Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Sep. 30, 2015 | Nov. 03, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | ITERIS, INC. | |
Entity Central Index Key | 350,868 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --03-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 31,974,059 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2015 | Mar. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 19,137 | $ 21,961 |
Trade accounts receivable, net of allowance for doubtful accounts of $306 and $314 at September 30, 2015 and March 31, 2015, respectively | 12,926 | 11,206 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 3,929 | 4,266 |
Inventories | 3,158 | 3,062 |
Deferred income taxes | 2,680 | 2,680 |
Prepaid expenses and other current assets | 1,665 | 1,338 |
Total current assets | 43,495 | 44,513 |
Property and equipment, net | 2,105 | 1,990 |
Deferred income taxes | 5,874 | 5,610 |
Intangible assets, net | 720 | 987 |
Goodwill | 17,318 | 17,318 |
Other assets | 203 | 214 |
Total assets | 69,715 | 70,632 |
Current liabilities: | ||
Trade accounts payable | 6,427 | 5,915 |
Accrued payroll and related expenses | 4,645 | 4,871 |
Accrued liabilities | 1,162 | 1,320 |
Billings in excess of costs and estimated earnings on uncompleted contracts | 1,890 | 1,549 |
Total current liabilities | 14,124 | 13,655 |
Deferred rent | 788 | 826 |
Unrecognized tax benefits | 189 | 183 |
Total liabilities | $ 15,101 | $ 14,664 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $1.00 par value: Authorized shares - 2,000 Issued and outstanding shares - none | ||
Common stock, $0.10 par value: Authorized shares - 70,000 at September 30, 2015 and March 31, 2015; Issued and outstanding shares - 31,974 at September 30, 2015 and 32,411 at March 31, 2015 | $ 3,198 | $ 3,242 |
Additional paid-in capital | 134,849 | 135,572 |
Accumulated deficit | (83,433) | (82,846) |
Total stockholders' equity | 54,614 | 55,968 |
Total liabilities and stockholders' equity | $ 69,715 | $ 70,632 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Sep. 30, 2015 | Mar. 31, 2015 |
Consolidated Balance Sheets | ||
Trade accounts receivable, allowance for doubtful accounts (in dollars) | $ 306 | $ 314 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, Authorized shares | 2,000 | 2,000 |
Preferred stock, Issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, Authorized shares | 70,000 | 70,000 |
Common stock, Issued shares | 31,974 | 32,411 |
Common stock, outstanding shares | 31,974 | 32,411 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Consolidated Statements of Operations | ||||
Total revenues | $ 20,573 | $ 18,550 | $ 38,938 | $ 36,666 |
Cost of revenues | 12,690 | 11,251 | 23,417 | 22,560 |
Gross profit | 7,883 | 7,299 | 15,521 | 14,106 |
Operating expenses: | ||||
Selling, general and administrative | 6,286 | 6,208 | 12,776 | 11,908 |
Research and development | 2,074 | 1,287 | 3,575 | 2,366 |
Amortization of intangible assets | 92 | 120 | 184 | 239 |
Change in fair value of contingent consideration | 4 | 8 | ||
Total operating expenses | 8,452 | 7,619 | 16,535 | 14,521 |
Operating loss | (569) | (320) | (1,014) | (415) |
Non-operating income (expense): | ||||
Other income (expense), net | 4 | 4 | (3) | |
Interest income (expense), net | 4 | (5) | 7 | (4) |
Loss from continuing operations before income taxes | (561) | (325) | (1,003) | (422) |
Benefit for income taxes | 112 | 92 | 310 | 121 |
Loss from continuing operations | (449) | (233) | (693) | (301) |
Gain on sale of discontinued operation, net of tax | 54 | 46 | 106 | 95 |
Net loss | $ (395) | $ (187) | $ (587) | $ (206) |
Loss per share from continuing operations - basic and diluted | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.01) |
Gain per share from sale of discontinued operation - basic and diluted (in dollars per share) | 0 | 0 | 0 | 0 |
Net loss per share - basic and diluted | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.01) |
Shares used in basic per share calculations (in shares) | 31,935 | 32,585 | 32,069 | 32,621 |
Shares used in diluted per share calculations (in shares) | 31,935 | 32,585 | 32,069 | 32,621 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities | ||
Net loss | $ (587) | $ (206) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Deferred income taxes | (325) | (61) |
Depreciation of property and equipment | 316 | 252 |
Stock-based compensation | 196 | 185 |
Amortization of intangible assets | 267 | 321 |
Change in fair value of contingent consideration | 8 | |
Gain on sale of discontinued operation, net of tax | (106) | (95) |
Loss on disposal of equipment | 54 | |
Changes in operating assets and liabilities, net of effects of discontinued operation: | ||
Accounts receivable | (1,720) | 469 |
Net costs and estimated earnings in excess of billings | 678 | 1,497 |
Inventories | (96) | 279 |
Prepaid expenses and other assets | (241) | (244) |
Accounts payable and accrued expenses | 94 | 393 |
Net cash (used in) provided by operating activities | (1,470) | 2,798 |
Cash flows from investing activities | ||
Purchases of property and equipment | (485) | (343) |
Net proceeds from sale of business segment | 94 | 98 |
Net cash used in investing activities | (391) | (245) |
Cash flows from financing activities | ||
Repurchases of common stock | (1,194) | (594) |
Proceeds from stock option exercises | 254 | 33 |
Tax withholding payment related to net share settlement of restricted stock units | (23) | (20) |
Net cash used in financing activities | (963) | (581) |
(Decrease) increase in cash and cash equivalents | (2,824) | 1,972 |
Cash and cash equivalents at beginning of period | 21,961 | 20,414 |
Cash and cash equivalents at end of period | $ 19,137 | $ 22,386 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 6 Months Ended |
Sep. 30, 2015 | |
Description of Business and Summary of Significant Accounting Policies | |
Description of Business and Summary of Significant Accounting Policies | 1. Description of Business and Summary of Significant Accounting Policies Description of Business Iteris, Inc. (referred to collectively with its subsidiaries in these consolidated financial statements as “Iteris,” the “Company,” “we,” “our” and “us”) is a provider of intelligent information solutions for both the traffic management and global agribusiness markets. We are focused on the development and application of advanced technologies and software-based information systems that reduce traffic congestion, provide measurement, management and predictive traffic and weather analytics, and improve the safety of surface transportation systems infrastructure. We believe our products, services and solutions, in conjunction with sound traffic management, minimize the environmental impact of traffic congestion. In the agribusiness markets, we have combined our unique intellectual property with enhanced soil, land surface and agronomy modeling techniques to create a set of ClearAg solutions. These solutions provide analytical support to large enterprises in the agriculture market and field-specific advisories to individual producers. By combining our unique intellectual property, products, decades of experience in traffic management, weather forecasting solutions and information technologies, we offer a broad range of Intelligent Transportation Systems (“ITS”) solutions to customers throughout the U.S. and internationally. We continue to make significant investments to leverage our existing technologies and further expand our software-based information systems to offer solutions to the precision agriculture technology markets. Iteris was incorporated in Delaware in 1987. Basis of Presentation Our unaudited consolidated financial statements include the accounts of Iteris, Inc. and its subsidiaries and have been prepared in accordance with the rules of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting, which permit certain foonotes or other financial information that are normally required by generally accepted accounting principles in the United States of America (“GAAP”) to be condensed or omitted. These unaudited consolidated financial statements should read in conjunction with the Company’s audited consolidated financial statements and related notes included in its Annual Report on Form 10-K for the fiscal year ended March 31, 2015 (“Fiscal 2015”), filed with the SEC on June 18, 2015. All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and six month periods ended September 30, 2015 are not necessarily indicative of the results to be expected for the fiscal year ending March 31, 2016 (“Fiscal 2016”) or any other periods. The results of continuing operations for all periods presented in the unaudited consolidated financial statements exclude our former vehicle sensors operation, which has been classified as a discontinued operatrion. See Note 3, “Sale of Vehicle Sensors,” for further discussion related to the discontinued operation presentation. