Press Release
Fiscal Fourth Quarter 2017 Financial Highlights
-
Total revenue increased 28% year over year to a record
$25.3 million -
Transportation Systems revenue increased 32% year over year to
$12.6 million -
Roadway Sensors revenue increased 25% year over year to
$11.3 million -
Agriculture and Weather Analytics revenue increased 16% year over year
to
$1.4 million -
Net loss of
$0.10 GAAP;$0.04 Non-GAAP
Fiscal 2017 Full Year Financial Highlights
-
Total revenue increased 24% year over year to a record
$96.0 million -
Transportation Systems revenue increased 45% year over year to
$49.3 million , with Segment operating income margins expanding 500 basis points -
Roadway Sensors revenue increased 5% year over year to
$42.2 million , with Segment operating income margins expanding 230 basis points -
Agriculture and Weather Analytics revenue increased 34% year over year
to
$4.5 million -
Cash balance increased to
$18.2 million -
Net loss of
$0.15 GAAP;$0.08 Non-GAAP
Management commentary:
”We are pleased to deliver a fourth consecutive quarter of strong
year-over-year performance, ending the fiscal year with a record
“We believe the strong performance across our vertical markets provides a solid foundation to build upon in fiscal 2018,” continued Bergera. “We anticipate additional growth and improved profitability as we introduce more innovations in our transportation end-markets, while continuing to build a market leading position in the global digital agriculture market.”
Business Segment Reassignment
Beginning in the Company’s first fiscal quarter of 2017, certain operations that were previously within its Agriculture and Weather Analytics segment (formerly known as Performance Analytics), specifically its performance measurement and information management solution iPeMS® and related traffic consulting services, were reassigned to the Transportation Systems segment to better align the Company’s traffic analytics capabilities, resources and initiatives. Prior year segment information presented in the table below has been re-classified to reflect this change.
GAAP Fiscal Fourth Quarter 2017 Financial Results
Total revenue in the fourth quarter of fiscal 2017 increased 28% to a
record
Operating expenses in the fourth quarter were
Operating loss in the fourth quarter was
GAAP Fiscal 2017 Full Year Financial Results
Total revenue in fiscal 2017 increased 24% to a record
Operating expenses in fiscal 2017 were
Operating loss in fiscal 2017 was
Non-GAAP Fiscal Q4 2017 Financial Results
In addition to results presented in accordance with generally accepted
accounting principles in
Non-GAAP operating expenses in the fourth quarter increased to
Non-GAAP Fiscal 2017 Full Year Financial Results
Non-GAAP operating expenses in fiscal 2017 were
Earnings Conference Call
Date:
Time:
Toll-free dial-in number: 1-888-349-9582
International dial-in number: 1-719-325-2196
Conference ID: 4406916
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
A replay of the conference call will be available after
About
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,
spending policy changes, constraints and delays; the timing and amount
of government funds allocated to overall transportation infrastructure
projects and the transportation industry; 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 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
ITERIS, INC. | |||||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(in thousands) | |||||||||
|
March 31, |
March 31, | |||||||
2017 | 2016 | ||||||||
ASSETS: |
|||||||||
Cash | $ | 18,201 | $ | 16,029 | |||||
Trade accounts receivable, net | 14,299 | 13,241 | |||||||
Unbilled accounts receivable | 6,456 | 5,250 | |||||||
Inventories | 2,250 | 3,153 | |||||||
Prepaid expenses and other current assets | 2,108 | 1,505 | |||||||
Total current assets | 43,314 | 39,178 | |||||||
Property and equipment, net | 2,064 | 2,139 | |||||||
Goodwill | 15,150 | 17,318 | |||||||
Intangible and other assets, net | 1,817 | 1,385 | |||||||
Total assets | $ | 62,345 | $ | 60,020 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY: |
|||||||||
Accounts payable and other current liabilities | $ | 16,530 | $ | 12,633 | |||||
