Itron Announces Third Quarter 2024 Financial Results
Itron (NASDAQ: ITRI) reported strong Q3 2024 financial results with revenue increasing 10% to $615 million. Gross profit rose 12% to $210 million, while GAAP net income reached $78 million, up $38 million year-over-year. GAAP diluted EPS increased by $0.83 to $1.70, and non-GAAP diluted EPS grew by $0.86 to $1.84. The company's adjusted EBITDA improved 29% to $89 million, with free cash flow up $30 million to $59 million.
All business segments showed growth: Device Solutions revenue up 11%, Networked Solutions up 8%, and Outcomes up 17%. The company updated its full-year 2024 guidance, projecting revenue between $2.428-$2.438 billion and non-GAAP diluted EPS of $5.28-$5.38.
Itron (NASDAQ: ITRI) ha riportato risultati finanziari solidi per il terzo trimestre 2024, con un aumento del fatturato del 10% a 615 milioni di dollari. L'utile lordo è aumentato del 12% a 210 milioni di dollari, mentre l'utile netto GAAP ha raggiunto i 78 milioni di dollari, con un incremento di 38 milioni di dollari rispetto all'anno precedente. L'EPS diluito GAAP è aumentato di 0,83 dollari a 1,70 dollari, e l'EPS diluito non GAAP è cresciuto di 0,86 dollari a 1,84 dollari. L'EBITDA rettificato dell'azienda è migliorato del 29% a 89 milioni di dollari, con il flusso di cassa libero che è aumentato di 30 milioni di dollari a 59 milioni di dollari.
Tutti i segmenti aziendali hanno mostrato una crescita: i ricavi delle Soluzioni dei Dispositivi sono aumentati dell'11%, le Soluzioni di Rete dell'8% e i Risultati del 17%. L'azienda ha aggiornato le previsioni per l'intero anno 2024, prevedendo ricavi tra 2,428 e 2,438 miliardi di dollari e un EPS diluito non GAAP di 5,28-5,38 dollari.
Itron (NASDAQ: ITRI) reportó resultados financieros sólidos para el tercer trimestre de 2024, con un aumento del 10% en los ingresos, alcanzando 615 millones de dólares. La ganancia bruta creció un 12%, ascendiendo a 210 millones de dólares, mientras que la renta neta GAAP alcanzó los 78 millones de dólares, un incremento de 38 millones de dólares en comparación con el año anterior. El EPS diluido GAAP aumentó en 0,83 dólares, llegando a 1,70 dólares, y el EPS diluido no GAAP creció en 0,86 dólares, alcanzando 1,84 dólares. El EBITDA ajustado de la compañía mejoró un 29%, alcanzando los 89 millones de dólares, con el flujo de caja libre subiendo 30 millones de dólares, hasta 59 millones de dólares.
Todos los segmentos de negocio mostraron crecimiento: los ingresos de Soluciones de Dispositivos aumentaron un 11%, las Soluciones en Red un 8% y los Resultados un 17%. La empresa actualizó sus proyecciones para todo el año 2024, proyectando ingresos entre 2,428 y 2,438 millones de dólares y un EPS diluido no GAAP de 5,28 a 5,38 dólares.
Itron (NASDAQ: ITRI)은 2024년 3분기 재무 결과가 강세를 보였으며, 매출이 10% 증가해 6억 1,500만 달러에 이르렀다고 보고했습니다. 총 이익은 12% 증가하여 2억 1,000만 달러에 달하고, GAAP 기준 순이익은 7,800만 달러에 이르며, 이는 전년 대비 3,800만 달러 증가한 수치입니다. GAAP 희석 EPS는 0.83달러 증가하여 1.70달러에 도달했고, 비 GAAP 희석 EPS는 0.86달러 증가하여 1.84달러로 성장했습니다. 회사의 조정된 EBITDA는 29% 개선되어 8,900만 달러에 도달했으며, 자유 현금 흐름은 3,000만 달러 증가하여 5,900만 달러로 증가했습니다.
모든 사업 부문이 성장세를 보였으며, 장치 솔루션 매출은 11% 증가하고, 네트워크 솔루션은 8%, 성과는 17% 증가했습니다. 회사는 2024년 전체 연도 가이던스를 업데이트하여 수익을 24억 2,800만~24억 4,300만 달러로 예상하고, 비 GAAP 희석 EPS는 5.28~5.38달러로 전망했습니다.