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires our management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made in the preparation of the consolidated financial statements include the collectability of accounts receivable and related allowance for doubtful accounts, projections of taxable income used to assess realizability of deferred tax assets, inventory and warranty reserves, costs to complete long-term contracts, indirect cost rates used in cost-plus contracts, contract reserves, the valuation of purchased intangible assets and goodwill, the valuation of equity instruments and estimates of future cash flows used to assess the recoverability of long-lived assets and the impairment of goodwill and fair value of our stock option awards used to calculate the stock-based compensation. Revenue Recognition Product revenues and related costs of sales are recognized when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery under the terms of the arrangement has occurred, (iii) the price to the customer is fixed or determinable, and (iv) collection of the receivable is reasonably assured. These criteria are typically met at the time of product shipment, but in certain circumstances, may not be met until receipt or acceptance by the customer. Accordingly, at the date revenue is recognized, the significant obligations or uncertainties concerning the sale have been resolved. Transportation Systems and Performance Analytics revenues are derived primarily from long-term contracts with governmental agencies and with commercial companies. When appropriate, revenues are recognized using the percentage of completion method of accounting, whereby revenue is recognized as contract performance progresses and is determined based on the relationship of costs incurred to total estimated costs. Any anticipated losses on contracts are charged to earnings when identified. Changes in job performance and estimated profitability, including those arising from contract penalty provisions and final contract settlements, may result in revisions to costs and revenues and are recognized in the period in which the revisions are determined. Profit incentives are included in revenues when their realization is reasonably assured. Certain of our revenues are recognized as services are performed and amounts are earned, which is measured by time incurred or other contractual milestones or output measures. Revenues accounted for in this manner generally relate to certain fixed fee professional services, cost-plus fixed fee or time-and-materials contracts. Revenues for ongoing operations and maintenance services contracts are generally accounted for ratably as the services are performed throughout the term of the contract. Payments received in advance of services performed are deferred and recognized when the related services are performed. We recognize revenue from the sale of deliverables that are part of a multiple-element arrangement in accordance with applicable accounting guidance that establishes a relative selling price hierarchy permitting the use of an estimated selling price to determine the allocation of arrangement consideration to a deliverable in a multiple-element arrangement where neither vendor specific objective evidence (“VSOE”) nor third-party evidence (“TPE”) of fair value is available for that deliverable. In the absence of VSOE or TPE of the standalone selling price for one or more delivered or undelivered elements in a multiple-element arrangement, we are required to estimate the selling prices of those elements. Overall arrangement consideration is allocated to each element (both delivered and undelivered items) that has stand-alone value based on their relative selling prices, regardless of whether those selling prices are evidenced by VSOE or TPE or are based on our estimated selling prices. We account for multiple-element arrangements that consist only of software and software-related services in accordance with applicable accounting guidance for software and software-related transactions. For such transactions, revenue on arrangements that include multiple elements is allocated to each element based on the relative fair value of each element, and fair value is determined by VSOE. If we cannot objectively determine the fair value of any undelivered element included in such multiple-element arrangements and the only undelivered element is post-contract customer support or maintenance, and VSOE of the fair value of such support or maintenance does not exist, revenue from the entire arrangement is recognized ratably over the support period. When the fair value of a delivered element has not been established but VSOE of fair value exists for the undelivered elements, we use the residual method to recognize revenue if the fair value of all undelivered elements is determinable. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is allocated to the delivered elements and is recognized as revenue. Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts Costs and estimated earnings in excess of billings on uncompleted contracts in the accompanying unaudited consolidated balance sheets represent unbilled amounts earned and reimbursable under services sales arrangements. At any given period-end, a large portion of the balance in this account represents the accumulation of labor, materials and other costs that have not been billed due to timing, whereby the accumulation of each month’s costs and earnings are not administratively billed until the subsequent month. Also included in this account are amounts that will become billable according to contract terms, which usually require the consideration of the passage of time, achievement of milestones or completion of the project. Such unbilled amounts are expected to be billed and collected within the next twelve months. Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts Billings in excess of costs and estimated earnings on uncompleted contracts in the accompanying unaudited consolidated balance sheets is comprised of cash collected from customers and billings to customers on contracts in advance of work performed, advance payments negotiated as a contract condition, estimated losses on uncompleted contracts, project-related legal liabilities and other project-related reserves. The unearned amounts are expected to be earned within the next twelve months. We record provisions for estimated losses on uncompleted contracts in the period in which such losses become known. The cumulative effects of revisions to contract revenues and estimated completion costs are recorded in the accounting period in which the amounts become evident and can be reasonably estimated. These revisions can include such items as the effects of change orders and claims, warranty claims, liquidated damages or other contractual penalties and adjustments for contract closeout settlements. Concentration of Credit Risk Financial instruments that potentially subject us to a concentration of credit risk consist principally of cash and cash equivalents and trade accounts receivable. Cash and cash equivalents consist primarily of demand deposits and money market funds maintained with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with high quality financial institutions, and therefore are believed to have minimal credit risk. Our accounts receivable are primarily derived from billings with customers located throughout North America, as well as in the Middle East, Europe, South America and Asia. We generally do not require collateral or other security from our customers. We maintain an allowance for doubtful accounts for potential credit losses, which losses have historically been within management’s expectations. We have historically had a diverse customer base. For the three and six months ended September 30, 2015, no individual customer represented greater than 10% of our total revenues. For the three months ended September 30, 2014, no individual customer represented more than 10% of our total revenues. For the six months ended September 30, 2014, one individual customer represented approximately 10% of our total revenues and no other individual customer represented greater than 10% of our total revenues. Fair Values of Financial Instruments The fair value of cash equivalents, receivables, accounts payable and accrued expenses approximate carrying value because of the short period of time to maturity. Cash and Cash Equivalents Cash and cash equivalents consist of cash and short-term investments with initial maturities of ninety days or less. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets were $1.7 million as of September 30, 2015 and $1.3 million as of March 31, 2015 and included approximately $520,000 of cash designated as collateral on performance bonds, as required under certain of our Transportation Systems contracts in the Middle East. The performance bonds require us to maintain 100% cash value of the bonds as collateral in a bank that is local to the purchasing agency. The performance bond collateral is required throughout the delivery of our services and maintained in the local bank until the contract is closed by the purchasing agency. We expect these requirements, and the related cash collateral restrictions, to remain in place through Fiscal 2016. Allowance for Doubtful Accounts The collectability of our accounts receivable is evaluated through review of outstanding invoices and ongoing credit evaluations of our customers’ financial condition. In cases where we are aware of circumstances that may impair a specific customer’s ability to meet its financial obligations subsequent to the original sale, we will record an allowance against amounts due, and thereby reduce the net recognized accounts receivable to the amount we reasonably believe will be collected. We also maintain an allowance based on our historical collections experience. When we determine that collection is not likely, we write off accounts receivable against the allowance for doubtful accounts. Inventories Inventories consist of finished goods, work-in-process and raw materials and are stated at the lower of cost or market. Cost is determined using the first-in, first-out method. Property and Equipment Property and equipment are recorded at cost and are depreciated using the straight-line method over the estimated useful life ranging from three to eight years. Leasehold improvements are depreciated over the term of the related lease or the estimated useful life of the improvement, whichever is shorter. Goodwill and Long-Lived Assets We evaluate goodwill on an annual basis in our fourth fiscal quarter or more frequently if we believe indicators of impairment exist. We have determined that our reporting units for purposes of testing for goodwill impairment are identical to our reportable segments for financial reporting purposes. We adopted the provisions issued by the Financial Accounting Standards Board (“FASB”) that were intended to simplify goodwill impairment testing. This guidance permits us to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we conduct a two-step goodwill impairment test. The first step of the impairment test involves comparing the fair values of the applicable reporting units with their carrying values. We determine the fair values of our reporting units using the income valuation approach, as well as other generally accepted valuation methodologies. If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, we perform the second step of the goodwill impairment test. The second step of the goodwill impairment test involves comparing