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Iteris Holdings Inc. Completes Merger

ANAHEIM, Calif.--Oct. 2, 20045, 2004--Iteris Holdings Inc. (OTCBB:ITRSA) (OTCBB:ITRSB), announced today that it has merged its Iteris Inc. operating subsidiary into Iteris Holdings. As part of the merger, each outstanding share of common stock of Iteris Inc. was converted into two (2) shares of Class A Common stock of Iteris Holdings Inc. Concurrent with the merger, Iteris Holdings has changed the name of the surviving merged company to Iteris Inc. Also in connection with the merger, as previously approved by the shareholders of the company, each outstanding share of Class B common stock has been converted into 1.1 shares of Class A common stock, resulting in a single class of common stock moving forward. The company will have approximately 28.2 million shares of common stock outstanding following the merger.

Jack Johnson, formerly the president of the Iteris Inc. subsidiary, will assume the role of president and chief executive officer of the newly merged company, replacing Gregory A. Miner, who will assume the role of chairman of the board. Also in connection with the merger, the company announced that James Miele, formerly the controller of the Iteris Inc. subsidiary, has been appointed vice president of finance and chief financial officer of the new merged company. Joel Slutzky, a founder of Iteris and a member of the company's board of directors, stated: "We are very excited about the new Iteris. Greg and Jack have done an outstanding job of simplifying the capital structure and they can now turn their complete focus to the rich set of opportunities that are available in the transportation market. I believe that we are in the right market at the right time. Traffic congestion and transportation safety will be major issues for years to come. We are now strategically positioned to capitalize on those opportunities and maximize shareholder value."

About Iteris Inc. (formerly known as Iteris Holdings Inc.)

Iteris Inc. is a leading provider of outdoor machine vision systems and sensors that enhance driver safety and optimize the flow of traffic. The company has combined outdoor image processing, traffic engineering, and information technology to offer a broad range of transportation and safety solutions. Iteris Inc. has headquarters in Anaheim. Investors are encouraged to contact the company at 714-774-5000, or at www.iteris.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:

This release contains forward-looking statements based on our current expectations, estimates and projections about our industry, management's beliefs, and certain assumptions made by us. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "may," "will" and variations of these words or similar expressions are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding the impact of the recent merger. These statements speak only as of the date hereof and are subject to change. We undertake no obligation to revise or update publicly any forward-looking statements for any reason. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors. Important factors that may cause such a difference include, but are not limited to, the transition of management and consolidation of operations, any accounting charges or other unanticipated impact of the merger, the market acceptance of our products and services, our operating results and general economic, political and market conditions. Further information on Iteris Holdings Inc., including additional risk factors that may affect our forward looking statements, is contained in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and our other SEC filings that are available through the SEC's EDGAR database (www.sec.gov) or from the company.