Iteris,
Inc. (NYSE MKT: ITI), a leader in providing intelligent traffic
management information solutions, reported financial results for its
fiscal fourth quarter and full year ended March 31, 2014.
Fiscal Q4 2014 Highlights vs. Same Year-ago Quarter
-
Total revenues up 11% to $17.6 million
-
Roadway Sensors revenues up 25% to $8.1 million
-
iPerform revenues up 14% to $1.6 million
Fiscal Year 2014 Highlights vs. Fiscal Year 2013
-
Total revenues up 11% to $68.2 million
-
Roadway Sensors revenues up 22% to $31.8 million
-
Gross margin improved 40 basis points to 38.1%
-
Operating income increased 24% to $2.0 million
-
Cash and cash equivalents increased 9% to $20.4 million
Fiscal Q4 2014 Financial Results
Total revenues in the fourth quarter of 2014 increased 11% to $17.6
million compared to $15.9 million in the year-ago quarter. This was
primarily driven by a 25% increase in Roadway Sensors. iPerform revenues
were also up 14%, while Transportation Systems revenues were down 1%.
Gross margin in the fourth quarter decreased 140 basis points to 34.9%
compared to 36.3% in the year-ago quarter. The decrease in gross margin
was primarily attributable to the timing of revenue recognition on
certain Transportation Systems contracts, which the company expects to
be realized in future quarters.
Operating expenses in the fourth quarter increased to $6.1 million
compared to $5.5 million in the same year-ago quarter. The increase was
primarily due to planned increases in sales and marketing expenses in
Roadway Sensors and iPerform, including planned increases in headcount
and accelerated research and development expenses in iPerform.
Operating income in the fourth quarter decreased to $44,000 compared to
$321,000 in the year-ago quarter. Net income in the fourth quarter was
$50,000 or $0.00 per share, compared to $56,000 or $0.00 per share in
the year-ago quarter. The decrease in operating income was primarily due
to significant investment in the iPerform business segment.
Total backlog at the end of the fourth quarter was $35.6 million
compared to $36.8 million in the prior quarter and $38.6 million in the
year-ago quarter. Backlog was comprised of $27.6 million from
Transportation Systems, $4.1 million from iPerform, and $3.9 million
from Roadway Sensors. The reduction reflects soft market conditions for
the transportation systems market. However, based upon active proposals
outstanding, the company believes the market is improving.
Fiscal Year 2014 Financial Results
Total revenues in 2014 increased 11% to $68.2 million compared to $61.7
million in 2013. The increase was primarily driven by a 22% increase in
Roadway Sensors revenues. iPerform revenues and Transportation Systems
revenues were also up 5% and 2%, respectively.
Gross margin in 2014 increased 40 basis points to 38.1% compared to
37.7% in 2013. The increase in gross margin was primarily due to higher
Roadway Sensors revenues, which carry a higher gross margin than
Transportation Systems and iPerform, as well as a slight reduction in
subcontractor’s content in certain of our Transportation Systems
contracts compared to the prior year, which slightly improved margins in
our Transportation Systems business.
Operating income in 2014 increased 24% to $2.0 million compared to $1.6
million in 2013, primarily driven by the 22% increase in Roadway
Sensors. Net income in 2014 was $1.4 million or $0.04 per share,
compared to $2.4 million or $0.07 per share in 2013, which included a
$0.1 million gain in 2014, and a $1.5 million gain in 2013, net of tax,
related to the sale of the company’s Vehicle Sensors business.
Management Commentary
“We ended fiscal 2014 with a strong fourth quarter, most notably in our
Roadway Sensors business, which grew revenues by 25% and contributed
significantly to our overall profitability,” said Abbas Mohaddes,
president and CEO of Iteris. “Our fourth quarter reflects increasing
demand for our core products and services, as well as success in various
growth initiatives developed earlier in the year, such as the
introduction of innovative new products in our Roadway Sensors business.
Two of these key products include our Vantage Velocity processor and
Vector hybrid video and radar detection camera.
