ROSH PINNA, Israel, May 10, 2017 (GLOBE NEWSWIRE) -- On Track Innovations Ltd. (OTI) (NASDAQ:OTIV), a global provider of near
field communication (NFC) and cashless payment solutions, reported financial results for the first quarter ended March 31, 2017.
Q1 2017 Operational Highlights
- Received purchase orders for thousands of cashless payment solutions for the growing fast food self-serve kiosk market, to be
delivered during 2017.
- Received purchase order for first installment of cashless payment systems sale into Japanese market
- Enhanced sales organization depth and capabilities with the appointment of Larry Susman as Vice President of Sales
Q1 2017 Financial Details
- Total quarterly revenue decreased to $4.0 million, a 28% decrease from $5.6 million in the prior quarter and a 12% decrease
from $4.6 million in the same year-ago period.
- Gross profit as a percentage of revenues increased to 55%, a 12% increase over 43% in the prior quarter and an increase of 4%
over 51% in the same year-ago period.
- Operating expenses decreased to $2.9 million, a 13% decrease from $3.4 million in the prior quarter and a 3% decrease from
$3.0 million in the same year-ago period.
- Net cash used in continuing operating activities decreased 43% to $0.7 million compared to $1.2 million in the same year-ago
period.
- Cash, cash equivalents and short-term investments at March 31, 2017 totaled $10.8 million, a decrease of 6% from December 31,
2016 and an increase of 13% from the same year-ago period.
Management Commentary - Shlomi Cohen (OTI CEO)
“We are pleased to report continued growth in our gross margins and an accelerating increase in recurring
revenues from telemetry terminal management services. Although our first quarter revenues were down from the same year-ago period,
our gross margins increased to 55%, a 12% increase over the prior year’s 43% gross margin. Due to our continued efforts to reduce
costs and increase efficiencies, our operating expenses and net cash used in operations continue to decline. For the 2017 full
year, we continue to expect that we will present a positive adjusted EBITDA.”
“Strategically, we have successfully established OTI as the leading one-stop-shop cashless solutions provider in our targeted
geographic and vertical business markets. This strength and the value we deliver to our customers enable us to grow our recurring
revenue business. Key wins during the first quarter include multiple contracts for cashless payment solutions that are being
installed in advanced self-checkout kiosks at major fast food chains across the U.S. This is a dynamic and growing market in which
we expect to be a major payment solutions provider. Also, in the U.S. we signed several partnering agreements to sell into specific
vertical markets in unattended retail.”
“Globally, we received our first purchase order in Japan, part of a 10,000 system purchase over three years. In Europe, we
partnered with Hemisphere West to serve the UK vending market, which remains primarily untapped and a clear opportunity for OTI.
Our OTI PetroSmart division has been effectively executing on the fueling management and payments opportunities and we are on track
to launch our suite of fuel payment solutions including EasyFuelPlus in North America later this year.”
Conference Call
OTI will hold a conference call on Wednesday, May 10th at 9:00 AM EDT to discuss results for the first quarter
of 2017.
OTI CEO Shlomi Cohen and CFO Yishay Curelaru will host the presentation, followed by a question and answer period.
Details
Date: Wednesday, May 10, 2017
Time: 9:00 AM Eastern Daylight Time (EDT)
Toll-Free Dial-In Number: (855) 422-8965
International Dial-In Number: +1 (210) 229-8821
Conference ID: 13474702
The conference call will be broadcast simultaneously and available for replay here and via the investor relations section of the company’s website.
Please call the conference telephone number five minutes prior to the start time. An operator will register your name and
organization.
Use of Non-GAAP Financial Information
This press release contains certain non-GAAP measures, namely, adjusted EBITDA from continuing operations, or adjusted earnings
from continuing operations before interest, income tax, depreciation and amortization. Adjusted EBITDA from continuing operations
represents earnings before interest or financing expenses, income tax, depreciation and amortization, and further eliminates the
effect of stock-based compensation expense. OTI believes that adjusted EBITDA from continuing operations should be considered in
evaluating the company’s operations since it provides a clearer indication of OTI’s operating results. This measure should be
considered in addition to results prepared in accordance with U.S. GAAP, but should not be considered a substitute for the U.S.
