EX-99.1 2 iti-20210930x8xkex991.htm EX-99.1 Document

Exhibit 99.1
itia02.jpg
Iteris Reports 18% Revenue Growth Year Over Year for First Half of Fiscal 2022 and
Maintains Full Year Revenue Guidance of $134 Million to $142 Million
SANTA ANA, Calif. – November 3, 2021 – Iteris, Inc. (NASDAQ: ITI), the global leader in smart mobility infrastructure management, today reported financial results for its fiscal second quarter 2022 ended September 30, 2021. During the first quarter of fiscal 2021, the company completed the sale of its Agriculture and Weather Analytics segment to DTN, LLC. The results of the Agriculture and Weather Analytics segment are reported as discontinued operations for all periods presented in this release.

Fiscal Second Quarter 2022 Financial Summary

•Total revenue of $33.2 million, up 14% year over year
•Record total ending backlog of $83.4 million, up 14% year over year
•GAAP net loss from continuing operations of $2.1 million, or $(0.05) per diluted share due to a one-time, non-cash charge in the second quarter related to an amendment to a software development contract
•Adjusted EBITDA of $2.3 million, a 18% or $0.4 million improvement year over year

Fiscal First Half 2022 Financial Summary

•Total revenue of $67.3 million, up 18% year over year
•GAAP net loss from continuing operations of $1.5 million, or $(0.03) per diluted share due to a one-time, non-cash charge in the second quarter related to an amendment to a software development contract
•Adjusted EBITDA of $5.4 million, a 28%, or $1.2 million, improvement year over year

Fiscal Full-Year 2022 Outlook

•Maintains the total revenue guidance range of $134 million to $142 million, which would represent year-over-year growth of 15% at the low end and 21% at the high end
•Maintains adjusted EBITDA guidance range of 7% to 8% of fiscal full year 2022 revenue, which would represent year-over-year growth of 10% at the low end and 27% at the high end

Management Commentary:

“Although supplier issues in the second quarter caused some delay in revenue recognition, we are very pleased with the customer response to our ClearMobility Platform and continue to experience strong demand across both public- and private-sector end-markets,” said Joe Bergera, president and CEO of Iteris. “We enter the second half of fiscal 2022 with record total ending backlog and an exciting product roadmap; therefore, we expect to continue to gain share in the highly fragmented smart mobility infrastructure management market.”

GAAP Fiscal Second Quarter 2022 Financial Results

Total revenue in the second quarter of fiscal 2022 increased 14% to $33.2 million, compared with $29.3 million in the same quarter a year ago primarily driven by the addition of revenues from TrafficCast, and continued strong demand for both hardware and software solutions.

Operating expenses in the second quarter increased 27% to $13.5 million compared with $10.6 million the same quarter a year ago. The increase was a result of the TrafficCast acquisition and continued investment in research and development and sales and marketing.

Operating loss from continuing operations in the second quarter was approximately $2.4 million, which included a $2.8 million one-time charge related to the amendment of a software development contract, compared with an operating income of approximately $0.7 million in the same quarter a year ago. Net loss from continuing operations in the second quarter was approximately $2.1 million, or $(0.05) per diluted share. After adjusting for the one-time charge, diluted earnings per share would have been $0.02, which compared with net income from continuing operations of $0.7 million, or $0.02 per diluted share, in the same quarter a year ago.
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Non-GAAP Fiscal Second Quarter 2022 Financial Results

In addition to results presented in accordance with generally accepted accounting principles in the United States (“GAAP”), the company has included the following non-GAAP financial measure: Adjusted income from continuing operations before interest, taxes, depreciation, amortization, stock-based compensation expense, restructuring charges, and project loss reserves (“Adjusted EBITDA”). A discussion of the company’s use of this non-GAAP financial measure is set forth below in the financial statements portion of this release under the heading “Non-GAAP Financial Measures and Reconciliation.”

Adjusted EBITDA in the second quarter was approximately $2.3 million, or 6.9% of total revenues, compared with approximately $2.0 million, or 6.7% of total revenues, in the same quarter a year ago.

Earnings Conference Call

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

Date: Wednesday, November 3, 2021
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Toll-free dial-in number: +1-800-437-2398
International dial-in number: +1 323-289-6576
Conference ID: 1077260

To listen to the live webcast or 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 November 10, 2021. To access the replay dial information, please click here.

About Iteris, Inc.

