11/16/2018Speed Camera Firm Announces New Tactics
Speed camera firm Verra Mobility, formerly ATS, tells investors it will focus on school bus cameras.
American Traffic Solutions, now known as Verra Mobility, last week announced a new strategy to enhance profits. This was the first time that the newly public company has had to inform the Nasdaq about its financial performance for the quarter. The firm produced a set of adjusted results to show how operations fared, excluding the costs of merging a recently acquired toll road management firm with what used to be the core red light camera and speed camera business.
"Looking forward, our future could not be brighter," Verra Mobility president David Roberts told investors on a conference call.
The tolling business, which represents 65 percent of Verra Mobility's income, saw a 32 percent increase in revenue for the third quarter of 2018. By contrast, the automated ticketing business saw an 8 percent increase compared to the prior year. Roberts was optimistic that motorists would soon be paying even more, so the company raised its earnings outlook to $385 million for the year.
"The increase in the number of express toll lanes will continue to drive our commercial business," Roberts said. "Most US cities are adopting the Vision Zero approach to safety and making the necessary capital investments."
The use of adjusted numbers in its report diminished the hit to the balance sheet from the $1 billion in debt the company assumed following the mergers and buyouts. Verra Mobility sees itself having a much more profitable future than its main photo ticketing rival, Redflex Traffic Solutions, which has failed to turn a profit since it was caught in a bribery scandal in 2014. Verra Mobility has been exploiting the Australian rival's woes to snatch a number of key automated ticketing contracts.
"It's going very well, we've really started to land the plane in key markets," Roberts said. "Georgia is a key market. We did open up through legislation that there is now the availability for school zone speed [cameras] in the state of Georgia, which is huge -- approximately $50 million."
In a discussion with financial analysts, Roberts suggested the firm was shifting focus to school bus cameras, which are easier to sell to lawmakers in states that have opposed speed cameras and red light cameras.
"What we're seeing is purpose built photo enforcement," Roberts said. "You're using photo enforcement to solve very specific problems. Those are the problems that people can genuinely agree on. I mean, it's very difficult to argue that a child should not be able to walk in a school zone without a person speeding through and causing an accident. I think what you're going to see is probably a shift in the sentiment related to photo enforcement because of these very specific uses."
National Highway Traffic Safety Administration statistics show school bus drivers, not passing motorists, are responsible for the vast majority of school-related transportation injuries (view report).