Iteris Reports Record Fiscal 2023 Fourth Quarter Revenue Up 24% Year Over Year and Record Full Year Revenue Up 17% Year Over Year
Reports Record Fiscal 2023 Ending Backlog of
Fiscal Fourth Quarter 2023 Financial Highlights
-
Record revenue of
$42.4 million 24% year over year -
GAAP net loss from continuing operations of
$0.5 million $(0.01) $2.5 million $0.06 -
Record backlog of
$114.2 million 14% year over year -
Net cash flow of
$6.2 million $16.6M -
Adjusted EBITDA of
$1.4 million $2.5 million
Fiscal Year 2023 Financial Highlights
-
Record revenue of
$156.1 million 17% over prior year -
GAAP net loss from continuing operations of
$14.9 million $(0.35) $8.0 million $0.19 -
Adjusted EBITDA loss of
$6.6 million $11.1 million
Management Commentary:
“We are very pleased to report fiscal 2023 fourth quarter and full year revenue increased
“Looking ahead, we believe the demand environment for smart mobility infrastructure will remain favorable due to positive secular trends and already committed federal funding for the Infrastructure Investment and Jobs Act. Therefore, we expect to experience strong demand for the Iteris ClearMobility™ Platform and a five-year organic revenue CAGR of approximately
Fiscal Year 2024 Outlook
-
Total revenue of
$168.0 million $175.0 million 10% year over year at the mid-point of the guidance range -
Adjusted EBITDA of
7% to9% of fiscal 2024 revenue, which would represent a significant year over year improvement, assuming the continued recovery and stabilization of the Company’s supply chain (see “Non-GAAP Financial Measures and Reconciliation” below for important information) -
Net cash flow of
$12.0 million $16.0 million
GAAP Fiscal Fourth Quarter 2023 Financial Results
Revenue in the fourth quarter of fiscal 2023 increased
Operating expenses in the fourth quarter decreased
Net loss from continuing operations in the fourth quarter was approximately
GAAP Fiscal Year 2023 Financial Results
Revenue in fiscal 2023 increased
Operating expenses in fiscal 2023 increased
Operating loss from continuing operations in fiscal 2023 was approximately
Non-GAAP Fiscal Fourth Quarter and Fiscal Year 2023 Financial Results
In addition to results presented in accordance with generally accepted accounting principles in
Adjusted EBITDA in the fourth quarter of fiscal 2023 was approximately
Adjusted EBITDA in fiscal 2023 was approximately
Earnings Conference Call
Iteris will conduct a conference call today to discuss its fiscal fourth quarter and full year 2023 results.
Date: Tuesday, June 13, 2023
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Toll-free dial-in number: 888-506-0062
International dial-in number: +1 973-528-0011
Participant access code: 819740
If joining by phone, 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 MKR Investor Relations at 1-213-277-5550.
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 telephone replay of the conference call will be available approximately two hours following the end of the call and will remain available for one week. To access the replay, dial +1-877-481-4010 (US Toll Free), or +1 919-882-2331 (International) and enter replay passcode 48360.
About Iteris, Inc.
Iteris is the world’s trusted technology ecosystem for smart mobility infrastructure management. Delivered through Iteris’ ClearMobility Platform, our cloud-enabled end-to-end solutions monitor, visualize and optimize mobility infrastructure around the world, and help bridge legacy technology silos to unlock the future of transportation. That’s why more than 10,000 public agencies and private-sector enterprises focused on mobility rely on Iteris every day. 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 acquisitions, 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, and impact related to the federal government debt ceiling and; uncertainties regarding potential multiple negative impacts that may occur in the future due to COVID-19; our ability to source key raw materials in light of the current global economic and supply chain situation, including the recently announced intention of data supplier Wejo to appoint an administrator due to insolvency; the timing and amount of government funds allocated to overall transportation infrastructure projects and the transportation industry; risks related to our ability to recruit, integrate and/or retain key talent; our ability to replace large contracts once they have been completed; the effectiveness of efficiency, cost, and expense reduction efforts; 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; 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
