Itron Inc.: Q3 Results

Die untenstehende Meldung ist eine Original-Meldung des Unternehmens. Sie ist nicht von der ECOreporter.de-Redaktion bearbeitet. Die presserechtliche Verantwortlichkeit liegt bei dem meldenden Unternehmen.

Liberty Lake, Wash- Itron, Inc. (NASDAQ:ITRI) reported financial results for its third quarter and nine months ended September 30, 2010. Highlights include:

•    Record quarterly and nine month revenues of $576 million and $1.6 billion;
•    Record quarterly and nine month non-GAAP diluted EPS of $1.06 and $3.06;
•    Record nine month cash flow from operations and free cash flow of $167.1 million and $121.6 million;
•    Record quarterly and nine month adjusted EBITDA of $89 million and $239 million;
•    Twelve-month backlog of $958 million and total backlog of $1.7 billion; and
•    Quarterly bookings of $528 million.

“Our growth this quarter has been driven by our smart solutions for electric, gas and water utilities. Itron’s investments and innovation are paying off with outstanding results,” said Malcolm Unsworth, president and CEO. “Our global backlog remains robust thanks to our balanced portfolio of products. We are excited about the potential for additional projects in North America and very pleased to see the continued momentum in Europe and other parts of the world towards the adoption of smart technologies.”

Operations Highlights:
Revenues:

Total Company - Total revenues of $576 million for the third quarter of 2010 and $1.6 billion for the first nine months of 2010 were 41% and 36% higher than respective 2009 revenues of $408 million and $1.2 billion.
North America - Revenues of $315 million for the third quarter and $862 million for the first nine months of 2010 were 130% and 105% higher than respective 2009 revenues of $137 million and $420 million. The increase in revenues in 2010 was primarily driven by higher shipments of smart meters and modules. During the third quarter of 2010, we shipped 1.3 million OpenWay units.
International - Revenues of $261 million for the third quarter of 2010 were $10 million, or 4%, lower than the comparable 2009 period revenues of $271 million. Although meter volumes were higher, revenues were lower due to changes in foreign exchange rates. Revenues of $783 million for the first nine months of 2010 were $8 million lower than the same period in 2009 with lower volumes due to economic conditions in certain markets.
Gross Margins:
Total Company - Gross margins of 32.0% for the third quarter and 31.6% for the first nine months of 2010 were comparable to 2009 gross margins of 31.7% and 32.4%.

North America – The gross margin of 35.5% for the quarter was higher than the 31.0% gross margin in the third quarter of 2009. The increase was due to manufacturing efficiency improvements resulting from higher volumes and cost reduction efforts. The gross margin for the first nine months of 2010 was 34.2% compared to 34.5% in the same period in 2009. An increase in compensation costs due to reinstating annual incentive plans in 2010 was offset by manufacturing efficiency improvements due to higher volumes and cost reduction efforts.
International - Gross margins of 27.8% for the quarter and 28.7% for the first nine months of 2010 were lower than 2009 gross margins of 32.1% and 31.3%. The decrease in margins was due primarily to increased warranty, facility consolidation and material costs.
Operating Expenses:

Total Company - Operating expenses of $123 million for the third quarter and $372 million for the first nine months of 2010 were higher than the 2009 periods of $120 million and $362 million.
North America - Operating expenses were $47 million for the third quarter and $139 million for the first nine months of 2010 compared with $44 million and $132 million for the same periods of 2009. The increase in operating expenses was primarily due to expenses in the current period associated with the reinstatement of annual incentive compensation plans in 2010 and higher sales and marketing and product development expenses. These increases were partially offset by a scheduled decrease in amortization of intangibles expense.
International - Operating expenses for the third quarter 2010 of $65 million were $5 million lower than $70 million in the third quarter of 2009. The decrease was due to foreign exchange rates and lower amortization of intangibles, partially offset by increases in other operating expenses. Operating expenses for the first nine months of 2010 were $201 million compared with $207 million for the same period of 2009. Decreases in operating expenses were due to decreased amortization of intangibles expense partially offset by increases in other operating expenses.
Corporate Unallocated - Corporate unallocated expenses were $11 million for the third quarter and $32 million for the first nine months of 2010 compared with $7 million and $23 million in the same periods of 2009. The increase in 2010 was primarily due to higher compensation expense.