Itron (NASDAQ: ITRI) a annoncé de solides résultats financiers pour le troisième trimestre 2024, avec une augmentation de 10% des revenus atteignant 615 millions de dollars. Le bénéfice brut a augmenté de 12% pour atteindre 210 millions de dollars, tandis que le bénéfice net GAAP a atteint 78 millions de dollars, en hausse de 38 millions de dollars par rapport à l'année précédente. Le BPA dilué GAAP a augmenté de 0,83 dollar pour atteindre 1,70 dollar, et le BPA dilué non GAAP a progressé de 0,86 dollar pour atteindre 1,84 dollar. L'EBITDA ajusté de l'entreprise s'est amélioré de 29% atteignant 89 millions de dollars, avec un flux de trésorerie disponible en hausse de 30 millions de dollars pour atteindre 59 millions de dollars.
Tous les segments d'activité ont montré une croissance : les revenus des Solutions de Dispositifs ont augmenté de 11%, ceux des Solutions Réseau de 8%, et les Résultats de 17%. L'entreprise a mis à jour ses prévisions pour l'ensemble de l'année 2024, projetant un chiffre d'affaires compris entre 2,428 et 2,438 milliards de dollars et un BPA dilué non GAAP de 5,28 à 5,38 dollars.
Itron (NASDAQ: ITRI) berichtete über starke finanzielle Ergebnisse im 3. Quartal 2024 mit einem Umsatzanstieg von 10% auf 615 Millionen US-Dollar. Der Bruttogewinn stieg um 12% auf 210 Millionen US-Dollar, während der GAAP-Reingewinn 78 Millionen US-Dollar erreichte, was einem Anstieg von 38 Millionen US-Dollar im Vergleich zum Vorjahr entspricht. Das verwässerte GAAP-EPS stieg um 0,83 US-Dollar auf 1,70 US-Dollar und das nicht-GAAP verwässerte EPS wuchs um 0,86 US-Dollar auf 1,84 US-Dollar. Das bereinigte EBITDA des Unternehmens verbesserte sich um 29% auf 89 Millionen US-Dollar, wobei der freie Cashflow um 30 Millionen US-Dollar auf 59 Millionen US-Dollar zunahm.
Alle Geschäftssegmente verzeichneten Wachstum: Die Einnahmen aus Geräte-Lösungen stiegen um 11%, Netzwerk-Lösungen um 8% und Ergebnisse um 17%. Das Unternehmen aktualisierte seine Prognose für das gesamte Jahr 2024 und projizierte einen Umsatz zwischen 2,428 und 2,438 Milliarden US-Dollar sowie ein nicht-GAAP verwässertes EPS von 5,28 bis 5,38 US-Dollar.
- Revenue increased 10% to $615 million in Q3 2024
- GAAP net income grew by $38 million to $78 million
- Adjusted EBITDA improved 29% to $89 million
- Free cash flow increased by $30 million to $59 million
- All business segments showed significant growth
- Company raised full-year 2024 guidance
- Total backlog decreased from $4.2 billion to $4.0 billion year-over-year
Insights
Itron delivered an exceptionally strong Q3 2024 with significant growth across all key metrics. Revenue grew 10% to
Most impressive is the company's guidance revision, raising full-year revenue targets to
The
LIBERTY LAKE, Wash., Oct. 31, 2024 (GLOBE NEWSWIRE) -- Itron, Inc. (NASDAQ: ITRI), which is innovating the way utilities and cities manage energy and water, announced today financial results for its third quarter ended September 30, 2024. Key results for the quarter include (compared with the third quarter of 2023):
- Revenue of
$615 million , increased10% ; - Gross profit of
$210 million , increased12% ; - GAAP net income attributable to Itron, Inc. of
$78 million , increased$38 million ; - GAAP diluted earnings per share of
$1.70 , increased$0.83 per share; - Non-GAAP diluted EPS of
$1.84 , increased$0.86 per share; - Adjusted EBITDA of
$89 million , increased29% ; and - Free cash flow of
$59 million , increased$30 million .
"Operational momentum continued during the third quarter and solid execution by our team led to results ahead of expectations.” said Tom Deitrich, Itron’s president and CEO. “The market, fueled by growth in energy and water demand, and increasing need to make infrastructure more agile aligns with Itron’s grid edge intelligence platform, uniquely positioning us to help our customers meet or exceed their objectives.”