the implied fair value of the affected reporting unit’s goodwill with the carrying value of that goodwill. The amount by which the carrying value of the goodwill exceeds its implied fair value, if any, is recognized as an impairment loss. We monitor the indicators for goodwill impairment testing between annual tests. As of September 30, 2015, there was no impairment to our goodwill. We test long-lived assets and purchased intangible assets (other than goodwill) for impairment if we believe indicators of impairment exist. We determine whether the carrying value of an asset or asset group is recoverable, based on comparisons to undiscounted expected future cash flows the asset are expected to generate. If an asset is not recoverable, we record an impairment loss equal to the amount by which the carrying value of the asset exceeds its fair value. We primarily use the income valuation approach to determine the fair value of our long lived assets and purchased intangible assets. As of September 30, 2015, there was no impairment to our long-lived and intangible assets. Income Taxes We utilize the asset and liability method of accounting for income taxes, under which deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse. A valuation allowance is recorded when it is more-likely-than-not that some or all of the deferred tax assets will not be realized, which increases our income tax expense in the period such determination is made. Income tax positions must meet a more-likely-than-not recognition threshold to be recognized. Income tax positions that previously failed to meet the more-likely-than-not threshold are recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not threshold are derecognized in the first subsequent financial reporting period in which that threshold is no longer met. Stock-Based Compensation We record stock-based compensation in our unaudited consolidated statements of operations as an expense, based on the estimated grant date fair value of our stock-based awards, whereby such fair values are amortized over the requisite service period. Our stock-based awards are currently comprised of common stock options and restricted stock units. The fair value of our common stock option awards is estimated on the grant date using the Black-Scholes-Merton option-pricing formula. While utilizing this model meets established requirements, the estimated fair values generated by it may not be indicative of the actual fair values of our common stock option awards as it does not consider certain factors important to those awards to employees, such as continued employment and periodic vesting requirements, as well as limited transferability. The fair value of our restricted stock units is based on the closing market price of our common stock on the grant date. If there are any modifications or cancellations of the underlying unvested stock-based awards, we may be required to accelerate, increase or cancel any remaining unearned stock-based compensation expense. Shipping and Handling Costs Shipping and handling costs are included as cost of revenues in the period during which the products ship. Warranty We generally provide a one to three year warranty from the original invoice date on all products, materials and workmanship. Products sold to various original equipment manufacturer customers sometimes carry longer warranties. Defective products will be either repaired or replaced, usually at our option, upon meeting certain criteria. We accrue a provision for the estimated costs that may be incurred for product warranties relating to a product as a component of cost of sales at the time revenue for that product is recognized. The accrued warranty reserve is included within accrued liabilities in the accompanying unaudited consolidated balance sheets. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which establishes principles for reporting revenue and cash flows arising from an entity’s contracts with customers. This new revenue recognition standard will replace most of the recognition guidance within GAAP. This guidance was deferred by ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, issued by the FASB in August 2015, and is now effective for fiscal years beginning on or after December 15, 2017 with early adoption permitted as of the original effective date. We have not determined the potential effects on our consolidated financial statements of the adoption of ASU 2014-09. In June 2014, the FASB issued ASU No. 2014-12, Compensation—Stock Compensation (“ASU 2014-12”) to resolve diversity in accounting treatment for share based awards in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The standard is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015 and may be applied prospectively or retrospectively. We do not anticipate a significant impact on our consolidated financial statements upon adoption of ASU 2014-12. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern (“ASU 2014-15”), which requires a business entity to evaluate whether there is substantial doubt about the ability to continue as a going concern for each annual and interim reporting period. If substantial doubt exists, additional disclosure is required. The standard is effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016. We do not anticipate a significant impact on its consolidated financial statements upon adoption of ASU 2014-15. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory (“ASU 2015-11”) to simplify the guidance on the measurement of inventory. Under the new standard, an entity should measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The standard is effective for interim and annual periods beginning after December 15, 2016. We do not anticipate a significant impact on our consolidated financial statements upon adoption of ASU 2015-11. |
Supplemental Financial Informat
Supplemental Financial Information | 6 Months Ended |
Sep. 30, 2015 | |
Supplemental Financial Information | |
Supplemental Financial Information | 2. Supplemental Financial Information Inventories The following table presents details of our inventories: September 30, March 31, 2015 2015 (In thousands) Materials and supplies $ $ Work in process Finished goods $ $ Intangible Assets The following table presents details of our intangible assets: September 30, 2015 March 31, 2015 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization (In thousands) Technology $ $ ) $ $ ) Customer contracts / relationships ) ) Trade names and non-compete agreements ) ) Capitalized software development costs ) ) Total $ $ ) $ $ ) As of September 30, 2015, future estimated amortization expense is as follows: Fiscal Year Ending March 31: (In thousands) Remainder of 2016 $ 2017 2018 2019 $ Warranty Reserve Activity The following table presents activity related to the warranty reserve: Six Months Ended September 30, 2015 2014 (In thousands) Balance at beginning of period $ $ Addition charged to cost of revenues Warranty claims ) ) Balance at end of period $ $ Comprehensive Income Comprehensive income is equal to net income for all periods presented in the accompanying unaudited consolidated statements of operations. Earnings (Loss) Per Share The following table sets forth the computation of basic and diluted loss per share from continuing operations: Three Months Ended Six Months Ended September 30, September 30, 2015 2014 2015 2014 (In thousands) Denominator: Weighted average common shares used in basic and diluted per share computation Dilutive stock options — — — — Dilutive restricted stock units — — — — Weighted average common shares used in diluted per share computation The following instruments were excluded for purposes of calculating weighted average common share equivalents in the computation of diluted loss from continuing operations per share as their effect would have been anti-dilutive: Three Months Ended Six Months Ended September 30, September 30, 2015 2014 2015 2014 (In thousands) Stock options Restricted stock units |
Sale of Vehicle Sensors
Sale of Vehicle Sensors | 6 Months Ended |
Sep. 30, 2015 | |
Sale of Vehicle Sensors | |
Sale of Vehicle Sensors | 3. Sale of Vehicle Sensors On July 29, 2011, we completed the sale of substantially all of our assets used in connection with our prior Vehicle Sensors segment to Bendix Commercial Vehicle Systems LLC (“Bendix”), a member of Knorr-Bremse Group. In connection with the asset sale, we are entitled to additional consideration in the form of the following performance and royalty-related earn-outs: Bendix is obligated to pay us an amount in cash equal to 85% of revenue associated with royalties received under our license and distribution agreements with Audiovox Electronics Corporation and Valeo Schalter and Sensoren GmbH through December 31, 2017, subject to certain reductions and limitations set forth in the asset purchase agreement. As of September 30, 2015, we received approximately $1.3 million in connection with royalty-related earn-outs provisions for a total of $14.9 million in cash from the Asset Sale. In accordance with applicable accounting guidance, we determined that the Vehicle Sensors segment, which constituted one of our operating segments, qualified as a discontinued operation. For the six months ended September 30, 2015 and 2014, we recorded a gain on sale of discontinued operation of approximately $106,000 and $95,000, respectively, net of tax, related to the earn-out provisions of the Agreement. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Sep. 30, 2015 | |
Fair Value Measurements | |
