Business Wire | Nov 4, 2021 08:30AM EDT

Itron Announces Third Quarter 2021 Financial Results

Nov. 04, 2021

LIBERTY LAKE, Wash.--(BUSINESS WIRE)--Nov. 04, 2021--Itron, Inc. (NASDAQ:ITRI) announced today financial results for its third quarter ended Sept. 30, 2021. Key results for the quarter include (compared with the third quarter of 2020):

* Revenue of $487 million, compared with $540 million; * Gross margin of 27.7%; compared with 26.5%; * GAAP net loss of $(2) million, compared with $(25) million; * GAAP loss per share (EPS) of $(0.04), compared with $(0.63); * Non-GAAP diluted EPS of $0.21, compared with $0.61; * Adjusted EBITDA of $26 million, compared with $40 million; * Free cash flow of $11 million compared with $38 million; and * Total backlog of $3.4 billion, compared with $2.8 billion.

"Despite the current component constraints that gated our third quarter results, we have been diligently executing on our strategy to drive stronger results as macro supply challenges abate," said Tom Deitrich, Itron's president and chief executive officer.

"Since our Investor Day on October 5, 2021, we announced the acquisition of SELC, growing our smart city and smart lighting solutions business. And yesterday, we announced a definitive agreement to sell our European Commercial and Industrial mechanical gas meter business; our gas stations metering and pressure regulation business; and our global gas regulator business. In conjunction with the sale, we have announced a restructuring project that drives reductions in certain locations and functional support areas."

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

Revenue Total third quarter revenue decreased 10% to $487 million, or 11%, excluding the impact of changes in foreign currency exchange rates. The decrease was primarily due to component constraints, which reduced revenue by approximately $100 million.

Device Solutions revenue decreased 14% and Networked Solutions revenue decreased 10% with the majority of the decline due to component constraints in the quarter. Outcomes revenue increased 5%.

Gross Margin Consolidated company gross margin of 27.7% increased 120 basis points from the prior year, primarily due to favorable product mix.

Operating Expenses and Operating Income GAAP operating expenses of $131 million decreased $36 million from the prior year, primarily due to lower restructuring expenses. Non-GAAP operating expenses of $119 million increased $5 million from the prior year primarily due to higher sales, general and administrative expenses, which includes higher variable compensation.

GAAP operating income of $4 million was $28 million higher than the prior year primarily due to lower operating expenses. Non-GAAP operating income of $16 million was $13 million lower than last year due to lower revenue and higher variable compensation.

Net Income (loss) and Earnings per Share The net loss attributable to Itron, Inc. for the quarter was $(2) million, or $(0.04) per diluted share, an improvement from a net loss of $(25) million, or $(0.63) per diluted share in 2020. The improvement was driven by GAAP operating income in 2021 and lower interest expense, partially offset by a higher GAAP tax rate.

Non-GAAP net income, which excludes certain charges including amortization of intangible assets, amortization of debt placement fees, debt extinguishment, restructuring, loss on sale of business, corporate transition cost, acquisition and integration, and the income tax effect of those adjustments, was $9 million, or $0.21 per diluted share, compared with $25 million, or $0.61 per diluted share, in 2020. The lower year over year results were due to lower non-GAAP operating income and a higher non-GAAP effective tax rate due to fewer discrete benefits in the period.

Cash Flow Net cash provided by operating activities was $18 million in the third quarter compared with $45 million in the same quarter of 2020. Free cash flow was $11 million in the third quarter compared with $38 million in the prior year. The year over year decrease in cash flow was primarily due to reduced non-GAAP EBITDA and lower cash inflows from working capital.

Other Measures

Total backlog was $3.4 billion and 12-month backlog was $1.4 billion, compared with $2.8 billion and $1.1 billion, respectively, in the prior year. Bookings in the quarter totaled $395 million.

Share Repurchase Program

On November 1, 2021, the Board of Directors at Itron authorized a new share repurchase program of up to $100 million of Itron's common stock over an 18-month period. Repurchases under the program will be made in the open market in accordance with applicable securities laws.

Earnings Conference Call

Itron will host a conference call to discuss the financial results and guidance contained in this release at 10 a.m. EDT on Nov. 4, 2021. 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 http://investors.itron.com/events.cfm. A replay of the audio webcast will be made available at http://investors.itron.com/events.cfm. A telephone replay of the conference call will be available through Nov. 9, 2021. To access the telephone replay, dial 888-203-1112 or 719-457-0820 and enter passcode 6979258.

