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- Consolidated net sales down 6% year-over-year; extreme weather conditions partly to blame.
- GAAP earnings down, as royalty income stream is being reinvested in R&D for growth opportunities in software solutions -- Safe Cities.
- GAAP earnings pressured by continued professional services expenses with respect to an ongoing, albeit winding down, FCPA investigation and non-cash charges.
- High margin royalty income protects downside and provides upside potential.
- License Plate Recognition ("LPR") hardware/software solutions offer upside optionality.
- Management has multiple levers to drive cash flow generation and profitability.
- Ongoing FCPA investigation creates uncertainty; 2013 earnings results hampered by non-recurring professional services costs. Management believes all FCPA related expenses are finished except for potential fine.
- Image Sensing Systems is a takeover candidate; the company adopted a shareholder's rights plan in 2013 to avoid being acquired at a discount.