LTRX has peaked our interest because of the following facts:
Stock trading near 5-year low, but...
New CEO was hired in August 2011 and he undertook some positive restructuring actions.
Recent quarterly results show significant financial improvement. Revenues seemingly stabilized and losses ended.
Company has introduced some new products, particularly for Apple accessories market that could gain traction. (i.e. xPrintServer™ - Network Edition, the first network solution to allow iPad and Apple mobile iOS users to print wirelessly to virtually any networked printer.)
Recent sale of stock to insiders, plus some insider buying.
Depressed EV/Sales, despite healthy gross margins and low cap-ex. And healthy balance sheet.
Risks/Issues for LTRX:
Aside from the standard risks,
the major risk I see for LTRX is that the company is effectively controlled by one person, Bernhard Bruscha, who has about 40% of the stock. But, he just bought some more stock at $2.
Don't see much hype here for the company, though the connection to Apple mobile device printing is very attractive. However, the company's product line seems very defocused.
There is no divestiture or other major change here, though the recent share sales count as some sort of major initiative because of the participation by insiders.
Quick summary of LTRX's capitalization and basic financials (the company has sold some stock in the last year, so the financials are not entirely clear at first glance).
Current Shares Outstanding: 14.3 million
Prior to share offerings: 10.5 million
Share Sale I: April 25, 2012, the Company sold to TL Investment in a private placement transaction 1,605,709 shares of its common stock at $2.8025 per share for net proceeds of approximately $4.4 million.
Share Sale II: On April 26, 2012, sale by the Company of 2,200,000 shares of its common stock, par value $0.0001 per share, to the public at a price of $2.50 per share.
So total shares are now equal to: 14.3 million (10.5 + 1.6 + 2.2)
Estimated Cash (assuming no burn): $11 million
Cash before offerings: $1.8
In aggregate, the Company received total net cash proceeds of approximately $9.3 million from the private placement and public offering common stock sales described above.
Debt: The company reports negligble debt, of around $600K, on the latest balance sheet.
Sales and other facts for Fiscal Year ended June 30, 2011: $49 million
Gross Margin: 48%
Depreciation: $1 million
Cap Ex: $400K