Cover
Cover - shares | 6 Months Ended | |
Sep. 30, 2022 | Nov. 07, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-08762 | |
Entity Registrant Name | ITERIS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 95-2588496 | |
Entity Address, Address Line One | 1250 S. Capital of Texas Hwy., Building 1, Suite 330 | |
Entity Address, City or Town | Austin | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78746 | |
City Area Code | 512 | |
Local Phone Number | 716-0808 | |
Title of 12(b) Security | Common Stock, $0.10 par value | |
Trading Symbol | ITI | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 42,639,121 | |
Entity Central Index Key | 0000350868 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --03-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Mar. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 7,991 | $ 23,689 |
Restricted cash | 141 | 120 |
Trade accounts receivable, net of allowance for doubtful accounts of $907 and $903 at September 30, 2022 and March 31, 2022, respectively | 26,540 | 25,628 |
Unbilled accounts receivable | 11,139 | 10,870 |
Inventories | 12,874 | 7,980 |
Prepaid expenses and other current assets | 3,597 | 4,076 |
Total current assets | 62,282 | 72,363 |
Property and equipment, net | 1,462 | 1,392 |
Right-of-use assets | 9,415 | 11,382 |
Intangible assets, net | 10,824 | 11,780 |
Goodwill | 28,340 | 28,340 |
Other assets | 1,096 | 1,120 |
Noncurrent assets of discontinued operations | 0 | 6 |
Total assets | 113,419 | 126,383 |
Current liabilities: | ||
Trade accounts payable | 14,796 | 11,926 |
Accrued payroll and related expenses | 10,550 | 11,409 |
Accrued liabilities | 5,451 | 5,623 |
Deferred revenue | 5,381 | 6,566 |
Current liabilities of discontinued operations | 0 | 163 |
Total current liabilities | 36,178 | 35,687 |
Lease liabilities | 8,716 | 10,763 |
Deferred income taxes | 378 | 337 |
Unrecognized tax benefits | 78 | 105 |
Other long-term liabilities | 2,590 | 2,456 |
Noncurrent liabilities of discontinued operations | 0 | 172 |
Total liabilities | 47,940 | 49,520 |
Commitments and contingencies (Note 6) | ||
Stockholders’ equity: | ||
Preferred stock, $1.00 par value: Authorized shares — 2,000 Issued and outstanding shares — none | 0 | 0 |
Common stock, $0.10 par value: Authorized shares - 70,000 at December 31, 2021 and March 31, 2021 Issued and outstanding shares — 42,334 at December 31, 2021 and 41,687 at March 31, 2021 | 4,265 | 4,242 |
Treasury Stock | (884) | 0 |
Additional paid-in capital | 188,459 | 186,720 |
Accumulated deficit | (126,361) | (114,099) |
Total stockholders' equity | 65,479 | 76,863 |
Total liabilities and stockholders' equity | $ 113,419 | $ 126,383 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Mar. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, allowance for doubtful accounts | $ 907 | $ 903 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, authorized shares | 2,000,000 | 2,000,000 |
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 | 70,000,000 | 70,000,000 |
Common stock, outstanding shares | 42,640,000 | 42,416,000 |
Common stock, issued shares | 42,640,000 | 42,416,000 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Total revenues | $ 39,259 | $ 33,247 | $ 72,926 | $ 67,332 |
Cost of revenues | 32,708 | 22,117 | 56,216 | 42,109 |
Gross profit | 6,551 | 11,130 | 16,710 | 25,223 |
Operating expenses: | ||||
General and administrative | 4,978 | 6,107 | 11,405 | 12,497 |
Sales and marketing | 5,674 | 4,895 | 10,872 | 9,482 |
Research and development | 2,173 | 1,829 | 4,309 | 3,594 |
Amortization of intangible assets | 651 | 668 | 1,319 | 1,336 |
Restructuring charges | 0 | 0 | 707 | 0 |
Total operating expenses | 13,476 | 13,499 | 28,612 | 26,909 |
Operating loss | (6,925) | (2,369) | (11,902) | (1,686) |
Non-operating income (expense): | ||||
Other income, net | 117 | 30 | 94 | 48 |
Interest income (expense), net | (300) | 1 | (332) | 4 |
Loss from continuing operations before income taxes | (7,108) | (2,338) | (12,140) | (1,634) |
(Provision) benefit for income taxes | (289) | 249 | (122) | 174 |
Net loss from continuing operations | (7,397) | (2,089) | (12,262) | (1,460) |
Loss from discontinued operations before gain on sale, net of tax | 0 | (58) | 0 | (76) |
Net loss from discontinued operations, net of tax | 0 | (58) | 0 | (76) |
Net loss | $ (7,397) | $ (2,147) | $ (12,262) | $ (1,536) |
Loss per share - basic and diluted: | ||||
Loss per share from continuing operations -Basic (in dollars per share) | $ (0.17) | $ (0.05) | $ (0.29) | $ (0.03) |
Net loss per share from continuing operations -Diluted (in dollars per share) | (0.17) | (0.05) | (0.29) | (0.03) |
Loss per share from discontinued operations - Basic (in dollars per share) | 0 | 0 | 0 | 0 |
Net loss per share from discontinued operations - Diluted (in dollars per share) | 0 | 0 | 0 | 0 |
Net income (loss) per share - Basic (in dollars per share) | (0.17) | (0.05) | (0.29) | (0.03) |
Net income (loss) per share - Diluted (in dollars per share) | $ (0.17) | $ (0.05) | $ (0.29) | $ (0.03) |
Shares used in basic and diluted per share calculations | 42,288,000 | 42,282,000 | 42,334,000 | 42,079,000 |
Product | ||||
Total revenues | $ 20,788 | $ 17,736 | $ 37,169 | $ 35,762 |
Cost of revenues | 20,026 | 8,983 | 31,683 | 18,540 |
Service | ||||
Total revenues | 18,471 | 15,511 | 35,757 | 31,570 |
Cost of revenues | $ 12,682 | $ 13,134 | $ 24,533 | $ 23,569 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities | ||
Net loss | $ (12,262) | $ (1,536) |
Less: Net loss from discontinued operations | 0 | (76) |
Net loss from continuing operations | (12,262) | (1,460) |
Adjustments to reconcile net loss from continuing operations to net cash used in operating activities: | ||
Project loss | 0 | 3,394 |
Right-of-use asset non-cash expense | 2,122 | 1,329 |
Deferred income taxes | 14 | (360) |
Depreciation of property and equipment | 308 | 426 |
Stock-based compensation | 1,544 | 1,628 |
Amortization of intangible assets | 1,626 | 1,618 |
Loss on disposal of equipment | 0 | 6 |
Changes in operating assets and liabilities, net of effects of discontinued operation and acquisition: | ||
Trade accounts receivable | (912) | (2,729) |
Unbilled accounts receivable and deferred revenue | (1,320) | (431) |
Inventories | (4,894) | (983) |
Prepaid expenses and other assets | 503 | (1,208) |
Trade accounts payable and accrued expenses | 1,123 | (906) |
Operating lease liabilities | (1,486) | (1,743) |
Net cash used in operating activities - continuing operations | (13,634) | (1,419) |
Net cash used in operating activities - discontinued operations | (329) | (49) |
Net cash used in operating activities | (13,963) | (1,468) |
Cash flows from investing activities | ||
Purchases of property and equipment | (378) | (336) |
Maturities of investments | 0 | 3,100 |
Capitalized software development costs | (670) | (1,275) |
Net cash provided by (used in) investing activities - continuing operations | (1,048) | 1,489 |
Net cash provided by investing activities - discontinued operations | 0 | 1,450 |
Net cash provided by (used in) investing activities | (1,048) | 2,939 |
Cash flows from financing activities | ||
Proceeds from stock option exercises | 45 | 1,407 |
Proceeds from ESPP purchases | 232 | 239 |
Tax withholding payments for net share settlements of restricted stock units | (59) | (179) |
Repurchases of common stock | (884) | 0 |
Net cash provided by (used in) financing activities | (666) | 1,467 |
Increase (decrease) in cash, cash equivalents and restricted cash | (15,677) | 2,938 |
Cash, cash equivalents and restricted cash at beginning of period | 23,809 | 25,468 |
Cash, cash equivalents and restricted cash at end of period | 8,132 | 28,406 |
Supplemental cash flow information: | ||
Income taxes | 0 | 165 |
Supplemental schedule of non-cash investing and financing activities: | ||
Lease liabilities arising from obtaining right-of-use assets | $ 155 | $ 1,744 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit |
Balance (in shares) at Mar. 31, 2021 | 41,687,000 | ||||
Balance, treasury stock (in shares) at Mar. 31, 2021 | 0 | ||||
Balance at Mar. 31, 2021 | $ 78,979 | $ 4,170 | $ 0 | $ 181,828 | $ (107,019) |
Increase (Decrease) in Stockholders' Equity | |||||
Stock option exercises (in shares) | 473,000 | ||||
Stock option exercises | 1,375 | $ 47 | 1,328 | ||
Stock-based compensation | 794 | 794 | |||
Net income (loss) | 611 | 611 | |||
Balance (in shares) at Jun. 30, 2021 | 42,160,000 | ||||
Balance, treasury stock (in shares) at Jun. 30, 2021 | 0 | ||||
Balance at Jun. 30, 2021 | 81,759 | $ 4,217 | $ 0 | 183,950 | (106,408) |
Balance (in shares) at Mar. 31, 2021 | 41,687,000 | ||||
Balance, treasury stock (in shares) at Mar. 31, 2021 | 0 | ||||
Balance at Mar. 31, 2021 | 78,979 | $ 4,170 | $ 0 | 181,828 | (107,019) |
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | (1,536) | ||||
Balance (in shares) at Sep. 30, 2021 | 42,333,000 | ||||
Balance, treasury stock (in shares) at Sep. 30, 2021 | 0 | ||||
Balance at Sep. 30, 2021 | 80,538 | $ 4,234 | $ 0 | 184,859 | (108,555) |
Balance (in shares) at Jun. 30, 2021 | 42,160,000 | ||||
Balance, treasury stock (in shares) at Jun. 30, 2021 | 0 | ||||
Balance at Jun. 30, 2021 | 81,759 | $ 4,217 | $ 0 | 183,950 | (106,408) |
Increase (Decrease) in Stockholders' Equity | |||||
Stock option exercises (in shares) | 15,000 | ||||
Stock option exercises | 32 | $ 1 | 31 | ||
Issuance of shares pursuant to Employee Stock Purchase Plan (in shares) | 44,000 | ||||
Issuance of shares pursuant to Employee Stock Purchase Plan | 239 | $ 4 | 235 | ||
Issuance of shares pursuant to vesting of restricted stock units, net of payroll withholding taxes (in shares) | 114,000 | ||||
Issuance of shares pursuant to vesting of restricted stock units, net of payroll withholding taxes | (179) | $ 12 | (191) | ||
Stock-based compensation | 834 | 834 | |||
Net income (loss) | (2,147) | (2,147) | |||
Balance (in shares) at Sep. 30, 2021 | 42,333,000 | ||||
Balance, treasury stock (in shares) at Sep. 30, 2021 | 0 | ||||
Balance at Sep. 30, 2021 | $ 80,538 | $ 4,234 | $ 0 | 184,859 | (108,555) |
Balance (in shares) at Mar. 31, 2022 | 42,416,000 | 42,416,000 | |||
Balance, treasury stock (in shares) at Mar. 31, 2022 | 0 | ||||
Balance at Mar. 31, 2022 | $ 76,863 | $ 4,242 | $ 0 | 186,720 | (114,099) |
Increase (Decrease) in Stockholders' Equity | |||||
Stock option exercises (in shares) | 1,000 | ||||
Stock option exercises | 1 | $ 0 | 1 | ||
Issuance of shares pursuant to vesting of restricted stock units, net of payroll withholding taxes (in shares) | 4,000 | ||||
Issuance of shares pursuant to vesting of restricted stock units, net of payroll withholding taxes | 24 | 24 | |||
Stock-based compensation | 848 | 848 | |||
Treasury stock purchases (in shares) | 300,000 | ||||
Treasury stock purchases | (884) | $ (884) | |||
Net income (loss) | (4,865) | (4,865) | |||
Balance (in shares) at Jun. 30, 2022 | 42,421,000 | ||||
Balance, treasury stock (in shares) at Jun. 30, 2022 | 300,000 | ||||
Balance at Jun. 30, 2022 | $ 71,987 | $ 4,242 | $ (884) | 187,593 | (118,964) |
Balance (in shares) at Mar. 31, 2022 | 42,416,000 | 42,416,000 | |||
Balance, treasury stock (in shares) at Mar. 31, 2022 | 0 | ||||
Balance at Mar. 31, 2022 | $ 76,863 | $ 4,242 | $ 0 | 186,720 | (114,099) |
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | $ (12,262) | ||||
Balance (in shares) at Sep. 30, 2022 | 42,640,000 | 42,640,000 | |||
Balance, treasury stock (in shares) at Sep. 30, 2022 | 300,000 | ||||
Balance at Sep. 30, 2022 | $ 65,479 | $ 4,265 | $ (884) | 188,459 | (126,361) |
Balance (in shares) at Jun. 30, 2022 | 42,421,000 | ||||
Balance, treasury stock (in shares) at Jun. 30, 2022 | 300,000 | ||||
Balance at Jun. 30, 2022 | 71,987 | $ 4,242 | $ (884) | 187,593 | (118,964) |
Increase (Decrease) in Stockholders' Equity | |||||
Stock option exercises (in shares) | 27,000 | ||||
Stock option exercises | 44 | $ 3 | 41 | ||
