Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Dec. 31, 2018 | Feb. 04, 2019 | |
Document and Entity Information | ||
Entity Registrant Name | ITERIS, INC. | |
Entity Central Index Key | 350,868 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2018 | |
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 | 33,352,741 | |
Document Fiscal Year Focus | 2,019 | |
Document Fiscal Period Focus | Q3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Mar. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 7,173,000 | $ 10,152,000 |
Short-term investments | 3,730,000 | 5,319,000 |
Trade accounts receivable, net of allowance for doubtful accounts of $451 and $333 at December 31, 2018 and March 31, 2018, respectively | 14,305,000 | 12,866,000 |
Unbilled accounts receivable | 5,602,000 | 7,473,000 |
Inventories | 3,823,000 | 2,921,000 |
Prepaid expenses and other current assets | 747,000 | 1,165,000 |
Total current assets | 35,380,000 | 39,896,000 |
Property and equipment, net | 2,283,000 | 2,333,000 |
Intangible assets, net | 3,254,000 | 3,751,000 |
Goodwill | 15,150,000 | 15,150,000 |
Other assets | 1,756,000 | 1,756,000 |
Total assets | 57,823,000 | 62,886,000 |
Current liabilities: | ||
Trade accounts payable | 8,694,000 | 7,838,000 |
Accrued payroll and related expenses | 6,222,000 | 7,398,000 |
Accrued liabilities | 2,379,000 | 2,358,000 |
Deferred revenue | 3,920,000 | 4,900,000 |
Total current liabilities | 21,215,000 | 22,494,000 |
Deferred rent | 501,000 | 638,000 |
Deferred income taxes | 65,000 | 65,000 |
Unrecognized tax benefits | 148,000 | 168,000 |
Total liabilities | 21,929,000 | 23,365,000 |
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 December 31, 2018 and March 31, 2018 Issued and outstanding shares - 33,297 at December 31, 2018 and 33,186 at March 31, 2018 | 3,334,000 | 3,318,000 |
Additional paid-in capital | 141,671,000 | 139,722,000 |
Accumulated deficit | (109,111,000) | (103,519,000) |
Total stockholders' equity | 35,894,000 | 39,521,000 |
Total liabilities and stockholders' equity | $ 57,823,000 | $ 62,886,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Dec. 31, 2018 | Mar. 31, 2018 |
Consolidated Balance Sheets | ||
Trade accounts receivable, allowance for doubtful accounts (in dollars) | $ 451 | $ 333 |
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 | 33,297 | 33,186 |
Common stock, outstanding shares | 33,297 | 33,186 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Total revenues | $ 23,140 | $ 26,026 | $ 73,032 | $ 78,457 |
Cost of product revenues | 6,814 | 7,299 | 20,210 | 20,438 |
Cost of service revenues | 7,434 | 8,784 | 24,077 | 28,203 |
Total cost of revenues | 14,248 | 16,083 | 44,287 | 48,641 |
Gross profit | 8,892 | 9,943 | 28,745 | 29,816 |
Operating expenses: | ||||
Selling, general and administrative | 9,450 | 9,098 | 28,160 | 26,948 |
Research and development | 1,887 | 1,946 | 5,888 | 5,554 |
Amortization of intangible assets | 61 | 18 | 191 | 84 |
Total operating expenses | 11,398 | 11,062 | 34,239 | 32,586 |
Operating loss | (2,506) | (1,119) | (5,494) | (2,770) |
Non-operating income (expense): | ||||
Other income (expense), net | 8 | (9) | 41 | (14) |
Interest income, net | 10 | 3 | 90 | 8 |
Loss from continuing operations before income taxes | (2,488) | (1,125) | (5,363) | (2,776) |
Benefit (provision) for income taxes | 24 | 1,373 | (21) | 1,407 |
Income (loss) from continuing operations | (2,464) | 248 | (5,384) | (1,369) |
Gain on sale of discontinued operation, net of tax | 95 | 258 | ||
Net income (loss) | $ (2,464) | $ 343 | $ (5,384) | $ (1,111) |
Income (loss) per share from continuing operations - basic and diluted (in dollars per share) | $ (0.07) | $ 0.01 | $ (0.16) | $ (0.04) |
Gain per share from sale of discontinued operation - basic and diluted (in dollars per share) | 0 | 0.01 | ||
Net income (loss) per share - basic and diluted (in dollars per share) | $ (0.07) | $ 0.01 | $ (0.16) | $ (0.03) |
Shares used in basic per share calculations (in shares) | 33,297 | 32,877 | 33,247 | 32,670 |
Shares used in diluted per share calculations (in shares) | 33,297 | 34,258 | 33,247 | 32,670 |
Product | ||||
Total revenues | $ 11,088 | $ 11,995 | $ 35,418 | $ 35,620 |
Service | ||||
Total revenues | $ 12,052 | $ 14,031 | $ 37,614 | $ 42,837 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities | ||
Net loss | $ (5,384,000) | $ (1,111,000) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Deferred income taxes | (20,000) | (1,381,000) |
Depreciation of property and equipment | 661,000 | 593,000 |
Stock-based compensation | 1,555,000 | 1,325,000 |
Amortization of intangible assets | 823,000 | 525,000 |
Gain on sale of discontinued operation, net of tax | (258,000) | |
Loss on disposal of equipment | 15,000 | |
Changes in operating assets and liabilities, net of effects of discontinued operation: | ||
Accounts receivable | (1,439,000) | 654,000 |
Unbilled accounts receivable and deferred revenue, net | 379,000 | (114,000) |
Inventories | (902,000) | (722,000) |
Prepaid expenses and other assets | 615,000 | 491,000 |
Accounts payable and accrued expenses | (436,000) | 98,000 |
Net cash provided by operating activities | (4,148,000) | 115,000 |
Cash flows from investing activities | ||
Purchases of property and equipment | (611,000) | (988,000) |
Purchases of investments | (4,079,000) | |
Sales and maturities of investments | 5,668,000 | |
Capitalized software development costs | (326,000) | (1,834,000) |
Net proceeds from sale of discontinued operation | 107,000 | 402,000 |
Net cash provided by investing activities | 759,000 | (2,420,000) |
Cash flows from financing activities | ||
Proceeds from stock option exercises | 62,000 | 986,000 |
Proceeds from ESPP purchases | 353,000 | |
Tax withholding payments for net share settlements of restricted stock units | (5,000) | (79,000) |
Net cash provided by financing activities | 410,000 | 907,000 |
Decrease in cash and cash equivalents | (2,979,000) | (1,398,000) |
Cash and cash equivalents at beginning of period | 10,152,000 | 18,201,000 |
Cash and cash equivalents at end of period | 7,173,000 | 16,803,000 |
Supplemental cash flow information: | ||
Income taxes | $ 1,000 | 128,000 |
Supplemental schedule of non-cash investing and financing activities: | ||
Capitalized software development costs included in accounts payable and accrued expenses | $ 227,000 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 9 Months Ended |
Dec. 31, 2018 | |
Description of Business and Summary of Significant Accounting Policies | |
Description of Business and Summary of Significant Accounting Policies | 1. 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 essential applied informatics that enable smart transportation and digital agriculture. Municipalities, government agencies, crop science companies, farmers and agronomists use our solutions to make roads safer and travel more efficient, as well as farmlands more sustainable, healthy and productive. As a pioneer in intelligent transportation systems (“ITS”) technology for more than two decades, our intellectual property, products, software-as-a-service offerings and weather forecasting systems offer a comprehensive range of ITS solutions to customers throughout the U.S. and internationally. In the agribusiness markets, we have combined our intellectual property with enhanced atmospheric, land surface and agronomic modeling techniques to offer smart content and analytic solutions that provide analytical support to large enterprises in the agriculture industry, such as seed and crop protection companies, integrated food companies, and agricultural equipment manufacturers and service providers. We believe our products, solutions and services improve and safely optimize mobility within our communities, while minimizing environmental impact on the roads we travel and the lands we farm. We continue to make significant investments to leverage our existing technologies and further expand both our advanced detection sensors and performance analytics systems in the transportation infrastructure market, while supporting the agriculture market with our smart content and digital farming platform. Iteris was incorporated in Delaware in 1987. 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, as amended, for the fiscal year ended March 31, 2018 (“Fiscal 2018”). All intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and nine month periods ended December 31, 2018 are not necessarily indicative of the results to be expected for the fiscal year ending March 31, 2019 (“Fiscal 2019”) 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 those related to revenue recognition, 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 and other contingencies, costs to complete long-term contracts, indirect cost rates used in cost plus contracts, the valuation of inventores, the valuation of purchased intangible assets and goodwill, the valuation of equity instruments, 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 Adoption of Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) On April 1, 2018, the Company adopted ASU 2014-09, including its subsequent amendments as codified under ASC Topic 606 (“ASC 606”), using the modified retrospective approach to apply ASC 606 to all contracts that were not completed as of the beginning of Fiscal Year 2019. ASC 606 is a comprehensive new revenue recognition principle that requires a company to recognize revenue to depict the transfer of promised goods or services to a customer at an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. Results for reporting periods beginning after March 31, 2018 are presented under ASC 606, while prior period amounts and disclosures are not adjusted and continue to be reported under the accounting standards in effect for the prior period. As a result, the Company recognized the cumulative effect of initially applying ASC 606 as an increase to the opening balance of accumulated deficit in the amount of approximately $0.2 million as of April 1, 2018. The impact of the adoption of the new standard is immaterial to the Company’s consolidated balance sheet, statement of operations, and cash flows. The following table represents the impact of adopting ASC 606 on our opening Consolidated Balance sheet as of April 1, 2018: March 31, 2018 Cumulative-Effect April 1, 2018 As Reported Adjustments As Adjusted (In thousands) Prepaid expenses and other current assets $ 1,165 $ 304 $ 1,469 Total assets $ 62,886 $ 304 $ 63,190 Deferred revenue 4,900 512 5,412 Total liabilities $ 23,365 $ 512 $ 23,877 Accumulated deficit (103,519) 208 (103,727) Total liabilities and stockholders' equity $ 62,886 $ 304 $ 63,190 Changes in Accounting Policies as a Result of Adopting ASC 606 and Nature of Goods and Services Revenues are recognized when control of the promised goods or services are transferred to our customers, in a gross amount that reflects the consideration that we expect to be entitled to in exchange for those goods or services. We generate all of our revenue from contracts with customers. Product revenue related contracts with customers begin when we acknowledge a purchase order for a specific customer order of product to be delivered in the near term. These purchase orders are short-term in nature. Product revenue is recognized at a point in time upon shipment or upon customer receipt of the product, depending on shipping terms. The Company determined that this method best represents the transfer of goods as transfer of control typically occurs upon shipment or upon customer receipt of the product. Service revenues, primarily derived from the Transportation Systems and Agriculture and Weather Analytics segments, are primarily from long-term engineering and consulting service contracts with governmental agencies. These contracts generally include performance obligations in which control is transferred over time. We recognize revenue on fixed fee contracts, over time, using the proportion of actual costs incurred to the total costs expected to complete the contract performance obligation. The Company determined that this method best represents the transfer of services as the proportion closely depicts the efforts or inputs completed towards the satisfaction of a fixed fee contract