Deferred revenue | 4,049 | 2,294 | |||||||
Total current liabilities | 20,579 | 14,927 | |||||||
Long-term liabilities | 1,542 | 1,631 | |||||||
Total liabilities | 22,121 | 16,558 | |||||||
Stockholders’ equity | 40,224 | 43,462 | |||||||
Total liabilities and stockholders’ equity |
$ | 62,345 | $ | 60,020 |
ITERIS, INC. |
||||||||||||||||||||||||||
UNAUDITED CONSOLIDATED | ||||||||||||||||||||||||||
STATEMENTS OF OPERATIONS | ||||||||||||||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||
March 31, |
March 31, | |||||||||||||||||||||||||
2017 |
2016 | 2017 | 2016 | |||||||||||||||||||||||
Total revenues | $ | 25,304 | $ | 19,796 | $ | 95,982 | $ | 77,748 | ||||||||||||||||||
Cost of revenues | 15,386 | 11,858 | 58,580 | 47,079 | ||||||||||||||||||||||
Gross profit | 9,918 | 7,938 | 37,402 | 30,669 | ||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Selling, general and administrative | 9,615 | 7,672 | 33,313 | 26,846 | ||||||||||||||||||||||
Research and development | 1,590 | 1,503 | 6,877 | 6,933 | ||||||||||||||||||||||
33 | 84 | 281 | 360 | |||||||||||||||||||||||
Amortization of intangible assets |
||||||||||||||||||||||||||
Loss on impairment of Goodwill | 2,168 | - | 2,168 | - | ||||||||||||||||||||||
Total operating expenses | 13,406 | 9,259 | 42,639 | 34,139 | ||||||||||||||||||||||
Operating loss | (3,488 | ) | (1,321 | ) | (5,237 | ) | (3,470 | ) | ||||||||||||||||||
Non-operating income (expense): | ||||||||||||||||||||||||||
Other income (expense), net | - | 1 | (7 | ) | 2 | |||||||||||||||||||||
Interest income, net | 4 | 1 | 13 | 12 | ||||||||||||||||||||||
Loss from continuing operations before income taxes | (3,484 | ) | (1,319 | ) | (5,231 | ) | (3,456 | ) | ||||||||||||||||||
Benefit (expense) for income taxes | 33 | (24 | ) | 44 | (9,079 | ) | ||||||||||||||||||||
Loss from continuing operations | (3,451 | ) | (1,343 | ) | (5,187 | ) | (12,535 | ) | ||||||||||||||||||
Gain on sale of discontinued operation, net of tax | 83 | 51 | 361 | 214 | ||||||||||||||||||||||
Net loss | $ | (3,368 | ) | $ | (1,292 | ) | $ | (4,826 | ) | $ | (12,321 | ) | ||||||||||||||
Loss per share from continuing operations – | (0.11 | ) | (0.04 | ) | (0.16 | ) | (0.39 | ) | ||||||||||||||||||
basic and diluted | $ | $ | $ | $ | ||||||||||||||||||||||
Gain per share from sale of discontinued operation – | 0.01 | 0.00 | 0.01 | 0.01 | ||||||||||||||||||||||
basic and diluted | $ | $ | $ | $ | ||||||||||||||||||||||
Net loss per share - basic and diluted | $ | (0.10 | ) | $ | (0.04 | ) | $ | (0.15 | ) | $ | (0.38 | ) | ||||||||||||||
Shares used in basic and diluted per share calculations |
32,324 |
32,043 |
32,174 |
32,049 |
ITERIS, INC. | ||||||||||||||||||||||
UNAUDITED SEGMENT REPORTING DETAILS | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||
Roadway |
Transportation |
Ag & Weather |
Iteris, Inc. |
|||||||||||||||||||
Three Months Ended March 31, 2017 |
||||||||||||||||||||||
Total revenues | $ | 11,272 | $ | 12,631 | $ | 1,401 | $ | 25,304 | ||||||||||||||
Loss on Impairment of Goodwill | - | - | (2,168 | ) | (2,168 | ) | ||||||||||||||||
Segment operating income (loss) | $ | 2,901 | $ | 1,667 | $ | (3,974 | ) | $ | 594 | |||||||||||||
Corporate and other income (expense), net | (4,049 | ) | ||||||||||||||||||||
Amortization of intangible assets |
(33 | ) | ||||||||||||||||||||
Operating loss | $ | (3,488 | ) | |||||||||||||||||||
Roadway |
Transportation |
Ag & Weather |
Iteris, Inc. | |||||||||||||||||||
Three Months Ended March 31, 2016 | ||||||||||||||||||||||
Total revenues | $ | 9,023 | $ | 9,560 | $ | 1,213 | $ | 19,796 | ||||||||||||||
Segment operating income (loss) | $ | 1,348 | $ | 1,097 | $ | (1,236 | ) | $ | 1,209 | |||||||||||||
Corporate and other income (expense), net | (2,446 | ) | ||||||||||||||||||||
Amortization of intangible assets | (84 | ) | ||||||||||||||||||||
Operating loss | $ | (1,321 | ) | |||||||||||||||||||
Roadway |
Transportation |
Ag & Weather |
Iteris, Inc. |
|||||||||||||||||||
Twelve Months Ended March 31, 2017 | ||||||||||||||||||||||
Total revenues | $ | 42,170 | $ | 49,270 | $ | 4,542 | $ | 95,982 | ||||||||||||||
