Lantronix, Inc. · NASDAQ:LTRX
Lantronix — Investor Presentation (September 2013)
27 slides from Lantronix's investor presentation, Sep 10, 2013
Slide 1: Company Overview September 2013
Company Overview September 2013
Slide 2: Safe Harbor
Page 2 Safe Harbor This presentation contains forward - looking statements, including statements concerning our business plans, our financial and operating results, our product development strategies, and our target financial model. We have based our forward - looking statements on our current expec
Slide 3: More than 15B connected devices on the Internet
Page 3 Today there are more than 15B connected devices on the Internet. There are more machines on the Internet today than PC’s or Mobile devices connected to people. Source : Gartner, January 2012
Slide 4: Connected devices expected to reach 50B in 2020
Page 4 In 2020, the number of connected devices is expected to reach 50B. That is six devices for every person on Earth. Source: Cisco Visual Networking Index, 2011 - 2016
Slide 5: Convergence of Mobility and M2M Systems
Page 5 Convergence of Mobility and M2M Systems….. Mobility: The proliferation of smartphones and tablets by users of all ages, geographies, social status, profession – everyone is going mobile. M2M: Rapid technology advances and use of machine - to - machine technologies (remote access to and manage
Slide 6: Where Does Lantronix Fit?
Page 6 Where Does Lantronix Fit? Our broad portfolio of solutions bring together “mobility” and “M2M ” enabling our customers to access, monitor and manage anything from anywhere…….
Slide 7: Lantronix Overview
Page 7 Lantronix Overview ( Nasdaq: LTRX ) • Established global provider of smart networking and communications solutions for machine - to - machine (M2M) applications • Results - driven management team with over 150 years of experience in M2M, communication and networking • Blue chip customer base
Slide 8: The Lantronix Value Proposition
Page 8 The Lantronix Value P roposition . . E ASE - OF - USE S ECURE T IME - TO - MARKET R UGGED F EATURE - R ICH
Slide 9: Growth Strategy
Page 9 Growth Strategy Leverage our networking expertise to capitalize on market transitions relating to the convergence of mobility and M2M deployments • Address market transitions with products offering simple customization , manageability , and highest levels of security and ruggedness • Expand m
Slide 10: Accelerate Growth: Expand Addressable Market by ~4x
Page 10 Accelerate Growth: Expand Addressable Market by ~4x Source: Primarily based upon internal estimates using source data from IDC & Harbor Research B ASELINE (P RIMARILY W IRED ) B ASELINE (P RIMARILY W IRED ) W IRELESS AND A NALOG M OBILE P RINTING $ - $0.5 $1.0 $1.5 $2.0 $2.5 2011 2016 Billio
Slide 11: M2M Solutions
Page 11 M2M Solutions OEM M ODULES • Embedded M2M solutions for a manufacturer of machines and electronic devices • Typically sold to OEMs through distribution channels • Recurring revenue stream E NTERPRISE S OLUTIONS • M2M solutions for existing machines and electronic devices • Typically sold to
Slide 12: Application Example - xPico Wi-Fi: Mobile Management of Heating System
Page 12 Application Example - xPico Wi - Fi: Mobile Management of Heating System Customer & Application Nationwide (U.S.) provider of heating products, system services and maintenance Challenge Reduce costs and improve accuracy of service call to the customer The Solution Enable the technician to us
Slide 13: Application Example – xPrintServer Office Edition: iOS Printing for Point of Sale
Page 13 Application Example – xPrintServer Office Edition: iOS Printing for Point of Sale Application To help protect your privacy, PowerPoint prevented this external picture from being automatically downloaded. To download anddisplay this picture, click Options in the Message Bar, and then click En
Slide 14: FY13 Revenue Contribution by Region and Product Line