ITERIS, INC. |
|||||||||||||||
UNAUDITED |
|||||||||||||||
STATEMENT OF OPERATIONS |
|||||||||||||||
(in thousands, except per share amounts) |
|||||||||||||||
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
|
|
|
|
|
|
|
|
||||||||
Product revenues |
$ |
25,076 |
|
|
$ |
17,097 |
|
|
$ |
85,097 |
|
|
$ |
68,729 |
|
Service revenues |
|
17,364 |
|
|
|
17,139 |
|
|
|
70,955 |
|
|
|
64,843 |
|
Total revenues |
|
42,440 |
|
|
|
34,236 |
|
|
|
156,052 |
|
|
|
133,572 |
|
Cost of product revenues |
|
15,349 |
|
|
|
11,572 |
|
|
|
63,013 |
|
|
|
40,501 |
|
Cost of service revenues |
|
13,603 |
|
|
|
11,588 |
|
|
|
51,021 |
|
|
|
45,678 |
|
Cost of revenues |
|
28,952 |
|
|
|
23,160 |
|
|
|
114,034 |
|
|
|
86,179 |
|
Gross profit |
|
13,488 |
|
|
|
11,076 |
|
|
|
42,018 |
|
|
|
47,393 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
General and administrative |
|
5,179 |
|
|
|
6,698 |
|
|
|
22,083 |
|
|
|
25,131 |
|
Sales and Marketing |
|
6,150 |
|
|
|
4,810 |
|
|
|
22,802 |
|
|
|
18,929 |
|
Research and development |
|
1,965 |
|
|
|
1,909 |
|
|
|
8,321 |
|
|
|
7,354 |
|
Amortization of intangible assets |
|
650 |
|
|
|
669 |
|
|
|
2,620 |
|
|
|
2,673 |
|
Restructuring charges |
|
— |
|
|
|
— |
|
|
|
707 |
|
|
|
— |
|
Total operating expenses |
|
13,944 |
|
|
|
14,086 |
|
|
|
56,533 |
|
|
|
54,087 |
|
Operating income (loss) |
|
(456 |
) |
|
|
(3,010 |
) |
|
|
(14,515 |
) |
|
|
(6,694 |
) |
Non-operating income (expense): |
|
|
|
|
|
|
|
||||||||
Other income (expense) |
|
(105 |
) |
|
|
(33 |
) |
|
|
124 |
|
|
|
(18 |
) |
Interest income (expense) |
|
3 |
|
|
|
(22 |
) |
|
|
(329 |
) |
|
|
(14 |
) |
Income (loss) from continuing operations before income tax taxes |
|
(558 |
) |
|
|
(3,065 |
) |
|
|
(14,720 |
) |
|
|
(6,726 |
) |
Benefit (provision) for income taxes |
|
14 |
|
|
|
27 |
|
|
|
(135 |
) |
|
|
(174 |
) |
Net income (loss) from continuing operations |
|
(544 |
) |
|
|
(3,038 |
) |
|
|
(14,855 |
) |
|
|
(6,900 |
) |
Loss from discontinued operations before gain on sale, net of tax |
|
— |
|
|
|
(76 |
) |
|
|
— |
|
|
|
(180 |
) |
Net income (loss) from discontinued operations, net of tax |
|
— |
|
|
|
(76 |
) |
|
|
— |
|
|
|
(180 |
) |
Net income (loss) |
$ |
(544 |
) |
|
$ |
(3,114 |
) |
|
$ |
(14,855 |
) |
|
$ |
(7,080 |
) |
|
|
|
|
|
|
|
|
||||||||
Income (loss) per share - basic: |
|
|
|
|
|
|
|
||||||||
Income (loss) per share from continuing operations |
$ |
(0.01 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.16 |
) |
Income per share from discontinued operations |
$ |
0.00 |
|
|
$ |
0.00 |
|
|
$ |
0.00 |
|
|
$ |
0.00 |
|
Net income (loss) per share |
$ |
(0.01 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.16 |
) |
|
|
|
|
|
|
|
|
||||||||
Income (loss) per share - diluted: |
|
|
|
|
|
|
|
||||||||
Income (loss) per share from continuing operations |
$ |
(0.01 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.16 |
) |
Income per share from discontinued operations |
$ |
0.00 |
|
|
$ |
0.00 |
|
|
$ |
0.00 |
|
|
$ |
0.00 |
|
Net income (loss) per share |
$ |
(0.01 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.16 |
) |
|
|
|
|
|
|
|
|
||||||||
Shares used in basic per share calculations |
|
42,485 |
|
|
|
42,398 |
|
|
|
42,374 |
|
|
|
42,222 |
|
Shares used in diluted per share calculations |
|
42,485 |
|
|
|
42,398 |
|
|
|
42,374 |
|
|
|
42,222 |
|
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 taxes, depreciation, amortization, interest expense, stock-based compensation expense, restructuring charges, project loss reserves, acquisition earnout payments, executive severance and transition costs (“Adjusted EBITDA”).