GAAP results. The non-GAAP measures included in this press release have been reconciled to the U.S. GAAP results in the tables
below.
| ON TRACK INNOVATIONS LTD. |
| INTERIM UNAUDITED RECONCILIATION OF NON-GAAP
ADJUSTMENT |
| The following table reflects On Track Innovations
Ltd. non-GAAP results reconciled to GAAP results: |
| (In thousands) |
| |
| |
|
Three months ended
March
31 |
| |
|
2017 |
|
|
2016 |
|
| |
|
(Unaudited) |
|
|
(Unaudited) |
|
| Net loss |
$ |
(865 |
) |
|
$ |
(928 |
) |
| |
|
|
| Net loss from discontinued operations |
|
83 |
|
|
144 |
|
| Financial expenses, net |
|
71 |
|
|
93 |
|
| Depreciation |
|
281 |
|
|
308 |
|
| Taxes on income |
|
31 |
|
|
16 |
|
| |
|
|
|
|
|
| TOTAL EBITDA FROM CONTINUING
OPERATIONS |
$ |
(399 |
) |
|
$ |
(367 |
) |
| |
|
|
| Stock-based compensation |
|
90 |
|
|
27 |
|
| TOTAL ADJUSTED EBITDA FROM CONTINUING OPERATIONS |
$ |
(309 |
) |
|
$ |
(340 |
) |
About OTI
On Track Innovations Ltd. (OTI) is a leader in contactless and NFC applications based on its extensive patent and IP portfolio.
OTI’s field-proven innovations have been deployed around the world to address NFC and other cashless payment solutions, petroleum
payment and management and mass transit ticketing. OTI markets and supports its solutions through a global network of regional
offices and alliances. For more information, visit www.otiglobal.com.
Safe Harbor for Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform
Act of 1995 and other Federal securities laws. Whenever words such as “think”, “believe,” “expect,” “anticipate,” “intend,” “plan,”
“estimate” or similar expressions are used, we are making forward-looking statements. For example, forward-looking statements
include statements regarding our expected Adjusted EBITDA for 2017, our expectations regarding future product launches and
growth into new markets, and our expectations regarding our pipeline and opportunities. Because such statements deal with future
events and is based on OTI’s current expectations, they are subject to various risks and uncertainties and actual results,
performance or achievements of OTI could differ materially from those described in or implied by the statements in this press
release. Forward-looking statements could be impacted by the effects of the protracted evaluation and validation periods in the
U.S. and other markets for contactless payment cards, as well as OTI’s new and existing products and our ability to execute
production on orders, as well as other risks and uncertainties, including those discussed in the “Risk Factors” section and
elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2016, and in subsequent filings with the Securities and
Exchange Commission. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable
assumptions, it can provide no assurance that expectations will be achieved. Except as otherwise required by law, OTI disclaims any
intention or obligation to update or revise any forward-looking statements, which speak only as of the date hereof, whether as a
result of new information, future events or circumstances or otherwise.
| ON TRACK INNOVATION LTD. |
| INTERIM UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEET |
| (In thousands, except share and per share data) |
| |
| |
|
March 31 |
|
December
31 |
| |
|
2017
|
|
2016 |
| Assets |
|
|
|
| |
|
|
|
| Current assets |
|
|
|
| Cash and cash equivalents |
|
$ |
6,909 |
|
$ |
5,952 |
| Short-term investments |
|
|
3,934 |
|
5,585 |
| Trade receivables (net of allowance for doubtful |
|
|
|
| accounts of $720 as of March 31, 2017 |
|
|
|
| and December 31, 2016) |
|
|
5,232 |
|
5,620 |
| Other receivables and prepaid expenses |
|
|
1,832 |
|
1,638 |
| Inventories |
|
|
3,439 |
|
3,069 |
| |
|
|
|
|
| Total current assets |
|
|
21,346 |
|
21,864 |
| |
|
|
|
| |
|
|
|
| Long-term restricted deposit for employees
benefit |
|
|
479 |
|
453 |
| |
|
|
|
| Severance pay deposits |
|
|
341 |
|
322 |
| |
|
|
|
| Property, plant and equipment, net |
|
|
5,875 |
|
5,788 |
| |
|
|
|
| Intangible assets, net |
|
|
326 |
|
278 |
| |
|
|
|
| Total Assets |
|
$ |
28,367 |
|
$ |
28,705 |
ON TRACK INNOVATION LTD.
