LANTRONIX REPORTS RECORD 33 PERCENT DEVICE NETWORKING YEAR-OVER-YEAR REVENUE GROWTH
10 November 2005 - Lantronix

Revenues for the device networking category in the first fiscal quarter were the company's highest to date, at $8.3 million, up $2.0 million, an increase of 33% compared with the same period of the prior fiscal year. Revenues from this category contributed 68% of total revenues, up from 56% the same period a year ago. A record number of device networking units shipped during the quarter, with units up approximately 70% compared to fiscal Q1 last year and compared to unit growth for the full fiscal year ended June 30, 2005 of 44%.

Revenues for the company's IT Management category in the first fiscal quarter were $2.8 million, down $0.3 million compared with the same period a year earlier. Revenues for non-core products were $1.2 million a decrease of $0.5 million from the quarter ended September 30, 2004.

Cash, cash equivalents and marketable securities increased $170,000 to $6.9 million during the quarter compared with a decrease of $3.0 million for the same period a year earlier. Fiscal Q1 2006 was the company's second sequential quarter of positive cash results including the quarter ended June 30, 2005.

'We are pleased with the strong performance in our device networking category, especially since sales in the summer quarter are typically slower than the rest of the year due to seasonality,' said Marc Nussbaum, chief executive officer and president. 'During the quarter, shipments of the XPort and WiPort embedded products were strong, with revenues up about 170% and units up about 200% compared to the same period last year. Our XPort and WiPort products contributed about two-thirds of the total embedded unit shipments and approximately 20% of total company revenues, up from about 9% in the same period one year ago.'

Nussbaum continued: 'One of the emerging Internet megatrends is the connecting of everyday devices to other machines and businesses, or M2M. Adoption of machine-to-machine networking technology is expected to continue accelerating over the next decade.'

The following statements are forward-looking and are based on current expectations. Statements about future revenues, product successes or sales, or cash usage are subject to variations in any specific period. Actual results may differ materially from those described below. Please see the risk factors below in this release for a description of certain important risk factors that could cause actual results to differ.

The company reiterated its annual guidance of 10-15% revenue growth for fiscal 2006, continued cash positive growth and achieving quarterly profitability during the fiscal year.

The company is scheduled to hold a conference call and report its unaudited results for the first quarter fiscal 2006 today at 5:00 p.m. Eastern Time. Investors can access the call at www.lantronix.com. A replay of the conference call will also be available via the company's website starting at 7:00 p.m. Eastern Time. Investors can also access the conference call by dialing 866-770-7051 and entering passcode 18899846. To access a replay of the conference call, starting at 7 p.m. Eastern Time on November 10, investors can call 888-286-8010 and enter passcode 48715383.

http://www.lantronix.com

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