performance obligation. Time & Materials (“T&M”) and Cost Plus Fixed Fee (“CPFF”) contracts are considered variable consideration. However, performance obligations with these fee types qualify for the “Right to Invoice” Practical Expedient. Under this practical expedient, the Company is allowed to recognize revenue, over time, in the amount to which the Company has a right to invoice. In addition, the Company is not required to estimate such variable consideration upon inception of the contract and reassess the estimate each reporting period. The Company determined that this method best represents the transfer of services as, upon billing, the Company has a right to consideration from a customer in an amount that directly corresponds with the value to the customer of the Company’s performance completed to date. Service revenues also consist of revenues derived from maintenance support and the use of the Company’s service platforms and APIs on a subscription basis. We generate this revenue from fees for maintenance support, monthly active user fees, software as a service (“SaaS”) fees, and hosting and storage fees. In most cases, the subscription or transaction arrangement is a single performance obligation comprised of a series of distinct services that are substantially the same and that have the same pattern of transfer (i.e., distinct days of service). The Company applies a time-based measure of progress to the total transaction price, which results in ratable recognition over the term of the contract. The Company determined that this method best represents the transfer of services as the customer obtains equal benefit from the service throughout the service period. The Company accounts for individual goods and services separately if they are distinct performance obligations, which often requires significant judgment based upon knowledge of the products and/or services, the solution provided and the structure of the sales contract. In SaaS agreements, we provide a service to the customer which combines the software functionality, maintenance and hosting into a single performance obligation. In product related contracts, a purchase order may contain different products, each constituting a separate performance obligation. We generally estimate variable consideration at the most likely amount to which we expect to be entitled and in certain cases based on the expected value, which requires judgment. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us. We review and update these estimates on a quarterly basis. The Company’s typical performance obligations include the following: Performance Obligation When Performance When Payment is How Standalone Selling Price is Product Revenues Standard purchase orders for delivery of a tangible product Upon shipment (point in time) Within 30 days of delivery Observable transactions Engineering services where the deliverable is considered a product As work is performed (over time) Within 30 days of services being invoiced Estimated using a cost-plus margin approach Service Revenues Engineering and consulting services As work is performed (over time) Within 30 days of services being invoiced Estimated using a cost-plus margin approach SaaS Over the course of the SaaS service once the system is available for use (over time) At the beginning of the contract period Estimated using a cost-plus margin approach Disaggregation of Revenue The Company disaggregates revenue from contracts with customers into reportable segments and the nature of the products and services. See Note 10 for our revenue by reportable segment. Trade Accounts Receivable and Contract Balances We classify our right to consideration in exchange for goods and services as either a receivable or a contract asset. A receivable is a right to consideration that is unconditional (i.e. only the passage of time is required before payment is due). We present such receivables in trade accounts receivable, net in our unaudited consolidated balance sheet at their net estimated realizable value. The Company maintains an allowance for doubtful accounts to provide for the estimated amount of receivables that will not be collected. If warranted, the allowance is increased by the Company’s provision for doubtful accounts, which is charged against income. All recoveries on receivables previously charged off are included in income, while direct charge-offs of receivables are deducted from the allowance. A contract asset is a right to consideration that is conditional upon factors other than the passage of time. Contract assets are presented as unbilled accounts receivable on the accompanying balance sheet. For example, we would record a contract asset if we record revenue on a professional services engagement, but are not entitled to bill until we achieve specified milestones. Our contract assets and liabilities are reported in a net position on a contract basis at the end of each reporting period. Contract Fulfillment Costs The Company evaluates whether or not we should capitalize the costs of fulfilling a contract. Such costs would be capitalized when they are not within the scope of other standards and: (1) are directly related to a contract; (2) generate or enhance resources that will be used to satisfy performance obligations; and (3) are expected to be recovered. As of December 31, 2018, we capitalized approximately $224,000 of contract fulfillment costs which are presented in the accompanying unaudited consolidated balance sheet as prepaid and other current assets. These costs primarily relate to the satisfaction of performance obligations related to the set up of SaaS platforms. These costs are amortized on a straight-line basis over the estimated useful life of the SaaS platform. Transaction Price Allocated to the Remaining Performance Obligations As of December 31, 2018, the aggregate amount of transaction price allocated to remaining performance obligations was immaterial primarily as a result of termination provisions within our contracts which make the duration of the accounting term of the contract one year or less. Practical Expedients and Exemptions T&M and CPFF contracts are considered variable consideration. However, performance obligations with an underlying fee type of T&M or CPFF qualify for the “Right to Invoice” Practical Expedient under ASC 606-10-55-18. Under this practical expedient, the Company is not required to estimate such variable consideration upon inception of the contract and reassess the estimate each reporting period. The Company utilizes the practical expedient under ASC 606-10-50-14 of not disclosing information about its remaining performance obligations for contracts with an original expected duration (i.e., contract term, determined based on the analysis of termination provisions described above) of 12 months or less. The Company pays sales commissions on certain sales contracts. These costs are accrued in the same period that the revenues are recorded. Using the practical expedient under ASC 340-40-25-4, the Company recognizes the incremental costs of obtaining a contract as an expense when incurred since the amortization period of the asset that the Company otherwise would have recognized is one year or less. The Company utilizes the practical expedient under ASC 606-10-25-18B to account for shipping and handling as fulfillment costs, and not a promised service (a revenue element). Shipping and handling costs are included as cost of revenues in the period during which the products ship. The Company excludes from the transaction price all sales taxes that are assessed by a governmental authority and that are imposed on and concurrent with a specific revenue-producing transaction and collected from a customer (for example, sales, use, value added, and some excise taxes). This employs the practical expedient under ASC 606-10-32-2A. Sales taxes are presented on a net basis (excluded from revenues) in the Company’s unaudited consolidated statements of operations. Deferred Revenue Deferred revenue in the accompanying unaudited consolidated balance sheets is comprised of refund liabilities related to billings and consideration received in advance of the satisfaction of performance obligations. 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 Europe and South America. 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 nine months ended December 31, 2018, one individual customer represented approximately 11% and 14%, respectively, of our total revenues and no other individual customer represented greater than 10% of our total revenues. For the three and nine months ended December 31, 2017, one individual customer represented approximately 20% and 22%, respectively, of our total revenues and no other individual customer represented greater than 10% of our total revenues. As of December 31, 2018, no individual customer represented greater than 10% our total accounts receivable. As of March 31, 2018, one customer represented approximately 13% of our total accounts receivable, and no other individual customer represented greater 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. Our investments are measured at fair value on a recurring basis. The framework for measuring fair value and related disclosure requirements about fair value measurements are provided in FASB ASC 820, Fair Value Measurements (“ASC 820”). This pronouncement defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy prescribed by ASC 820 contains three levels as follows: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Observable inputs other than quoted prices in active markets for identical assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3—Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. Cash and Cash Equivalents Cash and cash equivalents consist of cash and short-term investments with initial maturities of 90 days or less. Investments The Company’s investments are classified as either held-to-maturity, available-for-sale or trading, in accordance with FASB ASC 320, Capital Investments Capital Debt and Capital Equity Capital Securities (“ASC 320”). Held-to-maturity securities are those securities that the Company has the positive intent and ability to hold until maturity. Trading securities are those securities that the Company intends to sell in the near term. All other securities not included in the held-to-maturity or trading category are classified as available-for-sale. Held-to-maturity securities are recorded at amortized cost which approximates fair market value. Trading securities are carried at fair value with unrealized gains and losses charged to earnings. Available-for-sale securities are carried at fair value with unrealized gains and losses recorded within accumulated other comprehensive loss as a separate component of stockholders’ equity. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available (see Note 4). Under FASB ASC 320-10-35, a security is considered to be other-than-temporarily impaired if the present value of cash flows expected to be collected are less than the security’s amortized cost basis (the difference being defined as the “Credit Loss”) or if the fair value of the security is less than the security’s amortized cost basis and the investor intends, or will be required, to sell the security before recovery of the security’s amortized cost basis. If an other-than-temporary impairment exists, the charge to earnings is limited to the amount of Credit Loss if the investor does not intend to sell the security, and will not be required to sell the security, before recovery of the security’s amortized cost basis. Any remaining difference between fair value and amortized cost is recognized in other comprehensive loss, net of applicable taxes. The Company evaluates whether the decline in fair value of its investments is other-than-temporary at each quarter-end. This evaluation consists of a review by management, and includes market pricing information and maturity dates for the securities held, market and economic trends in the industry and information on the issuer’s financial condition and, if applicable, information on the guarantors’ financial condition. Factors considered in determining whether a loss is temporary include the length of time and extent to which the investment’s fair value has been less than its cost basis, the financial condition and near-term prospects of the issuer and guarantors, including any specific events which may influence the operations of the issuer and the Company’s intent and ability to retain the investment for a reasonable period of time sufficient to allow for any anticipated recovery of fair value. