Press Release

Itron Announces First Quarter 2015 Financial Results

LIBERTY LAKE, Wash.—May 4, 2015—Itron, Inc. (NASDAQ:ITRI) announced today financial results for its first quarter ended March 31, 2015. Highlights include:

  • Quarterly revenues of $448 million, inclusive of an unfavorable foreign currency impact of $44 million;
  • Quarterly GAAP net earnings per share of 13 cents;
  • Quarterly non-GAAP diluted earnings per share of 20 cents;
  • Quarterly adjusted EBITDA of $29 million;
  • Twelve-month backlog of $779 million and total backlog of $1.4 billion; and
  • Quarterly bookings of $424 million.

"I was encouraged by our results for the quarter, particularly the revenue growth and improved operational performance in the Electricity segment, along with the sequential improvement in the Gas segment's gross margin," said Philip Mezey, Itron's president and chief executive officer. "The improvement in Electricity offset lower margins in the Water and Gas segments compared with last year. Progress on operating efficiency initiatives and growth in our 12-month backlog reinforces our confidence in our outlook for the remainder of the year."

Financial Results
Revenues were $448 million for the quarter compared with $475 million in the same period in 2014. Changes in foreign currency exchange rates unfavorably impacted revenues by approximately $44 million for the quarter. Excluding the impact from foreign currency, revenues increased $17 million, or 4 percent, compared with the prior year quarter. This increase was driven by growth in the Electricity segment, which offset a decrease in the Gas segment. The Water segment was consistent with the prior year period.

Gross margin for the quarter was 30.8 percent compared with the prior year period margin of 32.5 percent. The decrease in gross margin was primarily due to unfavorable product mix and increased warranty expense in both the Gas and Water segments, which was partially offset by improved performance in the Electricity segment.

GAAP operating expenses were $125 million in the quarter compared with $150 million in the same period last year. The decrease was primarily driven by lower restructuring expense and a favorable impact of $15 million from changes in foreign currency exchange rates.

GAAP operating income for the quarter was $14 million compared with $5 million in the same period of 2014. The increase was driven primarily by decreased operating expenses. GAAP net income for the quarter was $5 million, or 13 cents per diluted share, compared with a net loss of $254,000, or 1 cent per share in the 2014 period. The increase in GAAP net income was driven by higher operating income and a decrease in other expenses related to foreign currency exchange gains and losses, partially offset by a higher tax rate driven primarily by a valuation allowance for certain deferred tax assets.

Non-GAAP operating expenses, which exclude amortization of intangibles, restructuring charges, acquisition related expenses and goodwill impairment, were $120 million for the quarter compared with $132 million in the prior year quarter. The decrease was primarily driven by changes in foreign currency exchange rates.

Non-GAAP operating income was $18 million for the quarter compared with $23 million in the same period in 2014. The decrease in non-GAAP operating income was primarily driven by lower gross profit. Non-GAAP net income and diluted earnings for the quarter were $8 million, or 20 cents per share, compared with $12 million, or 31 cents per share in the prior year quarter. The decrease in non-GAAP net income was driven by lower gross profit and a higher tax rate driven primarily by a valuation allowance on certain deferred tax assets. This decrease was partially offset by lower other expenses related to foreign currency exchange gains and losses. Currency translation unfavorably impacted non-GAAP earnings by 3 cents per diluted share compared with prior year.

Free cash flow for the quarter was negative $13 million compared with a positive $58 million in the first quarter of 2014. Free cash flow in the quarter was impacted by a number of significant cash payments scheduled during the quarter, including tax payments, settlement of a legal matter, variable compensation disbursements and restructuring payments.

In January, the company repurchased 335,251 shares of common stock at an average price of $39.62, which fully utilized the $50 million authorized under the 2014 share repurchase plan. On a cumulative basis, the company repurchased approximately 1.2 million shares under this plan. In February 2015, the Board authorized a new plan to repurchase up to $50 million of Itron common stock during a 12 month period. During the quarter, the company repurchased 84,000 shares of common stock at an average price of $36.41 per share under the 2015 plan.

Earnings Conference Call:
Itron will host a conference call to discuss the financial results contained in this release at 5 p.m. Eastern Daylight Time (EDT) on May 4, 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 are accessible on Itron's website at 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 A telephone replay of the conference call will be available through May 9, 2015. To access the telephone replay, dial 888-203-1112 (Domestic) or 719-457-0820 (International) and enter passcode 7661917.

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.

Related Documents:
Itron Q1 2015 Earnings Statement.

About Itron

Itron enables utilities and cities to safely, securely and reliably deliver critical infrastructure solutions to communities in more than 100 countries. Our portfolio of smart networks, software, services, meters and sensors helps our customers better manage electricity, gas and water resources for the people they serve. By working with our customers to ensure their success, we help improve the quality of life, ensure the safety and promote the well-being of millions of people around the globe. Itron is dedicated to creating a more resourceful world. Join us:

Itron® is a registered trademark of Itron, Inc. All third-party trademarks are property of their respective owners and any usage herein does not suggest or imply any relationship between Itron and the third party unless expressly stated.


Alison Mallahan

Senior Manager, Corporate Communications

(509) 891-3802


David Means

Director, Investor Relations

(737) 242-8448