“Transportation Systems revenue was down slightly in the fourth quarter,
reflecting soft market conditions in the trailing fiscal year. While we
have been disappointed with this segment in fiscal 2014, we believe
there are significant opportunities to improve this business and we are
working to position it for growth.
“As a result of many years of development activities in the
transportation marketplace, Iteris possesses unique capabilities in
precision weather mapping and forecasting. We are leveraging this
expertise to capitalize on opportunities in large markets both within
and adjacent to our traditional transportation markets. The profits and
cash flow generated by our core segments are funding the accelerated
investment in iPerform, a new generation of intelligent traffic and
weather-related information solutions, which we believe represents our
greatest growth opportunity.
“Demonstrated by recent contract wins, new key partnerships, and major
technical developments, iPerform has continued to make significant
progress. This includes a $1.2 million contract awarded by the Virginia
Department of Transportation to utilize our iPeMS® software and
partnering with HERE, a Nokia company, to provide traffic information
and analytics to the I-95 Corridor Coalition.
“We also recently launched iPerform’s ClearPath Weather™ and ClearPath
Ag™ decision support cloud-based software solutions to service both
public and commercial markets. Soon thereafter, we licensed ClearPath Ag
technology to Agrian, a leading provider of precision agronomy products.
As the demand for intelligent traffic management solutions continues to
expand, we strongly believe the strategic investments we are making will
build shareholder value and highlight Iteris as a go-to-market leader in
our target markets.”
Conference Call
Iteris will conduct a conference call today at 4:30 p.m. Eastern time
(1:30 p.m. Pacific time) to discuss its fiscal fourth quarter and full
year 2014 results.
Iteris’ CEO Abbas Mohaddes and Interim CFO Craig Christensen 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: Wednesday, September 3, 2014
Time: 4:30 p.m. Eastern time
(1:30 p.m. Pacific time)
Toll-free dial-in number: 1-888-505-4375
International
dial-in number: 1-719-457-2697
Conference ID: 8687081
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 replay of the conference call will be available after 7:30 p.m.
Eastern time on the same day through September 17, 2014.
Toll-free replay number: 1-877-870-5176
International replay
number: 1-858-384-5517
Replay ID: 8687081
About Iteris, Inc.
Iteris,
Inc. (NYSE MKT: ITI) is a leader in providing 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 and weather
analytics, and improve the safety of surface transportation systems. By
combining its unique IP, products, decades of expertise in traffic
management, hyper-local weather solutions 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 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 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,
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 recently extended
Federal Highway Bill on the Intelligent Transportation industry and the
expected benefits to Iteris; 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 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; 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.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(in thousands)
|
|
|
|
|
|
|
|
March 31,
|
|
March 31,
|
2014
|
2013
|
|
|
(unaudited)
|
|
|
ASSETS:
|
|
|
|
|
Cash
|
|
$
|
20,414
|
|
$
|
18,678
|
Trade accounts receivable, net
|
|
12,349
|
|
10,946
|
Costs and estimated earnings in excess of billings
|
|
5,813
|
|
6,346
|
on uncompleted contracts
|
Inventories
|
|
2,546
|
|
2,465
|
Prepaid expenses and other current assets
|
|
1,275
|
|
1,311
|
Current portion of deferred income taxes
|
|
1,429
|
|
2,363
|
Total current assets
|
|
|
43,826
|
|
|
42,109
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
1,546
|
|
1,862
|
Long-term portion of deferred income taxes
|
|
6,112
|
|
5,888
|
Goodwill
|
|
17,318
|
|
17,318
|
Intangible and other assets, net
|
|
1,805
|
|
2,334
|
Total assets
|
|
$
|
70,607
|
|
$
|
69,511
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY:
|
|
|
|
|
|
|
Accounts payable and other current liabilities
|
|
$
|
11,527
|
|
$
|
10,764
|
Billings in excess of costs and estimated earnings
|
|
|
|
|
|
|
on uncompleted contracts
|
|
1,391
|
|
1,958
|
Total current liabilities
|
|
12,918
|
|
12,722
|
Long-term liabilities
|
|
|
199
|
|
|
908
|
Total liabilities
|
|
|
13,117
|
|
|
13,630
|
Stockholders’ equity
|
|
|
57,490
|
|
|
55,881
|
Total liabilities and stockholders’ equity
|
|
$
|
70,607
|
|
$
|
69,511
|
|
|
|
|
|
|
|
Note: cash and prepaid expenses and other current assets as of March
31, 2013 have been stated on a pro forma basis for comparison with
the current year.
