iti-20220630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________________________________________

Form 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-08762

ITERIS, INC.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of

incorporation or organization)

1250 S. Capital of Texas Hwy., Building 1, Suite 330

Austin, Texas

(Address of principal executive office)

95-2588496

(I.R.S. Employer

Identification No.)

78746

(Zip Code)

(512) 716-0808

(Registrant’s telephone number, including area code)

(Former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.10 par value

ITI

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

As of August 1, 2022, there were 42,577,415 shares of our common stock outstanding.

Table of Contents

Table of Contents

ITERIS, INC.

Quarterly Report on Form 10-Q

Table of Contents


PART I.	FINANCIAL INFORMATION	1

ITEM 1.	FINANCIAL STATEMENTS	1

	UNAUDITED CONDENSED BALANCE SHEETS AT JUNE 30, 2022 AND MARCH 31, 2022	1

	UNAUDITED CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE MONTH PERIODS ENDED JUNE 30, 2022 AND 2021	2

	UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED JUNE 30, 2022 AND 2021	3

	UNAUDITED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY FOR THE THREE MONTH PERIODS ENDED JUNE 30, 2022 AND 2021	4

	NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS	5

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	22

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	30

ITEM 4.	CONTROLS AND PROCEDURES	30

PART II.	OTHER INFORMATION	31

ITEM 1.	LEGAL PROCEEDINGS	31

ITEM 1A.	RISK FACTORS	31

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	31

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	32

ITEM 4.	MINE SAFETY DISCLOSURES	32

ITEM 5.	OTHER INFORMATION	32

ITEM 6.	EXHIBITS	32

Unless otherwise indicated in this report, the "Company," "we," "us" and "our" refer to Iteris, Inc. ClearGuide®, ClearMobility™, Iteris®, Vantage® and VantageLive!® are among, but not all of, the trademarks of Iteris, Inc. Any other trademarks or trade names mentioned herein are the property of their respective owners.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Iteris, Inc.

Unaudited Condensed Balance Sheets

(In thousands, except par values)


	June 30, 2022		March 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	14,844	$	23,689
Restricted cash	241		120
Trade accounts receivable, net of allowance for doubtful accounts of $1,089 and $903 at June 30, 2022 and March 31, 2022, respectively	24,894		25,628
Unbilled accounts receivable	10,195		10,870
Inventories	13,326		7,980
Prepaid expenses and other current assets	5,191		4,076
Total current assets	68,691		72,363
Property and equipment, net	1,421		1,392
Right-of-use assets	10,950		11,382
Intangible assets, net	11,291		11,780
Goodwill	28,340		28,340
Other assets	1,335		1,120
Noncurrent assets of discontinued operations	—		6
Total assets	$	122,028	$	126,383
Liabilities and stockholders’ equity
Current liabilities:
Trade accounts payable	$	13,494	$	11,926
Accrued payroll and related expenses	11,961		11,409
Accrued liabilities	5,052		5,623
Deferred revenue	6,146		6,566
Current liabilities of discontinued operations	100		163
Total current liabilities	36,753		35,687
Lease liabilities	10,268		10,763
Deferred income taxes	357		337
Unrecognized tax benefits	104		105
Other long-term liabilities	2,413		2,456
Noncurrent liabilities of discontinued operations	146		172
Total liabilities	50,041		49,520
Commitments and contingencies (Note 6)
Stockholders’ equity:
Preferred stock, $1.00 par value:
Authorized shares — 2,000
Issued and outstanding shares — none	—		—
Common stock, $0.10 par value:
Authorized shares - 70,000 at June 30, 2022 and March 31, 2022
Issued and outstanding shares — 42,421 at June 30, 2022 and 42,416 at March 31, 2022	4,242		4,242
Treasury Stock	(884)		—
Additional paid-in capital	187,593		186,720
Accumulated deficit	(118,964)		(114,099)
Total stockholders' equity	71,987		76,863
Total liabilities and stockholders' equity	$	122,028	$	126,383

See accompanying Notes to Unaudited Condensed Financial Statements

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Iteris, Inc.

