Adjusted EBITDA of $2.9 million, representing an $8.1 million improvement year over year
AUSTIN, TX – November 9, 2023 – Iteris, Inc. (NASDAQ: ITI), the global leader in smart mobility infrastructure management, today reported financial results for its fiscal 2024 second quarter ended September 30, 2023.
Fiscal 2024 Second Quarter Financial Highlights
- Record revenue of $43.6 million, up 11% year over year
- Gross margins of 37.3%, up 2,060 basis points year over year due to successful supply chain improvement plan
- GAAP net income of $0.6 million, or $0.01 per share, a $7.9 million, or $0.18 per share improvement from the prior year
- Adjusted EBITDA of $2.9 million, an $8.1 million improvement, consistent with GAAP net income improvement (see “Non-GAAP Financial Measures and Reconciliation” below for important information)
- Continued strong net bookings of $43.8 million, up 4% year over year
- Notable new public- and private-sector contracts include:
- $9.5 million contract awarded by US Department of Transportation to drive the development of the nation’s architecture reference for cooperative and intelligent transportation, including the definition of standards for infrastructure to vehicle communications and vehicle electrification
- Consulting contract awarded by global automotive OEM to conduct North American Intelligent
- Transportation System market assessment
- Record total ending backlog of $124.0 million, up 11% year over year
- Ending cash and cash equivalents balances of $20.2 million on September 30, 2023, which reflects total payments of $3.8 million for the company’s annual performance bonuses
Fiscal 2024 First Half Financial Highlights
- Record revenue of $87.1 million, up 19% year over year
- Gross margins of 38.0%, up 1,510 basis points year over year due to successful supply chain improvement plan
- GAAP net income of $2.7 million, or $0.06 per share, a $14.9 million, or $0.35 per share, improvement from the prior year
- Adjusted EBITDA of $6.9 million, a $14.6 million improvement, consistent with GAAP net income improvement (see “Non-GAAP Financial Measures and Reconciliation” below for important information)
- Record net bookings of $96.9 million, up 14% year over year
- Net cash flow of $3.9 million, reflecting earnings improvement and strong working capital management
“Due to a combination of strong customer demand and solid commercial execution, we are pleased to report record revenue of $43.6 million and record total ending backlog of $124.0 million for our fiscal 2024 second quarter,” said Joe Bergera, President and CEO of Iteris. “Additionally, we are pleased with the successful outcome of our supply chain improvement plan that drove a 2,060 basis point improvement in gross margins and an associated $8.1 million improvement in adjusted EBITDA year over year."
“Given the compelling capabilities of the Iteris ClearMobility® Platform, we expect to continue to benefit from favorable trends in smart mobility infrastructure management, including the adoption of Cloud technologies, artificial intelligence, and Connected and Autonomous Vehicles. Therefore, we continue to anticipate a five-year organic revenue CAGR of approximately 14% and associated improvements in our operating structure to drive adjusted EBITDA margin expansion to approximately 16% to 19% consistent with our Vision 2027 targets.”
Fiscal Year 2024 Third Quarter and Full Year Outlook
- Third quarter total revenue guidance in the range of $41.0 million to $43.0 million, representing growth of 3% year over year at the mid-point of the guidance range, which accounts for a return to typical seasonality and temporary federal budget uncertainty
- Third quarter adjusted EBITDA margin guidance in the range of 4% to 6%, representing a significant year-over-year improvement (see “Non-GAAP Financial Measures and Reconciliation” below for important information) and reflective of seasonality and related revenue mix expectations for the quarter
- Raising the low end of full-year total revenue guidance to a range of $171.0 million to $175.0 million, representing organic growth of 11% year over year at the mid-point of the guidance range, which accounts for a return to typical seasonality and temporary federal budget uncertainty
- Reiterating full-year adjusted EBITDA margin guidance in the range of 7% to 9%, representing a significant year-over-year improvement (see “Non-GAAP Financial Measures and Reconciliation” below for important information)
- Reiterating full-year net cash flow guidance in the range of $12.0 million to $16.0 million, driven by adjusted EBITDA improvement and continued working capital management
GAAP Fiscal Year 2024 Second Quarter Financial Results
- Total revenue in the second quarter of fiscal year 2024 increased 11% to $43.6 million, compared with $39.3 million in the same quarter a year ago. This revenue growth was driven primarily by increased demand for Iteris’ ClearMobility® Platform, in particular its sensor products
- Operating expenses in the second quarter increased 17% to $15.8 million, compared with $13.5 million in the same quarter a year ago
- Net income in the second quarter was approximately $0.6 million, or $0.01 per share, compared with a net loss of approximately $7.4 million, or $(0.17) per share, in the same quarter a year ago. The improvement was primarily attributable to an improvement in gross margin, which was impacted in the prior period due to supply chain constraints and resulting high raw material costs
Non-GAAP Fiscal 2024 Second Quarter Results
In addition to results presented in accordance with generally accepted accounting principles in the United States (“GAAP”), Iteris (the “Company”) has included the following non-GAAP financial measure: net income (loss) before interest, taxes, depreciation, amortization, stock-based compensation expense, restructuring charges, project loss reserves, other legal expenses, and executive severance and transition costs (“Adjusted EBITDA”). A discussion of the Company’s use of this non-GAAP financial measure is set forth below in the financial statements portion of this release under the heading “Non-GAAP Financial Measures and Reconciliation,” along with a reconciliation of Adjusted EBITDA to net income (loss).
Adjusted EBITDA in the second quarter of fiscal 2024 was approximately $2.9 million, or 6.7% of total revenues, compared with an approximate $5.2 million loss, or (13.1)% of total revenues, in the same quarter a year ago. The improvement mirrors the increase in GAAP earnings.
Earnings Conference Call
Iteris will conduct a conference call today to discuss its fiscal 2024 second quarter results.
Date: Thursday, November 9, 2023
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Toll-free dial-in number: 877-545-0523
International dial-in number: +1 973-528-0016
Participant access code: 320838
If joining by phone, 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 MKR Investor Relations at 1-213-277-5550.
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 Toll Free), or +1 919-882-2331 (International) and enter replay passcode 49309.
About Iteris, Inc.
Iteris is the world’s trusted technology ecosystem for smart mobility infrastructure management. Delivered through Iteris’ ClearMobility® Platform, our cloud-enabled end-to-end solutions monitor, visualize and optimize mobility infrastructure around the world, and help bridge legacy technology silos to unlock the future of transportation. That’s why more than 10,000 public agencies and private-sector enterprises focused on mobility rely on Iteris every day. 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 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, and impact related to the federal government debt ceiling and; uncertainties regarding potential multiple negative impacts that may occur in the future due to COVID-19; our ability to source key raw materials in light of the current global economic and supply chain situation, including data supplier Wejo’s appointment of an administrator due to insolvency; the timing and amount of government funds allocated to overall transportation infrastructure projects and the transportation industry; risks related to our ability to recruit, integrate and/or retain key talent; 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; 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).
Kerry A. Shiba
Senior Vice President, Chief Financial Officer, Secretary and Treasurer
Tel: (949) 270-9457
MKR Investor Relations, Inc.
Tel: (213) 277-5550