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8-K - 8-K - ITERIS, INC.a14-4550_18k.htm

Exhibit 99.1

 

GRAPHIC

 

For Release at 1:05 p.m., PST 01/28/14

 

Iteris Reports Fiscal Third Quarter 2014 Results

 

— Total Revenues Up 18% to $16.5 Million —

 

SANTA ANA, Calif. — January 28, 2014 — Iteris, Inc. (NYSE MKT: ITI), a leader in providing intelligent traffic management information solutions, reported financial results for its fiscal third quarter ended December 31, 2013.

 

Fiscal Q3 2014 Highlights vs. Same Quarter a Year Ago

 

·            Total revenues up 18% to $16.5 million

·            Roadway Sensors revenues up 45% to $7.3 million

·            Gross margin improved 60 basis points to 37.4%

·            Operating income increased to $309,000 from a loss of $427,000, while continuing our accelerated investment in iPerform

·            Cash & cash equivalents increased $797,000 to $20.5 million

 

Fiscal Q3 2014 Financial Results

 

Total revenues in the third quarter of fiscal 2014 increased 18% to $16.5 million compared to $14.0 million in the same quarter a year ago. The increase was attributed to a 45% increase in Roadway Sensors revenues, and to a lesser extent, a 6% increase in Transportation Systems revenues. This was partially offset by an 8% decrease in iPerform revenues.

 

The significant increase in Roadway Sensors revenues was primarily due to the success of various growth initiatives developed earlier in the year, increases in the company’s international sales, OEM distributed products, and the timing of customer orders in the prior year. iPerform revenue decline of 8% was primarily due to delays in contract awards with certain public agencies. Sequentially, our total revenue declined 3% primarily due to seasonality, as the third quarter generally represents our smallest quarter in our fiscal year.

 

Gross margin in the third quarter increased 60 basis points to 37.4% from 36.8% in the same quarter a year ago. The increase in gross margin was primarily due to increased sales of the company’s Roadway Sensors products, which generally carry higher margins than the Transportation Systems segment.

 

Operating expenses in the third quarter increased 5% to $5.9 million compared to $5.6 million in the same quarter a year ago. The increase was primarily due to planned increases in sales and marketing and accelerated research and development expenses in the iPerform segment.

 

Operating income in the third quarter increased significantly to $309,000 compared to a loss of $427,000 in the same quarter a year ago. Net income in the third quarter was $238,000, or $0.01 per share, compared to net income of $1.1 million, or $0.03 per share, in the same quarter a year ago, which included a $1.4 million gain, net of tax, related to the sale of the company’s Vehicle Sensors business.

 



 

Total backlog at the end of the third quarter was $36.8 million compared to $38.0 million in the same quarter a year ago. Transportation Systems and iPerform declined 5.2% due to timing of new orders, partially offset by a 19% increase in Roadway Sensors. Backlog was comprised of $28.6 million from Transportation Systems, $4.4 million from iPerform, and $3.8 million from Roadway Sensors.

 

Management Commentary

 

“Our 18% revenue growth during the third quarter demonstrates the stability of the overall intelligent transportation market as well as strengthening demand for our core Roadway Sensors products and Transportation Systems services,” said Abbas Mohaddes, president and CEO of Iteris. “During the quarter, we also saw a significant improvement in operating income, which was primarily driven by growth in our Roadway Sensors segment.”

 

“We continued to fund our investment in iPerform from the operating profits of our core businesses,” continued Mohaddes. “In fact, we are now halfway through our 18-month accelerated investment period and continue to make significant advancements in developing our predictive weather and traffic platforms. During the third quarter, iPerform introduced its ClearPath™ Weather analytics platform in beta form to two new public agencies. Additionally, our ClearPath™ Incident platform now supports 50 metropolitan markets in more than 25 states. We expect to announce new traffic analytics and weather products into a number of new sales channels and continue to focus on growing our core business segments during this aggressive development cycle.”

 

Conference Call

 

Iteris will hold a conference call today at 4:30 p.m. ET (1:30 p.m. PT) to discuss its fiscal third quarter 2014 results. Iteris’ CEO Abbas Mohaddes will host the call, followed by a question and answer period.

 

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.

 

Date: Tuesday, January 28, 2014

Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)

Dial-in number: 1-877-941-4774

International dial-in number: 1-480-629-9760

Conference ID: 4661945

 

The conference call will be broadcast live and available for replay via the investor relations section of the Iteris website at www.iteris.com.

 

A telephone replay of the call will also be available after 7:30 p.m. ET on the same day through February 11, 2014.

