PROVIDENCE

A little more than a year ago, Clarence A. Davis was savoring the fruits of retirement. After a full career in the accounting field, there was finally time for golf and fishing at a new home in Savannah, Ga., which he shared with his wife, Ann Marie.

Now, it seems, retirement will have to wait.

Davis, 65, is the new chief executive officer of Nestor Traffic Systems Inc., the Providence-based company that provides red-light cameras and vehicle-monitoring services.

In an interview earlier this month, Davis told how a chance meeting on an airplane pulled him out of retirement; how several adult role models and sports helped him stay away from the gangs of Harlem; and how he plans to guide 32-year-old Nestor, which has never made money, into being a profitable company.

Davis came to Nestor with wide-ranging business experience. He has been president of two television stations and has run a sod farm, all three of which were in Florida. He also worked as a forensic auditor tracking down corporate fraud. Before retiring in 2005, he was chief operating officer of the American Institute of Certified Public Accountants.

“I’ll tell you my life’s been weird,” Davis said. “I’ve been blessed with opportunities and have taken advantage of those opportunities.”

Davis is a tall, affable man, whose easy smile makes a visitor quickly feel at ease. He frequently espouses life lessons imparted to him by his coaches and teachers: “You have all the tools inside you [to succeed]. You just have to develop them. … If you don’t have faith in yourself, why should others have faith in you? ”

His office is on the third floor of Nestor’s headquarters, a converted paper mill on the edge of Providence’s Smith Hill neighborhood. It’s bright and sparsely furnished. Books by U.S. Sen. John McCain and former President Ronald Reagan sit on a mostly empty bookcase near a title about the Boston Red Sox and another about mergers and acquisitions. A map of the United States on the back wall is dotted with push-pins that show where Nestor has had success, and where it needs to do more work.

Nestor has developed technology that allows a video camera to detect when a car has run a red light, or is speeding. The company installs one or more cameras at intersections, and the cameras constantly monitor the traffic. When the company’s specially designed computer program determines that a car has gone through a red light or broken the speed limit, it saves the video recording of the incident and transmits it back to Nestor’s Providence headquarters. There, employees review the videos and flag those in which the car’s license plate is clearly visible. In some cases, the company will then produce a traffic citation and mail it to the person registered to the car. In others, the company simply turns over the video evidence to the local police departments.

DAVIS GREW UP in a private housing development in Harlem. His father was a postal clerk who spoke five languages; his mother was a New York State claims clerk, who helped him with his calculus and geometry homework. Neither of his parents finished high school, he said.

They sent him to a Catholic high school in Queens, several miles away, which meant he spent nearly three hours a day on a bus and train. It gave him a lot of time to study, he said, but it also gave him a connection to a world outside of Harlem.

“I really didn’t have a lot of neighborhood friends,” he said. “It kept me out of that gangland thing.”

Davis said he excelled in sports, and he credits his coaches for helping steer him in the right direction.

One of them was William “Dolly” King, who was one of only a few blacks to play in the National Basketball League, the predecessor of the NBA.

He still remembers what King told him at age 9 or 10: “Understand the rules of the game, drill yourself in the basics and never let anger be a distraction to you.”

“He made it so clear to me these were the keys to moving through life.”

Davis studied accounting at Long Island University, and when he graduated, a professor tried to explain to him the limitations facing a young black man in America in 1967.

“Become a CPA, but don’t expect to make a partner,” the teacher told him. “He was not being degrading to me,” Davis said. “He was just telling me the practicality of what was out there.”

The advice became a motivator for Davis. “My mind immediately went to: I’ve gotta make partner.” He landed a job at a major Wall Street accounting firm, and by 1979, he made partner.

He left the firm in 1990 to start a consulting business that provided due-diligence investigations for acquisitions and did forensic auditing. In 1998, he joined the American Institute of Certified Public Accountants as chief financial officer, and later become chief operating officer.

He retired in 2005.

Davis came to Nestor following a chance meeting with Nestor’s former CEO, William Danzell. Both happened to be on the same plane, and Danzell was sitting next to an acquaintance of Davis’. Danzell mentioned that Nestor was looking for someone who could chair its audit committee for the company’s board of directors, and Davis’ friend told Danzell he knew the man for the job, and he was on the plane.

When they landed, the friend introduced Davis to Danzell, who asked Davis to send his resumÉ. About four months later, in May 2006, Davis accepted what was supposed to be a three-month assignment “to get a handle on what was going on” at Nestor.