Summary of Third Quarter Consolidated Financial Results
(All comparisons made are against the prior year period unless otherwise noted)
Revenue
Total third quarter revenue increased
Device Solutions revenue increased
Networked Solutions revenue increased
Outcomes revenue increased
Gross Margin
Itron's third quarter gross margin of
Operating Expenses and Operating Income
GAAP operating expenses of
GAAP operating income of
Net Income and Earnings per Share
Net income attributable to Itron, Inc. for the quarter was
Non-GAAP net income attributable to Itron, Inc., which excludes the expenses associated with amortization of intangible assets, amortization of debt placement fees, restructuring, loss on sale of business, strategic initiatives, acquisition and integration, and the tax effect of excluding these expenses, was
Both GAAP and Non-GAAP net income and EPS benefited from a favorable resolution of a foreign tax audit resulting in an increase in net income of approximately
Cash Flow
Net cash provided by operating activities was
Other Measures
Total backlog at quarter end was
Q4 2024 Outlook and Full Year 2024 Guidance Update
Outlook for the fourth quarter of 2024 is as follows:
- Revenue between
$600 and$610 million - Non-GAAP diluted EPS between
$1.00 and$1.10
Itron's guidance for the full year 2024 has been updated as follows:
- Revenue between
$2.42 8 to$2.43 8 billion vs. prior guidance of$2.38 5 to$2.41 5 billion - Non-GAAP diluted EPS between
$5.28 t o$5.38 vs. prior guidance of$4.45 t o$4.65
Earnings Conference Call
Itron will host a conference call to discuss the financial results contained in this release at 10 a.m. EDT on October 31, 2024. Interested parties may listen to the conference call on a live webcast. The webcast, along with a supplemental presentation, may be accessed from the company’s website at
https://investors.itron.com/events-presentations. Participants should access the webcast 10 minutes prior to the start of the call. A webcast replay of the conference call will be available through November 8, 2024 and may be accessed on the company's website at https://investors.itron.com/events-presentations.
About Itron
Itron is a proven global leader in energy, water, smart city, IIoT and intelligent infrastructure services. For utilities, cities and society, we build innovative systems, create new efficiencies, connect communities, encourage conservation and increase resourcefulness. By safeguarding our invaluable natural resources today and tomorrow, we improve the quality of life for people around the world. Join us: www.itron.com
Itron® is a registered trademark of Itron, Inc. All third-party trademarks are property of their respective owners and any usage herein does not suggest or imply any relationship between Itron and the third party unless expressly stated.
Cautionary Note Regarding Forward Looking Statements
This release contains, and our officers and representatives may from time to time make, "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical factors nor assurances of future performance. These statements are based on our expectations about, among others, revenues, operations, financial performance, earnings, liquidity, earnings per share, cash flows and restructuring activities including headcount reductions and other cost savings initiatives. This document reflects our current strategy, plans and expectations and is based on information currently available as of the date of this release. When we use words such as "expect", "intend", "anticipate", "believe", "plan", "goal", "seek", "project", "estimate", "future", "strategy", "objective", "may", "likely", "should", "will", "will continue", and similar expressions, including related to future periods, they are intended to identify forward-looking statements. Forward-looking statements rely on a number of assumptions and estimates. Although we believe the estimates and assumptions upon which these forward-looking statements are based are reasonable, any of these estimates or assumptions could prove to be inaccurate and the forward-looking statements based on these estimates and assumptions could be incorrect. Our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Actual results and trends in the future may differ materially from those suggested or implied by the forward-looking statements depending on a variety of factors. Therefore, you should not rely on any of these forward-looking statements. Some of the factors that we believe could affect our results include our ability to execute on our restructuring plans, our ability to achieve estimated cost savings, the rate and timing of customer demand for our products, rescheduling of current customer orders, changes in estimated liabilities for product warranties, adverse impacts of litigation, changes in laws and regulations, our dependence on new product development and intellectual property, future acquisitions, changes in estimates for stock-based and bonus compensation, increasing volatility in foreign exchange rates, international business risks, uncertainties caused by adverse economic conditions, including without limitation those resulting from extraordinary events or circumstances and other factors that are more fully described in Part I, Item 1A: Risk Factors included in our Annual Report on Form 10-K for the year ended Dec. 31, 2023 and other reports on file with the Securities and Exchange Commission. Itron undertakes no obligation to update or revise any information in this press release.
Non-GAAP Financial Information
To supplement our consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States (GAAP), we use certain adjusted or non-GAAP financial measures, including non-GAAP operating expense, non-GAAP operating income, non-GAAP net income, non-GAAP diluted earnings per share (EPS), adjusted EBITDA, free cash flow, and constant currency. We provide these non-GAAP financial measures because we believe they provide greater transparency and represent supplemental information used by management in its financial and operational decision making. We exclude certain costs in our non-GAAP financial measures as we believe the net result is a measure of our core business. We believe these measures facilitate operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain expense items that would not otherwise be apparent on a GAAP basis. Non-GAAP performance measures should be considered in addition to, and not as a substitute for, results prepared in accordance with GAAP. We strongly encourage investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. Our non-GAAP financial measures may be different from those reported by other companies. When providing future outlooks and/or earnings guidance, a reconciliation of forward-looking non-GAAP diluted EPS to the GAAP diluted EPS has not been provided because we are unable to predict with reasonable certainty the potential amount or timing of restructuring related expenses and their related tax effects without unreasonable effort. These costs are uncertain, depend on various factors and could have a material impact on GAAP results for the guidance period. A more detailed discussion of why we use non-GAAP financial measures, the limitations of using such measures, and reconciliations between non-GAAP and the nearest GAAP financial measures are included in this press release.
