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Iteris Reports Record Second Quarter Revenue of $25.2 Million

SANTA ANA, Calif.--(BUSINESS WIRE)--

Iteris, Inc. (ITI), the global leader in applied informatics for transportation and agriculture, today reported financial results for its fiscal second quarter ended September 30, 2017.

Fiscal Second Quarter 2018 Financial Highlights

  • Record total revenue of $25.2 million, up 5% year over year
  • Transportation Systems revenue of $13.1 million, up 6% year over year
  • Roadway Sensors revenue of $11.3 million, up 3% year over year
  • Agriculture and Weather Analytics revenue of $0.9 million, up 7% year over year

Fiscal First Half 2018 Financial Highlights

  • Record total revenue of $52.4 million, up 9% year over year
  • Transportation Systems revenue of $27.8 million, up 13% year over year
  • Roadway Sensors revenue of $22.5 million, up 5% year over year
  • Agriculture and Weather Analytics revenue of $2.1 million, up 18% year over year

Management commentary:

“We are encouraged to report continued growth across all of our business segments despite the unprecedented destruction that Hurricanes Harvey and Irma inflicted on two of our most strategic markets – Texas and Florida,” said Joe Bergera, president and CEO. “During the quarter, we not only experienced a variety of project delays but we also redeployed field personnel to assist with emergency relief. The region’s recovery now seems well underway and we expect our business to normalize over the second half of our fiscal year.”

“We are excited about our business outlook. Notwithstanding recent events, the fundamentals for both the smart transportation and digital agriculture markets remain positive. We will continue to improve execution across our traditional lines of business, while we also introduce business model innovations to enhance the long-term financial characteristics of our enterprise.”

Fiscal Second Quarter 2018 Financial Results

Total revenues in the second quarter of fiscal 2018 increased 5% to a record $25.2 million, compared with $24.1 million in the same quarter a year ago. This growth was driven by a 6% increase in Transportation Systems, a 3% increase in Roadway Sensors, and to a lesser extent, a 7% increase in Agriculture and Weather Analytics revenues.

Operating expenses in the second quarter were $11.1 million, compared with $9.6 million in the same quarter a year ago. The increase was primarily due to increases in selling, general and administrative expenses as a result of planned headcount increases in general and administrative positions, as well as increases in the Transportation Systems and Roadway Sensors salesforce headcount, all of which resulted in higher salary and personnel-related costs.

Operating loss in the second quarter was $1.1 million, compared with an operating loss of approximately $185,000 in the same quarter a year ago. Net loss in the second quarter was approximately $984,000 or ($0.03) per share, compared with a net loss of approximately $40,000 or ($0.00) per share in the year-ago quarter.

Earnings Conference Call

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

Date: Tuesday, November 7, 2017
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Toll-free dial-in number: 1-866-564-2842
International dial-in number: 1-323-794-2094
Conference ID: 2210377

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 November 21, 2017. To access the replay dial 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.

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 potential revenue growth for the upcoming quarters, the impact of natural disasters to our business, and 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, the potential impact of natural disasters in our strategic markets; 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 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 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).

ITERIS, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 
  September 30,   March 31,
2017 2017
 
ASSETS:
Cash $ 14,922 $ 18,201
Trade accounts receivable, net 15,076 14,299
Unbilled accounts receivable 6,812 6,456
Inventories 2,783 2,250
Prepaid expenses and other current assets   2,499   2,108
Total current assets 42,092 43,314
 
Property and equipment, net 2,474 2,064
Goodwill 15,150 15,150
Intangible and other assets, net   2,679   1,817
Total assets $ 62,395 $ 62,345
 
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Accounts payable and other current liabilities $ 15,970 $ 16,530
Deferred revenue   4,662   4,049
Total current liabilities 20,632 20,579
Long-term liabilities   1,581   1,542
Total liabilities 22,213 22,121
Stockholders’ equity   40,182   40,224
Total liabilities and stockholders’ equity $ 62,395 $ 62,345
 

ITERIS, INC.

