Lantronix Inc. Files Q1 Fiscal 2025 10-Q

TL;DR

Lantronix 10-Q filed for Q1 FY25. Financials updated.

AI Summary

Lantronix Inc. filed its 10-Q for the period ending September 30, 2024. The company reported financial results for the first quarter of its fiscal year 2025. Key financial data and operational details for this period are presented in the filing.

Why It Matters

This filing provides investors with an update on Lantronix's financial performance and operational status for the most recent quarter, crucial for investment decisions.

Risk Assessment

Risk Level: medium — 10-Q filings are standard for public companies, but the specific financial performance and disclosures within this report could indicate varying levels of risk.

Key Numbers

• Q1 2025 — Fiscal Quarter (Reporting period for the 10-Q)
• September 30, 2024 — End of Reporting Period (The date through which financial information is reported)
• June 30, 2025 — Fiscal Year End (The end date of the company's current fiscal year)

Key Players & Entities

• LANTRONIX INC (company) — Filer
• 0001683168-24-007780 (other) — Accession Number
• 20240930 (date) — Period of Report
• 20241108 (date) — Filing Date
• 0001114925 (company) — Central Index Key
• 3576 (other) — Standard Industrial Classification Code
• DE (other) — State of Incorporation
• 0630 (date) — Fiscal Year End
• 48 DISCOVERY, SUITE 250 (address) — Business Address
• IRVINE (location) — City

FAQ

Key Financial Figures

• $0.0001 — nge on which registered Common Stock, $0.0001 par value LTRX The Nasdaq Stock Marke

Filing Documents

• lantronix_i10q-093024.htm (10-Q) — 711KB
• lantronix_ex3101.htm (EX-31.1) — 10KB
• lantronix_ex3102.htm (EX-31.2) — 11KB
• lantronix_ex3201.htm (EX-32.1) — 7KB
• logo.jpg (GRAPHIC) — 4KB
• 0001683168-24-007780.txt ( ) — 3893KB
• ltrx-20240930.xsd (EX-101.SCH) — 28KB
• ltrx-20240930_cal.xml (EX-101.CAL) — 53KB
• ltrx-20240930_def.xml (EX-101.DEF) — 93KB
• ltrx-20240930_lab.xml (EX-101.LAB) — 277KB
• ltrx-20240930_pre.xml (EX-101.PRE) — 235KB
• lantronix_i10q-093024_htm.xml (XML) — 459KB

Financial Statements

Financial Statements 4 Unaudited Condensed Consolidated Balance Sheets at September 30, 2024 and June 30, 2024 4 Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended September 30, 2024 and 2023 5 Unaudited Condensed Consolidated Statements of Stockholders' Equity for the Three Months Ended September 30, 2024 and 2023 6 Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2024 and 2023 7 Notes to Unaudited Condensed Consolidated Financial Statements 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 21 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 28 Item 4.

Controls and Procedures

Controls and Procedures 28 PART II. OTHER INFORMATION 30 Item 1.

Legal Proceedings

Legal Proceedings 30 Item 1A.

Risk Factors

Risk Factors 30 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 46 Item 3. Defaults Upon Senior Securities 46 Item 4. Mine Safety Disclosures 46 Item 5. Other Information 46 Item 6. Exhibits 46 2 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q for the three months ended September 30, 2024 (the "Report") contains forward-looking statements within the meaning of the federal securities laws, which statements are subject to substantial risks and uncertainties. These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this Report, or incorporated by reference into this Report, are forward-looking statements. Throughout this Report, we have attempted to identify forward-looking statements by using words such as "may," "believe," "will," "could," "project," "anticipate," "expect," "estimate," "should," "continue," "potential," "plan," "forecasts," "goal," "seek," "intend," other forms of these words or similar words or expressions or the negative thereof. Additionally, statements concerning future matters such as our expected earnings, revenues, expenses and financial condition, our expectations with respect to the development of new products and other statements regarding matters that are not historical are forward-looking statements. We have based our forward-looking statements on management's current expectations and projections about trends affecting our business and industry and other future events. Although we do not make forward-looking

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements LANTRONIX, INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) September 30, June 30, 2024 2024 Assets Current assets: Cash and cash equivalents $ 26,395 $ 26,237 Accounts receivable, net 30,801 31,279 Inventories, net 29,533 27,698 Contract manufacturers' receivables 2,722 1,401 Prepaid expenses and other current assets 3,169 2,335 Total current assets 92,620 88,950 Property and equipment, net 3,642 4,016 Goodwill 27,824 27,824 Intangible assets, net 4,000 5,251 Lease right-of-use assets 9,165 9,567 Other assets 607 600 Total assets $ 137,858 $ 136,208 Liabilities and stockholders' equity Current liabilities: Accounts payable $ 17,149 $ 10,347 Accrued payroll and related expenses 3,440 5,836 Current portion of long-term debt, net 3,057 3,002 Other current liabilities 11,859 10,971 Total current liabilities 35,505 30,156 Long-term debt, net 12,409 13,219 Other non-current liabilities 11,014 11,478 Total liabilities 58,928 54,853 Commitments and contingencies (Note 8) - Stockholders' equity: Common stock 4 4 Additional paid-in capital 304,078 304,001 Accumulated deficit ( 225,523 ) ( 223,021 ) Accumulated other comprehensive income 371 371 Total stockholders' equity 78,930 81,355 Total liabilities and stockholders' equity $ 137,858 $ 136,208 See accompanying notes to unaudited condensed consolidated

