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Itron Announces Third Quarter 2019 Financial Results

November 4, 2019 GMT

LIBERTY LAKE, Wash.--(BUSINESS WIRE)--Nov 4, 2019--

Itron, Inc. (NASDAQ:ITRI) announced today financial results for its third quarter ended Sept. 30, 2019. Key results for the quarter include (compared with the third quarter of 2018):

“We had solid performance in the third quarter,” said Tom Deitrich, Itron’s president and chief executive officer. “These results were primarily driven by strong demand in our Networked Solutions segment. We continue to see a healthy pipeline of customer activity.”

Summary of Third Quarter Consolidated Financial Results

(All comparisons made are against the prior year period unless otherwise noted)

Revenue

Total third quarter revenue increased 5% to $624 million, or 7%, excluding the impact of changes in foreign currency exchange rates.

Networked Solutions revenue increased 11% driven by strong customer deliveries in North America. Device Solutions revenue decreased 3% and Outcomes revenue decreased 1%. Excluding the impact of changes in foreign currency exchange rates, the Device Solutions and Outcomes segments were both up 1%.

Gross Margin

Consolidated company gross margin of 31.5% decreased 160 basis points from the prior year due to higher warranty costs and variable compensation, partially offset by restructuring benefits.

Operating Expenses and Operating Income

GAAP operating expenses of $157 million increased $2 million from the prior year due to higher restructuring and product development expenses. Non-GAAP operating expenses of $130 million increased $4 million from the prior year, primarily due to increased variable compensation.

GAAP operating income of $39 million and non-GAAP operating income of $66 million decreased compared with the prior year due to higher operating expenses and the impact of changes in foreign currency exchange rates.

Net Income (loss) and Earnings per Share

The net income attributable to Itron, Inc. for the quarter was $17 million, or $0.42 per diluted share, a decrease from net income of $20 million, or $0.50 per diluted share, in 2018. The decrease was driven by lower operating income in the current period.

Non-GAAP net income, which excludes certain charges including restructuring, acquisition and integration related expenses, corporate transition cost, amortization of intangible assets, amortization of debt placement fees and the income tax effect of those adjustments, was $41 million, or $1.04 per diluted share, compared with $45 million, or $1.13 per diluted share, in 2018. The decrease in non-GAAP EPS was due to lower non-GAAP operating income in the current period.

Cash Flow

Net cash provided by operating activities was $50 million in the third quarter compared with $51 million in the same quarter of 2018. Free cash flow was $32 million in the third quarter compared with $37 million in the prior year. The decrease in cash flow was primarily due to the timing of working capital and capital expenditures.

Other Measures

Total backlog was $3.1 billion and 12-month backlog was $1.4 billion, which are both consistent with the prior year. Bookings in the quarter totaled $609 million.

Earnings Conference Call

Itron will host a conference call to discuss the financial results and guidance contained in this release at 5 p.m. EST on Nov. 4, 2019. The call will be webcast in a listen-only mode. Webcast information and conference call materials will be made available 10 minutes before the start of the call and will be accessible on Itron’s website at http://investors.itron.com/events.cfm. A replay of the audio webcast will be made available at http://investors.itron.com/events.cfm. A telephone replay of the conference call will be available through Nov. 9, 2019. To access the telephone replay, dial 888-203-1112 or 719-457-0820 and enter passcode 4489487.

About Itron

Itron ® enables utilities and cities to safely, securely and reliably deliver critical infrastructure services to communities in more than 100 countries. Our portfolio of smart networks, software, services, meters and sensors helps our customers better manage electricity, gas and water resources for the people they serve. By working with our customers to ensure their success, we help improve the quality of life, ensure the safety and promote the well-being of millions of people around the globe. Itron is dedicated to creating a more resourceful world. Join us: www.itron.com.

Itron® is registered trademarks of Itron, Inc. All third-party trademarks are property of their respective owners and any usage herein does not suggest or imply any relationship between Itron and the third party unless expressly stated.

