iti ir deck feb 2020 v02 - seeking alpha

ITERIS CONFIDENTIAL AND PROPRIETARY INFORMATION © 2020 Iteris, Inc. All rights reserved.

Investor PresentationFebruary 2020

NASDAQ: ITI


Safe Harbor Statement

• This presentation may contain forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include the potential growth of the markets in which we compete, the development status and planned availability of new products and features, and guidance provided on future revenue, gross margins and certain operating expenses. In fact, all statements that we make or incorporate by reference in the presentation, other than statements or characterizations of historical fact, are forward-looking statements. It should be clearly understood that these forward-looking statements, and our assumptions about the factors that influence them, are based on the limited information available to us at this date. Such information is subject to change, and we may not inform you when changes occur. We undertake no obligation to revise or update publicly any forward-looking statement to reflect future events or circumstances.

• Forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those described in the statements you hear today as a result of various factors. We refer you to our Form 10-K for the year ended March 31, 2016, subsequent and forthcoming 10-Qs and other filings with the SEC, which discuss some of the important risk factors that could contribute to such differences or otherwise affect our business, results of operations and financial condition.

• For additional financial and statistical information, including the information disclosed in accordance with SEC Regulation G, please see the Investors section of our website.

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Iteris At-a-Glance

• $109M+ total revenue for TTM ending Dec. 31– 25% of Total Revenue is Recurring Revenue (ARR)

• $117M+ total net bookings for TTM ending Dec. 31

• Targeted investments in SaaS initiatives

• 440 Employees

• More than 15,000 Customers

• Strong IP – Over 75 Patents issued/pending

• HQ Santa Ana, CA

• NASDAQ: ITI

Digital Agriculture

Smart Mobility

$5.1B $1.7B

Strategic Footprint in Large and Dynamic Markets

Note: ITI fiscal year ends Mar 31

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Smart Mobility

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Iteris Smart Mobility Segments

• $102.9M TTM revenue (combined 15% segment-level OI margin)

• Market leader in emerging IoT segment

for transportation infrastructure

• 322 employees with unique multi-disciplinary expertise

• Sensor design, data analytics, image

analysis, wireless communication

• Systems integration, transportation

engineering design & planning

• Meteorology and physical sciences

• Trusted advisor to 20 countries; 50 state DOTs; 1,000s of counties & municipalities

• Expanding suite of data aggregation and

analytics solutions

• Demonstrated record of technical leadership

• >20 patents issued or submitted

• USDOT Connected Vehicle Reference

Architecture Design

• Valuable strategic partnerships (e.g., Cisco

Systems)

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Estimated Market Size and Growth

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The Smart Mobility Infrastructure Market is estimated at $5.1B in 2020 growing to $8.7B by 2025

Data derived from actual pipeline analysis, competitive research, and third-party market research

$605

$1,139

$1,050

$770

$360

$440

$550$220

$-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

Traffic Sensors & Equipment

Transportation Planning

Design & Integration

SignalOperations

TransportationAnalytics

Network Monitoring & Operations

Road Safety& Security

Commercial Vehicle

Operations

$1.8B of the 2020 TAM represents potential recurring revenue

Growth Drivers:• Aging physical infrastructure• Outdated and inadequate

technology• Significant increase in traffic

congestion and fatalities• Urbanization, growth, and

regional competition• Adoption of connected and

electric vehicles


Key Customer Challenges Drive Market Requirements

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Technology Proliferation

Technical Complexity

Inadequate Communications

InfrastructurePrivacy & Security

Skills Gap

Future-Ready

Intelligence

Plug-and-Play

Cloud-Enabled


Iteris ClearMobility™ Platform

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SERV

ICES

Management OperationsPROCESS

INTELLIGENCE

Iteris

Con

sulti

ng S

ervi

ces

3RDPa

rty

Serv

ices

APPL

ICAT

ION

S

Network Monitoring

Asset Management

Traveler Information

Transportation AnalyticsSOFTWARE

Commercial Vehicle

Operations

INFR

ASTR

UCT

URE

DATA

COMMUNICATIONCell FiberBluetooth Wi-FiN

ETW

ORK

5G

DAS

HBO

ARD

S

Multi-Modal Analysis • Hot Spot Analysis • Weather Analysis Traffic Intelligence • Intersection Intelligence • Corridor Intelligence • Network Intelligence

Commercial Vehicle Operations

Roadway Sensors Other Equipment

Clou

d En

able

d

Other Data Feeds

Mesh


Iteris ClearMobility™ Platform

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• Context aware intelligence provides critical smart mobility insights

