Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Sep. 30, 2017 | Oct. 30, 2017 | |
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, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --03-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 32,787,202 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2017 | Mar. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 14,922 | $ 18,201 |
Trade accounts receivable, net of allowance for doubtful accounts of $414 and $389 at September 30, 2017 and March 31, 2017, respectively | 15,076 | 14,299 |
Unbilled accounts receivable | 6,812 | 6,456 |
Inventories | 2,783 | 2,250 |
Prepaid expenses and other current assets | 2,499 | 2,108 |
Total current assets | 42,092 | 43,314 |
Property and equipment, net | 2,474 | 2,064 |
Intangible assets, net | 2,320 | 1,498 |
Goodwill | 15,150 | 15,150 |
Other assets | 359 | 319 |
Total assets | 62,395 | 62,345 |
Current liabilities: | ||
Trade accounts payable | 8,279 | 7,886 |
Accrued payroll and related expenses | 5,446 | 6,443 |
Accrued liabilities | 2,245 | 2,201 |
Deferred revenue | 4,662 | 4,049 |
Total current liabilities | 20,632 | 20,579 |
Deferred rent | 715 | 649 |
Deferred income taxes | 707 | 707 |
Unrecognized tax benefits | 159 | 186 |
Total liabilities | 22,213 | 22,121 |
Commitments and contingencies (Note 6) | ||
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, 2017 and March 31, 2017 Issued and outstanding shares - 32,787 at September 30, 2017 and 32,488 at March 31, 2017 | 3,279 | 3,249 |
Additional paid-in capital | 138,351 | 136,968 |
Accumulated deficit | (101,448) | (99,993) |
Total stockholders' equity | 40,182 | 40,224 |
Total liabilities and stockholders' equity | $ 62,395 | $ 62,345 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Sep. 30, 2017 | Mar. 31, 2017 |
Consolidated Balance Sheets | ||
Trade accounts receivable, allowance for doubtful accounts (in dollars) | $ 414 | $ 389 |
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 | 32,787 | 32,488 |
Common stock, outstanding shares | 32,787 | 32,488 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Consolidated Statements of Operations | ||||
Product revenues | $ 11,702 | $ 11,086 | $ 23,625 | $ 22,093 |
Service revenues | 13,546 | 12,974 | 28,806 | 25,893 |
Total revenues | 25,248 | 24,060 | 52,431 | 47,986 |
Cost of product revenues | 6,278 | 6,196 | 13,141 | 12,150 |
Cost of service revenues | 9,002 | 8,409 | 19,417 | 16,972 |
Total cost of revenues | 15,280 | 14,605 | 32,558 | 29,122 |
Gross profit | 9,968 | 9,455 | 19,873 | 18,864 |
Operating expenses: | ||||
Selling, general and administrative | 9,153 | 7,858 | 17,850 | 15,663 |
Research and development | 1,881 | 1,698 | 3,608 | 3,308 |
Amortization of intangible assets | 33 | 84 | 66 | 169 |
Total operating expenses | 11,067 | 9,640 | 21,524 | 19,140 |
Operating loss | (1,099) | (185) | (1,651) | (276) |
Non-operating income (expense): | ||||
Other income (expense), net | 2 | (2) | (5) | (6) |
Interest income, net | 3 | 4 | 5 | 5 |
Loss from continuing operations before income taxes | (1,094) | (183) | (1,651) | (277) |
Benefit for income taxes | 33 | 8 | 34 | 7 |
Loss from continuing operations | (1,061) | (175) | (1,617) | (270) |
Gain on sale of discontinued operation, net of tax | 77 | 135 | 163 | 191 |
Net loss | $ (984) | $ (40) | $ (1,454) | $ (79) |
Loss per share from continuing operations - basic and diluted (in dollars per share) | $ (0.03) | $ (0.01) | $ (0.05) | $ (0.01) |
Gain per share from sale of discontinued operation - basic and diluted (in dollars per share) | 0 | 0.01 | 0.01 | 0.01 |
Net loss per share - basic and diluted (in dollars per share) | $ (0.03) | $ 0 | $ (0.04) | $ 0 |
Shares used in basic and diluted per share calculations (in shares) | 32,628 | 32,117 | 32,567 | 32,085 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities | ||
Net loss | $ (1,454) | $ (79) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Deferred income taxes | (27) | 13 |
Depreciation of property and equipment | 388 | 361 |
Stock-based compensation | 877 | 486 |
Amortization of intangible assets | 323 | 354 |
Gain on sale of discontinued operation, net of tax | (163) | (191) |
Loss on disposal of equipment | 6 | 12 |
Changes in operating assets and liabilities, net of effects of discontinued operation: | ||
Accounts receivable | (777) | 782 |
Unbilled accounts receivable and deferred revenue, net | 257 | (1,624) |
Inventories | (533) | 379 |
Prepaid expenses and other assets | (529) | (190) |
Accounts payable and accrued expenses | (889) | (24) |
Net cash (used in) provided by operating activities | (2,521) | 279 |
Cash flows from investing activities | ||
Purchases of property and equipment | (804) | (401) |
Capitalized software development costs | (750) | (461) |
Net proceeds from sale of discontinued operation | 260 | 88 |
Net cash used in investing activities | (1,294) | (774) |
Cash flows from financing activities | ||
Proceeds from stock option exercises | 566 | 214 |
Tax withholding payments for net share settlements of restricted stock units | (30) | (35) |
Net cash provided by financing activities | 536 | 179 |
Decrease in cash and cash equivalents | (3,279) | (316) |
Cash and cash equivalents at beginning of period | 18,201 | 16,029 |
Cash and cash equivalents at end of period | 14,922 | |
Supplemental cash flow information: | ||
Interest | 9 | |
Income taxes | 88 | $ 47 |
Supplemental schedule of non-cash investing activities: | ||
Capitalized software development costs included in accounts payable and accrued expenses | $ 395 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 6 Months Ended |
Sep. 30, 2017 | |
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 wholly-owned subsidiary, ClearAg, Inc., in this report as “Iteris,” the “Company,” “we,” “our” and “us”) is a provider of applied informatics 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 make roads safer and travel more efficient, as well as farmlands more sustainable, healthy and productive. 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 believe our products, services and solutions, in conjunction with sound traffic and land management, minimize the environmental impact to the roads we travel and the lands we farm. 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 that provide analytical support to large enterprises in the agriculture market, such as seed and crop protection companies, as well as field-specific advisories to individual producers. We continue to make significant investments to leverage our existing technologies and further expand our software-based information systems to offer digital analytics solutions to the agriculture markets. Iteris was incorporated in Delaware in 1987. Recent Developments ClearAg Inc. In April 2017, Iteris, Inc. formed a wholly-owned subsidiary, ClearAg, Inc., a Delaware corporation, to provide ClearAg solutions in the global agribusiness markets. Basis of Presentation Our unaudited consolidated financial statements include the accounts of Iteris, Inc. and its subsidiary, and have been prepared in accordance with the rules of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting, which permit certain footnotes 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 be 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, 2017 (“Fiscal 2017”), filed with the SEC on June 13, 2017. All intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and six month periods ended September 30, 2017 are not necessarily indicative of the results to be expected for the fiscal year ending March 31, 2018 (“Fiscal 2018”) or any other periods. The results of continuing operations for all periods presented in the unaudited consolidated financial statements exclude our former Vehicle Sensors segment, which has been classified as a discontinued operation. 