|
|
|
|
|
|
|
ITERIS, INC.
|
UNAUDITED CONSOLIDATED
|
STATEMENTS OF OPERATIONS
|
(in thousands, except per share amounts)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
March 31,
|
|
March 31,
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
$
|
17,623
|
|
|
$
|
15,883
|
|
|
$
|
68,228
|
|
|
$
|
61,685
|
|
Cost of revenues
|
|
|
11,479
|
|
|
|
10,111
|
|
|
|
42,254
|
|
|
|
38,427
|
|
Gross profit
|
|
|
6,144
|
|
|
|
5,772
|
|
|
|
25,974
|
|
|
|
23,258
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
4,741
|
|
|
|
4,581
|
|
|
|
19,269
|
|
|
|
18,090
|
|
Research and development
|
|
|
1,211
|
|
|
|
702
|
|
|
|
4,029
|
|
|
|
3,071
|
|
Amortization of intangible assets
|
|
|
144
|
|
|
|
161
|
|
|
|
627
|
|
|
|
644
|
|
Change in fair value of contingent
acquisition consideration
|
|
|
4
|
|
|
|
7
|
|
|
|
25
|
|
|
|
(181
|
)
|
Total operating expenses
|
|
|
6,100
|
|
|
|
5,451
|
|
|
|
23,950
|
|
|
|
21,624
|
|
Operating income
|
|
|
44
|
|
|
|
321
|
|
|
|
2,024
|
|
|
|
1,634
|
|
Non-operating income (expense):
|
|
|
|
|
|
|
|
|
Other income (expense), net
|
|
|
(6
|
)
|
|
|
(7
|
)
|
|
|
-
|
|
|
|
2
|
|
Interest income (expense), net
|
|
|
-
|
|
|
|
(4
|
)
|
|
|
-
|
|
|
|
(6
|
)
|
Income from continuing operations before income taxes
|
|
|
38
|
|
|
|
310
|
|
|
|
2,024
|
|
|
|
1,630
|
|
Provision for income taxes
|
|
|
(37
|
)
|
|
|
(241
|
)
|
|
|
(704
|
)
|
|
|
(716
|
)
|
Income from continuing operations
|
|
|
1
|
|
|
|
69
|
|
|
|
1,320
|
|
|
|
914
|
|
Gain (loss) on sale of discontinued operation, net of tax
|
|
|
49
|
|
|
|
(13
|
)
|
|
|
89
|
|
|
|
1,465
|
|
Net income
|
|
$
|
50
|
|
|
$
|
56
|
|
|
$
|
1,409
|
|
|
$
|
2,379
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per share from continuing operations –
basic and diluted
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
0.04
|
|
|
$
|
0.03
|
|
Gain (loss) per share from sale of discontinued operation –
basic and diluted
|
|
$
|
0.00
|
|
|
$
|
(0.00
|
)
|
|
$
|
0.00
|
|
|
$
|
0.04
|
|
Net income per share - basic and diluted
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
0.04
|
|
|
$
|
0.07
|
|
|
|
|
|
|
|
|
|
|
Shares used in basic per share calculations
|
|
|
32,778
|
|
|
|
32,993
|
|
|
|
32,665
|
|
|
|
33,491
|
|
Shares used in diluted per share calculations
|
|
|
32,912
|
|
|
|
33,162
|
|
|
|
32,847
|
|
|
|
33,609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ITERIS, INC.
|
UNAUDITED SEGMENT REPORTING DETAILS
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Roadway
Sensors
|
|
Transportation
Systems
|
|
iPerform
|
|
Iteris, Inc.