Cautionary Note Regarding Forward-Looking Statements

This release contains “forward-looking statements” within in the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical factors nor assurances of future performance. These statements relate to our expectations about, among others, revenues, operations, financial performance, earnings, earnings per share, cash flows and restructuring activities including headcount reductions and other cost savings initiatives. Although we believe the estimates and assumptions upon which these forward-looking statements are based are reasonable, any of these estimates or assumptions could prove to be inaccurate and the forward-looking statements based on these estimates and assumptions could be incorrect. Our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Actual results and trends in the future may differ materially from those suggested or implied by the forward-looking statements depending on a variety of factors. Therefore, you should not rely on any of these forward-looking statements. Some of the factors that we believe could affect our results include our ability to execute on our restructuring plan, our ability to achieve estimated cost savings, the rate and timing of customer demand for our products, rescheduling of current customer orders, changes in estimated liabilities for product warranties, adverse impacts of litigation, changes in laws and regulations, our dependence on new product development and intellectual property, future acquisitions, changes in estimates for stock-based and bonus compensation, increasing volatility in foreign exchange rates, international business risks and other factors that are more fully described in our Annual Report on Form 10-K for the year ended Dec. 31, 2018 and other reports on file with the Securities and Exchange Commission. Itron undertakes no obligation to update or revise any information in this press release.

Non-GAAP Financial Information

To supplement our consolidated financial statements, which are prepared in accordance with GAAP, we use certain non-GAAP financial measures, including non-GAAP operating expense, non-GAAP operating income, non-GAAP net income, non-GAAP diluted EPS, adjusted EBITDA, adjusted EBITDA margin, constant currency and free cash flow. We provide these non-GAAP financial measures because we believe they provide greater transparency and represent supplemental information used by management in its financial and operational decision making. We exclude certain costs in our non-GAAP financial measures as we believe the net result is a measure of our core business. The company believes these measures facilitate operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain expense items that would not otherwise be apparent on a GAAP basis. Non-GAAP performance measures should be considered in addition to, and not as a substitute for, results prepared in accordance with GAAP. Our non-GAAP financial measures may be different from those reported by other companies. A more detailed discussion of why we use non-GAAP financial measures, the limitations of using such measures, and reconciliations between non-GAAP and the nearest GAAP financial measures are included in this press release.

ITRON, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

 

 

 

(Unaudited, in thousands, except per share data)

 

 

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2019

 

2018

 

2019

 

2018

Revenues

 

 

 

 

 

Product revenues

$

552,897

 

$

525,716

 

 

$

1,663,794

 

$

1,578,740

 

Service revenues

71,577

 

70,246

 

 

210,293

 

210,333

 

Total revenues

624,474

 

595,962

 

 

1,874,087

 

1,789,073

 

Cost of revenues

 

 

 

 

 

Product cost of revenues

389,778

 

357,194

 

 

1,176,913

 

1,106,586

 

Service cost of revenues

38,292

 

41,671

 

 

122,293

 

128,958

 

Total cost of revenues

428,070

 

398,865

 

 

1,299,206

 

1,235,544

 

Gross profit

196,404

 

197,097

 

 

574,881

 

553,529

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

Sales, general and administrative

83,666

 

89,556

 

 

264,640

 

332,833

 

Research and development

50,612

 

47,239

 

 

150,551

 

162,298

 

Amortization of intangible assets

16,095

 

17,960

 

 

48,185

 

53,699

 

Restructuring

6,592

 

666

 

 

7,685

 

82,908

 

Total operating expenses

156,965

 

155,421

 

 

471,061

 

631,738

 

 

 

 

 

 

 

Operating income (loss)

39,439

 

41,676

 

 

103,820

 

(78,209

)

Other income (expense)

 

 

 

 

 

Interest income

517

 

431

 

 

1,379

 

1,725

 

Interest expense

(12,868

)

(14,171

)

 

(39,899

)

(44,320

)

Other income (expense), net

(2,759

)

(2,434

)

 

(6,463

)

(2,598

)

Total other income (expense)

(15,110

)

(16,174

)

 

(44,983

)

(45,193

)

 

 

 

 

 

 

Income (loss) before income taxes

24,329

 

25,502

 

 

58,837

 

(123,402

)

Income tax benefit (provision)

(6,152

)

(5,715

)

 

(20,692

)

1,692

 

Net Income (loss)

18,177

 

19,787

 

 

38,145

 

(121,710

)

Net income (loss) attributable to noncontrolling interests

1,330

 

(95

)

 

3,759

 

1,417

 

Net income (loss) attributable to Itron, Inc.