Loss on Impairment of Goodwill | - | - | (2,168 | ) | (2,168 | ) | ||||||||||||||||
Segment operating income (loss) | $ | 9,799 | $ | 8,482 | $ | (9,557 | ) | $ | 8,724 | |||||||||||||
Corporate and other income (expense), net | (13,680 | ) | ||||||||||||||||||||
Amortization of intangible assets | (281 | ) | ||||||||||||||||||||
Operating loss | $ | (5,237 | ) | |||||||||||||||||||
Roadway |
Transportation |
Ag & Weather |
Iteris, Inc. | |||||||||||||||||||
Twelve Months Ended March 31, 2016 | ||||||||||||||||||||||
Total revenues | $ | 40,259 | $ | 34,095 | $ | 3,394 | $ | 77,748 | ||||||||||||||
Segment operating income (loss) | $ | 8,401 | $ | 4,170 | $ | (6,140 | ) | $ | 6,431 | |||||||||||||
Corporate and other income (expense), net | (9,541 | ) | ||||||||||||||||||||
Amortization of intangible assets | (360 | ) | ||||||||||||||||||||
Operating loss | $ | (3,470 | ) |
Non-GAAP Financial Measures and Reconciliation
In addition to results presented in accordance with GAAP, the Company has included the following non-GAAP financial measures in this release: non-GAAP operating expenses, non-GAAP operating (loss) income, non-GAAP net income and non-GAAP basic and diluted earnings per share from continuing operations. These non-GAAP financial measures exclude the following items: (a) audit fee overruns; (b) quarterly review fee increases; (c) financial consulting services; (d) severance and transition related costs paid to the Company’s former Chief Executive Officer; (e) executive management recruiting costs; (f) loss on impairment of Goodwill; (g) the estimated income tax effect of the foregoing non-GAAP adjustments; and (h) the recording of a valuation allowance on the company’s deferred tax assets.
Management uses certain non-GAAP financial measures internally for strategic decision making, forecasting future results and evaluating current performance. Non-GAAP financial measures are not prepared in accordance with GAAP; therefore, the information is not necessarily comparable to other companies' financial information and should be considered as a supplement to, not a substitute for, or superior to, the corresponding financial measures calculated in accordance with GAAP.
Details of the items excluded from GAAP financial results in calculating non-GAAP financial measures and explanatory footnotes are as follows:
a) Audit fee overruns were calculated as the amount of audit fees that
exceeded the expected fees per the Company’s audit engagement letters.
For the audit of Fiscal 2015, $0 and approximately
b) Fiscal 2015 quarterly review fee increases were incurred during third and fourth quarters of Fiscal 2015 and related to the additional testing procedures required in connection with the Fiscal 2015 quarterly reviews. The quarterly review fee increases were calculated as the amount of review fees that exceeded the quarterly review fees in Fiscal years 2013 and 2014.
c) Management engaged financial consulting service firms to assist with the completion of its Fiscal 2015 and Fiscal 2014 audits. The fees incurred for assistance with the Fiscal 2015 audit were incurred during the first quarter of Fiscal 2016. The fees incurred for assistance with the Fiscal 2014 audit were incurred during the first and second quarters of 2015.
d) On
e) The Company incurred third party recruiting service fees in the third and fourth fiscal quarters of 2015 in connection with the search for a permanent CFO and CEO.
f) As a result of the Company’s annual goodwill impairment test for
Fiscal 2017, Management concluded that the carrying value of goodwill
related to legacy acquisitions by our Agriculture and Weather Analytic
reporting unit, exceeded its fair value. This resulted in an
approximately
g) The amount represents the estimated income tax effect of the non-GAAP adjustments. The tax effect of non-GAAP adjustments for Fiscal 2017 and Fiscal 2016 were calculated by applying an estimated tax rate of 1% to each specific non-GAAP item, due to the impact of the valuation allowance on our effective tax rate in those years. The tax effect of non-GAAP adjustments for Fiscal 2015 was calculated by applying an estimated tax rate of 38% to each specific non-GAAP item.