About Itron

Itron(r) enables utilities and cities to safely, securely and reliably deliver critical infrastructure services 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: www.itron.com.

Itron(r) 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.

Cautionary Note Regarding Forward Looking Statements

This release contains, and our officers and representatives may from time to time make, "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical factors nor assurances of future performance. These statements are based on our expectations about, among others, revenues, operations, financial performance, earnings, liquidity, earnings per share, cash flows and restructuring activities including headcount reductions and other cost savings initiatives. This document reflects our current strategy, plans and expectations and is based on information currently available as of the date of this release. When we use words such as "expect", "intend", "anticipate", "believe", "plan", "goal", "seek", "project", "estimate", "future", "strategy", "objective", "may", "likely", "should", "will", "will continue", and similar expressions, including related to future periods, they are intended to identify forward-looking statements. Forward-looking statements rely on a number of assumptions and estimates. Although we believe the estimates and assumptions upon which these forward-looking statements are based are reasonable, any of these estimates or assumptions could prove to be inaccurate and the forward-looking statements based on these estimates and assumptions could be incorrect. Our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Actual results and trends in the future may differ materially from those suggested or implied by the forward-looking statements depending on a variety of factors. Therefore, you should not rely on any of these forward-looking statements. Some of the factors that we believe could affect our results include our ability to execute on our restructuring plan, our ability to achieve estimated cost savings, the rate and timing of customer demand for our products, rescheduling of current customer orders, changes in estimated liabilities for product warranties, adverse impacts of litigation, 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, uncertainties caused by adverse economic conditions, including, without limitation those resulting from extraordinary events or circumstances such as the COVID-19 pandemic and other factors that are more fully described in Part I, Item 1A: Risk Factors included in our 2020 Annual Report and other reports on file with the SEC. We undertake no obligation to update or revise any forward-looking statement, whether written or oral.

The impact caused by the ongoing COVID-19 pandemic includes uncertainty as to the duration, spread, severity, and any resurgence of the COVID-19 pandemic including other factors contributing to infection rates, such as reinfection or mutation of the virus, the effectiveness or widespread availability and application of vaccines, the duration and scope of related government orders and restrictions, impact on overall demand, impact on our customers' businesses and workforce levels, disruptions of our business and operations, including the impact on our employees, limitations on, or closures of, our facilities, or the business and operations of our customers or suppliers. Our estimates and statements regarding the impact of COVID-19 are made in good faith to provide insight to our current and future operating and financial environment and any of these may materially change due to factors outside our control. For more information on risks associated with the COVID-19 pandemic, please see our risk in Part I, Item 1A: Risk Factors in our 2020 Annual Report.

Non-GAAP Financial Information

To supplement our consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States (GAAP), we use certain adjusted or non-GAAP financial measures, including non-GAAP operating expense, non-GAAP operating income, non-GAAP net income, non-GAAP diluted earnings per share (EPS), adjusted EBITDA, adjusted EBITDA margin, constant currency, 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. We exclude certain costs in our non-GAAP financial measures as we believe the net result is a measure of our core business. We believe these measures facilitate operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain expense items that would not otherwise be apparent on a GAAP basis. Non-GAAP performance measures should be considered in addition to, and not as a substitute for, results prepared in accordance with GAAP. We strongly encourage investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. Our non-GAAP financial measures may be different from those reported by other companies.

ITRON, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS



(Unaudited, in thousands, except per share data)

Three Months Ended Nine Months Ended September 30, September 30,

2021 2020 2021 2020

Revenues

Product revenues $ 410,947 $ 470,658 $ 1,265,470 $ 1,437,780

Service revenues 76,002 69,526 230,465 210,413

Total revenues 486,949 540,184 1,495,935 1,648,193

Cost of revenues

Product cost of 306,168 358,297 908,923 1,072,271 revenues

Service cost of 45,818 38,636 135,130 122,588 revenues

Total cost of 351,986 396,933 1,044,053 1,194,859 revenues

Gross profit 134,963 143,251 451,882 453,334



Operating expenses

Sales, general and 71,838 64,982 221,974 215,018 administrative

Research and 46,889 46,224 147,379 148,999 development

Amortization of 8,944 11,183 26,914 33,488 intangible assets

Restructuring 958 44,462 (830 ) 41,531

Loss on sale of 2,171 380 28,274 57,295 business

Total operating 130,800 167,231 423,711 496,331 expenses



Operating income 4,163 (23,980 ) 28,171 (42,997 )(loss)

