Lantronix Reports Fiscal 2015 Third Quarter Financial Results
IRVINE, CA -- (Marketwired) -- 04/29/15 -- Lantronix, Inc. (the "Company") (NASDAQ: LTRX), a specialized networking company providing smart IoT and M2M solutions, today reported results for its fiscal 2015 third quarter ended March 31, 2015.
Financial Highlights for the Third Quarter of Fiscal 2015:
- Net revenue of $10.4 million
- New product revenue grew by 33% year-over-year and 59% year-to-date
- Gross profit margin of 45.1%
- GAAP net loss of $839,000 or $0.06 per share
- Non-GAAP net loss of $357,000 or $0.02 per share
- Cash and cash equivalents of $5.6 million as of March 31, 2015
"During the third fiscal quarter of 2015, Lantronix continued to achieve year-over-year and year-to-date growth in new product sales. At the same time, weakness in capital spending continued to impact the timing of customer projects that affected total revenue for the quarter ended March 31, 2015," said Kurt Busch, Lantronix president and CEO. "Despite challenging near-term market conditions, we are executing on the fundamental elements of our growth strategy of engaging with Tier One accounts, delivering market leading smart IoT and M2M solutions, and expanding our sales and marketing efforts worldwide. Ultimately, we believe that these actions will create long-term profitable growth."
Operational and Product Highlights for the Third Quarter of Fiscal 2015:
- Lantronix began volume shipments for one of its first design wins using the xPico� Wi-Fi SMT, the newest addition to the xPico embedded device server product family.
- The Company began volume sales of SLC" 8000, the industry's first modular console manager, which was introduced during the second quarter of fiscal 2015.
- In January 2015, the Company announced that Konica Minolta added Lantronix xPrintServer� Cloud Print edition mobile printing solution to its EnvisionIT portfolio of mobile solutions.
- In February 2015, Lantronix showcased Wi-Fi enabled Internet of Things solutions at the 2015 Embedded World Conference. Featured Lantronix-enabled solutions included a humanoid robot, factory provisioning solutions, and an autonomous drone.
Financial Results for the Third Quarter of Fiscal Year 2015
Net revenue was $10.4 million for the third quarter of fiscal 2015, a decrease of $1.1 million, compared with $11.6 million for the third quarter of fiscal 2014 and a decrease of $291,000 compared with $10.7 million for the second quarter of fiscal 2015. The year-over-year and sequential decreases in net revenue were primarily due to a decline in legacy product sales and weakness in capital spending that impacted the timing of customer projects. The year-over-year decline in legacy products was partially offset by 33% growth in new product revenue. New products are defined as products that have been released since the start of the second quarter of fiscal 2012.
Gross profit as a percentage of net revenue was 45.1% for the third quarter of fiscal 2015, compared with 50.9% for the third quarter of fiscal 2014 and 48.2% for the second quarter of fiscal 2015. Gross profit as a percentage of revenue was lower primarily due to charges for excess inventories, totaling approximately $290,000, that were recorded in the third fiscal quarter.
Operating expenses were $5.5 million for the third quarter of fiscal 2015, compared with $6.0 million for the third quarter of fiscal 2014 and $5.8 million for the second quarter of fiscal 2015.
GAAP net loss for the third quarter of fiscal 2015 was $839,000 or $0.06 per share, compared with GAAP net loss of $130,000 or $0.01 per share, for the third quarter of fiscal 2014 and a GAAP net loss of $632,000 or $0.04 per share, for the second quarter of fiscal 2015.
Non-GAAP net loss for the third quarter of fiscal 2015 was $357,000 or $0.02 per share, compared with non-GAAP net income of $331,000 or $0.02 per share, for the third quarter of fiscal 2014 and non-GAAP net loss of $99,000 or $0.01 per share, for the second quarter of fiscal 2015. For additional information regarding our non-GAAP results, see "Discussion of Non-GAAP Financial Measures" below.
Cash and cash equivalents were $5.6 million as of March 31, 2015 compared with cash and cash equivalents of $6.3 million as of June 30, 2014.
Conference Call and Webcast
Lantronix will host an investor conference call with a simultaneous audio webcast today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss its fiscal 2015 third quarter results. To access the live conference call, investors should dial 1-888-243-4451 (US) or 1-412-542-4135 (international) and indicate that they are participating in the Lantronix Q3 FY 2015 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 Wednesday, April 29, 2015 at www.lantronix.com. A telephonic replay will also be available through May 7, 2015 by dialing 1-877-344-7529 (US) or 1-412-317-0088 (international) and entering passcode 10064423.
