Lantronix(US:LTRX)2024-11-08 12:44Revenue Performance - For the three months ended September 30, 2024, net revenue increased by $1,392,000 or 4.2% compared to the same period in 2023, driven by a 17.7% increase in the Embedded IoT Solutions product line [98]. - Embedded IoT Solutions generated $13,387,000 in revenue, accounting for 38.9% of total net revenue, while IoT System Solutions and Software & Services generated $18,759,000 (54.5%) and $2,277,000 (6.6%) respectively [100]. - The Americas region saw a significant revenue decline of $5,513,000 or 24.0%, while EMEA and APJ regions experienced increases of 59.1% and 85.9% respectively [101]. Profitability and Expenses - Gross profit for the three months ended September 30, 2024, was $14,475,000, representing a gross margin of 42.1%, slightly down from 42.7% in the prior year [106]. - Selling, general and administrative expenses increased to $9,496,000, a rise of $326,000 or 3.6%, primarily due to higher personnel-related costs [108]. - Research and development expenses totaled $4,956,000, accounting for 14.4% of net revenue, a decrease of $150,000 or 2.9% compared to the previous year [111]. - Restructuring and severance charges amounted to $900,000 for the three months ended September 30, 2024, a significant increase from $20,000 in the same period of 2023 [112]. - The company reported a net loss of $2,502,000 for the three months ended September 30, 2024, compared to a net loss of $1,886,000 in the prior year [98]. - Operating expenses increased by $932,000, primarily due to restructuring and severance charges, partially offset by revenue growth [98]. Cash Flow and Working Capital - Working capital decreased by $1,679,000 from June 30, 2024, to September 30, 2024, totaling $57,115,000 [117]. - Cash and cash equivalents increased by $158,000, reaching $26,395,000 as of September 30, 2024 [117]. - Net cash provided by operating activities decreased by $4,835,000, totaling $2,663,000 for the three months ended September 30, 2024 [126]. - Net inventories increased by $1,835,000, or 6.6%, from June 30, 2024, to September 30, 2024 [125]. - Accounts payable increased by $6,802,000, or 65.7%, from June 30, 2024, to September 30, 2024 [125]. - Contract manufacturers' receivables increased by $1,321,000, or 94.3%, from June 30, 2024, to September 30, 2024 [128]. - Net cash used in investing activities was $157,000 for the three months ended September 30, 2024, compared to $486,000 in the prior year [129]. - Net cash used in financing activities increased by $1,363,000, totaling $2,348,000 for the three months ended September 30, 2024 [126]. - The company anticipates that primary factors affecting cash and liquidity include net revenue, working capital requirements, and capital expenditures [121]. - The company is in compliance with all covenants of the Loan Agreement as of the date of the report [119]. Strategic Focus - The company continues to focus on high-growth industries such as Smart Cities, Automotive, and Enterprise markets, leveraging its IoT solutions to capitalize on market opportunities [88].