Other income (expense)

Interest income 352 354 1,326 2,165

Interest expense (2,628 ) (10,810 ) (27,107 ) (33,771 )

Other income (1,761 ) (2,607 ) (16,684 ) (3,414 )(expense), net

Total other income (4,037 ) (13,063 ) (42,465 ) (35,020 )(expense)



Income (loss) before 126 (37,043 ) (14,294 ) (78,017 )income taxes

Income tax benefit (1,136 ) 11,985 (5,581 ) (366 )(provision)

Net loss (1,010 ) (25,058 ) (19,875 ) (78,383 )

Net incomeattributable to 859 299 2,514 1,092 noncontrollinginterests

Net lossattributable to $ (1,869 ) $ (25,357 ) $ (22,389 ) $ (79,475 )Itron, Inc.



Net loss per common $ (0.04 ) $ (0.63 ) $ (0.51 ) $ (1.98 )share - Basic

Net loss per common $ (0.04 ) $ (0.63 ) $ (0.51 ) $ (1.98 )share - Diluted



Weighted averagecommon shares 45,240 40,337 43,983 40,199 outstanding - Basic

Weighted averagecommon shares 45,240 40,337 43,983 40,199outstanding -Diluted

ITRON, INC.

SEGMENT INFORMATION



(Unaudited, in thousands)

Three Months Ended Nine Months Ended September September 30, 30,

2021 2020 2021 2020

Product revenues

Device Solutions $ 149,830 $ 174,039 $ 480,808 $ 501,157

Networked Solutions 242,527 282,677 736,397 898,465

Outcomes 18,590 13,942 48,265 38,158

Total Company $ 410,947 $ 470,658 $ 1,265,470 $ 1,437,780



Service revenues

Device Solutions $ 2,404 $ 2,089 $ 7,174 $ 6,415

Networked Solutions 31,971 23,982 91,473 73,519

Outcomes 41,627 43,455 131,818 130,479

Total Company $ 76,002 $ 69,526 $ 230,465 $ 210,413



Total revenues

Device Solutions $ 152,234 $ 176,128 $ 487,982 $ 507,572

Networked Solutions 274,498 306,659 827,870 971,984

Outcomes 60,217 57,397 180,083 168,637

Total Company $ 486,949 $ 540,184 $ 1,495,935 $ 1,648,193



Gross profit

Device Solutions $ 22,480 $ 20,528 $ 85,228 $ 64,843

Networked Solutions 89,915 102,295 298,627 332,368

Outcomes 22,568 20,428 68,027 56,123

Total Company $ 134,963 $ 143,251 $ 451,882 $ 453,334



Operating income (loss)

Device Solutions $ 12,095 $ 11,017 $ 53,784 $ 28,095

Networked Solutions 61,150 71,404 205,071 237,466

Outcomes 11,774 12,044 34,647 29,468

Corporate (80,856 ) (118,445 ) (265,331 ) (338,026 )unallocated

Total Company $ 4,163 $ (23,980 ) $ 28,171 $ (42,997 )

ITRON, INC.

