Itron, Inc. (NASDAQ:ITRI) announced today financial results for
its third quarter and nine months ended Sept. 30, 2015. The results
include:
- Quarterly and nine month revenues of
$469 million and $1.4 billion;
- Strong year-over-year Electricity
revenue growth in North America of 17 percent in the quarter and 30
percent in the nine month period on a constant currency basis;
- Quarterly and nine month GAAP net
earnings per share of 33 cents and 9 cents;
- Quarterly and nine month non-GAAP net
earnings per share of 43 cents and 25 cents;
- An unfavorable tax adjustment due to a
valuation allowance on deferred tax assets in Brazil impacted per
share results by approximately 11 cents in the quarter and nine
month period;
- Quarterly and nine month adjusted
EBITDA of $42 million or 8.9 percent, and $75 million or 5.4
percent.
“Despite foreign currency headwinds, Itron’s third quarter
financial performance improved year-over-year driven by strong
growth in the Electricity segment in North America,” said Philip
Mezey, Itron president and chief executive officer. “We also
progressed on our operational improvements in the Gas and Water
segments. Importantly, we expect continued improvements in
consolidated company profitability and a lower tax rate in the
fourth quarter.”
“We continue to see strong customer opportunities involving
smarter endpoints, software analytics and services, and we are
driving innovation in these areas,” added Mr. Mezey. “At Itron
Utility Week in October, we unveiled plans for the next generation
communications system for energy and water customers. With OpenWay
Riva, we will have a single open standards-based network and
application platform for electricity, gas and water utilities --
differentiating Itron and positioning the company to deliver an
industry-leading multi-purpose network.”
”We remain focused on rigorously executing our restructuring
initiatives, which we expect to deliver $40 million of annualized
savings beginning in 2017. We are moving quickly and are on
schedule with our planned activities. Additionally, Tom Deitrich
recently joined Itron as the new chief operating officer and is
leading a comprehensive evaluation of Itron’s manufacturing and
supply chain strategies and R&D efficiency with the goal of
identifying additional operational and financial improvements. A.T.
Kearney, a global consulting firm, is supporting Tom with the
evaluation. I am confident we have the right team in place and we
are moving swiftly to deliver the value inherent in Itron for the
benefit of the company’s customers and shareholders.”
Financial Results - Quarter
Revenues were $469 million for the quarter compared with $496
million in 2014. Changes in foreign currency exchange rates
unfavorably impacted revenues by approximately $46 million for the
quarter. Excluding the impact of foreign currency, revenues
increased $19 million, or 4 percent, compared with the 2014
quarter. The increase in revenue was driven by strong sales
performance in the Electricity segment. Third quarter Electricity
segment revenues grew 17 percent in North America and 9 percent
worldwide, excluding the impact of foreign currency.
Gross margin for the quarter increased to 31.3 percent compared
with the prior year period margin of 30.4 percent. The improvement
in gross margin was driven by the Electricity segment, which
benefited from increased volumes and lower costs on an OpenWay
project in North America.
GAAP operating expenses in the quarter were $120 million
compared with $134 million in same period of 2014. Changes in
foreign currency exchange rates favorably impacted GAAP expenses by
approximately $12 million in the quarter. Excluding the impact of
foreign currency, expenses in the quarter decreased $3 million
compared with the prior year quarter. The decrease was the result
of lower general and administrative costs driven by a recovery of
$3.4 million from a litigation matter associated with the 2012
SmartSynch acquisition as well as lower intangible asset
amortization expense, partially offset by increased product
development investments.
GAAP operating income for the quarter improved to $27 million
compared with operating income of $16 million in the same period of
2014. GAAP net income for the quarter was $13 million, or 33 cents
per diluted share, compared with net income of $7 million, or 19
cents per diluted share. The increase in operating and net income
for the quarter was primarily attributable to improved performance
in the Electricity segment, which was partially offset by an
increased tax rate due to a valuation allowance applied to deferred
tax assets in Brazil.
