Lantronix Reports Record Revenue for Third Quarter of Fiscal 2024

  • Third Quarter Net Revenue of $41.2 Million, up 11 Percent Sequentially and up 25 Percent Year-Over-Year
  • Third Quarter GAAP EPS of ($0.01) vs. ($0.08) in the Prior Year
  • Third Quarter Non-GAAP EPS of $0.11 vs. $0.06 in the Prior Year

IRVINE, Calif., April 29, 2024 (GLOBE NEWSWIRE) -- Lantronix Inc. (NASDAQ: LTRX), a global provider of compute and connectivity IoT solutions, today reported results for its third quarter of fiscal 2024.

Net revenue totaled $41.2 million, up 11 percent sequentially and up 25 percent year-over-year.

GAAP EPS of ($0.01), compared to ($0.08) in the prior year and ($0.07) in the prior quarter.

Non-GAAP EPS of $0.11, compared to $0.06 in the prior year and $0.08 in the prior quarter.

Business Outlook

For the fourth fiscal quarter of 2024, the company expects revenue in a range of $46.5 million to $51.5 million and non-GAAP EPS of $0.12 to $0.18 per share.

Conference Call and Webcast

Management will host an investor conference call and audio webcast on Monday, April 29, 2024, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss its results for the third quarter of fiscal 2024 that ended March 31, 2024. To access the live conference call, investors should dial 1-844-802-2442 (U.S.) or 1-412-317-5135 (international) and indicate that they are participating in the Lantronix Q3 FY 2024 call. The webcast will be available simultaneously via the investor relations section of the company’s website.

Investors can access a replay of the conference call starting at approximately 7:00 p.m. Pacific Time on April 29, 2024, at the Lantronix website. A telephonic replay will also be available through May 6, 2024, by dialing 1-877-344-7529 (U.S.) or 1-412-317-0088 (international) or Canada toll-free at 1-855-669-9658 and entering passcode 1167329.

About Lantronix

Lantronix Inc. is a global provider of compute and connectivity IoT solutions that target high-growth industries, including Smart Cities, Automotive and Enterprise. Lantronix’s products and services empower companies to achieve success in the growing IoT markets by delivering customizable solutions that address each layer of the IoT Stack. Lantronix’s leading-edge solutions include Intelligent Substations infrastructure, Infotainment systems and Video Surveillance, supplemented with advanced Out-of-Band Management (OOB) for Cloud and Edge Computing.

For more information, visit the Lantronix website.

Discussion of Non-GAAP Financial Measures

Lantronix believes that the presentation of non-GAAP financial information, when presented in conjunction with the corresponding GAAP measures, provides important supplemental information to management and investors regarding financial and business trends relating to the company’s financial condition and results of operations. Management uses the aforementioned non-GAAP measures to monitor and evaluate ongoing operating results and trends to gain an understanding of our comparative operating performance. The non-GAAP financial measures disclosed by the company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations of the non-GAAP financial measures to the financial measures calculated in accordance with GAAP should be carefully evaluated. The non-GAAP financial measures used by the company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. The company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

Non-GAAP net income consists of net loss excluding (i) share-based compensation and the employer portion of withholding taxes on stock grants, (ii) depreciation and amortization, (iii) interest income (expense), (iv) other income (expense), (v) income tax provision (benefit), (vi) restructuring, severance and related charges, (vii) acquisition related costs, (viii) impairment of long-lived assets, (ix) amortization of purchased intangibles, (x) amortization of manufacturing profit in acquired inventory, (xi) fair value remeasurement of earnout consideration, and (xii) loss on extinguishment of debt.

Non-GAAP EPS is calculated by dividing non-GAAP net loss by non-GAAP weighted-average shares outstanding (diluted). For purposes of calculating non-GAAP EPS, the calculation of GAAP weighted-average shares outstanding (diluted) is adjusted to exclude share-based compensation, which for GAAP purposes is treated as proceeds assumed to be used to repurchase shares under the GAAP treasury stock method.

Guidance on earnings per share growth is provided only on a non-GAAP basis due to the inherent difficulty of forecasting the timing or amount of certain items that have been excluded from the forward-looking non-GAAP measures, and a reconciliation to the comparable GAAP guidance has not been provided because certain factors that are materially significant to Lantronix’s ability to estimate the excluded items are not accessible or estimable on a forward-looking basis without unreasonable effort.