Other Income/Expense:

Net Interest Expense – Net interest expense of $13 million for the third quarter and $42 million for the first nine months of 2010 compared with $20 million and $53 million for the same periods of 2009. Amortization of debt placement fees, which is included in net interest expense, was $1.4 million for the third quarter and $4.1 million for the first nine months of 2010 compared with $4.1 million and $6.2 million in the respective 2009 periods. Amortization of debt placement fees varies depending on the amount of debt repayments made in a given period. During the first nine months of 2010, we made approximately $107 million in debt repayments compared with $236 million in the same period of 2009.
Loss on Extinguishment of Debt – The results for the first nine months of 2009 included a $12.8 million net loss on the extinguishment of debt related to a convertible debt for common stock exchange. The difference in the value of the shares of Itron’s common stock issued under the exchange agreement and the value of the shares used to derive the amount payable under the original conversion agreement resulted in the net loss on extinguishment of debt.
Other Income/Expense – Other expense was $4.4 million in the third quarter of 2010 compared with $4.5 million in 2009. Other expense for the first nine months of 2010 was $5.4 million compared with $9.4 million in the 2009 period. The 2010 periods included lower foreign exchange losses than the 2009 periods. The foreign exchange losses were caused by fluctuations in exchange rates for material purchases and related product sales denominated in different currencies. Additionally, the 2009 periods included consulting and legal fees associated with an amendment to our senior debt agreement.

GAAP Measures:

GAAP Income Taxes – We had a tax expense of $14.7 million in the third quarter of 2010 compared with a benefit of $15.1 million in the third quarter of 2009. For the first nine months of 2010, we had a tax expense of $17.1 million compared with a benefit of $37.5 million in the same period of 2009. The 2010 year-to-date tax expense includes an $8.7 million tax benefit recorded in the first quarter which was due primarily to the receipt of a clean energy manufacturing tax credit and the reduction of tax reserves for certain foreign subsidiaries. The tax provision reflected in the first nine months of 2010 is derived from our estimated tax rate for the full year.

GAAP Net Income and Diluted EPS – Our GAAP net income and diluted EPS for the third quarter and first nine months of 2010 were $29.1 million, or 71 cents per share, and $82.8 million, or $2.02 per share. This compares with net losses of $3.0 million, or 7 cents per share, and $7.4 million, or 19 cents per share in the same periods in 2009. The increase in 2010 net income was primarily due to higher operating income in our North America segment.

Non-GAAP Measures:

Non-GAAP Operating Income – Non-GAAP operating income, which excludes amortization expense related to intangible assets, was $78.3 million, or 13.6% of revenues, in the third quarter and $198.6 million, or 12.1% of revenues, for the first nine months of 2010. This compares with $34.1 million, or 8.4% of revenues, and $102.5 million, or 8.5% of revenues, in the third quarter and first nine months of 2009. The increased operating income was primarily due to increased contribution from North America.

Non-GAAP Income Taxes – We had a non-GAAP tax rate of 32.7% for the third quarter and a rate of 23.2% for the first nine months of 2010. The rate for the first nine months includes the effect of a 4% tax benefit recorded in the first quarter of 2010 due primarily to the receipt of a clean energy manufacturing tax credit and the reduction of tax reserves for certain foreign subsidiaries. We had a non-GAAP tax benefit in the third quarter of 2009 and our year-to-date 2009 non-GAAP tax rate was 4.5%. The tax provision reflected in the first nine months of 2010 is derived from our estimated non-GAAP tax rate for the full year.
Non-GAAP Net Income and Diluted EPS – Non-GAAP net income, which excludes amortization expenses related to intangible assets, amortization of debt placement fees, the amortization of convertible debt discount, and the non-cash net loss associated with the convertible debt for stock exchange, was $43.5 million in the third quarter and $125.2 million for the first nine months of 2010. This compares with $18.2 million and $49.0 million in the 2009 periods. Non-GAAP diluted EPS was $1.06 and $3.06 in the third quarter and first nine months of 2010 compared with 45 cents and $1.28 in the same periods of 2009. Fully diluted shares outstanding for the first nine months of 2010 were 2.6 million shares higher than the same period in 2009 primarily due to the convertible debt for stock exchange in the first quarter of 2009 and the equity offering in the second quarter of 2009.