Non-GAAP operating expenses, which exclude amortization of
intangibles, restructuring charges, acquisition related expenses
and goodwill impairment, were $115 million for the quarter compared
with $123 million in the prior year quarter. Changes in foreign
currency exchange rates favorably impacted non-GAAP expenses by
approximately $11 million in the quarter. Excluding the foreign
currency impact, expenses increased by $3 million driven by
increased product development investments and higher general and
administrative expenses related to severance costs.
Non-GAAP operating income improved to $32 million for the
quarter compared with $28 million in the same period in 2014.
Non-GAAP net income for the quarter was $17 million, or 43 cents
per diluted share, compared with $15 million, or 39 cents per
diluted share, in the prior year quarter. The increase in non-GAAP
operating and net income for the quarter was primarily attributable
to improved performance in the Electricity segment, which was
partially offset by an increased tax rate due to a valuation
allowance applied to deferred tax assets in Brazil.
Free cash flow was negative $10 million for the quarter compared
with a positive $37 million in the prior year quarter. The decrease
over the prior year was primarily due to increased inventory to
support future production requirements and timing of accounts
payable disbursements.
Financial Results – Nine Months
Revenues were $1.4 billion for the first nine months of 2015,
compared with $1.5 billion in the 2014 period. Changes in foreign
currency exchange rates unfavorably impacted revenues by $140
million for the first nine months. Excluding the impact of foreign
currency, revenues increased $67 million, or 5 percent, compared
with the 2014 period. The increase in revenues was driven by the
Electricity segment, which grew 15 percent year-over-year on a
constant currency basis. Smart meter projects drove significant
revenue in North America resulting in 30 percent growth
year-over-over, excluding the impacts of foreign currency.
Gross margin for the first nine months of 2015 was 29.1 percent
compared with 32.1 percent in 2014. Improved performance in the
Electricity segment was partially offset by increased warranty
expense, primarily due to $28.2 million of charges recorded in the
Water segment that negatively impacted gross margin by
approximately 200 basis points. In addition, lower volumes and an
unfavorable product mix in the Gas segment negatively impacted
gross margin.
GAAP operating expenses for the nine month period were $367
million compared with $415 million in the prior year period.
Changes in foreign currency exchange rates favorably impacted GAAP
expenses by approximately $39 million for the nine month period.
Excluding the impact from foreign currency, expenses in the nine
month period decreased $9 million compared with the 2014 period.
The decrease was driven by lower intangible asset amortization
expense and adjustments to restructuring reserves.
GAAP operating income for the nine month period was $37 million
compared with $53 million in the 2014 period. GAAP net income in
the first nine months was $3 million, or 9 cents per diluted share,
compared with net income of $26 million, or 67 cents per diluted
share, in the 2014 period. The decrease in GAAP net earnings
compared with the prior year period was driven by lower gross
profit in the Water and Gas segments and an increased effective tax
rate and expense as a result of valuation allowances applied to
deferred tax assets in Brazil as well as other certain
jurisdictions.
Non-GAAP operating expenses, which exclude amortization of
intangibles, restructuring charges, acquisition related expenses
and goodwill impairment, were $358 million for the nine month
period compared with $383 million in the prior year period. Changes
in foreign currency exchange rates favorably impacted non-GAAP
expenses by approximately $36 million in the nine month period.
Excluding the foreign currency impact, expenses increased due to
product development investments and higher personnel, severance and
professional service costs.
Non-GAAP operating income for the first nine months of 2015 was
$45 million compared with $86 million in the 2014 period. Non-GAAP
net income for the first nine months of 2015 was $10 million, or 25
cents per diluted share, compared with non-GAAP net income of $49
million, or $1.24 per diluted share, in the 2014 period. The
decrease in non-GAAP operating income for the nine month period was
primarily attributable to lower gross profit in the Water and Gas
segments. Non-GAAP net income was negatively impacted by a higher
effective tax rate driven primarily by the valuation allowances
applied to deferred tax assets in Brazil as well as other certain
jurisdictions.
During the first nine months of 2015, free cash flow was
negative $13 million compared with positive $84 million in the 2014
period. The decrease over the prior year was primarily due to lower
earnings and increased inventory levels.
