Press Release
Fiscal Full Year 2018 Financial Highlights
-
Total revenue increased 8% year over year to a record
$103.7 million -
Transportation Systems revenue increased 11% year over year to
$54.5 million -
Agriculture and Weather Analytics revenue increased 8% year over year
to
$4.9 million , with segment gross margins expanding 210 basis points -
Roadway Sensors revenue increased 5% year over year to
$44.5 million -
Net loss per share of
$(0.11) GAAP;$(0.04) Non-GAAP
Fiscal Fourth Quarter 2018 Financial Highlights
-
Total revenue remained consistent with fiscal 2017 at
$25.3 million -
Transportation Systems revenue increased 4% year over year to
$13.1 million , with segment gross margins expanding 370 basis points -
Agriculture and Weather Analytics revenue increased 1% year over year
to
$1.4 million , with segment gross margins expanding 510 basis points -
Roadway Sensors revenue declined 4% year over year to
$10.8 million due to continued choppiness inTexas following last year’s Hurricane Harvey -
Net loss per share of
$(0.07) GAAP;$(0.04) Non-GAAP
Management commentary
“We are pleased with our full-year revenue performance, ending the
fiscal year with a record
“In fiscal Q4, our Roadway Sensors segment continued to encounter
choppiness in
In conclusion, Mr. Bergera noted “we remain focused on capturing the
significant opportunities in front of
GAAP Fiscal Fourth Quarter 2018 Financial Results
Total revenue in the fourth quarter of fiscal 2018 remained consistent
with fiscal 2017 at
Operating expenses in the fourth quarter were
Regarding selling, general and administrative expenses (SG&A), our
selling expenses increased approximately
Research and development (R&D) expenses increased approximately
Finally, fourth quarter fiscal 2017 saw the impairment of goodwill related to our Agriculture and Weather Analytics segment, while there was no goodwill impairment in Q4 of fiscal 2018.
Operating loss in the fourth quarter was
GAAP Fiscal 2018 Full Year Financial Results
Total revenue in fiscal 2018 increased 8.1% to a record
Operating expenses for fiscal year 2018 were
Regarding SG&A, selling expenses increased approximately
R&D expenses increased approximately
Finally, fiscal 2017 saw the impairment of goodwill in our Agriculture and Weather Analytics segment, while there were no goodwill impairment charges in fiscal 2018.
Operating loss in fiscal 2018 was
Non-GAAP Fiscal Q4 2018 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 2018 Full Year Financial Results
Non-GAAP operating expenses in fiscal 2018 were
Earnings Conference Call
Date:
Time:
Toll-free dial-in number: 1-800-263-0877
International
dial-in number: 1-646-828-8143
Conference ID: 5132802
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 and
cost-effective 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; risks related to our ability to
recruit and/or retain key talent; any softness in the markets that we
address, 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, | |||||
2018 | 2017 | |||||
ASSETS: | ||||||
Cash | $ | 10,152 | $ | 18,201 | ||
Short term investments | 5,319 | - | ||||
Trade accounts receivable, net | 12,866 | 14,299 | ||||
Unbilled accounts receivable | 7,473 | 6,456 | ||||
Inventories | 2,921 | 2,250 | ||||
Prepaid expenses and other current assets | 1,165 | 2,108 | ||||
Total current assets | 39,896 | 43,314 | ||||
Property and equipment, net | 2,333 | 2,064 | ||||
Goodwill | 15,150 | 15,150 | ||||
Intangible and other assets, net | 5,507 | 1,817 | ||||
Total assets | $ | 62,886 | $ | 62,345 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY: | ||||||
Accounts payable and other current liabilities | $ | 17,594 | $ | 16,530 | ||
Deferred revenue | 4,900 | 4,049 | ||||
Total current liabilities | 22,494 | 20,579 | ||||
Long-term liabilities | 871 | 1,542 | ||||
Total liabilities | 23,365 | 22,121 | ||||
Stockholders’ equity | 39,521 | 40,224 | ||||
Total liabilities and stockholders’ equity | $ | 62,886 | $ | 62,345 | ||
ITERIS, INC. |
|||||||||||||||||