For additional information, contact:
Itron, Inc.
Paul Vincent
Vice President, Investor Relations
(512) 560-1172
David Means
Director, Investor Relations
(737) 242-8448
Investors@itron.com
Itron, Inc.
- LinkedIn: https://www.linkedin.com/company/itroninc
- X: https://twitter.com/ItronInc
- Newsroom: https://itron.com/newsroom
- Blog: https://itron.com/blog
| ITRON, INC. | |||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
| (Unaudited, in thousands, except per share data) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Revenues | |||||||||||||||
| Product revenues | $ | 538,249 | $ | 480,355 | $ | 1,598,978 | $ | 1,361,482 | |||||||
| Service revenues | 77,213 | 80,417 | 228,995 | 234,978 | |||||||||||
| Total revenues | 615,462 | 560,772 | 1,827,973 | 1,596,460 | |||||||||||
| Cost of revenues | |||||||||||||||
| Product cost of revenues | 362,579 | 332,035 | 1,076,033 | 951,666 | |||||||||||
| Service cost of revenues | 43,285 | 41,534 | 126,503 | 127,276 | |||||||||||
| Total cost of revenues | 405,864 | 373,569 | 1,202,536 | 1,078,942 | |||||||||||
| Gross profit | 209,598 | 187,203 | 625,437 | 517,518 | |||||||||||
| Operating expenses | |||||||||||||||
| Sales, general and administrative | 79,639 | 76,576 | 254,023 | 231,176 | |||||||||||
| Research and development | 51,237 | 51,644 | 156,691 | 154,769 | |||||||||||
| Amortization of intangible assets | 4,814 | 4,663 | 13,311 | 14,433 | |||||||||||
| Restructuring | (723 | ) | (615 | ) | (624 | ) | 36,868 | ||||||||
| Loss on sale of business | 698 | 45 | 656 | 675 | |||||||||||
| Total operating expenses | 135,665 | 132,313 | 424,057 | 437,921 | |||||||||||
| Operating income | 73,933 | 54,890 | 201,380 | 79,597 | |||||||||||
| Other income (expense) | |||||||||||||||
| Interest income | 13,420 | 2,642 | 22,394 | 5,968 | |||||||||||
| Interest expense | (5,605 | ) | (2,445 | ) | (9,788 | ) | (6,479 | ) | |||||||
| Other income (expense), net | 677 | 646 | 695 | (1,162 | ) | ||||||||||
| Total other income (expense) | 8,492 | 843 | 13,301 | (1,673 | ) | ||||||||||
| Income before income taxes | 82,425 | 55,733 | 214,681 | 77,924 | |||||||||||
| Income tax provision | (3,515 | ) | (15,388 | ) | (32,124 | ) | (24,513 | ) | |||||||
| Net income | 78,910 | 40,345 | 182,557 | 53,411 | |||||||||||
| Net income attributable to noncontrolling interests | 951 | 173 | 1,559 | 874 | |||||||||||
| Net income attributable to Itron, Inc. | $ | 77,959 | $ | 40,172 | $ | 180,998 | $ | 52,537 | |||||||
| Net income per common share - Basic | $ | 1.73 | $ | 0.88 | $ | 3.98 | $ | 1.16 | |||||||
| Net income per common share - Diluted | $ | 1.70 | $ | 0.87 | $ | 3.91 | $ | 1.15 | |||||||
| Weighted average common shares outstanding - Basic | 44,982 | 45,462 | 45,458 | 45,393 | |||||||||||
| Weighted average common shares outstanding - Diluted | 45,839 | 45,950 | 46,239 | 45,768 | |||||||||||
| ITRON, INC. | |||||||||||||||
| SEGMENT INFORMATION | |||||||||||||||
| (Unaudited, in thousands) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Product revenues | |||||||||||||||
| Device Solutions | $ | 122,119 | $ | 110,138 | $ | 365,956 | $ | 340,098 | |||||||
| Networked Solutions | 390,201 | 352,771 | 1,158,857 | 964,909 | |||||||||||
| Outcomes | 25,929 | 17,446 | 74,165 | 56,475 | |||||||||||
| Total Company | $ | 538,249 | $ | 480,355 | $ | 1,598,978 | $ | 1,361,482 | |||||||
| Service revenues | |||||||||||||||
| Device Solutions | $ | 619 | $ | 631 | $ | 2,084 | $ | 2,085 | |||||||
| Networked Solutions | 26,512 | 32,200 | 78,076 | 94,460 | |||||||||||
| Outcomes | 50,082 | 47,586 | 148,835 | 138,433 | |||||||||||
| Total Company | $ | 77,213 | $ | 80,417 | $ | 228,995 | $ | 234,978 | |||||||
| Total revenues | |||||||||||||||
| Device Solutions | $ | 122,738 | $ | 110,769 | $ | 368,040 | $ | 342,183 | |||||||