When viewed with our financial results prepared in accordance with accounting principles generally accepted in the
We use Adjusted EBITDA non-GAAP operating performance measures internally as complementary financial measures to evaluate the performance and trends of our businesses. We present Adjusted EBITDA because we believe that it these provides useful information with respect to our ability to meet our operating commitments.
Adjusted EBITDA has 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:
- It does not reflect our cash expenditures, future requirements for capital expenditures or contractual commitments;
- It does 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;
- It is not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows;
- It does 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 than we do, limiting its usefulness as comparative measures.
Because of these limitations, Adjusted EBITDA should not be considered as a measure 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 audited consolidated financial statements contained in our Form 10-K. However, in spite of the above limitations, we believe that Adjusted EBITDA is useful to an investor in evaluating our results of operations because it:
- Is 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;
- Helps 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
- Is 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 (loss) when calculating Adjusted EBITDA:
- Income tax expense. This amount may be useful to investors because it represents the taxes that might be payable for the period and the change in deferred taxes during the period, and therefore could reduce cash flow available for use in our business.
- Depreciation expense. 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 expense. 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.
- 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. For fiscal year 2023, interest expense includes amortization of the remaining capitalized deferred financing costs due to the termination of the Credit Agreement (see Note 14, Long-Term Debt, to the Financial Statements for more information).
- 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 reserves. 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.
- Acquisition earnout payments. These expenses are a result of the TrafficCast International, Inc. acquisition in December, 2020 and are the final earnout payments per the acquisition agreement. Iteris excluded 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.
- Executive severance and transition costs. Iteris excludes executive severance and transition costs because 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.
It is impractical to attempt to reconcile expected Adjusted EBITDA to expected GAAP net income (loss) because many of the adjustments are difficult to forecast, including stock-based compensation because it depends on the price of our stock in the future, which is difficult to predict. Reconciliations of historical net income (loss) from continuing operations to Adjusted EBITDA and the presentation of Adjusted EBITDA as a percentage of net revenues were as follows:
ITERIS, INC. |
|||||||||||||||
UNAUDITED |
|||||||||||||||
RECONCILIATION OF ADJUSTED EBITDA TO NET INCOME (LOSS) FROM CONTINUING OPERATIONS |
|||||||||||||||
(in thousands, except percentage amounts) |
|||||||||||||||
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
|
|
|
|
||||||||||||
Net income (loss) from continuing operations |
$ |
(544 |
) |
|
$ |
(3,038 |
) |
|
$ |
(14,855 |
) |
|
$ |
(6,900 |
) |
|
|
|
|
|
|
|
|
||||||||
Income tax expense |
|
(14 |
) |
|
|
(27 |
) |
|
|
135 |
|
|
|
174 |
|
Depreciation expense |
|
154 |
|
|
|
191 |
|
|
|
615 |
|
|
|
820 |
|
Amortization expense |
|
783 |
|
|
|
812 |
|
|
|
3,179 |
|
|
|
3,240 |
|
Interest expense |
|
(3 |
) |
|
|
— |
|
|
|
329 |
|
|
|
— |
|
Stock-based compensation |
|
908 |
|
|
|
1,005 |
|
|
|
2,890 |
|
|
|
3,401 |
|
Other adjustments: |
|
|
|
|
|
|
|
||||||||
Restructuring charges |
|
— |
|
|
|
— |
|
|
|
707 |
|
|
|
— |
|
Project loss reserves |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,394 |
|
Acquisition earnout payments |
|
128 |
|
|
|
— |
|
|
|
376 |
|
|
|
— |
|
Executive severance and transition costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
340 |
|
Total adjustments |
|
1,956 |
|
|
|
1,981 |
|
|
|
8,231 |
|
|
|
11,369 |
|
Adjusted EBITDA |
$ |
1,412 |
|
|
$ |
(1,057 |
) |
|
$ |
(6,624 |
) |
|
$ |
4,469 |
|
Percentage of total revenues |
|
3.3 |
% |
|
|
(3.1 |
) % |
|
|
(4.2 |
) % |
|
|
3.3 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230613141709/en/
Iteris Contact
Kerry Shiba
Senior Vice President and Chief Financial Officer
Tel: (949) 270-9457
Email: kshiba@iteris.com
Investor Relations
MKR Investor Relations, Inc.
Todd Kehrli
Tel: (213) 277-5550
Email: iti@mkr-group.com
Source: Iteris, Inc.