UNAUDITED CONSOLIDATED

STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

   
Three Months Ended Six Months Ended
September 30, September 30,
2017     2016   2017     2016  
 
Product revenues $ 11,702 $ 11,086 $ 23,625 $ 22,093
Service revenues   13,546     12,974     28,806     25,893  
Total revenues 25,248 24,060 52,431   47,986
Cost of product revenues 6,278 6,196 13,141 12,150
Cost of service revenues   9,002     8,409     19,417     16,972  
Total cost of revenues   15,280     14,605     32,558     29,122  
Gross profit 9,968 9,455 19,873 18,864
 
Operating expenses:
Selling, general and administrative 9,153 7,858 17,850 15,663
Research and development 1,881 1,698 3,608 3,308
33   84   66   169  
Amortization of intangible assets        
Total operating expenses   11,067     9,640     21,524     19,140  
Operating loss (1,099 ) (185 ) (1,651 ) (276 )
 
Non-operating income (expense):
Other income (expense), net 2 (2 ) (5 ) (6 )
Interest income, net   3     4     5     5  
Loss from continuing operations before income taxes (1,094 ) (183 ) (1,651 ) (277 )
Benefit for income taxes   33     8     34     7  
Loss from continuing operations (1,061 ) (175 ) (1,617 ) (270 )
Gain on sale of discontinued operation, net of tax   77     135     163     191  
Net loss $ (984 ) $ (40 ) $ (1,454 ) $ (79 )
 
 
Loss per share from continuing operations – (0.03 ) (0.01 ) (0.05 ) (0.01 )
basic and diluted $ $ $ $
Gain 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 $ (0.03 ) $ (0.00 ) $ (0.04 ) $ (0.00 )
 
Shares used in basic and diluted per share calculations   32,628     32,117     32,567     32,085  
 

ITERIS, INC.

UNAUDITED SEGMENT REPORTING DETAILS

(in thousands)

       

Roadway
Sensors

Transportation
Systems

Ag & Weather
Analytics

Iteris, Inc.
Three Months Ended September 30, 2017
Product revenues $ 11,150 $ 552 $ - $ 11,702
Service revenues   111   12,542   893     13,546  
Total revenues $ 11,261 $ 13,094 $ 893 $ 25,248
 
Segment operating income (loss) $ 2,790 $ 1,933 $ (2,236 ) $ 2,487
Corporate and other income (expense), net (3,548 )
Amortization of intangible assets   (33 )
Operating loss $ (1,094 )
 

Roadway
Sensors

Transportation
Systems

Ag & Weather
Analytics

Iteris, Inc.
Three Months Ended September 30, 2016
Product revenues $ 10,833 $ 253 $ - $ 11,086
Service revenues   62   12,074   838     12,974  
Total revenues $ 10,895 $ 12,327 $ 838 $ 24,060
 
Segment operating income (loss) $ 2,647 $ 2,549 $ (2,077 ) $ 3,119
Corporate and other income (expense), net (3,218 )
Amortization of intangible assets   (84 )
Operating loss $ (183 )
 

Roadway
Sensors

Transportation
Systems

Ag & Weather
Analytics

Iteris, Inc.
Six Months Ended September 30, 2017
Product revenues $ 22,430 $ 1,195 $ - $ 23,625
Service revenues   111   26,626   2,069     28,806  
Total revenues $ 22,541 $ 27,821 $ 2,069 $ 52,431
 
Segment operating income (loss) $ 5,337 $ 4,265 $ (4,068 ) $ 5,534
Corporate and other income (expense), net (7,119 )
Amortization of intangible assets   (66 )
Operating loss $ (1,651 )
 

Roadway
Sensors

Transportation
Systems

Ag & Weather
Analytics

Iteris, Inc.
Six Months Ended September 30, 2016
Product revenues $ 21,437 $ 656 $ - $ 22,093
Service revenues   62   24,070   1,761     25,893  
Total revenues $ 21,499 $ 24,726 $ 1,761 $ 47,986
 
Segment operating income (loss) $ 4,956 $ 4,894 $ (3,690 ) $ 6,160
Corporate and other income (expense), net (6,268 )
Amortization of intangible assets   (169 )
Operating loss $ (277 )

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