Lantronix, Inc. revenue surged on 27.7% while EBITDA Margin decreased on 9.8 pp from -0.051% to -9.9%
09/10/2020 • About Lantronix, Inc. (
$LTRX) • By InTwits
Lantronix, Inc. reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- The company operates at negative EBITDA Margin: -9.9%
- Lantronix, Inc. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2016-FY2020 is 0.0%. Average EBITDA Margin for the same period was -2.3%
- Lantronix, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.1%.
- CAPEX is quite volatile: $1m in FY2020, $1m in FY2019, $0m in FY2018, $0m in FY2017, $1m in FY2016
- The company has unprofitable business model: ROIC is -22.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Lantronix, Inc.'s Revenue surged on 27.7%. Revenue growth showed acceleration in FY20Q4 - it increased 74.0% YoY. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 9.8 pp from -0.051% to -9.9% in FY2020. During FY2016-FY2020 EBITDA Margin topped in FY2018 at 2.7% and was declining since that time.
Gross Margin dropped on 11.1 pp from 56.0% to 44.9% in FY2020. During the last 5 years Gross Margin topped in FY2019 at 56.0%. SG&A as a % of Revenue decreased slightly on 1.1 pp from 33.8% to 32.7% in FY2020.
Net Income margin dropped on 17.1 pp from -0.87% to -17.9% in FY2020. During FY2016-FY2020 Net Income margin topped in FY2018 at 1.5% and was declining since that time.
Investments (CAPEX, working capital and M&A)
In FY2020 the company had CAPEX/Revenue of 0.96%. CAPEX/Revenue showed almost no change from FY2017 to FY2020. It's average CAPEX/Revenue for the last three years was 1.1%.
Return on investment
The company operates at negative ROIC (-22.2%) and ROE (-25.6%). ROIC dropped on 20.6 pp from -1.6% to -22.2% in FY2020. ROE dropped on 24.3 pp from -1.3% to -25.6% in FY2020. During FY2016-FY2020 ROIC topped in FY2018 at 3.5% and was declining since that time. During FY2016-FY2020 ROE topped in FY2018 at 3.1% and was declining since that time.
Leverage (Debt)
Debt level is -1.2x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2020. Debt jumped on 205,475% while cash dropped on 57.9%.
Lantronix, Inc. has no short term refinancing risk: cash is higher than short term debt (280.2%).
Management team
The company'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 06/30/2020
Lantronix, Inc. ($LTRX) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 40.592 | 44.730 | 45.580 | 46.890 | 59.878 | 27.7% |
| Gross Profit | 19.378 | 23.580 | 25.368 | 26.273 | 26.900 | 2.4% |
| SG&A | 14.396 | 15.803 | 16.499 | 15.851 | 19.582 | 23.5% |
| EBITDA | -1.169 | 0.411 | 1.246 | -0.024 | -5.899 | |
| Net Income | -1.962 | -0.277 | 0.680 | -0.408 | -10.738 | |
Balance Sheet
|
|---|
| Cash | 5.962 | 8.073 | 9.568 | 18.282 | 7.691 | -57.9% |
| Short Term Debt | 0.064 | 0.061 | 0.055 | 0.004 | 2.745 | 68,525.0% |
| Long Term Debt | 0.116 | 0.059 | 0.004 | 0.000 | 5.478 | |
Cash flow
|
|---|
| Capex | 0.570 | 0.236 | 0.229 | 0.891 | 0.572 | -35.8% |
Ratios
|
|---|
| Revenue growth | -5.5% | 10.2% | 1.9% | 2.9% | 27.7% | |
| EBITDA growth | -34.6% | -135.2% | 203.2% | -101.9% | 24,479.2% | |
|
|---|
| Gross Margin | 47.7% | 52.7% | 55.7% | 56.0% | 44.9% | -11.1% |
| EBITDA Margin | -2.9% | 0.9% | 2.7% | -0.1% | -9.9% | -9.8% |
| SG&A, % of revenue | 35.5% | 35.3% | 36.2% | 33.8% | 32.7% | -1.1% |
| Net Income Margin | -4.8% | -0.6% | 1.5% | -0.9% | -17.9% | -17.1% |
| CAPEX, % of revenue | 1.4% | 0.5% | 0.5% | 1.9% | 1.0% | -0.9% |
|
|---|
| ROIC | -9.6% | -0.9% | 3.5% | -1.6% | -22.2% | -20.6% |
| ROE | -10.2% | -1.4% | 3.1% | -1.3% | -25.6% | -24.3% |
| Net Debt/EBITDA | | -19.4x | -7.6x | | |
Lantronix, Inc. ($LTRX) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 13 | 13 | 17 | 17 | | 6.2% | 10.2% | 37.6% | 74.0% |