CONSOLIDATED BALANCE SHEETS



(Unaudited, in thousands) September 30, December 31, 2020 2021

ASSETS

Current assets

Cash and cash equivalents $ 188,691 $ 206,933

Accounts receivable, net 320,994 369,828

Inventories 175,432 182,377

Other current assets 117,270 171,124

Total current assets 802,387 930,262



Property, plant, and equipment, net 189,748 207,816

Deferred tax assets, net 101,907 76,142

Other long-term assets 41,666 51,656

Operating lease right-of-use assets, net 67,599 76,276

Intangible assets, net 103,763 132,955

Goodwill 1,115,697 1,131,916

Total assets $ 2,422,767 $ 2,607,023



LIABILITIES AND EQUITY

Current liabilities

Accounts payable $ 188,663 $ 215,639

Other current liabilities 74,718 72,591

Wages and benefits payable 99,347 86,249

Taxes payable 13,674 15,804

Current portion of debt - 18,359

Current portion of warranty 18,089 28,329

Unearned revenue 101,263 112,928

Total current liabilities 495,754 549,899



Long-term debt, net 449,629 902,577

Long-term warranty 16,598 13,061

Pension benefit obligation 114,771 119,457

Deferred tax liabilities, net 1,792 1,921

Operating lease liabilities 59,149 66,823

Other long-term obligations 85,248 113,012

Total liabilities 1,222,941 1,766,750



Equity

Common stock 1,782,060 1,389,419

Accumulated other comprehensive loss, (151,739 ) (138,526 )net

Accumulated deficit (456,734 ) (434,345 )

Total Itron, Inc. shareholders' equity 1,173,587 816,548

Noncontrolling interests 26,239 23,725

Total equity 1,199,826 840,273

Total liabilities and equity $ 2,422,767 $ 2,607,023

ITRON, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS



(Unaudited, in thousands) Nine Months Ended September 30,

2021 2020

Operating activities

Net loss $ (19,875 ) $ (78,383 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization 64,252 72,306

Non-cash operating lease expense 12,962 15,252

Stock-based compensation 18,251 20,638

Amortization of prepaid debt fees 17,383 3,029

Deferred taxes, net (5,170 ) (9,439 )

Loss on sale of business 28,274 57,295

Loss on extinguishment of debt 10,000 -

Restructuring, non-cash 951 6,518

Other adjustments, net 3,720 3,856

Changes in operating assets and liabilities, net of sale of business:

Accounts receivable 40,624 82,087

Inventories 2,150 8,978

Other current assets 26,072 (12,862 )

Other long-term assets 5,058 (2,547 )

Accounts payable, other current liabilities, and (27,124 ) (82,775 )taxes payable

Wages and benefits payable 14,110 (28,446 )

Unearned revenue (13,158 ) 15,098

Warranty (5,969 ) (10,894 )

Other operating, net (31,364 ) 10,860

Net cash provided by operating activities 141,147 70,571



Investing activities

Net proceeds (payments) related to the sale of 3,142 (748 )business

Acquisitions of property, plant, and equipment (27,781 ) (36,297 )

Other investing, net 2,820 3,573

Net cash used in investing activities (21,819 ) (33,472 )



Financing activities

Proceeds from borrowings 460,000 400,000

Payments on debt (946,094 ) -

Issuance of common stock 4,351 5,059

Proceeds from common stock offering 389,419 -

Proceeds from sale of warrants 45,349 -

Purchases of convertible note hedge contracts (84,139 ) -

Prepaid debt fees (12,021 ) (184 )

Other financing, net 6,327 (2,285 )

Net cash (used in) provided by financing activities (136,808 ) 402,590



Effect of foreign exchange rate changes on cash and (762 ) (3,426 )cash equivalents

Increase (decrease) in cash and cash equivalents (18,242 ) 436,263

Cash and cash equivalents at beginning of period 206,933 149,904

Cash and cash equivalents at end of period $ 188,691 $ 586,167

About Non-GAAP Financial Measures

The accompanying press release contains non-GAAP financial measures. To supplement our consolidated financial statements, which are prepared 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, free cash flow, and constant currency. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and other companies may define such measures differently. For more information on these non-GAAP financial measures, please see the table captioned Reconciliations of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures.

We use these non-GAAP financial measures for financial and operational decision making and/or as a means for determining executive compensation. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and ability to service debt by excluding certain expenses that may not be indicative of our recurring core operating results. These non-GAAP financial measures facilitate management's internal comparisons to our historical performance, as well as comparisons to our competitors' operating results. Our executive compensation plans exclude non-cash charges related to amortization of intangibles and certain discrete cash and non-cash charges, such as acquisition and integration related expenses, loss on sale of business, or restructuring charges. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. We believe these non-GAAP financial measures are useful to investors because they provide greater transparency with respect to key metrics used by management in its financial and operational decision making and because they are used by our institutional investors and the analyst community to analyze the health of our business.

