Lantronix Reports Revenues Increase by 3% to $11.8 Million

9/12/2003 - Lantronix (Nasdaq: LTRX) reported preliminary results for its fourth fiscal quarter and year ended June 30, 2003:

Revenues for the fourth fiscal quarter ended June 30, 2003 were $11.8 million, compared to $11.5 million for the same period last year. Net loss for the quarter was $(9.7) million, or $(0.18) per share, compared with a net loss of $(74.6) million, or $(1.39) per share for the same period last year. Net loss for the quarter included a $0.9 million impairment charge for purchased intangible assets. The company is still in the process of completing its annual impairment test of goodwill and purchased intangibles and estimates the impairment charge to be between $7.0 -- $12.0 million. This would result in a revised net loss for the quarter ended June 30, 2003 of between $(16.7) million, or $(0.30) per share and $(21.7) million, or $(0.39) per share. Net loss for the same period last year included an impairment charge of $57.3 million. The final results of the annual impairment test for the quarter ended June 30, 2003 will be reported in the financial statements that the company files in its Form 10-K with the SEC by the end of the month.

For the fiscal year ended June 30, 2003, net revenues were $49.5 million, compared to $57.6 million in fiscal 2002. Net loss for the year was $(38.2) million, or $(0.70) per share, reduced from $(93.5) million, or $(1.82) per share in fiscal 2002. Net loss for the year ended June 30, 2003 included a $0.9 million impairment charge for purchased intangible assets. The company is still in the process of completing its annual impairment test of goodwill and purchased intangibles and estimates the impairment charge to be between $7.0 -- $12.0 million. This would result in a revised net loss for the year ended June 30, 2003 of between $(45.2) million, or $(0.83) per share and $(50.2) million, or $(0.92) per share. Net loss for the fiscal year ended June 30, 2002 included an impairment charge of $57.3 million. Additionally, net loss for the fiscal year ended June 30, 2002 included the cumulative effective of an accounting change in the amount of $5.9 million related to the adoption of Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets."

During the fourth quarter, cash and cash equivalents and marketable securities decreased approximately $(459,000), compared with a decrease of $(5.5) million for the third quarter ended March 31, 2003.

"Our focus during this past year was on establishing a strong operational foundation and strategic plan that would stabilize the company and establish a base for achieving growth in fiscal 2004," said Marc Nussbaum, president and chief executive officer. "During the past four quarters, we simplified our business model and infrastructure, brought expenses in line with revenues, and reduced our cash burn. At the same time, we improved key operational fundamentals of the business and continued to invest in the necessary research, product development, marketing and sales initiatives."

FISCAL 2004 OUTLOOK
"Moving into fiscal 2004, our focus continues to be on managing our expenses closely while investing in programs to drive top-line growth. Now that we have stabilized our cash burn, our mission will be to further solidify our strong position and drive penetration in the machine-to-machine pervasive Internet space," Nussbaum said.

About Lantronix
Lantronix, Inc. (Nasdaq: LTRX) 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, Calif. For more information, visit the company on the Internet at www.lantronix.com

Safe Harbor
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby and the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Statements regarding the Company's ability to manage its costs, cash and to generate increased revenues, as well as others, are subject to significant risks and uncertainties, some of which are outside the control of the Company. For example, the Company's ability to manage its costs and cash position will depend on its ability to negotiate favorable terms with suppliers, and manage other costs, including costs associated with ongoing litigation. Other risks and uncertainties are more fully described in the Company's periodic filings with the Securities and Exchange Commission. These statements, and other forward-looking statements, are not guarantees of future performance and the Company undertakes no duty to update such statements.

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