Press Release

Itron Announces Fourth Quarter and Full Year 2015 Financial Results

Fourth Quarter Revenues Grew 4 percent, Excluding Impact of Foreign Currencies, Record Quarterly Revenue in Gas-North America, Strong Book-to-bill Ratio of 1.7:1 in Quarter

LIBERTY LAKE, Wash. — Feb. 17, 2016 — Itron, Inc. (NASDAQ:ITRI) announced today financial results for its fourth quarter and full year ended December 31, 2015. Highlights include:

  • Quarterly and full year revenues of $490 million and $1.9 billion;
  • Quarterly and full year GAAP diluted earnings per share of 56 cents and 64 cents;
  • Quarterly and full year non-GAAP diluted earnings per share of 76 cents and $1.01;
  • Quarterly and full year adjusted EBITDA of $53 million or 11 percent, and $128 million or 7 percent;

"Itron's fourth quarter results reflect solid operating performance," said Philip Mezey, Itron's president and chief executive officer. "Highlights in the quarter included higher shipments of smart meters and modules, strong revenue growth in the Water segment, improved gross margin in Gas, robust bookings in the Electricity and Gas businesses and increased cash flow."

Mezey added, "Smart grid and smart city momentum is accelerating, creating more opportunity for Itron’s innovative solutions for this industry. Our significant backlog growth, benefits from our restructuring and efficiency projects and our Itron OpenWay Riva™ next generation platform position us well for continued revenue growth and improved profitability in 2016."

Summary of Fourth Quarter Consolidated Financial Results
(All comparisons made are against the prior year period unless otherwise noted)

Total revenue for the quarter was $490 million compared with $510 million in 2014. Changes in foreign currency exchange rates unfavorably impacted revenue by approximately $38 million for the quarter. Excluding the impact of foreign currency, revenues increased $19 million, or 4 percent, driven primarily by the Water segment which grew 13 percent on a constant currency basis.

Gross margin for the quarter increased to 31.7 percent compared with the prior year period margin of 30.3 percent. The improvement in gross margin was driven by decreased variable compensation and improved Gas gross margin.

GAAP operating income improved to $35 million for the quarter compared with an operating loss of $49 million in 2014. Net income for the quarter was $21 million, or 56 cents per diluted share, compared with a net loss of $49 million, or $1.25 per share. The increases in operating income and net income for the quarter were driven primarily by a decrease of $52 million in restructuring charges and a decrease of $23 million in variable compensation due to a reduction in planned payout. The results also reflect improved gross margin performance in the Gas business. Tax expense was recognized in the quarter compared with a net tax benefit in the prior year period, largely due to improved income.

Non-GAAP operating income improved to $44 million for the quarter compared with $29 million. Non-GAAP net income for the quarter was $29 million, or 76 cents per diluted share, compared with $14 million, or 36 cents per diluted share. The increases in non-GAAP operating and net income for the quarter were driven primarily by lower operating expenses attributable to the reduced variable compensation and higher gross margin performance in the Gas business.

Free cash flow was $43 million for the fourth quarter compared with $4 million in the prior year quarter. The increase over the prior year was driven by improved earnings and working capital.

Other Measures
Bookings in the quarter totaled $822 million. Total backlog was $1.55 billion and twelve month backlog was $833 million at year-end, an increase of 4 percent and 11.5 percent, respectively.

During the quarter, the company repurchased 88,266 shares of Itron common stock at an average price of $34.04 per share pursuant to Board authorization to repurchase up to $50 million of Itron common stock. As of Dec. 31, 2015, the company had repurchased 743,444 shares of Itron common stock at an average price of $33.63 per share since the inception of the plan in February 2015. This plan will conclude on Feb. 19, 2016.

Financial Guidance — Full Year 2016
Itron's guidance for the full year 2016 is as follows:

  • Revenue between $1.85 and $1.95 billion
  • Non-GAAP diluted EPS between $1.95 and $2.25

This guidance assumes a Euro to U.S. dollar average exchange rate of $1.10 in 2016, average shares outstanding of approximately 38 million for the year and a non-GAAP effective tax rate for the year of approximately 37 percent.

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 Time on Feb. 17, 2016. 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 A replay of the audio webcast will be made available for one year at A telephone replay of the conference call will be available through Feb. 22, 2016. To access the telephone replay, dial (888) 203-1112 (Domestic) or (719) 457-0820 (International) and enter passcode 297230.

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.

Related Documents
Itron Q4 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