Other Financial Highlights:

Backlog and New Order Bookings: Total backlog was $1.7 billion at September 30, 2010 compared with $1.6 billion at September 30, 2009. Twelve month backlog of $958 million at September 30, 2010 was higher than the $749 million at September 30, 2009. New order bookings for the third quarter of 2010 were $528 million, compared with $400 million in the third quarter of 2009. Our book-to-bill ratios were .92 to 1 and .98 to 1 for the third quarter of 2010 and 2009, respectively.
Cash Flows from Operations and Financial Condition: Net cash provided by operating activities during the first nine months of 2010 was $167.1 million, compared with $87.1 million in the same period in 2009. Adjusted earnings before interest, taxes, depreciation, amortization and the non-cash net loss on the extinguishment of debt (adjusted EBITDA) in the third quarter of 2010 was $89 million compared with $41 million for the same period in 2009. Adjusted EBITDA for the first nine months of 2010 was $239 million compared with $131 million in the first nine months of 2009. Free cash flow for the first nine months of 2010 was $121.6 million compared with $49.1 million in the same period in 2009. Cash and equivalents were $148 million at September 30, 2010 compared with $122 million at December 31, 2009. The $215.7 million outstanding balance on our convertible senior subordinated notes is included in current portion of long term debt as of September 30, 2010 due to the combination of put, call and conversion options occurring within the next 12 months.

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 income, non-GAAP net income and 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 costs, particularly those associated with acquisitions. We exclude certain infrequent costs, particularly those associated with acquisitions, 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. Finally, 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.

Earnings Conference Call:

Itron will host a conference call to discuss the financial results contained in this release at 2:00 p.m. (PDT) on October 27, 2010. The call will be webcast in a listen only mode and can be accessed online at www.itron.com, “Investors/Investor Events.” The live webcast will begin at 2:00 p.m. (PDT). The webcast replay will begin after the conclusion of the live call and will be available for two weeks. A telephone replay of the call will also be available approximately one hour after the conclusion of the live call, for 48 hours, and is accessible by dialing (888) 203-1112 (Domestic) or (719) 457-0820 (International), entering passcode #4037712. You may also view presentation materials related to the earnings call on Itron’s website at www.itron.com under Investors / Presentations.

About Itron:

At Itron, we’re dedicated to delivering end-to-end smart grid and smart distribution solutions to electric, gas and water utilities around the globe. Our company is the world’s leading provider of smart metering, data collection and utility software systems, with nearly 8,000 utilities worldwide relying on our technology to optimize the delivery and use of energy and water. Our offerings include electricity, gas, water and heat meters; network communication technology; collection systems and related software applications; and professional services. To realize your smarter energy and water future, start here: www.itron.com.
Statements of operations, segment information, balance sheets, cash flow statements and reconciliations of non-GAAP financial measures to the most directly comparable 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,
              2010                     2009                     2010                     2009       

Revenues         $     575,968             $     408,358             $     1,644,708             $     1,210,624     
Cost of revenues               391,761                     278,879                     1,125,282                     818,452       
Gross profit             184,207                 129,479                 519,426                 392,172     

Operating expenses                                 
Sales and marketing             41,197                 37,669                 123,708                 112,569     
Product development             34,038                 31,077                 100,100                 93,044     
General and administrative             30,710                 26,606                 97,052                 84,097     
Amortization of intangible assets               16,882                     25,121                     51,459                     72,788       
Total operating expenses               122,827                     120,473                     372,319                     362,498       

Operating income             61,380                 9,006                 147,107                 29,674     
Other income (expense)                                 
Interest income             166                 (45     )             444                 971     
Interest expense             (13,328     )             (20,075     )             (42,216     )             (53,319     )
Loss on extinguishment of debt, net             -                 (2,460     )             -                 (12,800     )
Other income (expense), net               (4,423     )               (4,534     )               (5,440     )               (9,445     )
Total other income (expense)               (17,585     )               (27,114     )               (47,212     )               (74,593     )

Income (loss) before income taxes             43,795                 (18,108     )             99,895                 (44,919     )
Income tax (provision) benefit               (14,687     )               15,146                     (17,100     )               37,517       
Net income (loss)         $     29,108               $     (2,962     )         $     82,795               $     (7,402     )


Earnings (loss) per common share-Basic         $     0.72               $     (0.07     )         $     2.05               $     (0.19     )
Earnings (loss) per common share-Diluted         $     0.71               $     (0.07     )         $     2.02               $     (0.19     )


