SANTA ANA, Calif. – August 7, 2018 – Iteris, Inc. (NASDAQ: ITI), the global leader in applied informatics for transportation and agriculture, today reported financial results for its fiscal first quarter 2019 ended June 30, 2018.
Fiscal First Quarter 2019 Financial Summary
- Total revenue of $25.5 million, down 6.3% year over year
- Transportation Systems revenue of $13.2 million, down 10.5% year over year
- Roadway Sensors revenue of $10.9 million, down 3.7% year over year
- Agriculture and Weather Analytics revenue of $1.4 million, up 21.7% year over year
- Total Gross Margin Rate of 40.0%, up 357 basis points year over year
“As expected, our first quarter results were down year over year due to the transition of a large contract with the Virginia Department of Transportation, which impacted our Transportation Systems segment, and the continued choppiness in the Texas market for intersection detection that affected our Roadway Sensors segment,” said Joe Bergera, president and CEO. “We believe these conditions are temporary and expect Iteris to be a long-term beneficiary of a favorable shift in transportation infrastructure spending focused on smart cities, data analytics, and enhanced safety and mobility.”
“During Q1, our Transportation Systems segment, in particular, secured a large number of substantial contracts, and while our selling expense increased this period, the result was a total added segment backlog of $16.1 million for the quarter,” continued Mr. Bergera. “As a result, our total company ending backlog for the quarter increased by $2.4 million, or 5.8% on a sequential quarter basis. The fundamentals for both our smart transportation and digital agriculture markets remain positive, which we believe will drive improvements in our financial results as we move through the remainder of the year.”
GAAP Fiscal First Quarter 2019 Financial Results
Total revenue in the first quarter of fiscal 2019 decreased 6.3% to $25.5 million, compared with $27.2 million in the same quarter a year ago. This decline was driven by a 10.5% decrease in Transportation Systems and a 3.7% decrease in Roadway Sensors, which was partially offset by a 21.7% increase in Agriculture and Weather Analytics revenue.
Operating expenses in the first quarter were $11.8 million, compared with $10.5 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 increased sales and marketing activities, as well as costs related to our transition to a new ERP system and our adoption of the new ASC 606 revenue recognition rules. In addition, there was an increase in Roadway Sensors salesforce headcount, which resulted in higher salary and personnel-related costs.
Operating loss in the first quarter was $1.6 million compared with an operating loss of $0.6 million in the same quarter a year ago. Net loss in the first quarter was $1.6 million, or ($0.05) per share, compared with a net loss of $0.5 million, or ($0.01) per share in the year-ago quarter.
From a balance sheet perspective, cash and short-term investments decreased $2 million from the start of the fiscal year, however, this was more than offset by an increase in accounts receivable of $3.7 million. The decrease in cash and increase in accounts receivable was due to the launch of our new ERP system in April 2018, which resulted in a temporary delay in customer billing during Q1.
Non-GAAP Fiscal First Quarter 2019 Financial Results
In addition to results presented in accordance with generally accepted accounting principles in the United States (“GAAP”), the company has included the following non-GAAP financial measures: non-GAAP operating expenses, non-GAAP operating loss, non-GAAP net loss and non-GAAP basic and diluted net loss per share. These non-GAAP financial measures exclude the following items: (a) stock compensation expense; (b) depreciation; (c) amortization; and (d) the estimated tax effect of the foregoing non-GAAP adjustments. A discussion of the company’s use of these non-GAAP financial measures is set forth below in the financial statements portion of this release under the heading “Non-GAAP Financial Measures and Reconciliation”, which also includes a reconciliation of such non-GAAP financial measures to their most comparable GAAP financial measures for the three months ended June 30, 2018 and 2017.
Non-GAAP operating expenses in the first quarter increased to $10.9 million, compared with $9.8 million in the same quarter a year ago. Non-GAAP operating loss in the first quarter was approximately $540,000, compared with operating income of approximately $218,000 in the same quarter a year ago. Non-GAAP net loss in the first quarter was approximately ($538,000), or ($0.02) per share, compared with net income of approximately $292,000, or $0.01 per share, in the same quarter a year ago.
Earnings Conference Call
Iteris will conduct a conference call today to discuss its fiscal first quarter 2019 results.
Date: Tuesday, August 7, 2018
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Toll-free dial-in number: 1-888-394-8218
International dial-in number: 1-323-701-0225
Conference ID: 3805751
A replay of the conference call will be available after 7:30 p.m. Eastern time on the same day through August 14, 2018. 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 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 potential revenue growth for the upcoming quarters, the events that may have a potential impact on our future results, 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 timing and amount of government funds allocated to overall transportation infrastructure projects and the transportation industry; our ability to invest in marketing and selling our solution offerings on a cost-effective and efficient manner; federal, state and local government regulations, budgetary issues, constraints and delays; 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 attract, retain, integrate and incentivize our key employees and our ability to maintain and expand our ecosystem of customers, technology partners, service providers, teaming partners and sales channel partners; 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).
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