ADVERTISEMENT
Press release content from Globe Newswire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

Lantronix Reports Record Results for First Quarter of Fiscal 2022

November 10, 2021 GMT

  • Record First Quarter Net Revenue of $27.7 Million, up 62% Year Over Year, 34% Sequentially
  • First Quarter GAAP EPS totaled ($0.08) per Share vs. ($0.01) in the Prior Year
  • First Quarter Non-GAAP EPS totaled $0.08 per Share vs. $0.05 in Prior Year
  • Demand Strengthened, Driving Another Record Backlog Entering Q2 Fiscal 2022
  • Cash Balance Improved to $10.3 Million

IRVINE, Calif., Nov. 10, 2021 (GLOBE NEWSWIRE) -- Lantronix, Inc. (NASDAQ: LTRX), a global provider of secure turnkey solutions for Intelligent IT and Internet of Things (IoT), today reported results for the first quarter of fiscal 2022.

Net revenue totaled $27.7 million, up 62 percent year-over-year and up 34 percent sequentially.

ADVERTISEMENT

GAAP EPS totaled ($0.08), compared to ($0.01) in the prior year and ($0.04) in the prior quarter.

Non-GAAP EPS totaled $0.08, compared to $0.05 in the prior year and $0.06 in the prior quarter.

“Demand for Lantronix solutions strengthened again in our first quarter, and we entered the second quarter with record backlog in place,” stated Paul Pickle, president and CEO of Lantronix. “The integration of our most recent acquisition is well underway, and we are growing organically at a double-digit rate. As we focus on execution in a difficult supply chain environment, we expect to deliver strong year-over-year results for our shareholders.”

Business Outlook

Demand strengthened during the company’s fiscal first quarter, and the company currently believes that without supply chain constrains, it could post full-year revenue and non-GAAP EPS results above the high-end of the guidance range. However, taking the current supply chain dynamics into account, the company’s more conservative expectations for the full year fiscal 2022 has improved to revenue growth of 54–75 percent with non-GAAP EPS growth of 95–135 percent.

Conference Call and Webcast

To account for the Securities and Exchange Commission holiday on Nov. 11, Lantronix is releasing its first quarter of fiscal 2022 results today, Nov. 10, 2021.

ADVERTISEMENT

Lantronix will host an investor conference call and audio webcast, as previously planned, on Thursday, Nov. 11, 2021, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss its results for the first quarter of fiscal 2022 that ended Sept. 30, 2021. To access the live conference call, investors should dial 1-844-802-2442 (US) or 1-412-317-5135 (international) and indicate that they are participating in the Lantronix Q1 FY 2022 call. The webcast will be available simultaneously via the investor relations section of the Company’s website at www.lantronix.com.

Investors can access a replay of the conference call starting at approximately 5:00 p.m. Pacific Time on Thursday, Nov. 11, 2021, at www.lantronix.com. A telephonic replay will also be available through Nov. 18, 2021, by dialing 1-877-344-7529 (US) or 1-412-317-0088 (international) and entering passcode 10161701.

About Lantronix

Lantronix Inc. is a global provider of secure turnkey solutions for the Internet of Things (IoT) and Remote Environment Management (REM), offering Software as a Service (SaaS), connectivity services, engineering services and intelligent hardware.

Lantronix enables its customers to accelerate time to market and increase operational up-time and efficiency by providing reliable, secure and connected Intelligent Edge IoT and Remote Management Gateway solutions.

Lantronix’s products and services dramatically simplify the creation, development, deployment and management of IoT and IT projects across Robotics, Automotive, Wearables, Video Conferencing, Industrial, Medical, Logistics, Smart Cities, Security, Retail, Branch Office, Server Room, and Datacenter applications. For more information, visit the Lantronix website.

Learn more at the Lantronix blog, which features industry discussion and updates. Follow Lantronix on Twitter, view our YouTube video library or connect with us on LinkedIn.

References in this Report to “fiscal 2021” refer to the fiscal year ended June 30, 2021, and references to “fiscal 2022” refer to the fiscal year ending June 30, 2022.

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, and (x) amortization of manufacturing profit in acquired inventory.

Non-GAAP net income per share is calculated by dividing non-GAAP net loss by non-GAAP weighted-average shares outstanding (diluted). For purposes of calculating non-GAAP net income per share, 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 fiscal 2022, our ongoing integration of the Transition Networks and Net2Edge businesses we recently acquired from Communications Systems, Inc. (the “TN Companies”), our organic growth rate, and our expectations regarding supply chain dynamics affecting our business. 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 impact of the COVID-19 pandemic, including the emergence of new more contagious and/or vaccine-resistant strains of the virus and the impact of vaccination efforts, including the efficacy and public acceptance of vaccinations, on our business, employees, supply and distribution chains and the global economy; 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 successfully convert our backlog and current demand; our ability to mitigate any disruption in our and our suppliers’ and vendors’ supply chains; our ability to successfully implement our acquisitions strategy or integrate acquired companies, including the TN Companies; uncertainty as to the future profitability of acquired businesses, including the TN Companies, 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; the level of our indebtedness, our ability to service our indebtedness and the restrictions in our debt agreements; 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, 2021, filed with the Securities and Exchange Commission (the “SEC”) on August 27, 2021, including in the section entitled “Risk Factors” in Item 1A of Part I of that 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.

