Iteris, Inc. Reports Record Revenues in Fiscal First Quarter
ANAHEIM, Calif.--Aug. 4, 2005--Iteris, Inc. (AMEX:ITI), a leading provider of traffic optimization and safety technology products and services, today reported financial results for the fiscal first quarter ended June 30, 2005.For the first quarter ended June 30, 2005, Iteris, Inc. (the "Company") reported record net sales and contract revenues of $12.1 million representing a 6.1 percent increase compared to net sales and contract revenues of $11.4 million in the first quarter of the prior fiscal year. This increase was primarily a result of a 29.4 percent increase in AutoVue(TM) revenues compared to the first quarter of the prior fiscal year.
Contract revenues were $4.6 million for the fiscal first quarter ended June 30, 2005, which were consistent with contract revenues for the first quarter of the prior fiscal year and also consistent with contract revenues reported in the prior quarter.
The first quarter operating results included certain non-cash charges related to the amortization of stock-based compensation of $265,000, the amortization of intangible assets of $37,000 and $62,000 related to changes in value of Company common stock held in the Company's deferred compensation savings plan. As a result of these non-cash charges the Company reported an operating loss of $318,000 for the three-month period ended June 30, 2005 compared to operating income of $566,000 in the first quarter of the prior fiscal year. Excluding these non-cash charges, the Company's operating activities would have resulted in $46,000 of income for the three-month period ended June 30, 2005. A table is attached to this release to reconcile the Company's operating income (loss) as calculated and presented in accordance with U.S. Generally Accepted Accounting Principles ("GAAP") to pro forma non-GAAP operating income for all periods presented to better reflect the Company's operations exclusive of these non-cash charges.
The net loss for the fiscal quarter ended June 30, 2005 was $726,000 compared to net income of $966,000 in the corresponding period of the prior fiscal year. Net income reported in the prior fiscal quarter benefited from a one-time gain of $949,000 as a result of a legal settlement between Rockwell International and the Michigan Department of Transportation to which the Company was a third party beneficiary.
"We are pleased with the continued growth in our AutoVue business, both with Infiniti and within the truck market," commented Jack Johnson, chief executive officer of Iteris, Inc. "Discussions with several of the largest automakers are ongoing, and 43 truck fleets are evaluating our LDW system. While it's impossible to predict the timeline for signing new agreements, we believe the relationships we have forged represent significant near- and long-term growth opportunities, which we expect will result in new business this fiscal year."
"With Congress finally passing the Federal Highway Bill, we expect to capitalize on the significant amount of business which has been delayed while Congress passed a total of nine short-term extensions, inhibiting longer-term projects which are the lifeblood of this segment of our business. We have managed to maintain profitability during this difficult period and we are looking forward to a business climate unencumbered by fiscal uncertainties. Despite this challenge, we reported record revenues in the quarter and were profitable from our operations when excluding certain non-cash charges. With improvements anticipated for all three business units, we believe we are well positioned to report a record fiscal year with anticipated revenue growth of at least 10 percent compared to fiscal 2005."
As of June 30, 2005, the Company had 28.4 million shares of common stock outstanding and total stockholders' equity of $17.2 million. The Company completed the quarter with $2.3 million borrowed against its $5.0 million line of credit. As previously discussed, the Company is in negotiations with its senior lender to replace the existing line of credit facility with a new arrangement. The Company expects to have the new credit facility in place by the end of the second fiscal quarter.
Recent Operational Highlights Included:
-- AutoVue(TM) revenues exceeded the $2.0 million mark for the first time ever.
-- Since the introduction of Lane Departure Warning ("LDW") systems to the passenger car market, Iteris has recorded royalty revenues based on the cumulative shipment of approximately 13,000 units to Nissan.
-- AutoVue LDW systems' sales increased 117.3 percent in the heavy truck market in the fiscal first quarter compared to the first quarter of the prior fiscal year and are up 15.1 percent compared to the prior quarter.
-- Testing of the LDW system continues with 43 heavy truck fleets representing potentially 90,000 vehicles.
-- On June 2, 2005, the Company announced that its LDW system will be installed on new trucks purchased by three U.S. commercial truck fleets. Conover, NC-based Piedmont Express, Myrtle Beach, SC-based New South Companies, Inc., and another large national fleet, have all purchased new trucks from Freightliner with specifications that include the installation of Iteris' LDW system.