 

Toll-free replay number: 1-877-870-5176

International replay number: 1-858-384-5517

Replay ID: 4661945

 

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About Iteris, Inc.

 

Iteris, Inc. (NYSE MKT: ITI) is a leading provider of intelligent information solutions to the traffic management market. The Company is focused on the development and application of advanced technologies and software-based information systems that reduce traffic congestion, provide measurement, management, and predictive traffic analytics, and improve the safety of surface transportation systems. By combining its unique IP, products, decades of expertise in traffic management, and information technologies, Iteris offers a broad range of Intelligent Transportation System (ITS) solutions to customers worldwide. The firm is headquartered in Santa Ana, California, with offices nationwide and in the Middle East. For more information, please call 1-888-329-4483 or visit www.iteris.com.

 

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

 

This earnings release contains forward-looking statements based on our current expectations, estimates, and projections about our business, the traffic management industry, the U.S. and global economies, federal funding for transportation and infrastructure projects as well as management’s beliefs, and certain assumptions made by us. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “may,” “should, “ “could,” “will,” and variations of these words are intended to identify forward-looking statements. Such statements speak only as of the date hereof and are subject to change. We undertake no obligation to revise or update publicly any forward-looking statements for any reason. These statements include, but are not limited to, statements about the Company’s future performance and operating results, our expected organic growth, the impact of our new strategic relationship, and the market demand for and acceptance of our products, technologies and services.  Such statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict. Accordingly, our 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 Federal Highway Bill on the Intelligent Transportation industry and the expected benefits to Iteris; 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 transition our products and technologies to volume production in a timely manner; our ability to successfully develop, market and sell software-based solutions, specifically our IterisPeMS™ software; the timing and successful completion of customer qualification of our products and the risks of non-qualification; the potential unforeseen impact of product and service offerings from competitors, increased competition in certain market segments and other competitive pressures; 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 further expand our revenues

 

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and introduce and gain broad acceptance for new and recently introduced technologies, products or services and the 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, is 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).

 

Contact:

Liolios Group, Inc.

Scott Liolios or Cody Slach

Investor Relations

Tel 1-949-574-3860

ITI@liolios.com

 

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ITERIS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

 

 

December 31,

 

March 31,

 

 

 

2013

 

2013

 

 

 

(unaudited)

 

 

 

ASSETS:

 

 

 

 

 

Cash

 

$

20,511

 

$

19,137

 

Trade accounts receivable, net

 

10,643

 

10,946

 

Costs and estimated earnings in excess of billings on uncompleted contracts

 

5,661

 

6,346

 

Inventories

 

2,668

 

2,465

 

Prepaid expenses and other current assets

 

876

 

852

 

Current portion of deferred income taxes

 

2,363

 

2,363

 

Total current assets

 

42,722

 

42,109

 

 

 

 

 

 

 

Property and equipment, net

 

1,633

 

1,862

 

Long-term portion of deferred income taxes

 

5,189

 

5,888

 

Goodwill

 

17,318

 

17,318

 

Intangible and other assets, net

 

2,113

 

2,334

 

Total assets

 

$

68,975

 

$

69,511

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY:

 

 

 

 

 

Accounts payable and other current liabilities

 

$

9,847

 

$

10,764

 

Billings in excess of costs and estimated earnings on uncompleted contracts

 

1,626

 

1,958

 

Total current liabilities

 

11,473

 

12,722

 

Long-term liabilities

 

194

 

908

 

Total liabilities

 

11,667

 

13,630

 

Stockholders’ equity

 

57,308

 

55,881

 

Total liabilities and stockholders’ equity

 

$

68,975

 

$

69,511

 

 

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ITERIS, INC.

UNAUDITED CONSOLIDATED

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

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

December 31,

 

December 31,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$

16,548

 

$

13,994

 

$

50,605

 

$

45,802

 

Cost of revenues

 

10,356

 

8,843

 

30,775

 

28,316

 

Gross profit

 

6,192

 

5,151

 

19,830

 

17,486

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

4,632

 

4,382

 

14,528

 

13,509

 

Research and development

 

1,085

 

902

 

2,818

 

2,369

 

Amortization of intangible assets

 

161

 

161

 

483

 

483

 

Change in fair value of contingent acquisition consideration

 

5

 

133

 

21

 

(188

)

Total operating expenses

 

5,883

 

5,578

 

17,850

 

16,173

 

Operating income (loss)

 

309

 

(427

)

1,980

 

1,313

 

Non-operating income (expense):

 

 

 

 

 

 

 

 

 

Other income (expense), net

 

(3

)

1

 

6

 

9

 