© 2021 Lantronix, Inc. All rights reserved. Lantronix is a registered trademark.

Lantronix Investor Relations Contact:        
Jeremy Whitaker
Chief Financial Officer
investors@lantronix.com

LANTRONIX, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands)
     
  September 30,June 30,
   2021   2021 
Assets    
Current assets:    
Cash and cash equivalents $10,270  $9,739 
Accounts receivable, net  21,766   13,515 
Inventories  26,557   15,059 
Contract manufacturers' receivables  1,149   1,960 
Prepaid expenses and other current assets  3,551   2,880 
Total current assets  63,293   43,153 
Property and equipment, net  1,772   1,577 
Goodwill  18,270   15,810 
Purchased intangible assets, net  19,396   9,355 
Lease right-of-use assets  2,183   2,431 
Other assets  273   240 
Total assets $105,187  $72,566 
     
Liabilities and stockholders' equity    
Current liabilities:    
Accounts payable $15,600  $9,122 
Accrued payroll and related expenses  3,894   4,942 
Current portion of long-term debt, net  1,515   1,472 
Other current liabilities  10,093   7,328 
Total current liabilities  31,102   22,864 
Long-term debt, net  27,075   2,210 
Other non-current liabilities  1,376   1,396 
Total liabilities  59,553   26,470 
     
Commitments and contingencies    
     
Stockholders' equity:    
Common stock  3   3 
Additional paid-in capital  251,706   249,885 
Accumulated deficit  (206,446)  (204,163)
Accumulated other comprehensive income  371   371 
Total stockholders' equity  45,634   46,096 
Total liabilities and stockholders' equity $105,187  $72,566 
     
LANTRONIX, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
       
       
  Three Months Ended
  September 30,June 30, September 30,
   2021   2021   2020 
Net revenue $27,705  $20,638  $17,146 
Cost of revenue  15,242   10,566   8,907 
Gross profit  12,463   10,072   8,239 
Operating expenses:      
Selling, general and administrative  7,906   6,061   4,899 
Research and development  4,041   3,573   2,572 
Restructuring, severance and related charges  542   157   92 
Acquisition-related costs  541   663   - 
Amortization of purchased intangible assets  1,193   579   882 
Total operating expenses  14,223   11,033   8,445 
Loss from operations  (1,760)  (961)  (206)
Interest expense, net  (379)  (71)  (85)
Other income (expense), net  (102)  (14)  39 
Loss before income taxes  (2,241)  (1,046)  (252)
Provision for income taxes  42   50   50 
Net loss $(2,283) $(1,096) $(302)
Net loss per share - basic and diluted $(0.08) $(0.04) $(0.01)
Weighted-average common shares - basic and diluted 29,228   28,979   28,371 
       
LANTRONIX, INC.
UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS
(In thousands, except per share data)
       
  Three Months Ended
   September 30,
 June 30, September 30,
   2021   2021   2020 
       
GAAP net loss $(2,283) $(1,096) $(302)
Non-GAAP adjustments:      
Cost of revenue:      
Share-based compensation  100   69   58 
Employer portion of withholding taxes on stock grants  1   2   - 
Depreciation and amortization  136   104   177 
Total adjustments to cost of revenue  237   175   235 
Selling, general and administrative:      
Share-based compensation  1,126   800   445 
Employer portion of withholding taxes on stock grants  13   13   5 
Depreciation and amortization  67   40   55 
Total adjustments to selling, general and administrative  1,206   853   505 
Research and development:      
Share-based compensation  255   179   100 
Employer portion of withholding taxes on stock grants  8   6   6 
Depreciation and amortization  71   58   33 
Total adjustments to research and development  334   243   139 
Restructuring, severance and related charges  542   157   92 
Acquisition related costs  541   663   - 
Amortization of purchased intangible assets  1,193   579   882 
Amortization of manufacturing profit in acquired inventory 180   -   7 
Total non-GAAP adjustments to operating expenses  3,996   2,495   1,625 
Interest (income) expense, net  379   71   85 
Other (income) expense, net  102   14   (39)
Provision for income taxes  42   50   50 
Total non-GAAP adjustments  4,756   2,805   1,956 
Non-GAAP net income $2,473  $1,709  $1,654 
       
       
Non-GAAP net income per share - diluted $0.08  $0.06  $0.05 
       
Denominator for GAAP net income per share - diluted  29,228   28,979   28,371 
Non-GAAP adjustment  1,672   1,716   1,833 
Denominator for non-GAAP net income per share - diluted  30,900   30,695   30,204 
       
GAAP operating expenses $14,223  $11,033  $8,445 
Non-GAAP adjustments to operating expenses  (3,996)  (2,495)  (1,625)
Non-GAAP operating expenses $10,227  $8,538  $6,820 
       
LANTRONIX, INC.
UNAUDITED NET REVENUES BY PRODUCT LINE AND REGION
(In thousands)
      
 Three Months Ended
 September 30, 2021 June 30, 2021 September 30, 2020
IoT$22,831 $17,484 $14,620
REM 4,766  3,041  2,402
Other 108  113  124
 $27,705 $20,638 $17,146
      
      
 Three Months Ended
 September 30, 2021 June 30, 2021 September 30, 2020
Americas$18,227 $11,071 $10,929
EMEA 4,659  5,711  2,639
Asia Pacific Japan 4,819  3,856  3,578
 $27,705 $20,638 $17,146