$

16,847

 

$

19,882

 

 

$

34,386

 

$

(123,127

)

 

 

 

 

 

 

Net income (loss) per common share - Basic

$

0.43

 

$

0.51

 

 

$

0.87

 

$

(3.14

)

Net income (loss) per common share - Diluted

$

0.42

 

$

0.50

 

 

$

0.86

 

$

(3.14

)

 

 

 

 

 

 

Weighted average common shares outstanding - Basic

39,478

 

39,340

 

 

39,508

 

39,177

 

Weighted average common shares outstanding - Diluted

39,903

 

39,909

 

 

39,884

 

39,177

 

ITRON, INC.

SEGMENT INFORMATION

 

 

 

 

 

 

(Unaudited, in thousands)

 

 

 

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2019

 

2018

 

2019

 

2018

Product revenues

 

 

 

 

 

Device Solutions

$

211,096

 

$

216,371

 

 

$

644,254

 

$

693,544

 

Networked Solutions

330,487

 

297,726

 

 

978,259

 

852,819

 

Outcomes

11,314

 

11,619

 

 

41,281

 

32,377

 

Total Company

$

552,897

 

$

525,716

 

 

$

1,663,794

 

$

1,578,740

 

 

 

 

 

 

 

Service revenues

 

 

 

 

 

Device Solutions

$

2,253

 

$

3,879

 

 

$

8,573

 

$

12,219

 

Networked Solutions

25,734

 

22,782

 

 

70,305

 

66,193

 

Outcomes

43,590

 

43,585

 

 

131,415

 

131,921

 

Total Company

$

71,577

 

$

70,246

 

 

$

210,293

 

$

210,333

 

 

 

 

 

 

 

Total revenues

 

 

 

 

 

Device Solutions

$

213,349

 

$

220,250

 

 

$

652,827

 

$

705,763

 

Networked Solutions

356,221

 

320,508

 

 

1,048,564

 

919,012

 

Outcomes

54,904

 

55,204

 

 

172,696

 

164,298

 

Total Company

$

624,474

 

$

595,962

 

 

$

1,874,087

 

$

1,789,073

 

 

 

 

 

 

 

Gross profit

 

 

 

 

 

Device Solutions

$

40,945

 

$

46,484

 

 

$

122,451

 

$

148,831

 

Networked Solutions

135,406

 

133,057

 

 

388,717

 

359,588

 

Outcomes

20,053

 

17,556

 

 

63,713

 

45,110

 

Total Company

$

196,404

 

$

197,097

 

 

$

574,881

 

$

553,529

 

 

 

 

 

 

 

Operating income (loss)

 

 

 

 

 

Device Solutions

$

27,905

 

$

33,019

 

 

$

81,717

 

$

105,721

 

Networked Solutions

105,637

 

103,998

 

 

298,994

 

265,882

 

Outcomes

10,843

 

6,372

 

 

35,620

 

9,966

 

Corporate unallocated

(104,946

)

(101,713

)

 

(312,511

)

(459,778

)

Total Company

$

39,439

 

$

41,676

 

 

$

103,820

 

$

(78,209

)

ITRON, INC.

METER AND MODULE SUMMARY

 

 

 

 

 

 

(Unaudited, Units in thousands)

 

 

 

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2019

 

2018

 

2019

 

2018

Itron Endpoints

 

 

 

 

 

Standard endpoints (1)

5,420

5,760

 

16,460

17,400

Networked endpoints (1)

3,940

3,720

 

12,180

11,190

Total endpoints

9,360

9,480

 

28,640

28,590

(1)

As of the second quarter of 2019, we have refined the definition of a standard endpoint to more closely align to the segment performance of Device Solution and Networked Solutions as reported in the Operating Segment Results section below. The quantities presented for the three and nine months ended September 30, 2018 and for the three months ended March 31, 2019, as included in the nine-month period for 2019, have been recast to align with the refined definitions of standard and networked endpoints. The total endpoints shipped for each period is unchanged.