| Networked Solutions | 416,713 | 384,971 | 1,236,933 | 1,059,369 | |||||||||||
| Outcomes | 76,011 | 65,032 | 223,000 | 194,908 | |||||||||||
| Total Company | $ | 615,462 | $ | 560,772 | $ | 1,827,973 | $ | 1,596,460 | |||||||
| Gross profit | |||||||||||||||
| Device Solutions | $ | 33,342 | $ | 26,919 | $ | 94,637 | $ | 75,351 | |||||||
| Networked Solutions | 149,648 | 135,203 | 452,830 | 362,852 | |||||||||||
| Outcomes | 26,608 | 25,081 | 77,970 | 79,315 | |||||||||||
| Total Company | $ | 209,598 | $ | 187,203 | $ | 625,437 | $ | 517,518 | |||||||
| Operating income | |||||||||||||||
| Device Solutions | $ | 26,485 | $ | 17,675 | $ | 71,913 | $ | 45,837 | |||||||
| Networked Solutions | 115,231 | 102,503 | 349,353 | 266,052 | |||||||||||
| Outcomes | 11,186 | 10,280 | 30,928 | 35,867 | |||||||||||
| Corporate unallocated | (78,969 | ) | (75,568 | ) | (250,814 | ) | (268,159 | ) | |||||||
| Total Company | $ | 73,933 | $ | 54,890 | $ | 201,380 | $ | 79,597 | |||||||
| Total Gross Margin | 34.1 | % | 33.4 | % | 34.2 | % | 32.4 | % | |||||||
| ITRON, INC. | |||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||
| (Unaudited, in thousands) | September 30, 2024 | December 31, 2023 | |||||||
| ASSETS | |||||||||
| Current assets | |||||||||
| Cash and cash equivalents | $ | 982,507 | $ | 302,049 | |||||
| Accounts receivable, net | 338,769 | 303,821 | |||||||
| Inventories | 276,616 | 283,686 | |||||||
| Other current assets | 156,642 | 159,882 | |||||||
| Total current assets | 1,754,534 | 1,049,438 | |||||||
| Property, plant, and equipment, net | 120,449 | 128,806 | |||||||
| Deferred tax assets, net | 290,259 | 247,211 | |||||||
| Other long-term assets | 40,804 | 38,836 | |||||||
| Operating lease right-of-use assets, net | 37,641 | 41,186 | |||||||
| Intangible assets, net | 47,969 | 46,282 | |||||||
| Goodwill | 1,073,757 | 1,052,504 | |||||||
| Total assets | $ | 3,365,413 | $ | 2,604,263 | |||||
| LIABILITIES AND EQUITY | |||||||||
| Current liabilities | |||||||||
| Accounts payable | $ | 152,510 | $ | 199,520 | |||||
| Other current liabilities | 61,151 | 54,407 | |||||||
| Wages and benefits payable | 118,634 | 135,803 | |||||||
| Taxes payable | 14,273 | 8,636 | |||||||
| Current portion of warranty | 13,807 | 14,663 | |||||||
| Unearned revenue | 161,096 | 124,207 | |||||||
| Total current liabilities | 521,471 | 537,236 | |||||||
| Long-term debt, net | 1,240,950 | 454,827 | |||||||
| Long-term warranty | 7,925 | 7,501 | |||||||
| Pension benefit obligation | 64,886 | 63,887 | |||||||
| Deferred tax liabilities, net | 622 | 697 | |||||||
| Operating lease liabilities | 28,820 | 32,656 | |||||||
| Other long-term obligations | 132,052 | 176,028 | |||||||
| Total liabilities | 1,996,726 | 1,272,832 | |||||||
| Equity | |||||||||
| Common stock | 1,673,916 | 1,820,510 | |||||||
| Accumulated other comprehensive loss, net | (78,186 | ) | (81,190 | ) | |||||
| Accumulated deficit | (247,411 | ) | (428,409 | ) | |||||
| Total Itron, Inc. shareholders' equity | 1,348,319 | 1,310,911 | |||||||
| Noncontrolling interests | 20,368 | 20,520 | |||||||
| Total equity | 1,368,687 | 1,331,431 | |||||||
| Total liabilities and equity | $ | 3,365,413 | $ | 2,604,263 | |||||
| ITRON, INC. | |||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
| (Unaudited, in thousands) | Nine Months Ended September 30, | ||||||||
| 2024 | 2023 | ||||||||
| Operating activities | |||||||||
| Net income | $ | 182,557 | $ | 53,411 | |||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
| Depreciation and amortization of intangible assets | 40,979 | 42,013 | |||||||
| Non-cash operating lease expense | 11,481 | 12,197 | |||||||
| Stock-based compensation | 32,067 | 20,531 | |||||||
| Amortization of prepaid debt fees | 3,669 | 2,761 | |||||||
| Deferred taxes, net | (17,509 | ) | 1,938 | ||||||
| Loss on sale of business | 656 | 675 | |||||||