Issuance of shares pursuant to Employee Stock Purchase Plan (in shares) | 84,000 | ||||
Issuance of shares pursuant to Employee Stock Purchase Plan | 232 | 223 | |||
Issuance of shares pursuant to vesting of restricted stock units, net of payroll withholding taxes (in shares) | 108,000 | ||||
Issuance of shares pursuant to vesting of restricted stock units, net of payroll withholding taxes | (83) | (94) | |||
Stock-based compensation | 696 | 696 | |||
Net income (loss) | $ (7,397) | (7,397) | |||
Balance (in shares) at Sep. 30, 2022 | 42,640,000 | 42,640,000 | |||
Balance, treasury stock (in shares) at Sep. 30, 2022 | 300,000 | ||||
Balance at Sep. 30, 2022 | $ 65,479 | $ 4,265 | $ (884) | $ 188,459 | $ (126,361) |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 6 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | Description of Business and Summary of Significant Accounting Policies Description of Business Iteris, Inc. (referred to collectively in this report as "Iteris," the "Company," "we," "our," and "us") is a provider of smart mobility infrastructure management solutions. Our cloud-enabled end-to-end solutions help public transportation agencies, municipalities, commercial entities and other transportation infrastructure providers monitor, visualize, and optimize mobility infrastructure to make mobility safe, efficient and sustainable for everyone. As a pioneer in intelligent transportation systems ("ITS") technology, our intellectual property, products and software-as-a-service ("SaaS") offerings represent a comprehensive range of ITS solutions that we distribute to customers throughout the U.S. and internationally. We believe our solutions increase safety and decrease congestion within our communities, while also reducing urban emissions and other negative environmental conditions. 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 and we are always exploring strategic alternatives intended to optimize the value of our Company. Iteris was incorporated in Delaware in 1987 and has operated in its current form since 2004. Recent Developments COVID-19 Update The COVID-19 pandemic (the “Pandemic”) has materially adversely impacted global economic conditions. More than 27 months into the Pandemic, COVID-19 continues to have an unpredictable and unprecedented impact on the global economy. Despite increasing availability of COVID-19 vaccines, as well as an easing of restrictions on social, business, travel and government activities and functions, infection rates continue to fluctuate and federal, state and local government requirements are likely to remain fluid. The uncertainties caused by the Pandemic include, but are not limited to, supply chain disruptions, workplace dislocations, economic contraction, and downward pressure on some customer budgets and customer sentiment in general. We have not had any facility closures due to the Pandemic, but we have experienced supply chain and work delays on certain projects. Should such delays continue or worsen or should longer-term budgets or priorities of our clients be impacted, the Pandemic could further negatively affect our business, results of operations and financial condition. The extent of the impact of the Pandemic on our business and financial results, and the volatility of our stock price will depend largely on future developments, including the duration of the Pandemic, new and potentially more contagious variants, such as the Delta and Omicron variants, the impact on capital and financial markets, the distribution, rate of adoption and efficacy of vaccines, and the related impact on the budgets and financial circumstances of our customers and suppliers, all of which are highly uncertain and cannot be reasonably estimated as of the date of this report. Given the uncertainties surrounding the impacts of the Pandemic on the Company's future financial condition and results of operations, we have taken certain actions to preserve our liquidity, manage cash flow and strengthen our financial flexibility. Such actions include, but are not limited to, reducing our discretionary spending, reducing capital expenditures, and implementing restructuring activities. Refer to Note 3, Restructuring Activities, for more information. Our products require specialized parts which have become more difficult to source. In some cases, we have had to purchase such parts from third-party brokers at substantially higher prices. Additionally, to mitigate for component shortages, we have increased inventory levels. In the event demand doesn't materialize, we would need to hold excess inventory for several quarters. Alternatively, we may be unable to source sufficient components at any price, even from third-party brokers, to meet customer demand, resulting in high levels of unshippable backlog. We have placed non-cancellable inventory orders for certain products in advance of our normal lead times to secure normal and incremental future supply and capacity and may need to continue to do so in the future. The Company increased inventory by approximately $4.9 million during the six months ended September 30, 2022 which was a planned increase in inventory as part of the Company's supply chain strategy. During the three months ended September 30, 2022, inventory decreased from June 30, 2022 by a net $0.5 million and we had working capital of approximately $26.0 million as of September 30, 2022. The cash flow used in operating activities of our continuing operations was approximately $13.6 million which was primarily driven by the planned increase in inventory and the re-design of certain circuit boards as part of the Company’s supply chain strategy to help assure the Company has product and raw materials to satisfy customer demand, and the net operating loss as a result of higher inventory component costs related to the global supply chain constraints. The Company's tactics to mitigate the current global supply chain issues included re-designing certain circuit boards to accommodate computer chips that are more readily available in the market at more reasonable prices, and by accumulating inventory in the first two quarters of fiscal year 2023. The increase in inventory purchases and in particular components purchased in the secondary markets will be curtailed and the Company does not expect to continue to accumulate inventory in the future, in the same magnitude, in future periods. However, we may remain supply-constrained beyond the fiscal quarter ended September 30, 2022. If such efforts are not successful for the foreseeable future, the Company may need to further adjust its operations to have sufficient liquidity. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") was signed into law in the United States. The CARES Act provides relief to U.S. corporations through financial assistance programs and modifications to certain income tax provisions. The Company is applying certain beneficial provisions of the CARES Act, including the payroll tax deferral and the alternative minimum tax acceleration. Refer to Note 5, Income Taxes, for more information. The Pandemic has had an impact on the Company’s human capital. While our Santa Ana product and commercial operations facility has remained open throughout the Pandemic, easing of Pandemic restrictions imposed by local and state authorities have allowed a larger portion of our workforce to return to our various facilities while others continue to work remotely. The Company’s information technology infrastructure has proven sufficiently flexible to minimize disruptions in required duties and responsibilities. Additionally, we have been able to timely file financial reports. We believe we have the infrastructure to efficiently work remotely during the Pandemic. We do not expect to incur significant costs to safely reopen our facilities to all our employees. The Company assessed the impacts of the Pandemic on the estimates and assumptions used in preparing our unaudited condensed financial statements. The estimates and assumptions used in our assessments were based on management’s judgment and may be subject to change as new events occur and additional information is obtained. In particular, there is significant uncertainty about the duration and extent of the impact of the Pandemic and its resulting impact on global economic conditions. If economic conditions caused by the Pandemic do not recover as currently estimated by management, the Company’s financial condition, cash flows and results of operations may be materially impacted. The Company will continue to assess the effect on its operations by monitoring the spread of the Pandemic and the actions implemented to combat the virus throughout the world. As a result, our assessment of the impact of the Pandemic may change. Restructuring Activities To help offset recent increases in supply chain costs, on May 12, 2022, the Board of Directors of Iteris, Inc. approved additional restructuring activities to better position the Company for increased profitability and growth. During the three months ended June 30, 2022, the Company incurred approximately $0.7 million related to employee separation costs in relation to these activities which were included in restructuring charges on the unaudited condensed statement of operations. The Company did not incur any separation costs for the three months ended September 30, 2022. Refer to Note 3, Restructuring Activities, for more information. Basis of Presentation Our unaudited condensed financial statements 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 U.S. (“GAAP”) to be condensed or omitted. These unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements and related notes included in its Annual Report on Form 10-K for the fiscal year ended March 31, 2022 (“Fiscal 2022”), filed with the SEC on June 1, 2022. All intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and six month periods ended September 30, 2022 are not necessarily indicative of the results to be expected for Fiscal 2023 or any other periods. Use of Estimates The preparation of 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. Other significant estimates include the collectability of accounts receivable and related allowance for doubtful accounts, projections of taxable income used to assess realizability of deferred tax assets, warranty reserves and other contingencies, costs to complete long-term contracts, indirect cost rates used in cost plus contracts, the valuation of inventories, the valuation of purchased intangible assets and goodwill, the valuation of investments, 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 stock-based compensation. Revenue Recognition 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 consist of revenues derived from maintenance support and the use of the Company’s service platforms and Application Programming Interfaces ("API's") on a subscription basis. We generate this revenue from fees for maintenance and support, monthly active user fees, 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. Service revenues are also derived 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 to involve variable consideration. However, contractual 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. 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 that combines the software functionality, maintenance and hosting into a single performance obligation. In product-related contracts, a purchase order may cover 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 Obligation is Typically Satisfied When Payment is Typically Due How Standalone Selling Price is Typically Estimated 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 services, managed services, and consulting services As work is performed (over time) Within 30 days of services being invoiced Estimated using a cost-plus margin approach SaaS services 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 product revenues and services revenues. 