UNAUDITED CONSOLIDATED | |||||||||||||||||
STATEMENTS OF OPERATIONS | |||||||||||||||||
(in thousands, except per share amounts) | |||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||
March 31, | March 31, | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Total revenues | $ | 25,273 | $ | 25,304 | $ | 103,729 | $ | 95,982 | |||||||||
Cost of revenues | 15,257 | 15,386 | 63,898 | 58,580 | |||||||||||||
Gross profit | 10,016 | 9,918 | 39,831 | 37,402 | |||||||||||||
Operating expenses: | |||||||||||||||||
Selling, general and administrative | 10,452 | 9,615 | 37,400 | 33,313 | |||||||||||||
Research and development | 2,391 | 1,590 | 7,945 | 6,877 | |||||||||||||
Amortization of intangible assets |
4 | 33 | 88 | 281 | |||||||||||||
Loss on impairment of Goodwill | - | 2,168 | - | 2,168 | |||||||||||||
Total operating expenses | 12,847 | 13,406 | 45,433 | 42,639 | |||||||||||||
Operating loss | (2,831 | ) | (3,488 | ) | (5,602 | ) | (5,237 | ) | |||||||||
Non-operating income (expense): | |||||||||||||||||
Other expense, net | (3 | ) | - | (16 | ) | (7 | ) | ||||||||||
Interest income, net | 23 | 4 | 32 | 13 | |||||||||||||
Loss from continuing operations before income taxes | (2,811 | ) | (3,484 | ) | (5,586 | ) | (5,231 | ) | |||||||||
Benefit for income taxes | 411 | 33 | 1,818 | 44 | |||||||||||||
Loss from continuing operations | (2,400 | ) | (3,451 | ) | (3,768 | ) | (5,187 | ) | |||||||||
Gain (loss) on sale of discontinued operation, net of tax | (16 | ) | 83 | 242 | 361 | ||||||||||||
Net loss | $ | (2,416 | ) | $ | (3,368 | ) | $ | (3,526 | ) | $ | (4,826 | ) | |||||
Loss per share from continuing operations – | (0.07 | ) | (0.11 | ) | (0.12 | ) | (0.16 | ) | |||||||||
basic and diluted | $ | $ | $ | $ | |||||||||||||
Gain (loss) per share from sale of discontinued operation – | (0.00 | ) | 0.01 | 0.01 | 0.01 | ||||||||||||
basic and diluted | $ | $ | $ | $ | |||||||||||||
Net loss per share - basic and diluted | $ | (0.07 | ) | $ | (0.10 | ) | $ | (0.11 | ) | $ | (0.15 | ) | |||||
Shares used in basic and diluted per share calculations | 33,093 | 32,324 | 32,776 | 32,174 | |||||||||||||
ITERIS, INC. | |||||||||||||||
UNAUDITED SEGMENT REPORTING DETAILS | |||||||||||||||
(in thousands) | |||||||||||||||
Roadway Sensors | Transportation Systems | Ag & Weather Analytics | Iteris, Inc. | ||||||||||||
Three Months Ended March 31, 2018 | |||||||||||||||
Total revenues | $ | 10,774 | $ | 13,090 | $ | 1,409 | $ | 25,273 | |||||||
Segment operating income (loss) | $ | 1,442 | $ | 2,169 | $ | (2,165 | ) | $ | 1,447 | ||||||
Corporate and other income (expense), net | (4,274 | ) | |||||||||||||
Amortization of intangible assets | (4 | ) | |||||||||||||
Operating loss | $ | (2,831 | ) | ||||||||||||
Roadway Sensors | Transportation Systems | Ag & Weather Analytics | 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 Sensors | Transportation Systems | Ag & Weather Analytics | Iteris, Inc. | ||||||||||||
Twelve Months Ended March 31, 2018 | |||||||||||||||
Total revenues | $ | 44,357 | $ | 54,481 | $ | 4,891 | $ | 103,729 | |||||||
Segment operating income (loss) | $ | 8,825 | $ | 8,639 | $ | (8,048 | ) | $ | 9,416 | ||||||
Corporate and other income (expense), net | (14,930 | ) | |||||||||||||
Amortization of intangible assets | (88 | ) | |||||||||||||
Operating loss | $ | (5,602 | ) | ||||||||||||
Roadway Sensors | Transportation Systems | Ag & Weather Analytics | 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 | ) | ||||||||||||
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) stock-based compensation; (b) depreciation; (c) amortization; (d) Agriculture and Weather Analytics segment realignment; (e) loss on impairment of goodwill; (f) audit fee overruns; (g) financial consulting service fees; (h) severance and transition-related costs paid to the company’s former chief executive officer; (i) the estimated tax effect of the foregoing non-GAAP adjustments; (j) the recording of a valuation allowance on the company’s deferred tax assets; and (k) the impact of the Tax Act.
