Irvine, Calif., February 16, 2016 – Lantronix, Inc. (the “Company”) (NASDAQ: LTRX) a specialized networking company providing smart IoT and M2M solutions, today reported results for its second fiscal quarter ended December 31, 2015.
Quarterly Financial Highlights
- Net revenue of $9.5 million
- New Product revenue of $1.8 million
- Gross profit margin of 48.1%
- GAAP net loss of $928,000 or $0.06 per share
- Non-GAAP net loss of $196,000 or $0.01 per share
- Cash and cash equivalents of $4.6 million
Operational and Product Highlights:
- In October 2015, Lantronix signed a distribution agreement with the Avnet Electronics Marketing Americas business region of Avnet, Inc., (NYSE: AVT) a $27 billion leading technology distributor. Under terms of the agreement, Avnet will distribute Lantronix’s IoT-enabling modules and solutions throughout North and South America.
- In December 2015, Jeffrey Benck was appointed Lantronix President and CEO. Prior to joining Lantronix, Benck served as president and chief executive officer of Emulex Corporation, a global supplier of advanced networking, monitoring and management solutions, from July 2013 until Emulex was acquired by Avago Technologies in May 2015. Earlier, Benck served in executive management roles at Emulex, QLogic and IBM Corporation.
- In February 2016, the company announced that Sanjeev Datla was appointed chief technology officer. Prior to joining Lantronix, Datla served as CEO and founder of Moxtreme Corporation, a Silicon Valley-based startup technology company focused on the development of a cloud-based application-defined IoT and virtualized real-time messaging platform. Datla previously served in senior technology development roles at Emulex, Broadcom Corporation, ServerWorks Corporation and NEC Electronics.
- Today, the company announced that Kevin Yoder was appointed vice president of worldwide sales for Lantronix. Yoder is the former vice president of sales for the Americas for Avago Technologies (now Broadcom Limited) from 2011 to February 2016. Earlier, Yoder served in senior sales management roles at XMOS, Analog Devices, Texas Instruments and CoWare.
“It’s clear to me that our recent results do not reflect Lantronix’s full potential in the IoT marketplace,” said Jeffrey Benck, newly appointed Lantronix president and CEO. “Since taking the helm two months ago, my team and I have moved with a sense of urgency to identify how we could improve the business, define where we want to take Lantronix in the future, and begin taking action that we believe will ultimately create greater value for our customers and shareholders.”
Financial Results for Second Quarter of Fiscal Year 2016
Net revenue was $9.5 million for the second quarter of fiscal 2016, compared with $10.7 million for the second quarter of fiscal 2015, and $10.6 million for the first quarter of fiscal 2016.
Gross profit margin was 48.1% for the second quarter of fiscal 2016, compared to 48.2% for the second quarter of fiscal 2015, and 47.9% for the first quarter of fiscal 2016.
Operating expenses were $5.5 million for the second quarter of fiscal 2016, compared with $5.8 million for the second quarter of fiscal 2015 and $5.4 million for the first quarter of fiscal 2016. Included in operating expenses for the second quarter of fiscal 2016 was a severance charge of $286,000 in connection with the resignation of the former CEO.
GAAP net loss for the second quarter of fiscal 2016 was $928,000, or $0.06 per share, compared with GAAP net loss of $632,000, or $0.04 per share for the second quarter of fiscal 2015 and GAAP net loss of $331,000, or $0.02 per share for the first quarter of fiscal 2016.
Non-GAAP net loss for the second quarter of fiscal 2016 was $196,000, or $0.01 per share, compared with non-GAAP net loss of $99,000, or $0.01 per share for the second quarter of fiscal 2015 and non-GAAP net income of $124,000, or $0.01 per share for the first quarter of fiscal 2016. For additional information regarding our non-GAAP results, see “Discussion of Non-GAAP Financial Measures” below.
Cash and cash equivalents were $4.6 million as of December 31, 2015 compared with $5.0 million as of June 30, 2015.
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 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 Second Quarter FY 2016 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 today at www.lantronix.com. A telephonic replay will also be available through February 23, 2016 by dialing 1-877-344-7529 (US) or 1-412-317-0088 (international) and entering passcode 10078652.
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 and Asia. 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.
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), (iv) income tax provision (benefit), and (v) severance charges.
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.
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.
Investor Relations Contacts:
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