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, warranty reserves, costs to complete long-term contracts, indirect cost rates used in cost plus contracts, 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 revenues are derived primarily from long-term contracts with governmental agencies. Certain Agriculture and Weather Analytics revenues are also derived from long-term contracts with governmental agencies, as well as contracts with commercial companies. Agriculture and Weather Analytics revenues that are derived from contracts with commercial companies are generally from subscription revenue that we typically invoice our customers at the beginning of the term, in multiyear, annual, semi-annual or quarterly installments, and revenue is recognized ratably over the period of the subscription beginning once all requirements for revenue recognition have been met, including provisioning the service so that it is available to our customers. 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. 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 stand-alone 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. Unbilled Accounts Receivable Unbilled accounts receivable in the accompanying unaudited consolidated balance sheets represent unbilled amounts earned and reimbursable under services sales arrangements, including approximately $426,000 of costs and estimated earnings in excess of billings on uncompleted contracts accounted for under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605-35, Construction-Type and Production-Type Contracts (“ASC 605-35”). 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. Deferred Revenue Deferred revenue 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, including approximately $1.1 million of billings in excess of costs and estimated earnings on uncompleted contracts accounted for under FASB ASC 605-35. The unearned amounts are expected to be earned within the next twelve months. 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, 2017, one individual customer represented greater than 10% of our total revenues. For the three and six months ended September 30, 2016, one individual customer represented more than 10% of our total revenues. As of September 30, 2017, one individual customer represented more than 10% of our total accounts receivable. As of March 31, 2017, no individual customer represented more than 10% of our total accounts receivable. 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 90 days or less. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets were $2.5 million as of September 30, 2017 and $2.1 million as of March 31, 2017, and included approximately $535,000 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 is 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 be released in the second half of our Fiscal 2018. 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 net realizable value. 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 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 goodwill impairment test. 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. In Fiscal 2017, we adopted the provisions issued by the FASB that were intended to simplify goodwill impairment testing. This guidance permits us to eliminate the second step of the goodwill impairment test, and eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment. If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, 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, 2017, we determined that no adjustments to the carrying value of goodwill were required. 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 or asset group is 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, 2017, 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. As such, we determined it was appropriate to record a valuation allowance of approximately $10.1 million in the third quarter of our Fiscal 2016 against our deferred tax assets. We will frequently reassess the appropriateness of maintaining a valuation allowance. 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. Research and Development Expenditures Research and development expenditures are charged to expense in the period incurred. Shipping and Handling Costs Shipping and handling costs are included as cost of revenues in the period during which the products ship. Sales Taxes Sales taxes are presented on a net basis (excluded from revenues) in the consolidated unaudited statements of operations. 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 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. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations , which further clarifies the implementation guidance in ASU 2014-09. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing , to expand the guidance on identifying performance obligations and licensing within ASU 2014-09. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients , which amends the guidance in the new revenue standard on collectability, noncash consideration, presentation of sales tax, and transition. The amendments are intended to address implementation issues that were raised by stakeholders and provide additional practical expedients to reduce the cost and complexity of applying the new revenue standard. These standards are effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. We are currently executing a plan to evaluate the full impact of the adoption on our consolidated financial statements, as well as any changes to our accounting policies. We have preliminarily elected to adopt Topic 606 using the modified retrospective transition method. In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”). The pronouncement requires an entity to recognize assets and liabilities for the rights and obligations created by leases on the entity’s balance sheet for both finance and operating leases. For leases with a term of 12 months or less, an entity can elect to not recognize lease assets and lease liabilities and expense the lease over a straight-line basis for the term of the lease. ASU 2016-02 will require new disclosures that depict the amount, timing, and uncertainty of cash flows pertaining to an entity’s leases. Companies are required to adopt the new standard using a modified retrospective approach for annual and interim periods beginning after December 15, 2018. Early adoption of ASU 2016-02 is permitted. We are currently evaluating the impact of ASU 2016-02 on our consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The new standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. We are currently evaluating the impact of ASU 2016-15 on our consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), requiring restricted cash and cash equivalents to be included with cash and cash equivalents on the statement of cash flows. The new standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted. We are currently evaluating the impact of ASU 2016-18 on our consolidated financial statements. In December 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers (“ASU 2016-20”), which allows entities not to make quantitative disclosures about remaining performance obligations in certain cases and requires entities that use any of the new or previously existing optional exemptions to expand their qualitative disclosures. The new standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted. We are currently evaluating the impact of ASU 2016-20 on our consolidated financial statements. |
