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Lantronix Adjusts Loss by $2.2 Million

October 09, 2002|Dow Jones/AP

Lantronix Inc. said in its annual report filed Tuesday that it increased its loss for the fiscal year ending June 30 by $2.2 million because independent valuations of some assets resulted in additional impairment charges.

The Irvine company, which makes servers to control devices like bar-code scanners via the Internet, had reported in September a loss of $91.3 million on revenue of $57.6 million.

The $2.2 million adjustment included a $1.3-million impairment expense, $600,000 from reserves for bad debts and $300,000 from unrecorded liabilities.

Shares of Lantronix closed Tuesday at 39 cents on Nasdaq, down 4 cents. The stock is hovering near the 52-week low of 25 cents hit on Oct. 1. Lantronix said it completed the first phase of a turnaround plan, which involves an estimated 22% work force reduction. It expected to record a first-quarter restructuring charge of $3 million to $5 million.

Also in the annual report, Lantronix said that Steve Cotton, its former chief financial officer and chief operating officer, sued the company, alleging breach of contract, wrongful termination, defamation and other charges. Lantronix ended Cotton's employment in May, but gave no reason for the termination.

The annual report also said two former employees, Donald and Diane Dunstan--cofounders of US Software Corp.--sued the company alleging securities violations, fraud and negligence.

In May, the company's chairman and chief executive resigned after the company disclosed that revenue for the past two years was less than previously reported.

In June, the hardware and software maker restated its fiscal year 2001 financial statements to reflect a new revenue-recognition policy it adopted for distributor sales.

Lantronix is also being investigated by the Securities and Exchange Commission about events leading to the restatement.

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