• Managed services operate mission critical workflow on-premise or remote

• Apps analyze large data sets to support key operations and planning activities

• Design and integration services connect intersections to the Cloud and each other for visibility to entire network

• State-of-the-art sensors provide complete view of the transportation network

Management Operations

Network Monitoring

Asset Management

Traveler Information

Transportation Analytics

Commercial Vehicle

Operations

Cell FiberBluetooth Wi-Fi 5G

Roadway Sensors Other Equipment Other Data Feeds

Mesh

Multi-Modal Analysis • Hot Spot Analysis • Weather Analysis Traffic Intelligence • Intersection Intelligence • Corridor Intelligence • Network Intelligence

Commercial Vehicle Operations


The Iteris Advantage

Most future-ready product and service portfolio leverages decade plus experience managing US DOT’s CAV reference architecture

Advanced analytics reflect a unique combination of technical skills, domain knowledge, and big data expertise

Recognized best-of-breed products and services that can be bundled together effortlessly to create end-to-end solutions

Cloud approach enables customers to leverage their legacy investments, realize operating efficiencies, and enhance performance of transportation network

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Future-Ready

Intelligence

Plug-and-Play

Cloud-Enabled


Iteris Smart Mobility Strategic Objectives

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Streamline / automate workflow

Sustain double digit revenue growth

Increase share of recurring revenue

Expand operating margin

Increase scale of operation


Digital Agriculture


is helping Companies unlock the value of ‘E’ in their Digital Ag transformation

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is pioneering the Environmental

piece in this transformation

Digital Ag is transforming the world of Agriculture

through Data Science

across all 3 key factors

Genetics

Management Environment


Applying E-Intelligence to Gain Insight

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OPERATIONS INSIGHTS

PRODUCT INSIGHTS

LOCATIONS INSIGHTS

AGRONOMIC INSIGHTS

SOIL CONDITIONS

WEATHER CONDITIONS

SENSOR INTEGRATION

ENVIRONMENTAL CONDITIONS

ENVIRONMENTAL DATA

PRE-PACKAGED MODELS

INDICES & NOTIFICATIONS

‘E’ IMPACT ANALYSIS

MODEL CREATION OR ENHANCEMENT


International, Multi-Channel Customer Base

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Seed & Crop Protection

Farm ManagementInformation Systems

Ag Services

Select Customers by Business Category

Allied DataProviders


Our Digital Ag Strategic Priorities

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Pursue all options to maximize shareholder value

Achieve breakeven performance

Continue to increase account penetration

Continue to promote pre-packaged models

Further develop leadership in E-Intelligence space


Financials


Financial Objectives

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Double digit revenue growth

Increased mix of annual recurring revenue

Operating margin and adjusted EBITDA margin positive

Disciplined capital allocation to drive higher return on invested capital

Convert >100% of GAAP net income to cash starting in FY21 (begins April 2020)


Summary

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Business Model Improvements

Strategic footprint

Improved revenue predictability AND

Positive cash flow from operations in FY21

Unique, highly valuable expertise

Favorable secular trends

Double digit revenue growth with increasing mix of ARR


Thank You.

NASDAQ: ITI


Appendix


Key Statistics

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Trading Data (at 2-3-20)

Stock Price $5.1152 Week Low/High $3.81/$6.69

Avg. Daily Vol. (3 mos.) 143,187

Shares Outstanding 40.6M

Public Float, est. 93%

Institutional Holdings 48%

Market Cap $208M

Financial Highlights (at 12-31-19)

Total Revenue (ttm) $109.3MCash & Equivalents $10.2MShort-term Investments $17.1MTotal Assets $102.1MTotal Debt $0.0MTotal Liabilities $40.1MCash & Short-term Investments Per Share $0.67

Source: Capital IQ. ITI fiscal year ends Mar 31.


Balance Sheet (at 3/31/19)

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EBITDA

$11.8

$18.7 $18.7

$20.4

$22.0

$16.0

$18.2

$15.5

$9.0

$3.0

$0.6$0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19

Cash, Cash Equivalents & Short-term Investments ($Millions)

Cash & Equiv. Bank Debt

Cash from Operations

$Millions FY 15 FY 16 FY 17 FY 18 FY 19

EBITDA $(1.0) $(2.1) $(3.6) $(3.8) $(5.9)

$Millions FY 15 FY 16 FY 17 FY 18 FY 19

Cash from

operations$3.6 $(4.1) $2.9 $(0.3) $(5.8)

As of 12/31/19, Cash & Equivalents + Short-term Investments = $27.4M

iti ir deck feb 2020 v02 - seeking alpha

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