Supplemental Financial Informat
Supplemental Financial Information | 6 Months Ended |
Sep. 30, 2017 | |
Supplemental Financial Information | |
Supplemental Financial Information | 2. Supplemental Financial Information Inventories The following table presents details of our inventories: September 30, March 31, 2017 2017 (In thousands) Materials and supplies $ $ Work in process Finished goods $ $ Intangible Assets There are no indefinite lived intangible assets on our unaudited consolidated balance sheets. The following table presents details of our net intangible assets: September 30, 2017 March 31, 2017 Gross Accumulated Net Book Gross Accumulated Net Book (In thousands) Technology $ $ ) $ $ $ ) $ Customer contracts / relationships ) ) Trade names and non-compete agreements ) ) Capitalized software development costs ) ) Total $ $ ) $ $ $ ) $ As of September 30, 2017, future estimated amortization expense is as follows: Fiscal Year Ending March 31, (In thousands) Remainder of 2018 $ 2019 2020 2021 2022 Thereafter $ Warranty Reserve Activity Warranty reserve was recorded as accrued liabilities in the accompanying unaudited consolidated balance sheets. The following table presents activity related to the warranty reserve: Six Months Ended September 30, 2017 2016 (In thousands) Balance at beginning of fiscal year $ $ Additions charged to cost of sales 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. Loss Per Share The following table sets forth the reconciliation of weighted average common shares used in basic per share computations and weighted average common shares used in diluted per share computations in the unaudited consolidated financial statements: Three Months Ended Six Months Ended September 30, September 30, 2017 2016 2017 2016 (In thousands) Denominator: Weighted average common shares used in basic computation Dilutive stock options — — — — Dilutive restricted stock units — — — — Weighted average common shares used in diluted 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, 2017 2016 2017 2016 (In thousands) Stock options Restricted stock units |
Sale of Vehicle Sensors
Sale of Vehicle Sensors | 6 Months Ended |
Sep. 30, 2017 | |
Sale of Vehicle Sensors | |
Sale of Vehicle Sensors | 3. Sale of Vehicle Sensors On July 29, 2011, we completed the sale (the “Asset 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. From the date of the asset sale through September 30, 2017, we received approximately $2.4 million in connection with the royalty related earn-out provisions for a total of $17.7 million in cash received from the asset sale as of September 30, 2017. In accordance with applicable accounting guidance, we determined that the Vehicle Sensors segment, which constituted one of our operating segments at the time of the Asset Sale, qualified as a discontinued operation. For the six months ended September 30, 2017 and 2016, we recorded a gain on sale of discontinued operation of approximately $163,000 and $191,000, respectively, net of tax, related to the earn-out provisions of the asset purchase agreement for the Asset Sale. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Sep. 30, 2017 | |
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. 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, 2017 and 2016. |
Income Taxes
Income Taxes | 6 Months Ended |
Sep. 30, 2017 | |
Income Taxes | |
Income Taxes | 5. Income Taxes The following table sets forth our benefit for income taxes, along with the corresponding effective tax rates: Three Months Ended Six Months Ended September 30, September 30, 2017 2016 2017 2016 (In thousands, except percentages) Benefit for income taxes $ $ $ $ Change in valuation allowance ) ) ) ) Total 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. We have experienced a cumulative pre-tax loss over the trailing three years. As such, we consider it appropriate to continue to maintain a valuation allowance against our deferred tax assets. We will continuously reassess the appropriateness of maintaining a valuation allowance. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | 6. 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, the Company has in the past been, and may in the future be from time to time, involved in litigation relating to claims arising out of its operations in the normal course of business. While the Company cannot accurately predict the outcome of any such litigation, except as described below, the Company is not a party to any legal proceeding, the outcome of which, in management’s opinion, individually or in the aggregate, would have a material effect on the Company’s consolidated results of operations, financial position or cash flows. On September 15, 2016, a stockholder class action and derivative action (captioned Ionni v. Bergera, et al., Case No. 16-cv00807-RGA) was filed in the United States District Court for the District of Delaware (the “Court”) against certain of the Company’s current and former directors and officers (the “Individual Defendants”) and the Company as a nominal defendant (together with the Individual Defendants, the “Defendants”). The complaint asserted claims for breach of fiduciary duty and unjust enrichment. Plaintiff contended that, in 2014 and 2015, the Individual Defendants caused the Company to issue purportedly false and misleading proxy statements in connection with the Company’s annual meeting of stockholders in 2014 and 2015 (collectively, the “Proxy Statements”). In those Proxy Statements, the Company’s stockholders were asked to approve amendments (the “Amendments”) to increase the number of shares of the Company’s common stock reserved for issuance under the Iteris, Inc. 2007 Omnibus Incentive Plan (the “2007 Plan”). Among other things, Plaintiff alleged that the Proxy Statements were materially false and misleading because they affirmatively represented that no person could receive more than 500,000 stock options or SARs under the 2007 Plan in any fiscal year (the “Share Limit”) and failed to disclose that the Compensation Committee had the discretion to approve an annual grant to a 2007 Plan participant in excess of that amount. Plaintiff contended that, in voting to approve the Amendments, the Company’s stockholders were not fully informed and, therefore, the Amendments were not valid. Plaintiff sought rescission of any stock options granted pursuant to the Amendments, including the option to purchase up to 1,350,000 shares of the Company’s common stock that was granted in September 2015 to Mr. Bergera (the “CEO Option”) in connection with his appointment to serve as President and Chief Executive Officer of the Company. The Individual Defendants denied that they breached their fiduciary duties and the Company believed (and still believes) the Amendments were properly approved and that all of the options granted pursuant to the Amendments, including the CEO Option, were valid. Nonetheless, to eliminate the burden, expense and uncertainty of the litigation, on November 8, 2016, the parties entered into a Memorandum of Understanding (“MOU”) setting forth their agreement in principle to resolve the litigation. In consideration for a release of claims and dismissal of this litigation with prejudice, the Company agreed to submit a proposal at its 2016 Annual Meeting of Stockholders seeking stockholder approval for that portion of the CEO Option that exceeds the Share Limit (i.e., the 850,000 options above the Share Limit (the “Excess Shares”)). The Company submitted a proposal of the Excess Shares for approval by the Company stockholders at the 2016 Annual Meeting of Stockholders. On December 15, 2016, the Company’s stockholders approved the Excess Shares. On April 28, 2017, the parties entered into a Stipulation of Settlement and Compromise (the “Stipulation”) that provides for, among other things, a release of claims against Defendants. Under the Stipulation, Defendants agreed not to oppose any award of attorneys’ fees and expenses to Plaintiff up to $215,000. On May 2, 2017, the parties filed a motion for preliminary approval of the settlement. On May 11, 2017, the Court issued an order requesting briefing from the parties regarding the scope of the proposed release in the settlement, and on May 22, 2017, Defendants and Plaintiff each filed a letter brief to the Court in response to the order. On June 2, 2017, the Court issued an order granting the motion for preliminary approval, approving notice of the settlement, and scheduling a settlement approval hearing for September 8, 2017. At the settlement hearing on September 8, 2017, the Court approved the settlement and entered a final judgment dismissing the action with prejudice. No stockholder objected to either the settlement or the proposed fee award. The settlement became effective on October 10, 2017, because as of that date, the dismissal of the action is no longer subject to appeal. Pursuant to the settlement terms, Defendants have caused to be paid via wire the above award amount on or about October 27, 2017. An immaterial accrued liability for the settlement is included in the accompanying consolidated balance sheet as of September 30, 2017 and March 31, 2017. Related Party Transaction We previously subleased office space to Maxxess Systems, Inc. (“Maxxess”), one of our former subsidiaries that we sold in September 2003. The sublease terminated in September 2007, at which time Maxxess owed us an aggregate of $274,000. Maxxess executed a promissory note for such amount, which was subsequently amended and restated on July 23, 2013 and on August 11, 2016. The amended and restated note bears interest at a rate of 6% per annum, compounded annually, with accrued interest payable annually on the first business day of each calendar year. When authorized by the Company, Maxxess may pay down the balance of this note by providing consulting services to Iteris. We have previously fully reserved for amounts owed to us by Maxxess and the outstanding principal balance remains fully reserved. As of September 30, 2017, approximately $146,000 of the original principal balance was outstanding and payable to Iteris. Maxxess is currently owned by an investor group that includes one former Iteris director, who has not been a director of Iteris since September 2013, and one existing director of Iteris, who currently owns less than 2% of Maxxess’ capital stock. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Sep. 30, 2017 | |
Stock-Based Compensation | |
Stock-Based Compensation | 7. Stock-Based Compensation We currently maintain two stock incentive plans, the 2007 Plan and the 2016 Omnibus Incentive Plan (the “2016 Plan”). Of these plans, we may only grant future awards from the 2016 Plan. As of 2016 Annual Meeting of Stockholders, no future shares could be granted under the 2007 Plan. The 2016 Plan allows for the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), cash incentive awards and other stock-based awards. At September 30, 2017, there were approximately 2.3 million shares of common stock available for grant or issuance under the 2016 Plan. Total stock options vested and expected to vest were approximately 3.6 million as of September 30, 2017. Stock Options A summary of activity with respect to our stock options for the six months ended September 30, 2017 is as follows: Number of Weighted (In thousands) Options outstanding at March 31, 2017 $ Granted Exercised ) Forfeited ) Expired — — Options outstanding at September 30, 2017 $ 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, 2017 is as follows: Number of (In thousands) RSUs outstanding at March 31, 2017 Granted Vested ) Forfeited ) RSUs outstanding at September 30, 2017 Stock-Based Compensation Expense The following table presents stock-based compensation expense that is included in each line item on our unaudited consolidated statements of operations: Three Months Ended Six Months Ended September 30, September 30, 2017 2016 2017 2016 (In thousands) Cost of revenues $ $ $ $ Selling, general and administrative expense Research and development expense Total stock-based compensation expense $ $ $ $ At September 30, 2017, there was approximately $3.0 million and $574,000 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 2.6 years for stock options and 1.5 years for RSUs. |
Stock Repurchase Program
Stock Repurchase Program | 6 Months Ended |
Sep. 30, 2017 | |
Stock Repurchase Program | |
Stock Repurchase Program | 8. 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 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 cancelled the initial stock repurchase program and the approximate $1.7 million of remaining funds, and approved a new stock repurchase program pursuant to which we may acquire up to $3 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, 2017, we did not repurchase any shares. As of September 30, 2017, approximately $1.7 million remained available for the repurchase of our common stock under our current stock purchase program. From inception of the program in August 2011 through September 30, 2017, we repurchased approximately 3,422,000 shares of our common stock for an aggregate price of approximately $5.6 million, at an average price per share of $1.63. As of September 30, 2017, all repurchased shares have been retired and resumed their status as authorized and unissued shares of our common stock. |
Business Segment Information
Business Segment Information | 6 Months Ended |
Sep. 30, 2017 | |
Business Segment Information | |
Business Segment Information | 9. Business Segment Information We currently operate in three reportable segments: Roadway Sensors, Transportation Systems, and Agriculture and Weather Analytics. The Roadway Sensors segment provides hardware and software products to multiple segments of the ITS market that use advanced image processing technology and other techniques to capture and analyze sensor data through sophisticated algorithms, enabling vehicle, bicycle, and pedestrian detection and transmission of both video images and data using various communication technologies. These products primarily consist of various vehicle detection and information systems and products for traffic intersection control, communication, incident detection, and roadway traffic data collection applications. These include, among other products, our Vantage, VantageNext, VersiCam, Vantage Vector, SmartCycle, PedTrax, SmartSpan, Pegasus, Velocity, and P-series products. In May 2017, we announced the release of VantageLive!, a cloud-based intersection data analytics service that allows users to view intersection activity by collecting and analyzing vehicle, bicycle and pedestrian data through our Vantage platform in order to maximize traffic signal efficiency and improve intersection safety conditions. Our Roadway Sensors segment also includes the sale of certain complementary original equipment manufacturer (“OEM”) products for the traffic intersection market, which include, among other things, intersection controllers and component cabinets. The Transportation Systems segment provides transportation engineering and consulting services related to the planning, design, implementation, operation and management of surface transportation infrastructure systems, and the development of transportation management and traveler information systems for the ITS industry. This segment also includes our performance measurement and information management solution, known as “iPeMS”, and related traffic analytic consulting services, as well as our commercial vehicle goods movement compliance and inspection platform, known as “CVIEW-Plus”. Both iPeMS and CVIEW-Plus are considered software-as-a-service solutions. The Agriculture and Weather Analytics segment includes ClearPath Weather, our road-maintenance applications, and ClearAg, our digital analytics solutions. ClearPath Weather provides winter road maintenance recommendations for state agencies, municipalities and for commercial companies. Our ClearAg solutions leverage our EMPower platform, which is an adaptive learning engine that provides a comprehensive database of weather, soil and agronomic information combined with proprietary land-surface modeling, essential to making informed agricultural decisions and solving complex agricultural problems. Our ClearAg solutions include our ClearAg applications, ClearAg application program interfaces (“APIs”) and components, WeatherPlot mobile application, and ClearAg Insights applications. In July 2017, we launched our ClearAg irrigation APIs, including the EvapoSmart and IMFocus APIs, to enable users to optimize irrigation scheduling, water conservation and plant uptake while reducing watering costs. The accounting policies of our reportable segments are the same as those described in the summary of significant accounting policies (Note 1). Certain corporate general and administrative expenses, including general overhead functions such as information systems, accounting, human resources, marketing, compliance costs and certain administrative expenses, as well as interest and amortization of 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. Our Chief Executive Officer, who is our chief operating decision maker (“CODM”), reviews financial information at the operating segment level. Our CODM does not review assets by segment in his resource allocation, and therefore assets by segment are not disclosed below. The following table sets forth selected unaudited consolidated financial information for our reportable segments for the three and six months ended September 30, 2017 and 2016: Roadway Transportation Agriculture Total (In thousands) Three Months Ended September 30, 2017 Product revenues $ $ $ — $ Service revenues Total revenues $ $ $ $ Segment income (loss) ) Three Months Ended September 30, 2016 Product revenues $ $ $ — $ Service revenues Total revenues $ $ $ $ Segment income (loss) ) Six Months Ended September 30, 2017 Product revenues $ $ $ — $ Service revenues Total revenues $ $ $ $ Segment income (loss) ) Six Months Ended September 30, 2016 Product revenues $ $ $ — $ Service revenues Total revenues $ $ $ $ Segment 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, 2017 2016 2017 2016 (In thousands) Segment income (loss): Total income from reportable segments $ $ $ $ Unallocated amounts: Corporate and other expenses ) ) ) ) Amortization of intangible assets ) ) ) ) Other expense, net ) ) ) Interest income, net Loss from continuing operations before income taxes $ ) $ ) $ ) $ ) |
Description of Business and S15
Description of Business and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Sep. 30, 2017 | |
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 subsidiary, and have been prepared in accordance with the rules of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting, which permit certain footnotes 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 be 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, 2017 (“Fiscal 2017”), filed with the SEC on June 13, 2017. All intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and six month periods ended September 30, 2017 are not necessarily indicative of the results to be expected for the fiscal year ending March 31, 2018 (“Fiscal 2018”) or any other periods. The results of continuing operations for all periods presented in the unaudited consolidated financial statements exclude our former Vehicle Sensors segment, which has been classified as a discontinued operation. 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, warranty reserves, costs to complete long-term contracts, indirect cost rates used in cost plus contracts, 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 revenues are derived primarily from long-term contracts with governmental agencies. Certain Agriculture and Weather Analytics revenues are also derived from long-term contracts with governmental agencies, as well as contracts with commercial companies. Agriculture and Weather Analytics revenues that are derived from contracts with commercial companies are generally from subscription revenue that we typically invoice our customers at the beginning of the term, in multiyear, annual, semi-annual or quarterly installments, and revenue is recognized ratably over the period of the subscription beginning once all requirements for revenue recognition have been met, including provisioning the service so that it is available to our customers. 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. 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 stand-alone 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. |
Unbilled Accounts Receivable | Unbilled Accounts Receivable Unbilled accounts receivable in the accompanying unaudited consolidated balance sheets represent unbilled amounts earned and reimbursable under services sales arrangements, including approximately $426,000 of costs and estimated earnings in excess of billings on uncompleted contracts accounted for under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605-35, Construction-Type and Production-Type Contracts (“ASC 605-35”). 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. |
Deferred Revenue | Deferred Revenue Deferred revenue 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, including approximately $1.1 million of billings in excess of costs and estimated earnings on uncompleted contracts accounted for under FASB ASC 605-35. The unearned amounts are expected to be earned within the next twelve months. 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, 2017, one individual customer represented greater than 10% of our total revenues. For the three and six months ended September 30, 2016, one individual customer represented more than 10% of our total revenues. As of September 30, 2017, one individual customer represented more than 10% of our total accounts receivable. As of March 31, 2017, no individual customer represented more than 10% of our total accounts receivable. |
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 90 days or less. |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets were $2.5 million as of September 30, 2017 and $2.1 million as of March 31, 2017, and included approximately $535,000 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 is 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 be released in the second half of our Fiscal 2018. |
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 net realizable value. 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 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 goodwill impairment test. 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. In Fiscal 2017, we adopted the provisions issued by the FASB that were intended to simplify goodwill impairment testing. This guidance permits us to eliminate the second step of the goodwill impairment test, and eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment. If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, 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, 2017, we determined that no adjustments to the carrying value of goodwill were required. 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 or asset group is 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, 2017, 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. As such, we determined it was appropriate to record a valuation allowance of approximately $10.1 million in the third quarter of our Fiscal 2016 against our deferred tax assets. We will frequently reassess the appropriateness of maintaining a valuation allowance. 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. |
Research and Development Expenditures | Research and Development Expenditures Research and development expenditures are charged to expense in the period incurred. |
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. |
Sales Taxes | Sales Taxes Sales taxes are presented on a net basis (excluded from revenues) in the consolidated unaudited statements of operations. |
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 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. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations , which further clarifies the implementation guidance in ASU 2014-09. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing , to expand the guidance on identifying performance obligations and licensing within ASU 2014-09. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients , which amends the guidance in the new revenue standard on collectability, noncash consideration, presentation of sales tax, and transition. The amendments are intended to address implementation issues that were raised by stakeholders and provide additional practical expedients to reduce the cost and complexity of applying the new revenue standard. These standards are effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. We are currently executing a plan to evaluate the full impact of the adoption on our consolidated financial statements, as well as any changes to our accounting policies. We have preliminarily elected to adopt Topic 606 using the modified retrospective transition method. In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”). The pronouncement requires an entity to recognize assets and liabilities for the rights and obligations created by leases on the entity’s balance sheet for both finance and operating leases. For leases with a term of 12 months or less, an entity can elect to not recognize lease assets and lease liabilities and expense the lease over a straight-line basis for the term of the lease. ASU 2016-02 will require new disclosures that depict the amount, timing, and uncertainty of cash flows pertaining to an entity’s leases. Companies are required to adopt the new standard using a modified retrospective approach for annual and interim periods beginning after December 15, 2018. Early adoption of ASU 2016-02 is permitted. We are currently evaluating the impact of ASU 2016-02 on our consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The new standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. We are currently evaluating the impact of ASU 2016-15 on our consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), requiring restricted cash and cash equivalents to be included with cash and cash equivalents on the statement of cash flows. The new standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted. We are currently evaluating the impact of ASU 2016-18 on our consolidated financial statements. In December 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers (“ASU 2016-20”), which allows entities not to make quantitative disclosures about remaining performance obligations in certain cases and requires entities that use any of the new or previously existing optional exemptions to expand their qualitative disclosures. The new standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted. We are currently evaluating the impact of ASU 2016-20 on our consolidated financial statements. |
Supplemental Financial Inform16
Supplemental Financial Information (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Supplemental Financial Information | |
Schedule of inventories | September 30, March 31, 2017 2017 (In thousands) Materials and supplies $ $ Work in process Finished goods $ $ |
Schedule of intangible assets | September 30, 2017 March 31, 2017 Gross Accumulated Net Book Gross Accumulated Net Book (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 2018 $ 2019 2020 2021 2022 Thereafter $ |
Schedule of warranty reserve activity | Six Months Ended September 30, 2017 2016 (In thousands) Balance at beginning of fiscal year $ $ Additions charged to cost of sales Warranty claims ) ) Balance at end of period $ $ |
Schedule of computation of basic and diluted loss from continuing operations per share | Three Months Ended Six Months Ended September 30, September 30, 2017 2016 2017 2016 (In thousands) Denominator: Weighted average common shares used in basic computation Dilutive stock options — — — — Dilutive restricted stock units — — — — Weighted average common shares used in diluted computation |
Schedule of instruments excluded in the computation of diluted loss from continuing operations per share | Three Months Ended Six Months Ended September 30, September 30, 2017 2016 2017 2016 (In thousands) Stock options Restricted stock units |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Income Taxes | |
Schedule of benefit for income taxes along with effective tax rates | Three Months Ended Six Months Ended September 30, September 30, 2017 2016 2017 2016 (In thousands, except percentages) Benefit for income taxes $ $ $ $ Change in valuation allowance ) ) ) ) Total benefit for income taxes $ $ $ $ Effective tax rate % % % % |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Stock-Based Compensation | |
Summary of activity in the plans with respect to stock options | Number of Weighted (In thousands) Options outstanding at March 31, 2017 $ Granted Exercised ) Forfeited ) Expired — — Options outstanding at September 30, 2017 $ |
Summary of activity with respect to RSUs | Number of (In thousands) RSUs outstanding at March 31, 2017 Granted Vested ) Forfeited ) RSUs outstanding at September 30, 2017 |
Schedule of stock-based compensation expense | Three Months Ended Six Months Ended September 30, September 30, 2017 2016 2017 2016 (In thousands) Cost of revenues $ $ $ $ Selling, general and administrative expense Research and development expense Total stock-based compensation expense $ $ $ $ |
Business Segment Information (T
Business Segment Information (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Business Segment Information | |