Other Measures
Total backlog was $1.2 billion and twelve month backlog was $727
million at the end of the quarter. Bookings in the quarter totaled
$337 million, reflecting a number of smaller, diverse bookings
across many customers.
During the quarter, the company repurchased 382,403 shares of
Itron common stock at an average price of $31.62 per share pursuant
to Board authorization to repurchase up to $50 million of Itron
common stock. As of Sept. 30, 2015, the company had repurchased
655,178 shares of Itron common stock at an average price of $33.57
per share since the inception of the plan in February 2015.
Earnings Conference Call
Itron will host a conference call to discuss the financial
results and guidance contained in this release at 5 p.m. Eastern
Standard Time (EST) on Nov. 3, 2015. 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 available within 90 minutes of the conclusion of
the live call and available for one year at
http://investors.itron.com/events.cfm. A telephone replay of the
conference call will be available through Nov. 8, 2015. To access
the telephone replay, dial (888) 203-1112 (Domestic) or (719)
457-0820 (International) and enter passcode 9516999.
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 rate and timing of customer demand for our products,
rescheduling of current customer orders, changes in estimated
liabilities for product warranties, 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.
Non-GAAP Financial Information
To supplement our consolidated financial statements presented 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 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. Specifically, these non-GAAP financial
measures are provided to enhance investors’ overall understanding
of our current financial performance and our future anticipated
performance by excluding infrequent or non-cash costs, particularly
those associated with acquisitions. We exclude certain costs in our
non-GAAP financial measures as we believe the net result is a
measure of our core business. 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.
Statements of operations, segment information, balance sheets,
cash flow statements and reconciliations of non-GAAP financial
measures to the most directly comparable GAAP financial measures
follow.
ITRON, INC. CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited, in thousands,
except per share data)
Three Months Ended September 30,
Nine Months Ended September 30, 2015
2014 2015
2014 Revenues $ 469,092 $ 496,454 $ 1,387,442 $
1,460,602 Cost of revenues 322,126 345,692
983,706 992,264 Gross profit
146,966 150,762 403,736 468,338 Operating expenses Sales and
marketing 39,217 44,484 123,302 138,212 Product development 41,559
42,303 126,399 130,711 General and administrative 31,118 36,542
103,195 114,629 Amortization of intangible assets 7,869 10,917
23,730 33,096 Restructuring expense (5 ) 58 (9,686 ) (2,211 )
Goodwill impairment - - -
977 Total operating expenses 119,758
134,304 366,940 415,414
Operating income 27,208 16,458 36,796 52,924 Other income
(expense) - Interest income 180 163 440 313 Interest expense (2,799
) (3,015 ) (9,336 ) (8,837 ) Other income (expense), net
(1,120 ) (1,569 ) (3,003 ) (5,442 ) Total
other income (expense) (3,739 ) (4,421 )
(11,899 ) (13,966 ) Income before income taxes 23,469
12,037 24,897 38,958 Income tax benefit (provision) (10,144
) (4,484 ) (19,673 ) (11,679 ) Net income
13,325 7,553 5,224 27,279 Net income attributable to
non-controlling interests 630 245
1,817 966 Net income attributable to
Itron, Inc. $ 12,695 $ 7,308 $ 3,407 $ 26,313
Earnings per common share - Basic $ 0.33
$ 0.19 $ 0.09 $ 0.67 Earnings per
common share - Diluted $ 0.33 $ 0.19 $ 0.09 $
0.67 Weighted average common shares
outstanding - Basic 38,114 39,213 38,329 39,268 Weighted average