ITRON, INC.

CONSOLIDATED BALANCE SHEETS

 

 

 

 

(Unaudited, in thousands)

 

 

 

 

September 30, 2019

 

December 31, 2018

ASSETS

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

140,938

 

 

$

120,221

 

Accounts receivable, net

468,477

 

 

437,161

 

Inventories

231,081

 

 

220,674

 

Other current assets

126,527

 

 

118,085

 

Total current assets

967,023

 

 

896,141

 

 

 

 

 

Property, plant, and equipment, net

225,658

 

 

226,551

 

Deferred tax assets, net

59,332

 

 

64,830

 

Restricted cash

762

 

 

2,056

 

Other long-term assets

44,998

 

 

45,288

 

Operating lease right-of-use assets, net

78,386

 

 

 

Intangible assets, net

202,321

 

 

257,583

 

Goodwill

1,097,408

 

 

1,116,533

 

Total assets

$

2,675,888

 

 

$

2,608,982

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

Current liabilities

 

 

 

Accounts payable

$

315,394

 

 

$

309,951

 

Other current liabilities

62,017

 

 

70,136

 

Wages and benefits payable

117,409

 

 

88,603

 

Taxes payable

18,026

 

 

14,753

 

Current portion of debt

38,750

 

 

28,438

 

Current portion of warranty

38,018

 

 

47,205

 

Unearned revenue

94,989

 

 

93,621

 

Total current liabilities

684,603

 

 

652,707

 

 

 

 

 

Long-term debt

930,394

 

 

988,185

 

Long-term warranty

15,864

 

 

13,238

 

Pension benefit obligation

88,374

 

 

91,522

 

Deferred tax liabilities, net

1,445

 

 

1,543

 

Operating lease liabilities

67,024

 

 

 

Other long-term obligations

126,268

 

 

127,739

 

Total liabilities

1,913,972

 

 

1,874,934

 

 

 

 

 

Equity

 

 

 

Common stock

1,335,353

 

 

1,334,364

 

Accumulated other comprehensive loss, net

(207,054

)

 

(196,305

)

Accumulated deficit

(391,010

)

 

(425,396

)

Total Itron, Inc. shareholders' equity

737,289

 

 

712,663

 

Non-controlling interests

24,627

 

 

21,385

 

Total equity

761,916

 

 

734,048

 

Total liabilities and equity

$

2,675,888

 

 

$

2,608,982

 

ITRON, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

(Unaudited, in thousands)

 

 

 

 

Nine Months Ended
September 30,

 

2019

 

2018

Operating activities

 

 

 

Net income (loss)

$

38,145

 

 

$

(121,710

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

Depreciation and amortization of intangible assets

85,691

 

 

92,428

 

Amortization of operating lease right-of-use assets

13,847

 

 

 

Stock-based compensation

21,064

 

 

23,069

 

Amortization of prepaid debt fees

3,686

 

 

5,825

 

Deferred taxes, net

4,990

 

 

(13,141

)

Restructuring, non-cash

(2,147

)

 

569

 

Other adjustments, net

(6,121

)

 

(30

)

Changes in operating assets and liabilities, net of acquisitions

 

 

 

Accounts receivable

(39,385

)

 

7,774

 

Inventories

(15,762

)

 

(10,072

)

Other current assets

(10,494

)

 

(9,797

)

Other long-term assets

7,945

 

 

3,817

 

Accounts payable, other current liabilities, and taxes payable

(4,063

)

 

4,494

 

Wages and benefits payable

30,220

 

 

2,166

 

Unearned revenue

6,746

 

 

27,869

 

Warranty

(5,506

)

 

3,167

 

Other operating, net

(756

)

 

50,955

 

Net cash provided by operating activities

128,100

 

 

67,383

 

 

 

 

 

Investing activities

 

 

 

Acquisitions of property, plant, and equipment

(44,570

)

 

(42,493

)

Business acquisitions, net of cash equivalents acquired

 

 

(803,075

)

Other investing, net

9,977

 

 

(181

)

Net cash used in investing activities

(34,593

)

 

(845,749

)

 

 

 

 

Financing activities

 

 

 

