By Connor Hart

Lantronix will acquire DSZ's NetComm enterprise portfolio for $6.5 million in a deal the company said expands its next-generation 5G capabilities.

The acquisition, financed in cash together with the assumption of certain liabilities, is expected to close during the fiscal second quarter subject to certain conditions, Lantronix said Thursday.

The provider of software as a service, connectivity and engineering services expects the assets--which it estimates will independently generate between $6 million and $7 million in revenue in 2024--to be immediately accretive to earnings following the sale's closing.

Lantronix said the assets will let the company accelerate its focus on innovative industrial internet of things solutions at scale. The assets are primarily 4G- and 5G-solutions enabling ultra-fast ethernet-to-cellular and wi-fi connectivity for machines. Lantronix said that will enhance the company's connectivity solutions in what it called mission-critical areas such as infrastructure, asset monitoring and telecommunications.

The Irvine, Calif.-based company on Thursday also said it swung to a loss and posted lower-than-expected revenue in its fiscal first quarter.

Lantronix reported a loss of $2.5 million, or 7 cents a share, compared with a profit of $386,000, or 1 cent a share, in the same quarter last year. Adjusted earnings were 6 cents a share, missing the 9 cents a share that analysts surveyed by FactSet expected.

Revenue rose 4.2% to $34.4 million, but came in below the $36.3 million that analysts were looking for, according to FactSet.

For its fiscal second quarter, Lantronix guided for revenue between $29 million and $33 million, as well as adjusted per-share earnings between 1 cent and 5 cents. Analysts polled by FactSet project revenue of $38.6 million and adjusted earnings of 10 cents a share.

The stock dropped 10% to $3.50 in post-market trading following the results. Shares are down 33% this year.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

November 07, 2024 18:33 ET (23:33 GMT)

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