common shares outstanding - Diluted 38,358 39,493 38,591 39,516
ITRON, INC. SEGMENT INFORMATION
(Unaudited, in thousands)
Three Months
Ended September 30, Nine Months Ended September 30,
2015 2014
2015 2014 Revenues
Electricity $ 206,389 $ 203,441 $ 603,651 $ 567,414 Gas 136,588
149,276 401,063 449,707 Water 126,115 143,737
382,728 443,481 Total Company $
469,092 $ 496,454 $ 1,387,442 $ 1,460,602
Gross profit Electricity $ 56,859 $ 45,959 $
164,601 $ 141,675 Gas 45,916 53,492 133,541 168,609 Water
44,191 51,311 105,594
158,054 Total Company $ 146,966 $ 150,762 $
403,736 $ 468,338
Operating income
Electricity $ 10,575 $ (11,196 ) $ 16,875 $ (35,412 ) Gas 15,741
23,836 44,075 73,889 Water 14,290 19,157 10,876 60,319 Corporate
unallocated (13,398 ) (15,339 ) (35,030 )
(45,872 ) Total Company $ 27,208 $ 16,458 $
36,796 $ 52,924
METER AND MODULE
SUMMARY (Units in thousands)
Three Months Ended
September 30, Nine Months Ended September 30,
2015 2014 2015
2014 Meters Standard 4,100 4,800
13,540 14,130 Advanced and Smart 1,930 1,400
5,330 4,280 Total meters
6,030 6,200 18,870 18,410
Stand-alone communication modules Advanced and
Smart 1,530 1,480 4,250
4,410
ITRON, INC. CONSOLIDATED
BALANCE SHEETS (Unaudited, in thousands)
September 30, 2015 December 31, 2014
ASSETS Current assets Cash and cash equivalents $ 109,458 $
112,371 Accounts receivable, net 340,423 348,389 Inventories
214,237 154,504 Deferred tax assets current, net 35,975 39,115
Other current assets 106,059 104,307
Total current assets 806,152 758,686 Property, plant,
and equipment, net 190,295 207,789 Deferred tax assets noncurrent,
net 59,830 74,598 Other long-term assets 27,192 28,503 Intangible
assets, net 111,767 139,909 Goodwill 474,965
500,820 Total assets $ 1,670,201 $
1,710,305
LIABILITIES AND EQUITY Current
liabilities Accounts payable $ 201,450 $ 184,132 Other current
liabilities 68,140 100,945 Wages and benefits payable 93,206 95,248
Taxes payable 13,210 21,951 Current portion of debt 11,250 30,000
Current portion of warranty 40,060 21,063 Unearned revenue
44,639 43,436 Total current liabilities
471,955 496,775 Long-term debt 369,457 293,969 Long-term
warranty 14,684 15,403 Pension plan benefit liability 94,100
101,432 Deferred tax liabilities noncurrent, net 3,569 3,808 Other
long-term obligations 81,628 84,437
Total liabilities 1,035,393 995,824 Commitments and
contingencies Equity Preferred stock - - Common stock
1,246,177 1,270,045 Accumulated other comprehensive loss, net
(197,543 ) (136,514 ) Accumulated deficit (433,184 )
(436,591 ) Total Itron, Inc. shareholders' equity 615,450
696,940 Non-controlling interests 19,358
17,541 Total equity 634,808
714,481 Total liabilities and equity $ 1,670,201
$ 1,710,305
ITRON, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Nine Months Ended September 30,
2015 2014 Operating
activities Net income $ 5,224 $ 27,279 Adjustments to reconcile net
income to net cash provided by operating activities: Depreciation
and amortization 58,514 75,233 Stock-based compensation 10,879
12,703 Amortization of prepaid debt fees 1,851 1,212 Deferred
taxes, net 14,926 (9,787 ) Goodwill impairment - 977 Restructuring
expense, non-cash 1,395 - Other adjustments, net 1,877 120 Changes
in operating assets and liabilities: Accounts receivable (12,401 )
(1,576 ) Inventories (73,212 ) (23,986 ) Other current assets
(4,696 ) (5,298 ) Other long-term assets 605 (1,396 ) Accounts
payable, other current liabilities, and taxes payable (11,666 )
19,669 Wages and benefits payable 4,110 6,717 Unearned revenue
4,128 11,800 Warranty 20,280 (3,544 ) Other operating, net
(1,660 ) 6,415 Net cash provided by operating
activities 20,154 116,538 Investing activities Acquisitions
of property, plant, and equipment (33,324 ) (32,060 ) Business