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)
b)
c)
d) These expenses are associated with realigning our business strategies
related to our Agriculture and Weather Analytics segment based on
current economic conditions. In connection with these realignment
actions,
e) 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
f) 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, $0 and approximately
g) Management engaged financial consulting service firms to assist with the completion of its Fiscal 2015 audit. The fees incurred for assistance with the Fiscal 2015 audit were incurred during the first quarter of Fiscal 2016.
h) On
i) The amount represents the estimated income tax effect of the non-GAAP adjustments. The tax effect of non-GAAP adjustments for Fiscal 2018, Fiscal 2017 and Fiscal 2016 were calculated by applying an estimated tax rate of 1% to each specific non-GAAP item, due to the impact of the valuation allowance on our effective tax rate in those years.
j) The company recorded an approximate
k) The Tax Act was enacted on
Iteris, Inc. | ||||||||||||||
Schedule Reconciling GAAP Net Loss to Non-GAAP Net Loss | ||||||||||||||
($ in thousands, except per share amounts) | ||||||||||||||
(unaudited) | ||||||||||||||
For the Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
2018 | 2017 | 2016 | ||||||||||||
GAAP net loss | $ | (2,416 | ) | $ | (3,368 | ) | $ | (1,292 | ) | |||||
GAAP net loss per share - basic and diluted | $ | (0.07 | ) | $ | (0.10 | ) | $ | (0.04 | ) | |||||
The non-GAAP amounts have been adjusted to exclude the following items: | ||||||||||||||
Excluded from cost of revenues: | ||||||||||||||
Amortization (c) | $ | 197 | $ | 77 | $ | 42 | ||||||||
Excluded from operating expenses: | ||||||||||||||
Stock based compensation (a) | $ | 457 | $ | 258 | $ | 230 | ||||||||
Depreciation (b) | 226 | 185 | 167 | |||||||||||
Amortization (c) | 4 | 33 | 84 | |||||||||||
Agriculture and Weather Analytics segment realignment (d) | 547 | - | - | |||||||||||
Loss on impairment of Goodwill (e) | - | 2,168 | - | |||||||||||
Total excluded from operating expenses | $ | 1,234 | $ | 2,644 | $ | 481 | ||||||||
Total excluded operating loss | $ | 1,431 | $ | 2,721 | $ | 523 | ||||||||
Income tax effect on non-GAAP adjustments (i) | (14 | ) | (27 | ) | (5 | ) | ||||||||
Total excluded from operating loss after income tax effect | $ | 1,417 | $ | 2,694 | $ | 518 | ||||||||
Excluded from income tax benefit | ||||||||||||||
Impact of Tax Act (k) | (383 | ) | - | - | ||||||||||
Non-GAAP net loss | $ | (1,382 | ) | $ | (674 | ) | $ | (774 | ) | |||||
Non-GAAP net loss per share - basic and diluted | $ | (0.04 | ) | $ | (0.02 | ) | $ | (0.02 | ) | |||||
(a) - (k) 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, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
GAAP net loss | $ | (3,526 | ) | $ | (4,826 | ) | $ | (12,321 | ) | |||
GAAP net loss per share - basic and diluted | $ | (0.11 | ) | $ | (0.15 | ) | $ | (0.38 | ) | |||
The non-GAAP amounts have been adjusted to exclude the following items: | ||||||||||||
Excluded from cost of revenues: | ||||||||||||
Amortization (c) | $ | 638 | $ | 341 | $ | 166 | ||||||
Excluded from operating expenses | ||||||||||||
Stock based compensation (a) | $ | 1,781 | $ | 975 | $ | 658 | ||||||
Depreciation (b) | 819 | 729 | 649 | |||||||||
Amortization (c) | 88 | 282 | 360 | |||||||||
Agriculture and Weather Analytics segment realignment (d) | 547 | - | - | |||||||||
Loss on impairment of Goodwill (e) | - | 2,168 | - | |||||||||
Audit fee overruns (f) | - | - | 150 | |||||||||
Financial consulting service fees (g) | - | - | 88 | |||||||||
Executive management severance costs (h) | - | - | 150 | |||||||||
Total excluded from operating expenses | $ | 3,235 | $ | 4,154 | $ | 2,055 | ||||||
