6/26/2002 - Lantronix, Inc. (Nasdaq: LTRXE) announced that it has filed its Form 10-Q for the fiscal third quarter ended March 31, 2002 with the U.S. Securities and Exchange Commission ("SEC"), restoring the company's compliance with its SEC filing obligations. In addition, the company has filed with the SEC annual and quarterly reports containing restated consolidated financial statements for the fiscal year ended June 30, 2001 and the first six months of fiscal 2002 (for the fiscal quarters ended September 30, 2001 and December 31, 2001). Copies of the Form 10-Q for the quarter ended March 31, 2002 and the restated results will be available via the company's web site at www.lantronix.com
For the third fiscal quarter ended March 31, 2002, Lantronix reported net revenues of $14.6 million and net loss of $(8.7) million, or $(0.16) per share. For the same restated period last year, the company recorded net revenues of $12.5 million and net loss of $(851,000), or $(0.02) per share. The company attributed the slowdown in revenue growth in the third quarter to continued slowness in the networking market. Results for the quarter also included a $2.8 million restructuring charge and a $2.3 million write-down of inventory and increased bad debt provisions and other accrual adjustments. After giving effect to all adjustments, for the latest nine-month period, the company recorded net revenues of $46.1 million and net loss of $(12.9) million, or $(0.25) per share, compared with restated net revenues of $36.2 million and net loss of $(2.0) million, or $(0.06) per share for the same period last year.
"As experienced by most technology companies, our results reflect continued softness in the economy," said Marc Nussbaum, interim chief executive officer of Lantronix. "Moving forward, our objectives are to complete integration and simplification of our business model, re-energize our sales activity and implement the necessary operational disciplines and processes that will allow us to leverage the strength of our leading-edge technology with emerging opportunities in the systems, remote and enabling device networking markets."
Restatement of Financial Statements
In May 2002, following the termination of the company's previous chief financial officer/chief operating officer, the Lantronix Board of Directors initiated an investigation into the company's accounting and management practices. The voluntary internal review revealed that beginning in the third and fourth quarters of FY 2001, certain sales made to distributors in FY 2001 and FY 2002 did not qualify for revenue recognition upon shipment due to special terms negotiated with certain distributors that were outside of customary terms in the respective distributor agreements. As a result, Lantronix restated its fiscal year 2001 financial statements to adopt a new revenue recognition policy for distributor sales that recognizes revenue and related gross profit only when the distributor resells the products from its inventories to end-users, effective from July 1, 2000, one fiscal year earlier than previously reported.
In addition, the review found that terms and circumstances of certain sales made in the first six months of FY 2002 to customers who were not distributors also preclude revenue being recognized upon shipment.
For fiscal year 2001, the company reported restated loss before cumulative effect of accounting charges was $(7.2) million, or $(0.19) per share, on net revenues of $49.0 million versus the previously reported net loss of $(4.4) million, or $(0.12) per share on net revenues of $55.2 million. The cumulative effect of the accounting change recorded as of July 1, 2000, was a charge of $597,000 (net of income tax benefit of $176,000), or $(0.02) per share. For fiscal year 2000, the company reported net income of $1.1 million, or $0.03 per diluted share, on revenues of $45.0 million. For the first fiscal quarter ended September 30, 2001, Lantronix recorded restated net loss of $(2.3) million, or $(0.05) per share, on net revenues of $15.8 million versus the previously reported net loss of $(4.7) million, or $(0.10) per share on net revenues of $16.3 million. For the three-month period ended December 31, 2001, the company's restated net loss was $(1.9) million, or $(0.04) per share, on net revenues of $15.7 million versus the previously reported net loss of $(1.2) million, or $(0.02) per share on net revenues of $16.4 million.
For the six months ended December 31, 2001, the company's net loss was $(4.2) million, or $(0.09) per share, on net revenues of $31.6 million versus the previously reported net loss of $(5.9) million, or $(0.12) per share, on net revenues of $32.7 million. For the same period in fiscal year 2001, the company reported restated net loss of $(1.2) million, or $(0.04) per share, and revenues of $23.7 million.
Under the leadership of new management, the company is actively working to strengthen its policies, procedures, personnel, controls and internal communications in response to the circumstances that led to the restatement.
Fourth Quarter Business Outlook
The following statements are forward-looking and are based on current expectations. Actual results may differ materially as a result of the factors referenced below.
Based on current trends, for the fourth fiscal quarter ending June 30, 2002, the company anticipates that revenues could be 10 to 15 percent lower than in the third fiscal quarter. Due to added costs associated with the internal review and potential writedown of goodwill and other intangible assets, earnings may also be lower than expected.
"At this time we are finalizing our annual operating plan for fiscal 2003. Our financial objectives for the upcoming fiscal year are strong management of our cash position, restoration of profitability and execution of a strategic operations and marketing plan that can maximize the improved market opportunities we expect starting in calendar year 2003," said Nussbaum.
Lantronix will conduct an investor conference call to discuss its third fiscal 2002 quarter and amended results at 7:30 AM Pacific Time/10:30 AM Eastern Time on Tuesday, June 25, 2002. The call is being webcast by CCBN and on Lantronix's web site at www.lantronix.com
Lantronix, Inc. is a provider of hardware and software solutions ranging from systems that allow users to remotely manage network infrastructure equipment to technologies that network-enable devices and appliances. Lantronix was established in 1989, and its worldwide headquarters are in Irvine, California. For more information, visit the company on the Internet at www.lantronix.com
Previous Page | News by Category | News Search
If you found this page useful, bookmark and share it on: