Slide 1: Industry Leader in Secure Communications Solutions
INDUSTRY LEADER IN SECURE COMMUNICATIONS SOLUTIONS Jerry Chase Chief Executive Officer Reagan Sakai Chief Financial Officer October 2010
Slide 2: Safe Harbor Statement
This presentation contains forward-looking statements, including statements concerning financial results, anticipated market growth, market size, market vision, product features and availability timing, competitive assessments, the Company’s expectations concerning its operating results for fiscal y
Slide 3: Additional Information
Additional Information • Additional Information Lantronix has filed a preliminary proxy statement and will file a definitive proxy statement and other relevant documents concerning the annual meeting with the Securities and Exchange Commission. Our stockholders are urged to read the definitive proxy
Slide 4: Company Overview
• Founded: 1989 • Headquarters: Irvine, CA • Business Segment: Networking and Communications • Fiscal Year End: June 30th • Employees: 115 Company Overview Fiscal Q4 2010 Highlights (Fiscal year end June 30th) • Net Revenue of $11.8 million, up 4% YOY • Non-GAAP net income of $169,000, or $0.02 per
Slide 5: Our Path to Growth
Where We Were 2003 - 2007 Where We Are 2008 - 2010 Where We’re Going 2010+ Our Path to Growth • Lost Generation of Products . Period of failed products: o Did not meet customer needs • Financials : o Negative cash flow o Limited liquidity reserves and options • Strategic Issues . o Management team i
Slide 6: Moving Up The Value Chain
Standards-based enterprise mechanisms (SOA, XML, HL7, Web services, etc.) that allow “backend” applications easy access to devices Moving Up The Value Chain
Slide 7: AccessMyDevice - Value Proposition
What is AccessMyDevice.com? • Enterprise-grade, industrial strength remote access service. • “In the cloud” software-based solution What does it do? • Allows users to easily and securely view, manage, control, and service virtually any PC, server, machine, or electronic device from a web browser. Be
Slide 8: The Lantronix Solutions Architecture
The Lantronix Solutions Architecture External Products since 2009 Texas Instruments Renesas Others on a prioritized basis Competitor 1 Competitor 2 Other existing / future comp Embedded Products since 2009 All Future Products
Slide 9: Ex: AccessMyDevice & Microprocessor
Ex: AccessMyDevice & Microprocessor
Slide 10: AccessMyDevice - Applications
AccessMyDevice - Applications • Robotic Welding Machines • Industrial Packaging • Power Industry - Renewable Energy Metering • Utility Metering • Gas Station Metering/Credit Card Processing • Inventory tracking & environmental monitoring • Industrial Software for Machine Tools • Automotive - Design
Slide 11: Medical Market Opportunity Growth Drivers
Medical Market Opportunity Growth Drivers • Aging population: 13,000 US adults turn 60 each day for the next 20 years • Increased efficiency for medical care being driven by medical device and Health Information Technology investment ($225B for Hospital IT in 2009) • American Recovery and Re-investm
Slide 12: The Opportunity
+ + Three key segments represent a multi-billion dollar opportunity for Lantronix The Opportunity
Slide 13: Benefits of Health Information Technology Networks
Benefits of Health Information Technology Networks • Lower rate of complications, mortality • Lower overall healthcare costs • Lower documentation time • Improved documentation accuracy • Doctors can be “many places at once,” and spend more time with patients • Improved insurance claim process • Red
Slide 14: Where we Participate - HIT Networks
Where we Participate - HIT Networks Hospital Information Technology (HIT) Network Respiratory Gateway Infusion Pump Gateway Glucose Meter Gateway Patient Room Proprietary I/F HL7 I/F Proprietary I/F HL7 I/F Hospital Health Record System Other Hospital Systems Proprietary to HL7 Gateway Patient Room
Slide 15: Driving Connectivity to the Point-of-Care
Devices HIT System Making data “Network-ready” Making data “Application-ready” Delivering “Actionable data” LTRX Device Server Middleware Patient Connectivity is being driven by demands for : » Electronic data capture for automated reporting » Patient safety: • Real-time applications (e.g. alarm for
Slide 16: Driving Connectivity to the Point-of-Care
Devices HIT System Making data “Network-ready” Making data “Application-ready” Delivering “Actionable data” LTRX Device Server Patient in wired or wireless environments (our “box” product) Driving Connectivity to the Point-of-Care
Slide 17: World Class Customer Base
Security (800+ customers) Manufacturing (1,200+ customers) IT / Data Center (1,100+ customers) Medical (650+ customers) Hosp & Leisure (100+ customers) World Class Customer Base Over 2 million devices connected , across 10,000+ customers worldwide
Slide 18: Experienced Leadership
Jerry Chase - President & CEO 20 years: Terayon Communications, Thales Broadcasting & Multimedia, Thales Broadcasting & Multimedia (USA) Reagan Sakai - CFO 25 years: HyPerformix, VIEO, Crossroads Systems, McDATA, Exabyte, Maxtor, StorageTek Keith Knight - VP, Operations 25 Years: Emulex, Aristos Log
Slide 19: Financial Summary
• WW economy affected FY’09 revenue; however, reasons for optimism – FY’10 has stabilized and order rates continue to improve – Focused and flattened sales organization – New product introductions – Customer-driven partnerships, relationships, and product development • Gross margin 50+% – Incrementa
Slide 20: FQ4'10 Highlights
• Business Highlights: – Stabilized and increasing order rates in FY’10 – Increased activity (evaluations, bids, request for pricing) • Project-related activity on the upswing • High level of interest and activity for XPort Pro • FQ4’10 Financial Highlights: (fiscal year end June 30) – Revenue $11.8
Slide 21: Quarterly Revenue
Quarterly Revenue FY’09 FY’10 • FQ3’10 YOY growth of 13%; sequential growth of 6% • FQ4’10 YOY growth of 4%
Slide 22: Gross Margin
Gross Margin $ in Millions • Gross Margin % remains 50% plus • GM expansion: fixed overhead absorption, product cost & spending reductions
Slide 23: Non-GAAP Profitability
Non-GAAP Profitability $ in Millions • Non-GAAP profitable in FY10 • Eight consecutive quarters of non-GAAP profitability (10 of last 11 quarters)
Slide 24: Cash & Working Capital
Cash & Working Capital $ in Millions • Stable cash and working capital • FQ410 cash increased by $800K Cash Working Capital
Slide 25: Summary
• Growing market • Focus on medical device connectivity will accelerate growth • Recently released products beginning to contribute to revenue • Strong order rates across verticals, geographies, product lines • Eight consecutive quarters of “cash earnings” • Strong balance sheet Summary
Slide 26: Thank You
THANK YOU INDUSTRY LEADER IN SECURE COMMUNICATIONS SOLUTIONS