| Restructuring, non-cash | (171 | ) | 910 | ||||||
| Other adjustments, net | (838 | ) | (318 | ) | |||||
| Changes in operating assets and liabilities, net of acquisition and sale of business: | |||||||||
| Accounts receivable | (31,169 | ) | (37,832 | ) | |||||
| Inventories | 5,532 | (48,280 | ) | ||||||
| Other current assets | 4,102 | (43,240 | ) | ||||||
| Other long-term assets | (1,391 | ) | 3,392 | ||||||
| Accounts payable, other current liabilities, and taxes payable | (39,054 | ) | 220 | ||||||
| Wages and benefits payable | (18,010 | ) | 17,361 | ||||||
| Unearned revenue | 33,453 | 38,619 | |||||||
| Warranty | (476 | ) | (2,177 | ) | |||||
| Restructuring | (19,816 | ) | 23,966 | ||||||
| Other operating, net | (27,736 | ) | (9,071 | ) | |||||
| Net cash provided by operating activities | 158,326 | 77,076 | |||||||
| Investing activities | |||||||||
| Net proceeds (payments) related to the sale of business | 405 | (772 | ) | ||||||
| Acquisitions of property, plant, and equipment | (20,878 | ) | (18,304 | ) | |||||
| Business acquisitions, net of cash and cash equivalents acquired | (34,126 | ) | — | ||||||
| Other investing, net | 212 | 73 | |||||||
| Net cash used in investing activities | (54,387 | ) | (19,003 | ) | |||||
| Financing activities | |||||||||
| Proceeds from borrowings | 805,000 | — | |||||||
| Issuance of common stock | 4,317 | 2,366 | |||||||
| Payments on call spread for convertible offering | (108,997 | ) | — | ||||||
| Repurchase of common stock | (100,000 | ) | — | ||||||
| Prepaid debt fees | (21,617 | ) | (517 | ) | |||||
| Other financing, net | (2,618 | ) | (4,488 | ) | |||||
| Net cash provided by (used in) financing activities | 576,085 | (2,639 | ) | ||||||
| Effect of foreign exchange rate changes on cash and cash equivalents | 434 | (2,670 | ) | ||||||
| Increase in cash and cash equivalents | 680,458 | 52,764 | |||||||
| Cash and cash equivalents at beginning of period | 302,049 | 202,007 | |||||||
| Cash and cash equivalents at end of period | $ | 982,507 | $ | 254,771 | |||||
About Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared in accordance with GAAP, we use certain non-GAAP financial measures, including non-GAAP operating expense, non-GAAP operating income, non-GAAP net income, non-GAAP diluted EPS, adjusted EBITDA, free cash flow, and constant currency. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and other companies may define such measures differently. For a reconciliation of each non-GAAP measure to the most comparable financial measure prepared and presented in accordance with GAAP, please see the table captioned Reconciliations of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures.
We use these non-GAAP financial measures for financial and operational decision making and/or as a means for determining executive compensation. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and ability to service debt by excluding certain expenses that may not be indicative of our recurring core operating results. These non-GAAP financial measures facilitate management's internal comparisons to our historical performance, as well as comparisons to our competitors' operating results. Our executive compensation plans exclude non-cash charges related to amortization of intangibles and certain discrete cash and non-cash charges, such as restructuring, loss on sale of business, strategic initiative expenses, or acquisition and integration related expenses. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. We believe these non-GAAP financial measures are useful to investors because they provide greater transparency with respect to key metrics used by management in its financial and operational decision making and because they are used by our institutional investors and the analyst community to analyze the health of our business.