Fair Value Measurements | 4. Fair Value Measurements We measure fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used to measure fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets and liabilities; Level 2, defined as observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities or prices quoted in inactive markets; and Level 3, defined as unobservable inputs that are significant to the fair value of the asset or liability, and for which little or no market data exists, therefore requiring management to utilize its own assumptions to provide its best estimate of what market participants would use in valuing the asset or liability. The liability for the estimated fair value of the contingent consideration in connection with our acquisitions of MET and BTS was initially determined using Level 3 inputs based on a probability weighted calculation whereby we assigned estimated probabilities to achieving the earn-out targets and then discounted the total contingent consideration to net present value. The MET and BTS earn-out targets were completed during Fiscal 2013 and the deferred acquisition payments were completed during Fiscal 2015. There was no remaining contingent consideration liability at September 30, 2015 or March 31, 2015 . We did not have any material financial assets or liabilities measured at fair value on a recurring basis using Level 3 inputs as of September 30, 2015 or March 31, 2015. Our non-financial assets, such as goodwill, intangible assets and property and equipment, are measured at fair value on a non-recurring basis, generally when there is a transaction involving those assets such as a purchase transaction, a business combination or an adjustment for impairment. No non-financial assets were measured at fair value during the six months ended September 30, 2015 and 2014. |
Credit Facility
Credit Facility | 6 Months Ended |
Sep. 30, 2015 | |
Credit Facility | |
Credit Facility | 5. Credit Facility We currently have a two-year, $12.0 million revolving line of credit with CB&T, which expires on October 1, 2016. Interest on borrowed amounts under the revolving line of credit is payable monthly at a rate equal to the current stated prime rate (3.25% at September 30, 2015). We are obligated to pay an unused line fee of 0.15% per annum applied to the average unused portion of the revolving line of credit during the preceding month. The revolving line of credit does not contain any early termination fees and is secured by substantially all of our assets. As of September 30, 2015 and March 31, 2015, no amounts were outstanding under the credit facility with CB&T. Availability under this line of credit may be reduced or otherwise limited as a result of our obligations to comply with certain financial and other covenants. As of September 30, 2015 and March 31, 2015, we were in compliance with all such financial covenants. |
Income Taxes
Income Taxes | 6 Months Ended |
Sep. 30, 2015 | |
Income Taxes | |
Income Taxes | 6. Income Taxes The following table sets forth our provision for income taxes, along with the corresponding effective tax rates: Three Months Ended Six Months Ended September 30, September 30, 2015 2014 2015 2014 (In thousands, except percentages) Benefit for income taxes $ $ $ $ Effective tax rate % % % % On an interim basis, we estimate what our anticipated annual effective tax rate will be, while also separately considering applicable discrete and other non-recurring items, and record a quarterly income tax provision in accordance with the anticipated annual rate. As the fiscal year progresses, we refine our estimates based on actual events and financial results during the year. This process can result in significant changes to our expected effective tax rate. When this occurs, we adjust our income tax provision during the quarter in which our estimates are refined so that the year-to-date provision reflects the expected annual effective tax rate. These changes, along with adjustments to our deferred taxes, among others, may create fluctuations in our overall effective tax rate from quarter to quarter. In assessing the realizability of our deferred tax assets, we review all available positive and negative evidence, including reversal of deferred tax liabilities, potential carrybacks, projected future taxable income, tax planning strategies and recent financial performance. As of September 30, 2015, the Company is in a position of overall cumulative pre-tax income over the trailing three years. We will continuously reassess the appropriateness of recording a valuation allowance considering the Company’s projections of future income and cumulative income (loss) in the Company’s trailing three years, among other factors. Future operating results may require the Company to record a valuation allowance against some or all of its’ deferred tax assets in Fiscal 2016. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies: | |
Commitments and Contingencies | 7. Commitments and Contingencies Litigation and Other Contingencies As a provider of traffic engineering services, hardware products, software and other various solutions for the traffic and agricultural industries, we have in the past been, and may in the future be from time to time, involved in litigation relating to claims arising out of our operations in the normal course of business. While we cannot accurately predict the outcome of any such litigation, we currently are not a party to any legal proceedings, the adverse outcome of which, in management’s opinion, individually or in the aggregate, would have a material adverse effect on our consolidated results of operations, financial position or cash flows. Related Party Transaction We previously subleased office space to Maxxess Systems, Inc. (“Maxxess”), one of our former subsidiaries that we sold in September 2003. Maxxess is currently owned by an investor group that includes one current Iteris director, who is the Chief Executive Officer of Maxxess, and one former Iteris director. The Maxxess investor group also includes one former director of Iteris, Inc. The sublease terminated in September 2007, at which time Maxxess owed us an aggregate of $274,000, which was subsequently amended and restated on July 23, 2013. The amended and restated note bears interest at a rate of 6% per annum, compounded annually, with accrued interest to be paid quarterly on the first business day of each calendar quarter. Payments under the amended and restated note may only be paid in cash and all amounts outstanding will become due and payable on the earliest of (i) August 10, 2016, (ii) a change of control in Maxxess, or (iii) a financing by Maxxess resulting in gross proceeds of at least $10 million. As of September 30, 2015, approximately $259,000 of the original principal balance was outstanding and payable to Iteris. We have previously fully reserved for amounts owed to us by Maxxess and all outstanding principal remains fully reserved. On June 30, 2015, the Company entered into an agreement with Maxxess to provide professional services to the Company’s Performance Analytics segment, in support of its ClearAg software development initiative. The professional services commenced in July 2015 and are expected to last approximately four months. The total effort under this agreement is limited to 200 hours, billed on a time and materials basis, not to exceed $40,000. During the three month period ended September 30, 2015, approximately $7,000 of professional services were rendered to the Company. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Sep. 30, 2015 | |
Stock-Based Compensation | |
Stock-Based Compensation | 8. Stock-Based Compensation We currently maintain two separate stock incentive plans. Of these plans, we may only grant future awards from the 2007 Omnibus Incentive Plan (the “2007 Plan”). The 2007 Plan allows for the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”) and other stock-based awards. At September 30, 2015, there were approximately 1,098,000 shares of common stock available for grant or issuance under the 2007 Plan. In September 2015, we granted 1,350,000 stock options to our CEO under the 2007 Plan, using the following black-scholes input assumptions: i) expected life of approximately 7.3 years, ii) risk-free interest rate of 1.9%, iii) expected volatility of approximately 0.48, and iv) dividend yield of 0%. Total stock options vested and expected to vest were approximately 3.0 million options and 1.8 million options as of September 30, 2015 and 2014, respectively. Stock Options A summary of activity with respect to our stock options for the six months ended September 30, 2015 is as follows: Number of Shares Weighted- Average Exercise Price Per Share (In thousands) Options outstanding at March 31, 2015 $ Granted Exercised ) Forfeited ) Expired ) Options outstanding at September 30, 2015 $ Restricted Stock Units A summary of activity with respect to our RSUs, which entitle the holder to receive one share of our common stock for each RSU upon vesting, for the six months ended September 30, 2015 is as follows: Number of Shares (In thousands) Restricted stock units ouststanding at March 31, 2015 Restricted stock units vested ) Restricted stock units forfeited ) Restricted stock units outstanding at September 30, 2015 Stock-Based Compensation Expense The following table presents stock-based compensation expense that is included in each functional line item on our unaudited consolidated statements of operations: Three Months Ended Six Months Ended September 30, September 30, 2015 2014 2015 2014 (In thousands) Cost of revenues $ $ $ $ Selling, general and administrative expense Research and development expense $ $ $ $ At September 30, 2015, there was approximately $2,155,000 and $183,000 of unrecognized compensation expense related to unvested stock options and RSUs, respectively. This expense is currently expected to be recognized over a weighted average period of approximately 3.4 years for stock options and 2.5 years for RSUs. |
Stock Repurchase Program
Stock Repurchase Program | 6 Months Ended |
Sep. 30, 2015 | |
Stock Repurchase Program | |