Non-GAAP operating expenses and non-GAAP operating income - We define non-GAAP operating expenses as operating expenses excluding certain expenses related to the amortization of intangible assets, restructuring, loss on sale of business, corporate transition cost, and acquisition and integration. We define non-GAAP operating income as operating income (loss) excluding the expenses related to the amortization of intangible assets, restructuring, loss on sale of business, corporate transition cost, and acquisition and integration. Acquisition and integration related expenses include costs, which are incurred to affect and integrate business combinations, such as professional fees, certain employee retention and salaries related to integration, severances, contract terminations, travel costs related to knowledge transfer, system conversion costs, and asset impairment charges. We consider these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of expenses that are related to acquisitions and restructuring projects. By excluding these expenses, we believe that it is easier for management and investors to compare our financial results over multiple periods and analyze trends in our operations. For example, in certain periods, expenses related to amortization of intangible assets may decrease, which would improve GAAP operating margins, yet the improvement in GAAP operating margins due to this lower expense is not necessarily reflective of an improvement in our core business. There are some limitations related to the use of non-GAAP operating expenses and non-GAAP operating income versus operating expenses and operating income calculated in accordance with GAAP. We compensate for these limitations by providing specific information about the GAAP amounts excluded from non-GAAP operating expense and non-GAAP operating income and evaluating non-GAAP operating expense and non-GAAP operating income together with GAAP operating expense and operating income.

Non-GAAP net income and non-GAAP diluted EPS - We define non-GAAP net income as net income (loss) attributable to Itron, Inc. excluding the expenses associated with amortization of intangible assets, amortization of debt placement fees, debt extinguishment, restructuring, loss on sale of business, corporate transition cost, acquisition and integration, and the tax effect of excluding these expenses. We define non-GAAP diluted EPS as non-GAAP net income divided by diluted weighted-average shares outstanding during the period calculated on a GAAP basis and then reduced to reflect the anti-dilutive impact of the convertible note hedge transaction entered into in connection with the 0% Convertible Notes due 2026 issued in March 2021. We consider these financial measures to be useful metrics for management and investors for the same reasons that we use non-GAAP operating income. The same limitations described above regarding our use of non-GAAP operating income apply to our use of non-GAAP net income and non-GAAP diluted EPS. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP measures and evaluating non-GAAP net income and non-GAAP diluted EPS together with GAAP net income attributable to Itron, Inc. and GAAP diluted EPS.

For interim periods the budgeted annual effective tax rate (AETR) is used, adjusted for any discrete items, as defined in Accounting Standards Codification (ASC) 740 - Income Taxes. The budgeted AETR is determined at the beginning of the fiscal year. The AETR is revised throughout the year based on changes to our full-year forecast. If the revised AETR increases or decreases by 200 basis points or more from the budgeted AETR due to changes in the full-year forecast during the year, the revised AETR is used in place of the budgeted AETR beginning with the quarter the 200 basis point threshold is exceeded and going forward for all subsequent interim quarters in the year. We continue to assess the AETR based on latest forecast throughout the year and use the most recent AETR anytime it increases or decreases by 200 basis points or more from the prior interim period.

Adjusted EBITDA - We define adjusted EBITDA as net income (loss) (a) minus interest income, (b) plus interest expense, depreciation and amortization, debt extinguishment, restructuring, loss on sale of business, corporate transition cost, acquisition and integration, and (c) excluding income tax provision or benefit. Management uses adjusted EBITDA as a performance measure for executive compensation. A limitation to using adjusted EBITDA is that it does not represent the total increase or decrease in the cash balance for the period and the measure includes some non-cash items and excludes other non-cash items. Additionally, the items that we exclude in our calculation of adjusted EBITDA may differ from the items that our peer companies exclude when they report their results. We compensate for these limitations by providing a reconciliation of this measure to GAAP net income (loss).

Free cash flow - We define free cash flow as net cash provided by operating activities less cash used for acquisitions of property, plant and equipment. We believe free cash flow provides investors with a relevant measure of liquidity and a useful basis for assessing our ability to fund our operations and repay our debt. The same limitations described above regarding our use of adjusted EBITDA apply to our use of free cash flow. We compensate for these limitations by providing specific information regarding the GAAP amounts and reconciling to free cash flow.

Constant currency - We refer to the impact of foreign currency exchange rate fluctuations in our discussions of financial results, which references the differences between the foreign currency exchange rates used to translate operating results from the entity's functional currency into U.S. dollars for financial reporting purposes. We also use the term "constant currency", which represents financial results adjusted to exclude changes in foreign currency exchange rates as compared with the rates in the comparable prior year period. We calculate the constant currency change as the difference between the current period results and the comparable prior period's results restated using current period foreign currency exchange rates.