Total excluded operating loss | $ | 3,873 | $ | 4,495 | $ | 2,221 | ||||||
Income tax effect on non-GAAP adjustments (i) | (39 | ) | (45 | ) | (22 | ) | ||||||
Total excluded from operating loss after income tax effect | $ | 3,834 | $ | 4,450 | $ | 2,199 | ||||||
Excluded from income tax expenses | ||||||||||||
Valuation allowance on deferred tax assets (j) | - | - | 10,064 | |||||||||
Impact of Tax Act (k) | (1,742 | ) | - | - | ||||||||
Non-GAAP net loss | $ | (1,434 | ) | $ | (376 | ) | $ | (158 | ) | |||
Non-GAAP net loss per share - basic and diluted | $ | (0.04 | ) | $ | (0.01 | ) | $ | (0.00 | ) | |||
(a) - (k) 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, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
GAAP cost of revenues | $ | 15,257 | $ | 15,386 | $ | 11,858 | ||||||
Amortization (c) | (197 | ) | (77 | ) | (42 | ) | ||||||
Non-GAAP cost of revenues | $ | 15,060 | $ | 15,309 | $ | 11,816 | ||||||
GAAP operating expenses | $ | 12,847 | $ | 13,406 | $ | 9,259 | ||||||
Stock based compensation (a) | (457 | ) | (258 | ) | (230 | ) | ||||||
Depreciation (b) | (226 | ) | (185 | ) | (167 | ) | ||||||
Amortization (c) | (4 | ) | (33 | ) | (84 | ) | ||||||
Agriculture and Weather Analytics segment realignment (d) | (547 | ) | - | - | ||||||||
Loss on impairment of Goodwill (e) | - | (2,168 | ) | - | ||||||||
Non-GAAP operating expenses | $ | 11,613 | $ | 10,762 | $ | 8,778 | ||||||
GAAP operating loss | $ | (2,831 | ) | $ | (3,488 | ) | $ | (1,321 | ) | |||
Stock based compensation (a) | (457 | ) | (258 | ) | (230 | ) | ||||||
Depreciation (b) | (226 | ) | (185 | ) | (167 | ) | ||||||
Amortization (c) | (201 | ) | (110 | ) | (126 | ) | ||||||
Agriculture and Weather Analytics segment realignment (d) | (547 | ) | - | - | ||||||||
Loss on impairment of Goodwill (e) | - | (2,168 | ) | - | ||||||||
Non-GAAP operating loss | $ | (1,400 | ) | $ | (767 | ) | $ | (798 | ) | |||
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, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
GAAP cost of revenues | $ | 63,898 | $ | 58,580 | $ | 47,079 | ||||||
Amortization (c) | (638 | ) | (341 | ) | (166 | ) | ||||||
Non-GAAP cost of revenues | $ | 63,260 | $ | 58,239 | $ | 46,913 | ||||||
GAAP operating expenses | $ | 45,433 | $ | 42,638 | $ | 34,139 | ||||||
Stock based compensation (a) | (1,781 | ) | (975 | ) | (658 | ) | ||||||
Depreciation (b) | (819 | ) | (729 | ) | (649 | ) | ||||||
Amortization (c) | (88 | ) | (282 | ) | (360 | ) | ||||||
Agriculture and Weather Analytics segment realignment (d) | (547 | ) | - | - | ||||||||
Loss on impairment of Goodwill (e) | - | (2,168 | ) | - | ||||||||
Audit fee overruns (f) | - | - | (150 | ) | ||||||||
Financial consulting service fees (g) | - | - | (88 | ) | ||||||||
Executive management severance costs (h) | - | - | (150 | ) | ||||||||
Non-GAAP operating expenses | $ | 42,198 | $ | 38,484 | $ | 32,084 | ||||||
GAAP operating loss | $ | (5,602 | ) | $ | (5,236 | ) | $ | (3,470 | ) | |||
Stock based compensation (a) | (1,781 | ) | (975 | ) | (658 | ) | ||||||
Depreciation (b) | (819 | ) | (729 | ) | (649 | ) | ||||||
Amortization (c) | (726 | ) | (623 | ) | (526 | ) | ||||||
Agriculture and Weather Analytics segment realignment (d) | (547 | ) | - | - | ||||||||
Loss on impairment of Goodwill (e) | - | (2,168 | ) | - | ||||||||
Audit fee overruns (f) | - | - | (150 | ) | ||||||||
Financial consulting service fees (g) | - | - | (88 | ) | ||||||||
Executive management severance costs (h) | - | - | (150 | ) | ||||||||
Non-GAAP operating loss | $ | (1,729 | ) | $ | (741 | ) | $ | (1,249 | ) | |||
View source version on businesswire.com: https://www.businesswire.com/news/home/20180607006132/en/
Source:
Investor Relations
MKR Group, Inc.
Todd Kehrli
323-468-2300
iti@mkr-group.com