Stock Repurchase Program | 9. Stock Repurchase Program In August 2011, our Board of Directors approved a stock repurchase program, pursuant to which we were authorized to acquire up to $3.0 million of our outstanding common stock from time to time through August 2012. We repurchased approximately 964,000 shares under this original program for a total purchase price of $1.3 million. On August 9, 2012, our Board of Directors approved a new stock repurchase program pursuant to which we may acquire up to $3.0 million of our outstanding common stock for an unspecified length of time. Under the new program, we may repurchase shares from time to time in the open- market and privately negotiated transactions and block trades, and may also repurchase shares pursuant to a 10b5-1 trading plan during our closed trading windows. There is no guarantee as to the exact number of shares that will be repurchased. We may modify or terminate the repurchase program at any time without prior notice. On November 6, 2014, our Board of Directors approved a $3.0 million increase to the Company’s existing stock repurchase program, pursuant to which the Company may continue to acquire shares of its outstanding common stock from time to time for an unspecified length of time. For the three and six months ended September 30, 2015, we repurchased approximately 255,000 and 656,000 shares of our common stock, respectively. For the three and six months ended September 30, 2014, we repurchased approximately 145,000 and 323,000 shares of our common stock, respectively. As of September 30, 2015, approximately $1,690,000 remained available for the repurchase of our common stock under our current stock purchase program. From inception of the original program in August 2011 through September 30, 2015, we repurchased approximately 3,422,000 shares of our common stock for an aggregate repurchase price of approximately $5.6 million at an average price per share of $1.63. All repurchased shares have been retired and resumed their status as authorized and unissued shares of our common stock as of September 30, 2015. |
Business Segment Information
Business Segment Information | 6 Months Ended |
Sep. 30, 2015 | |
Business Segment Information | |
Business Segment Information | 10. Business Segment Information We currently operate in three reportable segments: Roadway Sensors, Transportation Systems and Performance Analytics . The Roadway Sensors segment provides hardware and software products to multiple segments of the ITS market. These various vehicle detection and information systems are used for traffic intersection control, incident detection and roadway traffic data collection applications. These include, among other products, our Vantage, VantageNext, VersiCam, Vantage Vector, SmartCycle, SmartSpan, Pegasus, Velocity, P10, P100 and Abacus products. The Transportation Systems segment includes transportation engineering and consulting services, and the development of transportation management and traveler information systems for the ITS industry. The Performance Analytics segment includes our performance measurement and information management solution iPeMS, a specialized transportation performance measurement and traffic analytics solution, as well as ClearPath Weather, our road-maintenance application, and ClearAg, our precision agriculture solution. iPeMS provides big data and software analytics solutions that help determine current and future traffic patterns, permitting the effective performance analysis and management of traffic infrastructure resources. ClearPath Weather provides winter road maintenance recommendations for state agencies, municipalities and for commercial companies. Our ClearAg platform provides access to a comprehensive database of weather, soil and agronomic information essential to making informed agricultural decisions. Certain corporate expenses, including interest and amortization of certain intangible assets, are not allocated to the segments. The reportable segments are each managed separately because they manufacture and distribute distinct products or provide services with different processes. All reported segment revenues are derived from external customers. The following table sets forth selected unaudited consolidated financial information for our reportable segments for the three and six months ended September 30, 2015 and 2014: Roadway Sensors Transportation Systems Performance Analytics Total (In thousands) Three Months Ended September 30, 2015 Revenues $ $ $ $ Segment operating income (loss) ) Three Months Ended September 30, 2014 Revenues $ $ $ $ Segment operating income (loss) ) Six Months Ended September 30, 2015 Revenues $ $ $ $ Segment operating income (loss) ) Six Months Ended September 30, 2014 Revenues $ $ $ $ Segment operating income (loss) ) The following table reconciles total segment income to unaudited consolidated income from continuing operations before income taxes: Three Months Ended Six Months Ended September 30, September 30, 2015 2014 2015 2014 (In thousands) Segment operating income: Total income from reportable segments $ $ $ $ Unallocated amounts: Corporate and other expenses ) ) ) ) Amortization of intangible assets ) ) ) ) Change in fair value of contingent consideration — ) — ) Other expense, net — ) Interest income, net ) ) Loss from continuing operations before income taxes $ ) $ ) $ ) $ ) |
Description of Business and S16
Description of Business and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Sep. 30, 2015 | |
Description of Business and Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation Our unaudited consolidated financial statements include the accounts of Iteris, Inc. and its subsidiaries and have been prepared in accordance with the rules of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting, which permit certain foonotes or other financial information that are normally required by generally accepted accounting principles in the United States of America (“GAAP”) to be condensed or omitted. These unaudited consolidated financial statements should read in conjunction with the Company’s audited consolidated financial statements and related notes included in its Annual Report on Form 10-K for the fiscal year ended March 31, 2015 (“Fiscal 2015”), filed with the SEC on June 18, 2015. All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and six month periods ended September 30, 2015 are not necessarily indicative of the results to be expected for the fiscal year ending March 31, 2016 (“Fiscal 2016”) or any other periods. The results of continuing operations for all periods presented in the unaudited consolidated financial statements exclude our former vehicle sensors operation, which has been classified as a discontinued operatrion. See Note 3, “Sale of Vehicle Sensors,” for further discussion related to the discontinued operation presentation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires our management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made in the preparation of the consolidated financial statements include the collectability of accounts receivable and related allowance for doubtful accounts, projections of taxable income used to assess realizability of deferred tax assets, inventory and warranty reserves, costs to complete long-term contracts, indirect cost rates used in cost-plus contracts, contract reserves, the valuation of purchased intangible assets and goodwill, the valuation of equity instruments and estimates of future cash flows used to assess the recoverability of long-lived assets and the impairment of goodwill and fair value of our stock option awards used to calculate the stock-based compensation. |
Revenue Recognition | Revenue Recognition Product revenues and related costs of sales are recognized when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery under the terms of the arrangement has occurred, (iii) the price to the customer is fixed or determinable, and (iv) collection of the receivable is reasonably assured. These criteria are typically met at the time of product shipment, but in certain circumstances, may not be met until receipt or acceptance by the customer. Accordingly, at the date revenue is recognized, the significant obligations or uncertainties concerning the sale have been resolved. Transportation Systems and Performance Analytics revenues are derived primarily from long-term contracts with governmental agencies and with commercial companies. When appropriate, revenues are recognized using the percentage of completion method of accounting, whereby revenue is recognized as contract performance progresses and is determined based on the relationship of costs incurred to total estimated costs. Any anticipated losses on contracts are charged to earnings when identified. Changes in job performance and estimated profitability, including those arising from contract penalty provisions and final contract settlements, may result in revisions to costs and revenues and are recognized in the period in which the revisions are determined. Profit incentives are included in revenues when their realization is reasonably assured. Certain of our revenues are recognized as services are performed and amounts are earned, which is measured by time incurred or other contractual milestones or output measures. Revenues accounted for in this manner generally relate to certain fixed fee professional services, cost-plus fixed fee or time-and-materials contracts. Revenues for ongoing operations and maintenance services contracts are generally accounted for ratably as the services are performed throughout the term of the contract. Payments received in advance of services performed are deferred and recognized when the related services are performed. We recognize revenue from the sale of deliverables that are part of a multiple-element arrangement in accordance with applicable accounting guidance that establishes a relative selling price hierarchy permitting the use of an estimated selling price to determine the allocation of arrangement consideration to a deliverable in a multiple-element arrangement where neither vendor specific objective evidence (“VSOE”) nor third-party evidence (“TPE”) of fair value is available for that deliverable. In the absence of VSOE or TPE of the standalone selling price for one or more delivered or undelivered elements in a multiple-element arrangement, we are required to estimate the selling prices of those elements. Overall arrangement consideration is allocated to each element (both delivered and undelivered items) that has stand-alone value based on their relative selling prices, regardless of whether those selling prices are evidenced by VSOE or TPE or are based on our estimated selling prices. We account for multiple-element arrangements that consist only of software and software-related services in accordance with applicable accounting guidance for software and software-related transactions. For such transactions, revenue on arrangements that include multiple elements is allocated to each element based on the relative fair value of each element, and fair value is determined by VSOE. If we cannot objectively determine the fair value of any undelivered element included in such multiple-element arrangements and the only undelivered element is post-contract customer support or maintenance, and VSOE of the fair value of such support or maintenance does not exist, revenue from the entire arrangement is recognized ratably over the support period. When the fair value of a delivered element has not been established but VSOE of fair value exists for the undelivered elements, we use the residual method to recognize revenue if the fair value of all undelivered elements is determinable. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is allocated to the delivered elements and is recognized as revenue. |
Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts | Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts Costs and estimated earnings in excess of billings on uncompleted contracts in the accompanying unaudited consolidated balance sheets represent unbilled amounts earned and reimbursable under services sales arrangements. At any given period-end, a large portion of the balance in this account represents the accumulation of labor, materials and other costs that have not been billed due to timing, whereby the accumulation of each month’s costs and earnings are not administratively billed until the subsequent month. Also included in this account are amounts that will become billable according to contract terms, which usually require the consideration of the passage of time, achievement of milestones or completion of the project. Such unbilled amounts are expected to be billed and collected within the next twelve months. |
Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts | Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts Billings in excess of costs and estimated earnings on uncompleted contracts in the accompanying unaudited consolidated balance sheets is comprised of cash collected from customers and billings to customers on contracts in advance of work performed, advance payments negotiated as a contract condition, estimated losses on uncompleted contracts, project-related legal liabilities and other project-related reserves. The unearned amounts are expected to be earned within the next twelve months. We record provisions for estimated losses on uncompleted contracts in the period in which such losses become known. The cumulative effects of revisions to contract revenues and estimated completion costs are recorded in the accounting period in which the amounts become evident and can be reasonably estimated. These revisions can include such items as the effects of change orders and claims, warranty claims, liquidated damages or other contractual penalties and adjustments for contract closeout settlements. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject us to a concentration of credit risk consist principally of cash and cash equivalents and trade accounts receivable. Cash and cash equivalents consist primarily of demand deposits and money market funds maintained with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with high quality financial institutions, and therefore are believed to have minimal credit risk. Our accounts receivable are primarily derived from billings with customers located throughout North America, as well as in the Middle East, Europe, South America and Asia. We generally do not require collateral or other security from our customers. We maintain an allowance for doubtful accounts for potential credit losses, which losses have historically been within management’s expectations. We have historically had a diverse customer base. For the three and six months ended September 30, 2015, no individual customer represented greater than 10% of our total revenues. For the three months ended September 30, 2014, no individual customer represented more than 10% of our total revenues. For the six months ended September 30, 2014, one individual customer represented approximately 10% of our total revenues and no other individual customer represented greater than 10% of our total revenues. |
Fair Values of Financial Instruments | Fair Values of Financial Instruments The fair value of cash equivalents, receivables, accounts payable and accrued expenses approximate carrying value because of the short period of time to maturity. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash and short-term investments with initial maturities of ninety days or less. |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets were $1.7 million as of September 30, 2015 and $1.3 million as of March 31, 2015 and included approximately $520,000 of cash designated as collateral on performance bonds, as required under certain of our Transportation Systems contracts in the Middle East. The performance bonds require us to maintain 100% cash value of the bonds as collateral in a bank that is local to the purchasing agency. The performance bond collateral is required throughout the delivery of our services and maintained in the local bank until the contract is closed by the purchasing agency. We expect these requirements, and the related cash collateral restrictions, to remain in place through Fiscal 2016. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The collectability of our accounts receivable is evaluated through review of outstanding invoices and ongoing credit evaluations of our customers’ financial condition. In cases where we are aware of circumstances that may impair a specific customer’s ability to meet its financial obligations subsequent to the original sale, we will record an allowance against amounts due, and thereby reduce the net recognized accounts receivable to the amount we reasonably believe will be collected. We also maintain an allowance based on our historical collections experience. When we determine that collection is not likely, we write off accounts receivable against the allowance for doubtful accounts. |
Inventories | Inventories Inventories consist of finished goods, work-in-process and raw materials and are stated at the lower of cost or market. Cost is determined using the first-in, first-out method. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and are depreciated using the straight-line method over the estimated useful life ranging from three to eight years. Leasehold improvements are depreciated over the term of the related lease or the estimated useful life of the improvement, whichever is shorter. |
Goodwill and Long-Lived Assets | Goodwill and Long-Lived Assets We evaluate goodwill on an annual basis in our fourth fiscal quarter or more frequently if we believe indicators of impairment exist. We have determined that our reporting units for purposes of testing for goodwill impairment are identical to our reportable segments for financial reporting purposes. We adopted the provisions issued by the Financial Accounting Standards Board (“FASB”) that were intended to simplify goodwill impairment testing. This guidance permits us to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we conduct a two-step goodwill impairment test. The first step of the impairment test involves comparing the fair values of the applicable reporting units with their carrying values. We determine the fair values of our reporting units using the income valuation approach, as well as other generally accepted valuation methodologies. If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, we perform the second step of the goodwill impairment test. The second step of the goodwill impairment test involves comparing the implied fair value of the affected reporting unit’s goodwill with the carrying value of that goodwill. The amount by which the carrying value of the goodwill exceeds its implied fair value, if any, is recognized as an impairment loss. We monitor the indicators for goodwill impairment testing between annual tests. As of September 30, 2015, there was no impairment to our goodwill. We test long-lived assets and purchased intangible assets (other than goodwill) for impairment if we believe indicators of impairment exist. We determine whether the carrying value of an asset or asset group is recoverable, based on comparisons to undiscounted expected future cash flows the asset are expected to generate. If an asset is not recoverable, we record an impairment loss equal to the amount by which the carrying value of the asset exceeds its fair value. We primarily use the income valuation approach to determine the fair value of our long lived assets and purchased intangible assets. As of September 30, 2015, there was no impairment to our long-lived and intangible assets. |
Income Taxes | Income Taxes We utilize the asset and liability method of accounting for income taxes, under which deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse. A valuation allowance is recorded when it is more-likely-than-not that some or all of the deferred tax assets will not be realized, which increases our income tax expense in the period such determination is made. Income tax positions must meet a more-likely-than-not recognition threshold to be recognized. Income tax positions that previously failed to meet the more-likely-than-not threshold are recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not threshold are derecognized in the first subsequent financial reporting period in which that threshold is no longer met. |
Stock-Based Compensation | Stock-Based Compensation We record stock-based compensation in our unaudited consolidated statements of operations as an expense, based on the estimated grant date fair value of our stock-based awards, whereby such fair values are amortized over the requisite service period. Our stock-based awards are currently comprised of common stock options and restricted stock units. The fair value of our common stock option awards is estimated on the grant date using the Black-Scholes-Merton option-pricing formula. While utilizing this model meets established requirements, the estimated fair values generated by it may not be indicative of the actual fair values of our common stock option awards as it does not consider certain factors important to those awards to employees, such as continued employment and periodic vesting requirements, as well as limited transferability. The fair value of our restricted stock units is based on the closing market price of our common stock on the grant date. If there are any modifications or cancellations of the underlying unvested stock-based awards, we may be required to accelerate, increase or cancel any remaining unearned stock-based compensation expense. |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs are included as cost of revenues in the period during which the products ship. |