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets were approximately $747,000 as of December 31, 2018. Prepaid expenses and other current assets were $1.2 million as of March 31, 2018 and included approximately $130,000 of cash designated as collateral on performance bonds, as required under certain of our Transportation Systems contracts in the Middle East. The performance bonds required 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 was required throughout the delivery of our services and was maintained in the local bank until the contract was closed by the purchasing agency. The requirements on the remaining performance bonds, and the related cash collateral restrictions, were released during the quarter ended June 30, 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 perform an annual qualitative assessment of our goodwill during the fourth fiscal quarter, or more frequently, to determine if any events or circumstances exist, such as an adverse change in business climate or a decline in overall industry demand, that would indicate that it would more likely than not reduce the fair value of a reporting unit below its carrying amount, including goodwill. If events or circumstances do not indicate that the fair value of a reporting unit is below its carrying amount, then goodwill is not considered to be impaired and no further testing is required. If further testing is required, we perform a two-step process. The first step involves comparing the fair value of our reporting unit to its carrying value, including goodwill. If the carrying value of the reporting unit exceeds its fair value, the second step of the test is performed by comparing the carrying value of the goodwill in the reporting unit to its implied fair value. An impairment charge is recognized for the excess of the carrying value of goodwill over its implied fair value. 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 December 31, 2018, 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 December 31, 2018, 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 full valuation allowance against our deferred tax assets. We will continuously 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 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. 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 consolidated balance sheets. We do not provide any service-type warranties. Comprehensive Loss The difference between net loss and comprehensive loss was de minimis for the three and nine months ended December 31, 2018. Comprehensive loss equaled net loss for three and nine months ended December 31, 2017. Recent Accounting Pronouncements 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. ASU 2016-02 requires entities 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. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”). In issuing ASU 2018-11, the FASB decided to provide another transition method in addition to the existing transition method by allowing entities to initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company is currently evaluating the impact the guidance will have on its consolidated financial statements. The Company currently expects that most of its operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon adoption. Therefore, the Company expects this |
Supplemental Financial Informat
Supplemental Financial Information | 9 Months Ended |
Dec. 31, 2018 | |
Supplemental Financial Information | |
Supplemental Financial Information | 2 . Supplemental Financial Information Inventories The following table presents details of our inventories: December 31, March 31, 2018 2018 (In thousands) Materials and supplies $ 1,562 $ 1,745 Work in process 1,334 232 Finished goods 927 944 $ 3,823 $ 2,921 Property and Equipment, net The following table presents details of our property and equipment, net: December 31 March 31, 2018 2018 (In thousands) Equipment $ 6,568 $ 6,053 Leasehold improvements 2,939 2,880 Accumulated depreciation (7,224) (6,600) $ 2,283 $ 2,333 Depreciation expense was approximately $198,000 and $661,000 for the three and nine months ended December 31, 2018, respectively. Depreciation expense was approximately $205,000 and $593,000 for the three and nine months ended December 31, 2017, respectively. 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: December 31, 2018 March 31, 2018 Gross Gross Carrying Accumulated Net Book Carrying Accumulated Net Book Amount Amortization Value Amount Amortization Value (In thousands) Technology $ 1,856 $ (1,856) $ — $ 1,856 $ (1,856) $ — Customer contracts / relationships 750 (750) — 750 (750) — Trade names and non-compete agreements 1,110 (1,110) — 1,110 (1,102) 8 Capitalized software development costs 5,433 (2,179) 3,254 5,108 (1,365) 3,743 Total $ 9,149 $ (5,895) $ 3,254 $ 8,824 $ (5,073) $ 3,751 Amortization expense for intangible assets subject to amortization was approximately $273,000 and $823,000 for the three and nine months ended December 31, 2018, respectively. Amortization expense for intangible assets subject to amortization was approximately $202,000 and $525,000 for the three and nine months ended December 31, 2017, respectively. Approximately $212,000 and $632,000 of the intangible asset amortization was recorded to cost of revenues, and approximately $61,000 and $191,000 was recorded to amortization expense for the three and nine months ended December 31, 2018, respectively, in the consolidated statements of operations. Approximately $184,000 and $441,000 of the intangible asset amortization was recorded to cost of revenues, and approximately $18,000 and $84,000 was recorded to amortization expense for the three and nine months ended December 31, 2017, respectively, in the consolidated statements of operations. As of December 31, 2018, our net capitalized software development costs of approximately $3.3 million is primarily associated with our Oracle Enterprise Resource Planning (“ERP”) system design and implementation of approximately $2.1 million, which has a useful life of 10 years beginning Fiscal 2019. As of December 31, 2018, future estimated amortization expense is as follows: Fiscal Year Ending March 31, (In thousands) Remainder of 2019 $ 280 2020 870 2021 521 2022 302 2023 244 Thereafter 1,037 $ 3,254 Warranty Reserve Activity Warranty reserve is recorded as accrued liabilities in the accompanying unaudited consolidated balance sheets. The following table presents activity related to the warranty reserve: Nine Months Ended December 31, 2018 2017 (In thousands) Balance at beginning of fiscal year $ 403 $ 278 Additions charged to cost of sales 509 512 Warranty claims (361) (400) Balance at end of period $ 551 $ 390 Earnings Per Share The following table sets forth the computation of basic and diluted loss from continuing operations per share: Three Months Ended Nine Months Ended December 31, December 31, 2018 2017 2018 2017 (In thousands, except par values) Numerator: Income (loss) from continuing operations $ (2,464) $ 248 $ (5,384) $ (1,369) Gain on sale of discontinued operation, net of tax — 95 — 258 Net income (loss) $ (2,464) $ 343 $ (5,384) $ (1,111) Denominator: Weighted average common shares used in basic computation 33,297 32,877 33,247 32,670 Dilutive stock options — 1,274 — — Dilutive restricted stock units — 107 — — Weighted average common shares used in diluted computation 33,297 34,258 33,247 32,670 Net income (loss) per share: Basic $ (0.07) $ 0.01 $ (0.16) $ (0.03) Diluted $ (0.07) $ 0.01 $ (0.16) $ (0.03) 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 Nine Months Ended December 31, December 31, 2018 2017 2018 2017 (In thousands) Stock options 5,225 3,607 4,515 3,770 Restricted stock units 181 246 155 256 |
Sale of Vehicle Sensors
Sale of Vehicle Sensors | 9 Months Ended |
Dec. 31, 2018 | |
Sale of Vehicle Sensors | |
Sale of Vehicle Sensors | 3. 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 was 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 December 31, 2018, we received approximately $2.7 million in connection with royalty-related earn-outs provisions for a total of $18 million in cash received from the Asset Sale. In accordance with applicable accounting guidance, we determined that the Vehicle Sensors segment, which constituted one of our operating segments, qualified as a discontinued operation. For the nine months ended December 31, 2018 and 2017, we recorded a gain on sale of discontinued operation of approximately $0 and $258,000, 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 | 9 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | 4. 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 nonrecurring 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 at December 31, 2018 and March 31, 2018. The following tables present the Company’s financial assets that are recorded at fair value on a recurring basis, segregated among the appropriate levels within the fair value hierarchy: As of December 31, 2018 Gross Unrealized Gross Unrealized Estimated Fair Amortized Cost Loss Gain Value (In thousands) Level 1: Money market funds $ 2,008 $ — $ — $ 2,008 Subtotal 2,008 — — 2,008 Level 2: Certificates of deposit — — — — Commercial paper — — — — Corporate notes and bonds 2,180 (4) — 2,176 US Treasuries 799 (0) — 799 US Government agencies 754 — — 754 Subtotal 3,733 (4) — 3,729 Total $ 5,741 $ (4) $ — $ 5,737 As of March 31, 2018 Gross Unrealized Gross Unrealized Estimated Fair Amortized Cost Loss Gain Value (In thousands) Level 1: Money market funds $ 666 $ — $ — $ 666 Subtotal 666 — — 666 Level 2: Certificates of deposit — — — — Commercial paper 1,891 — — 1,891 Corporate notes and bonds 2,008 (2) — 2,006 US Treasuries 1,500 (1) — 1,499 US Government agencies 2,950 (1) — 2,949 Subtotal 8,349 (4) — 8,345 Total $ 9,015 $ (4) $ — $ 9,011 |
Income Taxes
Income Taxes | 9 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Income Taxes | 5. The effective tax rate used for interim periods is the estimated annual effective tax rate, based on current estimate of full year results, except that taxes related to specific events, if any, are recorded in the interim period in which they occur. Income tax benefit for the three months ended December 31, 2018 was approximately $24,000, or 1.0% of the pre-tax loss as compared with a benefit of approximately $1.4 million, or 122.0% of pre-tax loss for the three months ended December 31, 2017. Income tax expense for the nine months ended December 31, 2018 was approximately $21,000, or (0.4%) of the pre-tax loss as compared with a benefit of approximately $1.4 million, or 50.7% of pre-tax loss for the nine months ended December 31, 2017. In assessing the realizability of our deferred tax assets, we review all available positive and negative evidence, including reversal of deferred tax liabilities, potential carrybacks, projected future taxable income, tax planning strategies and recent financial performance. As we have experienced a cumulative pre-tax loss over the trailing three years, we continue to maintain a valuation allowance against our deferred tax assets. The Tax Act was enacted on December 22, 2017 and the Company accounted for the effects of the Tax Act in the period of enactment. Also, on December 22, 2017, the SEC issued guidance under SAB 118 directing taxpayers to consider the impact of the Tax Act as “provisional” when it does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the change in tax law. In accordance with SAB 118, the income tax effects of the Tax Act represent the Company’s best estimate based on its current interpretation of the enacted legislation. The Company is accumulating data to finalize the underlying calculations and evaluate other aspects of this Tax Act, or in certain cases, the U.S. Treasury is expected to issue further guidance on the application of certain provisions of the Tax Act. In accordance with SAB 118, the income tax effects of the Tax Act discussed above are considered provisional and will be finalized in the current fiscal year. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | 6. 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 is, and may in the future from time to time, be 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, 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. 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, August 11, 2016 and on August 11, 2018. 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 December 31, 2018, approximately $146,000 of the original principal balance was outstanding and payable to Iteris. Maxxess is currently owned by an investor group that includes, among others, 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 | 9 Months Ended |
