Lantronix, Inc. (NASDAQ: LTRX) Q1 Loss Widens, Major Shareholder Scoffs

Lantronix, Inc

Lantronix, Inc. (NASDAQ: LTRX) Q1 Loss Widens, Major Shareholder Scoffs

Just a week and half after the company's co-founder and biggest shareholder since 1989 called for the resignation of the Chairman and CEO in a press release,Lantronix today announced first quarter 2011 earnings for the quarter ending September 20th, 2010. Losses for the company have widened.

Bernhard Bruscha is the author of the letter to shareholders released on Monday, October 18th that blasted Lantronix and called for the immediate resignations of Chairman Lewis Solomon and President and CEO Jerry Chase.

In it, he penned his admiration for what the company could be, but made clear his supreme disappointment with the management's continued focus on an unprofitable business and inability to stay competitive in other areas and industries of growth. For the first quarter of a likely very challenging year for the company and its shareholders, Lantronix reported net revenues that were up by about 14% to $12.2M.

However, the company also added a 26% loss to its books of $678K resulted in a ($.07) per share loss compared with a ($.05) per share loss in the same quarter last year. The company explains that the wider net loss was due to legal and consulting expenses related to a current contested proxy, increases in payroll costs, freight costs, and research and development related to "upcoming product releases", Lantronix said. All told, operating expenses were up about 13% from $6.1M to $6.9M for the first quarter 2011. Lantronix is a provider of secure communication technologies that simplify remote access, management and control of any electronic device. The products empower businesses to make better decisions based on real-time information, and gain a competitive advantage by generating new revenue streams, improving productivity and increasing efficiency and profitability.

However, Bruscha has insisted in his letter that the company and its management team have been focusing on the wrong business. Bruscha and his European technology investment firm, TL Investment GmbH, are pushing for the company to gain a foothold in the Machine to Machine market (M2M) that industry analysts expect a 20% annual growth rate for going forward. Bruscha has also accused Lantronix's management of squandering money on an expensive and ineffective eight member Board of Directors. His letter calls for the Board to be reorganized into a five member board, with the cash savings being used more appropriately elsewhere. Jerry Chase is optimistic.

"We are pleased with the revenue growth and continued positive momentum we generated in the first quarter and the increasing market traction we are seeing for our new generation products. We achieved a major milestone during the quarter with the launch of AccessMyDevice(TM), our leading edge managed service solution, which will provide new revenue streams and serve as a robust platform for delivering Software-as-a-Service ("SaaS") solutions to the machine-to-machine ("M2M") market." Lantronix still has a long way to go. Although shares are trading higher less than 2% today on lackluster earnings, the stock is still off by about 31% since their fourth quarter 2010 highs of $4.80 a share.

For more information visit http://www.worldmarketmedia.com/779/section.aspx/2612/post/lantronix-inc-nasdaq-ltrx-q1-loss-widens-major-shareholder-scoffs

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