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 condensed balance sheets 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 unaudited condensed balance sheets. 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 refund liabilities are reported in a net position on a contract basis at the end of each reporting period. Refund liabilities are consideration received in advance of the satisfaction of performance obligations. 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 September 30, 2022 and March 31, 2022, there was approximately $0.6 million and $0.6 million, respectively, of contract fulfillment costs, which are presented in the accompanying unaudited condensed balance sheets 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 September 30, 2022 and March 31, 2022, the aggregate amount of transaction price allocated to remaining performance obligations was immaterial, primarily as a result of the termination provisions within our contracts, which make the duration of the accounting term of the contract one year or less. Deferred Revenue Deferred revenue in the accompanying unaudited condensed 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 domestic customers. We maintain an allowance for doubtful accounts for potential credit losses, which losses have historically been within management’s expectations. We currently have, and historically have had, a diverse customer base. For the three and six month periods ended September 30, 2022 and 2021, no individual customer represented greater than 10% of our total revenues. As of September 30, 2022, one individual customer represented greater than 10% of our total accounts receivable, with a balance comprising 14.1% of our total accounts receivable. As of March 31, 2022, no 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 Financial Accounting Standard Board (“FASB”) Accounting Standards Codification (“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, Cash Equivalents and Restricted Cash Cash and cash equivalents consist of cash and short-term investments with initial maturities of 90 days or less. As of each of September 30, 2022 and March 31, 2022, restricted cash was $0.1 million and $0.1 million, respectively, consisting of cash restricted for shares purchased under the Employee Stock Purchase Plan ("ESPP") (See Note 8, Stock-Based Compensation, for further details on the ESPP). Cash, cash equivalents and restricted cash presented in the accompanying unaudited condensed statements of cash flows consist of the following (in thousands): September 30, March 31, Cash and cash equivalents $ 7,991 $ 23,689 Restricted cash 141 120 $ 8,132 $ 23,809 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 raw materials, work-in-process, and finished goods 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 Intangible Assets Intangible assets with determinable economic lives are carried at cost, less accumulated amortization. Amortization is computed over the estimated useful life of each asset on a straight-line basis. The Company determines the useful lives of identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors the Company considers when determining useful lives include the contractual term of any agreement related to the asset, the historical performance of the asset, the Company's long-term strategy for using the asset, any laws or other local regulations which could impact the useful life of the asset and other economic factors, including competition and specific market conditions. 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 otherwise, we compare the fair value of our reporting unit to its carrying value, including goodwill. 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. In prior years the Company had two operating and reportable segments, Roadway Sensors ("RWS") and Transportation Systems ("SYS"), which also represented the reporting units for purposes of goodwill impairment testing. In Fiscal 2021, in conjunction with the re-organization as described in Note 10, Business Segments, the Company also reassessed the reporting unit conclusion and determined that there are three reporting units and a single operating and reportable segment. As of September 30, 2022, there were no indicators of goodwill impairment. 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. 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, as of September 30, 2022, 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 unaudited condensed 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, restricted stock units and performance 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. The fair value of our performance stock unit awards is estimated on the grant date using a Monte Carlo simulation model. While the use of these models meets established requirements, the estimated fair values generated by the models may not be indicative of the actual fair values of our 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 Repair and Maintenance Costs We incur repair and maintenance costs in the normal course of business. Should the repair or maintenance result in a permanent improvement to one of our leased facilities, the cost is capitalized as a leasehold improvement and amortized over its useful life or the remainder of the lease period, whichever is shorter. Non-permanent repair and maintenance costs are charged to expense as incurred. Comprehensive Income (Loss) The difference between net income (loss) and comprehensive income (loss) was de minimis for the three and six months ended September 30, 2022 and September 30, 2021. Recent Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. This standard update requires that certain financial assets be measured at amortized cost net of an allowance for estimated credit losses such that the net receivable represents the present value of expected cash collection. In addition, this standard update requires that certain financial assets be measured at amortized cost reflecting an allowance for estimated credit losses expected to occur over the life of the assets. The estimate of credit losses must be based on all relevant information including historical information, current conditions and reasonable and supportable forecasts that affect the collectability of the amounts. In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842): Effective Dates, which defers the effective date of ASU 2016-13 to fiscal years beginning after December 15, 2022 for all entities except SEC reporting companies that are not smaller reporting companies. We are currently evaluating the timing and impact of adopting ASU 2016-13 on our unaudited condensed financial statements. |
Supplemental Financial Informat
Supplemental Financial Information | 6 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Financial Information | Supplemental Financial InformationInventories The following table presents details of our inventories, net of reserves: September 30, March 31, (In thousands) Raw materials $ 10,241 $ 5,680 Work in process 148 200 Finished goods 2,485 2,100 $ 12,874 $ 7,980 Property and Equipment The following table presents details of our property and equipment, net: September 30, March 31, (In thousands) Equipment $ 6,701 $ 6,825 Leasehold improvements 848 3,117 Accumulated depreciation (6,087) (8,550) $ 1,462 $ 1,392 Depreciation expense was approximately $0.2 million and $0.3 million for the three and six months ended September 30, 2022, respectively, and approximately $0.2 million and $0.4 million for the three and six months ended September 30, 2021, respectively. Approximately $0.1 million and $0.1 million of the depreciation expense was recorded to cost of revenues, and approximately $0.1 million and $0.2 million was recorded to operating expenses, respectively, in the unaudited condensed consolidated statements of operations for the three and six month periods ended September 30, 2022. Approximately $0.0 million and $0.1 million of the depreciation expense was recorded to cost of revenues, and approximately $0.1 million and $0.3 million was recorded to operating expenses, respectively, in the unaudited condensed consolidated statements of operations for the three and six month periods ended September 30, 2021. During the three and six months ended September 30, 2022, approximately $2.3 million of fully depreciated leasehold improvements and approximately $0.5 million of fully depreciated equipment that were no longer in use were disposed of. Intangible Assets The following table presents details of our net intangible assets: September 30, 2022 March 31, 2022 Gross Accumulated Net Book Gross Accumulated Net Book (In thousands) Technology $ 4,986 $ (2,982) $ 2,004 $ 4,986 $ (2,519) $ 2,467 Customer contracts / relationships 9,550 (3,665) 5,885 9,550 (2,959) 6,591 Trade names and non-compete agreements 782 (770) 12 782 (753) 29 Capitalized software development costs 6,570 (3,647) 2,923 5,900 (3,207) 2,693 Total $ 21,888 $ (11,064) $ 10,824 $ 21,218 $ (9,438) $ 11,780 Amortization expense for intangible assets subject to amortization was approximately $0.8 million and $1.6 million for the three and six month periods ended September 30, 2022, respectively, and $0.8 million and $1.6 million for the three and six month periods ended September 30, 2021, respectively. Approximately $0.2 million and $0.3 million of the intangible asset amortization was recorded to cost of revenues and approximately $0.7 million and $1.3 million, was recorded to amortization expense, respectively, in the unaudited condensed statements of operations for the three and six months ended September 30, 2022. Approximately $0.1 million and $0.3 million of the intangible asset amortization was recorded to cost of revenues and approximately $0.7 million and $1.3 million, was recorded to amortization expense, respectively, in the unaudited condensed statements of operations for the three and six months ended September 30, 2021. We have one indefinite useful life intangible asset, with de minimis carrying value, which was included in trade names and non-compete agreements. As of September 30, 2022, future estimated amortization expense was as follows: Year Ending March 31, (In thousands) 2023 $ 1,544 2024 2,993 2025 2,512 2026 1,296 2027 1,095 Thereafter 1,372 $ 10,812 The future estimated amortization expense does not include the indefinite useful life intangible asset described above. Warranty Reserve Activity Warranty reserve is recorded as accrued liabilities in the accompanying unaudited condensed balance sheets. The following table presents activity related to the warranty reserve: Warranty Reserve Activity Six Months Ended 2022 2021 (In thousands) Balance at beginning of fiscal year $ 616 $ 569 Additions charged to cost of sales 104 148 Warranty claims (67) (55) Balance at end of reporting period $ 653 $ 662 Loss Per Share The following table sets forth the computation of basic and diluted net loss per share: Three Months Ended Six Months Ended 2022 2021 2022 2021 (In thousands, except per share amounts) (In thousands, except per share amounts) Numerator: Net loss from continuing operations $ (7,397) $ (2,089) $ (12,262) $ (1,460) Net loss from discontinued operations, net of tax — (58) — (76) Net loss $ (7,397) $ (2,147) $ (12,262) $ (1,536) Denominator: Weighted average common shares used in basic computation $ 42,288 42,282 $ 42,334 42,079 Dilutive stock options — — — — Weighted average common shares used in diluted computation $ 42,288 42,282 $ 42,334 42,079 Basic and diluted: Net loss per share from continuing operations: $ (0.17) $ (0.05) $ (0.29) $ (0.03) Net loss per share from discontinued operations: $ — $ — $ — $ — Net loss per share $ (0.17) $ (0.05) $ (0.29) $ (0.03) The following instruments were excluded for purposes of calculating weighted average common share equivalents in the computation of diluted net loss per share as their effect would have been anti-dilutive: Three Months Ended Six Months Ended 2022 2021 2022 2021 (In thousands) Stock options 5,534 90 5,626 58 Restricted stock units 345 356 395 178 |