Non-GAAP operating expenses and non-GAAP operating income – We define non-GAAP operating expenses as operating expenses excluding certain expenses related to the amortization of intangible assets, restructuring, loss on sale of business, strategic initiative expenses, and acquisition and integration related expenses. We define non-GAAP operating income as operating income excluding the expenses related to the amortization of intangible assets, restructuring, loss on sale of business, strategic initiative expenses, and acquisition and integration related expenses. Acquisition and integration related expenses include costs, which are incurred to affect and integrate business combinations, such as professional fees, certain employee retention and salaries related to integration, severances, contract terminations, travel costs related to knowledge transfer, system conversion costs, and asset impairment charges. We consider these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of expenses that are not related to our core operating results. By excluding these expenses, we believe that it is easier for management and investors to compare our financial results over multiple periods and analyze trends in our operations. For example, in certain periods, expenses related to amortization of intangible assets may decrease, which would improve GAAP operating margins, yet the improvement in GAAP operating margins due to this lower expense is not necessarily reflective of an improvement in our core business. There are some limitations related to the use of non-GAAP operating expenses and non-GAAP operating income versus operating expenses and operating income calculated in accordance with GAAP. We compensate for these limitations by providing specific information about the GAAP amounts excluded from non-GAAP operating expense and non-GAAP operating income and evaluating non-GAAP operating expense and non-GAAP operating income together with GAAP operating expense and operating income.
Non-GAAP net income and non-GAAP diluted EPS – We define non-GAAP net income as net income attributable to Itron, Inc. excluding the expenses associated with amortization of intangible assets, amortization of debt placement fees, restructuring, loss on sale of business, strategic initiative expenses, acquisition and integration related expenses, and the tax effect of excluding these expenses. We define non-GAAP diluted EPS as non-GAAP net income divided by diluted weighted-average shares outstanding during the period calculated on a GAAP basis and then reduced to reflect any anti-dilutive impact of the convertible notes hedge transactions. We consider these financial measures to be useful metrics for management and investors for the same reasons that we use non-GAAP operating income. The same limitations described above regarding our use of non-GAAP operating income apply to our use of non-GAAP net income and non-GAAP diluted EPS. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP measures and evaluating non-GAAP net income and non-GAAP diluted EPS together with GAAP net income attributable to Itron, Inc. and GAAP diluted EPS.
For interim periods the budgeted annual effective tax rate (AETR) is used, adjusted for any discrete items, as defined in Accounting Standards Codification (ASC) 740 - Income Taxes. The budgeted AETR is determined at the beginning of the fiscal year. The AETR is revised throughout the year based on changes to our full-year forecast. If the revised AETR increases or decreases by 200 basis points or more from the budgeted AETR due to changes in the full-year forecast during the year, the revised AETR is used in place of the budgeted AETR beginning with the quarter the 200 basis point threshold is exceeded and going forward for all subsequent interim quarters in the year. We continue to assess the AETR based on latest forecast throughout the year and use the most recent AETR anytime it increases or decreases by 200 basis points or more from the prior interim period.
Adjusted EBITDA – We define adjusted EBITDA as net income (a) minus interest income, (b) plus interest expense, depreciation and amortization, restructuring, loss on sale of business, strategic initiative expenses, acquisition and integration related expenses, and (c) excluding income tax provision or benefit. Management uses adjusted EBITDA as a performance measure for executive compensation. A limitation to using adjusted EBITDA is that it does not represent the total increase or decrease in the cash balance for the period and the measure includes some non-cash items and excludes other non-cash items. Additionally, the items that we exclude in our calculation of adjusted EBITDA may differ from the items that our peer companies exclude when they report their results. We compensate for these limitations by providing a reconciliation of this measure to GAAP net income.
Free cash flow – We define free cash flow as net cash provided by operating activities less cash used for acquisitions of property, plant and equipment. We believe free cash flow provides investors with a relevant measure of liquidity and a useful basis for assessing our ability to fund our operations and repay our debt. The same limitations described above regarding our use of adjusted EBITDA apply to our use of free cash flow. We compensate for these limitations by providing specific information regarding the GAAP amounts in the reconciliation.
Constant currency – We refer to the impact of foreign currency exchange rate fluctuations in our discussions of financial results, which references the differences between the foreign currency exchange rates used to translate operating results from the entity's functional currency into U.S. dollars for financial reporting purposes. We also use the term "constant currency", which represents financial results adjusted to exclude changes in foreign currency exchange rates as compared with the rates in the comparable prior year period. We calculate the constant currency change as the difference between the current period results and the comparable prior period's results restated using current period foreign currency exchange rates.