Weighted average common shares outstanding-Basic             40,400                 40,039                 40,307                 38,003     
Weighted average common shares outstanding-Diluted             40,828                 40,039                 40,950                 38,003     

ITRON, INC.
SEGMENT INFORMATION

(Unaudited, in thousands)

        Three Months Ended September 30,         Nine Months Ended September 30,
              2010                     2009                     2010                     2009       
Revenues                                 
Itron North America         $     315,335             $     137,351             $     861,607             $     419,658     
Itron International               260,633                     271,007                     783,101                     790,966       
Total Company         $     575,968               $     408,358               $     1,644,708               $     1,210,624       

Gross profit                                 
Itron North America         $     111,858             $     42,524             $     294,880             $     144,737     
Itron International               72,349                     86,955                     224,546                     247,435       
Total Company         $     184,207               $     129,479               $     519,426               $     392,172       

Operating income (loss)                                 
Itron North America         $     64,581             $     (1,188     )         $     155,892             $     12,459     
Itron International             7,652                 17,319                 23,314                 40,018     
Corporate unallocated               (10,853     )               (7,125     )               (32,099     )               (22,803     )
Total Company         $     61,380               $     9,006               $     147,107               $     29,674       


METER AND MODULE SUMMARY
(Units in thousands)         
        Three Months Ended September 30,         Nine Months Ended September 30,
              2010                     2009                     2010                     2009       
Total meters (with and without AMR/AMI)                                 
Itron North America                                 
Electricity             1,800                 740                 4,990                 2,340     
Gas             160                 90                 420                 260     
Itron International                                 
Electricity             2,020                 1,890                 5,590                 5,670     
Gas             940                 1,160                 2,940                 3,880     
Water               2,290                     1,960                     6,960                     6,540       
Total meters               7,210                     5,840                     20,900                     18,690       

Additional meter information (Total Company)                                 
Meters with AMR             1,110                 670                 2,830                 2,200     
Meters with AMI             1,130                 120                 2,990                 220     
Standalone AMR/AMI modules               1,620                     850                     4,410                     2,860       
Meters with AMR/AMI and modules               3,860                     1,640                     10,230                     5,280       

Meters with other vendors' AMR/AMI               130                     160                     390                     470       

ITRON, INC.
CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

        September 30, 2010         December 31, 2009
ASSETS                 
Current assets                 
Cash and cash equivalents         $     148,114             $     121,893
Accounts receivable, net             383,814                 337,948
Inventories             225,765                 170,084
Deferred tax assets current, net             22,965                 20,762
Other current assets               72,371                     75,229
Total current assets             853,029                 725,916

Property, plant, and equipment, net             302,306                 318,217
Prepaid debt fees             5,704                 8,628
Deferred tax assets noncurrent, net             49,612                 89,932
Other noncurrent assets             16,298                 18,117
Intangible assets, net             315,756                 388,212
Goodwill               1,236,583                     1,305,599
Total assets         $     2,779,288               $     2,854,621

LIABILITIES AND SHAREHOLDERS' EQUITY                 
Current liabilities                 
Accounts payable         $     238,095             $     219,255
Other current liabilities             59,806                 64,583
Wages and benefits payable             96,713                 71,592
Taxes payable             22,879                 14,377
Current portion of debt             226,246                 10,871
Current portion of warranty             28,232                 20,941
Unearned revenue             30,749                 40,140
Deferred tax liabilities current, net               1,669                     1,625
Total current liabilities             704,389                 443,384

Long-term debt             436,704                 770,893
Long-term warranty             24,993                 12,932
Pension plan benefits             60,013                 63,040
Deferred tax liabilities noncurrent, net             52,128                 80,695
Other long-term obligations               68,417                     83,163
Total liabilities             1,346,644                 1,454,107

Commitments and contingencies                 

Shareholders' equity                 
Preferred stock             -                 -
Common stock             1,321,287                 1,299,134
Accumulated other comprehensive income (loss), net             (1,688     )             71,130
Retained earnings               113,045                     30,250
Total shareholders' equity               1,432,644                     1,400,514
Total liabilities and shareholders' equity         $     2,779,288               $     2,854,621

