Iteris Reports Record Fiscal 2023 Second Quarter Total Revenue of $39.3 Million and Record Total Ending Backlog of $111.8 Million

Raises the low-end of fiscal 2023 revenue guidance to a range of $150 million to $155 million, representing 14% year over year growth at the mid-point of the guidance range

AUSTIN, Texas – November 8, 2022 – Iteris, Inc., the global leader in smart mobility infrastructure management, today reported financial results for its fiscal second quarter 2023 ended September 30, 2022.

Fiscal 2023 Second Quarter Financial Summary

• Total revenue increased 18% year over year to a record $39.3 million
• Service revenue increased 19% year over year to $18.5 million with continued strong adoption of Iteris’ ClearMobility® Platform
• Product revenue increased 17% year over year to $20.8 million despite $0.9 million in shipments slipping out of the quarter due to global supply chain constraints
• GAAP net loss from continuing operations was $7.4 million, or $(0.17) per share, largely due to the company working through the majority of unusually high-cost inventory items associated with recent global supply chain constraints, compared to net loss from continuing operations of $2.1 million, or $(0.05) per share, in the same quarter a year ago
• Adjusted EBITDA loss in the second quarter was approximately $5.2 million, or (13.1)% of total revenues, largely due to global supply chain constraints, compared to $2.3 million, or 6.9% of total revenues, in the same quarter a year ago
• Total net bookings increased 15% year over year to $42.2 million
• Total ending backlog increased 34% year over year to a record $111.8 million

Management Commentary:

“We are pleased fiscal 2023 second quarter revenue rose 18% year over year to a record total $39.3 million,” said Joe Bergera, president and CEO of Iteris. “To meet customer commitments, we shipped a historic number of Vantage sensors despite global supply chain constraints requiring the use of expensive secondary market components. While this drove extraordinary costs of goods sold for the quarter, we were able to bleed high-cost inventory items through our income statement and reoptimize our inventory for alternative circuit boards we are bringing online at normalized component costs. As a result, our second quarter actions positioned Iteris for a critical inflection point in the second half of fiscal 2023.

“Indeed, we anticipate sustained above market revenue growth through the second half of fiscal 2023, because the availability of our redesigned circuit boards will enable us to accelerate the conversion rate of our record total ending backlog. Likewise, we expect gross profit margins for our Vantage sensor products to improve progressively throughout the quarter, returning to normal rates by the fiscal year end, due to favorable costs of goods sold for these new circuit board designs. Based on these combined factors, we forecast year over year revenue growth of approximately 20% and sequential improvements in profitability through the second half, enabling us to exit the fiscal year at approximately 10% adjusted EBITDA margins.”

Fiscal 2023 Second Half and Full Year Outlook

• Second half revenue growth is expected to be approximately 20% year over year due to the benefits of Iteris’ supply chain mitigation
• Second half adjusted EBITDA is expected to be in the range of $3.5 million to $4.0 million, or 4.5% to 5.0% of revenue, due to the compounding financial benefits of the global supply chain mitigation program, enabling the Company to exit the fiscal year at approximately 10% adjusted EBITDA margins
• Second half net cashflow is expected to be in the range of $4.0 million to $6.0 million
• Full year fiscal 2023 revenue is expected to be in the range of $150 million to $155 million, representing growth of 14% year over year at the mid-point of the guidance range
• Full year adjusted EBITDA is expected to be in the range of -1.0% to -3.0% of full year fiscal 2023 revenue, reflecting global supply chain constraints realized in the fiscal 2023 first half as mentioned above

Earnings Conference Call

Iteris will conduct a conference call today to discuss its fiscal second quarter results.

Date: Tuesday, November 8, 2022 Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time) Toll-free dial-in number: +1-888-506-0062 International dial-in number: +1 973-528-0011 Conference ID: 375118

If joining by phone, please call the conference telephone number 5-10 minutes prior to the start time and ask to join the Iteris earnings call. 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 and Canada Toll Free), +1 919-882-2331 (International) and enter replay passcode 46774.

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," "feels", "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, including in light of the ongoing COVID-19 pandemic; our ability to source key raw materials in light of the current global supply chain situation; the timing and amount of government funds allocated to overall transportation infrastructure projects and the transportation industry; 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; risks related to our ability to recruit and/or retain key talent; 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 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 Contact

Douglas Groves
Senior Vice President and Chief Financial Officer
Tel: (949) 270-9643
Email: dgroves@iteris.com