The tables below reconcile the non-GAAP financial measures of operating expenses, operating income, net income, diluted EPS, adjusted EBITDA, and free cash flow with the most directly comparable GAAP financial measures.
| ITRON, INC. | |||||||||||||||||
| RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES | |||||||||||||||||
| TO THE MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES | |||||||||||||||||
| (Unaudited, in thousands, except per share data) | |||||||||||||||||
| TOTAL COMPANY RECONCILIATIONS | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||
| NON-GAAP OPERATING EXPENSES | |||||||||||||||||
| GAAP operating expenses | $ | 135,665 | $ | 132,313 | $ | 424,057 | $ | 437,921 | |||||||||
| Amortization of intangible assets | (4,814 | ) | (4,663 | ) | (13,311 | ) | (14,433 | ) | |||||||||
| Restructuring | 723 | 615 | 624 | (36,868 | ) | ||||||||||||
| Loss on sale of business | (698 | ) | (45 | ) | (656 | ) | (675 | ) | |||||||||
| Strategic initiative | — | 5 | — | 5 | |||||||||||||
| Acquisition and integration | (248 | ) | (28 | ) | (656 | ) | (117 | ) | |||||||||
| Non-GAAP operating expenses | $ | 130,628 | $ | 128,197 | $ | 410,058 | $ | 385,833 | |||||||||
| NON-GAAP OPERATING INCOME | |||||||||||||||||
| GAAP operating income | $ | 73,933 | $ | 54,890 | $ | 201,380 | $ | 79,597 | |||||||||
| Amortization of intangible assets | 4,814 | 4,663 | 13,311 | 14,433 | |||||||||||||
| Restructuring | (723 | ) | (615 | ) | (624 | ) | 36,868 | ||||||||||
| Loss on sale of business | 698 | 45 | 656 | 675 | |||||||||||||
| Strategic initiative | — | (5 | ) | — | (5 | ) | |||||||||||
| Acquisition and integration | 248 | 28 | 656 | 117 | |||||||||||||
| Non-GAAP operating income | $ | 78,970 | $ | 59,006 | $ | 215,379 | $ | 131,685 | |||||||||
| NON-GAAP NET INCOME & DILUTED EPS | |||||||||||||||||
| GAAP net income attributable to Itron, Inc. | $ | 77,959 | $ | 40,172 | $ | 180,998 | $ | 52,537 | |||||||||
| Amortization of intangible assets | 4,814 | 4,663 | 13,311 | 14,433 | |||||||||||||
| Amortization of debt placement fees | 1,759 | 897 | 3,538 | 2,629 | |||||||||||||
| Restructuring | (723 | ) | (615 | ) | (624 | ) | 36,868 | ||||||||||
| Loss on sale of business | 698 | 45 | 656 | 675 | |||||||||||||
| Strategic initiative | — | (5 | ) | — | (5 | ) | |||||||||||
| Acquisition and integration | 248 | 28 | 656 | 117 | |||||||||||||
| Income tax effect of non-GAAP adjustments | (504 | ) | (293 | ) | (891 | ) | (10,156 | ) | |||||||||
| Non-GAAP net income attributable to Itron, Inc. | $ | 84,251 | $ | 44,892 | $ | 197,644 | $ | 97,098 | |||||||||
| Non-GAAP diluted EPS | $ | 1.84 | $ | 0.98 | $ | 4.27 | $ | 2.12 | |||||||||
| Non-GAAP weighted average common shares outstanding - Diluted | 45,839 | 45,950 | 46,239 | 45,768 | |||||||||||||
| ADJUSTED EBITDA | |||||||||||||||||
| GAAP net income attributable to Itron, Inc. | $ | 77,959 | $ | 40,172 | $ | 180,998 | $ | 52,537 | |||||||||
| Interest income | (13,420 | ) | (2,642 | ) | (22,394 | ) | (5,968 | ) | |||||||||
| Interest expense | 5,605 | 2,445 | 9,788 | 6,479 | |||||||||||||
| Income tax provision | 3,515 | 15,388 | 32,124 | 24,513 | |||||||||||||
| Depreciation and amortization | 14,716 | 13,645 | 40,979 | 42,013 | |||||||||||||
| Restructuring | (723 | ) | (615 | ) | (624 | ) | 36,868 | ||||||||||
| Loss on sale of business | 698 | 45 | 656 | 675 | |||||||||||||
| Strategic initiative | — | (5 | ) | — | (5 | ) | |||||||||||
| Acquisition and integration | 248 | 28 | 656 | 117 | |||||||||||||
| Adjusted EBITDA | $ | 88,598 | $ | 68,461 | $ | 242,183 | $ | 157,229 | |||||||||
| FREE CASH FLOW | |||||||||||||||||
| Net cash provided by operating activities | $ | 65,301 | $ | 34,087 | $ | 158,326 | $ | 77,076 | |||||||||
| Acquisitions of property, plant, and equipment | (6,623 | ) | (5,806 | ) | (20,878 | ) | (18,304 | ) | |||||||||
| Free Cash Flow | $ | 58,678 | $ | 28,281 | $ | 137,448 | $ | 58,772 | |||||||||
FAQ
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