Santa Ana-based Iteris Inc., which provides high-tech systems and sensors to improve traffic flow, is looking for chip suppliers in addition to Intel Corp. to help overcome supply chain disruptions.
The company (Nasdaq: ITI) on June 1 reported revenue for the fiscal year ended March 31 climbed 14% to $133.6 million, despite supply chain disruptions. It also forecast fiscal 2023 revenue may climb to $147 million to $155 million, which implies a 13% growth at the midpoint. Both its fourth-quarter results and FY23 forecast topped analysts’ consensus estimates, sending the shares up 12% on June 2.
The higher revenue comes even though Iteris is scrambling to get chips from supplier Intel.
Iteris “still can’t get enough” chips from the Santa Clara-based company, so it’s identified alternative chip providers, CEO Joe Bergera told the Business Journal on June 2.
The company has redesigned some circuit boards “so that we can replace the Intel chips in some cases with alternative chips provided by other manufacturers.”
Iteris provides a technology ecosystem to make traffic systems more efficient. Delivered through its ClearMobility Platform, the company’s cloud-enabled end-to-end systems monitor, visualize and optimize mobility infrastructure.
That includes traffic detection, connected vehicles, traffic and incident data, asset management and congestion management, among other functions.
Iteris, which was based in Santa Ana, late last year moved its headquarters to Austin, Texas.
However, the Santa Ana office, which has 150 of the company’s 450 employees, also includes CEO Bergera and core location for Product and Commercial Operations.
25% Share Decline
Company executives are clearly unhappy with its stock price, which has declined about 60% since its 52-week high last July of $7.77. Iteris, which has an approximately $133 million market cap, on June 1 announced a $10 million share buyback program even though it has only has $23.7 million in cash on hand as of March 31.
“The stock buyback program demonstrates our confidence in the future growth of the company and the undervalued price of our stock” Chief Financial Officer Douglas Groves said in a statement.
Bergera said the $1.2 trillion federal infrastructure law “creates a really nice tailwind for our business.”
“That’s probably the single biggest opportunity in the near to medium term,” according to Bergera. “The mobility and infrastructure market are very healthy.”
He says Iteris should be “fairly immunized’ from any economic downturn that may be in the offing.
Geographically, California is the largest customer through the contracts are spread out across municipalities.
“We work with pretty much every major city across the state.” Bergera added that the Orange County Transportation Authority is “one of our larger customers.”
Texas, Virginia and Florida are probably the other three largest customers, operating through state agencies, he said.
Supply Chain
The company also estimates growing profits this year, predicting its adjusted EBITDA will be 5% to 6% of 2023 revenue, which implies $7.4 million to $9.3 million, up from $4.5 million in the prior year. The company warned the forecast assumes gradual improvements related to global supply chain disruptions.
“We continued to experience strong customer demand for Iteris’ ClearMobility Platform, with fourth-quarter and full-year bookings growing 27% and 28%, respectively, year-over-year,” Bergera said.
“We’ve been making a lot of strategic investments in our product portfolio and our underlying platforms.”
Orange County has become a hub for telematics firms that can tell companies where their vehicles are at any given time.
Other notable firms are Irvine-based firms CalAmp, Advantage GPS, Teletrac Navman, Spireon and Teletrac Navman, as well as Verizon Connect in Aliso Viejo.
