SANTA ANA, Calif. – November 5, 2019 – Iteris, Inc. (NASDAQ: ITI), the global leader in applied informatics for transportation and agriculture, today reported financial results for its second fiscal quarter 2020 ended September 30, 2019.
Fiscal First Half and Second Quarter 2020 Financial Highlights
- Total second quarter revenue of $27.9 million and first half revenue of $54.5 million, up 14% and 9% respectively year over year
- Total second quarter net bookings of $34.7 million and first half net bookings of $65.7 million, up 3% and 7% respectively year over year
- Total ending backlog of $70.6 million, up 18% sequentially
- Closed acquisition of Albeck Gerken (AGI), Incorporated, which contributed $1.7 million of revenue to the Transportation Systems segment.
“We are pleased to report record total revenue, net bookings and ending backlog results for the second quarter of fiscal 2020,” said Joe Bergera, president and CEO. “As we enter the second half of fiscal 2020, we expect our revenue growth to accelerate due to an increase in the rate of revenue conversion on the historically high backlog of our Transportation Systems segment.”
“On July 2, we closed the acquisition of Albeck Gerken and our integration is proceeding to plan. Additionally, we are already beginning to realize commercial benefits from the combination of the two companies. Looking ahead, Iteris remains well positioned to capitalize on favorable long-term, secular trends in both our end markets – smart transportation and digital agriculture.”
GAAP Fiscal Second Quarter 2020 Financial Results
Total revenue in the second quarter of fiscal 2020 increased 14% to $27.9 million, compared with $24.4 million in the same quarter a year ago. This increase was driven primarily by a 14% increase in Transportation Systems, a 14% increase in Roadway Sensors and a 20% increase in Agriculture and Weather Analytics. AGI contributed $1.7 million in revenue to the Transportation Systems segment for the period.
Operating expenses in the second quarter increased 24% to $13.7 million, compared with $11.1 million in the same quarter a year ago. This increase was primarily due to expenses related to the acquisition of AGI, as well as increased bid and proposal activities in Transportations Systems. In connection with the AGI acquisition completed in July 2019, we added general and administrative employees, which is expected to increase our selling, general and administrative expense in fiscal 2020.
Operating loss in the second quarter was $2.4 million, compared with $1.4 million in the same quarter a year ago. Net loss in the second quarter was $2.2 million, or ($0.05) per share, compared with $1.3 million or ($0.04) in the same quarter a year ago.
GAAP Fiscal Half Year 2020 Financial Results
Total revenue in the first half of fiscal 2020 increased 9% to $54.5 million, compared with $49.9 million in the same quarter a year ago. This increase was driven primarily by a 16% increase in Roadway Sensors, a 3% increase in Transportation Systems, and a 9% increase in Agriculture and Weather Analytics.
Operating expenses in the first half increased 13% to $25.7 million, compared with $22.8 million in the same period a year ago. This increase was primarily due to expenses related to the acquisition of AGI, as well as increased bid and proposal activities in Transportations Systems.
Operating loss in the first half was $3.9 million, compared with $3.0 million in the same period a year ago. Net loss in the first half was $3.8 million, or ($0.10) per share, compared with $2.9 million or ($0.09) in the same quarter a year ago.
Cash and short-term investments increased $20.5 million from the start of the fiscal year as a result of $26.8 million in net proceeds from the issuance of 6.2 million shares of common stock in connection with our public offering in the first quarter, which was offset by $5.6 million of cash used for the purchase of AGI on July 2. Excluding these transactions, our cash and short-term investments balance decreased slightly to $8.1 million from the prior year end balance of $9.0 million, primarily due to non-recurring AGI acquisition costs. Long-term assets and liabilities increased $23.1 million and $12.1 million respectively, when compared to the prior year end, primarily as a result of the adoption of the new lease accounting standard, ASC 842, which requires the recording of lease-related assets and liabilities on our balance sheet, and $9.2 million of goodwill and intangibles related to the AGI acquisition.
Non-GAAP Fiscal Second Quarter 2020 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; (d) the costs associated with the acquisition of Albeck Gerken; and (e) 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 and six months ended September 30, 2019 and 2018.
Non-GAAP operating expenses in the second quarter were approximately $11.9 million, compared with $10.3 million in the same quarter a year ago. Non-GAAP operating loss in the second quarter was approximately $322,000, compared with with non-GAAP operating loss of approximately $409,000 in the same quarter a year ago. Non-GAAP net loss in the second quarter was approximately $178,000, or ($0.00) per share, compared with a non-GAAP net loss of approximately $364,000, or $(0.01) per share, in the same quarter a year ago.
Non-GAAP Fiscal Half Year 2020 Financial Results
Non-GAAP operating expenses in the first half were approximately $22.8 million, compared with $21.2 million in the same period a year ago. Non-GAAP operating loss in the first half was approximately $690,000, compared with non-GAAP operating loss of approximately $950,000 in the same period a year ago. Non-GAAP net loss in the first half was approximately $559,000, or ($0.01) per share, compared with a non-GAAP net loss of approximately $902,000, or $(0.03) per share, in the same period a year ago.
Earnings Conference Call
Iteris will conduct a conference call today to discuss its fiscal first quarter 2020 results.
Date: Tuesday, November 5, 2019
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Toll-free dial-in number: 1-800-367-2403
International dial-in number: +1 334-777-6978
Conference ID: 7888058
A replay of the conference call will be available after 7:30 p.m. Eastern time on the same day through November 12, 2019. 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 demand and growth opportunities, conversion of bookings to revenue, the impact and success of new solution offerings, the Company’s recent acquisition, 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; the timing and amount of government funds allocated to overall transportation infrastructure projects and the transportation industry; our ability to secure additional contract awards and successfully complete awarded contracts on a timely and cost-effective basis; the effectiveness of efficiency, cost, and expense reduction efforts; our ability to successfully complete and integrate acquired 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; 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 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).
MKR Investor Relations, Inc.
Tel: (323) 468-2300