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Lantronix Updates on 2nd Quarter Fiscal 2014 Financial Results

February 11, 2014

Lantronix, Inc., a global provider of smart networking and communications solutions for machine-to-machine (M2M) applications, reported results for its second fiscal quarter ended December 31, 2013.

Financial Highlights:

-Net revenue of $11.0 million

-Gross profit as a percentage of net revenue of 49.6 percent

-GAAP net loss of $(323,000), or ($0.02) per share

-Non-GAAP net income of $191,000, or $0.01 per share

-Second consecutive quarter of non-GAAP net income and positive cash flow from operations

-Sequential revenue growth of 11 percent for Enterprise Solutions product line

Operational and Product Highlights:

-In January 2014, the Company announced the launch of the xPrintServer Cloud Print Edition, currently the only Google Cloud Print certified print server. The latest addition to Lantronix' mobile printing solutions allows users to print to their installed base of network and USB printers from their Google Cloud Print enabled devices, including Chromebooks and Android smartphones.

-During the second quarter of fiscal 2014, the Company announced several new product collaborations, including:

-A partnership with Bixolon, a manufacturer of receipt and Auto ID printers, to deliver a mobile printing solution for retail and point of sale customers that utilizes Lantronix' xPrintServer products.

-A project with Superwinch, a manufacturer of consumer and industrial winches, to demonstrate a mobile winch app powered by the Lantronix xPico Wi-Fi module at SEMA 2013, the world's premier automotive specialty product trade event.

-The xPico Wi-Fi Tower Module, designed specifically for the Freescale Tower System. The design kit was developed in collaboration with Freescale Semiconductor, a company focusing in embedded processing solutions for the automotive, consumer, industrial and networking markets.

-In December 2013, Lantronix launched the XPort Pro Lx6 embedded device server, the newest addition to its XPort Pro family. The new product allows OEM manufacturers to embed their products with secure device connectivity that is Internet Protocol v6 (IPv6) ready.

"The December quarter marked our second consecutive quarter of non-GAAP net income and sequential quarterly growth in sales of our Enterprise Solutions product line as a result of both new customer acquisitions and increased revenue contribution from several of our new Enterprise Solution product families," said Kurt Busch, Lantronix president and CEO. "We continue to be pleased with the steady progress of our new OEM Module product families and as customer design wins ramp to production, we expect to reverse the revenue decline in this product line."

Financial Results for the Second Quarter of Fiscal 2014

In a release on January 31, the Company noted that net revenue was $11.0 million for the second quarter of fiscal 2014, a decrease of $1.2 million, compared to $12.2 million for the second quarter of fiscal 2013 and an increase of $85,000, compared to $10.9 million for the first quarter of fiscal 2014. The year-over-year decline in net revenue was primarily due to a decrease in sales of mature product families.

Gross profit as a percentage of net revenue was 49.6 percent for the second quarter of fiscal 2014, compared to 49.6 percent for the second quarter of fiscal 2013 and 49.5 percent for the first quarter of fiscal 2014.

Operating expenses were $5.7 million for the second quarter of fiscal 2014, a decrease of $679,000, compared to $6.4 million for the second quarter of fiscal 2013 and an increase of $76,000, compared to $5.6 million for the first quarter of fiscal 2014.

GAAP net loss for the second quarter of fiscal 2014 was $(323,000), or ($0.02) per share, compared to a GAAP net loss of $(412,000), or ($0.03) per share, for the second quarter of fiscal 2013 and a GAAP net loss of $(267,000) or ($0.02) per share, for the first quarter of fiscal 2014.

Non-GAAP net income for the second quarter of fiscal 2014 was $191,000, or $0.01 per share compared to non-GAAP net income of $70,000 or $0.00 per share for the second quarter of fiscal 2013 and a non-GAAP net income of $220,000, or $0.01 per share, for the first quarter of fiscal 2014.

Cash and cash equivalents were $6.1 million as of December 31, 2013, an increase of $855,000, compared with $5.2 million as of June 30, 2013.

More Information:

http://www.lantronix.com

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