Restructuring Activities
Restructuring Activities | 6 Months Ended |
Sep. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Activities | Restructuring Activities On May 12, 2022, the Board of Directors of Iteris, Inc. approved restructuring activities to better position the Company for increased profitability and growth. During the three and six months ended September 30, 2022, the Company incurred approximately $0.0 million and $0.7 million, respectively, related to employee separation costs in relation to these activities which were included in restructuring charges on the unaudited condensed statement of operations. As of September 30, 2022, we have accrued approximately $0.5 million for severance and benefits related to the restructuring activities in accrued payroll and related expenses on the unaudited condensed balance sheet. The restructuring activities during the three and six month periods ended September 30, 2022 were as follows (in thousands): Balance at March 31, 2022 $ — Charged to expenses 707 Cash payments (19) Balance at June 30, 2022 $ 688 Cash payments (149) Balance at September 30, 2022 $ 539 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements We measure fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value measurements are based on a three tier hierarchy that prioritizes the inputs used to measure fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets and liabilities; Level 2, defined as observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities or prices quoted in inactive markets; and Level 3, defined as unobservable inputs that are significant to the fair value of the asset or liability, and for which little or no market data exists, therefore requiring management to utilize its own assumptions to provide its best estimate of what market participants would use in valuing the asset or liability. We did not have any material financial assets or liabilities measured at fair value on a recurring basis using Level 3 inputs as of September 30, 2022 or March 31, 2022. 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. As a result of the re-organization completed in April 2021, as discussed in Note 10, Business Segments, the Company reallocated goodwill to the three new reporting units. No non-financial assets were measured at fair value at September 30, 2022 and March 31, 2022. 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 September 30, 2022 (In thousands) Amortized Gross Gross Estimated Fair Assets: Level 1: Securities held in deferred compensation plan (1) $ 1,315 $ (283) $ 129 $ 1,161 Total $ 1,315 $ (283) $ 129 $ 1,161 Liabilities: Level 1: Deferred compensation plan liabilities (2) $ 1,318 $ (277) $ 138 $ 1,179 Subtotal 1,318 (277) 138 1,179 Level 3: Contingent consideration (3) 255 — — 255 Subtotal 255 — — 255 Total $ 1,573 $ (277) $ 138 $ 1,434 As of March 31, 2022 (In thousands) Amortized Gross Gross Estimated Fair Assets: Level 1: Money market funds $ 71 $ — $ — $ 71 Securities held in deferred compensation plan (1) 998 (106) 73 965 Subtotal 1,069 (106) 73 1,036 Level 2: Commercial paper 7,499 — — 7,499 US Treasuries 7,798 — — 7,798 Subtotal 15,297 — — 15,297 Total $ 16,366 $ (106) $ 73 $ 16,333 Liabilities: Level 1: Deferred compensation plan liabilities (2) $ 1,013 $ (106) $ 72 $ 979 Subtotal 1,013 (106) 72 979 Level 3: Contingent consideration (3) 600 — — 600 Subtotal 600 — — 600 Total $ 1,613 $ (106) $ 72 $ 1,579 (1) Included in prepaid expenses and other current assets on the Company’s balance sheet. (2) Included in accrued payroll and related expenses on the Company’s balance sheet. (3) Included short-term portion in accrued liabilities and long-term portion in other long-term liabilities on the Company’s balance sheet. As of September 30, 2022, the balance of contingent consideration was all short-term and included in accrued liabilities on the Company's balance sheet. In accordance with the terms of the acquisition of the assets of TrafficCast completed on December 7, 2020, contingent consideration relating to an earnout of up to $1.0 million was recorded at its fair value of $0.6 million, of which $0.3 million was paid on April 1, 2022. As of September 30, 2022, the current fair value remaining is $0.3 million and is due on March 31, 2023, if earned. The contingent consideration representing Level 3 fair value measurement was prepared using the following assumptions: Assumptions Risk free rate 0.14% Counter party risk premium 8.20% Revenue WACC 5.10% Revenue volatility 25.00% Unrealized losses related to 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, any of our investments before recovery of their cost basis. As a result, there was no other-than-temporary impairment for these investments as of September 30, 2022. |
Income Taxes
Income Taxes | 6 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe 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 expense for the three and six months ended September 30, 2022 was approximately $0.3 million and $0.1 million, or (3.9)% and (1.0)%, respectively, of pre-tax loss, as compared with a benefit of approximately $0.2 million and $0.2 million, or 11.2% and 11.4%, respectively, of pre-tax loss for the three and six months ended September 30, 2021. 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. We intend to continue maintaining a full valuation allowance on our deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. Release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded. However, the exact timing and amount of the valuation allowance release are subject to change on the basis of the level of profitability that we are able to actually achieve. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation and Other Contingencies As a provider of traffic engineering services, hardware products, software and other various solutions for the traffic industry, 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 unaudited condensed results of operations, financial position or cash flows. |
Right-of-Use Assets and Lease L
Right-of-Use Assets and Lease Liabilities | 6 Months Ended |
Sep. 30, 2022 | |
Lessee Disclosure [Abstract] | |
Right-of-Use Assets and Lease Liabilities | Right-of-Use Assets and Lease Liabilities We have various operating leases for our offices, office equipment and vehicles in the United States. These leases expire at various times through 2029. Certain lease agreements contain renewal options from 1 year to 5 years, rent abatement, and escalation clauses that are factored into our determination of lease payments when appropriate. The table below presents lease-related assets and liabilities recorded on the unaudited condensed balance sheet as follows: Classification September 30, 2022 (In thousands) Assets Operating lease right-of-use-assets - continuing operations Right-of-use assets $ 9,415 Total operating lease right-of-use-assets $ 9,415 Liabilities Operating lease liabilities (short-term) - continuing operations Accrued liabilities $ 2,263 Operating lease liabilities (long-term) - continuing operations Lease liabilities 8,716 Total lease liabilities $ 10,979 Lease Costs We recorded approximately $0.6 million and $1.3 million of lease costs in on our unaudited condensed statements of operations for the three and six months ended September 30, 2022 as compared to approximately $0.7 million and $1.4 million for the three and six months ended September 30, 2021. The Company currently has no variable lease costs. The Company recorded a de minimis amount of sublease income for both the three and six months ended September 30, 2022 and September 30, 2021, which was included in loss from discontinued operations on the unaudited condensed statement of operations. Supplemental Information The table below presents supplemental information related to operating leases during the six months ended September 30, 2022 (in thousands, except weighted average information): Cash paid for amounts included in the measurement of operating lease liabilities $ 706 Weighted average remaining lease term (in years) 4.32 Weighted average discount rate 4.8 % Maturities of Lease Liabilities Maturities of lease liabilities as of September 30, 2022 were as follows: Fiscal Year Ending March 31, Operating Leases (In thousands) 2023 $ 1,373 2024 2,657 2025 2,428 2026 2,143 2027 2,178 Thereafter 1,491 Total lease payments 12,270 Less imputed interest (1,291) Present value of future lease payments 10,979 Less current obligations under leases (2,263) Long-term lease obligations $ 8,716 |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation 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, time-restricted stock units (“RSUs"), performance-based restricted stock units ("PSUs”), cash incentive awards and other stock-based awards. At September 30, 2022, there were approximately 3,259,600 shares of common stock available for grant or issuance under the 2016 Plan. Total stock options vested and expected to vest were approximately 5.8 million as of September 30, 2022. Stock Options A summary of activity with respect to our stock options for the six months ended September 30, 2022 is as follows: Options Weighted (In thousands) Options outstanding at March 31, 2022 5,943 $ 4.32 Granted 20 2.96 Exercised (28) 1.59 Forfeited (114) 5.18 Expired (10) 1.61 Options outstanding at September 30, 2022 5,811 4.31 Restricted Stock Units A summary of activity with respect to our RSUs, which entitle the holder to receive one share of our common stock for each RSU upon vesting, for the six months ended September 30, 2022 is as follows: # of Shares Weighted (In thousands) RSUs outstanding at March 31, 2022 451 $ 4.12 Granted 100 3.21 Vested (144) 5.28 Forfeited (42) 5.23 RSUs outstanding at September 30, 2022 365 3.28 Performance Stock Units The Company has granted a total "target" number of 219,501 PSUs to our executive officers. Between 0% and 160% of the PSUs will be eligible to vest based on average annual performance during the three-year performance period relative to the revenues per share and cash flow from operations objectives to be established by the Compensation Committee at the beginning of each year. In addition, the final PSU vesting based on the revenues per share and cash flow from operations performance will be subject to a modifier between .75x-1.25x based on the Company's total shareholder return relative to the Russell 2000 during the performance period, for a maximum achievement percentage of 200% of the "target" number of PSUs. The PSUs are amortized over a derived service period of 3 years. The value and the derived service period of the PSUs were estimated using the Monte-Carlo simulation model. The following table summarizes the details of the performance stock units: # of Shares Weighted Average Price Per Share (In thousands) PSUs outstanding at March 31, 2022 115 $ 6.33 Granted 87 3.09 Forfeited — — PSUs outstanding at September 30, 2022 202 4.93 As of September 30, 2022, a total of 19,855 PSUs had vested under this program but they had not been issued because the three-year performance period has not yet elapsed. If cessation of service of a recipient should occur prior to the end of the three-year period, that recipient's vested PSUs will be forfeited. Stock-Based Compensation Expense The following table presents stock-based compensation expense that is included in each line item on our unaudited condensed statements of operations: Three Months Ended Six Months Ended 2022 2021 2022 2021 (In thousands) (In thousands) Cost of revenues $ 78 $ 51 $ 142 $ 108 General and administrative expense 347 659 965 1,275 Sales and marketing 116 73 194 143 Research and development expense 155 51 243 102 Total stock-based compensation $ 696 $ 834 $ 1,544 $ 1,628 As of September 30, 2022, there was approximately $3.4 million, $0.2 million and $0.4 million of unrecognized compensation expense related to unvested stock options, RSUs and PSUs, respectively. This expense is currently expected to be recognized over a weighted average period of approximately 2.4 years for stock options, 2.8 years for RSUs and 1.8 years for PSUs. 