EX-99.1 2 a18-5551_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

Iteris Reports Strong Third Quarter Revenue of $26.0 Million

 

Roadway Sensors Segment Rebounds from Prior Quarter Weather Disruptions

 

SANTA ANA, Calif. — February 7, 2018 — Iteris, Inc. (NASDAQ: ITI), the global leader in applied informatics for transportation and agriculture, today reported financial results for its fiscal third quarter ended December 31, 2017.

 

Fiscal Third Quarter 2018 Financial Highlights

 

·                  Total revenue of $26.0 million, up 15% year over year

 

·                  Transportation Systems revenue of $13.6 million, up 14% year over year

 

·                  Roadway Sensors revenue of $11.0 million, up 18% year over year

 

·                  Agriculture and Weather Analytics revenue of $1.4 million, up 2% year over year

 

Management commentary:

 

“We are pleased to report record third quarter total revenue results reflecting solid growth in all business segments and positive market fundamentals,” said Joe Bergera, president and CEO.

 

“With ongoing innovation in both our technology and business models, we remain excited about our business outlook.”

 

“As anticipated, our Roadway Sensors segment activity in Texas recovered nicely following the prior quarter disruptions from Hurricane Harvey. As a result, the business segment returned to healthy double-digit growth in the third quarter, thanks in part to strong distribution performance.”

 

Fiscal Third Quarter 2018 Financial Results

 

Total revenues in the third quarter of fiscal 2018 increased 15% to a record $26.0 million, compared with $22.7 million in the same quarter a year ago. This growth was driven by an 18% increase in Roadway Sensors sales, as a result of business recovery in two of our most strategic markets — Texas and Florida, which were affected by hurricanes Harvey and Irma in 2017. Our Roadway Sensors segment also had strong performance in the distribution of third-party products.  Third quarter revenue growth was also attributable to the solid 14% growth in Transportation Systems revenues and, to a lesser extent, a 2% increase in Agriculture and Weather Analytics revenues. While our Agriculture and Weather Analytics segment showed modest growth this period, our ClearAg® product line revenue continued to show significant growth, which was partially offset by a decline in our ClearPath Weather® products revenue. The decline in ClearPath Weather was due to a business model change, which we expect to create improved product operating margins. More specifically, we eliminated our dependence on a third-party royalty, which reduces ClearPath Weather’s gross revenue while improving its gross margins and creating positive pricing flexibility going forward.

 

Operating expenses in the third quarter were $11.1 million, compared with $10.1 million in the same quarter a year ago. The rise in operating expense was primarily due to increases in selling, general and administrative costs, driven by higher compensation costs that were driven by higher revenues, and an increase in business development costs aimed at the pursuit of large contracts in the Transportation Systems segment.

 

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Operating loss in the third quarter was $1.1 million, compared with an operating loss of approximately $1.5 million in the same quarter a year ago. Net income in the third quarter was approximately $343,000 or $0.01 per share, compared with a net loss of approximately $1.4 million or ($0.04) per share in the year-ago quarter. The main driver of net income in the third quarter was an income tax benefit of $1.4 million, which contributed $0.04 per share, as a result of the passage of new tax legislation known as the Tax Cuts and Jobs Act.

 

Earnings Conference Call

 

Iteris will conduct a conference call today to discuss its fiscal third quarter 2018 results.

 

Date: Wednesday, February 7, 2018
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)

Toll-free dial-in number: 1-800-263-0877

International dial-in number: 1-323-794-2094

Conference ID: 3213732

 

To listen to the live or archived webcast of the earnings call or to view the press release, please visit the investor relations section of the Iteris website at www.iteris.com.

 

A replay of the conference call will be available after 7:30 p.m. Eastern time on the same day through February 21, 2018. To access the replay dial-in information, please click here.

 

About Iteris, Inc.

 

Iteris is the global leader in applied informatics for transportation and agriculture, turning big data into big breakthrough solutions. We collect, aggregate and analyze data on traffic, roads, weather, water, soil and crops to generate precise informatics that lead to safer transportation and smarter farming. Municipalities, government agencies, crop science companies, farmers and agronomists around the world use our solutions to make roads safer and travel more efficient, as well as farmlands more sustainable, healthy and productive. Visit www.iteris.com for more information and join the conversation on Twitter, LinkedIn and Facebook.

 

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:

 

This release may contain forward-looking statements, which speak only as of the date hereof and are based upon our current expectations and the information available to us at this time. Words such as “believes,” “anticipates,” “expects,” “intends,” “plans,” “seeks,” “estimates,” “may,” “will,” “can,” and variations of these words or similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, statements about the Company’s anticipated growth opportunities, the impact of the new management team, the impact and success of new product introductions and acquisitions, our future performance, growth, operating results, financial condition and prospects. Such statements are subject to certain risks, uncertainties, and assumptions that are difficult to predict and actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors.