Dec. 31, 2018 | |
Stock-Based Compensation | |
Stock-Based Compensation | 7. We currently maintain two stock incentive plans, the 2007 Omnibus Incentive Plan and the 2016 Omnibus Incentive Plan (the “2016 Plan”). Of these plans, we may only grant future awards from the 2016 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 December 31, 2018, there were approximately 2.5 million shares of common stock available for grant or issuance under the 2016 Plan. Total stock options vested and expected to vest were approximately 5.1 million as of December 31, 2018. Stock Options A summary of activity with respect to our stock options for the nine months ended December 31, 2018 is as follows: Weighted Average Exercise Number of Price Per Shares Share (In thousands) Options outstanding at March 31, 2018 4,124 $ 3.58 Granted 1,038 4.20 Exercised (25) 2.27 Forfeited (76) 4.93 Expired (1) 4.91 Options outstanding at December 31, 2018 5,060 3.69 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 nine months ended December 31, 2018 is as follows: Number of Shares (In thousands) RSUs outstanding at March 31, 2018 144 Granted 62 Vested (59) Forfeited (24) RSUs outstanding at December 31, 2018 123 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 Nine Months Ended December 31, December 31, 2018 2017 2018 2017 (In thousands) Cost of revenues $ 35 $ 16 $ 104 $ 47 Selling, general and administrative expense 444 398 1,303 1,167 Research and development expense 51 33 148 111 Total stock-based compensation expense $ 530 $ 447 $ 1,555 $ 1,325 At December 31, 2018, there was approximately $5.2 million and $461,000 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 2.9 years for stock options and 1.4 years for RSUs. If there are any modifications or cancellations of the underlying unvested awards, we may be required to accelerate, increase or cancel any remaining unearned stock-based compensation expense. Future stock based compensation expense and unearned stock-based compensation will increase to the extent that we grant additional stock options, RSUs or other stock-based awards. Other Stock-Based Compensation Plans Beginning January 1, 2018, the Company adopted an Employee Stock Purchase Plan (“ESPP”) which allows employees to have a percentage of their base compensation withheld to purchase the Company’s common stock at 95% of the lower of the fair market at the beginning of the offering period and on the last trading day of the offering period. There are two offering periods during a calendar year, which consist of the six months beginning each January 1 and July 1. Employees may contribute 1-15% of their eligible gross pay up to a $25,000 annual stock value limit. 35,808 shares were purchased related to the first offering period of Fiscal 2019 in June 2018. 52,760 shares were purchased related to the second offering period of Fiscal 2019 in December 2018. There were no share purchases in Fiscal 2018. The ESPP is considered a non-compensatory plan and accordingly no compensation expense is recorded in connection with this benefit. |
Stock Repurchase Program
Stock Repurchase Program | 9 Months Ended |
Dec. 31, 2018 | |
Stock Repurchase Program | |
Stock Repurchase Program | 8. On August 9, 2012, our Board of Directors 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 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, to the extent such a 10b5-1 plan is in place. 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 nine months ended December 31, 2018 and 2017, we did not repurchase any shares. As of December 31, 2018, approximately $1.7 million remained available for the repurchase of our common stock under our current stock repurchase program. From inception of the program in August 2011 through December 31, 2018, 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 December 31, 2018, all repurchased shares have been retired and resumed their status as authorized and unissued shares of our common stock. |
Investments
Investments | 9 Months Ended |
Dec. 31, 2018 | |
Investments | |
Investments | 9. Our investments consisted of the following: As of December 31, 2018 Gross Unrealized Gross Unrealized Estimated Fair Amortized Cost Loss Gain Value (In thousands) Cash and cash equivalents $ 2,008 $ — $ — $ 2,008 Short-term investments 3,733 (4) — 3,729 Long-term investments — — — — Total $ 5,741 $ (4) $ — $ 5,737 As of March 31, 2018 Gross Unrealized Gross Unrealized Estimated Fair Amortized Cost Loss Gain Value (In thousands) Cash and cash equivalents $ 3,692 $ — $ — $ 3,692 Short-term investments 5,323 (4) — 5,319 Long-term investments — — — — Total $ 9,015 $ (4) $ — $ 9,011 Unrealized losses related to these investments are due to interest rate fluctuations as opposed to credit quality. In addition, we do not intend to sell, and it is not more likely than not that, we would be required to sell, these investments before recovery of their cost basis. As a result, there is no other-than-temporary impairment for these investments as of December 31, 2018. |
Business Segment Information
Business Segment Information | 9 Months Ended |
Dec. 31, 2018 | |
Business Segment Information | |
Business Segment Information | 10. We currently operate in three reportable segments: Roadway Sensors, Transportation Systems, and Agriculture and Weather Analytics. The Roadway Sensors segment provides various advanced detection sensors and systems for traffic intersection management, communication systems and roadway traffic data collection applications. The Roadways Sensors product line uses advanced image processing technology and other techniques to capture and analyze sensor data through sophisticated algorithms, enabling vehicle, bicycle and pedestrian detection, as well as the transmission of both video images and data using various communication technologies. Our Roadway Sensors products include, among others, Vantage, VantageLive!, VantagePegasus, VantageRadius, Vantage Vector, Velocity, SmartCycle, SmartCycle Bike Indicator, SmartSpan, VersiCam, PedTrax and P-Series products. Our Roadway Sensors segment also includes the sale of original equipment manufacturer (“OEM”) products for the traffic intersection markets, which include, among other things, traffic signal controllers and traffic signal equipment cabinets. The Transportation Systems segment provides engineering and consulting services, performance measurement and traffic analytics solutions, as well as the development of transportation management and traveler information systems for the ITS industry. Our Transportation Systems services include planning, design, implementation, operation and management of surface transportation infrastructure systems. We perform analysis and study goods movement, provide commercial vehicle safety solutions, provide travel demand forecasting and systems engineering, and identify mitigation measures to reduce traffic congestion. Our Transportation Systems product line includes Iteris SPM and iPeMS, our performance measurement and information management solutions as well as our commercial vehicle operations and vehicle safety compliance platforms known as CVIEW-Plus, CheckPoint, UCRLink, and inspect. The Agriculture and Weather Analytics segment includes ClearPath Weather, our road maintenance applications, and ClearAg, our digital agriculture platform. Our ClearPath Weather is a web-based solution, that includes a suite of tools that applies data assimilation and modeling technologies for assessing historical weather conditions for both short-term and long-range weather forecasts and customizable route/site weather and pavement forecasting, and providing winter road maintenance recommendations for state agencies, municipalities and for commercial companies that allow such users to create solutions to meet roadway maintenance decision needs. Our ClearAg solutions combine weather and agronomic data with proprietary land-surface modeling and analytics to solve complex agricultural problems and to increase the efficiency and sustainability of farmlands. We currently offer our ClearAg solutions to companies in the agriculture industry, such as seed and crop protection companies, integrated food companies, and agricultural equipment manufacturers and service providers. Our ClearAg solutions provide weather, environment, soil and plant growth modeling to deliver smart content through ClearAg APIs and components, IMFocus APIs, ClearAg applications, WeatherPlot mobile applications, and ClearAg Insights applications. 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 nine months ended December 31, 2018 and 2017: Agriculture Roadway Transportation and Weather Sensors Systems Analytics Total (In thousands) Three Months Ended December 31, 2018 Product revenues $ 10,165 $ 923 $ — $ 11,088 Service revenues 69 10,410 1,573 12,052 Total revenues $ 10,234 $ 11,333 $ 1,573 $ 23,140 Segment income (loss) 1,153 1,147 (1,138) 1,162 Three Months Ended December 31, 2017 Product revenues $ 11,008 $ 987 $ — $ 11,995 Service revenues 34 12,584 1,413 14,031 Total revenues $ 11,042 $ 13,571 $ 1,413 $ 26,026 Segment income (loss) 2,048 2,207 (1,815) 2,440 Agriculture Roadway Transportation and Weather Sensors Systems Analytics Total (In thousands) Nine Months Ended December 31, 2018 Product revenues $ 31,926 $ 3,492 $ — $ 35,418 Service revenues 145 33,384 4,085 37,614 Total revenues $ 32,071 $ 36,876 $ 4,085 $ 73,032 Segment income (loss) 5,463 4,276 (3,869) 5,870 Nine Months Ended December 31, 2017 Product revenues $ 33,438 $ 2,182 $ — $ 35,620 Service revenues 145 39,210 3,482 42,837 Total revenues $ 33,583 $ 41,392 $ 3,482 $ 78,457 Segment income (loss) 7,384 6,472 (5,882) 7,974 The following table reconciles total segment income (loss) to unaudited consolidated loss from continuing operations before income taxes: Three Months Ended Nine Months Ended December 31, December 31, 2018 2017 2018 2017 (In thousands) Segment income (loss): Total income from reportable segments $ 1,162 $ 2,440 $ 5,870 $ 7,974 Unallocated amounts: Corporate and other expenses (3,607) (3,541) (11,173) (10,660) Amortization of intangible assets (61) (18) (191) (84) Other expense, net 8 (9) 41 (14) Interest income, net 10 3 90 8 Loss from continuing operations before income taxes $ (2,488) $ (1,125) $ (5,363) $ (2,776) |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Dec. 31, 2018 | |
