Lantronix Reports Record Revenue for Fourth Quarter and Full Fiscal 2024

• Fourth Quarter Net Revenue of $49.1 Million, up 19 Percent Sequentially and up 41 Percent Year-Over-Year
  
• Fourth Quarter GAAP EPS of $0.01 vs. ($0.05) in the Prior Year, a $0.06 Improvement
• Fourth Quarter Non-GAAP EPS of $0.15 vs. $0.06 in the Prior Year, up 150 Percent
  
  
• Annual Net Revenue of $160.3 Million, up 22% From the Prior Year
  
• Annual GAAP EPS of ($0.12) vs. ($0.25) in the Prior Year, a $0.13 Improvement
• Annual Non-GAAP EPS of $0.40 vs. $0.23 in the Prior Year, up 74 Percent
• Cash Balance of $26.2 Million, up 95 Percent From the Prior Year

IRVINE, Calif., Sept. 05, 2024 (GLOBE NEWSWIRE) -- Lantronix Inc. (NASDAQ: LTRX), a global leader of compute and connectivity IoT solutions, today reported results for its fourth quarter of fiscal 2024.

Net revenue totaled $49.1 million, up 19 percent sequentially and up 41 percent year-over-year.

GAAP EPS of $0.01, compared to ($0.05) in the prior year and ($0.01) in the prior quarter.

Non-GAAP EPS of $0.15, compared to $0.06 in the prior year and $0.11 in the prior quarter.

Business Outlook

For the first fiscal quarter of 2025, the company expects revenue in a range of $34 million to $38 million and non-GAAP EPS of $0.07 to $0.11 per share.

Conference Call and Webcast

Management will host an investor conference call and audio webcast on Thursday, Sept.5, 2024, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss its results for the fourth quarter of fiscal 2024 that ended June 30, 2024. 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 Q4 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 Sept. 5, 2024, at the Lantronix website. A telephonic replay will also be available through Sept. 12, 2024, by dialing 1-877-344-7529 (US) or 1-412-317-0088 (international) or Canada toll-free at 1-855-669-9658 and entering passcode 3146069.

About Lantronix

Lantronix Inc. is a global leader 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 first fiscal quarter of 2025. 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 March 31, 2024, filed with the SEC on May 2, 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
investors@lantronix.com

LANTRONIX, INC.
Unaudited Consolidated Balance Sheets
(In thousands, except share and par value data)
		June 30,				June 30,
		2024				2023
Assets
Current Assets:
Cash and cash equivalents		$	26,237			$	13,452
Accounts receivable, net			31,279				27,682
Inventories, net			27,698				49,736
Contract manufacturers' receivable			1,401				3,019
Prepaid expenses and other current assets			2,335				2,662
Total current assets			88,950				96,551
Property and equipment, net			4,016				4,629
Goodwill			27,824				27,824
Intangible assets, net			5,251				10,565
Lease right-of-use assets			9,567				11,583
Other assets			600				472
Total assets		$	136,208			$	151,624
Liabilities and stockholders' equity
Current Liabilities:
Accounts payable		$	10,347			$	12,401
Accrued payroll and related expenses			5,836				2,431
Current portion of long-term debt, net			3,002				2,743
Other current liabilities			10,971				28,813
Total current liabilities			30,156				46,388
Long-term debt, net			13,219				16,221
Other non-current liabilities			11,478				11,459
Total liabilities			54,853				74,068
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.0001 par value; 5,000,000 shares authorized;
none issued and outstanding			-				-
Common stock, $0.0001 par value; 100,000,000 shares authorized;
37,872,883 and 36,875,586 shares issued and outstanding at
June 30, 2024 and 2023, respectively			4				4
Additional paid-in capital			304,001				295,686
Accumulated deficit			(223,021	)			(218,505	)
Accumulated other comprehensive income			371				371
Total stockholders' equity			81,355				77,556
Total liabilities and stockholders' equity		$	136,208			$	151,624

LANTRONIX, INC.
Unaudited Consolidated Statements of Operations
(In thousands, except per share data)
		Three Months Ended												Years Ended
		June 30,				March 31,				June 30,				June 30,
		2024				2024				2023				2024				2023
Net revenue		$	49,075			$	41,183			$	34,924			$	160,327			$	131,189
Cost of revenue			30,353				24,679				21,126				95,973				74,925
Gross profit			18,722				16,504				13,798				64,354				56,264
Operating expenses:
Selling, general and administrative			11,059				9,753				8,032				40,206				36,948
Research and development			5,265				5,186				4,948				20,282				19,625
Restructuring, severance and related charges			523				350				29				1,423				693
Acquisition-related costs			-				-				-				-				315
Fair value remeasurement of earnout consideration			-				-				86				(9	)			(447	)
Amortization of intangible assets			1,310				1,310				1,464				5,314				5,804
Total operating expenses			18,157				16,599				14,559				67,216				62,938
Income (loss) from operations			565				(95	)			(761	)			(2,862	)			(6,674	)
Interest expense, net			(175	)			(171	)			(404	)			(916	)			(1,485	)
Other income (expense), net			9				2				(52	)			7				(73	)
Income (loss) before income taxes			399				(264	)			(1,217	)			(3,771	)			(8,232	)
Provision for income taxes			13				159				436				745				748
Net income (loss)		$	386			$	(423	)		$	(1,653	)		$	(4,516	)		$	(8,980	)
Net income (loss) per share - basic		$	0.01			$	(0.01	)		$	(0.05	)		$	(0.12	)		$	(0.25	)
Net income (loss) per share - diluted		$	0.01			$	(0.01	)		$	(0.05	)		$	(0.12	)		$	(0.25	)
Weighted-average common shares - basic			37,697				37,509				36,719				37,386				36,257
Weighted-average common shares - diluted			38,096				37,509				36,719				37,386				36,257