ITRON, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

        Nine Months Ended September 30,
              2010                     2009       

Operating activities                 
Net income (loss)         $     82,795             $     (7,402     )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:                 
Depreciation and amortization             97,184                 113,812     
Stock-based compensation             14,222                 13,467     
Amortization of prepaid debt fees             4,219                 6,384     
Amortization of convertible debt discount             7,505                 7,262     
Loss on extinguishment of debt, net             -                 9,960     
Deferred taxes, net             711                 (51,341     )
Other adjustments, net             4,008                 1,768     
Changes in operating assets and liabilities, net of acquisitions:                 
Accounts receivable             (53,770     )             11,608     
Inventories             (57,698     )             (4,211     )
Accounts payables, other current liabilities, and taxes payable             38,139                 (2,473     )
Wages and benefits payable             26,799                 (10,404     )
Unearned revenue             (8,564     )             9,272     
Warranty             16,087                 (5,735     )
Other operating, net               (4,521     )               (4,880     )
Net cash provided by operating activities             167,116                 87,087     

Investing activities                 
Acquisitions of property, plant, and equipment             (45,507     )             (38,023     )
Business acquisitions & contingent consideration, net of cash equivalents acquired             -                 (1,317     )
Other investing, net               5,412                     4,101       
Net cash used in investing activities             (40,095     )             (35,239     )

Financing activities                 
Payments on debt             (106,524     )             (236,495     )
Issuance of common stock             7,931                 165,235     
Prepaid debt fees             (1,347     )             (3,936     )
Other financing, net               (983     )               (1,309     )
Net cash used in financing activities             (100,923     )             (76,505     )

Effect of foreign exchange rate changes on cash and cash equivalents               123                     4,988       
Increase (decrease) in cash and cash equivalents             26,221                 (19,669     )
Cash and cash equivalents at beginning of period               121,893                     144,390       
Cash and cash equivalents at end of period         $     148,114               $     124,721       

ITRON, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
TO MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES

(Unaudited, in thousands, except per share data)

        Three Months Ended September 30,         Nine Months Ended September 30,
              2010                     2009                     2010                     2009       
Non-GAAP operating income:                                 
GAAP operating income         $     61,380             $     9,006             $     147,107             $     29,674     
Amortization of intangible assets               16,882                     25,121                     51,459                     72,788       
Non-GAAP operating income         $     78,262               $     34,127               $     198,566               $     102,462       

Non-GAAP net income:                                 
GAAP net income (loss)         $     29,108             $     (2,962     )         $     82,795             $     (7,402     )
Amortization of intangible assets             16,882                 25,121                 51,459                 72,788     
Amortization of debt placement fees             1,404                 4,053                 4,063                 6,214     
Amortization of convertible debt discount             2,547                 2,367                 7,504                 7,262     
Loss on extinguishment of debt, net             -                 -                 -                 9,960     
Income tax effect of non-GAAP adjustments               (6,467     )               (10,378     )               (20,616     )               (39,831     )
Non-GAAP net income         $     43,474               $     18,201               $     125,205               $     48,991       

Non-GAAP diluted EPS         $     1.06               $     0.45               $     3.06               $     1.28       

Weighted average common shares outstanding - Diluted               40,828                     40,456                     40,950                     38,387       

Adjusted EBITDA:                                 
GAAP net income (loss)         $     29,108             $     (2,962     )         $     82,795             $     (7,402     )
Interest income             (166     )             45                 (444     )             (971     )
Interest expense             13,328                 20,075                 42,216                 53,319     
Income tax (benefit) provision             14,687                 (15,146     )             17,100                 (37,517     )
Depreciation and amortization             32,113                 39,405                 97,184                 113,812     
Loss on extinguishment of debt, net               -                     -                     -                     9,960       
Adjusted EBITDA         $     89,070               $     41,417               $     238,851               $     131,201       

Free Cash Flow:                                 
Net cash provided by operating activities         $     50,030             $     19,734             $     167,116             $     87,087     
Acquisitions of property, plant, and equipment               (17,791     )               (10,219     )               (45,507     )               (38,023     )
Free Cash Flow         $     32,239               $     9,515               $     121,609               $     49,064       

Contact:

Itron
Ranny Dwiggins
Vice President, Investor Relations
509-891-3443
ranny.dwiggins@itron.com

Aktuell, seriös und kostenlos: Der ECOreporter-Newsletter. Seit 1999.
Nach oben scrollen
ECOreporter Journalistenpreise
Anmelden
x