Iteris, Inc. (NASDAQ:ITI) Q4 2023 Earnings Call Transcript

Joe Bergera: Yes. So, every customer account is different. But in general, we’re seeing a really high receptivity. This is a model that we’re actually evangelizing. I’d say that we’re probably on the bleeding edge. And when we embarked on this, we were uncertain how quickly it would begin to resonate with agencies, but we believe it’s actually beginning to resonate at a meaningful level and actually, kind of ahead of our original expectations. So, I think that we’re tapping into, sort of this latent demand, which is fantastic. The thing that we need to work through, however, is working with agencies to get from a position where they are interested in procuring the services on that basis as we’ve been trying to outline for them and figure out how that can fit into their procurement practices and work within their budget frameworks.

And so, there’s still some more work to be done there. But what we’re finding is that those, sort of more progressive agencies are very eager to work with us to get through those, kind of that next level of hurdles. And as we get more and more success with that, then we’ll be able to take those best practices and migrate them to other agencies who are perhaps less forward thinking. But that being said, in terms of like tapping into like the basic underlying demand, I think that we feel very confident that we’ve identified a gold vein here, and we’re increasingly tapping into that market interest in capitalizing on this alternative delivery form. And I think to some degree, you kind of hit on maybe one of the primary reasons why that’s the case.

As a result of COVID-19, as everybody knows, there was like a huge loss in like labor, right? It kind of evaporated. And a lot of that labor that was lost happened to be boomers. And as you may or may not know, there is – if you look at the public sector labor force, they had a particularly high exposure to employees that are – that generation, the baby boomer generation, meaning that there’s been a tremendous drain on labor capacity among these agencies. And so, they’re desperate to try to figure out how do we plug that gap and our ability to offer cloud-enabled managed services and process virtualization. And just generally, automation is a great answer for them. And I think that’s why we’re seeing such a high level of interest. And again, the only issue for us now, not the only issue, but the primary issue for us now is to help agencies get from like that level of interest to a point where it’s easy for them to now procure these services, and we’re starting to work through that with agencies, frankly, across the country, although we are seeing probably more interest in this model in some of the bigger states, which would include California, Texas, and Florida.

Kerry Shiba: And when you think about flexibility, scalability, and time to ramp up our model, all, I think, enhances outcome in all those cases. It’s a great return on investment also because you’re now looking at supporting fixed cost operations underneath all of that, too.

Tim Moore: Great. Thanks for sharing. That’s very helpful color. And that’s it for my questions. Thank you.

Joe Bergera: Thanks, Tim.

Operator: The next question is from Ryan Sigdahl with Craig-Hallum. Please proceed.

Ryan Sigdahl: Hi, guys. All my operational questions have been answered. But just two clarifications. One, what was cash as of the end of the quarter, if you’re willing to give that one balance sheet metric? And then two, any internal control deficiencies or material weaknesses related to the potential restatements?