About Lantronix
Lantronix, Inc. (NASDAQ: LTRX) is a specialized networking company providing M2M (machine to machine) and IoT (Internet of Things) solutions. Our products deliver secure connectivity, device management and mobility for today's increasingly connected world. By networking and managing devices and machines that have never before been connected, we enable our customers to realize the possibilities of the Internet of Things. Founded in 1989, Lantronix pioneers robust, intelligent and easy to deploy solutions for mission critical applications in a wide range of industries, including data center, medical, security, industrial, transportation, retail, financial and government. Lantronix is headquartered in Irvine, California, with offices in Europe, Asia and Japan. For more information, visit www.lantronix.com.
Learn more at the Lantronix blog, www.lantronix.com/blog, featuring industry discussion and updates. To follow Lantronix on Twitter, please visit www.twitter.com/Lantronix. View our video library on YouTube at www.youtube.com/user/LantronixInc or connect with us on LinkedIn at www.linkedin.com/company/lantronix. The Lantronix blog, http://www.lantronix.com/blog, features industry discussion and updates.
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. 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. Management believes that non-GAAP net income (loss) and non-GAAP net income (loss) per share are important measures of the Company's business. 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.
Non-GAAP net income (loss) consists of net income (loss) excluding (i) non-GAAP adjustments to operating expenses, (ii) interest income (expense), (iii) other income (expense), and (iv) income tax provision (benefit).
Non-GAAP net income (loss) per share is calculated by dividing non-GAAP net income (loss) by non-GAAP weighted-average shares outstanding (diluted). For purposes of calculating non-GAAP net income (loss) 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.
Forward-Looking Statements This news release contains forward-looking statements, including statements concerning our sales expansion efforts, our relationships with certain customers, and our projected operating and financial performance. 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. Some of the risks and uncertainties that may cause actual results to differ from those expressed or implied in the forward-looking statements are described in "Risk Factors" in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, as well as in our other 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.
� 2015 Lantronix, Inc. All rights reserved. Lantronix, xPico, and xPrintServer are registered trademarks of Lantronix, Inc. All other trademarks and trade names are the property of their respective holders.
LANTRONIX, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, June 30,
2015 2014
---------- ----------
Assets
Current assets:
Cash and cash equivalents $ 5,598 $ 6,264
Accounts receivable, net 2,631 3,631
Contract manufacturers' receivable 486 359
Inventories, net 8,740 8,404
Prepaid expenses and other current assets 493 524
---------- ----------
Total current assets 17,948 19,182
Property and equipment, net 1,311 1,487
Goodwill 9,488 9,488
Deferred tax assets 400 400
Other assets 95 125
---------- ----------
Total assets $ 29,242 $ 30,682
========== ==========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 4,032 $ 4,547
Accrued payroll and related expenses 1,676 1,863
Warranty reserve 111 150
Deferred tax liabilities 400 400
Other current liabilities 3,614 3,418
---------- ----------
Total current liabilities 9,833 10,378
Long-term capital lease obligations 8 7
Other non-current liabilities 93 131
---------- ----------
Total liabilities 9,934 10,516
---------- ----------
Commitments and contingencies
Stockholders' equity:
Common stock 1 1
Additional paid-in capital 205,888 205,013
Accumulated deficit (186,952) (185,219)
Accumulated other comprehensive income 371 371
---------- ----------
Total stockholders' equity 19,308 20,166
---------- ----------
Total liabilities and stockholders' equity $ 29,242 $ 30,682
========== ==========
LANTRONIX, INC.