Schedule of selected unaudited consolidated financial information for reportable segments | Roadway Transportation Agriculture Total (In thousands) Three Months Ended September 30, 2017 Product revenues $ $ $ — $ Service revenues Total revenues $ $ $ $ Segment income (loss) ) Three Months Ended September 30, 2016 Product revenues $ $ $ — $ Service revenues Total revenues $ $ $ $ Segment income (loss) ) Six Months Ended September 30, 2017 Product revenues $ $ $ — $ Service revenues Total revenues $ $ $ $ Segment income (loss) ) Six Months Ended September 30, 2016 Product revenues $ $ $ — $ Service revenues Total revenues $ $ $ $ Segment income (loss) ) |
Schedule of reconciles total segment income to unaudited consolidated income from continuing operations before income taxes | Three Months Ended Six Months Ended September 30, September 30, 2017 2016 2017 2016 (In thousands) Segment income (loss): Total income from reportable segments $ $ $ $ Unallocated amounts: Corporate and other expenses ) ) ) ) Amortization of intangible assets ) ) ) ) Other expense, net ) ) ) Interest income, net Loss from continuing operations before income taxes $ ) $ ) $ ) $ ) |
Description of Business and S20
Description of Business and Summary of Significant Accounting Policies (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Sep. 30, 2017USD ($)customer | Sep. 30, 2016customer | Sep. 30, 2017USD ($)customer | Sep. 30, 2016customer | Mar. 31, 2017USD ($)customer | Dec. 31, 2015USD ($) | |
Unbilled Accounts Receivable | ||||||
Costs and estimated earnings in excess of billings on uncompleted contracts | $ 426,000 | $ 426,000 | ||||
Deferred Revenue | ||||||
Billings in excess of costs and estimated earnings on uncompleted contracts | 1,100,000 | 1,100,000 | ||||
Prepaid Expenses and Other Current Assets | ||||||
Prepaid expenses and other current assets | 2,499,000 | 2,499,000 | $ 2,108,000 | |||
Cash designated as collateral on performance bonds | $ 535,000 | $ 535,000 | $ 535,000 | |||
Percentage of cash value of the bonds as collateral | 100.00% | |||||
Goodwill and Long-Lived Assets | ||||||
Adjustment to carrying value of goodwill | $ 0 | |||||
Impairment of long-lived and intangible assets | $ 0 | |||||
Income Taxes | ||||||
Valuation allowance on deferred tax assets | $ 10,100,000 | |||||
Total Revenues | Customer | One individual customer | ||||||
Concentration of Credit Risk | ||||||
Number of customers | customer | 1 | 1 | 1 | 1 | ||
Trade Accounts Receivable | Customer | One individual customer | ||||||
Concentration of Credit Risk | ||||||
Number of customers | customer | 1 | 0 | ||||
Minimum | ||||||
Warranty | ||||||
Warranty period | 1 year | |||||
Minimum | Property and equipment | ||||||
Property and Equipment | ||||||
Useful life | 3 years | |||||
Minimum | Total Revenues | Customer | One individual customer | ||||||
Concentration of Credit Risk | ||||||
Percentage of concentration risk | 10.00% | 10.00% | 10.00% | 10.00% | ||
Minimum | Trade Accounts Receivable | Customer | One individual customer | ||||||
Concentration of Credit Risk | ||||||
Percentage of concentration risk | 10.00% | 10.00% | ||||
Maximum | ||||||
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 |
Supplemental Financial Inform21
Supplemental Financial Information - Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Mar. 31, 2017 |
Inventories | ||
Materials and supplies | $ 1,159 | $ 887 |
Work in process | 295 | 298 |
Finished goods | 1,329 | 1,065 |
Total inventories | $ 2,783 | $ 2,250 |
Supplemental Financial Inform22
Supplemental Financial Information - Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Mar. 31, 2017 |
Intangible Assets | ||
Gross Carrying Amount | $ 7,018 | $ 5,874 |
Accumulated Amortization | (4,698) | (4,376) |
Net Book Value | 2,320 | 1,498 |
Technology | ||
Intangible Assets | ||
Gross Carrying Amount | 1,856 | 1,856 |
Accumulated Amortization | (1,852) | (1,828) |
Net Book Value | 4 | 28 |
Customer contracts / relationships | ||
Intangible Assets | ||
Gross Carrying Amount | 750 | 750 |
Accumulated Amortization | (746) | (726) |
Net Book Value | 4 | 24 |
Trade names and non-compete agreements | ||
Intangible Assets | ||
Gross Carrying Amount | 1,110 | 1,110 |
Accumulated Amortization | (1,087) | (1,066) |
Net Book Value | 23 | 44 |
Capitalized software development costs | ||
Intangible Assets | ||
Gross Carrying Amount | 3,302 | 2,158 |
Accumulated Amortization | (1,013) | (756) |
Net Book Value | $ 2,289 | $ 1,402 |
Supplemental Financial Inform23
Supplemental Financial Information - Future Estimated Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Mar. 31, 2017 |
Future estimated amortization expense | ||
Remainder of 2018 | $ 384 | |
2,019 | 863 | |
2,020 | 578 | |
2,021 | 233 | |
2,022 | 131 | |
Thereafter | 131 | |
Net Book Value | $ 2,320 | $ 1,498 |
Supplemental Financial Inform24
Supplemental Financial Information - Warranty Reserve Activity (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Activity related to warranty reserve | ||
Balance at beginning of fiscal year | $ 278 | $ 193 |
Additions charged to cost of sales | 359 | 88 |
Warranty claims | (294) | (78) |
Balance at end of period | $ 343 | $ 203 |
Supplemental Financial Inform25
Supplemental Financial Information - Loss Per Share (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Denominator: | ||||
Weighted average common shares used in basic computation (in shares) | 32,628 | 32,117 | 32,567 | 32,085 |
Weighted average common shares used in diluted computation (in shares) | 32,628 | 32,117 | 32,567 | 32,085 |
Supplemental Financial Inform26
Supplemental Financial Information - Loss Per Share Excluded weighted average (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Stock options | ||||
Shares excluded in the computation of loss from continuing operations per share | ||||
Shares excluded in the computation of loss from continuing operations per share | 3,927 | 3,367 | 3,852 | 3,339 |
Restricted stock units | ||||
Shares excluded in the computation of loss from continuing operations per share | ||||
Shares excluded in the computation of loss from continuing operations per share | 289 | 175 | 261 | 174 |
Sale of Vehicle Sensors (Detail
Sale of Vehicle Sensors (Details) | Jul. 29, 2011 | Sep. 30, 2017USD ($)segment | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)segment | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)segment |
Sale of Vehicle Sensors | ||||||
Net proceeds from sale of discontinued operation | $ 260,000 | $ 88,000 | ||||
Number of discontinued operations business segments | segment | 1 | 1 | 1 | |||
Gain on the sale, net of tax | $ 77,000 | $ 135,000 | $ 163,000 | 191,000 | ||
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 | $ 2,400,000 | |||||
Net proceeds from sale of discontinued operation | $ 17,700,000 | |||||
Gain on the sale, net of tax | $ 163,000 | $ 191,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Sep. 30, 2016 |
Non-financial assets measured at fair value | ||
Non-financial assets measured at fair value | $ 0 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Reconciliation of income tax (benefit) provision to taxes computed at U.S. federal statutory rates | ||||
Benefit for income taxes | $ 650 | $ 92 | $ 899 | $ 141 |
Change in valuation allowance | (617) | (84) | (865) | (134) |
Total benefit for income taxes | $ 33 | $ 8 | $ 34 | $ 7 |
Effective tax rate (as a percent) | 3.00% | 4.30% | 2.00% | 2.50% |
Commitments and Contingencies -