financial statements

financial statements. 4 LANTRONIX, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Three Months Ended September 30, 2024 2023 Net revenue $ 34,423 $ 33,031 Cost of revenue 19,948 18,934 Gross profit 14,475 14,097 Operating expenses: Selling, general and administrative 9,496 9,170 Research and development 4,956 5,106 Restructuring, severance and related charges 900 20 Fair value remeasurement of earnout consideration – ( 9 ) Amortization of intangible assets 1,251 1,384 Total operating expenses 16,603 15,671 Loss from operations ( 2,128 ) ( 1,574 ) Interest expense, net ( 119 ) ( 338 ) Other income (expense), net ( 37 ) 19 Loss before income taxes ( 2,284 ) ( 1,893 ) Provision (benefit) for income taxes 218 ( 7 ) Net loss $ ( 2,502 ) $ ( 1,886 ) Net loss per share - basic and diluted $ ( 0.07 ) $ ( 0.05 ) Weighted-average common shares - basic and diluted 38,024 36,982 See accompanying notes to unaudited condensed consolidated

financial statements

financial statements. 5 LANTRONIX, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (In thousands) Three Months Ended September 30, 2024 Accumulated Additional Other Total Common Stock Paid-In Accumulated Comprehensive Stockholders' Shares Amount Capital Deficit Income Equity Balance at June 30, 2024 37,872 $ 4 $ 304,001 $ ( 223,021 ) $ 371 $ 81,355 Shares issued pursuant to stock awards, net 602 – 19 – – 19 Tax withholding paid on behalf of employees for restricted shares – – ( 1,542 ) – – ( 1,542 ) Share-based compensation – – 1,600 – – 1,600 Net loss – – – ( 2,502 ) – ( 2,502 ) Balance at September 30, 2024 38,474 $ 4 $ 304,078 $ ( 225,523 ) $ 371 $ 78,930 Three Months Ended September 30, 2023 Accumulated Additional Other Total Common Stock Paid-In Accumulated Comprehensive Stockholders' Shares Amount Capital Deficit Income Equity Balance at June 30, 2023 36,875 $ 4 $ 295,686 $ ( 218,505 ) $ 371 $ 77,556 Shares issued pursuant to stock awards, net 385 – 93 – – 93 Tax withholding paid on behalf of employees for restricted shares – – ( 514 ) – – ( 514 ) Share-based compensation – – 1,742 – – 1,742 Net loss – – – ( 1,886 ) – ( 1,886 ) Balance at September 30, 2023 37,260 $ 4 $ 297,007 $ ( 220,391 ) $ 371 $ 76,991 See accompanying notes to unaudited condensed consolidated

financial statements

financial statements. 6 LANTRONIX, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Three Months Ended September 30, 2024 2023 Operating activities Net loss $ ( 2,502 ) $ ( 1,886 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Share-based compensation 1,600 1,742 Depreciation and amortization 543 528 Amortization of intangible assets 1,251 1,384 Amortization of manufacturing profit in acquired inventory associated with acquisitions – 317 Amortization of deferred debt issuance costs 24 27 Fair value remeasurement of earnout consideration – ( 9 ) Changes in operating assets and liabilities, net of assets and liabilities acquired: Accounts receivable 478 ( 2,423 ) Inventories ( 1,835 ) 3,623 Contract manufacturers' receivable ( 1,321 ) 2,389 Prepaid expenses and other current assets ( 834 ) ( 233 ) Lease right-of-use assets 481 481 Other assets ( 7 ) 11 Accounts payable 6,790 ( 3,591 ) Accrued payroll and related expenses ( 2,396 ) 108 Other liabilities 391 5,030 Net cash provided by operating activities 2,663 7,498 Investing activities Purchases of property and equipment ( 157 ) ( 486 ) Net cash used in investing activities ( 157 ) ( 486 ) Financing activities Net proceeds from issuances of common stock 19 93 Tax withholding paid on behalf of employees for restricted shares ( 1,542 ) ( 514 ) Payment of borrowings on term loan ( 779 ) ( 518 ) Payment of lease liabilities ( 46 ) ( 46 ) Net cash used in financing activities ( 2,348 ) ( 985 ) Increase in cash and cash equivalents 158 6,027 Cash and cash equivalents at beginning of period 26,237 13,452 Cash and cash equivalents at end of period $ 26,395 $ 19,479 See accompanying notes to unaudited condensed consolidated

financial statements

financial statements. 7 LANTRONIX, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL September 30, 2024 1. Company and Significant Accounting Policies Company Lantronix, Inc., which we refer to herein as the Company, Lantronix, we, our, or us, is a global leader in compute and connectivity solutions, targeting high-growth industries such as Smart Cities, Automotive, and Enterprise markets. Our products and services empower companies to capitalize on the expanding internet of things ("IoT") market by delivering customizable solutions that address each layer of the IoT stack. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of Lantronix have been prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP") for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Securities and Exchange Commission ("SEC") Regulation S-X. Accordingly, they should be read in conjunction with the audited consolidated financial statements and notes thereto for the fiscal year ended June 30, 2024, included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024, which was filed with the SEC on September 9, 2024. The unaudited condensed consolidated financial statements contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the consolidated financial position of Lantronix at September 30, 2024, the consolidated results of our operations for the three months ended September 30, 2024 and our consolidated cash flows for the three months ended September 30, 2024. All intercompany accounts and transactions have been eliminated. Significant Accounting Policies Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amoun

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