Proceeds from borrowings

50,000

 

 

761,938

 

Payments on debt

(100,313

)

 

(332,297

)

Issuance of common stock

7,117

 

 

8,283

 

Repurchase of common stock

(25,000

)

 

 

Prepaid debt fees

(175

)

 

(24,042

)

Other financing, net

(5,221

)

 

(5,526

)

Net cash provided by (used in) financing activities

(73,592

)

 

408,356

 

 

 

 

 

Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash

(543

)

 

(6,175

)

Increase (decrease) in cash, cash equivalents, and restricted cash

19,372

 

 

(376,185

)

Cash, cash equivalents, and restricted cash at beginning of period

122,328

 

 

487,335

 

Cash, cash equivalents, and restricted cash at end of period

$

141,700

 

 

$

111,150

 

About Non-GAAP Financial Measures

The accompanying press release contains non-GAAP financial measures. To supplement our consolidated financial statements, which are prepared in accordance with GAAP, we use certain non-GAAP financial measures, including non-GAAP operating expense, non-GAAP operating income, non-GAAP net income, non-GAAP diluted EPS, adjusted EBITDA, free cash flow and constant currency. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and other companies may define such measures differently. For more information on these non-GAAP financial measures please see the table captioned “Reconciliations of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures.”

We use these non-GAAP financial measures for financial and operational decision making and/or as a means for determining executive compensation. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and ability to service debt by excluding certain expenses that may not be indicative of our recurring core operating results. These non-GAAP financial measures facilitate management’s internal comparisons to our historical performance as well as comparisons to our competitors’ operating results. Our executive compensation plans exclude non-cash charges related to amortization of intangibles and certain discrete cash and non-cash charges such as acquisition and integration related expenses, restructuring charges or goodwill impairment charges. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. We believe these non-GAAP financial measures are useful to investors because they provide greater transparency with respect to key metrics used by management in its financial and operational decision making and because they are used by our institutional investors and the analyst community to analyze the health of our business.

Non-GAAP operating expenses and non-GAAP operating income - We define non-GAAP operating expenses as operating expenses excluding certain expenses related to the amortization of intangible assets, restructuring, acquisition and integration, corporate transition costs, and goodwill impairment. We define non-GAAP operating income as operating income excluding the expenses related to the amortization of intangible assets, restructuring, acquisition and integration, corporate transition costs, and goodwill impairment. Acquisition and integration related expenses include costs which are incurred to affect and integrate business combinations, such as professional fees, certain employee retention and salaries related to integration, severances, contract terminations, travel costs related to knowledge transfer, system conversion costs, and asset impairment charges. We consider these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of expenses that are related to acquisitions and restructuring projects. By excluding these expenses, we believe that it is easier for management and investors to compare our financial results over multiple periods and analyze trends in our operations. For example, in certain periods expenses related to amortization of intangible assets may decrease, which would improve GAAP operating margins, yet the improvement in GAAP operating margins due to this lower expense is not necessarily reflective of an improvement in our core business. There are some limitations related to the use of non-GAAP operating expenses and non-GAAP operating income versus operating expenses and operating income calculated in accordance with GAAP. We compensate for these limitations by providing specific information about the GAAP amounts excluded from non-GAAP operating expense and non-GAAP operating income and evaluating non-GAAP operating expense and non-GAAP operating income together with GAAP operating expense and GAAP operating income.

Non-GAAP net income and non-GAAP diluted EPS - We define non-GAAP net income as net income attributable to Itron, Inc. excluding the expenses associated with amortization of intangible assets, amortization of debt placement fees, restructuring, corporate transition costs, acquisition and integration, goodwill impairment, and the tax effect of excluding these expenses. We define non-GAAP diluted EPS as non-GAAP net income divided by the weighted average shares, on a diluted basis, outstanding during each period. We consider these financial measures to be useful metrics for management and investors for the same reasons that we use non-GAAP operating income. The same limitations described above regarding our use of non-GAAP operating income apply to our use of non-GAAP net income and non-GAAP diluted EPS. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP measures and evaluating non-GAAP net income and non-GAAP diluted EPS together with GAAP net income attributable to Itron, Inc. and GAAP diluted EPS.