|
Three Months Ended March 31, 2014
|
|
|
|
|
|
|
|
|
Total revenues
|
|
$
|
8,116
|
|
$
|
7,863
|
|
$
|
1,644
|
|
|
$
|
17,623
|
|
|
|
|
|
|
|
|
|
|
Segment operating income (loss)
|
|
$
|
1,285
|
|
$
|
645
|
|
$
|
(652
|
)
|
|
$
|
1,278
|
|
Corporate and other income (expense), net
|
|
|
|
|
|
|
|
|
(1,086
|
)
|
Amortization of intangible assets
|
|
|
|
|
|
|
|
|
(144
|
)
|
Change in fair value of contingent acquisition consideration
|
|
|
|
|
|
|
|
|
(4
|
)
|
Operating income
|
|
|
|
|
|
|
|
$
|
44
|
|
|
|
|
|
|
|
|
|
|
|
|
Roadway
Sensors
|
|
Transportation
Systems
|
|
iPerform
|
|
Iteris, Inc.
|
Three Months Ended March 31, 2013 *
|
|
|
|
|
|
|
|
|
Total revenues
|
|
$
|
6,517
|
|
$
|
7,925
|
|
$
|
1,441
|
|
|
$
|
15,883
|
|
|
|
|
|
|
|
|
|
|
Segment operating income (loss)
|
|
$
|
891
|
|
$
|
1,043
|
|
$
|
(205
|
)
|
|
$
|
1,729
|
|
Corporate and other income (expense), net
|
|
|
|
|
|
|
|
|
(1,240
|
)
|
Amortization of intangible assets
|
|
|
|
|
|
|
|
|
(161
|
)
|
Change in fair value of contingent acquisition consideration
|
|
|
|
|
|
|
|
|
(7
|
)
|
Operating income
|
|
|
|
|
|
|
|
$
|
321
|
|
|
|
|
|
|
|
|
|
|
|
|
Roadway
Sensors
|
|
Transportation
Systems
|
|
iPerform
|
|
Iteris, Inc.
|
Twelve Months Ended March 31, 2014
|
|
|
|
|
|
|
|
|
Total revenues
|
|
$
|
31,769
|
|
$
|
30,524
|
|
$
|
5,935
|
|
|
$
|
68,228
|
|
|
|
|
|
|
|
|
|
|
Segment operating income (loss)
|
|
$
|
5,791
|
|
$
|
3,363
|
|
$
|
(1,575
|
)
|
|
$
|
7,579
|
|
Corporate and other income (expense), net
|
|
|
|
|
|
|
|
|
(4,903
|
)
|
Amortization of intangible assets
|
|
|
|
|
|
|
|
|
(627
|
)
|
Change in fair value of contingent acquisition consideration
|
|
|
|
|
|
|
|
|
(25
|
)
|
Operating income
|
|
|
|
|
|
|
|
$
|
2,024
|
|
|
|
|
|
|
|
|
|
|
|
|
Roadway
Sensors
|
|
Transportation
Systems
|
|
iPerform
|
|
Iteris, Inc.
|
Twelve Months Ended March 31, 2013 *
|
|
|
|
|
|
|
|
|
Total revenues
|
|
$
|
26,002
|
|
$
|
30,010
|
|
$
|
5,673
|
|
|
$
|
61,685
|
|
|
|
|
|
|
|
|
|
|
Segment operating income (loss)
|
|
$
|
4,119
|
|
$
|
3,561
|
|
$
|
(233
|
)
|
|
$
|
7,447
|
|
Corporate and other income (expense), net
|
|
|
|
|
|
|
|
|
(5,350
|
)
|
Amortization of intangible assets
|
|
|
|
|
|
|
|
|
(644
|
)
|
Change in fair value of contingent acquisition consideration
|
|
|
|
|
|
|
|
|
181
|
|
Operating income
|
|
|
|
|
|
|
|
$
|
1,634
|
|
|
|
|
|
|
|
|
|
|
* Transportation Systems and iPerform revenues and segment operating
income (loss) have been stated on a pro forma
|
basis for comparison with the current year.
|
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