Page 14 FY13 Revenue Contribution by Region and Product Line Plan to increase EMEA and Asia Pacific contribution to Enterprise Solutions sales by expanding WW sales channels and marketing E NTERPRISE S OLUTIONS 49% OEM M ODULES 51% 38% 39% 13% 10% 71% 20% 4% 6% Americas EMEA Japan Asia Pacific
Slide 15: Sales Channels and Key Customers
Page 15 Sales Channels and Key Customers
Slide 16: FY12 Stabilize, FY13 Execute, FY14 Grow
Page 16 FY12 FY13 FY14 Stabilize Execute Grow - Expect new products to outpace decline in mature products - Focus on profitable growth - Continued product development - Expanding sales channels and marketing - Financial discipline - Revenue growth of 3% - New product revenue begins to outpace declin
Slide 17: Selected Income Statement Information
Page 17 Selected Income Statement Information Note: Please see Appendix A to this presentation for a reconciliation of non - GAAP measures. Non - GAAP operating income (loss) exc ludes share - based compensation, amortization & depreciation. (In millions) 2012 2013 Net Revenue $45.4 $46.7 Y/Y Change
Slide 18: Selected Condensed Balance Sheet Information
Page 18 Selected Condensed Balance Sheet Information (In millions, except price per share data) 2012 2013 Cash and Cash Equivalents 11.4$ 5.2$ Accounts Receivable, Net 2.7 2.6 Inventories, Net 6.0 8.7 Prepaid Expenses and Other 1.1 1.1 Total Current Assets 21.2 17.6 Total Non-Current Assets 11.4 11.
Slide 19: Why Lantronix?
Page 19 Why Lantronix? • Well positioned to address convergence of mobility and M2M systems • 12 new products introduced during last 2 - years TAM Expected to Increase by ~4x • Highly motivated and experienced leadership team with track record of execution on product development and financial discip
Slide 20: Thank You
LANTRONIX’ CONNECT SMART. DO MORE. THANK YOU LANTRONIX
Slide 21: Appendix A: Use of Non-GAAP Financial Measures
Page 21 Appendix A: Use of Non - GAAP Financial Measures Lantronix believes that the presentation of non - GAAP financial information, when presented in conjunction with the corresponding GAAP measures, provides important supplemental information to management and investors regarding financial and b
Slide 22: Appendix A: Reconciliation of Non-GAAP Financial Measures
Page 22 Appendix A: Reconciliation of Non - GAAP Financial Measures (In thousands) 2012 2013 GAAP net income (loss) (3,040)$ (2,769)$ Non-GAAP adjustments: Share-based compensation 750 850 Depreciation and amortization 987 853 Interest income (expense), net 97 59 Other income (expense), net 82 18 Pr
Slide 23: Exhibits
Exhibits LANTRONIX:
Slide 24: Target Model
Page 24 Target Model Leveraged operating model provides for accelerated income growth Financial Metrics (as a % of net revenue): FY 12 FY 13 3 - Year Target Model Gross Margin 48.8% 47.4% 49 - 51% GAAP Net Income (7%) (6%) 5 - 7% Non - GAAP Net Income (1%) (2%) 8 - 10% Target Model disclosed in our
Slide 25: Management Team
Page 25 Management Team Jeremy Whitaker , Chief Financial Officer • Former Lantronix Vice President of Finance, returned to join turnaround • Broad perspective with both outside auditor (Ernst & Young) and internal finance and accounting experience at multiple publicly traded companies Tom Morton ,
Slide 26: Board of Directors
Page 26 Board of Directors Bernhard Bruscha, Chairman and Lantronix Co - Founder (2007) • 25+ years as serial entrepreneur in technology industry • Founder of TL Investment with global investments in Europe, Asia and US Kurt Busch , Director, Lantronix President & CEO (2012) • 20+ years technology i
Slide 27: Management and Board of Director Ownership
Page 27 Management and Board of Director Ownership Shares Owned Options O/S Kurt Busch, CEO & President, Director 12,460 570,000 Bernhard Bruscha, Director & Founder 6,115,342 141,158 Bruce Edwards, Director 11,000 25,000 Michael Fink, VP of Operations 1,000 75,000 Paul Folino, Director 25,000 34,89