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 We currently maintain 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 $0.03 million annual stock value limit. In July 2022, 84,426 shares related to the first offering period of Fiscal 2023 were purchased. In July 2021, 44,449 shares related to the first offering period of Fiscal 2022 were purchased. The ESPP is considered a non-compensatory plan and accordingly, no compensation expense is recorded in connection with this benefit. Deferred Compensation Plan Effective October 1, 2020, the Company adopted the Iteris, Inc. Deferred Compensation Plan (the "DC Plan"). The DC Plan consists of two plans, one that is intended to be an unfunded arrangement for eligible employees who are part of a select group of management or highly compensated employees of the Company within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, and one for the benefit of non-employee members of our board of directors. Key employees, including our executive officers, and our non-employee directors who are notified regarding their eligibility to participate and delivered the DC Plan enrollment materials are eligible to participate in the DC Plan. Under the DC Plan, we will provide participants with the opportunity to make annual elections to defer a percentage of their eligible cash compensation and equity awards. A participant is always 100% vested in his or her own elective cash deferrals and any earnings thereon. Elective deferrals of equity awards are credited to a bookkeeping account established in the name of the participant with respect to an equivalent number of shares of our common stock, and such credited shares are subject to the same vesting conditions as are applicable to the equity award subject to the election. The Company established a rabbi trust to finance our obligations under the DC Plan with corporate-owned life insurance policies on participants, and the assets held within this trust are subject to the claims of the Company's creditors. The assets and liabilities are recorded at their fair value, which represents their respective amortized cost values plus any unrealized gains or losses. Refer to Note 4, Fair Value Measurements, for further detail on the DC plan. |
Stock Repurchase Program
Stock Repurchase Program | 6 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Stock Repurchase Program | Stock Repurchase Program On August 9, 2012, the Board approved a stock repurchase program pursuant to which we could acquire up to $3.0 million of our outstanding common stock for an unspecified length of time. Under the program, we could repurchase shares from time to time in the open market and privately negotiated transactions and block trades, and could also repurchase shares pursuant to a 10b5-1 trading plan during our closed trading windows. There was no guarantee as to the exact number of shares that would be repurchased. We may modify or terminate the repurchase program at any time without prior notice. On November 6, 2014, the Board approved a $3.0 million increase to the Company’s 2012 stock repurchase program, pursuant to which the Company could continue to acquire shares of its outstanding common stock from time to time for an unspecified length of time. From the inception of the 2012 stock repurchase program on August 9, 2012 through its retirement on May 12, 2022, we repurchased approximately 2,458,000 shares of our common stock for an aggregate price of approximately $4.3 million, at an average price per share of $1.73. As of September 30, 2022, these repurchased shares have been retired and resumed their status as authorized and unissued shares of our common stock. On May 12, 2022 the Board of Directors retired the 2012 stock repurchase program and approved a new plan for the company to acquire up to $10.0 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. 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. No shares were repurchased during the three months ended September 30, 2022. During the six months ended September 30, 2022, we repurchased 0.3 million shares, for an aggregate price of approximately $0.9 million, at an average price of $2.90 per share. As of September 30, 2022 approximately $9.1 million remained available for the repurchase of our common stock under our current program. |
Business Segments
Business Segments | 6 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Business Segments | Business SegmentsIn Fiscal 2021, the Company underwent a re-organization that was completed in April 2021. The purpose of this was to align the Company’s organization structure with its singular goal of providing best-in-class smart mobility infrastructure management solutions to the marketplace. As a result of the re-organization, the Company's Chief Operating Decision Maker ("CODM"), who is our Chief Executive Officer, reviews the Company's results on a consolidated basis and our financial results are presented under a single reporting segment in order to provide the most accurate representation of Company's performance. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt On January 25, 2022, Iteris, Inc., entered into a Credit Agreement (the “Credit Agreement”) with Capital One, National Association, as agent. The Credit Agreement provided for a $20 million revolving credit facility with a maturity date of January 24, 2026. In addition, the Company had the ability from time to time to increase the revolving commitments up to an additional aggregate amount not to exceed $40 million, subject to receipt of lender commitments and certain conditions precedent. The Credit Agreement that evidenced the facility contained customary representations, warranties, covenants, and events of default. The Credit Agreement was collateralized by substantially all of our property and assets, including intellectual property. The Credit Agreement also contained certain restrictions and covenants that required the Company to maintain, on an ongoing basis, (i) a leverage ratio of no greater than 3.00 to 1.00 and (ii) a fixed charge coverage ratio of not less than 1.25 to 1.00. The leverage ratio also determined the applicable interest rate under the Credit Agreement. Borrowings under the revolving credit facility accrued interest at a rate equal to either Secured Overnight Financing Rate ("SOFR") or a specified base rate, at the Company’s option, plus an applicable margin. The applicable margins ranged from 2.00% to 2.80% per annum for SOFR loans and 1.00% to 1.80% per annum for base rate loans. The revolving credit facility was subject to a commitment fee payable on the unused revolving credit facility commitments ranging from 0.25% to 0.35%, that was dependent on the Company’s leverage ratio. On September 12, 2022, the Company voluntarily terminated the Credit Agreement and expensed the remaining capitalized deferred financing costs. The Company had not borrowed against the Credit Agreement since its inception, but the Company continued to incur customary fees thereunder prior to this termination. In connection with the termination of the Credit Agreement, all liens securing such obligations and guarantees of such obligations were released. Amortization of the deferred financing costs and commitment fees on the unused revolving credit facility commitments of $0.3 million are included in Interest Income (Expense), net on the unaudited condensed statement of operations. As of September 30, 2022, no amounts of capitalized deferred financing costs remained. |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Our unaudited condensed financial statements 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 U.S. (“GAAP”) to be condensed or omitted. These unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements and related notes included in its Annual Report on Form 10-K for the fiscal year ended March 31, 2022 (“Fiscal 2022”), filed with the SEC on June 1, 2022. All intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and six month periods ended September 30, 2022 are not necessarily indicative of the results to be expected for Fiscal 2023 or any other periods. |
Use of Estimates | Use of Estimates The preparation of 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. Other significant estimates include the collectability of accounts receivable and related allowance for doubtful accounts, projections of taxable income used to assess realizability of deferred tax assets, warranty reserves and other contingencies, costs to complete long-term contracts, indirect cost rates used in cost plus contracts, the valuation of inventories, the valuation of purchased intangible assets and goodwill, the valuation of investments, 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 stock-based compensation. |
Revenue Recognition | Revenue Recognition 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 consist of revenues derived from maintenance support and the use of the Company’s service platforms and Application Programming Interfaces ("API's") on a subscription basis. We generate this revenue from fees for maintenance and support, monthly active user fees, 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. Service revenues are also derived 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 to involve variable consideration. However, contractual 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. 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 that combines the software functionality, maintenance and hosting into a single performance obligation. In product-related contracts, a purchase order may cover 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 Obligation is Typically Satisfied When Payment is Typically Due How Standalone Selling Price is Typically Estimated 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 services, managed services, and consulting services As work is performed (over time) Within 30 days of services being invoiced Estimated using a cost-plus margin approach SaaS services 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 product revenues and services revenues. 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 condensed balance sheets 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 unaudited condensed balance sheets. 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 refund liabilities are reported in a net position on a contract basis at the end of each reporting period. Refund liabilities are consideration received in advance of the satisfaction of performance obligations. 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 September 30, 2022 and March 31, 2022, there was approximately $0.6 million and $0.6 million, respectively, of contract fulfillment costs, which are presented in the accompanying unaudited condensed balance sheets 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 September 30, 2022 and March 31, 2022, the aggregate amount of transaction price allocated to remaining performance obligations was immaterial, primarily as a result of the termination provisions within our contracts, which make the duration of the accounting term of the contract one year or less. |
Deferred Revenue | Deferred Revenue Deferred revenue in the accompanying unaudited condensed 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 domestic customers. We maintain an allowance for doubtful accounts for potential credit losses, which losses have historically been within management’s expectations. |
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 Financial Accounting Standard Board (“FASB”) Accounting Standards Codification (“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, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents consist of cash and short-term investments with initial maturities of 90 days or less. |
