Iteris greenlights ways to better account for its revenue
Some people in Southern California like dealing with congested freeways — mainly those who work for Iteris Inc. of Santa Ana.
Iteris makes sensors and other devices that, combined with company software, track and predict things such as traffic, weather and ground moisture. The company also provides consulting services.
In Texas, an Iteris vehicle detection system decides when to give motorists a green light to merge with freeway traffic.
In Colorado, when roads are covered with snow and ice, Iteris monitoring equipment advises maintenance crews on where to plow and what de-icing strategy — such as salt — they should use.
For chemical giant BASF’s crop protection division, the Iteris ClearAg system tracks hail storms to help alert growers of looming problems.
Iteris grew out of the company founded in 1969 called Odetics Inc., which was an incubator for high-tech companies. The company went public in 1989, changed its name to Iteris Holdings in 2003 and shortened the title to Iteris Inc. in 2005.
The latest
Iteris has revealed in regulatory filings that the company last year determined its internal controls over financial reporting and disclosures were ineffective. In particular, “we determined that we had significant deficiencies relating to our accounting for consulting services revenues,” Iteris told the Securities and Exchange Commission.
The company said in February that it hired a director of revenue recognition and is “implementing processes and controls” to ensure revenue is recognized and accounted for in accordance with generally accepted accounting principles.
Interim Chief Executive Kevin Daly said the ways the company booked revenue “in complex, multi-element contracts were not consistent with what our auditors felt was appropriate.”
“We did change the processes and recomputed revenue recognition for all of the affected contracts,” he said. “This took quite awhile but did not require restating any reporting period. We are, of course, using the revised procedures going forward and do not anticipate any further issues in this area.”
In March, the company said it had reached a confidential settlement with Wavetronix of Provo, Utah, over a patent infringement case that had been instigated by Wavetronix.
In February, Iteris posted a net loss of $98,000 for its third fiscal quarter, which ended Dec. 31. The company attributed the loss to increased expenses preparing financial reports and investing in new products. A year earlier, the company’s net income was $238,000. Third-quarter revenue rose 6% to $17.5 million.
Accomplishments
Iteris has been adding products for the agricultural industry and in April announced it had received a patent for its ClearAg system that applies “real-time, field-level weather simulation to identify the optimal time to harvest crops, based on predicted weather and soil conditions and crop moisture levels.”
Last year, Iteris won a transportation planning award from the American Planning Assn. for its contributions to the Long Beach general plan. Daly said the company had suggested innovations and “appropriate technology for efficient mobility.”
Challenges
Iteris needs a permanent chief executive, following the resignation in February of Abbas Mohaddes from that post and from his position on the company board of directors.
Daly said the company is trying to expand into new areas, such as helping growers at a time when harvest yields are going to have to increase at “nearly three times historical rates.”
“We’ve expanded the analysis and modeling area to include the ability to provide forecasts and advisories to growers, some through apps that can be run on their mobile devices,” he said. “This will give growers real-time information about their microclimates. When to irrigate. When to plant. When to harvest.”
Analysts
Iteris does not receive much coverage by Wall Street analysts.
Zack’s Investment Research suggests holding the stock.
Analyst Jeff Van Sinderen of B. Riley & Co. said in a recent note to investors that the company was poised for better performance in 2015. “We expect top line and margin growth over the next few years,” Van Sinderen said.
Twitter: @RonWLATimes