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, as amended, for the fiscal year ended March 31, 2018 (“Fiscal 2018”). All intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and nine month periods ended December 31, 2018 are not necessarily indicative of the results to be expected for the fiscal year ending March 31, 2019 (“Fiscal 2019”) 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 those related to revenue recognition, 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 and other contingencies, costs to complete long-term contracts, indirect cost rates used in cost plus contracts, the valuation of inventores, the valuation of purchased intangible assets and goodwill, the valuation of equity instruments, 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 Adoption of Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) On April 1, 2018, the Company adopted ASU 2014-09, including its subsequent amendments as codified under ASC Topic 606 (“ASC 606”), using the modified retrospective approach to apply ASC 606 to all contracts that were not completed as of the beginning of Fiscal Year 2019. ASC 606 is a comprehensive new revenue recognition principle that requires a company to recognize revenue to depict the transfer of promised goods or services to a customer at an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. Results for reporting periods beginning after March 31, 2018 are presented under ASC 606, while prior period amounts and disclosures are not adjusted and continue to be reported under the accounting standards in effect for the prior period. As a result, the Company recognized the cumulative effect of initially applying ASC 606 as an increase to the opening balance of accumulated deficit in the amount of approximately $0.2 million as of April 1, 2018. The impact of the adoption of the new standard is immaterial to the Company’s consolidated balance sheet, statement of operations, and cash flows. The following table represents the impact of adopting ASC 606 on our opening Consolidated Balance sheet as of April 1, 2018: March 31, 2018 Cumulative-Effect April 1, 2018 As Reported Adjustments As Adjusted (In thousands) Prepaid expenses and other current assets $ 1,165 $ 304 $ 1,469 Total assets $ 62,886 $ 304 $ 63,190 Deferred revenue 4,900 512 5,412 Total liabilities $ 23,365 $ 512 $ 23,877 Accumulated deficit (103,519) 208 (103,727) Total liabilities and stockholders' equity $ 62,886 $ 304 $ 63,190 Changes in Accounting Policies as a Result of Adopting ASC 606 and Nature of Goods and Services Revenues are recognized when control of the promised goods or services are transferred to our customers, in a gross amount that reflects the consideration that we expect to be entitled to in exchange for those goods or services. We generate all of our revenue from contracts with customers. Product revenue related contracts with customers begin when we acknowledge a purchase order for a specific customer order of product to be delivered in the near term. These purchase orders are short-term in nature. Product revenue is recognized at a point in time upon shipment or upon customer receipt of the product, depending on shipping terms. The Company determined that this method best represents the transfer of goods as transfer of control typically occurs upon shipment or upon customer receipt of the product. Service revenues, primarily derived from the Transportation Systems and Agriculture and Weather Analytics segments, are primarily from long-term engineering and consulting service contracts with governmental agencies. These contracts generally include performance obligations in which control is transferred over time. We recognize revenue on fixed fee contracts, over time, using the proportion of actual costs incurred to the total costs expected to complete the contract performance obligation. The Company determined that this method best represents the transfer of services as the proportion closely depicts the efforts or inputs completed towards the satisfaction of a fixed fee contract performance obligation. Time & Materials (“T&M”) and Cost Plus Fixed Fee (“CPFF”) contracts are considered variable consideration. However, performance obligations with these fee types qualify for the “Right to Invoice” Practical Expedient. Under this practical expedient, the Company is allowed to recognize revenue, over time, in the amount to which the Company has a right to invoice. In addition, the Company is not required to estimate such variable consideration upon inception of the contract and reassess the estimate each reporting period. The Company determined that this method best represents the transfer of services as, upon billing, the Company has a right to consideration from a customer in an amount that directly corresponds with the value to the customer of the Company’s performance completed to date. Service revenues also consist of revenues derived from maintenance support and the use of the Company’s service platforms and APIs on a subscription basis. We generate this revenue from fees for maintenance support, monthly active user fees, software as a service (“SaaS”) fees, and hosting and storage fees. In most cases, the subscription or transaction arrangement is a single performance obligation comprised of a series of distinct services that are substantially the same and that have the same pattern of transfer (i.e., distinct days of service). The Company applies a time-based measure of progress to the total transaction price, which results in ratable recognition over the term of the contract. The Company determined that this method best represents the transfer of services as the customer obtains equal benefit from the service throughout the service period. The Company accounts for individual goods and services separately if they are distinct performance obligations, which often requires significant judgment based upon knowledge of the products and/or services, the solution provided and the structure of the sales contract. In SaaS agreements, we provide a service to the customer which combines the software functionality, maintenance and hosting into a single performance obligation. In product related contracts, a purchase order may contain different products, each constituting a separate performance obligation. We generally estimate variable consideration at the most likely amount to which we expect to be entitled and in certain cases based on the expected value, which requires judgment. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us. We review and update these estimates on a quarterly basis. The Company’s typical performance obligations include the following: Performance Obligation When Performance When Payment is How Standalone Selling Price is Product Revenues Standard purchase orders for delivery of a tangible product Upon shipment (point in time) Within 30 days of delivery Observable transactions Engineering services where the deliverable is considered a product As work is performed (over time) Within 30 days of services being invoiced Estimated using a cost-plus margin approach Service Revenues Engineering and consulting services As work is performed (over time) Within 30 days of services being invoiced Estimated using a cost-plus margin approach SaaS Over the course of the SaaS service once the system is available for use (over time) At the beginning of the contract period Estimated using a cost-plus margin approach Disaggregation of Revenue The Company disaggregates revenue from contracts with customers into reportable segments and the nature of the products and services. See Note 10 for our revenue by reportable segment. Trade Accounts Receivable and Contract Balances We classify our right to consideration in exchange for goods and services as either a receivable or a contract asset. A receivable is a right to consideration that is unconditional (i.e. only the passage of time is required before payment is due). We present such receivables in trade accounts receivable, net in our unaudited consolidated balance sheet at their net estimated realizable value. The Company maintains an allowance for doubtful accounts to provide for the estimated amount of receivables that will not be collected. If warranted, the allowance is increased by the Company’s provision for doubtful accounts, which is charged against income. All recoveries on receivables previously charged off are included in income, while direct charge-offs of receivables are deducted from the allowance. A contract asset is a right to consideration that is conditional upon factors other than the passage of time. Contract assets are presented as unbilled accounts receivable on the accompanying balance sheet. For example, we would record a contract asset if we record revenue on a professional services engagement, but are not entitled to bill until we achieve specified milestones. Our contract assets and liabilities are reported in a net position on a contract basis at the end of each reporting period. Contract Fulfillment Costs The Company evaluates whether or not we should capitalize the costs of fulfilling a contract. Such costs would be capitalized when they are not within the scope of other standards and: (1) are directly related to a contract; (2) generate or enhance resources that will be used to satisfy performance obligations; and (3) are expected to be recovered. As of December 31, 2018, we capitalized approximately $224,000 of contract fulfillment costs which are presented in the accompanying unaudited consolidated balance sheet as prepaid and other current assets. These costs primarily relate to the satisfaction of performance obligations related to the set up of SaaS platforms. These costs are amortized on a straight-line basis over the estimated useful life of the SaaS platform. Transaction Price Allocated to the Remaining Performance Obligations As of December 31, 2018, the aggregate amount of transaction price allocated to remaining performance obligations was immaterial primarily as a result of termination provisions within our contracts which make the duration of the accounting term of the contract one year or less. Practical Expedients and Exemptions T&M and CPFF contracts are considered variable consideration. However, performance obligations with an underlying fee type of T&M or CPFF qualify for the “Right to Invoice” Practical Expedient under ASC 606-10-55-18. Under this practical expedient, the Company is not required to estimate such variable consideration upon inception of the contract and reassess the estimate each reporting period. The Company utilizes the practical expedient under ASC 606-10-50-14 of not disclosing information about its remaining performance obligations for contracts with an original expected duration (i.e., contract term, determined based on the analysis of termination provisions described above) of 12 months or less. The Company pays sales commissions on certain sales contracts. These costs are accrued in the same period that the revenues are recorded. Using the practical expedient under ASC 340-40-25-4, the Company recognizes the incremental costs of obtaining a contract as an expense when incurred since the amortization period of the asset that the Company otherwise would have recognized is one year or less. The Company utilizes the practical expedient under ASC 606-10-25-18B to account for shipping and handling as fulfillment costs, and not a promised service (a revenue element). Shipping and handling costs are included as cost of revenues in the period during which the products ship. The Company excludes from the transaction price all sales taxes that are assessed by a governmental authority and that are imposed on and concurrent with a specific revenue-producing transaction and collected from a customer (for example, sales, use, value added, and some excise taxes). This employs the practical expedient under ASC 606-10-32-2A. Sales taxes are presented on a net basis (excluded from revenues) in the Company’s unaudited consolidated statements of operations. |
Deferred Revenue | Deferred Revenue Deferred revenue in the accompanying unaudited consolidated balance sheets is comprised of refund liabilities related to billings and consideration received in advance of the satisfaction of performance obligations. |
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 Europe and South America. 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 nine months ended December 31, 2018, one individual customer represented approximately 11% and 14%, respectively, of our total revenues and no other individual customer represented greater than 10% of our total revenues. For the three and nine months ended December 31, 2017, one individual customer represented approximately 20% and 22%, respectively, of our total revenues and no other individual customer represented greater than 10% of our total revenues. As of December 31, 2018, no individual customer represented greater than 10% our total accounts receivable. As of March 31, 2018, one customer represented approximately 13% of our total accounts receivable, and no other individual customer represented greater 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. Our investments are measured at fair value on a recurring basis. The framework for measuring fair value and related disclosure requirements about fair value measurements are provided in FASB ASC 820, Fair Value Measurements (“ASC 820”). This pronouncement defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy prescribed by ASC 820 contains three levels as follows: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Observable inputs other than quoted prices in active markets for identical assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3—Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. |