Warranty | Warranty We generally provide a one to three year warranty from the original invoice date on all products, materials and workmanship. Products sold to various original equipment manufacturer customers sometimes carry longer warranties. Defective products will be either repaired or replaced, usually at our option, upon meeting certain criteria. We accrue a provision for the estimated costs that may be incurred for product warranties relating to a product as a component of cost of sales at the time revenue for that product is recognized. The accrued warranty reserve is included within accrued liabilities in the accompanying unaudited consolidated balance sheets. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which establishes principles for reporting revenue and cash flows arising from an entity’s contracts with customers. This new revenue recognition standard will replace most of the recognition guidance within GAAP. This guidance was deferred by ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, issued by the FASB in August 2015, and is now effective for fiscal years beginning on or after December 15, 2017 with early adoption permitted as of the original effective date. We have not determined the potential effects on our consolidated financial statements of the adoption of ASU 2014-09. In June 2014, the FASB issued ASU No. 2014-12, Compensation—Stock Compensation (“ASU 2014-12”) to resolve diversity in accounting treatment for share based awards in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The standard is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015 and may be applied prospectively or retrospectively. We do not anticipate a significant impact on our consolidated financial statements upon adoption of ASU 2014-12. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern (“ASU 2014-15”), which requires a business entity to evaluate whether there is substantial doubt about the ability to continue as a going concern for each annual and interim reporting period. If substantial doubt exists, additional disclosure is required. The standard is effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016. We do not anticipate a significant impact on its consolidated financial statements upon adoption of ASU 2014-15. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory (“ASU 2015-11”) to simplify the guidance on the measurement of inventory. Under the new standard, an entity should measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The standard is effective for interim and annual periods beginning after December 15, 2016. We do not anticipate a significant impact on our consolidated financial statements upon adoption of ASU 2015-11. |
Supplemental Financial Inform17
Supplemental Financial Information (Tables) | 6 Months Ended |
Sep. 30, 2015 | |
Supplemental Financial Information | |
Schedule of inventories | September 30, March 31, 2015 2015 (In thousands) Materials and supplies $ $ Work in process Finished goods $ $ |
Schedule of intangible assets | September 30, 2015 March 31, 2015 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization (In thousands) Technology $ $ ) $ $ ) Customer contracts / relationships ) ) Trade names and non-compete agreements ) ) Capitalized software development costs ) ) Total $ $ ) $ $ ) |
Schedule of future estimated amortization expense | Fiscal Year Ending March 31: (In thousands) Remainder of 2016 $ 2017 2018 2019 $ |
Schedule of warranty reserve activity | Six Months Ended September 30, 2015 2014 (In thousands) Balance at beginning of period $ $ Addition charged to cost of revenues Warranty claims ) ) Balance at end of period $ $ |
Schedule of computation of basic and diluted (loss) income from continuing operations per share | Three Months Ended Six Months Ended September 30, September 30, 2015 2014 2015 2014 (In thousands) Denominator: Weighted average common shares used in basic and diluted per share computation Dilutive stock options — — — — Dilutive restricted stock units — — — — Weighted average common shares used in diluted per share computation |
Schedule of instruments excluded in the computation of diluted income from continuing operations per share | Three Months Ended Six Months Ended September 30, September 30, 2015 2014 2015 2014 (In thousands) Stock options Restricted stock units |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Sep. 30, 2015 | |
Income Taxes | |
Schedule of provision for income taxes and effective tax rates | Three Months Ended Six Months Ended September 30, September 30, 2015 2014 2015 2014 (In thousands, except percentages) Benefit for income taxes $ $ $ $ Effective tax rate % % % % |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Sep. 30, 2015 | |
Stock-Based Compensation | |
Summary of activity in the plans with respect to stock options | Number of Shares Weighted- Average Exercise Price Per Share (In thousands) Options outstanding at March 31, 2015 $ Granted Exercised ) Forfeited ) Expired ) Options outstanding at September 30, 2015 $ |
Summary of activity with respect to RSUs | Number of Shares (In thousands) Restricted stock units ouststanding at March 31, 2015 Restricted stock units vested ) Restricted stock units forfeited ) Restricted stock units outstanding at September 30, 2015 |
Schedule of stock-based compensation expense | Three Months Ended Six Months Ended September 30, September 30, 2015 2014 2015 2014 (In thousands) Cost of revenues $ $ $ $ Selling, general and administrative expense Research and development expense $ $ $ $ |
Business Segment Information (T
Business Segment Information (Tables) | 6 Months Ended |
Sep. 30, 2015 | |
Business Segment Information | |
Schedule of selected financial information for reportable segments | Roadway Sensors Transportation Systems Performance Analytics Total (In thousands) Three Months Ended September 30, 2015 Revenues $ $ $ $ Segment operating income (loss) ) Three Months Ended September 30, 2014 Revenues $ $ $ $ Segment operating income (loss) ) Six Months Ended September 30, 2015 Revenues $ $ $ $ Segment operating income (loss) ) Six Months Ended September 30, 2014 Revenues $ $ $ $ Segment operating income (loss) ) |
Schedule of reconciliation of total segment income to consolidated income from continuing operations before income taxes | Three Months Ended Six Months Ended September 30, September 30, 2015 2014 2015 2014 (In thousands) Segment operating income: Total income from reportable segments $ $ $ $ Unallocated amounts: Corporate and other expenses ) ) ) ) Amortization of intangible assets ) ) ) ) Change in fair value of contingent consideration — ) — ) Other expense, net — ) Interest income, net ) ) Loss from continuing operations before income taxes $ ) $ ) $ ) $ ) |
Description of Business and S21
Description of Business and Summary of Significant Accounting Policies (Details) | 6 Months Ended | ||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($)customer | Mar. 31, 2015USD ($) | |
Prepaid Expenses and Other Current Assets | |||
Prepaid expenses and other current assets | $ 1,665,000 | $ 1,338,000 | |
Cash designated as collateral on performance bonds | $ 520,000 | ||
Percentage of cash value of the bonds as collateral | 100.00% | ||
Goodwill and Long-Lived Assets | |||
Impairment of goodwill | $ 0 | ||
Impairment of long-lived and intangible assets | $ 0 | $ 0 | |
Total Revenues | Customer | |||
Concentration of Credit Risk | |||
Number of customers | customer | 1 | ||
Maximum | |||
Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts | |||
Expected period for unbilled amounts to be billed and collected | 12 months | ||
Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts | |||
Expected period for unearned amounts to be earned | 12 months | ||
Warranty | |||
Warranty period | 3 years | ||
Maximum | Property and equipment | |||
Property and Equipment | |||
Useful life | 8 years | ||
Minimum | |||
Warranty | |||
Warranty period | 1 year | ||
Minimum | Property and equipment | |||
Property and Equipment | |||
Useful life | 3 years |
Supplemental Financial Inform22
Supplemental Financial Information (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Mar. 31, 2015 |
Inventories | ||
Materials and supplies | $ 1,379 | $ 1,566 |
Work in process | 171 | 216 |
Finished goods | 1,608 | 1,280 |
Total inventories | $ 3,158 | $ 3,062 |
Supplemental Financial Inform23
Supplemental Financial Information (Details 2) - USD ($) $ in Thousands | Sep. 30, 2015 | Mar. 31, 2015 |
Intangible Assets | ||
Gross Carrying Amount | $ 4,214 | $ 4,214 |
Accumulated Amortization | (3,494) | (3,227) |
Future estimated amortization expense | ||
Remainder of 2016 | 259 | |
2,017 | 365 | |
2,018 | 88 | |
2,019 | 8 | |
Total | 720 | 987 |
Technology | ||
Intangible Assets | ||
Gross Carrying Amount | 1,856 | 1,856 |
Accumulated Amortization | (1,637) | (1,565) |
Customer contracts / relationships | ||
Intangible Assets | ||
Gross Carrying Amount | 750 | 750 |
Accumulated Amortization | (559) | (497) |
Trade names and non-compete agreements | ||
Intangible Assets | ||
Gross Carrying Amount | 1,110 | 1,110 |
Accumulated Amortization | (966) | (916) |
Capitalized software development costs | ||
Intangible Assets | ||
Gross Carrying Amount | 498 | 498 |
Accumulated Amortization | $ (332) | $ (249) |
Supplemental Financial Inform24
Supplemental Financial Information (Details 3) - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Activity related to warranty reserve | ||
Balance at beginning of period | $ 181 | $ 184 |
Additions charged to cost of sales | 126 | 60 |
Warranty claims | (105) | (64) |
Balance at end of period | $ 202 | $ 180 |
Supplemental Financial Inform25
Supplemental Financial Information (Details 4) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Denominator: | ||||