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 |
Inventories | Inventories Inventories consist of raw materials, work-in-process, and finished goods 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 |
Intangible Assets | Intangible Assets Intangible assets with determinable economic lives are carried at cost, less accumulated amortization. Amortization is computed over the estimated useful life of each asset on a straight-line basis. The Company determines the useful lives of identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors the Company considers when determining useful lives include the contractual term of any agreement related to the asset, the historical performance of the asset, the Company's long-term strategy for using the asset, any laws or other local regulations which could impact the useful life of the asset and other economic factors, including competition and specific market conditions. |
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 otherwise, we compare the fair value of our reporting unit to its carrying value, including goodwill. 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. In prior years the Company had two operating and reportable segments, Roadway Sensors ("RWS") and Transportation Systems ("SYS"), which also represented the reporting units for purposes of goodwill impairment testing. In Fiscal 2021, in conjunction with the re-organization as described in Note 10, Business Segments, the Company also reassessed the reporting unit conclusion and determined that there are three reporting units and a single operating and reportable segment. As of September 30, 2022, there were no indicators of goodwill impairment. |
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, as of September 30, 2022, 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 |
Stock-Based Compensation | Stock-Based CompensationWe record stock-based compensation in our unaudited condensed 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, restricted stock units and performance 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. The fair value of our performance stock unit awards is estimated on the grant date using a Monte Carlo simulation model. While the use of these models meets established requirements, the estimated fair values generated by the models may not be indicative of the actual fair values of our 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 |
Repair and Maintenance Costs | Repair and Maintenance Costs We incur repair and maintenance costs in the normal course of business. Should the repair or maintenance result in a permanent improvement to one of our leased facilities, the cost is capitalized as a leasehold improvement and amortized over its useful life or the remainder of the lease period, whichever is shorter. Non-permanent repair and maintenance costs are charged to expense as incurred. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) The difference between net income (loss) and comprehensive income (loss) was de minimis for the three and six months ended September 30, 2022 and September 30, 2021. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. This standard update requires that certain financial assets be measured at amortized cost net of an allowance for estimated credit losses such that the net receivable represents the present value of expected cash collection. In addition, this standard update requires that certain financial assets be measured at amortized cost reflecting an allowance for estimated credit losses expected to occur over the life of the assets. The estimate of credit losses must be based on all relevant information including historical information, current conditions and reasonable and supportable forecasts that affect the collectability of the amounts. In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842): Effective Dates, which defers the effective date of ASU 2016-13 to fiscal years beginning after December 15, 2022 for all entities except SEC reporting companies that are not smaller reporting companies. We are currently evaluating the timing and impact of adopting ASU 2016-13 on our unaudited condensed financial statements. |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of typical performance obligations | The Company’s typical performance obligations include the following: Performance Obligation When Performance Obligation is Typically Satisfied When Payment is Typically Due How Standalone Selling Price is Typically Estimated 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 services, managed services, and consulting services As work is performed (over time) Within 30 days of services being invoiced Estimated using a cost-plus margin approach SaaS services 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 |
Schedule of cash, cash equivalents and restricted cash | Cash, cash equivalents and restricted cash presented in the accompanying unaudited condensed statements of cash flows consist of the following (in thousands): September 30, March 31, Cash and cash equivalents $ 7,991 $ 23,689 Restricted cash 141 120 $ 8,132 $ 23,809 |
Supplementary Financial Informa
Supplementary Financial Information (Tables) | 6 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of inventories | The following table presents details of our inventories, net of reserves: September 30, March 31, (In thousands) Raw materials $ 10,241 $ 5,680 Work in process 148 200 Finished goods 2,485 2,100 $ 12,874 $ 7,980 |
Schedule of property and equipment, net | The following table presents details of our property and equipment, net: September 30, March 31, (In thousands) Equipment $ 6,701 $ 6,825 Leasehold improvements 848 3,117 Accumulated depreciation (6,087) (8,550) $ 1,462 $ 1,392 |
Schedule of net intangible assets | The following table presents details of our net intangible assets: September 30, 2022 March 31, 2022 Gross Accumulated Net Book Gross Accumulated Net Book (In thousands) Technology $ 4,986 $ (2,982) $ 2,004 $ 4,986 $ (2,519) $ 2,467 Customer contracts / relationships 9,550 (3,665) 5,885 9,550 (2,959) 6,591 Trade names and non-compete agreements 782 (770) 12 782 (753) 29 Capitalized software development costs 6,570 (3,647) 2,923 5,900 (3,207) 2,693 Total $ 21,888 $ (11,064) $ 10,824 $ 21,218 $ (9,438) $ 11,780 |
Schedule of future estimated amortization expense | As of September 30, 2022, future estimated amortization expense was as follows: Year Ending March 31, (In thousands) 2023 $ 1,544 2024 2,993 2025 2,512 2026 1,296 2027 1,095 Thereafter 1,372 $ 10,812 |
Schedule of warranty reserve activity | The following table presents activity related to the warranty reserve: Warranty Reserve Activity Six Months Ended 2022 2021 (In thousands) Balance at beginning of fiscal year $ 616 $ 569 Additions charged to cost of sales 104 148 Warranty claims (67) (55) Balance at end of reporting period $ 653 $ 662 |
Schedule of computation of basic and diluted net loss per share | The following table sets forth the computation of basic and diluted net loss per share: Three Months Ended Six Months Ended 2022 2021 2022 2021 (In thousands, except per share amounts) (In thousands, except per share amounts) Numerator: Net loss from continuing operations $ (7,397) $ (2,089) $ (12,262) $ (1,460) Net loss from discontinued operations, net of tax — (58) — (76) Net loss $ (7,397) $ (2,147) $ (12,262) $ (1,536) Denominator: Weighted average common shares used in basic computation $ 42,288 42,282 $ 42,334 42,079 Dilutive stock options — — — — Weighted average common shares used in diluted computation $ 42,288 42,282 $ 42,334 42,079 Basic and diluted: Net loss per share from continuing operations: $ (0.17) $ (0.05) $ (0.29) $ (0.03) Net loss per share from discontinued operations: $ — $ — $ — $ — Net loss per share $ (0.17) $ (0.05) $ (0.29) $ (0.03) |
Schedule of instruments excluded in the computation of diluted net loss per share | The following instruments were excluded for purposes of calculating weighted average common share equivalents in the computation of diluted net loss per share as their effect would have been anti-dilutive: Three Months Ended Six Months Ended 2022 2021 2022 2021 (In thousands) Stock options 5,534 90 5,626 58 Restricted stock units 345 356 395 178 |
Restructuring Activities (Table
Restructuring Activities (Tables) | 6 Months Ended |
Sep. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
Summary of restructuring activities | The restructuring activities during the three and six month periods ended September 30, 2022 were as follows (in thousands): Balance at March 31, 2022 $ — Charged to expenses 707 Cash payments (19) Balance at June 30, 2022 $ 688 Cash payments (149) Balance at September 30, 2022 $ 539 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets that are recorded at fair value on a recurring basis | 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 September 30, 2022 (In thousands) Amortized Gross Gross Estimated Fair Assets: Level 1: Securities held in deferred compensation plan (1) $ 1,315 $ (283) $ 129 $ 1,161 Total $ 1,315 $ (283) $ 129 $ 1,161 Liabilities: Level 1: Deferred compensation plan liabilities (2) $ 1,318 $ (277) $ 138 $ 1,179 Subtotal 1,318 (277) 138 1,179 Level 3: Contingent consideration (3) 255 — — 255 Subtotal 255 — — 255 Total $ 1,573 $ (277) $ 138 $ 1,434 As of March 31, 2022 (In thousands) Amortized Gross Gross Estimated Fair Assets: Level 1: Money market funds $ 71 $ — $ — $ 71 Securities held in deferred compensation plan (1) 998 (106) 73 965 Subtotal 1,069 (106) 73 1,036 Level 2: Commercial paper 7,499 — — 7,499 US Treasuries 7,798 — — 7,798 Subtotal 15,297 — — 15,297 Total $ 16,366 $ (106) $ 73 $ 16,333 Liabilities: Level 1: Deferred compensation plan liabilities (2) $ 1,013 $ (106) $ 72 $ 979 Subtotal 1,013 (106) 72 979 Level 3: Contingent consideration (3) 600 — — 600 Subtotal 600 — — 600 Total $ 1,613 $ (106) $ 72 $ 1,579 (1) Included in prepaid expenses and other current assets on the Company’s balance sheet. (2) Included in accrued payroll and related expenses on the Company’s balance sheet. (3) Included short-term portion in accrued liabilities and long-term portion in other long-term liabilities on the Company’s balance sheet. As of September 30, 2022, the balance of contingent consideration was all short-term and included in accrued liabilities on the Company's balance sheet. |
Assumptions Used in Preparing Contingent Consideration Representing Level 3 Fair Value Measurement | The contingent consideration representing Level 3 fair value measurement was prepared using the following assumptions: Assumptions Risk free rate 0.14% Counter party risk premium 8.20% Revenue WACC 5.10% Revenue volatility 25.00% |
Right-of-Use Assets and Lease_2
Right-of-Use Assets and Lease Liabilities (Tables) | 6 Months Ended |
Sep. 30, 2022 | |
Lessee Disclosure [Abstract] | |
Schedule of lease-related assets and liabilities recorded on the unaudited condensed consolidated balance sheet | The table below presents lease-related assets and liabilities recorded on the unaudited condensed balance sheet as follows: Classification September 30, 2022 (In thousands) Assets Operating lease right-of-use-assets - continuing operations Right-of-use assets $ 9,415 Total operating lease right-of-use-assets $ 9,415 Liabilities Operating lease liabilities (short-term) - continuing operations Accrued liabilities $ 2,263 Operating lease liabilities (long-term) - continuing operations Lease liabilities 8,716 Total lease liabilities $ 10,979 |
Schedule of supplemental information related to operating leases | The table below presents supplemental information related to operating leases during the six months ended September 30, 2022 (in thousands, except weighted average information): Cash paid for amounts included in the measurement of operating lease liabilities $ 706 Weighted average remaining lease term (in years) 4.32 Weighted average discount rate 4.8 % |