Iteris is the global leader in smart mobility infrastructure management – the foundation for a new era of mobility. We apply cloud computing, artificial intelligence, advanced sensors, advisory services and managed services to achieve safe, efficient and sustainable mobility. Our end-to-end solutions monitor, visualize and optimize mobility infrastructure around the world to help ensure that roads are safe, travel is efficient, and communities thrive. 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 demand and growth opportunities, conversion of bookings to revenue, the impact and success of new solution offerings, the Company’s recent acquisition, our future performance, growth and profitability, operating results, and 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, spending and scheduling changes, funding constraints and delays, including in light of the COVID-19 pandemic; the timing and amount of government funds allocated to overall transportation infrastructure projects and the transportation industry; our ability to replace large contracts once they have been completed; the effectiveness of efficiency, cost, and expense reduction efforts; our ability to achieve anticipated benefits from our sale of our Agriculture and Weather Analytics segment; our ability to successfully complete and integrate acquired assets and companies; our ability to specify, develop, complete, introduce, market and gain broad acceptance of our new and existing product and service offerings; risks related to our ability to recruit and/or retain key talent; the potential unforeseen impact of product and service offerings from competitors, increased competition in certain market segments, and such competitors’ patent coverage and claims; any softness in the markets that we address; adverse effects of the COVID-19 pandemic on our vendors and our employees; 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, such as the COVID-19 pandemic, import/export tariffs, terrorist activities or armed conflicts 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).

Iteris Contact
Douglas Groves
Senior Vice President and Chief Financial Officer
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Tel: (949) 270-9643
Email: dgroves@iteris.com

Investor Relations
MKR Investor Relations, Inc.
Todd Kehrli
Tel: (213) 277-5550
Email: iti@mkr-group.com
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ITERIS, INC.
UNAUDITED CONDENSED CONSOLIDATED
BALANCE SHEETS
(in thousands)
September 30,
2021		March 31,
2021
Assets
Current assets:
Cash and cash equivalents$28,166 $25,205 
Restricted cash240 263 
Short-term investments— 3,100 
Trade accounts receivable, net21,749 19,020 
Unbilled accounts receivable10,263 11,541 
Inventories6,049 5,066 
Prepaid expenses and other current assets2,443 5,445 
Total current assets68,910 69,640 
Property and equipment, net1,827 1,923 
Right-of-use assets11,768 11,353 
Intangible assets, net13,042 14,297 
Goodwill28,340 28,340 
Other assets1,516 1,238 
Noncurrent assets of discontinued operations 42 78 
Total assets$125,445 $126,869 
Liabilities and stockholders’ equity
Current liabilities:
Trade accounts payable$8,060 $8,935 
Accrued payroll and related expenses10,700 11,734 
Accrued liabilities4,817 4,921 
Deferred revenue6,605 7,349 
Current liabilities of discontinued operations 127 94 
Total current liabilities30,309 33,033 
Long-term liabilities14,379 14,596 
Noncurrent liabilities of discontinued operations 219 261 
Total liabilities44,907 47,890 
Stockholders’ equity80,538 78,979 
Total liabilities and stockholders’ equity$125,445 $126,869 

















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ITERIS, INC.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
(in thousands, except per share amounts)


Three Months Ended
September 30,		Six Months Ended
September 30,
2021202020212020
Product revenues$17,736 $16,265 $35,762 $30,659 
Service revenues15,511 12,991 31,570 26,597 
Total revenues33,247 29,256 67,332 57,256 
Cost of product revenues8,983 9,332 18,540 17,413 
Cost of service revenues13,134 8,566 23,569 17,617 
Cost of revenues22,117 17,898 42,109 35,030 
Gross profit11,130 11,358 25,223 22,226 
Operating expenses:
General and administrative6,107 5,872 12,497 11,240 
Sales and marketing4,895 3,374 9,482 6,729 
Research and development1,829 1,134 3,594 2,048 
Amortization of intangible assets668 230 1,336 460 
Restructuring charges— — — 619 
Total operating expenses13,499 10,610 26,909 21,096 
Operating income (loss)(2,369)748 (1,686)1,130 
Non-operating income (expense):
Other income (expense), net30 (44)48 (28)
Interest income, net1 43 4 97 
Income (loss) from continuing operations before income taxes(2,338)747 (1,634)1,199 
(Provision) benefit for income taxes249 (28)174 (62)
Net income (loss) from continuing operations(2,089)719 (1,460)1,137 
Loss from discontinued operations before gain on sale, net of tax(58)(306)(76)(1,664)
Gain on sale of discontinued operations, net of tax— — — 11,288 
Net income (loss) from discontinued operations, net of tax(58)(306)(76)9,624 
Net income (loss)$(2,147)$413 $(1,536)$10,761 
Income (loss) per share - basic:
Income (loss) per share from continuing operations$(0.05)$0.02 $(0.03)$0.03 
Income (loss) per share from discontinued operations$0.00 $(0.01)$0.00 $0.24 
Net income (loss) per share$(0.05)$0.01 $(0.03)$0.27 
Income (loss) per share - diluted:
Income (loss) per share from continuing operations$(0.05)$0.02 $(0.03)$0.03 
Income (loss) per share from discontinued operations$0.00 $(0.01)$0.00 $0.23 
Net income (loss) per share$(0.05)$0.01 $(0.03)$0.26 
Shares used in basic per share calculations42,282 40,989 42,079 40,860 
Shares used in diluted per share calculations42,282 41,909 42,079 41,708 








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ITERIS, INC.