-- Approximately $6.5 million in new Systems consulting contracts were signed during the quarter ended June 30, 2005. Systems' consulting backlog at the end of the first fiscal quarter was $15.9 million up from $13.3 million reported at the end of the prior quarter.
-- On July 11, 2005, the Company announced that cumulative sales for its Vantage video detection system product line reached the $100 million mark.
-- On July 6, 2005, the Company announced it will be included in the Russell Microcap Index.
-- Iteris continues to receive positive media coverage of its LDW technology. Please refer to recent articles in The Boston Globe and Detroit Free Press on our website www.iteris.com.
About Iteris, Inc.
Iteris, Inc. is a leading provider of outdoor vision systems and sensors that optimize the flow of traffic and enhance driver safety. Iteris combines outdoor image processing, traffic engineering, and information technology to offer a broad range of transportation and safety solutions. Iteris, Inc. is headquartered in Anaheim, California. Investors are encouraged to contact us at 714-774-5000, or at www.iteris.com.
ITERIS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, March 31,
2005 2005
(unaudited)
ASSETS:
Cash $- $46
Trade accounts receivable, net 9,697 8,866
Costs and estimated earnings in excess of
billings on uncompleted contracts 2,382 2,086
Inventory 3,848 4,344
Prepaid expenses 498 384
Deferred tax assets 660 660
Property and equipment, net 1,153 1,103
Goodwill 27,774 27,774
Identifiable intangible assets, net 662 698
Other assets 712 695
Total assets $47,386 $46,656
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and other liabilities $8,983 $9,007
Revolving line of credit 2,298 945
Deferred gain on sale of building 662 733
Deferred compensation plan liability 834 772
Notes payable 4,994 5,327
Convertible debentures, net 9,048 8,996
Total liabilities 26,819 25,780
Redeemable common stock 3,414 3,414
Total stockholders' equity 17,153 17,462
Total liabilities and stockholders' equity $47,386 $46,656
ITERIS, INC.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months
Ended
June 30,
2005 2004
Net sales and contract revenues:
Net sales $7,525 $6,903
Contract revenues 4,554 4,538
Total net sales and contract revenues 12,079 11,441
Costs and expenses:
Cost of net sales 3,746 3,546
Cost of contract revenues 2,899 2,946
Gross profit 5,434 4,949
Operating expenses:
Selling, general and administrative 3,689 3,600
Research and development 1,699 793
Stock-based compensation 265 --
Deferred compensation plan expense 62 --
Amortization of intangible assets 37 --
Total operating expenses 5,752 4,393
Operating income (loss) (318) 556
Non-operating income (expense):
Other income (expense), net (48) 923
Interest expense, net (352) (70)
Income (loss) before income taxes and minority
interest (718) 1,409
Income tax expense (8) (75)
Minority interest in earnings of subsidiary -- (368)
Net income (loss) $(726) $966
Earnings (loss) per share:
Basic earnings (loss) per share $(0.03) $0.04
Diluted earnings (loss) per share $(0.03) $0.04
Shares used in calculating earnings (loss) per share:
Basic 28,062 23,434
Diluted 28,062 24,865
ITERIS, INC.
UNAUDITED RECONCILIATION OF
GAAP OPERATING INCOME (LOSS) TO
PRO FORMA NON-GAAP OPERATING INCOME
(in thousands)
The pro forma non-GAAP adjustments set forth below are based upon our
unaudited condensed consolidated statements of operations for the
periods shown. These adjustments are not in accordance with or an
alternative for, U.S. Generally Accepted Accounting Principles
("GAAP"). However, the Company believes pro forma non-GAAP reporting
provides meaningful insight into the Company's ongoing economic
performance and therefore uses pro forma non-GAAP reporting internally
to assist in evaluating and managing the Company's operations. The
Company has chosen to provide this supplemental information to
investors to enable them to perform additional comparisons of
operating results and to illustrate the results of the Company's
ongoing operations exclusive of certain non-cash charges.
Three Months
Ended
June 30,
2005 2004
GAAP operating income (loss) $(318) $566
Add back non-cash charges:
Stock-based compensation expense 265 -
Deferred compensation savings plan expense 62 -
Amortization of intangible assets 37 -
Pro Forma non-GAAP operating income $46 $566