h) The Company recorded an approximate
Iteris, Inc. | ||||||||||||||||||
Schedule Reconciling GAAP Net Loss to Non-GAAP Net Loss | ||||||||||||||||||
($ in thousands, except per share amounts) | ||||||||||||||||||
(unaudited) | ||||||||||||||||||
For the Three Months Ended |
||||||||||||||||||
March 31, |
||||||||||||||||||
2017 | 2016 | 2015 | ||||||||||||||||
GAAP net loss | $ | (3,368 | ) | $ | (1,292 | ) | $ | (766 | ) | |||||||||
GAAP net loss per share - basic and diluted | $ | (0.10 | ) | $ | (0.04 | ) | $ | (0.02 | ) | |||||||||
The non-GAAP amounts have been adjusted to exclude the following items: | ||||||||||||||||||
Excluded from operating expenses: | ||||||||||||||||||
Quarterly review fee increases (b) | $ | - | $ | - | $ | (53 | ) | |||||||||||
Financial consulting service fees (c) | - | - | (12 | ) | ||||||||||||||
Executive management severance costs (d) | - | - | (594 | ) | ||||||||||||||
Executive management recruiting costs (e) | - | - | (272 | ) | ||||||||||||||
Loss on impairment of Goodwill (f) | (2,168 | ) | - | - | ||||||||||||||
Total excluded from operating expenses | $ | (2,168 | ) | $ | - | $ | (931 | ) | ||||||||||
Total excluded operating loss | $ | (2,168 | ) | $ | - | $ | (931 | ) | ||||||||||
Income tax effect on non-GAAP adjustments (g) | 22 | - | 363 | |||||||||||||||
Total excluded from operating expenses after income tax effect | $ | (2,146 | ) | $ | - | $ | (568 | ) | ||||||||||
Non-GAAP net loss | $ | (1,222 | ) | $ | (1,292 | ) | $ | (198 | ) | |||||||||
Non-GAAP net loss per share - basic and diluted | $ |
(0.04 |
) | $ | (0.04 | ) | $ | (0.01 | ) | |||||||||
(b) - (g) See corresponding footnotes above. |
Iteris, Inc. |
||||||||||||||||||
Schedule Reconciling GAAP Net Loss to Non-GAAP Net (Loss) Income | ||||||||||||||||||
($ in thousands, except per share amounts) | ||||||||||||||||||
(unaudited) | ||||||||||||||||||
For the Twelve Months Ended |
||||||||||||||||||
March 31, | ||||||||||||||||||
2017 | 2016 | 2015 | ||||||||||||||||
GAAP net loss | $ | (4,826 | ) | $ | (12,321 | ) | $ | (1,070 | ) | |||||||||
GAAP net loss per share - basic and diluted | $ | (0.15 | ) | $ | (0.38 | ) | $ | (0.03 | ) | |||||||||
The non-GAAP amounts have been adjusted to exclude the following items: | ||||||||||||||||||
Excluded from operating expenses | ||||||||||||||||||
Audit Fee overruns (a) | $ | - | $ | (150 | ) | $ | (941 | ) | ||||||||||
Quarterly review fee increases (b) | - | - | (174 | ) | ||||||||||||||
Financial consulting service fees (c) | - | (88 | ) | (768 | ) | |||||||||||||
Executive management severance costs (d) | - | (150 | ) | (594 | ) | |||||||||||||
Executive management recruiting costs (e) | - | - | (383 | ) | ||||||||||||||
Loss on impairment of Goodwill (f) | (2,168 | ) | - | - | ||||||||||||||
Total excluded from operating expenses | $ | (2,168 | ) | $ | (388 | ) | $ | (2,860 | ) | |||||||||
Total excluded operating loss | $ | (2,168 | ) | $ | (388 | ) | $ | (2,860 | ) | |||||||||
Income tax effect on non-GAAP adjustments (g) | 22 | 4 | 1,116 | |||||||||||||||
Total excluded from operating expenses after income tax effect | $ | (2,146 | ) | $ | (384 | ) | $ |
(1,744 |
) | |||||||||
Excluded from income tax expenses | ||||||||||||||||||
Valuation allowance on deferred tax assets (h) | - | (10,064 | ) | - | ||||||||||||||