Schedule of undiscounted cash flows | Maturities of lease liabilities as of September 30, 2022 were as follows: Fiscal Year Ending March 31, Operating Leases (In thousands) 2023 $ 1,373 2024 2,657 2025 2,428 2026 2,143 2027 2,178 Thereafter 1,491 Total lease payments 12,270 Less imputed interest (1,291) Present value of future lease payments 10,979 Less current obligations under leases (2,263) Long-term lease obligations $ 8,716 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of activity with respect to stock options | A summary of activity with respect to our stock options for the six months ended September 30, 2022 is as follows: Options Weighted (In thousands) Options outstanding at March 31, 2022 5,943 $ 4.32 Granted 20 2.96 Exercised (28) 1.59 Forfeited (114) 5.18 Expired (10) 1.61 Options outstanding at September 30, 2022 5,811 4.31 |
Summary of activity with respect to RSUs | A summary of activity with respect to our RSUs, which entitle the holder to receive one share of our common stock for each RSU upon vesting, for the six months ended September 30, 2022 is as follows: # of Shares Weighted (In thousands) RSUs outstanding at March 31, 2022 451 $ 4.12 Granted 100 3.21 Vested (144) 5.28 Forfeited (42) 5.23 RSUs outstanding at September 30, 2022 365 3.28 |
Summary of activity with respect to PSUs | The following table summarizes the details of the performance stock units: # of Shares Weighted Average Price Per Share (In thousands) PSUs outstanding at March 31, 2022 115 $ 6.33 Granted 87 3.09 Forfeited — — PSUs outstanding at September 30, 2022 202 4.93 |
Schedule of stock-based compensation expense | The following table presents stock-based compensation expense that is included in each line item on our unaudited condensed statements of operations: Three Months Ended Six Months Ended 2022 2021 2022 2021 (In thousands) (In thousands) Cost of revenues $ 78 $ 51 $ 142 $ 108 General and administrative expense 347 659 965 1,275 Sales and marketing 116 73 194 143 Research and development expense 155 51 243 102 Total stock-based compensation $ 696 $ 834 $ 1,544 $ 1,628 |
Description of Business and S_4
Description of Business and Summary of Significant Accounting Policies - Recent Developments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Operating loss | $ 7,397 | $ 2,147 | $ 12,262 | $ 1,536 |
Planned increase (decrease) in inventories | (500) | 4,894 | 983 | |
Working capital | $ 26,000 | 26,000 | ||
Cash flow used in operating activities of continuing operations | $ (13,634) | $ (1,419) |
Description of Business and S_5
Description of Business and Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Mar. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Capitalized contract fulfillment costs | $ 0.6 | $ 0.6 |
Description of Business and S_6
Description of Business and Summary of Significant Accounting Policies - Concentration of Credit Risk (Details) - Accounts Receivable - Customer - customer | 6 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Mar. 31, 2022 | |
One Individual Customer | ||
Significant accounting policies | ||
Number of customers | 1 | |
Percentage of concentration risk | 14.10% | |
No individual customer | ||
Significant accounting policies | ||
Number of customers | 0 | |
Percentage of concentration risk | 10% |
Description of Business and S_7
Description of Business and Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Cash and cash equivalents | $ 7,991 | $ 7,991 | $ 23,689 | ||
Restricted cash | 141 | 141 | 120 | ||
Cash, cash and cash equivalents and restricted cash | 8,132 | 8,132 | $ 28,406 | $ 23,809 | $ 25,468 |
Decrease in inventories | $ (500) | $ 4,894 | $ 983 |
Description of Business and S_8
Description of Business and Summary of Significant Accounting Policies - Property and Equipment (Details) - Property and equipment | 3 Months Ended |
Sep. 30, 2022 | |
Minimum | |
Significant accounting policies | |
Useful life | 3 years |
Maximum | |
Significant accounting policies | |
Useful life | 8 years |
Description of Business and S_9
Description of Business and Summary of Significant Accounting Policies - Goodwill and Long-Lived Assets (Details) | 6 Months Ended | ||
Sep. 30, 2022 segment | Sep. 30, 2022 reporting_unit | Sep. 30, 2021 segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of operating segments | 1 | 2 | |
Number of reportable segments | 1 | 2 | |
Number of reporting units | 3 | 3 |
Description of Business and _10
Description of Business and Summary of Significant Accounting Policies - Warranty (Details) | 6 Months Ended |
Sep. 30, 2022 | |
Minimum | |
Significant accounting policies | |
Warranty period | 1 year |
Maximum | |
Significant accounting policies | |
Warranty period | 3 years |
Supplemental Financial Inform_2
Supplemental Financial Information - Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Mar. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 10,241 | $ 5,680 |
Work in process | 148 | 200 |
Finished goods | 2,485 | 2,100 |
Total inventories | $ 12,874 | $ 7,980 |
Supplemental Financial Inform_3
Supplemental Financial Information - Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Mar. 31, 2022 |
Property and Equipment, net | ||
Accumulated depreciation | $ (6,087) | $ (8,550) |
Property and equipment, net | 1,462 | 1,392 |
Equipment | ||
Property and Equipment, net | ||
Gross | 6,701 | 6,825 |
Leasehold improvements | ||
Property and Equipment, net | ||
Gross | $ 848 | $ 3,117 |
Supplemental Financial Inform_4
Supplemental Financial Information - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property and Equipment, net | ||||
Depreciation | $ 200 | $ 200 | $ 308 | $ 426 |
Amortization of intangible assets | 800 | 800 | 1,626 | 1,618 |
Amortization recorded to cost of revenues | 200 | 100 | 300 | 300 |
Amortization of intangible assets | 651 | 668 | 1,319 | 1,336 |
Leasehold improvements | ||||
Property and Equipment, net | ||||
Fully depreciated property, plant, and equipment that were disposed of | 2,300 | 2,300 | ||
Equipment | ||||
Property and Equipment, net | ||||
Fully depreciated property, plant, and equipment that were disposed of | 500 | 500 | ||
Cost of revenues | ||||
Property and Equipment, net | ||||
Depreciation | 100 | 0 | 100 | 100 |
Operating expenses | ||||
Property and Equipment, net | ||||
Depreciation | $ 100 | $ 100 | $ 200 | $ 300 |
Supplemental Financial Inform_5
Supplemental Financial Information - Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Mar. 31, 2022 |
Intangible Assets | ||
Gross Carrying Amount | $ 21,888 | $ 21,218 |
Accumulated Amortization | (11,064) | (9,438) |
Net Book Value | 10,824 | 11,780 |
Technology | ||
Intangible Assets | ||
Gross Carrying Amount | 4,986 | 4,986 |
Accumulated Amortization | (2,982) | (2,519) |
Net Book Value | 2,004 | 2,467 |
Customer contracts / relationships | ||
Intangible Assets | ||
Gross Carrying Amount | 9,550 | 9,550 |
Accumulated Amortization | (3,665) | (2,959) |
Net Book Value | 5,885 | 6,591 |
Trade names and non-compete agreements | ||
Intangible Assets | ||
Gross Carrying Amount | 782 | 782 |
Accumulated Amortization | (770) | (753) |
Net Book Value | 12 | 29 |
Capitalized software development costs | ||
Intangible Assets | ||
Gross Carrying Amount | 6,570 | 5,900 |
Accumulated Amortization | (3,647) | (3,207) |
Net Book Value | $ 2,923 | $ 2,693 |
Supplemental Financial Inform_6
Supplemental Financial Information - Future Estimated Amortization Expense (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Future estimated amortization expense | |
2022 | $ 1,544 |
2023 | 2,993 |
2024 | 2,512 |
2025 | 1,296 |
2026 | 1,095 |
Thereafter | 1,372 |
Net Book Value | $ 10,812 |
Supplemental Financial Inform_7
Supplemental Financial Information - Warranty Reserve Activity (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Activity related to warranty reserve | ||
Balance at beginning of fiscal year | $ 616 | $ 569 |
Additions charged to cost of sales | 104 | 148 |
Warranty claims | (67) | (55) |
Balance at end of reporting period | $ 653 | $ 662 |
Supplementary Financial Infor_2
Supplementary Financial Information - Earnings (loss) per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator: | ||||||
Net loss from continuing operations | $ (7,397) | $ (2,089) | $ (12,262) | $ (1,460) | ||
Net loss from discontinued operations, net of tax | 0 | (58) | 0 | (76) | ||
Net loss | $ (7,397) | $ (4,865) | $ (2,147) | $ 611 | $ (12,262) | $ (1,536) |
Denominator: | ||||||
Weighted average common shares used in basic computation | 42,288,000 | 42,282,000 | 42,334,000 | 42,079,000 | ||
Dilutive stock options (in shares) | 0 | 0 | 0 | 0 | ||
Weighted average common shares used in diluted computation | 42,288,000 | 42,282,000 | 42,334,000 | 42,079,000 | ||
Basic: | ||||||
Net loss per share from continuing operations (in dollars per share) | $ (0.17) | $ (0.05) | $ (0.29) | $ (0.03) | ||
Net loss per share from continuing operations -Diluted (in dollars per share) | (0.17) | (0.05) | (0.29) | (0.03) | ||
Net loss per share from discontinued operations (in dollars per share) | 0 | 0 | 0 | 0 | ||
Net loss per share from discontinued operations - Diluted (in dollars per share) | 0 | 0 | 0 | 0 | ||
Net income (loss) per share - Basic (in dollars per share) | (0.17) | (0.05) | (0.29) | (0.03) | ||
Net income (loss) per share - Diluted (in dollars per share) | $ (0.17) | $ (0.05) | $ (0.29) | $ (0.03) |
Supplemental Financial Inform_8
Supplemental Financial Information - Earnings (loss) per Share Excluded Weighted Average (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
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 | 5,534 | 90 | 5,626 | 58 |
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 | 345 | 356 | 395 | 178 |
Restructuring Activities (Detai
Restructuring Activities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Mar. 31, 2022 | |
Restructuring and Related Activities [Abstract] | ||||||
Total restructuring charges | $ 0 | $ 707 | $ 0 | $ 707 | $ 0 | |
Restructuring reserve | $ 539 | $ 688 | $ 539 | $ 0 |
Restructuring Activities - Rest
Restructuring Activities - Restructuring Reserve (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Restructuring Reserve [Roll Forward] | |||||
Restructuring reserve, beginning balance | $ 688 | $ 0 | $ 0 | ||
Restructuring charges | 0 | 707 | $ 0 | 707 | $ 0 |
Cash payments | (149) | (19) | |||
Restructuring reserve, ending balance | $ 539 | $ 688 | $ 539 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) | 6 Months Ended | |||
Apr. 01, 2022 USD ($) | Sep. 30, 2022 USD ($) reporting_unit | Sep. 30, 2022 USD ($) segment | Mar. 31, 2022 USD ($) | |
Fair Value Disclosures [Abstract] | ||||
Number of reporting units | 3 | 3 | ||
Earnout contingent consideration (up to) | $ 1,000,000 | $ 1,000,000 | ||
Estimated Fair Value | 1,434,000 | 1,434,000 | $ 1,579,000 | |
Payment earnout contingent consideration | $ 300,000 | |||
Non-financial assets measured at fair value | $ 0 | $ 0 | $ 0 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Mar. 31, 2022 |
Assets: | ||
Amortized Cost | $ 1,315 | $ 16,366 |
Gross Unrealized Loss | (283) | (106) |
Gross Unrealized Gain | 129 | 73 |
Estimated Fair Value | 1,161 | 16,333 |
Liabilities: | ||
Amortized Cost | 1,573 | 1,613 |
Gross Unrealized Loss | (277) | (106) |
Gross Unrealized Gain | 138 | 72 |
Estimated Fair Value | 1,434 | 1,579 |
Level 1: | ||
Assets: | ||
Amortized Cost | 1,069 | |
Gross Unrealized Loss | (106) | |
Gross Unrealized Gain | 73 | |
Estimated Fair Value | 1,036 | |
Liabilities: | ||
Amortized Cost | 1,318 | 1,013 |
Gross Unrealized Loss | (277) | (106) |
Gross Unrealized Gain | 138 | 72 |
Estimated Fair Value | 1,179 | 979 |
Level 1: | Money market funds | ||
Assets: | ||
Amortized Cost | 71 | |
Gross Unrealized Loss | 0 | |
Gross Unrealized Gain | 0 | |
Estimated Fair Value | 71 | |