LANTRONIX, INC.
Unaudited Reconciliation of Non-GAAP Adjustments
(In thousands)
		Three Months Ended												Years Ended
		June 30,				March 31,				June 30,				June 30,
		2024				2024				2023				2024				2023
GAAP net income (loss)		$	386			$	(423	)		$	(1,653	)		$	(4,516	)		$	(8,980	)
Non-GAAP adjustments:
Cost of revenue:
Share-based compensation			66				66				(1	)			237				158
Employer portion of withholding taxes on stock grants			1				1				-				7				13
Amortization of manufacturing profit in acquired inventory			126				190				44				822				225
Depreciation and amortization			124				144				102				463				466
Total adjustment to costs of revenue			317				401				145				1,529				862
Selling, general and administrative:
Share-based compensation			2,010				1,337				414				6,248				4,546
Employer portion of withholding taxes on stock grants			19				21				14				87				181
Depreciation and amortization			369				352				327				1,393				1,022
Total adjustments to selling, general and administrative			2,398				1,710				755				7,728				5,749
Research and development:
Share-based compensation			471				469				414				1,852				1,504
Employer portion of withholding taxes on stock grants			4				9				5				31				34
Depreciation and amortization			72				76				84				308				248
Total adjustments to research and development			547				554				503				2,191				1,786
Restructuring, severance and related charges			523				350				29				1,423				693
Acquisition related costs			-				-				-				-				315
Fair value remeasurement of earnout consideration			-				-				86				(9	)			(447	)
Amortization of purchased intangible assets			1,310				1,310				1,464				5,314				5,804
Litigation settlement cost			115				-				-				115				330
Total non-GAAP adjustments to operating expenses			4,893				3,924				2,837				16,762				14,230
Interest expense, net			175				171				404				916				1,485
Other expense (income), net			(9	)			(2	)			52				(7	)			73
Provision for income taxes			13				159				436				745				748
Total Non-GAAP adjustments			5,389				4,653				3,874				19,945				17,398
Non-GAAP net income		$	5,775			$	4,230			$	2,221			$	15,429			$	8,418
Non-GAAP net income per share (diluted)		$	0.15			$	0.11			$	0.06			$	0.40			$	0.23
Denominator for GAAP net income (loss) per share (diluted)			38,096				37,509				36,719				37,386				36,257
Non-GAAP adjustment			771				1,674				548				1,367				932
Denominator for non-GAAP net income per share (diluted)			38,867				39,183				37,267				38,753				37,189
GAAP cost of revenue		$	30,353			$	24,679			$	21,126			$	95,973			$	74,925
Non-GAAP adjustments to cost of revenue			(317	)			(401	)			(145	)			(1,529	)			(862	)
Non-GAAP cost of revenue			30,036				24,278				20,981				94,444				74,063
Non-GAAP gross profit		$	19,039			$	16,905			$	13,943			$	65,883			$	57,126
Non-GAAP gross margin			38.8	%			41.0	%			39.9	%			41.1	%			43.5	%

LANTRONIX, INC.
Unaudited Net Revenues by Product Line and Region
(In thousands)
	Three Months Ended									Years Ended
	June 30, 2024			March 31, 2024			June 30, 2023			June 30, 2024			June 30, 2023
Embedded IoT Solutions	$	11,364		$	12,452		$	18,818		$	46,953		$	63,636
IoT System Solutions		35,603			26,789			13,928			104,450			57,496
Software & Services		2,108			1,942			2,178			8,924			10,057
	$	49,075		$	41,183		$	34,924		$	160,327		$	131,189
	June 30, 2024			March 31, 2024			June 30, 2023			June 30, 2024			June 30, 2023
Americas	$	17,126		$	17,543		$	18,844		$	78,203		$	78,557
EMEA		26,194			18,354			6,800			64,025			23,286
APJ		5,755			5,286			9,280			18,099			29,346
	$	49,075		$	41,183		$	34,924		$	160,327		$	131,189