Interest income (expense), net

 

8

 

12

 

 

(2

)

Income (loss) from continuing operations before income taxes

 

314

 

(414

)

1,986

 

1,320

 

(Provision) benefit for income taxes

 

(86

)

120

 

(667

)

(475

)

Income (loss) from continuing operations

 

228

 

(294

)

1,319

 

845

 

Gain on sale of discontinued operation, net of tax

 

10

 

1,391

 

40

 

1,478

 

Net income

 

$

238

 

$

1,097

 

$

1,359

 

$

2,323

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.01

 

$

(0.01

)

$

0.04

 

$

0.03

 

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

 

$

0.00

 

$

0.04

 

$

0.00

 

$

0.04

 

Net income per share - basic and diluted

 

$

0.01

 

$

0.03

 

$

0.04

 

$

0.07

 

 

 

 

 

 

 

 

 

 

 

Shares used in basic per share calculations

 

32,734

 

33,532

 

32,628

 

33,657

 

Shares used in diluted per share calculations

 

32,897

 

33,641

 

32,826

 

33,759

 

 

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ITERIS, INC.

UNAUDITED SEGMENT REPORTING DETAILS

(in thousands)

 

 

 

Roadway
Sensors

 

Transportation
Systems

 

iPerform

 

Iteris, Inc.

 

Three Months Ended December 31, 2013

 

 

 

 

 

 

 

 

 

Total revenues

 

$

7,348

 

$

7,505

 

$

1,695

 

$

16,548

 

 

 

 

 

 

 

 

 

 

 

Segment operating income (loss)

 

$

1,336

 

$

692

 

$

(414

)

$

1,614

 

Corporate and other income (expense), net

 

 

 

 

 

 

 

(1,139

)

Amortization of intangible assets

 

 

 

 

 

 

 

(161

)

Change in fair value of contingent acquisition consideration

 

 

 

 

 

 

 

(5

)

Operating income

 

 

 

 

 

 

 

$

309

 

 

 

 

 

 

 

 

 

 

 

 

 

Roadway
Sensors

 

Transportation
Systems

 

iPerform

 

Iteris, Inc.

 

Three Months Ended December 31, 2012 *

 

 

 

 

 

 

 

 

 

Total revenues

 

$

5,081

 

$

7,078

 

$

1,835

 

$

13,994

 

 

 

 

 

 

 

 

 

 

 

Segment operating income

 

$

243

 

$

928

 

$

119

 

$

1,290

 

Corporate and other income (expense), net

 

 

 

 

 

 

 

(1,423

)

Amortization of intangible assets

 

 

 

 

 

 

 

(161

)

Change in fair value of contingent acquisition consideration

 

 

 

 

 

 

 

(133

)

Operating loss

 

 

 

 

 

 

 

$

(427

)

 

 

 

 

 

 

 

 

 

 

 

 

Roadway
Sensors

 

Transportation
Systems

 

iPerform

 

Iteris, Inc.

 

Nine Months Ended December 31, 2013

 

 

 

 

 

 

 

 

 

Total revenues

 

$

23,654

 

$

22,661

 

$

4,290

 

$

50,605

 

 

 

 

 

 

 

 

 

 

 

Segment operating income (loss)

 

$

4,506

 

$

2,721

 

$

(923

)

$

6,304

 

Corporate and other income (expense), net

 

 

 

 

 

 

 

(3,820

)

Amortization of intangible assets

 

 

 

 

 

 

 

(483

)

Change in fair value of contingent acquisition consideration

 

 

 

 

 

 

 

(21

)

Operating income

 

 

 

 

 

 

 

$

1,980

 

 

 

 

 

 

 

 

 

 

 

 

 

Roadway
Sensors

 

Transportation
Systems

 

iPerform

 

Iteris, Inc.

 

Nine Months Ended December 31, 2012 *

 

 

 

 

 

 

 

 

 

Total revenues

 

$

19,485

 

$

22,085

 

$

4,232

 

$

45,802

 

 

 

 

 

 

 

 

 

 

 

Segment operating income (loss)

 

$

3,228

 

$

2,518

 

$

(28

)

$

5,718

 

Corporate and other income (expense), net

 

 

 

 

 

 

 

(4,110

)

Amortization of intangible assets

 

 

 

 

 

 

 

(483

)

Change in fair value of contingent acquisition consideration

 

 

 

 

 

 

 

188

 

Operating income

 

 

 

 

 

 

 

$

1,313

 

 


*  Transportation Systems and iPerform revenues and segment operating income (loss) have been stated on a proforma basis for comparison with the current year.

 

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