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. |
Investments | Investments The Company’s investments are classified as either held-to-maturity, available-for-sale or trading, in accordance with FASB ASC 320, Capital Investments Capital Debt and Capital Equity Capital Securities (“ASC 320”). Held-to-maturity securities are those securities that the Company has the positive intent and ability to hold until maturity. Trading securities are those securities that the Company intends to sell in the near term. All other securities not included in the held-to-maturity or trading category are classified as available-for-sale. Held-to-maturity securities are recorded at amortized cost which approximates fair market value. Trading securities are carried at fair value with unrealized gains and losses charged to earnings. Available-for-sale securities are carried at fair value with unrealized gains and losses recorded within accumulated other comprehensive loss as a separate component of stockholders’ equity. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available (see Note 4). Under FASB ASC 320-10-35, a security is considered to be other-than-temporarily impaired if the present value of cash flows expected to be collected are less than the security’s amortized cost basis (the difference being defined as the “Credit Loss”) or if the fair value of the security is less than the security’s amortized cost basis and the investor intends, or will be required, to sell the security before recovery of the security’s amortized cost basis. If an other-than-temporary impairment exists, the charge to earnings is limited to the amount of Credit Loss if the investor does not intend to sell the security, and will not be required to sell the security, before recovery of the security’s amortized cost basis. Any remaining difference between fair value and amortized cost is recognized in other comprehensive loss, net of applicable taxes. The Company evaluates whether the decline in fair value of its investments is other-than-temporary at each quarter-end. This evaluation consists of a review by management, and includes market pricing information and maturity dates for the securities held, market and economic trends in the industry and information on the issuer’s financial condition and, if applicable, information on the guarantors’ financial condition. Factors considered in determining whether a loss is temporary include the length of time and extent to which the investment’s fair value has been less than its cost basis, the financial condition and near-term prospects of the issuer and guarantors, including any specific events which may influence the operations of the issuer and the Company’s intent and ability to retain the investment for a reasonable period of time sufficient to allow for any anticipated recovery of fair value. |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets were approximately $747,000 as of December 31, 2018. Prepaid expenses and other current assets were $1.2 million as of March 31, 2018 and included approximately $130,000 of cash designated as collateral on performance bonds, as required under certain of our Transportation Systems contracts in the Middle East. The performance bonds required 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 was required throughout the delivery of our services and was maintained in the local bank until the contract was closed by the purchasing agency. The requirements on the remaining performance bonds, and the related cash collateral restrictions, were released during the quarter ended June 30, 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 perform an annual qualitative assessment of our goodwill during the fourth fiscal quarter, or more frequently, to determine if any events or circumstances exist, such as an adverse change in business climate or a decline in overall industry demand, that would indicate that it would more likely than not reduce the fair value of a reporting unit below its carrying amount, including goodwill. If events or circumstances do not indicate that the fair value of a reporting unit is below its carrying amount, then goodwill is not considered to be impaired and no further testing is required. If further testing is required, we perform a two-step process. The first step involves comparing the fair value of our reporting unit to its carrying value, including goodwill. If the carrying value of the reporting unit exceeds its fair value, the second step of the test is performed by comparing the carrying value of the goodwill in the reporting unit to its implied fair value. An impairment charge is recognized for the excess of the carrying value of goodwill over its implied fair value. 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 December 31, 2018, 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 December 31, 2018, 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 full valuation allowance against our deferred tax assets. We will continuously 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 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. |
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 consolidated balance sheets. We do not provide any service-type warranties. |
Comprehensive Loss | Comprehensive Loss The difference between net loss and comprehensive loss was de minimis for the three and nine months ended December 31, 2018. Comprehensive loss equaled net loss for three and nine months ended December 31, 2017. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements 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. ASU 2016-02 requires entities 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. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”). In issuing ASU 2018-11, the FASB decided to provide another transition method in addition to the existing transition method by allowing entities to initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company is currently evaluating the impact the guidance will have on its consolidated financial statements. The Company currently expects that most of its operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon adoption. Therefore, the Company expects this adoption will result in a material increase in the long-term assets and long-term liabilities on its consolidated balance sheets. Enhanced disclosures will also be required to give financial statement users the ability to assess the amount, timing and uncertainty of cash flows arising from leases. The Company plans to adopt the standard in the first quarter of fiscal year ended March 31, 2020 and is currently continuing its assessment, which may identify other impacts the revised standard will have on the consolidated financial statements. In March 2018, the FASB issued ASU 2018-05, Income Taxes (Topic 740), and Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (“ASU 2018-05”). ASU 2018-05 adds various SEC paragraphs pursuant to the issuance of the December 2017 SEC Staff Accounting Bulletin (“SAB”) No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which was effective immediately. The SEC issued SAB 118 to address concerns about reporting entities’ ability to timely comply with the accounting requirements to recognize all of the effects of the Tax Cuts and Jobs Act (the “Tax Act”) in the period of enactment. SAB 118 allows disclosure that timely determination of some or all of the income tax effects from the Tax Act are incomplete by the due date of the financial statements and if possible to provide a reasonable estimate. The Company has accounted for the tax effects of the Tax Act under the guidance of SAB 118, on a provisional basis. The Company’s accounting for certain income tax effects is incomplete, but the Company has determined what it believes are reasonable estimates for those effects and has recorded provisional amounts in its consolidated financial statements as of December 31, 2018 and March 31, 2018. In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting(“ASU 2018-07”), which expand the scope of Topic 718, Compensation – Stock Compensation to include share-based payment transaction for acquiring goods and services from nonemployees. This update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, and early adoption is permitted. The adoption of ASU 2018-07 is not expected to have a material impact on our consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirement for Fair Value Measurements (“ASU 2018-13”), which modifies the disclosure requirements on fair value measurements. This update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, and early adoption is permitted. We are currently evaluating the impact of ASU 2018-13 on our consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal Use Software (subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”), which clarifies the accounting for implementation costs in cloud computing arrangements. This update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, and early adoption is permitted. We are currently evaluating the impact of ASU 2018-15 on our consolidated financial statements. |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Dec. 31, 2018 | |
Schedule of typical performance obligations | Performance Obligation When Performance When Payment is How Standalone Selling Price is Product Revenues Standard purchase orders for delivery of a tangible product Upon shipment (point in time) Within 30 days of delivery Observable transactions Engineering services where the deliverable is considered a product As work is performed (over time) Within 30 days of services being invoiced Estimated using a cost-plus margin approach Service Revenues Engineering and consulting services As work is performed (over time) Within 30 days of services being invoiced Estimated using a cost-plus margin approach SaaS Over the course of the SaaS service once the system is available for use (over time) At the beginning of the contract period Estimated using a cost-plus margin approach |
ASU 2014-09 | |
Schedule of impact on our opening Consolidated Balance sheet | March 31, 2018 Cumulative-Effect April 1, 2018 As Reported Adjustments As Adjusted (In thousands) Prepaid expenses and other current assets $ 1,165 $ 304 $ 1,469 Total assets $ 62,886 $ 304 $ 63,190 Deferred revenue 4,900 512 5,412 Total liabilities $ 23,365 $ 512 $ 23,877 Accumulated deficit (103,519) 208 (103,727) Total liabilities and stockholders' equity $ 62,886 $ 304 $ 63,190 |
Supplemental Financial Inform_2
Supplemental Financial Information (Tables) | 9 Months Ended |
Dec. 31, 2018 | |
Supplemental Financial Information | |
Schedule of inventories | December 31, March 31, 2018 2018 (In thousands) Materials and supplies $ 1,562 $ 1,745 Work in process 1,334 232 Finished goods 927 944 $ 3,823 $ 2,921 |
Schedule of property and equipment, net | December 31 March 31, 2018 2018 (In thousands) Equipment $ 6,568 $ 6,053 Leasehold improvements 2,939 2,880 Accumulated depreciation (7,224) (6,600) $ 2,283 $ 2,333 |
Schedule of intangible assets | December 31, 2018 March 31, 2018 Gross Gross Carrying Accumulated Net Book Carrying Accumulated Net Book Amount Amortization Value Amount Amortization Value (In thousands) Technology $ 1,856 $ (1,856) $ — $ 1,856 $ (1,856) $ — Customer contracts / relationships 750 (750) — 750 (750) — Trade names and non-compete agreements 1,110 (1,110) — 1,110 (1,102) 8 Capitalized software development costs 5,433 (2,179) 3,254 5,108 (1,365) 3,743 Total $ 9,149 $ (5,895) $ 3,254 $ 8,824 $ (5,073) $ 3,751 |
Schedule of future estimated amortization expense | As of December 31, 2018, future estimated amortization expense is as follows: Fiscal Year Ending March 31, (In thousands) Remainder of 2019 $ 280 2020 870 2021 521 2022 302 2023 244 Thereafter 1,037 $ 3,254 |