Commitments and Contingencies - Litigation and Other Contingencies (Details) - 2007 Plan - USD ($) | Apr. 28, 2017 | Nov. 08, 2016 | Sep. 30, 2015 | Sep. 15, 2016 |
Commitments and Contingencies | ||||
Awarded value | $ 215,000 | |||
Proxy Statements | Pending Litigation | ||||
Commitments and Contingencies | ||||
Stock options authorized under the plan (in shares) | 500,000 | |||
Mr. Bergera | Proxy Statements | Pending Litigation | ||||
Commitments and Contingencies | ||||
Excess options granted (in shares) | 850,000 | |||
Mr. Bergera | Proxy Statements | Pending Litigation | Maximum | ||||
Commitments and Contingencies | ||||
Options granted (in shares) | 1,350,000 |
Commitments and Contingencies31
Commitments and Contingencies - Related Party Transaction (Details) - Maxxess | 6 Months Ended | ||
Sep. 30, 2017USD ($)subsidiary | Aug. 11, 2016USD ($) | Jul. 23, 2013USD ($) | |
Related Party Transactions | |||
Number of former subsidiaries | subsidiary | 1 | ||
Promissory note payable issued to reporting entity for amounts previously owed under a sublease agreement | $ | $ 146,000 | $ 274,000 | $ 274,000 |
Interest on promissory note (as a percent) | 6.00% | ||
Maximum | |||
Related Party Transactions | |||
Ownership percentage of non-controlling | 2.00% |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options & RSUs (Details) | 6 Months Ended |
Sep. 30, 2017plan$ / sharesshares | |
Stock-Based Compensation | |
Number of stock incentive plans | plan | 2 |
Vested and expected to vest at the end of the period (in shares) | 3,600,000 |
Stock options | |
Number of Shares | |
Options outstanding at the beginning of the period (in shares) | 3,776,000 |
Granted (in shares) | 150,000 |
Exercised (in shares) | (289,000) |
Forfeited (in shares) | (31,000) |
Options outstanding at the end of the period (in shares) | 3,606,000 |
Weighted Average Exercise Price Per Share | |
Options outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 2.76 |
Granted (in dollars per share) | $ / shares | 6.07 |
Exercised (in dollars per share) | $ / shares | 1.96 |
Forfeited (in dollars per share) | $ / shares | 3.98 |
Options outstanding at the end of the period (in dollars per share) | $ / shares | $ 2.95 |
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) | 232,000 |
Granted (in shares) | 10,000 |
Vested (in shares) | (15,000) |
Forfeited (in shares) | (2,000) |
RSUs outstanding at the end of the period (in shares) | 225,000 |
2007 Plan | |
Stock-Based Compensation | |
Authorized for future issuance under stock incentive plans (in shares) | 0 |
2016 Plan | |
Stock-Based Compensation | |
Authorized for future issuance under stock incentive plans (in shares) | 2,300,000 |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Stock-Based Compensation | ||||
Total stock-based compensation expense | $ 428,000 | $ 262,000 | $ 877,000 | $ 486,000 |
Stock options | ||||
Stock-Based Compensation | ||||
Unrecognized compensation expense related to unvested stock options | 3,000,000 | $ 3,000,000 | ||
Weighted average period over which compensation expense is expected to be recognized | 2 years 7 months 6 days | |||
Restricted stock units | ||||
Stock-Based Compensation | ||||
Unrecognized compensation expense related to unvested RSUs | 574,000 | $ 574,000 | ||
Weighted average period over which compensation expense is expected to be recognized | 1 year 6 months | |||
Cost of revenues | ||||
Stock-Based Compensation | ||||
Total stock-based compensation expense | 16,000 | 12,000 | $ 31,000 | 22,000 |
Selling, general and administrative expense | ||||
Stock-Based Compensation | ||||
Total stock-based compensation expense | 376,000 | 233,000 | 768,000 | 433,000 |
Research and development expense | ||||
Stock-Based Compensation | ||||
Total stock-based compensation expense | $ 36,000 | $ 17,000 | $ 78,000 | $ 31,000 |
Stock Repurchase Program (Detai
Stock Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 06, 2014 | Aug. 31, 2012 | Sep. 30, 2017 | Aug. 09, 2012 | Aug. 31, 2011 |
Stock Repurchase Program | |||||
Number of shares of common stock repurchased | 3,422,000 | ||||
Value of common stock repurchased | $ 5.6 | ||||
Average price per share of common stock repurchased (in dollars per share) | $ 1.63 | ||||
August 2011 Program | |||||
Stock Repurchase Program | |||||
Number of shares of common stock repurchased | 964,000 | ||||
Value of common stock repurchased | $ 1.3 | ||||
Value of remaining funds cancelled under initial stock repurchase program | $ 1.7 | ||||
August 2011 Program | Maximum | |||||
Stock Repurchase Program | |||||
Value of common stock approved under stock repurchase program | $ 3 | ||||
August 2012 Program | |||||
Stock Repurchase Program | |||||
Increase in the authorized amount for repurchase of common stock | $ 3 | ||||
Value of common stock available for repurchase under current program | $ 1.7 | ||||
August 2012 Program | Maximum | |||||
Stock Repurchase Program | |||||
Value of common stock approved under stock repurchase program | $ 3 |
Business Segment Information (D
Business Segment Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)segment | Sep. 30, 2016USD ($) | |
Business Segments | ||||
Number of reportable segments | segment | 3 | |||
Product revenues | $ 11,702 | $ 11,086 | $ 23,625 | $ 22,093 |
Service revenues | 13,546 | 12,974 | 28,806 | 25,893 |
Total revenues | 25,248 | 24,060 | 52,431 | 47,986 |
Segment income (loss) | (1,099) | (185) | (1,651) | (276) |
Operating segments | ||||
Business Segments | ||||
Product revenues | 11,702 | 11,086 | 23,625 | 22,093 |
Service revenues | 13,546 | 12,974 | 28,806 | 25,893 |
Total revenues | 25,248 | 24,060 | 52,431 | 47,986 |
Segment income (loss) | 2,487 | 3,119 | 5,534 | 6,160 |
Operating segments | Roadway Sensors | ||||
Business Segments | ||||
Product revenues | 11,150 | 10,833 | 22,430 | 21,437 |
Service revenues | 111 | 62 | 111 | 62 |
Total revenues | 11,261 | 10,895 | 22,541 | 21,499 |
Segment income (loss) | 2,790 | 2,647 | 5,337 | 4,956 |
Operating segments | Transportation Systems | ||||
Business Segments | ||||
Product revenues | 552 | 253 | 1,195 | 656 |
Service revenues | 12,542 | 12,074 | 26,626 | 24,070 |
Total revenues | 13,094 | 12,327 | 27,821 | 24,726 |
Segment income (loss) | 1,933 | 2,549 | 4,265 | 4,894 |
Operating segments | Agriculture and Weather Analytics | ||||
Business Segments | ||||
Service revenues | 893 | 838 | 2,069 | 1,761 |
Total revenues | 893 | 838 | 2,069 | 1,761 |
Segment income (loss) | $ (2,236) | $ (2,077) | $ (4,068) | $ (3,690) |
Business Segment Information -
Business Segment Information - Reconciliation of Total Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Income (loss): | ||||
Total income from reportable segments | $ (1,099) | $ (185) | $ (1,651) | $ (276) |
Amortization of intangible assets | (33) | (84) | (66) | (169) |
Other expense, net | 2 | (2) | (5) | (6) |
Interest income, net | 3 | 4 | 5 | 5 |
Loss from continuing operations before income taxes | (1,094) | (183) | (1,651) | (277) |
Operating segments | ||||
Segment Income (loss): | ||||
Total income from reportable segments | 2,487 | 3,119 | 5,534 | 6,160 |
Unallocated amounts | ||||
Segment Income (loss): | ||||
Corporate and other expenses | (3,553) | (3,220) | (7,119) | (6,267) |
Amortization of intangible assets | (33) | (84) | (66) | (169) |
Other expense, net | 2 | (2) | (5) | (6) |
Interest income, net | 3 | 4 | 5 | 5 |
Loss from continuing operations before income taxes | $ (1,094) | $ (183) | $ (1,651) | $ (277) |