For interim periods, beginning the first quarter of 2019, the budgeted annual effective tax rate (AETR) is used, adjusted for any discrete items, as defined in ASC 740 - Income Taxes. The budgeted AETR is determined at the beginning of the fiscal year. The AETR is revised throughout the year based on changes to our full-year forecast. If the revised AETR increases or decreases by 200 basis points or more from the budgeted AETR due to changes in the full-year forecast during the year, the revised AETR is used in place of the budgeted AETR beginning with the quarter the 200 basis point threshold is exceeded and going forward for all subsequent interim quarters in the year. We continue to assess the AETR based on latest forecast throughout the year and use the most recent AETR anytime it increases or decreases by 200 basis points or more from the prior interim period.

Adjusted EBITDA - We define adjusted EBITDA as net income (a) minus interest income, (b) plus interest expense, depreciation and amortization, restructuring, acquisition and integration related expense, corporate transition costs, goodwill impairment and (c) excluding income tax provision or benefit. Management uses adjusted EBITDA as a performance measure for executive compensation. A limitation to using adjusted EBITDA is that it does not represent the total increase or decrease in the cash balance for the period and the measure includes some non-cash items and excludes other non-cash items. Additionally, the items that we exclude in our calculation of adjusted EBITDA may differ from the items that our peer companies exclude when they report their results. We compensate for these limitations by providing a reconciliation of this measure to GAAP net income (loss).

Free cash flow - We define free cash flow as net cash provided by (used in) operating activities less cash used for acquisitions of property, plant and equipment. We believe free cash flow provides investors with a relevant measure of liquidity and a useful basis for assessing our ability to fund our operations and repay our debt. The same limitations described above regarding our use of adjusted EBITDA apply to our use of free cash flow. We compensate for these limitations by providing specific information regarding the GAAP amounts and reconciling to free cash flow.

Constant currency - We refer to the impact of foreign currency exchange rate fluctuations in our discussions of financial results, which references the differences between the foreign currency exchange rates used to translate operating results from local currencies into U.S. dollars for financial reporting purposes. We also use the term “constant currency,” which represents financial results adjusted to exclude changes in foreign currency exchange rates as compared with the rates in the comparable prior year period. We calculate the constant currency change as the difference between the current period results and the comparable prior period’s results restated using current period foreign currency exchange rates.

The accompanying tables have more detail on the GAAP financial measures that are most directly comparable to the non-GAAP financial measures and the related reconciliations between these financial measures.

ITRON, INC.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

TO THE MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES

 

 

 

 

 

 

(Unaudited, in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

TOTAL COMPANY RECONCILIATIONS

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2019

 

2018

 

2019

 

2018

NON-GAAP NET INCOME & DILUTED EPS

 

 

 

 

 

GAAP income (loss) attributable to Itron, Inc.

$

16,847

 

$

19,882

 

 

$

34,386

 

$

(123,127

)

Amortization of intangible assets

16,095

 

17,960

 

 

48,185

 

53,699

 

Amortization of debt placement fees

1,240

 

1,178

 

 

3,555

 

5,693

 

Restructuring

6,592

 

666

 

 

7,685

 

82,908

 

Corporate transition cost

57

 

 

 

1,613

 

 

Acquisition and integration related expense

3,834

 

10,079

 

 

24,593

 

83,874

 

Income tax effect of non-GAAP adjustments (1)

(3,269

)

(4,719

)

(16,131

)

(32,451

)

Non-GAAP net income attributable to Itron, Inc. (1)

$

41,396

 

$

45,046

 

 

$

103,886

 

$

70,596

 

 

 

 

 

 

 

Non-GAAP diluted EPS (1)

$

1.04

 

$

1.13

 

 

$

2.60

 

$

1.77

 

 

 

 

 

 

 

Weighted average common shares outstanding - Diluted

39,903

 

39,909

 

 

39,884

 

39,825

 

 

 

 

 

 

 

ADJUSTED EBITDA

 

 

 

 

 

GAAP income (loss) attributable to Itron, Inc.

