LIBERTY LAKE, Wash.--(BUSINESS WIRE)--Itron, Inc. (NASDAQ:ITRI) announced today it has filed a Form 12b-25, Notification of Late Filing, with the U.S. Securities and Exchange Commission (SEC) relating to the Company’s report on Form 10-K for the period ended Dec. 31, 2015.
The Company has determined that additional time is needed to review revenue recognition on certain contracts where the Company has not been able to demonstrate Vendor Specific Objective Evidence (VSOE) of fair value for maintenance contracts associated with certain software solutions for the year ended Dec. 31, 2015. The Company also has identified deficiencies in its revenue processes and controls, the combination of which represents a material weakness. Specifically, the Company did not design and maintain effective controls to determine whether VSOE could be demonstrated for maintenance contracts associated with certain software solutions for the year ended Dec. 31, 2015. The Company is performing additional analyses, including evaluating if the current and prior periods are impacted. Itron is working with its independent auditor, Ernst & Young LLP, to address these matters.
The Company does not expect that the results finally reported will be materially different than the preliminary results announced on Feb. 17, 2016 and furnished to the SEC in the Company’s Current Report on Form 8-K dated Feb. 17, 2016. However, there is no assurance that the final results to be included in the Form 10-K will not be materially different.
The Company expects to file the Form 10-K on or before March 15, 2016, the prescribed due date under the fifteen calendar day extension period provided under Rule 12b-25 under the Securities Exchange Act of 1934.
“We are currently reviewing the timing of revenue recognition of certain agreements,” said Philip Mezey, Itron’s president and chief executive officer. “We remain committed to meeting high standards in providing timely, accurate and transparent financial reporting, and we will require additional time in order to fully complete our analysis. This review is regarding the timing of revenue recognized between periods, with no impact to cash, and no affect on our business outlook, which remains strong."
The Company also reaffirmed its financial guidance for the full year 2016. The guidance is as follows:
- Revenue between $1.85 and $1.95 billion
- Non-GAAP diluted earnings per share 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.
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.