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 changes in U.S.trade policy, including recently increased or future tariffs, a pandemic or similar outbreak, 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; the impact of a pandemic or similar outbreak on our business, employees, customers, supply and distribution chains and the global economy; our ability to successfully implement our acquisition 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; our use of AI may result in reputational, competitive or financial harm and liability; 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, 2024, filed with the Securities and Exchange Commission (the "SEC”) on Sept.9, 2024, 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, 2025, expected to be filed with the SEC on or about May 9, 2025 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.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands) March 31, June 30, 2025 2024Assets Current assets: Cash and cash equivalents$19,999 $26,237 Accounts receivable, net 23,648 31,279 Inventories, net 28,151 27,698 Contract manufacturers' receivables 1,637 1,401 Prepaid expenses and other current assets 3,029 2,335 Total current assets 76,464 88,950 Property and equipment, net 2,768 4,016 Goodwill 31,089 27,824 Intangible assets, net 4,310 5,251 Lease right-of-use assets 8,974 9,567 Other assets 584 600 Total assets$124,189 $136,208 Liabilities and stockholders' equity Current liabilities: Accounts payable$11,005 $10,347 Accrued payroll and related expenses 3,905 5,836 Current portion of long-term debt, net 3,063 3,002 Other current liabilities 10,594 10,971 Total current liabilities 28,567 30,156 Long-term debt, net 9,458 13,219 Other non-current liabilities 10,694 11,478 Total liabilities 48,719 54,853 Commitments and contingencies Stockholders' equity: Common stock 4 4 Additional paid-in capital 306,858 304,001 Accumulated deficit (231,763) (223,021)Accumulated other comprehensive income 371 371 Total stockholders' equity 75,470 81,355 Total liabilities and stockholders' equity$124,189 $136,208 LANTRONIX, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share data) Three Months Ended Nine Months Ended March 31, December 31, March 31, March 31, 2025 2024 2024 2025 2024Net revenue$28,500 $31,161 $41,183 $94,084 $111,252 Cost of revenue 16,097 17,877 24,679 53,922 65,620 Gross profit 12,403 13,284 16,504 40,162 45,632 Operating expenses: Selling, general and administrative 8,959 8,811 9,753 27,237 29,147 Research and development 4,463 4,984 5,186 14,403 15,017 Restructuring, severance and related charges 1,581 193 350 2,674 900 Acquisition-related costs 100 208 - 337 - Fair value remeasurement of earnout consideration - - - - (9)Amortization of intangible assets 879 1,248 1,310 3,378 4,004 Total operating expenses 15,982 15,444 16,599 48,029 49,059 Loss from operations (3,579) (2,160) (95) (7,867) (3,427)Interest expense, net (159) (126) (171) (404) (741)Other income (loss), net (19) 8 2 (48) (2)Loss before income taxes (3,757) (2,278) (264) (8,319) (4,170)Provision for income taxes 111 94 159 423 732 Net loss$(3,868) $(2,372) $(423) $(8,742) $(4,902)Net loss per share - basic and diluted$(0.10) $(0.06) $(0.01) $(0.23) $(0.13)Weighted-average common shares - basic and diluted 38,820 38,631 37,509 38,493 37,283 LANTRONIX, INC.
Non-GAAP net loss 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.
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