Iteris, Inc. Reports Third Quarter Revenue Growth of 7% to $16.5 Million
SANTA ANA, Calif. January 29, 2009: Iteris, Inc. (NYSE Alternext US:ITI), a leader in the traffic management market that focuses on the application and development of advanced technologies, today reported financial results for its third fiscal quarter ended December 31, 2008.
For the quarter ended December 31, 2008, Iteris, Inc. (the “Company”) reported net sales and contract revenues of $16.5 million, representing a 7.2 percent increase compared to net sales and contract revenues of $15.4 million reported in the same quarter of the prior fiscal year. The increase was primarily a result of a 19.3 percent increase in Transportation Systems revenues to $7.4 million. Roadway Sensors net sales for the quarter ended December 31, 2008 were down slightly from $6.4 million reported in the prior year quarter to $6.3 million while Vehicle Sensors net sales were up slightly to $2.8 million from $2.7 million.
Abbas Mohaddes, the Company's president and chief executive officer, commented, “I am pleased to report continued revenue growth and profitability for our fiscal third quarter. We plan to remain focused on executing on our growth strategy through new product innovation and by penetrating new geographic regions. I am particularly pleased with our Transportation Systems consulting segment, which reported strong revenue growth of 19 percent. Despite the state of the economy, the Transportation Systems segment has maintained a strong backlog of $33.9 million, representing a year-over-year increase of 41 percent.” Mohaddes continued, “We believe Iteris is well-positioned to succeed during these challenging times. In addition, I expect Iteris to benefit from the anticipated infrastructure stimulus package as we provide proven value through our services and products in roadway and transit design, construction support, and transportation system management.”
Gross margins declined to 39.5 percent in the third quarter compared to 42.3 percent in the prior year quarter primarily as a result of sales mix in the Company’s Roadway Sensors business. Operating expenses during the current quarter were $5.3 million representing a decrease of 1.9 percent from $5.4 million in the prior year quarter. Operating expenses decreased notably as a percent of net sales and contract revenues to 32.0 percent in the quarter ended December 31, 2008 from 35.0 percent in the prior year quarter.
The Company reported operating income of $1.2 million and net income of $741,000, or $0.02 per share, for the quarter ended December 31, 2008 compared to operating income of $1.1 million and net income of $954,000, or $0.03 per share, in the same quarter of the prior fiscal year. In the prior year quarter, net income was positively affected by an income tax benefit of approximately $141,000 generated through the release of valuation allowance against certain deferred tax assets. There was no such release of valuation allowance for the quarter ended December 31, 2008.
For the nine months ended December 31, 2008, net sales and contract revenues were $53.0 million, representing an increase of 10.1 percent compared to net sales and contract revenues of $48.1 million in the same period of the prior fiscal year. Operating income for the nine months ended December 31, 2008 was $4.7 million compared to $5.0 million in the same period of the prior fiscal year. The Company reported net income of $2.5 million, or $0.07 per share, for the nine months ended December 31, 2008 compared to net income of $4.2 million, or $0.12 per share, for the same period in the prior fiscal year.
The Company ended the current quarter with approximately $6.0 million in cash on hand and no borrowings on its $12.0 million working capital line of credit. Additionally, as of the date of this release, the Company has retired $9.1 million of the original convertible debentures issued in May 2004, using $2.1 million of its own cash and $6.5 million in borrowings from its senior lender that were specifically designated for this purpose. In total, the Company has saved approximately $500,000 in principal through the early retirement of this debt.
“Iteris completed the third fiscal quarter in the strongest financial position in company history,” Mr. Mohaddes continued, “We have significantly strengthened our balance sheet, improved our working capital position and operating cash flows. While the weakness in the U.S. and global economies is having an impact on product sales, we currently believe the demand for Iteris’ products and services should remain strong. We continue to launch new products, open new markets, and maintain our goal of achieving accelerated revenue growth.”
As previously announced, the Company will conduct a conference call with analysts and investors to discuss the financial results for the third quarter ended December 31, 2008 today at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). The Company will broadcast the conference call over the Internet. To listen to the webcast please visit the Investor Relations page on Company’s website at ITERIS. The webcast will be recorded and available for replay until February 12, 2009.