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Iteris Inc Reports Operating Results (10-Q)

February 11, 2013 | About:
10qk

10qk

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Iteris Inc (ITI) filed Quarterly Report for the period ended 2012-12-31.

Iteris, Inc. has a market cap of $53.5 million; its shares were traded at around $1.6 with a P/E ratio of 24.7 and P/S ratio of 0.9.

Highlight of Business Operations:

Under the terms of the Agreement, upon the closing of the Asset Sale, Bendix paid us $14 million in cash, less a $2 million holdback and subject to adjustments based upon the working capital of the Vehicle Sensors segment at closing, and Bendix assumed certain specified obligations and liabilities of the Vehicle Sensors segment. We are entitled to additional consideration in the form of the following performance and royalty-related earn-outs: Bendix is obligated to pay us an amount in cash equal to (i) 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 and (ii) 30% of the amount, if any, by which the amount of revenue generated from the sale of our lane departure warning systems exceeds targets for such revenue for the two years following closing, each subject to certain reductions and limitations set forth in the Agreement. For the three and nine months ended December 31, 2012, we earned approximately $388,000 and $475,000, net of tax, respectively, related to the earn-out provisions of the Agreement. Since July 2011, on a cumulative basis, we have earned approximately $604,000, net of tax, related to the earn-out provisions.

We have historically had a diverse customer base. For the three and nine months ended December 31, 2012, one individual customer represented approximately 12% and 14% of our total revenues, respectively, and no other individual customer represented greater than 10% of our total revenues. For the three and nine months ended December 31, 2011, no individual customer represented greater than 10% of our total revenues.

Total revenues for the three months ended December 31, 2012 decreased approximately 6% to $14.0 million, compared to $14.9 million in the corresponding period in the prior year due primarily to a decrease of approximately 23% in Roadway Sensors revenues, which was partially offset by an additional $652,000 in iPerform revenues, attributable to the acquisition of BTS in November 2011.

Total revenues for the nine months ended December 31, 2012 increased approximately 6% to $45.8 million, compared to $43.2 million in the corresponding period in the prior year due primarily to an increase of approximately 10% in Transportation Systems revenues and the acquisition of BTS in November 2011, which was partially offset by an approximate 8% decrease in Roadway Sensors revenues. Approximately $2.2 million of the increase in total revenues was attributable to the acquisition of BTS in November 2011.

Our gross profit as a percentage of total revenues decreased for the nine months ended December 31, 2012 as compared to the corresponding period in the prior year primarily as a result of our product and service mix. Revenues derived from our Roadway Sensors segment decreased to approximately 43% of our total revenues for the nine months ended December 31, 2012 as compared to 49% for the corresponding prior year period. Roadway Sensors revenues generally carry higher margins than Transportation Systems and iPerform revenues; therefore, a shift in the sales mix weighted less towards Roadway Sensors revenues can negatively impact our overall margin.

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