Iteris, Inc. reports 8.1% revenue growth in FY2018 and almost no change in EBITDA Margin of -3.9%
06/07/2018 • About Iteris, Inc. (
$ITI) • By InTwits
Iteris, Inc. reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- Iteris, Inc. is a growth stock: FY2018 revenue growth was 8.1%, 5 year revenue CAGR was 11.0% at FY2018 ROIC -13.9%
- The company operates at negative EBITDA Margin: -3.9%
- Iteris, Inc. motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 was 0.0% while average EBITDA Margin was -1.9% for the sames years
- Iteris, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.0%.
- The company has unprofitable business model: ROIC is -13.9%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.6x while industry average is -0.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Iteris, Inc.'s Revenue increased on 8.1%. Revenue growth showed slowdown in FY18Q4 - it was -0.1% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.74 pp from 4.7% to 5.5% in 2018. During FY2014-FY2018 EBITDA Margin bottomed in FY2017 at -4.0%.
Gross Margin decreased slightly on 0.57 pp from 39.0% to 38.4% in FY2018. During the last 5 years Gross Margin topped in FY2016 at 39.4% and was declining since that time. SG&A as a % of Revenue increased slightly on 1.3 pp from 34.7% to 36.1% in FY2018. SG&A as a % of Revenue followed a growing trend in FY2014-FY2018.
Net Income margin increased slightly on 1.6 pp from -5.0% to -3.4% in FY2018. During the last 5 years Net Income margin bottomed in FY2016 at -16.3% and was growing since that time.
Investments (CAPEX, working capital and M&A)
In FY2018 Iteris, Inc. had CAPEX/Revenue of 1.0%. Iteris, Inc.'s CAPEX/Revenue showed almost no change from FY2015 to FY2018. For the last three years the average CAPEX/Revenue was 0.95%.
Return on investment
The company operates at negative ROIC (-13.9%) and ROE (-8.8%). ROIC decreased slightly on 1.7 pp from -12.3% to -13.9% in FY2018. ROE increased on 2.7 pp from -11.5% to -8.8% in FY2018. ROIC stuck to a declining trend at -4.4 pp per annum in FY2014-FY2018. During FY2014-FY2018 ROE bottomed in FY2016 at -25.5% and was growing since that time.
Leverage (Debt)
The company has no debt. Cash dropped on 44.2%.
Management team
Iteris, Inc.'s CEO is Joseph Bergera "Joe". Joseph Bergera "Joe" is a founder and has 3 years tenure with the company. The company's CFO Andrew C Schmidt has spent 4 years with the company.
Financial and operational results
FY ended 03/31/2018
Iteris, Inc. ($ITI) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 68.2 | 72.3 | 77.7 | 96.0 | 103.7 | 8.1% |
| Gross Profit | 26.0 | 28.2 | 30.7 | 37.4 | 39.8 | 6.5% |
| SG&A | 19.3 | 24.4 | 26.8 | 33.3 | 37.4 | 12.3% |
| EBITDA | 3.5 | -1.0 | -2.7 | -3.9 | -4.1 | |
| Net Income | 1.4 | -1.1 | -12.7 | -4.8 | -3.5 | |
Balance Sheet
|
|---|
| Cash | 20.4 | 22.0 | 16.0 | 18.2 | 10.2 | -44.2% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 0.5 | 1.0 | 0.9 | 0.7 | 1.1 | 61.5% |
Ratios
|
|---|
| Revenue growth | 10.6% | 5.9% | 7.6% | 23.5% | 8.1% | |
| EBITDA growth | 10.9% | -127.1% | 177.4% | 46.3% | 4.4% | |
|
|---|
| Gross Margin | 38.1% | 39.0% | 39.4% | 39.0% | 38.4% | -0.6% |
| EBITDA Margin | 5.2% | -1.3% | -3.4% | -4.0% | -3.9% | 0.1% |
| SG&A, % of revenue | 28.2% | 33.8% | 34.5% | 34.7% | 36.1% | 1.3% |
| Net Income Margin | 2.1% | -1.5% | -16.3% | -5.0% | -3.4% | 1.6% |
| CAPEX, % of revenue | 0.7% | 1.4% | 1.1% | 0.7% | 1.0% | 0.3% |
|
|---|
| ROIC | 3.5% | -3.6% | -7.6% | -12.3% | -13.9% | -1.7% |
| ROE | 2.5% | -1.9% | -25.5% | -11.5% | -8.8% | 2.7% |
| Net Debt/EBITDA | -5.8x | | | | |
Iteris, Inc. ($ITI) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 27 | 25 | 26 | 25 | | 13.6% | 4.9% | 14.7% | -0.1% |
| EBITDA | -0 | -1 | -1 | -2 | | -191.7% | -477.1% | | |
