Lantronix Reports Fiscal 2016 First Quarter Financial Results

IRVINE, CA--(Marketwired - Oct 29, 2015) - Lantronix, Inc. (the "Company") (NASDAQ: LTRX^[1]) a specialized networking company providing smart IoT and M2M solutions, today reported results for its first fiscal quarter ended September 30, 2015.

Quarterly Financial Highlights

• Net revenue of $10.6 million
• Gross profit margin of 47.9%
• GAAP net loss of $331,000 or $0.02 per share
• Non-GAAP net income of $124,000 or $0.01 per share
• Cash and cash equivalents of $4.7 million

"We were pleased to achieve sequential topline growth and a return to non-GAAP profitability during the first fiscal quarter," said Kurt Busch, Lantronix president and CEO. "New Products continued to make significant revenue contribution during the quarter, in particular our xPico Wi-Fi IoT module and SLC 8000 advanced console server."

Busch continued: "Year-over-year results continue to be impacted by declining sales of Legacy Products. At the same time, with a pipeline of New Product opportunities and design wins, new platforms and solutions expected to launch over the next several quarters, and an expanding sales channel, we remain confident that our strategy will yield double-digit New Product revenue growth in fiscal 2016."

Operational and Product Highlights for the First Quarter of Fiscal 2016:

• Lantronix SLC™ 8000 Advanced Console Server was selected by a new Tier One customer deploying a networking lab automation and test solution. The SLC 8000 was chosen because it is the first and only modular advanced console server supporting both USB and RS232 (RJ45) device modules and is designed to provide scalable, highly secure next-generation data center and IT infrastructure management capabilities.
• Completed delivery of the first significant production order for a consumer drone application using the xPico® Wi-Fi IoT Module. The xPico Wi-Fi is ideally suited to enable the Internet of Things in a wide range of verticals such as environmental monitoring, entertainment, security, and other industrial and consumer applications.
• Expanded the available market for the SLC 8000 by obtaining FIPS 140-2 Level 1 certification. FIPS 140-2 is a security standard for IT systems that is mandatory for many U.S. and Canadian government and military applications and also is increasingly becoming a requirement for financial services and healthcare applications.
• Launched the next generation xPrintServer® Office edition, the only print server appliance that supports thousands of printer models and is both Apple AirPrint and Google Cloud Print certified. In July 2015, the Apple Online store began carrying the newest xPrintServer Office edition.
• Yesterday, the Company announced the signing of a distribution agreement with Avnet, Inc. (NYSE: AVT^[2]) -- 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.

Financial Results for First Quarter of Fiscal Year 2016

Net revenue was $10.6 million for the first quarter of fiscal 2016, a decrease of $963,000, compared with $11.5 million for the first quarter of fiscal 2015, and an increase of $342,000 compared with the fourth quarter of fiscal 2015.

Gross profit margin was 47.9% for the first quarter of fiscal 2016, compared to 48.5% for the first quarter of fiscal 2015, and 47.1% for the fourth quarter of fiscal 2015.

Operating expenses were $5.4 million for the first quarter of fiscal 2016, compared with $5.8 million for the first quarter of fiscal 2015 and the fourth quarter of fiscal 2015.

GAAP net loss for the first quarter of fiscal 2016 was $331,000, or $0.02 per share, compared with GAAP net loss of $262,000, or $0.02 per share for the first quarter of fiscal 2015 and GAAP net loss of $1.0 million, or $0.07 per share for the fourth quarter of fiscal 2015.

Non-GAAP net income for the first quarter of fiscal 2016 was $124,000, or $0.01 per share, compared with non-GAAP net income of $264,000, or $0.02 per share for the first quarter of fiscal 2015 and non-GAAP net loss of $575,000, or $0.04 per share for the fourth 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 $4.7 million as of September 30, 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 fiscal 2015 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 First Quarter FY 2016 call. The webcast will be available simultaneously via the investor relations section of the Company's website at www.lantronix.com^[3].

Investors can access a replay of the conference call starting at approximately 5:00 p.m. Pacific Time today at www.lantronix.com^[4]. A telephonic replay will also be available through November 5, 2015 by dialing 1-877-344-7529 (US) or 1-412-317-0088 (international) and entering passcode 10074744.

Upcoming Events

Lantronix management will present an overview of the Company's business and technologies at the following investor conferences:

• The Microcap Conference at the Philadelphia Marriott Downtown on Thursday, November 5, 2015
• SeeThruEquity Fall Microcap Conference at the Convene Grand Central on Thursday, November 12, 2015.

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