The tables below reconcile the non-GAAP financial measures of operating expenses, operating income, net income, diluted EPS, adjusted EBITDA, and free cash flow with the most directly comparable GAAP financial measures.

ITRON, INC.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

TO THE MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES



(Unaudited, inthousands, except per share data)



TOTAL COMPANY Three Months Ended Nine Months EndedRECONCILIATIONS September 30, September 30,

2021 2020 2021 2020

NON-GAAP OPERATING EXPENSES

GAAP operating expenses $ 130,800 $ 167,231 $ 423,711 $ 496,331

Amortization of (8,944 ) (11,183 ) (26,914 ) (33,488 )intangible assets

Restructuring (958 ) (44,462 ) 830 (41,531 )

Loss on sale of business (2,171 ) (380 ) (28,274 ) (57,295 )

Corporate transition - - - 33 cost

Acquisition and (118 ) 2,348 368 738 integration

Non-GAAP operating $ 118,609 $ 113,554 $ 369,721 $ 364,788 expenses



NON-GAAP OPERATING INCOME

GAAP operating income $ 4,163 $ (23,980 ) $ 28,171 $ (42,997 )(loss)

Amortization of 8,944 11,183 26,914 33,488 intangible assets

Restructuring 958 44,462 (830 ) 41,531

Loss on sale of business 2,171 380 28,274 57,295

Corporate transition - - - (33 )cost

Acquisition and 118 (2,348 ) (368 ) (738 )integration

Non-GAAP operating $ 16,354 $ 29,697 $ 82,161 $ 88,546 income



NON-GAAP NET INCOME & DILUTED EPS

GAAP net lossattributable to Itron, $ (1,869 ) $ (25,357 ) $ (22,389 ) $ (79,475 )Inc.

Amortization of 8,944 11,183 26,914 33,488 intangible assets

Amortization of debt 1,905 972 17,252 2,898 placement fees

Debt extinguishment - - 11,681 -

Restructuring 958 44,462 (830 ) 41,531

Loss on sale of business 2,171 380 28,274 57,295

Corporate transition - - - (33 )cost

Acquisition and 118 (2,348 ) (368 ) (738 )integration

Income tax effect of (2,775 ) (4,658 ) (16,491 ) (6,037 )non-GAAP adjustments

Non-GAAP net incomeattributable to Itron, $ 9,452 $ 24,634 $ 44,043 $ 48,929 Inc.



Non-GAAP diluted EPS $ 0.21 $ 0.61 $ 0.99 $ 1.21



Non-GAAP weightedaverage common shares 45,506 40,559 44,330 40,507 outstanding - Diluted



ADJUSTED EBITDA

GAAP net lossattributable to Itron, $ (1,869 ) $ (25,357 ) $ (22,389 ) $ (79,475 )Inc.

Interest income (352 ) (354 ) (1,326 ) (2,165 )

Interest expense 2,628 10,810 27,107 33,771

Income tax provision 1,136 (11,985 ) 5,581 366 (benefit)

Debt extinguishment - - 11,681 -

Depreciation and 21,333 24,076 64,252 72,306 amortization

Restructuring 958 44,462 (830 ) 41,531

Loss on sale of business 2,171 380 28,274 57,295

Corporate transition - - - (33 )cost

Acquisition and 118 (2,348 ) (368 ) (738 )integration

Adjusted EBITDA $ 26,123 $ 39,684 $ 111,982 $ 122,858



FREE CASH FLOW

Net cash provided by $ 18,467 $ 44,785 $ 141,147 $ 70,571 operating activities

Acquisitions ofproperty, plant, and (7,305 ) (7,248 ) (27,781 ) (36,297 )equipment

Free Cash Flow $ 11,162 $ 37,537 $ 113,366 $ 34,274

View source version on businesswire.com: https://www.businesswire.com/news/home/20211104005285/en/

CONTACT: Itron, Inc. Kenneth P. Gianella Vice President, Investor Relations (669) 770-4643

CONTACT: David Means Director, Investor Relations (737) 242-8448

CONTACT: Rebecca Hussey Manager, Investor Relations (509) 891-3574