Schedule of warranty reserve activity | Nine Months Ended December 31, 2018 2017 (In thousands) Balance at beginning of fiscal year $ 403 $ 278 Additions charged to cost of sales 509 512 Warranty claims (361) (400) Balance at end of period $ 551 $ 390 |
Schedule of computation of basic and diluted loss from continuing operations per share | Three Months Ended Nine Months Ended December 31, December 31, 2018 2017 2018 2017 (In thousands, except par values) Numerator: Income (loss) from continuing operations $ (2,464) $ 248 $ (5,384) $ (1,369) Gain on sale of discontinued operation, net of tax — 95 — 258 Net income (loss) $ (2,464) $ 343 $ (5,384) $ (1,111) Denominator: Weighted average common shares used in basic computation 33,297 32,877 33,247 32,670 Dilutive stock options — 1,274 — — Dilutive restricted stock units — 107 — — Weighted average common shares used in diluted computation 33,297 34,258 33,247 32,670 Net income (loss) per share: Basic $ (0.07) $ 0.01 $ (0.16) $ (0.03) Diluted $ (0.07) $ 0.01 $ (0.16) $ (0.03) |
Schedule of instruments excluded in the computation of diluted loss from continuing operations per share | Three Months Ended Nine Months Ended December 31, December 31, 2018 2017 2018 2017 (In thousands) Stock options 5,225 3,607 4,515 3,770 Restricted stock units 181 246 155 256 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurements | |
Schedule of financial assets that are recorded at fair value on a recurring basis | As of December 31, 2018 Gross Unrealized Gross Unrealized Estimated Fair Amortized Cost Loss Gain Value (In thousands) Level 1: Money market funds $ 2,008 $ — $ — $ 2,008 Subtotal 2,008 — — 2,008 Level 2: Certificates of deposit — — — — Commercial paper — — — — Corporate notes and bonds 2,180 (4) — 2,176 US Treasuries 799 (0) — 799 US Government agencies 754 — — 754 Subtotal 3,733 (4) — 3,729 Total $ 5,741 $ (4) $ — $ 5,737 As of March 31, 2018 Gross Unrealized Gross Unrealized Estimated Fair Amortized Cost Loss Gain Value (In thousands) Level 1: Money market funds $ 666 $ — $ — $ 666 Subtotal 666 — — 666 Level 2: Certificates of deposit — — — — Commercial paper 1,891 — — 1,891 Corporate notes and bonds 2,008 (2) — 2,006 US Treasuries 1,500 (1) — 1,499 US Government agencies 2,950 (1) — 2,949 Subtotal 8,349 (4) — 8,345 Total $ 9,015 $ (4) $ — $ 9,011 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Dec. 31, 2018 | |
Stock-Based Compensation | |
Summary of activity in the plans with respect to stock options | Weighted Average Exercise Number of Price Per Shares Share (In thousands) Options outstanding at March 31, 2018 4,124 $ 3.58 Granted 1,038 4.20 Exercised (25) 2.27 Forfeited (76) 4.93 Expired (1) 4.91 Options outstanding at December 31, 2018 5,060 3.69 |
Summary of activity with respect to RSUs | Number of Shares (In thousands) RSUs outstanding at March 31, 2018 144 Granted 62 Vested (59) Forfeited (24) RSUs outstanding at December 31, 2018 123 |
Schedule of stock-based compensation expense | Three Months Ended Nine Months Ended December 31, December 31, 2018 2017 2018 2017 (In thousands) Cost of revenues $ 35 $ 16 $ 104 $ 47 Selling, general and administrative expense 444 398 1,303 1,167 Research and development expense 51 33 148 111 Total stock-based compensation expense $ 530 $ 447 $ 1,555 $ 1,325 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Dec. 31, 2018 | |
Investments | |
Schedule of Unrealized Gain (Loss) on Investments | As of December 31, 2018 Gross Unrealized Gross Unrealized Estimated Fair Amortized Cost Loss Gain Value (In thousands) Cash and cash equivalents $ 2,008 $ — $ — $ 2,008 Short-term investments 3,733 (4) — 3,729 Long-term investments — — — — Total $ 5,741 $ (4) $ — $ 5,737 As of March 31, 2018 Gross Unrealized Gross Unrealized Estimated Fair Amortized Cost Loss Gain Value (In thousands) Cash and cash equivalents $ 3,692 $ — $ — $ 3,692 Short-term investments 5,323 (4) — 5,319 Long-term investments — — — — Total $ 9,015 $ (4) $ — $ 9,011 |
Business Segment Information (T
Business Segment Information (Tables) | 9 Months Ended |
Dec. 31, 2018 | |
Business Segment Information | |
Schedule of selected financial information for reportable segments | Agriculture Roadway Transportation and Weather Sensors Systems Analytics Total (In thousands) Three Months Ended December 31, 2018 Product revenues $ 10,165 $ 923 $ — $ 11,088 Service revenues 69 10,410 1,573 12,052 Total revenues $ 10,234 $ 11,333 $ 1,573 $ 23,140 Segment income (loss) 1,153 1,147 (1,138) 1,162 Three Months Ended December 31, 2017 Product revenues $ 11,008 $ 987 $ — $ 11,995 Service revenues 34 12,584 1,413 14,031 Total revenues $ 11,042 $ 13,571 $ 1,413 $ 26,026 Segment income (loss) 2,048 2,207 (1,815) 2,440 Agriculture Roadway Transportation and Weather Sensors Systems Analytics Total (In thousands) Nine Months Ended December 31, 2018 Product revenues $ 31,926 $ 3,492 $ — $ 35,418 Service revenues 145 33,384 4,085 37,614 Total revenues $ 32,071 $ 36,876 $ 4,085 $ 73,032 Segment income (loss) 5,463 4,276 (3,869) 5,870 Nine Months Ended December 31, 2017 Product revenues $ 33,438 $ 2,182 $ — $ 35,620 Service revenues 145 39,210 3,482 42,837 Total revenues $ 33,583 $ 41,392 $ 3,482 $ 78,457 Segment income (loss) 7,384 6,472 (5,882) 7,974 |
Schedule of reconciles total segment income (loss) to consolidated loss from continuing operations before income taxes | Three Months Ended Nine Months Ended December 31, December 31, 2018 2017 2018 2017 (In thousands) Segment income (loss): Total income from reportable segments $ 1,162 $ 2,440 $ 5,870 $ 7,974 Unallocated amounts: Corporate and other expenses (3,607) (3,541) (11,173) (10,660) Amortization of intangible assets (61) (18) (191) (84) Other expense, net 8 (9) 41 (14) Interest income, net 10 3 90 8 Loss from continuing operations before income taxes $ (2,488) $ (1,125) $ (5,363) $ (2,776) |
Description of Business and S_4
Description of Business and Summary of Significant Accounting Policies (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2018USD ($)customer | Dec. 31, 2017customer | Dec. 31, 2018USD ($)customer | Dec. 31, 2017customer | Mar. 31, 2018USD ($)customer | Apr. 01, 2018USD ($) | |
Revenue Recognition | ||||||
Prepaid expenses and other current assets | $ 747,000 | $ 747,000 | $ 1,165,000 | |||
Total assets | 57,823,000 | 57,823,000 | 62,886,000 | |||
Deferred revenue | 3,920,000 | 3,920,000 | 4,900,000 | |||
Total liabilities | 21,929,000 | 21,929,000 | 23,365,000 | |||
Accumulated deficit | (109,111,000) | (109,111,000) | (103,519,000) | |||
Total liabilities and stockholders' equity | 57,823,000 | 57,823,000 | $ 62,886,000 | |||
Contract Fulfillment Costs | ||||||
Capitalized contract fulfillment costs | 224,000 | $ 224,000 | ||||
Practical Expedients and Exemptions | ||||||
Practical expedients not disclosing performance obligation | true | |||||
Practical expedients incremental cost | true | |||||
Prepaid Expenses and Other Current Assets | ||||||
Cash designated as collateral on performance bonds | $ 130,000 | $ 130,000 | ||||
Percentage of cash value of the bonds as collateral | 100.00% | |||||
Goodwill and Long-Lived Assets | ||||||
Adjustment for impairment | $ 0 | |||||
Impairment of long-lived and intangible assets | $ 0 | |||||
Total revenues | Customer | One individual customer | ||||||
Concentration of Credit Risk | ||||||
Number of customers | customer | 1 | 1 | 1 | 1 | ||
Percentage of concentration risk | 11.00% | 20.00% | 14.00% | 22.00% | ||
Total revenues | Customer | No individual customer | ||||||
Concentration of Credit Risk | ||||||
Number of customers | customer | 0 | 0 | 0 | 0 | ||
Total accounts receivable | Customer | One individual customer | ||||||
Concentration of Credit Risk | ||||||
Number of customers | customer | 1 | |||||
Percentage of concentration risk | 13.00% | |||||
Total accounts receivable | Customer | No individual customer | ||||||
Concentration of Credit Risk | ||||||
Number of customers | customer | 0 | 0 | ||||
Minimum | ||||||
Warranty | ||||||
Warranty period | 1 year | |||||
Minimum | Property and equipment | ||||||
Property and Equipment, net | ||||||
Useful life | 3 years | |||||
Minimum | Total revenues | Customer | No individual customer | ||||||
Concentration of Credit Risk | ||||||
Percentage of concentration risk | 10.00% | 10.00% | 10.00% | 10.00% | ||
Minimum | Total accounts receivable | Customer | No individual customer | ||||||
Concentration of Credit Risk | ||||||
Percentage of concentration risk | 10.00% | 10.00% | ||||
Maximum | ||||||
Warranty | ||||||
Warranty period | 3 years | |||||
Maximum | Property and equipment | ||||||
Property and Equipment, net | ||||||
Useful life | 8 years | |||||
ASU 2014-09 | ||||||
Revenue Recognition | ||||||
Prepaid expenses and other current assets | $ 1,469,000 | |||||
Total assets | 63,190,000 | |||||
Deferred revenue | 5,412,000 | |||||
Total liabilities | 23,877,000 | |||||
Accumulated deficit | (103,727,000) | |||||
Total liabilities and stockholders' equity | $ 63,190,000 | |||||
Cumulative-Effect Adjustments | ASU 2014-09 | ||||||
Revenue Recognition | ||||||
Prepaid expenses and other current assets | $ 304,000 | |||||
Total assets | 304,000 | |||||
Deferred revenue | 512,000 | |||||
Total liabilities | 512,000 | |||||
Accumulated deficit | 208,000 | |||||
Total liabilities and stockholders' equity | $ 304,000 |
Supplemental Financial Inform_3
Supplemental Financial Information - Inventories , Property and Equipment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2018 | |
Inventories | |||||
Materials and supplies | $ 1,562,000 | $ 1,562,000 | $ 1,745,000 | ||
Work in process | 1,334,000 | 1,334,000 | 232,000 | ||
Finished goods | 927,000 | 927,000 | 944,000 | ||
Total inventories | 3,823,000 | 3,823,000 | 2,921,000 | ||
Property and Equipment, net | |||||
Accumulated depreciation | (7,224,000) | (7,224,000) | (6,600,000) | ||
Property and Equipment, net | 2,283,000 | 2,283,000 | 2,333,000 | ||
Depreciation expense | 198,000 | $ 205,000 | 661,000 | $ 593,000 | |
Equipment | |||||
Property and Equipment, net | |||||
Gross | 6,568,000 | 6,568,000 | 6,053,000 | ||
Leasehold improvements | |||||
Property and Equipment, net | |||||
Gross | $ 2,939,000 | $ 2,939,000 | $ 2,880,000 |
Supplemental Financial Inform_4
Supplemental Financial Information - Intangible Assets (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2018 | |
Intangible Assets | |||||
Gross Carrying Amount | $ 9,149,000 | $ 9,149,000 | $ 8,824,000 | ||
Accumulated Amortization | (5,895,000) | (5,895,000) | (5,073,000) | ||
Net Book Value | 3,254,000 | 3,254,000 | 3,751,000 | ||
Amortization expense | 273,000 | $ 202,000 | 823,000 | $ 525,000 | |
Amortization recorded to cost of revenues | 212,000 | 184,000 | 632,000 | 441,000 | |
Amortization of intangible assets | 61,000 | $ 18,000 | 191,000 | $ 84,000 | |
Net capitalized software development costs | 3,300,000 | 3,300,000 | |||
Technology | |||||
Intangible Assets | |||||
Gross Carrying Amount | 1,856,000 | 1,856,000 | 1,856,000 | ||
Accumulated Amortization | (1,856,000) | (1,856,000) | (1,856,000) | ||
Customer contracts / relationships | |||||
Intangible Assets | |||||
Gross Carrying Amount | 750,000 | 750,000 | 750,000 | ||
Accumulated Amortization | (750,000) | (750,000) | (750,000) | ||
Trade names and non-compete agreements | |||||
Intangible Assets | |||||
Gross Carrying Amount | 1,110,000 | 1,110,000 | 1,110,000 | ||
Accumulated Amortization | (1,110,000) | (1,110,000) | (1,102,000) | ||
Net Book Value | 8,000 | ||||
Capitalized software development costs | |||||
Intangible Assets | |||||
Gross Carrying Amount | 5,433,000 | 5,433,000 | 5,108,000 | ||
Accumulated Amortization | (2,179,000) | (2,179,000) | (1,365,000) | ||
Net Book Value | 3,254,000 | 3,254,000 | $ 3,743,000 | ||
Oracle ERP system design and implementation | |||||
Intangible Assets | |||||
Net capitalized software development costs | $ 2,100,000 | $ 2,100,000 | |||
Useful life (in years) | 10 years |
Supplemental Financial Inform_5
Supplemental Financial Information - Future Estimated Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Mar. 31, 2018 |
Future estimated amortization expense | ||
Remainder of 2019 | $ 280 | |
2,020 | 870 | |
2,021 | 521 | |
2,022 | 302 | |
2,023 | 244 | |