 

Important factors that may cause such a difference include, but are not limited to, federal, state and local government budgetary issues, constraints and delays; the timing and amount of government funds allocated to overall transportation infrastructure projects and the transportation industry; the potential impact of the recently extended Federal Highway Bill on the Intelligent Transportation industry and the expected benefits to Iteris; the potential unforeseen impact of product and service offerings from competitors, increased competition in certain market segments and other competitive pressures; our ability to secure additional Transportation Systems consulting contracts and successfully complete such contracts on a timely basis; our ability to

 

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specify, develop, complete, introduce, market and gain broad acceptance of our new and existing products and technologies the timing and successful completion of customer qualification of our products and the risks of non-qualification; the availability of components used in the manufacture of certain of our products; the effectiveness of efficiency, cost, and expense reduction efforts; our ability to successfully identify, complete and integrate acquisitions of products, technologies and companies; our ability to retain, integrate and incentivize our new management team and their ability to shape the strategic direction of the company and implement change; any softness in the real estate development market, and the impact of general economic and political conditions and specific conditions in the markets we address, and the possible disruption in government spending and commercial activities related to terrorist activity or armed conflict in the United States and internationally. Further information on Iteris, Inc., including additional risk factors that may affect our forward-looking statements, as contained in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K, and our other SEC filings that are available through the SEC’s website (www.sec.gov).

 

Investor Relations
MKR Group, Inc.
Todd Kehrli

323-468-2300
iti@mkr-group.com

 

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ITERIS, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

 

 

December 31,

 

March 31,

 

 

 

2017

 

2017

 

 

 

 

 

 

 

ASSETS:

 

 

 

 

 

Cash

 

$

16,803

 

$

18,201

 

Trade accounts receivable, net

 

13,645

 

14,299

 

Unbilled accounts receivable

 

7,175

 

6,456

 

Inventories

 

2,972

 

2,250

 

Prepaid expenses and other current assets

 

1,452

 

2,108

 

Total current assets

 

42,047

 

43,314

 

 

 

 

 

 

 

Property and equipment, net

 

2,444

 

2,064

 

Deferred income taxes

 

652

 

 

Goodwill

 

15,150

 

15,150

 

Intangible and other assets, net

 

3,374

 

1,817

 

Total assets

 

$

63,667

 

$

62,345

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY:

 

 

 

 

 

Accounts payable and other current liabilities

 

$

16,827

 

$

16,530

 

Deferred revenue

 

4,654

 

4,049

 

Total current liabilities

 

21,481

 

20,579

 

Long-term liabilities

 

841

 

1,542

 

Total liabilities

 

22,322

 

22,121

 

Stockholders’ equity

 

41,345

 

40,224

 

Total liabilities and stockholders’ equity

 

$

63,667

 

$

62,345

 

 

4



 

ITERIS, INC.

UNAUDITED CONSOLIDATED

STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

December 31,

 

December 31,

 

 

 

2017

 

2016

 

 2017

 

2016

 

 

 

 

 

 

 

 

 

 

 

Product revenues

 

$

11,995

 

$

10,046

 

$

35,620

 

$

32,139

 

Service revenues

 

14,031

 

12,645

 

42,837

 

38,539

 

Total revenues

 

26,026

 

22,691

 

78,457

 

70,678

 

Cost of product revenues

 

7,299

 

5,581

 

20,438

 

17,731

 

Cost of service revenues

 

8,784

 

8,490

 

28,203

 

25,463

 

Total cost of revenues

 

16,083

 

14,071

 

48,641

 

43,194

 

Gross profit

 

9,943

 

8,620

 

29,816

 

27,484

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

9,098

 

8,035

 

26,948

 

23,698

 

Research and development

 

1,946

 

1,979

 

5,554

 

5,287

 

Amortization of intangible assets

 

18

 

80

 

84

 

248

 

Total operating expenses

 

11,062

 

10,094

 

32,586

 

29,233

 

Operating loss

 

(1,119

)

(1,474

)

(2,770

)

(1,749

)

Non-operating income (expense):

 

 

 

 

 

 

 

 

 

Other income (expense), net

 

(9

)

(1

)

(14

)

(7

)

Interest income, net

 

3

 

4

 

8

 

9

 

Loss from continuing operations before income taxes

 

(1,125

)

(1,471

)

(2,776

)

(1,747

)

Benefit for income taxes

 

1,373

 

4

 

1,407

 

11

 

Income (loss) from continuing operations

 