Forward-Looking Statements

This news release contains forward-looking statements, including statements concerning our revenue and earnings expectations for the fourth fiscal quarter of 2024. These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. We have based our forward-looking statements on our current expectations and projections about trends affecting our business and industry and other future events. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. Forward-looking statements are subject to substantial risks and uncertainties that could cause our results or experiences, or future business, financial condition, results of operations or performance, to differ materially from our historical results or those expressed or implied in any forward-looking statement contained in this news release. Other factors which could have a material adverse effect on our operations and future prospects or which could cause actual results to differ materially from our expectations include, but are not limited to: the effects of negative or worsening regional and worldwide economic conditions or market instability on our business, including effects on purchasing decisions by our customers; our ability to mitigate any disruption in our and our suppliers’ and vendors’ supply chains due to the COVID-19 pandemic or other outbreaks, wars and recent conflicts in Europe, Asia and the Middle East, hostilities in the Red Sea, or other causes; our ability to successfully convert our backlog and current demand; our ability to successfully implement our acquisitions strategy or integrate acquired companies; uncertainty as to the future profitability of acquired businesses, and delays in the realization of, or the failure to realize, any accretion from acquisition transactions; acquiring, managing and integrating new operations, businesses or assets, and the associated diversion of management attention or other related costs or difficulties; our ability to continue to generate revenue from products sold into mature markets; our ability to develop, market, and sell new products; our ability to succeed with our new software offerings; fluctuations in our revenue due to the project-based timing of orders from certain customers; unpredictable timing of our revenues due to the lengthy sales cycle for our products and services and potential delays in customer completion of projects; our ability to accurately forecast future demand for our products; delays in qualifying revisions of existing products; constraints or delays in the supply of, or quality control issues with, certain materials or components; difficulties associated with the delivery, quality or cost of our products from our contract manufacturers or suppliers; risks related to the outsourcing of manufacturing and international operations; difficulties associated with our distributors or resellers; intense competition in our industry and resultant downward price pressure; rises in inventory levels and inventory obsolescence; undetected software or hardware errors or defects in our products; cybersecurity risks; our ability to obtain appropriate industry certifications or approvals from governmental regulatory bodies; changes in applicable U.S. and foreign government laws, regulations, and tariffs; our ability to protect patents and other proprietary rights and avoid infringement of others’ proprietary technology rights; issues relating to the stability of our financial and banking institutions and relationships; the level of our indebtedness, our ability to service our indebtedness and the restrictions in our debt agreements; the impact of rising interest rates; our ability to attract and retain qualified management; and any additional factors included in our Report on Form 10-K for the fiscal year ended June 30, 2023, filed with the Securities and Exchange Commission (the “SEC”) on Sept. 12, 2023, including in the section entitled “Risk Factors” in Item 1A of Part I of that report; in our Quarterly Report on Form 10-Q for the fiscal quarter ended Dec. 31, 2023, filed with the SEC on Feb. 8, 2024, including in the section entitled “Risk Factors” in Item 1A of Part II of such report; and in our other public filings with the SEC. In addition, actual results may differ as a result of additional risks and uncertainties of which we are currently unaware or which we do not currently view as material to our business. For these reasons, investors are cautioned not to place undue reliance on any forward-looking statements. The forward-looking statements we make speak only as of the date on which they are made. We expressly disclaim any intent or obligation to update any forward-looking statements after the date hereof to conform such statements to actual results or to changes in our opinions or expectations, except as required by applicable law or the rules of the Nasdaq Stock Market LLC. If we do update or correct any forward-looking statements, investors should not conclude that we will make additional updates or corrections.

© 2024 Lantronix Inc. All rights reserved. Lantronix is a registered trademark.

Lantronix Investor Relations Contact:        
Jeremy Whitaker
Chief Financial Officer

 (In thousands)
 March 31, June 30,
  2024   2023 
Current assets:   
Cash and cash equivalents$24,642  $13,452 
Accounts receivable, net 28,542   27,682 
Inventories, net 40,552   49,736 
Contract manufacturers' receivables 1,562   3,019 
Prepaid expenses and other current assets 2,586   2,662 
Total current assets 97,884   96,551 
Property and equipment, net 4,409   4,629 
Goodwill 27,824   27,824 
Intangible assets, net 6,561   10,565 
Lease right-of-use assets 10,128   11,583 
Other assets 586   472 
Total assets$147,392  $151,624 
Liabilities and stockholders' equity   
Current liabilities:   
Accounts payable$13,845  $12,401 
Accrued payroll and related expenses 4,539   2,431 
Current portion of long-term debt, net 3,002   2,743 
Other current liabilities 22,188   28,813 
Total current liabilities 43,574   46,388 
Long-term debt, net 13,970   16,221 
Other non-current liabilities 11,763   11,459 
Total liabilities 69,307   74,068 
Commitments and contingencies   
Stockholders' equity:   
Common stock 4   4 
Additional paid-in capital 301,117   295,686 
Accumulated deficit (223,407)  (218,505)
Accumulated other comprehensive income 371   371 
Total stockholders' equity 78,085   77,556 
Total liabilities and stockholders' equity$147,392  $151,624 