Level 1: | Securities Held In Deferred Compensation Plan | ||
Assets: | ||
Amortized Cost | 1,315 | 998 |
Gross Unrealized Loss | (283) | (106) |
Gross Unrealized Gain | 129 | 73 |
Estimated Fair Value | 1,161 | 965 |
Level 1: | Deferred Compensation Plan Liabilities | ||
Liabilities: | ||
Amortized Cost | 1,318 | 1,013 |
Gross Unrealized Loss | (277) | (106) |
Gross Unrealized Gain | 138 | 72 |
Estimated Fair Value | 1,179 | 979 |
Level 2: | ||
Assets: | ||
Amortized Cost | 15,297 | |
Gross Unrealized Loss | 0 | |
Gross Unrealized Gain | 0 | |
Estimated Fair Value | 15,297 | |
Level 2: | Commercial paper | ||
Assets: | ||
Amortized Cost | 7,499 | |
Gross Unrealized Loss | 0 | |
Gross Unrealized Gain | 0 | |
Estimated Fair Value | 7,499 | |
Level 2: | US Treasuries | ||
Assets: | ||
Amortized Cost | 7,798 | |
Gross Unrealized Loss | 0 | |
Gross Unrealized Gain | 0 | |
Estimated Fair Value | 7,798 | |
Level 3: | ||
Liabilities: | ||
Amortized Cost | 255 | 600 |
Gross Unrealized Loss | 0 | 0 |
Gross Unrealized Gain | 0 | 0 |
Estimated Fair Value | 255 | 600 |
Level 3: | Contingent Consideration | ||
Liabilities: | ||
Amortized Cost | 255 | 600 |
Gross Unrealized Loss | 0 | 0 |
Gross Unrealized Gain | 0 | 0 |
Estimated Fair Value | $ 255 | $ 600 |
Fair Value Measurements - Assum
Fair Value Measurements - Assumptions Used in Preparing Contingent Consideration Representing Level 3 Fair Value Measurement (Details) | Sep. 30, 2022 Rate |
Risk free rate | |
Fair Value Measurements | |
Business combination, contingent consideration, liability, measurement input | 0.0014 |
Counter party risk premium | |
Fair Value Measurements | |
Business combination, contingent consideration, liability, measurement input | 0.0820 |
Revenue WACC | |
Fair Value Measurements | |
Business combination, contingent consideration, liability, measurement input | 0.0510 |
Revenue volatility | |
Fair Value Measurements | |
Business combination, contingent consideration, liability, measurement input | 0.2500 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Reconciliation of income tax (benefit) provision to taxes computed at U.S. federal statutory rates | ||||
Income tax expense (benefit) | $ 289 | $ (249) | $ 122 | $ (174) |
Income tax expense (benefit) as a percentage of pre-tax loss | (3.90%) | 11.20% | (1.00%) | 11.40% |
Right-of-Use Assets and Lease_3
Right-of-Use Assets and Lease Liabilities - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Lease Costs | ||||
Lease costs | $ 600,000 | $ 700,000 | $ 1,300,000 | $ 1,400,000 |
Variable lease costs | $ 0 | |||
Minimum | ||||
Operating Leases | ||||
Renewal option term | 1 year | 1 year | ||
Maximum | ||||
Operating Leases | ||||
Renewal option term | 5 years | 5 years |
Right-of-Use Assets and Lease_4
Right-of-Use Assets and Lease Liabilities - Related Assets and Liabilities on the Balance Sheet (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Assets | |
Total operating lease right-of-use-assets | $ 9,415 |
Liabilities | |
Operating lease liabilities (short-term) | 2,263 |
Operating lease liabilities (long-term) | 8,716 |
Total lease liabilities | 10,979 |
Continuing operations | |
Assets | |
Total operating lease right-of-use-assets | 9,415 |
Liabilities | |
Operating lease liabilities (short-term) | $ 2,263 |
Operating lease, liability, current, statement of financial position | Accrued liabilities |
Operating lease liabilities (long-term) | $ 8,716 |
Right-of-Use Assets and Lease_5
Right-of-Use Assets and Lease Liabilities - Supplemental Information (Details) $ in Thousands | 6 Months Ended |
Sep. 30, 2022 USD ($) | |
Supplemental Information | |
Cash paid for amounts included in the measurement of operating lease liabilities | $ 706 |
Weighted average remaining lease term (in years) | 4 years 3 months 25 days |
Weighted average discount rate | 4.80% |
Right-of-Use Assets and Lease_6
Right-of-Use Assets and Lease Liabilities - Undiscounted Cash Flows (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Operating Leases | |
2023 | $ 1,373 |
2024 | 2,657 |
2025 | 2,428 |
2026 | 2,143 |
2027 | 2,178 |
Thereafter | 1,491 |
Total lease payments | 12,270 |
Less imputed interest | (1,291) |
Total lease liabilities | 10,979 |
Less current obligations under leases | (2,263) |
Lease liabilities | $ 8,716 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) | 6 Months Ended |
Sep. 30, 2022 plan $ / shares shares | |
Stock-Based Compensation | |
Number of stock incentive plans | plan | 2 |
Vested and expected to vest at the end of the period (in shares) | 5,800,000 |
Options | |
Expired (in shares) | (10,000) |
Weighted Average Exercise Price Per Share | |
Expired (in dollars per share) | $ / shares | $ 1.61 |
Stock options | |
Options | |
Options outstanding at the beginning of the period (in shares) | 5,943,000 |
Granted (in shares) | 20,000 |
Exercised (in shares) | (28,000) |
Forfeited (in shares) | (114,000) |
Options outstanding at the end of the period (in shares) | 5,811,000 |
Weighted Average Exercise Price Per Share | |
Options outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 4.32 |
Granted (in dollars per share) | $ / shares | 2.96 |
Exercised (in dollars per share) | $ / shares | 1.59 |
Forfeited (in dollars per share) | $ / shares | 5.18 |
Options outstanding at the end of the period (in dollars per share) | $ / shares | $ 4.31 |
2016 Plan | |
Stock-Based Compensation | |
Authorized for future issuance under stock incentive plans (in shares) | 3,259,600 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Units (Details) - Restricted stock units | 6 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares of common stock receivable upon vesting of each RSU (in shares) | 1 |
Number of Shares | |
Options outstanding at the beginning of the period (in shares) | 451,000 |
Granted (in shares) | 100,000 |
Vested (in shares) | (144,000) |
Forfeited (in shares) | (42,000) |
Options outstanding at the end of the period (in shares) | 365,000 |
Weighted Average Price Per Share | |
Options outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 4.12 |
Granted (in dollar per share) | $ / shares | 3.21 |
Vested (in dollars per share) | $ / shares | 5.28 |
Forfeited (in dollars per share) | $ / shares | 5.23 |
Options outstanding at the end of the period (in dollars per share) | $ / shares | $ 3.28 |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Stock Units (Details) | 6 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Maximum achievement percentage | 2 |
Performance Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance period | 3 years |
Service period | 3 years |
Performance stock units vested, not issued | 19,855 |
Number of Shares | |
Options outstanding at the beginning of the period (in shares) | 115,000 |
Granted (in shares) | 87,000 |
Forfeited (in shares) | 0 |
Options outstanding at the end of the period (in shares) | 202,000 |
Weighted Average Price Per Share | |
Options outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 6.33 |
Granted (in dollar per share) | $ / shares | 3.09 |
Forfeited (in dollars per share) | $ / shares | 0 |
Options outstanding at the end of the period (in dollars per share) | $ / shares | $ 4.93 |
Minimum | Performance Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting percentage | 0% |
Maximum | Performance Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting percentage | 160% |
Executive officers | Performance Stock Units | |
Number of Shares | |
Granted (in shares) | 219,501 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Stock-Based Compensation | ||||
Total stock-based compensation | $ 696 | $ 834 | $ 1,544 | $ 1,628 |
Stock options | ||||
Stock-Based Compensation | ||||
Unrecognized compensation expense related to unvested stock options | 3,400 | $ 3,400 | ||
Weighted average period over which compensation expense is expected to be recognized | 2 years 4 months 24 days | |||
Restricted stock units | ||||
Stock-Based Compensation | ||||
Unrecognized compensation expense related to unvested RSUs | 200 | $ 200 | ||
Weighted average period over which compensation expense is expected to be recognized | 2 years 9 months 18 days | |||
Phantom Share Units (PSUs) | ||||
Stock-Based Compensation | ||||
Unrecognized compensation expense related to unvested RSUs | 400 | $ 400 | ||
Weighted average period over which compensation expense is expected to be recognized | 1 year 9 months 18 days | |||
Cost of revenues | ||||
Stock-Based Compensation | ||||
Total stock-based compensation | 78 | 51 | $ 142 | 108 |
General and administrative expense | ||||
Stock-Based Compensation | ||||
Total stock-based compensation | 347 | 659 | 965 | 1,275 |
Sales and marketing | ||||
Stock-Based Compensation | ||||
Total stock-based compensation | 116 | 73 | 194 | 143 |
Research and development expense | ||||
Stock-Based Compensation | ||||
Total stock-based compensation | $ 155 | $ 51 | $ 243 | $ 102 |
Stock-Based Compensation - Othe
Stock-Based Compensation - Other Stock-Based Compensation Plans (Details) $ in Thousands | 1 Months Ended | ||
Jan. 01, 2018 USD ($) offeringPeriod | Jul. 31, 2022 shares | Jul. 31, 2021 shares | |
Other Stock-Based Compensation Plans | |||
Number of shares purchased (in shares) | shares | 84,426 | 44,449 | |
ESPP | |||
Other Stock-Based Compensation Plans | |||
Purchase price of common stock | 95% | ||
Number of offering periods | offeringPeriod | 2 | ||
Duration of offering period | 6 months | ||
Annual stock value | $ | $ 30 | ||
ESPP | Minimum | |||
Other Stock-Based Compensation Plans | |||
Employer matching contribution | 1% | ||
ESPP | Maximum | |||
Other Stock-Based Compensation Plans | |||
Employer matching contribution | 15% |
Stock-Based Compensation - Defe
Stock-Based Compensation - Deferred Compensation Plan (Details) | Oct. 01, 2020 plan |
Share-Based Payment Arrangement [Abstract] | |
Number of deferred compensation plans | 2 |
Stock Repurchase Program (Detai
Stock Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | 119 Months Ended | |||
Nov. 06, 2014 | Sep. 30, 2022 | Jun. 30, 2022 | May 12, 2022 | Aug. 09, 2012 | |
August 2012 Program | |||||
Stock Repurchase Program | |||||
Increase in the authorized amount for repurchase of common stock | $ 3 | ||||
Number of shares acquired | 2,458,000 | ||||
Value of common stock repurchased | $ 4.3 | ||||
Average price per share of common stock repurchased (in dollars per share) | $ 1.73 | ||||
August 2012 Program | Maximum | |||||
Stock Repurchase Program | |||||
Value of common stock approved under stock repurchase program | $ 3 | ||||
May 2022 Program | |||||
Stock Repurchase Program | |||||
Number of shares acquired | 300,000 | ||||
Value of common stock repurchased | $ 0.9 | ||||
Average price per share of common stock repurchased (in dollars per share) | $ 2.90 | ||||
Value of common stock available for repurchase under current program | $ 9.1 | ||||
May 2022 Program | Maximum | |||||
Stock Repurchase Program | |||||
Value of common stock approved under stock repurchase program | $ 10 |
Long-Term Debt (Details)
Long-Term Debt (Details) - Revolving Credit Facility - Line of Credit $ in Millions | Jan. 25, 2022 USD ($) Rate |
Subsequent Event [Line Items] | |
Maximum borrowing capacity | $ | $ 20 |
Increase limit in revolving commitments | $ | $ 40 |
Leverage ratio, maximum | 300% |
Leverage ratio, minimum | 100% |
Fixed charge coverage ratio, maximum | 125% |
Fixed charge coverage ratio, minimum | 100% |
Minimum | |
Subsequent Event [Line Items] | |
Unused commitment fee percentage | 0.25% |
Minimum | SOFR | |
Subsequent Event [Line Items] | |
Basis spread on variable rate | 2% |
Minimum | Base Rate | |
Subsequent Event [Line Items] | |
Basis spread on variable rate | 1% |
Maximum | |
Subsequent Event [Line Items] | |
Unused commitment fee percentage | 0.35% |
Maximum | SOFR | |
Subsequent Event [Line Items] | |
Basis spread on variable rate | 2.80% |
Maximum | Base Rate | |
Subsequent Event [Line Items] | |
Basis spread on variable rate | 1.80% |