Lantronix, Inc.

Good day and welcome to the Landtronic's fourth quarter 2022 results conference call. All participants will be in a listen-only mode. Should you need assistance, please signal conference specialists by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. And to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mr. Rob Adams, corporate development, and investor relations. Please go ahead, sir.

Thank you, and good afternoon, everyone. Thanks for joining the fourth quarter fiscal 2022 conference call. Joining us on the call today are Paul Pickle, our president and chief executive officer, and Jeremy Whitaker, our chief financial officer. A live and archived webcast of today's call will be available on the company's website. In addition, you can find the call-in details for the phone replay in today's release. During this call, management may make forward-looking statements which involve risks and uncertainties that could cause our results to differ materially from management's current expectations. We encourage you to review the cautionary statements and risk factors contained in the earnings release, which was furnished to the SEC today and is available on our website and in the company's SEC filings such as 10-K and 10-Qs. Landtronics undertakes no obligation to revise or update publicly any forward-looking statements to reflect future events or circumstances. Please refer to the news release and the financial information in the investor relations section of our website for additional details that will supplement mandatory commentary. Furthermore, during the call, the company will discuss some non-GAAP financial measures. Today's release, which is posted in the investor relations section of our website, describes the differences between our non-GAAP and GAAP reporting and presents reconciliations for the non-GAAP financial measures that we will use. With that, I'll now turn the call over to Jeremy Whitaker, our Chief Financial Officer. Jeremy?

Thank you, Rob, and welcome to everyone joining us for this afternoon's call. I'm going to provide the financial results as well as some of the business highlights for our fourth quarter of fiscal 2022 before I hand it over to Paul for his commentaries. For the fourth quarter of fiscal 2022, we reported record revenue of $35.9 million, an increase of 74% when compared to $20.6 million for the fourth quarter of fiscal 2021, and up 11% sequentially as compared to $32.3 million reported in the third quarter of fiscal 2022. The year-on-year increase was driven by organic growth of 29% in addition to the contribution from our acquisition of the TN companies. Gross margin was 41.9% for the fourth quarter of fiscal 2022 as compared with 42.1% in the prior quarter. Selling general administrative expenses for the fourth quarter of fiscal 2022 were 9.4 million compared with 6.1 million for the fourth quarter of fiscal 2021 and 8.3 million for the third quarter of fiscal 2022. Research and development expenses for the fourth quarter of fiscal 2022 were $4.9 million, compared with $3.6 million for the fourth quarter of fiscal 2021 and $4.5 million for the third quarter of fiscal 2022. The year-on-year increases in SG&A and R&D were largely driven by the acquisition of the TN companies at the beginning of our fiscal year. Gap net income was 2.5 million, or 7 cents per share, during the fourth quarter of fiscal 2022, compared to a gap net loss of 1.1 million, or 4 cents per share, during the fourth quarter of fiscal 2021. The increase in gap net income was primarily due to non-cash income related to our most recent acquisition. Non-gap net income was 2.9 million, or 8 cents per share, during the fourth quarter of fiscal 2022, compared to non-GAAP net income of $1.7 million, or six cents per share, during the fourth quarter of fiscal 2021. Now, turning to the full year results. Net revenue for fiscal 2022 was $129.7 million, compared to $71.5 million in fiscal 2021, representing an all-time record and an increase of 81%, driven by organic growth of 31% and contribution from the acquisition of the TN companies. Gross profit as a percentage of net revenue for fiscal 2022 was 42.9% as compared with 46.2% for fiscal 2021. The decline in gross margin percentage was primarily due to product mix and increased supply chain costs during fiscal 2022. Gap operating expenses for fiscal 2022 were 60.6 million, compared with $36.4 million for fiscal 2021. Non-GAAP operating expenses for fiscal 2022 were $44.8 million compared to $28.2 million for fiscal 2021. As a percentage of revenue, non-GAAP operating expenses for fiscal 2022 declined as a percentage of revenue to 35% as compared to 39% of revenue in fiscal 2021. For fiscal 2022, we reported a gap net loss of 5.4 million or 16 cents per share compared to gap net loss of 4 million or 14 cents per share for fiscal 2021. The increase in gap net loss was primarily due to non-cash acquisition related costs. Non-gap net income increased by 97% to 11.4 million or 33 cents per share for fiscal 2022. as compared to 5.8 million or 19 cents per share in fiscal 2021. Now turning to the balance sheet. We ended the June 2022 quarter with cash and cash equivalents of 17.2 million as compared to 9.7 million in the prior fiscal year. Working capital increased to 54.5 million as of June 30th, 2022 as compared with 51.8 million as of March 31st, 2022. Net inventories were $37.7 million as of June 30, 2022, compared with $33.2 million as of March 31, 2022. Now turning to our annual outlook. For fiscal year 2023, we are targeting revenue of $149 to $162 million, representing growth in a range of approximately 15% to 25%. In non-GAAPs, EPS in a range of 39 to 44 cents per share, representing growth in the range of approximately 18 to 33%. We expect the revenue and earnings growth to be more heavily weighted in the second half of the fiscal year, as our two largest design wins are expected to ramp into full production during the second half. I'll now turn the call over to Paul.