CONTACT: JIM KERRIGAN
949-453-3990
LANTRONIX REPORTS PRELIMINARY FOURTH QUARTER AND FISCAL 2003 RESULTS
SEPTEMBER 10, 2003 - IRVINE, CALIFORNIA - Lantronix (Nasdaq LTRX) today reported
preliminary results for its fourth fiscal quarter and year ended June 30, 2003:
- - Revenues for the quarter ended June 30, 2003 were $11.8 million, up three
percent from the same period last year, when the company reported revenues
of $11.5 million.
- - Cash usage for the quarter was reduced to $ (459,000), better than the
company's previous guidance of $ (1.3) million, and better than $ (5.5)
million cash used for the third quarter ended March 31, 2003.
- ----------------------------
Revenues for the fourth fiscal quarter ended June 30, 2003 were $11.8 million,
compared to $11.5 million for the same period last year. Net loss for the
quarter was $(9.7) million, or $(0.18) per share, compared with a net loss of
$(74.6) million, or $(1.39) per share for the same period last year. Net loss
for the quarter included a $0.9 million impairment charge for purchased
intangible assets. The company is still in the process of completing its annual
impairment test of goodwill and purchased intangibles and estimates the
impairment charge to be between $7.0 - $12.0 million. This would result in a
revised net loss for the quarter ended June 30, 2003 of between $(16.7) million,
or $(0.30) per share and $(21.7) million, or $(0.39) per share. Net loss for the
same period last year included an impairment charge of $57.3 million. The final
results of the annual impairment test for the quarter ended June 30, 2003 will
be reported in the financial statements that the company files in its Form 10-K
with the SEC by the end of the month.
For the fiscal year ended June 30, 2003, net revenues were $49.5 million,
compared to $57.6 million in fiscal 2002. Net loss for the year was $(38.2)
million, or $(0.70) per share, reduced from $(93.5) million, or $(1.82) per
share in fiscal 2002. Net loss for the year ended June 30, 2003 included a $0.9
million impairment charge for purchased intangible assets. The company is still
in the process of completing its annual impairment test of goodwill and
purchased intangibles and estimates the impairment charge to be between $7.0 -
$12.0 million. This would result in a revised net loss for the year ended June
30, 2003 of between $(45.2) million, or $(0.83) per share and $(50.2) million,
or $(0.92) per share. Net loss for the fiscal year ended June 30, 2002 included
an impairment charge of $57.3 million. Additionally, net loss for the fiscal
year ended June 30, 2002 included the cumulative effective of an accounting
change in the amount of $5.9 million related to the adoption of Statement of
Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets."
During the fourth quarter, cash and cash equivalents and marketable securities
decreased approximately $(459,000), compared with a decrease of $(5.5) million
for the third quarter ended March 31, 2003.
"Our focus during this past year was on establishing a strong operational
foundation and strategic plan that would stabilize the company and establish a
base for achieving growth in fiscal 2004," said Marc Nussbaum, president and
chief executive officer. "During the past four quarters, we simplified our
business model and infrastructure, brought expenses in line with revenues, and
reduced our cash burn. At the same time, we improved key operational
fundamentals of the business and continued to invest in the necessary research,
product development, marketing and sales initiatives."
FISCAL 2004 OUTLOOK
"Moving into fiscal 2004, our focus continues to be on managing our expenses
closely while investing in programs to drive top-line growth. Now that we have
stabilized our cash burn, our mission will be to further solidify our strong
position and drive penetration in the machine-to-machine pervasive Internet
space," Nussbaum said.
About Lantronix
Lantronix, Inc. (Nasdaq: LTRX) is a provider of hardware and software solutions
ranging from systems that allow users to remotely manage network infrastructure
equipment to technologies that network-enable devices and appliances. Lantronix
was established in 1989, and its worldwide headquarters are in Irvine, Calif.
For more information, visit the company on the Internet at www.lantronix.com.
-----------------
Safe Harbor
This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to be covered by
the safe harbors created thereby and the Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995. Statements regarding the Company's
ability to manage its costs, cash and to generate increased revenues, as well as
others, are subject to significant risks and uncertainties, some of which are
outside the control of the Company. For example, the Company's ability to manage
its costs and cash position will depend on its ability to negotiate favorable
terms with suppliers, and manage other costs, including costs associated with
ongoing litigation. Other risks and uncertainties are more fully described in
the Company's periodic filings with the Securities and Exchange Commission.
These statements, and other forward-looking statements, are not guarantees of
future performance and the Company undertakes no duty to update such statements.
SELECTED CONSOLIDATED BALANCE SHEET DATA
(In thousands)
June 30,
2003 2002
---------- -----------
Cash and cash equivalents and
marketable securities $14,078 $33,454
Accounts receivable, net 3,858 6,172
Inventories 6,011 10,743
Goodwill, net 16,081 13,811
Purchased intangible assets, net 10,426 14,681
Long-term investments 5,458 6,761
Total assets 69,651 103,812
Accumulated deficit (131,037) (92,875)
Total stockholders' equity 47,104 82,157
SELECTED UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS DATA
(In thousands, except per share data)
Three Months Ended For the Year Ended
June 30, June 30,
2003 2002 2003 2002
--------- ------ ------- ------
Net revenues $11,808 $11,509 $49,509 $57,646
Cost of revenues 8,700 15,059 33,953 40,510
Gross profit 3,108 (3,550) 15,556 17,136
Operating expenses:
Selling, general and
administrative 6,783 19,009 30,633 43,487
Research and development 2,330 2,952 10,413 9,225
Stock-based compensation 183 203 2,527 2,863
Amortization of purchased
intangible assets 230 (125) 1,087 1,263
Impairment of goodwill and
purchased intangible assets 886 50,828 886 50,828
Restructure charges 662 663 5,711 3,473
Litigation settlement costs 1,533 -- 1,533 --
In-process research and
development -- 1,000 -- 1,000
Total operating expenses 12,607 74,530 52,790 112,139
Loss from operations (9,499) (78,080) (37,234) (95,003)
Interest income (expense), net (39) 242 248 1,546
Other income (expense), net 9 229 (926) (760)
Loss before income taxes and
cumulative effect of accounting
change (9,529) (77,609) (37,912) (94,217)
Provision (benefit) for income
taxes 188 (2,982) 250 (6,665)
Loss before cumulative effect of
accounting change (9,717) (74,627) (38,162) (87,552)
Cumulative effect of accounting
change:
Adoption of new accounting
standard, SFAS No. 142 -- -- -- (5,905)
Net loss $(9,717) $(74,627) $(38,162) $(93,457)
Basic and diluted loss per share
before cumulative effect of
accounting change $(0.18) $(1.39) $(0.70) $(1.70)
Cumulative effect of accounting
changes per share:
Adoption of new accounting
standard, SFAS No. 142 -- -- -- (0.12)
Basic and diluted net loss per
share $(0.18) $(1.39) $(0.70) $(1.82)
Weighted average shares (basic and
diluted) 55,328 53,681 54,523 51,403