Unaudited Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended Nine Months Ended
-------------------------------------- --------------------
March 31, December 31, March 31,
2015 2014 2014 March 31,
-------------------
2015 2014
----------- -------------- ----------- --------- ----------
Net revenue (1) $ 10,444 $ 10,735 $ 11,593 $ 32,715 $ 33,444
Cost of revenue 5,735 5,565 5,694 17,237 16,718
----------- -------------- ----------- --------- ----------
Gross profit 4,709 5,170 5,899 15,478 16,726
----------- -------------- ----------- --------- ----------
Operating
expenses:
Selling,
general and
administrative 3,914 3,992 4,248 11,981 12,258
Research and
development 1,619 1,782 1,757 5,145 5,081
----------- -------------- ----------- --------- ----------
Total operating
expenses 5,533 5,774 6,005 17,126 17,339
----------- -------------- ----------- --------- ----------
Loss from
operations (824) (604) (106) (1,648) (613)
Interest
expense, net (4) (3) (6) (12) (22)
Other income
(expense), net (5) 1 (2) (25) (30)
----------- -------------- ----------- --------- ----------
Loss before
income taxes (833) (606) (114) (1,685) (665)
Provision for
income taxes 6 26 16 48 55
----------- -------------- ----------- --------- ----------
Net loss and
comprehensive
loss $ (839) $ (632) $ (130) $ (1,733) $ (720)
=========== ============== =========== ========= ==========
Net loss per
share (basic
and diluted) $ (0.06) $ (0.04) $ (0.01) $ (0.12) $ (0.05)
=========== ============== =========== ========= ==========
Weighted-average
common shares
(basic and
diluted) 14,942 14,874 14,686 14,868 14,629
=========== ============== =========== ========= ==========
Net revenue from
related parties $ 28 $ 112 $ 79 $ 219 $ 452
=========== ============== =========== ========= ==========
(1) Includes net
revenue from
related parties
LANTRONIX, INC.
Unaudited Reconciliation of Non-GAAP Adjustments
(In thousands, except per share data)
Three Months Ended
--------------------------------------------
March 31, December 31, March 31,
2015 2014 2014
-------------- -------------- --------------
GAAP net loss $ (839) $ (632) $ (130)
Non-GAAP adjustments:
Cost of revenue:
Share-based compensation 17 16 11
Depreciation and
amortization 143 149 122
-------------- -------------- --------------
Total adjustments to cost of
revenue 160 165 133
-------------- -------------- --------------
Selling, general and
adminstrative:
Share-based compensation 189 195 144
Depreciation and
amortization 52 63 83
-------------- -------------- --------------
Total adjustments to
selling, general and
administrative 241 258 227
-------------- -------------- --------------
Research and development:
Share-based compensation 44 54 54
Employer portion of
withholding taxes on stock
grants - 6 -
Depreciation and
amortization 22 22 23
-------------- -------------- --------------
Total adjustments to
research and development 66 82 77
-------------- -------------- --------------
Total non-GAAP adjustments to
operating expenses 307 340 304
-------------- -------------- --------------
Interest expense, net 4 3 6
Other income (expense), net 5 (1) 2
Provision for income taxes 6 26 16
-------------- -------------- --------------
Total non-GAAP adjustments 482 533 461
-------------- -------------- --------------
Non-GAAP net income (loss) $ (357) $ (99) $ 331
============== ============== ==============
Non-GAAP net income (loss) per
share (diluted) $ (0.02) $ (0.01) $ 0.02
============== ============== ==============
Denominator for GAAP net
income (loss) per share
(diluted) 14,942 14,874 14,686
Non-GAAP adjustment - - 662
-------------- -------------- --------------
Denominator for non-GAAP net
income (loss) per share
(diluted) 14,942 14,874 15,348
============== ============== ==============
GAAP operating expenses $ 5,533 $ 5,774 $ 6,005
Non-GAAP adjustments to
operating expenses (307) (340) (304)
-------------- -------------- --------------
Non-GAAP operating expenses $ 5,226 $ 5,434 $ 5,701
============== ============== ==============
LANTRONIX, INC.
Unaudited Reconciliation of Non-GAAP Adjustments
(In thousands, except per share data)
Nine Months Ended
-----------------------------
March 31,
-----------------------------
2015 2014
-------------- --------------
GAAP net loss $ (1,733) $ (720)
Non-GAAP adjustments:
Cost of revenue:
Share-based compensation 53 35
Depreciation and
amortization 431 363
-------------- --------------
Total adjustments to cost of
revenue 484 398
-------------- --------------
Selling, general and
adminstrative:
Share-based compensation 558 461
Depreciation and
amortization 180 286
-------------- --------------
Total adjustments to
selling, general and
administrative 738 747
-------------- --------------
Research and development:
Share-based compensation 159 166
Employer portion of
withholding taxes on stock
grants 6 -
Depreciation and
amortization 69 44
-------------- --------------
Total adjustments to
research and development 234 210
-------------- --------------
Total non-GAAP adjustments to
operating expenses 972 957
-------------- --------------
Interest expense, net 12 22
Other income (expense), net 25 30
Provision for income taxes 48 55
-------------- --------------
Total non-GAAP adjustments 1,541 1,462
-------------- --------------
Non-GAAP net income (loss) $ (192) $ 742
============== ==============
Non-GAAP net income (loss) per
share (diluted) $ (0.01) $ 0.05
============== ==============
Denominator for GAAP net
income (loss) per share
(diluted) 14,868 14,629
Non-GAAP adjustment - 199
-------------- --------------
Denominator for non-GAAP net
income (loss) per share
(diluted) 14,868 14,828
============== ==============
GAAP operating expenses $ 17,126 $ 17,339
Non-GAAP adjustments to
operating expenses (972) (957)
-------------- --------------
Non-GAAP operating expenses $ 16,154 $ 16,382
============== ==============
LANTRONIX, INC.
