For Immediate Release
LANTRONIX, INC. REPORTS FISCAL 2004 SECOND QUARTER RESULTS
COMPANY RECORDS SECOND CONSECUTIVE QUARTER OF REVENUE GROWTH AND REDUCED CASH
USAGE; SALES OF XPORT REACH 5% OF REVENUES, ONE QUARTER AHEAD OF EXPECTATIONS
IRVINE, CA, FEBRUARY 5, 2004 - Irvine, CA - Lantronix, Inc. (NASDAQ: LTRX)
today reported results for its second fiscal quarter ended December 31, 2003:
Revenues for the second fiscal quarter ended December 31, 2003 were $12.5
million, an improvement from the prior quarter when the company reported $12.2
million in revenue.
Net loss was reduced to $(5.3) million, or $(0.09) per share for the second
fiscal quarter 2004, compared with net loss of $(7.1) million, or $(0.13) per
share for the same quarter in fiscal 2003.
Cash and cash equivalents and marketable securities decreased approximately
$214,000 during the quarter, in line with the company's earlier guidance and
representing a reduction from the prior quarter's cash usage of $611,000.
For the second fiscal quarter ended December 31, 2003, the company reported
revenues of $12.5 million and net loss of $(5.3) million, or $(0.09) per share,
compared with revenues of $12.7million and net loss of $(7.1) million, or
$(0.13) per share for the second fiscal quarter ended December 31, 2002 and
revenues of $12.2 million and net loss of $(3.0) million, or $(0.05) per share
for the quarter ended September 30, 2003.
Results for the second fiscal quarter 2004 were impacted by a non-cash
impairment charge of $3.0 million related certain goodwill and purchased
intangible assets of Premise Systems, Inc., which was acquired by the company
during fiscal year 2002. The impairment expense included approximately $0.8
million charged to cost of sales and $2.2 million charged to operating expenses.
The net loss of $(5.3) million for the quarter included the impairment charge of
$3.0 million.
Cash and cash equivalents and marketable securities decreased approximately
$214,000 during the quarter ended December 31, 2003, compared with a decrease of
$4.3 million for the same period a year earlier, and compared with a decrease of
$611,000 in the quarter ended September 30, 2003.
"We have made substantial progress over the past year in both financial
performance and company positioning. Although our increase in revenue from the
prior quarter was modest, results for the December quarter represent our second
consecutive period of revenue growth and reinforce our belief that the core
Device Networking and IT Management product lines are beginning to experience
increased demand," stated Marc Nussbaum, president and CEO.
"Sales in our core businesses of IT Management and Device Networking were
up 6.7% from the prior quarter. Sales of the company's flagship embedded XPort
family reached 5% of sales for the second fiscal quarter ended December 31,
2003, one quarter ahead of earlier guidance."
(a) FISCAL 2004 OUTLOOK
The following statements are forward-looking and are based on current
expectations. Statements about future revenues, product successes or sales, or
cash usage are subject to variations in any specific period. Actual results may
differ materially from those described below. The company undertakes no
obligation to update this release.
"During the third quarter, we look forward to continued improvement in our
core business and operational fundamentals with cash usage in the range of $1
million," said Nussbaum.
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 products 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.
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This release may be deemed to contain forward-looking statements, which are
subject to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements include, among other
things, statements regarding future events and the future financial performance
of the Company that involve risks and uncertainties. Readers are cautioned that
these forward-looking statements are only predictions and may differ materially
from actual future events or results. Readers are urged to read the documents
filed by the Company with the SEC, which identify risk factors that could cause
actual results to differ materially from the forward-looking statements.
Among the important factors or risks that could cause actual results or events
to differ materially from those in the forward-looking statements in this
release are: business and economic conditions and growth trends in our industry
and target markets, as well as the geographic regions we serve; variations in
customer demand for products and services; changes in customer order patterns or
customer mix; insufficient, excess or obsolete inventory; litigation involving
patents, intellectual property, antitrust, stockholder and other matters,
including the cost of pending litigation; and other factors. For example, our
future cash usage could be substantially different from our projects if our
operating costs or demand for our products varied from our projections.
The financial information contained in this release should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's most recent reports on Form 10-K and Form 10-Q, each
as it may be amended from time to time. The Company's current results of
operations are not necessarily indicative of its operating results for any
future periods. Although any projections included in this release and the
factors influencing them will likely change, the Company undertakes no
obligation to update the information. Such information speaks only as of the
date of this release.
# # #
Lantronix is a registered trademark of Lantronix, Inc. All other trademarks are
properties of their respective owners.
Media Contacts: Jim Kerrigan, CFO Lantronix 949-453-3990
SELECTED CONSOLIDATED BALANCE SHEET DATA
(IN THOUSANDS)
DECEMBER 31, JUNE 30,
2003 2003
(UNAUDITED)
Cash and cash equivalents and marketable securities $ 10,253 $ 14,078
Accounts receivable, net. . . . . . . . . . . . . . 3,000 3,858
Inventories . . . . . . . . . . . . . . . . . . . . 5,698 6,011
Goodwill, net . . . . . . . . . . . . . . . . . . . 9,488 11,726
Purchased intangible assets, net. . . . . . . . . . 3,122 5,394
Long-term investments . . . . . . . . . . . . . . . 5,045 5,458
Total assets. . . . . . . . . . . . . . . . . . . . 53,576 62,856
Accumulated deficit . . . . . . . . . . . . . . . . (148,728) (140,424)
Total stockholders' equity. . . . . . . . . . . . . 31,501 37,717
SELECTED UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
2003 2002 2003 2002
-------- -------- -------- ---------
Net revenues . . . . . . . . . . . . . . . . . . . . . . . . $12,532 $12,658 $24,762 $ 25,339
Cost of revenues . . . . . . . . . . . . . . . . . . . . . . 7,695 7,687 13,807 15,883
-------- -------- -------- ---------
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . 4,837 4,971 10,955 9,456
-------- -------- -------- ---------
Operating expenses:
Selling, general and administrative . . . . . . . . . . 5,540 8,208 12,245 16,079
Research and development. . . . . . . . . . . . . . . . 1,990 3,117 3,974 5,547
Stock-based compensation. . . . . . . . . . . . . . . . 63 335 218 780
Amortization of purchased intangible assets . . . . . . 145 228 289 456
Impairment of goodwill and purchased intangible assets. 2,252 2,252
Restructure charges . . . . . . . . . . . . . . . . . . - - 4,929
-------- -------- -------- ---------
Total operating expenses . . . . . . . . . . . . . . . . . . 9,990 11,888 18,978 27,791
-------- -------- -------- ---------
Loss from operations . . . . . . . . . . . . . . . . . . . . (5,153) (6,917) (8,023) (18,335)
Interest income (expense), net . . . . . . . . . . . . . . . 11 75 35 267
Other income (expense), net. . . . . . . . . . . . . . . . . (10) (318) (180) (408)
-------- -------- -------- ---------
Loss before income taxes . . . . . . . . . . . . . . . . . . (5,152) (7,160) (8,168) (18,476)
Provision (benefit) for income taxes . . . . . . . . . . . . 103 (38) 136 48
-------- -------- -------- ---------
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . $(5,255) $(7,122) $(8,304) $(18,524)
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Basic and diluted net loss per share . . . . . . . . . . . . $ (0.09) $ (0.13) $ (0.15) $ (0.34)
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Weighted average shares (basic and diluted). . . . . . . . . 57,098 53,947 55,693 53,932
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