This company should be GAAP profitable by now... but the new plan is "3 years" to get there. Their cash is decreasing because they can't get to profitability and they don't seem to be able to manage their inventory well. Oh and they xPrintServer sales are decreasing... wow, hard to believe with all that good marketing the company does on it.
Kurt has been there for two years, joining the company on August 23, 2011. The TRANSITION PERIOD IS OVER. Where's the profitability? Why are they draining the cash-on-hand? What are they doing over there? I fully expect they will sell another 3 million shares at around 1.50 to raise another $4.5 million so this company can continue to operate slowly.
So the question for Mr. Bruscha is--are you planning to get this company profitable or is this just a hobby for you? Because I invested in a company that I expect to be profitable and soon, not this talk of a 3-year plan. I want a 3-quarter plan of profitability.
This is a old mens club. Instead of joining the Kawanas, American Legion, or other Big hat group (I love them all those hat groups esp the Shriners) LTRX is public traded retirement club for Old Men. Yes that is harsh but it is better than saying LTRX is just a hobby. I think it could be a hobby business too...LOL. I do like the possible ways LTRX could grow but you need to go out and hire a bunch of kids to make it happen. Old guys rarely understand the mobile world or the way it is evolving.
Someone will get drunk on LTRX cool aid and fork over 5 million for shares and brag they own x percent of a company. The person will be initiated into the old mens club much like Johnny in the Shining. I know a few people love this company and that is fine because I drank the cool aid once a long long time ago when...well when it was possible to actually sell shares at 34 bucks.
In short, if you want to take it in the shorts buy buy buy. If you want to watch a train wreck.....I have been watching for 13 years. What do I expect, I expect that old men with old ideas and old companies just fade away. Yes this is the long goodbye from LTRX. One day in another 10 years, the company will give notice that operations are being moved to a smaller place. The reduction of work force will be combined with a new CEO who will say "LTRX is selling off assets to focus on UFO parts." Those part will never be made or sold....the assets will be sold of the old company in a fire sale. A few employee's will spin out next generation stuff and that will be it. You will mail your shares into a PO Box and get a check for less than cents per share.
To avoid this...LTRX needs to attack mobile computing markets with connectivity and networking. Maybe move to China.....trade on that stock board....hmm not a bad idea.
We share the same frustration with the languishing share price and tepid financials. The difference is analyzing the source of the problem.
In my opinion your first error was underestimating the amount of damage Bernhard Bruscha's rampage inflicted. In his crusade to toss Jerry Chase Bernhard's $5 million bulldozer left a wide wake of destruction through the Lantronix staff, customers, partners, leadership team, morale, reputation, revenue stream, cash flow, R&D and cash position... not to mention dropping the share price from $4 to a still-very-familiar $1.50.
Your second error was assuming any new CEO could sweep in and repair the smoldering wreckage in a few quarters. This turnaround has and will continue to take considerable time.
Your third error is any suggestion Bernhard should march back in to, "fix it again." Mr. Bruscha's track record in the 1990's of founding tech start-ups and taking them public on the tech bubble was impressive. Over the subsequent 15 years his track record of trying to run and/or fix publicly traded company's has been abysmal. Lantronix is one case in point. TransTec AG, his publicly traded company in Germany that he completely controls as majority shareholder, continues to flounder.
One option going forward is to give Kurt at least 18 more months to see if his new product lines will ramp. The second option, and perhaps the best course, is to admit Lantronix remains too small to be a publicly traded company and find the right acquirer. If Kurt is on track in his new initiatives, and I believe he is, there should be larger tech players interested in wrapping Lantronix under their umbrella.
Good luck to everyone.
Great post as always Fuji, but as Active has shown many times before he just doesn't get it. He doesn't understand that what Brusha did set the company back years and caused shareholders to get diluted yet again.
I got to say these results were worse than even my pessimistic expectations and I see under $1 more than I see over $2.
I also have to say these paid pumper are really making this board less fun for me. I had a lot more fun when I was teaching Active how to read financial statements.
Fuji, here's my rebuttal. First, I think that you mistakenly believe that Bernhard is the cause of the company's past problems and the reason the company is struggling to increase revenues. Bernhard was NOT the problem. The problem was, we had a prior leader that knew very little about M2M or print servers or sensors or wireless, etc. Someone sold him on subscription based remote access management software that very few wanted and he dumped most of the company's resources into developing it. We saw very few new products released while ManageLinx 3.0 and AccessMyDevice were being developed (neither sold today). Because of this, the company had very few products to replace aging legacy products. We should have had xPico and xSenso and the xPrintServer 2-3 years ago. They are behind on having products to replace existing products. Were they trying to replace the xPort with AccessMyDevice? I'm sure the prior management team was very smart, but they were not smart in the area that Lantronix serves. I have said for years that the company needed WiFi, broadband wireless, and sensor technology. So, now we have leadership that knows all about M2M and are developing the products the company should be developing! That problem is now solved! But we now have a new problem!!! The good news... Kurt, Berhnard, and those at the company now are experts in M2M. The bad news... they do not know how to sell or market the products they develop. Their marketing is poor and they have done nothing to correct this. They hope sales will increase by increasing their distribution, but they don't know how to increase sales with the distribution they have now. I've been getting a lot of "case studies" emails from Lantronix and this is a good first step! BUT... they need to do much more. They need to have better customer databases, online seminars, better partnership with retail, better partnerships in general, and more clever ways to get the word out.