Unaudited Net Revenues by Product Line and Region
(In thousands)
Three Months Ended
--------------------------------------------------------------
March 31, 2015 December 31, 2014
------------------------------ ------------------------------
OEM Enterprise OEM Enterprise
Modules Solutions Total Modules Solutions Total
-------- ------------ -------- -------- ------------ --------
New Products $ 495 $ 1,157 $ 1,652 $ 291 $ 1,354 $ 1,645
Legacy
Products 4,734 4,058 8,792 5,007 4,083 9,090
-------- ------------ -------- -------- ------------ --------
$ 5,229 $ 5,215 $ 10,444 $ 5,298 $ 5,437 $ 10,735
======== ============ ======== ======== ============ ========
Three Months Ended
--------------------------------------------------------------
March 31, 2015 December 31, 2014
------------------------------ ------------------------------
OEM Enterprise OEM Enterprise
Modules Solutions Total Modules Solutions Total
-------- ------------ -------- -------- ------------ --------
Americas $ 1,978 $ 3,407 $ 5,385 $ 1,971 $ 3,662 $ 5,633
EMEA 2,151 1,172 3,323 2,154 1,150 3,304
Asia Pacific 493 307 800 550 349 899
Japan 607 329 936 623 276 899
-------- ------------ -------- -------- ------------ --------
$ 5,229 $ 5,215 $ 10,444 $ 5,298 $ 5,437 $ 10,735
======== ============ ======== ======== ============ ========
LANTRONIX, INC.
Unaudited Net Revenues by Product Line and
Region
(In thousands)
Three Months Ended
------------------------------
March 31, 2014
------------------------------
OEM Enterprise
Modules Solutions Total
-------- ------------ --------
New Products $ 420 $ 821 $ 1,241
Legacy
Products 5,671 4,681 10,352
-------- ------------ --------
$ 6,091 $ 5,502 $ 11,593
======== ============ ========
Three Months Ended
------------------------------
March 31, 2014
------------------------------
OEM Enterprise
Modules Solutions Total
-------- ------------ --------
Americas $ 2,409 $ 3,475 $ 5,884
EMEA 2,241 1,455 3,696
Asia Pacific 665 319 984
Japan 776 253 1,029
-------- ------------ --------
$ 6,091 $ 5,502 $ 11,593
======== ============ ========
Nine Months Ended March 31,
-------------------------------------------------------
2015 2014
--------------------------- ---------------------------
OEM Enterprise OEM Enterprise
Modules Solutions Total Modules Solutions Total
-------- ---------- ------- -------- ---------- -------
New Products $ 970 $ 4,045 $ 5,015 $ 565 $ 2,585 $ 3,150
Legacy Products 15,185 12,515 27,700 15,440 14,854 30,294
-------- ---------- ------- -------- ---------- -------
$ 16,155 $ 16,560 $32,715 $ 16,005 $ 17,439 $33,444
======== ========== ======= ======== ========== =======
Nine Months Ended March 31,
-------------------------------------------------------
2015 2014
--------------------------- ---------------------------
OEM Enterprise OEM Enterprise
Modules Solutions Total Modules Solutions Total
-------- ---------- ------- -------- ---------- -------
Americas $ 6,358 $ 11,219 $17,577 $ 6,005 $ 11,465 $17,470
EMEA 6,474 3,447 9,921 6,184 3,855 10,039
Asia Pacific 1,660 968 2,628 1,924 1,151 3,075
Japan 1,663 926 2,589 1,892 968 2,860
-------- ---------- ------- -------- ---------- -------
$ 16,155 $ 16,560 $32,715 $ 16,005 $ 17,439 $33,444
======== ========== ======= ======== ========== =======
Investor Relations Contacts: Jeremy Whitaker Chief Financial Officer 949-453-3990 E.E. Wang [email protected] 949-614-5879
Source: Lantronix, Inc.