Lantronix(US:LTRX)2022-05-05 20:40Revenue Growth - For the three months ended March 31, 2022, net revenue increased by $15,216,000 or 88.9% compared to the same period in 2021, driven by a 109.3% increase in IoT product line revenue and a 9.3% increase in REM product line revenue [127]. - IoT product line revenue for the three months ended March 31, 2022 was $28,587,000, accounting for 88.4% of total net revenue, with a significant contribution from the acquisition of the TN Companies, which represented approximately 30% of total net revenues [128][129]. - REM product line revenue for the three months ended March 31, 2022 was $3,614,000, representing 11.2% of total net revenue, primarily due to increased unit sales of the SLS product family in the Americas [128][130]. - Net revenue for the nine months ended March 31, 2022 was $93,710,000, an 84.3% increase from $50,839,000 in the same period of 2021, driven by a 91.8% increase in IoT product line revenue [138]. - Net revenue from the IoT product line for the nine months ended March 31, 2022 was $41,683,000, contributing 85.3% to total net revenue, with a 91.8% increase from the previous year [139]. - The Americas region accounted for $58,748,000 or 62.7% of total net revenue for the nine months ended March 31, 2022, reflecting a 113.1% increase from $27,567,000 in 2021 [139]. Loss and Expenses - The company reported a net loss of $3,190,000 for the three months ended March 31, 2022, compared to a net loss of $1,187,000 for the same period in 2021, primarily due to increased costs related to the acquisition of the TN Companies [127]. - The net loss for the nine months ended March 31, 2022 was $7,868,000, compared to a net loss of $2,948,000 for the same period in 2021, primarily due to acquisition-related costs [138]. - Selling, general and administrative expenses for the three months ended March 31, 2022 increased to $8,326,000, a 66.7% increase from $4,995,000 in 2021, representing 25.8% of net revenue compared to 29.2% in 2021 [135]. - Selling, general and administrative expenses for the nine months ended March 31, 2022 totaled $25,167,000, a 70.7% increase from $14,747,000 in 2021, representing 26.9% of net revenue [144]. - Research and development expenses for the three months ended March 31, 2022 were $4,483,000, a 78.0% increase from $2,519,000 in 2021, accounting for 13.9% of net revenue [137]. - Research and development expenses for the nine months ended March 31, 2022, increased by $5,294,000, or 70.2%, compared to the same period in 2021, totaling $7,540,000 [145]. - The company incurred approximately $760,000 in restructuring, severance, and related charges during the nine months ended March 31, 2022, primarily due to headcount reductions and restructuring efforts [146]. - Acquisition-related costs amounted to approximately $763,000 during the nine months ended March 31, 2022, mainly for banking, legal, and professional fees associated with the TN Companies acquisition [148]. Cash Flow and Financing - The company raised approximately $32,600,000 in net proceeds from an underwritten offering of 4,700,000 shares at an initial price of $7.50 per share [120]. - Net cash provided by financing activities was $43,876,000 for the nine months ended March 31, 2022, driven by net proceeds from a public offering of $32,600,000 and $29,500,000 from credit facilities [169]. - Cash used in operating activities increased by $8,650,000, resulting in a net cash outflow of $6,066,000 for the nine months ended March 31, 2022 [163]. - Cash and cash equivalents increased by $13,043,000, totaling $22,782,000 as of March 31, 2022, compared to $9,739,000 on June 30, 2021 [154]. Inventory and Receivables - Net inventories increased by $18,107,000, or 120.2%, from June 30, 2021, to March 31, 2022, with $7,830,000 attributed to the TN Companies acquisition [165]. - Accounts receivable rose by $9,674,000, or 71.6%, from June 30, 2021, to March 31, 2022, with $5,156,000 from the TN Companies acquisition [166]. Operational Challenges - The company continues to face supply chain challenges, including increased costs of components and logistics, which have led to delays in shipments to some customers [123]. - The company is adjusting its go-to-market strategy by adding more distributors and value-added resellers to mitigate potential revenue declines due to the ongoing COVID-19 pandemic [122]. Gross Profit and Margin - Gross profit for the three months ended March 31, 2022 was $13,616,000, a 76.4% increase from $7,718,000 in the same period of 2021, with a gross margin decrease from 45.1% to 42.1% due to higher supply chain costs [133]. - Gross profit for the nine months ended March 31, 2022 was $40,519,000, a 76.5% increase from $22,953,000 in 2021, with a gross margin decrease from 45.1% to 43.2% [143]. SaaS Platform - The company’s SaaS platform enables single pane of glass management for IoT and REM deployments, facilitating easy deployment, monitoring, and management across global operations [112][114].