| Net Income | -0 | -1 | 0 | -2 | | | | | |
Balance Sheet
|
|---|
| Cash | 18 | 15 | 17 | 10 | | 16.4% | -5.0% | -6.0% | -44.2% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 36.4% | 39.5% | 38.2% | 39.6% | | -2.9% | 0.2% | 0.2% | 0.4% |
| EBITDA Margin | -0.8% | -2.8% | -2.7% | -9.5% | | -1.9% | -3.6% | 2.3% | 3.1% |
| Net Income Margin | -1.7% | -3.9% | 1.3% | -9.6% | | -1.6% | -3.7% | 7.4% | 3.8% |
Peers in Electronic Equipment & Instrum
Below you can find Iteris, Inc. benchmarking vs. other companies in Electronic Equipment & Instrum industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Hickok Inc ($HICKA) | | -7.2% | 13.5% | 258.4% | 178.7% |
| Electro Scientific Industries, Inc. ($ESIO) | | -12.2% | 15.9% | -12.7% | 128.5% |
| Microvision, Inc. ($MVIS) | | 163.6% | 60.7% | -34.7% | 82.8% |
| Ipsidy Inc ($IDTY) | | | | | 66.2% |
| Magal Security Systems Ltd. ($MAGS) | | -17.8% | 6.4% | -5.2% | 44.0% |
| |
|---|
| Median (60 companies) | -37.7% | 3.5% | 0.3% | 3.6% | 11.0% |
|---|
| Iteris, Inc. ($ITI) | | 5.9% | 7.6% | 23.5% | 8.1% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Intellicheck, Inc. ($IDN) | 58.2% | 57.1% | 80.0% | 85.5% | 91.3% |
| Image Sensing Systems, Inc. ($ISNS) | 74.7% | 77.1% | 71.0% | 79.9% | 80.9% |
| National Instruments Corporation ($NATI) | 74.4% | 74.1% | 74.5% | 74.5% | 75.4% |
| Cognex Corporation ($CGNX) | 77.9% | 77.2% | 75.2% | 75.6% | 74.4% |
| Applied DNA Sciences Inc ($APDN) | | | 82.2% | 77.3% | 69.1% |
| |
|---|
| Median (59 companies) | 42.7% | 42.3% | 41.2% | 41.8% | 42.6% |
|---|
| Iteris, Inc. ($ITI) | 38.1% | 39.0% | 39.4% | 39.0% | 38.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Cognex Corporation ($CGNX) | 32.9% | 30.1% | 31.9% | 36.0% | 30.1% |
| Coherent, Inc. ($COHR) | 14.2% | 16.7% | 18.9% | 24.9% | 26.6% |
| Hollysys Automation Technologies, Ltd. ($HOLI) | 21.3% | 26.9% | 23.5% | 16.1% | 23.9% |
| Electro Scientific Industries, Inc. ($ESIO) | -10.1% | -19.1% | -2.0% | -17.8% | 23.1% |
| FLIR Systems, Inc. ($FLIR) | 20.7% | 22.8% | 21.3% | 20.0% | 21.7% |
| |
|---|
| Median (59 companies) | 5.5% | 5.2% | 3.4% | 5.1% | 3.5% |
|---|
| Iteris, Inc. ($ITI) | 5.2% | -1.3% | -3.4% | -4.0% | -3.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Wrap Technologies Inc ($WRTC) | | | | | 61.4% |
| ClearSign Combustion Corporation ($CLIR) | | 80.3% | 22.1% | 17.4% | 17.7% |
| LightPath Technologies, Inc. ($LPTH) | 16.8% | 5.0% | 6.5% | 7.8% | 7.7% |
| Giga-tronics Inc ($GIGA) | 1.7% | 0.1% | 1.3% | 0.3% | 7.0% |
| Applied DNA Sciences Inc ($APDN) | 8.4% | 3.9% | 16.1% | 3.1% | 6.8% |
| |
|---|
| Median (59 companies) | 1.9% | 2.0% | 2.1% | 1.7% | 2.3% |
|---|
| Iteris, Inc. ($ITI) | 0.7% | 1.4% | 1.1% | 0.7% | 1.0% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Evans & Sutherland Computer Corp ($ESCC) | | | 83.3% | 39.6% | 55.3% |
| Electro Scientific Industries, Inc. ($ESIO) | -11.7% | -19.7% | -7.1% | -22.9% | 31.5% |
| Coherent, Inc. ($COHR) | 9.9% | 13.1% | 15.6% | 24.0% | 21.5% |
| Zebra Technologies Corporation ($ZBRA) | 3.3% | 0.9% | 2.2% | 10.2% | 20.8% |
| Cognex Corporation ($CGNX) | 18.3% | 15.6% | 17.7% | 25.6% | 20.1% |
| |
|---|
| Median (71 companies) | 3.3% | 2.3% | 2.2% | 3.3% | 1.2% |
|---|
| Iteris, Inc. ($ITI) | 3.5% | -3.6% | -7.6% | -12.3% | -13.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Itron, Inc. ($ITRI) | 2.1x | 1.9x | 1.0x | 2.0x | 12.3x |
| Track Group Inc ($TRCK) | | | | | 12.2x |
| Mesa Laboratories, Inc. ($MLAB) | 0.7x | 1.1x | 1.7x | 2.0x | 3.5x |
| Trimble Inc. ($TRMB) | 1.3x | 1.7x | 1.1x | 1.3x | 3.4x |
| MTS Systems Corporation ($MTSC) | -0.0x | -0.4x | 5.8x | 3.9x | 3.2x |
| |
|---|
| Median (35 companies) | -0.7x | -0.9x | -0.8x | -0.7x | -0.8x |
|---|