Unaudited Condensed Statements of Operations

(In thousands, except per share amounts)


	Three Months Ended June 30,
	2022		2021

Product revenues	$	16,381	$	18,026
Service revenues	17,286		16,059
Total revenues	33,667		34,085
Cost of product revenues	11,657		9,557
Cost of service revenues	11,851		10,435
Cost of revenues	23,508		19,992
Gross profit	10,159		14,093
Operating expenses:
General and administrative	6,412		6,390
Sales and marketing	5,198		4,587
Research and development	2,136		1,765
Amortization of intangible assets	668		668
Restructuring charges	707		—
Total operating expenses	15,121		13,410
Operating income (loss)	(4,962)		683
Non-operating income (expense):
Other income (expense), net	(23)		18
Interest income (expense), net	(32)		3
Income (loss) from continuing operations before income taxes	(5,017)		704
(Provision) benefit for income taxes	167		(75)
Net income (loss) from continuing operations	(4,850)		629
Loss from discontinued operations before gain on sale, net of tax	(15)		(18)
Net loss from discontinued operations, net of tax	(15)		(18)
Net income (loss)	$	(4,865)	$	611

Income (loss) per share - basic:
Income (loss) per share from continuing operations	$	(0.11)	$	0.02
Income per share from discontinued operations	—		—
Net income (loss) per share	$	(0.11)	$	0.02

Income (loss) per share - diluted:
Income (loss) per share from continuing operations	$	(0.11)	$	0.01
Income per share from discontinued operations	—		—
Net income (loss) per share	$	(0.11)	$	0.01

Shares used in basic per share calculations	42,380		41,875
Shares used in diluted per share calculations	42,380		43,380

See accompanying Notes to Unaudited Condensed Financial Statements

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Iteris, Inc.

Unaudited Condensed Statements of Cash Flows

(In thousands)


	Three Months Ended June 30,
	2022		2021
Cash flows from operating activities
Net income (loss)	$	(4,865)	$	611
Less: Net loss from discontinued operations	(15)		(18)
Net income (loss) from continuing operations	(4,850)		629

Adjustments to reconcile net income (loss) from continuing operations to net cash provided by (used in) operating activities:
Right-of-use asset non-cash expense	538		7
Deferred income taxes	19		(170)
Depreciation of property and equipment	159		232
Stock-based compensation	848		794
Amortization of intangible assets	822		803
Loss on disposal of equipment	—		7
Changes in operating assets and liabilities, net of effects of discontinued operation and acquisition:
Trade accounts receivable	734		(3,806)
Unbilled accounts receivable and deferred revenue	212		1,025
Inventories	(5,346)		(115)
Prepaid expenses and other assets	(1,330)		(185)
Trade accounts payable and accrued expenses	1,137		2,055
Operating lease liabilities	(189)		(52)
Net cash provided by (used in) operating activities - continuing operations	(7,246)		1,224
Net cash used in operating activities - discontinued operations	(98)		(100)
Net cash provided by (used in) operating activities	(7,344)		1,124
Cash flows from investing activities
Purchases of property and equipment	(188)		(67)
Maturities of investments	—		3,100
Capitalized software development costs	(333)		(1,076)
Net cash provided by (used in) investing activities - continuing operations	(521)		1,957
Net cash provided by investing activities - discontinued operations	—		1,450
Net cash provided by (used in) investing activities	(521)		3,407
Cash flows from financing activities
Proceeds from stock option exercises	1		1,375
Tax withholding payments for net share settlements of restricted stock units	24		—
Repurchases of common stock	(884)		—
Net cash provided by (used in) financing activities	(859)		1,375
Increase (decrease) in cash, cash equivalents and restricted cash	(8,724)		5,906
Cash, cash equivalents and restricted cash at beginning of period	23,809		25,468
Cash, cash equivalents and restricted cash at end of period	$	15,085	$	31,374
Supplemental cash flow information:
Cash paid during the year for:
Income taxes	$	—	$	1
Supplemental schedule of non-cash investing and financing activities:
Deferred payment of purchase price receivable	$	—	$	50
Lease liabilities arising from obtaining right-of-use assets	$	106	$	—

See accompanying Notes to Unaudited Condensed Financial Statements

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Iteris, Inc.

Unaudited Condensed Statements of Stockholders’ Equity

(In thousands)


	THREE MONTH PERIOD ENDED JUNE 30, 2022
	Common Stock			Treasury Stock		Additional Paid-In Capital		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount		Shares	Amount
Balance at March 31, 2022	42,416	$	4,242	—	—	$	186,720	$	(114,099)	$	76,863
Stock option exercises	1	—		—	—	1		—		1
Issuance of shares pursuant to vesting of restricted stock units, net of payroll withholding taxes	4	—		—	—	24		—		24
Stock-based compensation	—	—		—	—	848		—		848
Treasury stock purchases	—	—		300	(884)	—		—		(884)
Net loss	—	—		—	—	—		(4,865)		(4,865)
Balance at June 30, 2022	42,421	$	4,242	300	(884)	$	187,593	$	(118,964)	$

SEC Form 10-Q filed by Iteris Inc.