Non-GAAP net (loss) income | $ | (2,680 | ) | $ | (1,873 | ) | $ |
674 |
||||||||||
Non-GAAP net (loss) income per share - basic and diluted | $ | (0.08 | ) | $ | (0.06 | ) | $ | 0.02 | ||||||||||
(a) - (h) See corresponding footnotes above. |
Iteris, Inc. | ||||||||||||||||||
Schedule Reconciling GAAP Operating (Loss) to Non-GAAP Operating (Loss) Income | ||||||||||||||||||
($ in thousands, except per share amounts) | ||||||||||||||||||
(unaudited) | ||||||||||||||||||
For the Three Months Ended | ||||||||||||||||||
March 31, | ||||||||||||||||||
2017 | 2016 | 2015 | ||||||||||||||||
GAAP operating expenses | $ | 13,406 | $ | 9,259 | $ | 8,285 | ||||||||||||
Quarterly review fee increases (b) | - | - | (53 | ) | ||||||||||||||
Financial consulting service fees (c) | - | - | (12 | ) | ||||||||||||||
Executive management severance costs (d) | - | - | (594 | ) | ||||||||||||||
Executive management recruiting costs (e) | - | - | (272 | ) | ||||||||||||||
Loss on impairment of Goodwill (f) | (2,168 | ) | - | - | ||||||||||||||
Non-GAAP operating expenses | $ | 11,238 | $ | 9,259 | $ | 7,354 | ||||||||||||
GAAP operating loss | $ | (3,488 | ) | $ | (1,321 | ) | $ | (1,071 | ) | |||||||||
Quarterly review fee increases(b) | - | - | (53 | ) | ||||||||||||||
Financial consulting service fees (c) | - | - | (12 | ) | ||||||||||||||
Executive management severance costs (d) | - | - | (594 | ) | ||||||||||||||
Executive management recruiting costs (e) | - | - | (272 | ) | ||||||||||||||
Loss on impairment of Goodwill (f) | (2,168 | ) | - | - | ||||||||||||||
Non-GAAP operating loss | $ | (1,320 | ) | $ | (1,321 | ) | $ | (140 | ) |
Iteris, Inc. | ||||||||||||||||||
Schedule Reconciling GAAP Operating (Loss) to Non-GAAP Operating (Loss) Income | ||||||||||||||||||
($ in thousands, except per share amounts) | ||||||||||||||||||
(unaudited) | ||||||||||||||||||
For the Twelve Months Ended |
||||||||||||||||||
March 31, | ||||||||||||||||||
2017 | 2016 | 2015 | ||||||||||||||||
GAAP operating expenses | $ | 42,639 | $ | 34,139 | $ | 30,261 | ||||||||||||
Audit Fee overruns (a) | - | (150 | ) | (941 | ) | |||||||||||||
Quarterly review fee increases (b) | - | - | (174 | ) | ||||||||||||||
Financial consulting service fees (c) | - | (88 | ) | (768 | ) | |||||||||||||
Executive management severance costs (d) | - | (150 | ) | (594 | ) | |||||||||||||
Executive management recruiting costs (e) | - | - | (383 | ) | ||||||||||||||
Loss on impairment of Goodwill (f) | (2,168 | ) | - | - | ||||||||||||||
Non-GAAP operating expenses | $ | 40,471 | $ | 33,751 | $ | 27,401 | ||||||||||||
GAAP operating loss | $ | (5,237 | ) | $ | (3,470 | ) | $ | (2,079 | ) | |||||||||
Audit Fee overruns (a) | - | (150 | ) | (941 | ) | |||||||||||||
Quarterly review fee increases (b) | - | - | (174 | ) | ||||||||||||||
Financial consulting service fees (c) | - | (88 | ) | (768 | ) | |||||||||||||
Executive management severance costs (d) | - | (150 | ) | (594 | ) | |||||||||||||
Executive management recruiting costs (e) | - | - | (383 | ) | ||||||||||||||
Loss on impairment of Goodwill (f) | (2,168 | ) | - | - | ||||||||||||||
Non-GAAP operating (loss) income | $ | (3,069 | ) | $ | (3,082 | ) | $ | 781 |
View source version on businesswire.com: http://www.businesswire.com/news/home/20170608006223/en/
Source:
Investor Relations
MKR Group, Inc.
Todd Kehrli,
323-468-2300
iti@mkr-group.com