$

16,847

 

$

19,882

 

 

$

34,386

 

$

(123,127

)

Interest income

(517

)

(431

)

 

(1,379

)

(1,725

)

Interest expense

12,868

 

14,171

 

 

39,899

 

44,320

 

Income tax provision (benefit)

6,152

 

5,715

 

 

20,692

 

(1,692

)

Depreciation and amortization of intangible assets

28,623

 

30,449

 

 

85,691

 

92,428

 

Restructuring

6,592

 

666

 

 

7,685

 

82,908

 

Corporate transition cost

57

 

 

 

1,613

 

 

Acquisition and integration related expense

3,834

 

10,079

 

 

24,593

 

83,874

 

Adjusted EBITDA

$

74,456

 

$

80,531

 

 

$

213,180

 

$

176,986

 

 

 

 

 

 

 

FREE CASH FLOW

 

 

 

 

 

Net cash provided by operating activities

$

50,037

 

$

50,504

 

 

$

128,100

 

$

67,383

 

Acquisitions of property, plant, and equipment

(18,059

)

(13,184

)

 

(44,570

)

(42,493

)

Free Cash Flow

$

31,978

 

$

37,320

 

 

$

83,530

 

$

24,890

 

 

 

 

 

 

 

NON-GAAP OPERATING INCOME

 

 

 

 

 

GAAP operating income (loss)

$

39,439

 

$

41,676

 

 

$

103,820

 

$

(78,209

)

Amortization of intangible assets

16,095

 

17,960

 

 

48,185

 

53,699

 

Restructuring

6,592

 

666

 

 

7,685

 

82,908

 

Corporate transition cost

57

 

 

 

1,613

 

 

Acquisition and integration related expense

3,834

 

10,079

 

 

24,593

 

83,874

 

Non-GAAP operating income

$

66,017

 

$

70,381

 

 

$

185,896

 

$

142,272

 

 

 

 

 

 

 

NON-GAAP OPERATING EXPENSES

 

 

 

 

 

GAAP operating expenses

$

156,965

 

$

155,421

 

 

$

471,061

 

$

631,738

 

Amortization of intangible assets

(16,095

)

(17,960

)

 

(48,185

)

(53,699

)

Restructuring

(6,592

)

(666

)

 

(7,685

)

(82,908

)

Corporate transition cost

(57

)

 

 

(1,613

)

 

Acquisition and integration related expense

(3,834

)

(10,079

)

 

(24,593

)

(83,874

)

Non-GAAP operating expenses

$

130,387

 

$

126,716

 

 

$

388,985

 

$

411,257

 

(1)

The income tax effect of non-GAAP adjustments is calculated using the statutory tax rates for the relevant jurisdictions, provided no valuation allowance exists. If a valuation allowance exists, there is no tax impact to the non-GAAP adjustment. Effective for the first quarter of 2019, we use the budgeted annual effective tax rate (AETR) for interim periods, with adjustments for discrete items, as defined in ASC 740 - Income Taxes. This method impacts interim periods only and does not impact full year tax results, as any difference between the budgeted or revised AETR and the actual AETR for non-GAAP adjustments would be recognized in the fourth quarter of the year. If the revised methodology had been applied in the third quarter of 2018, non-GAAP net income would have decreased by $4.8 million to $40.2 million, and diluted non-GAAP EPS would have decreased by $0.12 to $1.01. If the methodology had been applied in the nine months ended September 30, 2018 non-GAAP net income would have increased by $1 million to $71.5 million, and diluted non-GAAP EPS would have increased by $0.03 to $1.80.

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20191104005940/en/

CONTACT: Itron, Inc.

Kenneth P. Gianella

Vice President, Investor Relations

(669) 770-4643Rebecca Hussey

Manager, Investor Relations

(509) 891-3574

KEYWORD: WASHINGTON UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: ENVIRONMENT TECHNOLOGY UTILITIES SOFTWARE ALTERNATIVE ENERGY OTHER NATURAL RESOURCES ENERGY HARDWARE DATA MANAGEMENT NATURAL RESOURCES

SOURCE: Itron, Inc.

Copyright Business Wire 2019.

PUB: 11/04/2019 04:05 PM/DISC: 11/04/2019 04:05 PM

http://www.businesswire.com/news/home/20191104005940/en