Lantronix, Inc. EBITDA dropped on 102% while Revenue increased on 2.9%
09/10/2019 • About Lantronix, Inc. (
$LTRX) • By InTwits
Lantronix, Inc. reported FY2019 financial results today. Here are the key drivers of the company's long term financial model:
- The company operates at negative EBITDA Margin: -0.1%
- Lantronix, Inc. motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2015-FY2019 was 0.0% while average EBITDA Margin was -0.6% for the sames years
- Lantronix, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.1%. At the same time it's in pair with industry average of 3.5%
- CAPEX is quite volatile: $1m in FY2019, $0m in FY2018, $0m in FY2017, $1m in FY2016, $1m in FY2015
- The company has unprofitable business model: ROIC is -1.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 2.9%. Revenue growth showed slowdown in FY19Q4 - it was -16.9% YoY. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 2.8 pp from 2.7% to -0.051% in FY2019. During FY2015-FY2019 EBITDA Margin topped in FY2018 at 2.7%.
Gross Margin showed almost no change in FY2019. Gross Margin grew at 2.5 pp per annum in the last 5 years. SG&A as a % of Revenue decreased on 2.4 pp from 36.2% to 33.8% in FY2019.
Net Income margin decreased on 2.4 pp from 1.5% to -0.87% in FY2019. During the last 5 years Net Income margin topped in FY2018 at 1.5%.
Investments (CAPEX, working capital and M&A)
In FY2019 Lantronix, Inc. had CAPEX/Revenue of 1.9%. Lantronix, Inc.'s CAPEX/Revenue showed almost no change from FY2016 to FY2019. For the last three years the average CAPEX/Revenue was 0.98%.
Return on investment
The company operates at negative ROIC (-1.6%) and ROE (-1.3%). ROIC decreased on 5.1 pp from 3.5% to -1.6% in FY2019. ROE decreased on 4.4 pp from 3.1% to -1.3% in FY2019. During FY2015-FY2019 ROIC topped in FY2018 at 3.5%. During the last 5 years ROE topped in FY2018 at 3.1%.
Leverage (Debt)
Debt level is -5.0x Net Debt / EBITDA and Debt / EBITDA. Debt dropped on 93.2% while cash surged on 91.1%.
Lantronix, Inc. has no short term refinancing risk: cash is higher than short term debt (457,050.0%).
Management team
Lantronix, Inc.'s CEO is Paul H Pickle. Paul H Pickle has 1 year tenure with the company. Jeremy R Whitaker is a Lantronix, Inc.'s CFO. Jeremy R Whitaker has spent 9 years at the company.
Financial and operational results
FY ended 06/30/2019
Lantronix, Inc. ($LTRX) key annual financial indicators| mln. $ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 42.946 | 40.592 | 44.730 | 45.580 | 46.890 | 2.9% |
| Gross Profit | 20.298 | 19.378 | 23.580 | 25.368 | 26.273 | 3.6% |
| SG&A | 16.041 | 14.396 | 15.803 | 16.499 | 15.851 | -3.9% |
| EBITDA | -1.788 | -1.169 | 0.411 | 1.246 | -0.024 | -101.9% |
| Net Income | -2.771 | -1.962 | -0.277 | 0.680 | -0.408 | -160.0% |
Balance Sheet
|
|---|
| Cash | 4.989 | 5.962 | 8.073 | 9.568 | 18.282 | 91.1% |
| Short Term Debt | 0.700 | 0.064 | 0.061 | 0.055 | 0.004 | -92.7% |
| Long Term Debt | 0.152 | 0.116 | 0.059 | 0.004 | 0.000 | -100.0% |
Cash flow
|
|---|
| Capex | 0.577 | 0.570 | 0.236 | 0.229 | 0.891 | 289.1% |
Ratios
|
|---|
| Revenue growth | -3.6% | -5.5% | 10.2% | 1.9% | 2.9% | |
| EBITDA growth | -2,363.3% | -34.6% | -135.2% | 203.2% | -101.9% | |
|
|---|
| Gross Margin | 47.3% | 47.7% | 52.7% | 55.7% | 56.0% | 0.4% |
| EBITDA Margin | -4.2% | -2.9% | 0.9% | 2.7% | -0.1% | -2.8% |
| SG&A, % of revenue | 37.4% | 35.5% | 35.3% | 36.2% | 33.8% | -2.4% |
| Net Income Margin | -6.5% | -4.8% | -0.6% | 1.5% | -0.9% | -2.4% |
| CAPEX, % of revenue | 1.3% | 1.4% | 0.5% | 0.5% | 1.9% | 1.4% |
|
|---|
| ROIC | -13.1% | -9.6% | -0.9% | 3.5% | -1.6% | -5.1% |
| ROE | -14.3% | -10.2% | -1.4% | 3.1% | -1.3% | -4.4% |
| Net Debt/EBITDA | | | -19.4x | -7.6x | |
Lantronix, Inc. ($LTRX) key quoterly financial indicators
| mln. $ | FY19Q1 | FY19Q2 | FY19Q3 | FY19Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 12 | 12 | 12 | 10 | | 13.1% | 5.9% | 3.4% | -16.9% |