At the time, the company’s share price had lost more than half its value, falling from $6.90 to $3.15 a share in just six months. Nestor badly needed more capital to keep its operations going, but Danzell and the board of directors disagreed about how to manage the company.

Davis said his job was to help put procedures in place to address an “information flow issue.” The board, he said, “didn’t get all the information necessary [from company management] to make sound decisions.”

That three-month assignment was extended to five months. And in May of this year, after shares of Nestor had spiraled down to 56 cents a share, a drop of 92 percent over the previous 18 months, the board voted 6 to 0 to fire Danzell. (Davis abstained from the vote.)

Davis accepted the post of interim CEO and the assignment of finding a permanent top executive. At the time, he said he wasn’t interested in the job himself, for a couple of reasons. Nestor was still in a precarious financial situation and “I didn’t know if I wanted to make a long-term commitment to anything,” he said. “And I kinda missed playing golf.”

But it wasn’t long before Davis was persuaded to take the job. He said one of the company’s major clients asked him “how soon can you remove ‘interim’ from your title?” Then a group of investors stepped forward and offered to invest $4.95 million in a private stock offering, on the condition that Davis become the permanent CEO.

“The more I thought about it, the more I became wedded to it. It just made sense — the intrigue of building this company just sort of got me.”

NESTOR GAVE HIM a contract with an annual salary of $360,000, about 55 percent more than the company paid its previous CEO, according to data from regulatory filings. The contract is automatically renewed for a second year, unless the company takes action not to renew it. If he is fired “without cause,” or quits “for good reason,” Nestor will pay him one year’s salary.

Davis faces many challenges at Nestor.

The company’s main source of revenue is its red-light monitoring system, which has been installed in Canada and seven states: California, Texas, Maryland, Georgia, Tennessee, Delaware and Virginia.

At the end of June, Nestor had installed 247 red-light camera systems, and 4 speed-detection systems, according to regulatory filings.

The company gets income by collecting either a per-ticket fee, or by a flat monthly service charge it negotiates with a municipality. The fees per ticket average about $30 to $35, and monthly service fees run from $2,000 to $7,000 per approach.

(Intersections typically have four approaches and municipalities often choose to install the red-light monitoring system on the two busiest approaches. One approach can have up to three cameras.)

One of the problems facing Davis is the capital-intensive nature of Nestor’s business. The cost of installing each red-light approach is $30,000 to $50,000. In July, the company said it had only enough operating funds to fill about half of the orders for monitoring approaches that it had accepted.

Another pressing issue is the company’s lagging stock price. In April, Nestor was warned by the Nasdaq Stock Market that the company’s shares could be delisted unless they traded above $1 per share for 10 consecutive days during the following six months, which end tomorrow. Although Nestor’s share price has risen about 29 percent since Davis was appointed interim CEO in May, it has not risen above $1 a share over the past six months. On Friday, shares of Nestor (NEST:NASDAQ) closed unchanged at 72 cents per share.

IF THE COMPANY is delisted, it could be found in default in some of its financing agreements, which means that the lenders could demand Nestor repay the balance of existing loans. But the company has said it believes it is “unlikely” that will happen.

Last week, Davis said the company has been in contact with Nasdaq, and plans to file documents tomorrow seeking a six-month extension.

If the shares don’t rise above $1 over the next six months, Davis said the company could implement a “reverse split” to push the share price above $1. A company can trigger a reverse split by reducing the number of shares, which makes each share more valuable.

“It’s not something the company wants to do,” he said, but it remains an option.

So what pulled Davis out of retirement?

“You look to continue to create,” he said. “That’s the joy of life, that’s the passion of life to be able to create, to do new things. With Nestor, I saw an opportunity in an industry in its infancy to really participate in the creation of some new and different ideas.”

Davis said that in Nestor, he sees a company with broader prospects in the surveillance business because of the increased focus on homeland security since the 9/11 terrorist attacks.

For example, he said, there is an initiative in Manhattan to install a series of cameras on Wall Street that would read license plates as a way to detect possible terrorist activity. Nestor’s technology could be adapted to those types of uses, he said.

“The natural bridge is there,” Davis said.

He said he sees Nestor growing through merging with another company, although no such deal is on the horizon. Any potential combination is more likely with another company that is a player in the homeland security industry, rather than with one of Nestor’s eight competitors in the traffic monitoring business, Davis said.

“It could well be that we will continue along … in our present industry, and merge with someone who is doing something else, but under the umbrella of homeland security.”

tbarmann@projo.com