| EBITDA | -2 | -0 | -3 | 0 | | - | - | -423.0% | - |
| Net Income | -2 | -1 | -5 | -2 | | - | - | -621.6% | - |
Balance Sheet
|
|---|
| Cash | 12 | 9 | 7 | 8 | | -36.7% | -50.8% | -61.2% | -57.3% |
| Short Term Debt | 1 | 2 | 3 | 3 | | - | - | - | - |
| Long Term Debt | 0 | 5 | 6 | 5 | | - | - | - | - |
Ratios
|
|---|
| Gross Margin | 48.6% | 51.2% | 44.7% | 37.7% | | -6.4% | -3.8% | -12.3% | -19.3% |
| EBITDA Margin | -13.1% | -2.3% | -19.6% | 1.6% | | -13.1% | -2.3% | -27.9% | 11.6% |
| Net Income Margin | -19.4% | -10.2% | -31.6% | -9.8% | | -19.4% | -10.2% | -39.9% | 0.2% |
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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Resonant Inc. ($RESN) | - | 116.2% | -19.8% | 40.3% | 329.9% |
| Franklin Wireless Corp ($FKWL) | - | -18.8% | -38.1% | 21.3% | 105.9% |
| Ribbon Communications Inc. ($RBBN) | - | 30.6% | 75.2% | -2.6% | 49.8% |
| Inseego Corp. ($INSG) | - | -10.0% | -7.7% | 8.4% | 43.0% |
| Casa Systems, Inc. ($CASA) | - | 11.2% | -15.5% | -5.0% | 39.3% |
| |
|---|
| Median (35 companies) | 7.5% | 5.1% | 3.5% | 3.7% | 2.1% |
|---|
| Lantronix, Inc. ($LTRX) | - | 10.2% | 1.9% | 2.9% | 27.7% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| F5 Networks, Inc. ($FFIV) | 83.1% | 83.1% | 83.3% | 84.1% | 82.6% |
| Radware Ltd. ($RDWR) | 81.8% | 81.3% | 82.2% | 82.1% | 82.0% |
| Radcom Ltd. ($RDCM) | 69.6% | 71.8% | 74.0% | 70.0% | 71.4% |
| AudioCodes Ltd. ($AUDC) | 60.7% | 62.4% | 62.8% | 47.4% | 67.9% |
| Arista Networks, Inc. ($ANET) | 64.0% | 64.5% | 63.8% | 64.1% | 63.9% |
| |
|---|
| Median (33 companies) | 43.7% | 41.0% | 40.5% | 43.2% | 46.8% |
|---|
| Lantronix, Inc. ($LTRX) | 47.7% | 52.7% | 55.7% | 56.0% | 44.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| InterDigital, Inc. ($IDCC) | 73.6% | 67.3% | 41.9% | 37.5% | 39.5% |
| EchoStar Corporation ($SATS) | 40.3% | 38.1% | 37.4% | 36.4% | 35.0% |
| Arista Networks, Inc. ($ANET) | 23.3% | 29.8% | 14.0% | 35.7% | 33.1% |
| Motorola Solutions, Inc. ($MSI) | 22.2% | 25.5% | 22.0% | 26.7% | 25.9% |
| F5 Networks, Inc. ($FFIV) | 30.3% | 29.9% | 30.1% | 26.2% | 22.9% |
| |
|---|
| Median (32 companies) | 5.9% | 6.5% | 5.4% | 5.0% | 9.3% |
|---|
| Lantronix, Inc. ($LTRX) | -2.9% | 0.9% | 2.7% | -0.1% | -9.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Resonant Inc. ($RESN) | 132.5% | 124.8% | 245.2% | 109.7% | 22.3% |
| EchoStar Corporation ($SATS) | 39.9% | 30.9% | 26.5% | 22.2% | 21.7% |
| KVH Industries, Inc. ($KVHI) | 3.2% | 8.0% | 9.3% | 7.9% | 8.9% |
| Harmonic Inc. ($HLIT) | 3.7% | 3.2% | 1.7% | 2.6% | 8.5% |
| Applied Optoelectronics, Inc. ($AAOI) | 19.0% | 17.5% | 26.9% | 15.1% | 6.7% |
| |
|---|
| Median (32 companies) | 2.0% | 1.9% | 1.7% | 2.5% | 2.2% |
|---|
| Lantronix, Inc. ($LTRX) | 1.4% | 0.5% | 0.5% | 1.9% | 1.0% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Franklin Wireless Corp ($FKWL) | 12.2% | 4.7% | -14.9% | -13.0% | 37.5% |
| Motorola Solutions, Inc. ($MSI) | 26.4% | 39.5% | 35.3% | 34.0% | 26.4% |
| Arista Networks, Inc. ($ANET) | 25.7% | 33.9% | 14.5% | 33.3% | 23.5% |
| AudioCodes Ltd. ($AUDC) | 6.1% | 8.6% | 16.1% | -7.7% | 20.8% |
| F5 Networks, Inc. ($FFIV) | 43.1% | 46.9% | 47.9% | 34.1% | 16.5% |
| |
|---|
| Median (35 companies) | 2.4% | 2.2% | 0.3% | 1.2% | 2.3% |
|---|
| Lantronix, Inc. ($LTRX) | -9.6% | -0.9% | 3.5% | -1.6% | -22.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Inseego Corp. ($INSG) | - | - | 3.9x | 82.5x | 26.9x |
| CommScope Holding Company, Inc. ($COMM) | 4.3x | 4.6x | 4.4x | 27.0x | 10.5x |
| Harmonic Inc. ($HLIT) | - | - | 3.4x | 1.9x | 6.5x |
| Ribbon Communications Inc. ($RBBN) | -17.2x | - | - | - | 3.5x |
| Casa Systems, Inc. ($CASA) | -0.2x | 0.3x | 0.2x | 32.1x | 3.2x |
| |
|---|
| Median (25 companies) | -0.9x | -0.6x | 0.2x | -0.3x | -0.4x |
|---|