Non-GAAP Financial Measures and Reconciliation

In addition to results presented in accordance with GAAP, the company has included the following non-GAAP financial measure in this release: Adjusted income (loss) from continuing operations before interest, taxes, depreciation, amortization, stock-based compensation expense, restructuring charges, and project loss reserves (“Adjusted EBITDA”).

When viewed with our financial results prepared in accordance with GAAP and accompanying reconciliations, we believe Adjusted EBITDA provides additional useful information to clarify and enhance the understanding of the factors and trends affecting our past performance and future prospects. We define this measure, explain how it is calculated and provide reconciliations of this measure to the most comparable GAAP measure in the table below. Adjusted EBITDA is a supplemental measure of our performance that is not required by, or presented in accordance with, GAAP. This is not a measurement of our financial performance under GAAP and should not be considered as alternatives to net income or any other performance measures derived in accordance with GAAP, or as an alternative to net cash provided by operating activities as measures of our liquidity. The presentation of this measure should not be interpreted to mean that our future results will be unaffected by unusual or nonrecurring items.

We use the Adjusted EBITDA non-GAAP operating performance measure internally as a complementary financial measure to evaluate the performance and trends of our businesses. We present Adjusted EBITDA and the related financial ratios, as applicable, because we believe that measures such as these provide useful information with respect to our ability to meet our operating commitments.

Adjusted EBITDA and the related financial ratios have limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations include:
•They do not reflect our cash expenditures, future requirements for capital expenditures or contractual commitments;
•They do not reflect changes in, or cash requirements for, our working capital needs;
•Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements;
•They are not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows;
•They do not reflect the impact on earnings of charges resulting from matters unrelated to our ongoing operations; and
•Other companies in our industry may calculate Adjusted EBITDA differently from us, limiting their usefulness as comparative measures.

Because of these limitations, Adjusted EBITDA and the related financial ratios should not be considered as measures of discretionary cash available to us to invest in the growth of our business or as a measure of cash that will be available to us to meet our obligations. You should compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only as supplemental information. See our Condensed Consolidated Financial Statements contained in this Press Release. However, in spite of the above limitations, we believe that Adjusted EBITDA and the related financial ratios are useful to an investor in evaluating our results of operations because these measures:
•Are widely used by investors to measure a company’s operating performance without regard to items excluded from the calculation of such terms, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired, among other factors;
•Help investors to evaluate and compare the results of our operations from period to period by removing the effect of our capital structure from our operating performance; and
•Are used by our management team for various other purposes in presentations to our Board of Directors as a basis for strategic planning and forecasting.

The following financial items have been added back to or subtracted from our net income when calculating Adjusted EBITDA:
•Interest expense. Iteris excludes interest expense because it does not believe this item is reflective of ongoing business and operating results. This amount may be useful to investors for determining current cash flow.
•Income tax. This amount may be useful to investors because it represents the taxes which may be payable for the period and the change in deferred taxes during the period, and may reduce cash flow available for use in our business.
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•Depreciation. Iteris excludes depreciation expense primarily because it is a non-cash expense. These amounts may be useful to investors because it generally represents the wear and tear on our property and equipment used in our operations.
•Amortization. Iteris incurs amortization of intangible assets in connection with acquisitions. Iteris also incurs amortization related to capitalized software development costs. Iteris excludes these items because it does not believe that these expenses are reflective of ongoing operating results in the period incurred. These amounts may be useful to investors because it represents the estimated attrition of our acquired customer base and the diminishing value of product rights.
•Stock-based compensation. These expenses consist primarily of expenses from employee and director equity based compensation plans Iteris excludes stock-based compensation primarily because they are non-cash expenses and Iteris believes that it is useful to investors to understand the impact of stock-based compensation to its results of operations and current cash flow.
•Restructuring charges. These expenses consist primarily of employee separation expenses, facility termination costs, and other expenses associated with Company restructuring activities. Iteris excludes these expenses as it does not believe that these expenses are reflective of ongoing operating results in the period incurred. These amounts may be useful to our investors in evaluating our core operating performance.
•Project loss. These expenses consist primarily of expenses incurred to complete a software development contract that will not be recoverable and largely related to previously incurred and capitalized costs for non-recurring engineering activity. Iteris excludes these expenses as it does not believe that these expenses are reflective of ongoing operating results in the period incurred. These amounts may be useful to our investors in evaluating our core operating performance.

Reconciliations of net income (loss) from continuing operations to Adjusted EBITDA and the presentation of Adjusted EBITDA as a percentage of net revenues were as follows:

Three Months Ended
September 30,		Six Months Ended
September 30,
2021202020212020
(In Thousands)(In Thousands)
Net income (loss) from continuing operations$(2,089)$719$(1,460)$1,137
Income tax expense (benefit)(249)28(174)62
Depreciation expense194182426367
Amortization expense8153631,618724
Stock-based compensation8346671,6281,331
Other adjustments:
Restructuring charges———619
Project loss2,805—3,394—
Total adjustments$4,399$1,240$6,892$3,103
Adjusted EBITDA$2,310$1,959$5,432$4,240
Percentage of total revenues6.9 %6.7 %8.1 %7.4 %
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