248

 

(1,467

)

(1,369

)

(1,736

)

Gain on sale of discontinued operation, net of tax

 

95

 

87

 

258

 

278

 

Net income (loss)

 

$

343

 

$

(1,380

)

$

(1,111

)

$

(1,458

)

 

 

 

 

 

 

 

 

 

 

Income (loss) per share from continuing operations — basic and diluted

 

$

0.01

 

$

(0.05

)

$

(0.04

)

$

(0.05

)

Gain per share from sale of discontinued operation — basic and diluted

 

$

0.00

 

$

0.01

 

$

0.01

 

$

0.01

 

Net income (loss) per share - basic and diluted

 

$

0.01

 

$

(0.04

)

$

(0.03

)

$

(0.04

)

 

 

 

 

 

 

 

 

 

 

Shares used in basic per share calculations

 

32,877

 

32,205

 

32,670

 

32,125

 

Shares used in diluted per share calculations

 

34,258

 

32,205

 

32,670

 

32,125

 

 

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ITERIS, INC.

UNAUDITED SEGMENT REPORTING DETAILS

(in thousands)

 

 

 

Roadway 
Sensors

 

Transportation 
Systems

 

Ag & Weather 
Analytics

 

Iteris, Inc.

 

Three Months Ended December 31, 2017

 

 

 

 

 

 

 

 

 

Product revenues

 

$

11,008

 

$

987

 

$

 

$

11,995

 

Service revenues

 

34

 

12,584

 

1,413

 

14,031

 

Total revenues

 

$

11,042

 

$

13,571

 

$

1,413

 

$

26,026

 

 

 

 

 

 

 

 

 

 

 

Segment operating income (loss)

 

$

2,048

 

$

2,207

 

$

(1,815

)

$

2,440

 

Corporate and other income (expense), net

 

 

 

 

 

 

 

(3,541

)

Amortization of intangible assets

 

 

 

 

 

 

 

(18

)

Operating loss

 

 

 

 

 

 

 

$

(1,119

)

 

 

 

Roadway 
Sensors

 

Transportation 
Systems

 

Ag & Weather 
Analytics

 

Iteris, Inc.

 

Three Months Ended December 31, 2016

 

 

 

 

 

 

 

 

 

Product revenues

 

$

9,377

 

$

669

 

$

 

$

10,046

 

Service revenues

 

20

 

11,244

 

1,381

 

12,645

 

Total revenues

 

$

9,397

 

$

11,913

 

$

1,381

 

$

22,691

 

 

 

 

 

 

 

 

 

 

 

Segment operating income (loss)

 

$

1,940

 

$

1,920

 

$

(1,892

)

$

1,968

 

Corporate and other income (expense), net

 

 

 

 

 

 

 

(3,362

)

Amortization of intangible assets

 

 

 

 

 

 

 

(80

)

Operating loss

 

 

 

 

 

 

 

$

(1,474

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Roadway 
Sensors

 

Transportation 
Systems

 

Ag & Weather 
Analytics

 

Iteris, Inc.

 

Nine Months Ended December 31, 2017

 

 

 

 

 

 

 

 

 

Product revenues

 

$

33,438

 

$

2,182

 

$

 

$

35,620

 

Service revenues

 

145

 

39,210

 

3,482

 

42,837

 

Total revenues

 

$

33,583

 

$

41,392

 

$

3,482

 

$

78,457

 

 

 

 

 

 

 

 

 

 

 

Segment operating income (loss)

 

$

7,384

 

$

6,472

 

$

(5,882

)

$

7,974

 

Corporate and other income (expense), net

 

 

 

 

 

 

 

(10,660

)

Amortization of intangible assets

 

 

 

 

 

 

 

(84

)

Operating loss

 

 

 

 

 

 

 

$

(2,770

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Roadway 
Sensors

 

Transportation 
Systems

 

Ag & Weather 
Analytics

 

Iteris, Inc.

 

Nine Months Ended December 31, 2016

 

 

 

 

 

 

 

 

 

Product revenues

 

$

30,815

 

$

1,324

 

$

 

$

32,139

 

Service revenues

 

82

 

35,314

 

3,143

 

38,539

 

Total revenues

 

$

30,897

 

$

36,638

 

$

3,143

 

$

70,678

 

 

 

 

 

 

 

 

 

 

 

Segment operating income (loss)

 

$

6,897

 

$

6,813

 

$

(5,582

)

$

8,128

 

Corporate and other income (expense), net

 

 

 

 

 

 

 

(9,629

)

Amortization of intangible assets

 

 

 

 

 

 

 

(248

)

Operating loss

 

 

 

 

 

 

 

$

(1,749

)

 

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