(In thousands, except per share data)
 Three Months Ended Nine Months Ended
 March 31, December 31, March 31, March 31,
  2024   2023   2023   2024   2023 
Net revenue$41,183  $37,038  $32,964  $111,252  $96,265 
Cost of revenue 24,679   22,007   18,328   65,620   53,799 
Gross profit 16,504   15,031   14,636   45,632   42,466 
Operating expenses:         
Selling, general and administrative 9,753   10,224   9,946   29,147   28,916 
Research and development 5,186   4,725   5,067   15,017   14,677 
Restructuring, severance and related charges 350   530   490   900   664 
Acquisition-related costs -   -   -   -   315 
Fair value remeasurement of earnout consideration -   -   140   (9)  (533)
Amortization of intangible assets 1,310   1,310   1,424   4,004   4,340 
Total operating expenses 16,599   16,789   17,067   49,059   48,379 
Loss from operations (95)  (1,758)  (2,431)  (3,427)  (5,913)
Interest expense, net (171)  (232)  (465)  (741)  (1,081)
Other income (loss), net 2   (23)  (29)  (2)  (21)
Loss before income taxes (264)  (2,013)  (2,925)  (4,170)  (7,015)
Provision (benefit) for income taxes 159   580   140   732   312 
Net loss$(423) $(2,593) $(3,065) $(4,902) $(7,327)
Net loss per share - basic and diluted$(0.01) $(0.07) $(0.08) $(0.13) $(0.20)
Weighted-average common shares - basic and diluted 37,509   37,354   36,548   37,283   36,105 

(In thousands, except per share data)
 Three Months Ended Nine Months Ended
 March 31, December 31,March 31, March 31,
  2024   2023   2023   2024   2023 
GAAP net loss$(423) $(2,593) $(3,065) $(4,902) $(7,327)
Non-GAAP adjustments:         
Cost of revenue:         
Share-based compensation 66   64   47   171   159 
Employer portion of withholding taxes on stock grants 1   1   1   6   13 
Amortization of manufacturing profit in acquired inventory 190   189   77   696   181 
Depreciation and amortization 144   109   116   339   364 
Total adjustments to cost of revenue 401   363   241   1,212   717 
Selling, general and administrative:         
Share-based compensation 1,337   1,628   1,293   4,238   4,132 
Employer portion of withholding taxes on stock grants 21   10   25   68   167 
Depreciation and amortization 352   338   280   1,024   695 
Total adjustments to selling, general and administrative 1,710   1,976   1,598   5,330   4,994 
Research and development:         
Share-based compensation 469   484   388   1,381   1,090 
Employer portion of withholding taxes on stock grants 9   5   5   27   29 
Depreciation and amortization 76   52   37   236   164 
Total adjustments to research and development 554   541   430   1,644   1,283 
Restructuring, severance and related charges 350   530   490   900   664 
Acquisition related costs -   -   -   -   315 
Fair value remeasurement of earnout consideration -   -   140   (9)  (533)
Amortization of purchased intangible assets 1,310   1,310   1,424   4,004   4,340 
Litigation settlement cost -   -   250   -   330 
Total non-GAAP adjustments to operating expenses 3,924   4,357   4,332   11,869   11,393 
Interest expense, net 171   232   465   741   1,081 
Other (income) expense, net (2)  23   29   2   21 
Provision for income taxes 159   580   140   732   312 
Total non-GAAP adjustments 4,653   5,555   5,207   14,556   13,524 
Non-GAAP net income$ 4,230  $ 2,962  $ 2,142  $ 9,654  $ 6,197 
Non-GAAP net income per share - diluted$ 0.11  $ 0.08  $ 0.06  $ 0.25  $ 0.17 
Denominator for GAAP net income per share - diluted 37,509   37,354   36,548   37,283   36,105 
Non-GAAP adjustment 1,674   1,228   839   1,021   1,066 
Denominator for non-GAAP net income per share - diluted 39,183   38,582   37,387   38,304   37,171 
GAAP cost of revenue$24,679  $22,007  $18,328  $65,620  $53,799 
Non-GAAP adjustments to cost of revenue (401)  (363)  (241)  (1,212)  (717)
Non-GAAP cost of revenue 24,278   21,644   18,087   64,408   53,082 
Non-GAAP gross profit$16,905  $15,394  $14,877  $46,844  $43,183 
Non-GAAP gross margin 41.0%  41.6%  45.1%  42.1%  44.9%

(In thousands)
 Three Months Ended Nine Months Ended
 March 31, 2024 December 31, 2023 March 31, 2023 March 31, 2024 March 31, 2023
Embedded IoT Solutions$12,452  $11,764  $16,055  $35,589  $44,818 
IoT System Solutions 26,789   23,022   14,034   68,847   43,568 
Software & Services 1,942   2,252   2,875   6,816   7,879 
 $41,183  $37,038  $32,964  $111,252  $96,265 
 Three Months Ended Nine Months Ended
 March 31, 2024 December 31, 2023 March 31, 2023 March 31, 2024 March 31, 2023
Americas$17,543  $20,601  $19,095  $61,077  $59,713 
EMEA 18,354   12,886   6,380   37,831   16,486 
Asia Pacific Japan 5,286   3,551   7,489   12,344   20,066 
 $41,183  $37,038  $32,964  $111,252  $96,265