Thereafter | 1,037 | |
Net Book Value | $ 3,254 | $ 3,751 |
Supplemental Financial Inform_6
Supplemental Financial Information - Warranty Reserve Activity (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Activity related to warranty reserve | ||
Balance at beginning of fiscal year | $ 403 | $ 278 |
Additions charged to cost of sales | 509 | 512 |
Warranty claims | (361) | (400) |
Balance at end of period | $ 551 | $ 390 |
Supplemental Financial Inform_7
Supplemental Financial Information - Earnings (loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Numerator: | ||||
Income (loss) from continuing operations | $ (2,464) | $ 248 | $ (5,384) | $ (1,369) |
Gain on sale of discontinued operation, net of tax | 95 | 258 | ||
Net income (loss) | $ (2,464) | $ 343 | $ (5,384) | $ (1,111) |
Denominator: | ||||
Weighted average common shares used in basic computation (in shares) | 33,297 | 32,877 | 33,247 | 32,670 |
Weighted average common shares used in diluted computation (in shares) | 33,297 | 34,258 | 33,247 | 32,670 |
Net income (loss) per share: | ||||
Basic (in dollars per share) | $ (0.07) | $ 0.01 | $ (0.16) | $ (0.03) |
Diluted (in dollars per share) | $ (0.07) | $ 0.01 | $ (0.16) | $ (0.03) |
Stock options | ||||
Denominator: | ||||
Dilutive stock options (in shares) | 1,274 | |||
Restricted stock units | ||||
Denominator: | ||||
Dilutive restricted stock units (in shares) | 107 |
Supplemental Financial Inform_8
Supplemental Financial Information - Earnings (loss) Per Share Excluded weighted average (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
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 | 5,225 | 3,607 | 4,515 | 3,770 |
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 | 181 | 246 | 155 | 256 |
Sale of Vehicle Sensors (Detail
Sale of Vehicle Sensors (Details) | Jul. 29, 2011 | Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | Dec. 31, 2018USD ($)segment |
Sale of Vehicle Sensors | ||||||
Amount of earn-outs in connection with royalty | $ 23,140,000 | $ 26,026,000 | $ 73,032,000 | $ 78,457,000 | ||
Net proceeds from sale of discontinued operation | $ 107,000 | 402,000 | ||||
Number of discontinued operations business segments | segment | 1 | 1 | 1 | |||
Gain on sale of discontinued operation, net of tax | $ 95,000 | 258,000 | ||||
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 | $ 2,700,000 | |||||
Type of revenue | iti:RoyaltyMember | |||||
Net proceeds from sale of discontinued operation | $ 18,000,000 | |||||
Gain on sale of discontinued operation, net of tax | $ 0 | $ 258,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Mar. 31, 2018 |
Non-financial assets measured at fair value | ||
Non-financial assets measured at fair value | $ 0 | $ 0 |
Amortized Cost | 5,741 | 9,015 |
Gross Unrealized Loss | (4) | (4) |
Estimated Fair Value | 5,737 | 9,011 |
Level 1 | ||
Non-financial assets measured at fair value | ||
Amortized Cost | 2,008 | 666 |
Estimated Fair Value | 2,008 | 666 |
Level 1 | Money market funds | ||
Non-financial assets measured at fair value | ||
Amortized Cost | 2,008 | 666 |
Estimated Fair Value | 2,008 | 666 |
Level 2 | ||
Non-financial assets measured at fair value | ||
Amortized Cost | 3,733 | 8,349 |
Gross Unrealized Loss | (4) | (4) |
Estimated Fair Value | 3,729 | 8,345 |
Level 2 | Commercial paper | ||
Non-financial assets measured at fair value | ||
Amortized Cost | 1,891 | |
Estimated Fair Value | 1,891 | |
Level 2 | Corporate notes and bonds | ||
Non-financial assets measured at fair value | ||
Amortized Cost | 2,180 | 2,008 |
Gross Unrealized Loss | (4) | (2) |
Estimated Fair Value | 2,176 | 2,006 |
Level 2 | US Treasuries | ||
Non-financial assets measured at fair value | ||
Amortized Cost | 799 | 1,500 |
Gross Unrealized Loss | 0 | (1) |
Estimated Fair Value | 799 | 1,499 |
Level 2 | US Government agencies | ||
Non-financial assets measured at fair value | ||
Amortized Cost | 754 | 2,950 |
Gross Unrealized Loss | (1) | |
Estimated Fair Value | $ 754 | $ 2,949 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of income tax (benefit) provision to taxes computed at U.S. federal statutory rates | ||||
Expense (benefit) for income taxes | $ (24) | $ (1,373) | $ 21 | $ (1,407) |
Income tax expense (benefit) as a percentage of pre-tax loss | 1.00% | 122.00% | (0.40%) | 50.70% |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 9 Months Ended | |||
Dec. 31, 2018USD ($)subsidiary | Aug. 11, 2018USD ($) | Aug. 11, 2016USD ($) | Jul. 23, 2013USD ($) | |
Maximum | Maxxess | ||||
Related Party Transaction | ||||
Ownership percentage of non-controlling | 2.00% | |||
Maxxess | ||||
Related Party Transaction | ||||
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 | $ 274,000 |
Interest on promissory note (as a percent) | 6.00% |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options & RSUs (Details) | 9 Months Ended |
Dec. 31, 2018plan$ / sharesshares | |
Stock-Based Compensation | |
Number of stock incentive plans | plan | 2 |
Vested and expected to vest at the end of the period (in shares) | 5,100,000 |
Stock options | |
Number of Shares | |
Options outstanding at the beginning of the period (in shares) | 4,124,000 |
Granted (in shares) | 1,038,000 |
Exercised (in shares) | (25,000) |
Forfeited (in shares) | (76,000) |
Expired (in shares) | (1,000) |
Options outstanding at the end of the period (in shares) | 5,060,000 |
Weighted Average Exercise Price Per Share | |
Options outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 3.58 |
Granted (in dollars per share) | $ / shares | 4.20 |
Exercised (in dollars per share) | $ / shares | 2.27 |
Forfeited (in dollars per share) | $ / shares | 4.93 |
Expired (in dollars per share) | $ / shares | 4.91 |
Options outstanding at the end of the period (in dollars per share) | $ / shares | $ 3.69 |
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) | 144,000 |
Granted (in shares) | 62,000 |
Vested (in shares) | (59,000) |
Forfeited (in shares) | (24,000) |
RSUs outstanding at the end of the period (in shares) | 123,000 |
2016 Plan | |
Stock-Based Compensation | |
Authorized for future issuance under stock incentive plans (in shares) | 2,500,000 |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock-Based Compensation | ||||
Total stock-based compensation expense | $ 530,000 | $ 447,000 | $ 1,555,000 | $ 1,325,000 |
Stock options | ||||
Stock-Based Compensation | ||||
Unrecognized compensation expense related to unvested stock options | 5,200,000 | $ 5,200,000 | ||
Weighted average period over which compensation expense is expected to be recognized | 2 years 10 months 24 days | |||
Restricted stock units | ||||
Stock-Based Compensation | ||||
Unrecognized compensation expense related to unvested RSUs | 461,000 | $ 461,000 | ||
Weighted average period over which compensation expense is expected to be recognized | 1 year 4 months 24 days | |||
Cost of revenues | ||||
Stock-Based Compensation | ||||
Total stock-based compensation expense | 35,000 | 16,000 | $ 104,000 | 47,000 |
Selling, general and administrative expense | ||||
Stock-Based Compensation | ||||
Total stock-based compensation expense | 444,000 | 398,000 | 1,303,000 | 1,167,000 |
Research and development expense | ||||
Stock-Based Compensation | ||||
Total stock-based compensation expense | $ 51,000 | $ 33,000 | $ 148,000 | $ 111,000 |
Stock-Based Compensation - Othe
Stock-Based Compensation - Other Stock-Based Compensation Plans (Details) | Jan. 01, 2018USD ($)period | Dec. 31, 2018shares | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Mar. 31, 2018shares |
Other Stock-Based Compensation Plans | ||||||
Stock-based compensation expense | $ 1,555,000 | $ 1,325,000 | ||||
ESPP | ||||||
Other Stock-Based Compensation Plans | ||||||
Purchase price of common stock (as a percent) | 95.00% | |||||
Number of offering periods | period | 2 | |||||
Duration of offering period (in months) | 6 months | |||||
Annual stock value | $ 25,000 | $ 35,808 | ||||
Number of share repurchases | shares | 52,760 | 0 | ||||
Stock-based compensation expense | $ 0 | |||||
ESPP | Minimum | ||||||
Other Stock-Based Compensation Plans | ||||||
Employer matching contribution (as a percent) | 1.00% | |||||
ESPP | Maximum | ||||||
Other Stock-Based Compensation Plans | ||||||
Employer matching contribution (as a percent) | 15.00% |
Stock Repurchase Program (Detai
Stock Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 06, 2014 | Dec. 31, 2018 | Aug. 09, 2012 |
Stock Repurchase Program | |||
Number of shares acquired | 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 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 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2018 | Mar. 31, 2018 | |
Investments | ||
Amortized Cost | $ 5,741 | $ 9,015 |
Gross Unrealized Loss | (4) | (4) |
Estimated Fair Value | 5,737 | 9,011 |
Other-than-temporary impairment of investments | 0 | |
Cash and cash equivalents | ||
Investments | ||
Amortized Cost | 2,008 | 3,692 |
Estimated Fair Value | 2,008 | 3,692 |
Short-term investments | ||
Investments | ||
Amortized Cost | 3,733 | 5,323 |
Gross Unrealized Loss | (4) | (4) |
Estimated Fair Value | $ 3,729 | $ 5,319 |
Business Segment Information -
Business Segment Information - Business Segments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | |
Business Segments | ||||
Number of reportable segments | segment | 3 | |||
Total revenues | $ 23,140 | $ 26,026 | $ 73,032 | $ 78,457 |
Segment income (loss) | (2,506) | (1,119) | (5,494) | (2,770) |
Product | ||||
Business Segments | ||||
Total revenues | 11,088 | 11,995 | 35,418 | 35,620 |
Service | ||||
Business Segments | ||||
Total revenues | 12,052 | 14,031 | 37,614 | 42,837 |
Operating segments | ||||
Business Segments | ||||
Total revenues | 23,140 | 26,026 | 73,032 | 78,457 |
Segment income (loss) | 1,162 | 2,440 | 5,870 | 7,974 |
Operating segments | Product | ||||
Business Segments | ||||
Total revenues | 11,088 | 11,995 | 35,418 | 35,620 |
Operating segments | Service | ||||
Business Segments | ||||
Total revenues | 12,052 | 14,031 | 37,614 | 42,837 |
Operating segments | Roadway Sensors | ||||
Business Segments | ||||
Total revenues | 10,234 | 11,042 | 32,071 | 33,583 |
Segment income (loss) | 1,153 | 2,048 | 5,463 | 7,384 |
Operating segments | Roadway Sensors | Product | ||||
Business Segments | ||||
Total revenues | 10,165 | 11,008 | 31,926 | 33,438 |
Operating segments | Roadway Sensors | Service | ||||
Business Segments | ||||
Total revenues | 69 | 34 | 145 | 145 |
Operating segments | Transportation Systems | ||||
Business Segments | ||||
Total revenues | 11,333 | 13,571 | 36,876 | 41,392 |
Segment income (loss) | 1,147 | 2,207 | 4,276 | 6,472 |
Operating segments | Transportation Systems | Product | ||||
Business Segments | ||||
Total revenues | 923 | 987 | 3,492 | 2,182 |
Operating segments | Transportation Systems | Service | ||||
Business Segments | ||||
Total revenues | 10,410 | 12,584 | 33,384 | 39,210 |
Operating segments | Agriculture and Weather Analytics | ||||
Business Segments | ||||
Total revenues | 1,573 | 1,413 | 4,085 | 3,482 |
Segment income (loss) | (1,138) | (1,815) | (3,869) | (5,882) |
Operating segments | Agriculture and Weather Analytics | Service | ||||
Business Segments | ||||
Total revenues | $ 1,573 | $ 1,413 | $ 4,085 | $ 3,482 |
Business Segment Information _2
Business Segment Information - Reconciliation of Total Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment income (loss): | ||||
Total income from reportable segments | $ (2,506) | $ (1,119) | $ (5,494) | $ (2,770) |
Amortization of intangible assets | (61) | (18) | (191) | (84) |
Other expense, net | 8 | (9) | 41 | (14) |
Interest income, net | 10 | 3 | 90 | 8 |
Loss from continuing operations before income taxes | (2,488) | (1,125) | (5,363) | (2,776) |
Operating segments | ||||
Segment income (loss): | ||||
Total income from reportable segments | 1,162 | 2,440 | 5,870 | 7,974 |
Unallocated amounts | ||||
Segment income (loss): | ||||
Corporate and other expenses | (3,607) | (3,541) | (11,173) | (10,660) |
Amortization of intangible assets | (61) | (18) | (191) | (84) |
Other expense, net | 8 | (9) | 41 | (14) |
Interest income, net | 10 | 3 | 90 | 8 |
Loss from continuing operations before income taxes | $ (2,488) | $ (1,125) | $ (5,363) | $ (2,776) |