acquisitions, net of cash equivalents acquired (5,754 ) - Other
investing, net 545 (193 ) Net cash used in
investing activities (38,533 ) (32,253 ) Financing
activities Proceeds from borrowings 89,709 - Payments on debt
(30,186 ) (68,750 ) Issuance of common stock 2,229 2,324 Repurchase
of common stock (35,278 ) (15,324 ) Other financing, net
1,881 2,395 Net cash provided by (used in)
financing activities 28,355 (79,355 ) Effect of foreign
exchange rate changes on cash and cash equivalents (12,889 )
(7,260 ) Decrease in cash and cash equivalents (2,913 )
(2,330 ) Cash and cash equivalents at beginning of period
112,371 124,805 Cash and cash equivalents at
end of period $ 109,458 $ 122,475
Itron, Inc.About Non-GAAP Financial
Measures
The accompanying press release contains non-GAAP financial
measures. To supplement our consolidated financial statements,
which are prepared and presented 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 and free cash flow. 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. For
more information on these non-GAAP financial measures please see
the table captioned “Reconciliations of Non-GAAP Financial Measures
to Most Directly Comparable GAAP Financial Measures.”
We use these non-GAAP financial measures for financial and
operational decision making and 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 acquired through a business acquisition
and non-recurring discrete cash and non-cash charges that are
infrequent in nature such as purchase accounting adjustments,
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 expense and non-GAAP operating income – We
define non-GAAP operating expense as operating expense excluding
certain expenses related to the amortization of intangible assets
acquired through a business acquisition, restructuring,
acquisitions and goodwill impairment. We define non-GAAP operating
income as operating income excluding the expenses related to the
amortization of intangible assets acquired through a business
acquisition, restructuring, acquisitions and goodwill impairment.
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 previous acquisitions and
restructurings. 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 expense and non-GAAP operating income versus
operating expense and operating income calculated in accordance
with GAAP. Non-GAAP operating expense and non-GAAP operating income
exclude some costs that are recurring. Additionally, the expenses
that we exclude in our calculation of non-GAAP operating expense
and non-GAAP operating income may differ from the expenses that our
peer companies exclude when they report the results of their
operations. We compensate for these limitations by providing
specific information about the GAAP amounts we have excluded from
our 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 excluding the expenses associated
with amortization of intangible assets acquired through a business
acquisition, restructuring, acquisitions, goodwill impairment and
amortization of debt placement fees. 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 and GAAP diluted
EPS.
Adjusted EBITDA – We define adjusted EBITDA as net income (a)
minus interest income, (b) plus interest expense, depreciation and
amortization of business acquisition related intangible asset
expenses, restructuring expense, acquisition related expense,
goodwill impairment and (c) exclude the tax expense or benefit. We
believe that providing this financial measure is important for
management and investors to understand our ability to service our
debt as it is a measure of the cash generated by our core business.
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.
Free cash flow – We define free cash flow as net cash provided
by 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.
