Smart Meter and Module Volumes Increase 28
Percent Year-Over-Year
Itron, Inc. (NASDAQ:ITRI) today announced selected operating
results for the first quarter ended March 31, 2016 and provided an
update on its ongoing accounting review of revenue recognition on
certain software and maintenance contracts.
“Itron’s preliminary first quarter results reflect continued
solid business momentum and improved operational performance across
all segments,” said Philip Mezey, Itron’s president and chief
executive officer. “Preliminary revenue and operating results were
ahead of our plan, cash flow was robust and we reduced debt levels.
Other highlights in the quarter include increased global smart
meter shipments both year-over-year and sequentially, continued
strength in the North American region and improvement in our
European business results.”
Mezey continued, “We remain committed to strengthening Itron’s
revenue processes and to providing accurate and transparent
financial information. We continue to work diligently toward
completion of our revenue accounting analysis and the completion of
our independent auditors’ review of our analysis. While complex,
this accounting review relates to the timing of software-related
revenues recognized between periods, which has no impact on cash or
cash earnings generation. Importantly, we have remained focused on
executing against our strategic initiatives, as underscored by our
strong operational performance in the quarter.”
Selected First Quarter 2016 Operating Results
As a result of Itron's previously announced, ongoing accounting
review, financial statements presented in conformity with U.S.
generally accepted accounting principles (GAAP) for the first
quarter of 2016 are not yet available. The company provided the
following operating results for the first quarter of 2016, which it
expects will be unaffected by the accounting review process:
- Advanced and smart meter and module
volumes increased 28 percent compared with the first quarter of
2015, including:
- Highest volume of electric smart meters
shipped in 14 quarters
- Record level of gas smart meter
shipments
- Water meter and module shipments up 17
percent compared with the fourth quarter of 2015
METER AND MODULE SUMMARY (Units in thousands)
Q1 2016 Q4 2015
Q3 2015 Q2 2015
Q1 2015 Meters Standard 4,370 4,020 4,100
4,700 4,740 Advanced and Smart 2,190 1,960
1,930 1,860 1,540 Total meters
6,560 5,980 6,030 6,560
6,280
Stand-alone communication modules
Advanced and Smart 1,460 1,590 1,530
1,410 1,310
- Itron also announced that Avista has
selected Itron’s OpenWay Riva® IoT solution to modernize its
electric and gas network in Washington state and lay the foundation
for smart city applications.
- Free cash flow for the quarter of $25
million compared with negative $13 million for the first quarter of
2015.
- Cash and cash equivalents of $133
million at March 31, 2016 compared with $131 million on Dec. 31,
2015, reflecting ample liquidity and financial flexibility.
- Itron repaid $23 million in debt during
the first quarter, reducing the company’s total outstanding debt to
$348 million at March 31, 2016.
- Itron obtained waivers through June 15,
2016 and July 15, 2016 from its creditors for the late filing of
the company’s 2015 Form 10-K and first quarter of 2016 Form 10-Q,
respectively.
Segment Business Update
- The Electricity segment continued to
benefit from favorable product mix in North America and a strong
order pipeline. In Europe, Itron has increased Linky meter
production to maximum capacity for the company’s smart meter
project with Électricité Réseau Distribution France, and Itron
France recently delivered its 500,000th Linky smart meter.
- The Gas segment also benefited from
strong volume and mix in North America as well as higher smart
meter shipments to select European customers. The sales pipeline
particularly in North America continues to be robust.
- The Water segment results improved
significantly compared with the first quarter of 2015, driven by
strong performance in the North America, Europe/Middle East/Africa
and Asia Pacific regions, lower warranty costs and favorable brass
pricing. The sales pipeline reflects continued deployment of smart
water projects globally.
- The company remains focused on
enhancing operational processes, including its manufacturing and
supply chain strategy, R&D efficiency and exiting non-core
businesses. Itron is on track to fully realize $40 million of
annual savings in 2017 resulting from its restructuring plan
previously announced in Nov. 2014.
Financial Outlook – Full Year 2016
The company believes that its core operational results are on
track with prior financial guidance for fiscal year 2016.
Consistent with company practices, Itron will update guidance as
part of its second quarter financial results conference call.
Ongoing Accounting Review of Revenue Recognition from
Software Contracts
As previously announced, Itron delayed the filing of its Form
10-K for the year ended Dec. 31, 2015 and is conducting a review of
revenue recognition for certain software and maintenance contracts.
The company’s review is ongoing. Itron is working to conclude its
analysis and the review of the company’s analysis by its
independent auditor, Ernst & Young LLP, as soon as reasonably
practicable. The extended time is required to complete complex
accounting analyses on a large number of software contracts from
2015 and prior years and to quantify any necessary period-to-period
adjustments to revenue and costs.
Due to the ongoing accounting review, the company will not be
able to file its report on Form 10-Q for the first quarter ended
March 31, 2016 in a timely manner. Itron will file a Form 12b-25,
Notification of Late Filing, with the U.S. Securities and Exchange
Commission (SEC) relating to the company’s Form 10-Q for the first
quarter. As a result of this delay, Itron expects to receive an
additional notice from The Nasdaq Stock Market (“NASDAQ”)
indicating that it is not currently in compliance with NASDAQ
Listing Rule 5250(c)(1). Under NASDAQ Listing Rules, Itron will
submit a plan to NASDAQ no later than May 16, 2016 to support its
request for an extension to regain compliance with the Listing
Rules by filing its Form 10-K for the year ended Dec. 31, 2015 and
its Form 10-Q for the quarter ended March 31, 2016. If the plan is
accepted, NASDAQ can grant an exception of up to 180 calendar days,
or until Sept. 12, 2016, for the company to regain compliance.
Itron believes that this notice and the company’s non-compliance
with NASDAQ Listing Rule 5250(c)(1) will have no immediate effect
on the listing or trading of Itron’s common stock on the NASDAQ
Global Select Market.
About Itron
Itron is a world-leading technology and services company
dedicated to the resourceful use of energy and water. We provide
comprehensive solutions that measure, manage and analyze energy and
water. Our broad product portfolio includes electricity, gas, water
and thermal energy measurement devices and control technology;
communications systems; software; as well as managed and consulting
services. With thousands of employees supporting nearly 8,000
customers in more than 100 countries, Itron applies knowledge and
technology to better manage energy and water resources. Together,
we can create a more resourceful world. Join us: www.itron.com.
Itron® is a registered trademark of Itron, Inc.
Forward-Looking Statements
This release contains forward-looking statements concerning our
expectations about operations, financial performance, sales,
earnings and cash flows. These statements reflect our current plans
and expectations and are based on information currently available.
The statements rely on a number of assumptions and estimates, which
could be inaccurate, and which are subject to risks and
uncertainties that could cause our actual results to vary
materially from those anticipated. Risks and uncertainties include
the timing and ability to regain compliance with the reporting
obligations of the Securities and Exchange Commission within any
exemption period granted by NASDAQ, 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
December 31, 2014 and other reports on file with the Securities and
Exchange Commission. Itron undertakes no obligation to update
publicly or revise any forward-looking statements, including our
business outlook.
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version on businesswire.com: http://www.businesswire.com/news/home/20160503006956/en/
Itron, Inc.Barbara Doyle, 509-891-3443Vice President, Investor
RelationsorMarni Pilcher, 509-891-3847Director, Investor
Relations
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