Weighted average common shares used in basic and diluted per share computation (in shares) | 31,935 | 32,585 | 32,069 | 32,621 |
Weighted average common shares used in diluted per share computation | 31,935 | 32,585 | 32,069 | 32,621 |
Supplemental Financial Inform26
Supplemental Financial Information (Details 5) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Stock options | ||||
Shares excluded in the computation of income (loss) from continuing operations per share | ||||
Shares excluded in the computation of income (loss) from continuing operations per share | 3,616 | 2,061 | 3,013 | 2,070 |
Restricted stock units | ||||
Shares excluded in the computation of income (loss) from continuing operations per share | ||||
Shares excluded in the computation of income (loss) from continuing operations per share | 184 | 289 | 235 | 242 |
Sale of Vehicle Sensors (Detail
Sale of Vehicle Sensors (Details) $ in Thousands | Jul. 29, 2011 | Sep. 30, 2015USD ($)segment | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)segment | Sep. 30, 2014USD ($) |
Sale of Vehicle Sensors | |||||
Cash proceeds from sale of assets | $ 94 | $ 98 | |||
Number of discontinued operations business segments | segment | 1 | 1 | |||
Sale of Vehicle Sensors, additional disclosures | |||||
Gain on the sale, net of tax | $ 54 | $ 46 | $ 106 | 95 | |
Vehicle Sensors segment | |||||
Sale of Vehicle Sensors | |||||
Additional cash consideration, percentage of revenue associated with royalties | 85.00% | ||||
Amount of earn-outs in connection with royalty | 1,300 | ||||
Cash proceeds from sale of assets | 14,900 | ||||
Sale of Vehicle Sensors, additional disclosures | |||||
Gain on the sale, net of tax | $ 106 | $ 95 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Mar. 31, 2015 | |
Fair value disclosure of liabilities | |||
Current portions of contingent consideration included within accrued liabilities | $ 0 | $ 0 | |
Non-financial assets measured at fair value | |||
Non-financial assets measured at fair value | $ 0 | $ 0 |
Credit Facility (Details)
Credit Facility (Details) - USD ($) $ in Millions | 6 Months Ended | |
Sep. 30, 2015 | Mar. 31, 2015 | |
Credit facility | ||
Revolving Line of Credit | ||
Amount outstanding | $ 0 | $ 0 |
Revolving Line of Credit | ||
Revolving Line of Credit | ||
Term of debt instrument | 2 years | |
Maximum borrowing capacity | $ 12 | |
Prime rate at the end of the period (as a percent) | 3.25% | |
Unused line fee (as a percent) | 0.15% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Taxes | ||||
Benefit (provision) for income taxes | $ 112 | $ 92 | $ 310 | $ 121 |
Effective tax rate (as a percent) | 19.90% | 28.40% | 30.90% | 28.60% |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Jun. 30, 2014USD ($)item | Jul. 23, 2013USD ($) | Sep. 30, 2015USD ($)directorsubsidiary |
Related Party Transaction | |||
Promissory note payable issued to reporting entity for amounts previously owed under a sublease agreement | $ 259,000 | ||
Maxxess | |||
Related Party Transaction | |||
Number of former subsidiaries | subsidiary | 1 | ||
Number of current directors included in investor group | director | 1 | ||
Number of former directors included in investor group | director | 1 | ||
Number of directors included in investor group | director | 1 | ||
Promissory note payable issued to reporting entity for amounts previously owed under a sublease agreement | $ 274,000 | ||
Interest on promissory note (as a percent) | 6.00% | ||
Term of professional services agreement | 4 months | ||
Professional services cost | $ 7,000 | ||
Maxxess | Minimum | |||
Related Party Transaction | |||
Gross proceeds from financing by related party | $ 10,000,000 | $ 10,000,000 | |
Maxxess | Maximum | |||
Related Party Transaction | |||
Professional services hours | item | 200 | ||
Professional services cost | $ 40,000 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) | 1 Months Ended | 6 Months Ended | |
Sep. 30, 2015$ / sharesshares | Sep. 30, 2015plan$ / sharesshares | Sep. 30, 2014shares | |
Employee Benefit Plans | |||
Number of stock incentive plans | plan | 2 | ||
Stock options | |||
Number of Options | |||
Options outstanding at the beginning of the period (in shares) | 2,199,000 | ||
Granted (in shares) | 1,490,000 | ||
Exercised (in shares) | (185,000) | ||
Forfeited (in shares) | (79,000) | ||
Expired (in shares) | (75,000) | ||
Options outstanding at the end of the period (in shares) | 3,350,000 | 3,350,000 | |
Weighted Average Exercise Price Per Share | |||
Options outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 1.83 | ||
Granted (in dollars per share) | $ / shares | 2.35 | ||
Exercised (in dollars per share) | $ / shares | 1.38 | ||
Forfeited (in dollars per share) | $ / shares | 1.82 | ||
Expired (in dollars per share) | $ / shares | 2.06 | ||
Options outstanding at the end of the period (in dollars per share) | $ / shares | $ 2.08 | $ 2.08 | |
Restricted stock units | |||
Weighted Average Exercise Price Per Share | |||
Number of shares of common stock receivable upon vesting of each RSU | 1 | ||
Number of Shares | |||
RSUs outstanding at the beginning of the period (in shares) | 194,000 | ||
Vested (in shares) | (46,000) | ||
Forfeited (in shares) | (18,000) | ||
RSUs outstanding at the end of the period (in shares) | 130,000 | 130,000 | |
2007 Plan | |||
Employee Benefit Plans | |||
Shares of common stock available for grant | 1,098,000 | 1,098,000 | |
Vested and expected to vest at the end of the period (in shares) | 3,000,000 | 3,000,000 | 1,800,000 |
2007 Plan | CEO | |||
Employee Benefit Plans | |||
Expected life - years | 7 years 3 months 18 days | ||
Risk-free interest rate (as a percent) | 1.90% | ||
Expected volatility of common stock (as a percent) | 0.48% | ||
Dividend yield (as a percent) | 0.00% | ||
Number of Options | |||
Granted (in shares) | 1,350,000 |
Stock-Based Compensation (Det33
Stock-Based Compensation (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Stock-Based Compensation | ||||
Stock-based compensation expense | $ 113,000 | $ 86,000 | $ 196,000 | $ 185,000 |
Stock options | ||||
Stock-Based Compensation | ||||
Unrecognized compensation expense related to unvested stock options | 2,155,000 | $ 2,155,000 | ||
Weighted average period over which compensation expense is expected to be recognized | 3 years 4 months 24 days | |||
Restricted stock units | ||||
Stock-Based Compensation | ||||
Unrecognized compensation expense related to unvested RSUs | 183,000 | $ 183,000 | ||
Weighted average period over which compensation expense is expected to be recognized | 2 years 6 months | |||
Cost of revenues | ||||
Stock-Based Compensation | ||||
Stock-based compensation expense | 11,000 | 5,000 | $ 18,000 | 9,000 |
Selling, general and administrative expense. | ||||
Stock-Based Compensation | ||||
Stock-based compensation expense | 88,000 | 69,000 | 158,000 | 155,000 |
Research and development expense. | ||||
Stock-Based Compensation | ||||
Stock-based compensation expense | $ 14,000 | $ 12,000 | $ 20,000 | $ 21,000 |
Stock Repurchase Program (Detai
Stock Repurchase Program (Details) - USD ($) | Nov. 06, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Aug. 09, 2012 | Aug. 31, 2011 |
Stock Repurchase Program | ||||||||
Increase in the authorized amount for repurchase of common stock | $ 3,000,000 | |||||||
Number of shares of common stock repurchased | 255,000 | 145,000 | 656,000 | 323,000 | 3,422,000 | |||
Value of common stock repurchased | $ 5,600,000 | |||||||
Average price per share of common stock repurchased (in dollars per share) | $ 1.63 | |||||||
Value of common stock available for repurchase under current program | $ 1,690,000 | $ 1,690,000 | $ 1,690,000 | |||||
Maximum | ||||||||
Stock Repurchase Program | ||||||||
Value of common stock approved under stock repurchase program | $ 3,000,000 | |||||||
August 2011 Program | ||||||||
Stock Repurchase Program | ||||||||
Number of shares of common stock repurchased | 964,000 | |||||||
Value of common stock repurchased | $ 1,300,000 | |||||||
August 2011 Program | Maximum | ||||||||
Stock Repurchase Program | ||||||||
Value of common stock approved under stock repurchase program | $ 3,000,000 |
Business Segment Information (D
Business Segment Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)segment | Sep. 30, 2014USD ($) | |
Business Segments | ||||
Number of reportable segments | segment | 3 | |||
Revenues | $ 20,573 | $ 18,550 | $ 38,938 | $ 36,666 |
Segment operating income (loss) | (569) | (320) | (1,014) | (415) |
Operating segments | ||||
Business Segments | ||||
Revenues | 20,573 | 18,550 | 38,938 | 36,666 |
Segment operating income (loss) | 1,090 | 1,893 | 2,952 | 3,850 |
Operating segments | Roadway Sensors | ||||
Business Segments | ||||
Revenues | 11,559 | 10,196 | 21,464 | 19,216 |
Segment operating income (loss) | 2,288 | 2,123 | 4,890 | 3,920 |
Operating segments | Transportation Systems | ||||
Business Segments | ||||
Revenues | 8,110 | 7,284 | 15,488 | 14,949 |
Segment operating income (loss) | 1,159 | 965 | 2,085 | 1,819 |
Operating segments | Performance Analytics | ||||
Business Segments | ||||
Revenues | 904 | 1,070 | 1,986 | 2,501 |
Segment operating income (loss) | $ (2,357) | $ (1,195) | $ (4,023) | $ (1,889) |
Business Segment Information 36
Business Segment Information (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Business Segments | ||||
Total income from reportable segments | $ (569) | $ (320) | $ (1,014) | $ (415) |
Amortization of intangible assets | (92) | (120) | (184) | (239) |
Change in fair value of acquisition contingent consideration | (4) | (8) | ||
Other income (expense), net | 4 | 4 | (3) | |
Interest income, net | 4 | (5) | 7 | (4) |
Loss from continuing operations before income taxes | (561) | (325) | (1,003) | (422) |
Operating segments | ||||
Business Segments | ||||
Total income from reportable segments | 1,090 | 1,893 | 2,952 | 3,850 |
Unallocated amounts | ||||
Business Segments | ||||
Corporate and other expenses | (1,567) | (2,089) | (3,782) | (4,018) |
Amortization of intangible assets | (92) | (120) | (184) | (239) |
Change in fair value of acquisition contingent consideration | (4) | (8) | ||
Other income (expense), net | 4 | 4 | (3) | |
Interest income, net | 4 | (5) | 7 | (4) |
Loss from continuing operations before income taxes | $ (561) | $ (325) | $ (1,003) | $ (422) |