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, 2015
2014 2015
2014 NON-GAAP NET INCOME & DILUTED EPS
GAAP net income $ 12,695 $ 7,308 $ 3,407 $ 26,313 Amortization of
intangible assets 7,869 10,917 23,730 33,096 Amortization of debt
placement fees 244 379 1,773 1,137 Restructuring expense (5 ) 58
(9,686 ) (2,211 ) Acquisition related expenses (3,271 ) 217 (5,554
) 795 Goodwill impairment - - - 977 Income tax effect of non-GAAP
adjustments (935 ) (3,470 ) (3,923 )
(11,048 ) Non-GAAP net income $ 16,597 $ 15,409 $
9,747 $ 49,059 Non-GAAP
diluted EPS $ 0.43 $ 0.39 $ 0.25 $ 1.24
Weighted average common shares outstanding - Diluted
38,358 39,493 38,591
39,516
ADJUSTED EBITDA GAAP net income $
12,695 $ 7,308 $ 3,407 $ 26,313 Interest income (180 ) (163 ) (440
) (313 ) Interest expense 2,799 3,015 9,336 8,837 Income tax
provision 10,144 4,484 19,673 11,679 Depreciation and amortization
19,754 24,608 58,514 75,214 Restructuring expense (5 ) 58 (9,686 )
(2,211 ) Acquisition related expenses (3,271 ) 217 (5,554 ) 795
Goodwill impairment - - -
977 Adjusted EBITDA $ 41,936 $ 39,527 $
75,250 $ 121,291
FREE CASH FLOW Net
cash provided by operating activities $ 2,587 $ 49,347 $ 20,154 $
116,538 Acquisitions of property, plant, and equipment
(12,332 ) (12,657 ) (33,324 ) (32,060 ) Free
Cash Flow $ (9,745 ) $ 36,690 $ (13,170 ) $ 84,478
NON-GAAP OPERATING INCOME GAAP operating income $
27,208 $ 16,458 $ 36,796 $ 52,924 Amortization of intangible assets
7,869 10,917 23,730 33,096 Restructuring expense (5 ) 58 (9,686 )
(2,211 ) Acquisition related expenses (3,271 ) 217 (5,554 ) 795
Goodwill impairment - - -
977 Non-GAAP operating income $ 31,801 $
27,650 $ 45,286 $ 85,581
NON-GAAP
OPERATING EXPENSE GAAP operating expense $ 119,758 $ 134,304 $
366,940 $ 415,414 Amortization of intangible assets (7,869 )
(10,917 ) (23,730 ) (33,096 ) Restructuring expense 5 (58 ) 9,686
2,211 Acquisition related expenses 3,271 (217 ) 5,554 (795 )
Goodwill impairment - - -
(977 ) Non-GAAP operating expense $ 115,165 $ 123,112
$ 358,450 $ 382,757
SEGMENT
RECONCILIATIONS Three Months Ended September 30,
Nine Months Ended September 30, 2015
2014 2015
2014 NON-GAAP OPERATING INCOME - ELECTRICITY
Electricity - GAAP operating income (loss) $ 10,575 $ (11,196 ) $
16,875 $ (35,412 ) Amortization of intangible assets 4,413 6,129
13,296 18,473 Restructuring expense (1,960 ) (89 ) (7,790 ) (8,544
) Acquisition related expenses (3,390 ) 217 (5,673 ) 748 Goodwill
impairment - - -
977 Electricity - Non-GAAP operating income (loss) $ 9,638
$ (4,939 ) $ 16,708 $ (23,758 )
NON-GAAP
OPERATING INCOME - GAS Gas - GAAP operating income $ 15,741 $
23,836 $ 44,075 $ 73,889 Amortization of intangible assets 1,950
2,612 5,865 7,982 Restructuring expense (619 ) (476 )
(1,303 ) (262 ) Gas - Non-GAAP operating income $
17,072 $ 25,972 $ 48,637 $ 81,609
NON-GAAP OPERATING INCOME - WATER Water - GAAP
operating income $ 14,290 $ 19,157 $ 10,876 $ 60,319 Amortization
of intangible assets 1,506 2,176 4,569 6,641 Restructuring expense
324 163 597 1,173 Acquisition related expenses 104
- 104 - Water - Non-GAAP
operating income $ 16,224 $ 21,496 $ 16,146 $
68,133
NON-GAAP OPERATING INCOME - CORPORATE
UNALLOCATED Corporate unallocated - GAAP operating loss $
(13,398 ) $ (15,339 ) $ (35,030 ) $ (45,872 ) Restructuring expense
2,250 460 (1,190 ) 5,422 Acquisition related expenses 15
- 15 47 Corporate
unallocated - Non-GAAP operating loss $ (11,133 ) $ (14,879 ) $
(36,205 ) $ (40,403 )
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version on businesswire.com: http://www.businesswire.com/news/home/20151103006739/en/
Itron, Inc.Barbara DoyleVice President, Investor
Relations509-891-3443orMarni PilcherDirector, Investor
Relations509-891-3847
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