8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  July 25, 2011

ITERIS, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-08762	95-2588496
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

1700 Carnegie Ave., Suite 100, Santa Ana,	California 92705
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:  (949) 270-9400

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On July 25, 2011, Iteris, Inc., a Delaware corporation (the “Company”), entered into an Asset Purchase Agreement (the “Agreement”) with Bendix Commercial Vehicle Systems LLC, a Delaware limited liability company (“Bendix”).  Subject to the satisfaction or waiver of the conditions to closing included in the Agreement, the Company will sell to Bendix substantially all of its assets used in connection with the Company’s vehicle sensors business.  The Company’s vehicle sensors business encompasses a portfolio of vehicle active safety systems including lane departure warning, forward collision warning and blind spot warning, as well as SafetyDirect® software that analyzes real-time driver performance.

If the transactions contemplated by the Agreement are consummated, Bendix will (i) pay the Company $14,000,000, subject to a $2,000,000 holdback and adjustments based upon the working capital of the vehicle sensors business at closing, and assume certain specified obligations and liabilities of the vehicle sensors business.  The Company will be entitled to additional consideration in the form of certain performance and royalty-related earn-outs.  Bendix will pay to the Company an amount in cash equal to (i) 85% of revenue associated with royalties received under the Company’s license and distribution agreements with Audiovox Electronics Corporation and Valeo Schalter und Sensoren GmbH through December 31, 2017 and (ii) 30% of the amount, if any, by which the amount of revenue generated from the sale of the Company’s lane departure warning systems exceeds Bendix’s projection for such revenue for the two years following closing, each subject to certain reductions and limitations set forth in the Agreement.

Consummation of the transactions contemplated by the Agreement is subject to customary conditions, including without limitation, (i) the other party’s representations and warranties in the Agreement being true and correct in all material respects as of the closing date, (ii) the other party’s compliance in all material respects with covenants contained in the Agreement, (iii) the absence of any law, order or injunction prohibiting the transaction contemplated by the Agreement, (iv) the absence of any material adverse effect on the Company, and (v) the receipt of specified third party consents.

The Agreement and sale of the Company’s vehicle sensors business was unanimously approved by the Company’s Board of Directors.

The foregoing description of the Agreement is qualified in its entirety by reference to the full text of the Agreement, which will be filed as an exhibit to a subsequent report filed by the Company under the Securities Exchange Act of 1934, as amended.

Item 7.01 – Regulation FD Disclosure

On July 25, 2011, Iteris issued a press release announcing the signing of the Agreement, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by this reference.

The foregoing information is furnished pursuant to Item 7.01 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d)Exhibits.

Exhibit Number	Description
99.1	Press Release, dated July 25, 2011.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ITERIS, INC.
Date: July 26, 2011	/s/ JAMES S. MIELE
	James S. Miele
	Chief Financial Officer

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EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release, dated July 25, 2011.

4

EX-99.1

Exhibit 99.1

Iteris Advances its Traffic Management Strategy with Vehicle Sensors Divestiture

— Company Receives $14 Million Plus Potential Earn-outs —

SANTA ANA, Calif. — July 25, 2011 — Iteris, Inc. (NYSE Amex: ITI), a leader in traffic management solutions, has signed a definitive agreement to sell its vehicle sensors business to Bendix Commercial Vehicle Systems LLC, a member of Knorr-Bremse Group, for $14 million, plus potential performance and royalty-related earn-outs, subject to $2 million in holdbacks  and adjustments based upon working capital at closing.

“This divestiture is an important step in our strategic plan to focus the Company on the traffic management market,” said Abbas Mohaddes, president and CEO of Iteris. “The divestiture accomplishes two objectives. It enables us to concentrate our energy and resources in the growing Traffic Management Market and provides additional funding to pursue new growth initiatives in that market.”

“We plan to further enhance our intellectual property through acquisition opportunities much like our recent purchase of Meridian Environmental Technology,” Mohaddes continued. “We also intend to make further investments in R&D and sales and marketing, which  we expect will accelerate our organic growth.”

The Company’s vehicle sensors business encompasses a portfolio of vehicle active safety systems including lane departure warning, forward collision warning and blind spot warning, as well as SafetyDirect® software that analyzes real-time driver performance.

The transaction is expected to close prior to August 31, subject to customary closing conditions. Strauss Capital Partners LLC provided financial advisory services to Iteris for this transaction.

About Bendix Commercial Vehicle Systems LLC

Bendix Commercial Vehicle Systems, a member of the Knorr-Bremse Group, develops and supplies leading-edge active safety technologies, air brake charging, and control systems and components under the Bendix® brand name for medium- and heavy-duty trucks, tractors, trailers, buses, and other commercial vehicles throughout North America. An industry pioneer, employing more than 2,200 people, Bendix is driven to deliver solutions for improved vehicle performance, safety, and overall operating cost. Bendix Commercial Vehicle Systems is headquartered in Elyria, Ohio, with manufacturing plants in Acuña, Mexico; Bowling Green, Ky.; and Huntington, Ind. For more information, call 1-800-AIR-BRAKE (1-800-247-2725) or visit www.bendix.com.

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About Iteris, Inc.

Iteris, Inc. is a leader in traffic management focused on the development and application of advanced technologies that reduce traffic congestion, minimize the environmental impact of traffic congestion, and improve the safety of surface transportation systems infrastructure. Combining outdoor image processing, traffic engineering, and information technology, Iteris offers a broad range of Intelligent Transportation Systems solutions to customers worldwide. Iteris is headquartered in Santa Ana, California with offices throughout North America and in Europe and the Middle East. Investors are encouraged to contact us at 888-329-4483 or at www.iteris.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This release may contain forward-looking statements, which speak only as of the date hereof and are based upon our current expectations and the information available to us at this time. Words such as “believes,” “anticipates,” “expects,” “intends,” “plans,” “seeks,” “estimates,” “may,” “will,” “can,” and variations of these words or similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, statements about the  Company’s plans and timetable for selling its vehicle sensor business, the use of proceeds resulting from the transaction and its future prospects.

Actual results may differ materially from those stated in any forward-looking statements based on a number of factors including, but not limited to, the Company’s ability to identify and take advantage of strategic opportunities, the Company’s ability to specify, develop, and complete its technologies in a timely manner; budget constraints; changing governmental priorities; the timing and successful completion of the sale of the vehicle sensor business; the potential unforeseen impact of product and service offerings from competitors and other competitive or governmental pressures; and the general economic, political, and specific conditions in the markets addressed by the Company. Further information on Iteris, Inc., including additional risk factors that may affect its forward looking statements, is contained in the Company’s Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, its Current Reports on Form 8-K, and its other SEC filings that are available through the SEC’s website (www.sec.gov).

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For Information, Contact:

Scott Liolios or Cody Slach

Investor Relations

Liolios Group, Inc.

Tel 949-574-3860

info@liolios.com