| EBITDA | 0 | 0 | 1 | -1 | | | -100.0% | 104.5% | -214.0% |
| Net Income | 0 | 0 | 1 | -1 | | | -100.0% | 190.7% | -233.0% |
Balance Sheet
|
|---|
| Cash | 19 | 19 | 18 | 18 | | 131.1% | 125.6% | 101.0% | 88.1% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | -100.0% |
| Long Term Debt | 0 | 0 | 0 | 0 | | -100.0% | -100.0% | -100.0% | -100.0% |
Ratios
|
|---|
| Gross Margin | 55.0% | 55.0% | 57.0% | 57.0% | | 2.3% | -0.7% | 0.2% | -0.1% |
| EBITDA Margin | 0.0% | 0.0% | 8.3% | -10.0% | | 4.7% | -3.3% | 4.1% | -17.3% |
| Net Income Margin | 0.0% | 0.0% | 8.3% | -10.0% | | 6.0% | -2.0% | 5.4% | -16.2% |
Peers in Communications Equipment
Below you can find Lantronix, Inc. benchmarking vs. other companies in Communications Equipment industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Ribbon Communications Inc. ($RBBN) | | | 30.6% | 75.2% | |
| Extreme Networks, Inc. ($EXTR) | 6.4% | -4.4% | 13.2% | 64.4% | |
| Optical Cable Corporation ($OCC) | -11.3% | -12.2% | -0.8% | 37.0% | |
| ParkerVision Inc ($PRKR) | | 37,601.2% | -97.5% | 35.0% | |
| Network-1 Technologies, Inc. ($NTIP) | 34.6% | 292.9% | -74.7% | 34.4% | |
| |
|---|
| Median (66 companies) | 1.8% | 7.5% | 5.1% | 3.5% | -10.0% |
|---|
| Lantronix, Inc. ($LTRX) | | | 10.2% | 1.9% | 2.9% |
Top companies by Gross margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| F5 Networks, Inc. ($FFIV) | 82.7% | 83.1% | 83.1% | 83.3% | |
| Radware Ltd. ($RDWR) | 82.4% | 81.8% | 81.3% | 82.2% | |
| Radcom Ltd. ($RDCM) | 76.8% | 69.6% | 71.8% | 74.0% | 70.0% |
| Casa Systems, Inc. ($CASA) | 70.8% | 69.1% | 73.4% | 73.4% | |
| NetScout Systems, Inc. ($NTCT) | 79.2% | 65.6% | 70.2% | 72.4% | |
| |
|---|
| Median (67 companies) | 42.7% | 43.7% | 41.0% | 40.5% | 35.4% |
|---|
| Lantronix, Inc. ($LTRX) | | 47.7% | 52.7% | 55.7% | 56.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Network-1 Technologies, Inc. ($NTIP) | 33.7% | 50.6% | 37.8% | 42.8% | |
| InterDigital, Inc. ($IDCC) | 58.1% | 73.6% | 67.3% | 41.9% | |
| EchoStar Corporation ($SATS) | 39.7% | 40.3% | 38.1% | 37.4% | |
| Ubiquiti Networks, Inc. ($UBNT) | 25.5% | 37.3% | 34.3% | 32.8% | |
| Ituran Location and Control Ltd. ($ITRN) | 30.5% | 29.9% | 29.9% | 30.4% | |
| |
|---|
| Median (65 companies) | 7.3% | 5.9% | 6.5% | 5.4% | -4.9% |
|---|
| Lantronix, Inc. ($LTRX) | | -2.9% | 0.9% | 2.7% | -0.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Resonant Inc. ($RESN) | | 132.5% | 124.8% | 245.2% | |
| ViaSat, Inc. ($VSAT) | 26.5% | 26.7% | 33.0% | 32.1% | |
| Applied Optoelectronics, Inc. ($AAOI) | 30.1% | 19.0% | 17.5% | 26.9% | |
| EchoStar Corporation ($SATS) | 43.8% | 39.9% | 30.9% | 26.5% | |
| Finisar Corporation ($FNSR) | 11.9% | 9.4% | 9.7% | 16.8% | |
| |
|---|
| Median (65 companies) | 2.4% | 2.0% | 1.9% | 1.7% | 1.4% |
|---|
| Lantronix, Inc. ($LTRX) | | 1.4% | 0.5% | 0.5% | 1.9% |
Top companies by ROIC, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| F5 Networks, Inc. ($FFIV) | 40.8% | 43.1% | 46.9% | 47.9% | |
| Ubiquiti Networks, Inc. ($UBNT) | 31.5% | 41.5% | 38.5% | 39.1% | |
| Motorola Solutions, Inc. ($MSI) | 18.9% | 26.4% | 39.5% | 35.3% | |
| Ituran Location and Control Ltd. ($ITRN) | 46.8% | 50.1% | 48.5% | 35.1% | |
| Casa Systems, Inc. ($CASA) | | 43.2% | 39.7% | 21.9% | |
| |
|---|
| Median (70 companies) | 2.1% | 2.4% | 2.2% | 0.3% | -7.4% |
|---|
| Lantronix, Inc. ($LTRX) | | -9.6% | -0.9% | 3.5% | -1.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Extreme Networks, Inc. ($EXTR) | | -2.2x | -1.5x | 7.1x | |
| ViaSat, Inc. ($VSAT) | 2.5x | 3.2x | 2.5x | 5.8x | |
| CommScope Holding Company, Inc. ($COMM) | 9.6x | 4.3x | 4.6x | 4.4x | |
| Inseego Corp. ($INSG) | | | | 3.9x | |
| Finisar Corporation ($FNSR) | 0.2x | -0.5x | 1.6x | 3.8x | |
| |
|---|
| Median (45 companies) | -0.6x | -0.9x | -0.6x | 0.2x | 0.0x |
|---|
| Lantronix, Inc. ($LTRX) | | | -19.4x | -7.6x | |