INTERIM UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except share and per share data)
| |
March 31 |
|
December 31 |
| |
2017 |
|
2016 |
| Liabilities and Equity |
|
|
| |
|
|
| Current Liabilities |
|
|
| Short-term bank credit and current maturities |
|
|
| of long-term bank loans |
$ |
4,482 |
|
|
$ |
4,369 |
|
| Trade payables |
|
6,540 |
|
|
6,957 |
|
| Other current liabilities |
|
3,397 |
|
|
2,822 |
|
| |
|
|
|
|
| Total current liabilities |
|
14,419 |
|
|
14,148 |
|
| |
|
|
| Long-Term Liabilities |
|
|
| Long-term loans, net of current maturities |
|
1,134 |
|
|
1,215 |
|
| Accrued severance pay |
|
858 |
|
|
811 |
|
| Deferred tax liability |
|
416 |
|
|
|
373 |
|
| Total long-term liabilities |
|
2,408 |
|
|
2,399 |
|
| |
|
|
| Total Liabilities |
|
16,827 |
|
|
16,547 |
|
| |
|
|
| |
|
|
| Commitments and Contingencies |
|
|
| |
|
|
| Equity |
|
|
| |
|
|
| Ordinary shares of NIS 0.1 par value: Authorized – |
|
|
| 50,000,000 shares as of March 31, 2017 and |
|
|
| December 31, 2016; issued: 42,259,743 and 42,243,075 shares as |
|
|
| of March 31, 2017 and December 31, 2016, respectively; |
|
|
| outstanding: 41,081,044 and 41,064,376 shares |
|
|
| as of March 31, 2017, and December 31, 2016, respectively |
|
1,061 |
|
|
1,061 |
|
| Additional paid-in capital |
|
224,507 |
|
|
224,415 |
|
| Treasury shares at cost - 1,178,699 shares as of March 31, |
|
|
| 2017 and December 31, 2016 |
|
(2,000 |
) |
|
(2,000 |
) |
| Accumulated other comprehensive loss |
|
(1,081 |
) |
|
(1,236 |
) |
| Accumulated deficit |
|
(210,947 |
) |
|
|
(210,082 |
) |
| Total Equity |
|
11,540 |
|
|
|
12,158 |
|
| |
|
|
| |
|
|
| Total Liabilities and Equity |
$ |
28,367 |
|
|
$
|
28,705 |
|
| ON TRACK INNOVATION LTD. |
| INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS |
| (In thousands, except share and per share data) |
| |
| |
|
Three months ended
March 31 |
| |
|
2017 |
2016* |
| Revenues |
|
|
|
| Sales |
|
$ |
2,780 |
|
|
$ |
|
3,362 |
|
| Licensing and transaction fees |
|
|
1,240 |
|
|
1,210 |
|
| |
|
|
|
| Total revenues |
|
|
4,020 |
|
|
4,572 |
|
| |
|
|
|
|
|
|
|
| Cost of revenues |
|
|
|
|
|
|
|
| Cost of sales |
|
|
1,800 |
|
|
2,249 |
|
| Total cost of revenues |
|
|
1,800 |
|
|
2,249 |
|
| |
|
|
|
|
|
|
|
| Gross profit |
|
|
2,220 |
|
|
2,323 |
|
| Operating expenses |
|
|
|
| Research and development |
|
|
702 |
|
|
721 |
|
| Selling and marketing |
|
|
1,342 |
|
|
1,353 |
|
| General and administrative |
|
|
856 |
|
|
924 |
|
| |
|
|
|
| |
|
|
|
| Total operating expenses |
|
|
2,900 |
|
|
2,998 |
|
| |
|
|
|
| Operating loss from continuing operations |
|
|
(680 |
) |
|
(675 |
) |
| Financial expenses, net |
|
|
(71 |
) |
|
(93 |
) |
| |
|
|
|
| Loss from continuing operations before taxes on
income |
|
|
(751 |
) |
|
(768 |
) |
| |
|
|
|
| Income tax |
|
|
(31 |
) |
|
(16 |
) |
| |
|
|
|
| Net loss from continuing operations |
|
|
(782 |
) |
|
(784 |
) |
| Net loss from discontinued operations |
|
|
(83 |
) |
|
(144 |
) |
| |
|
|
|
| Net loss |
|
|
(865 |
) |
|
(928 |
) |
| |
|
|
|
| Net loss attributable to non-controlling interest |
|
|
- |
|
|
63 |
|
| Net loss attributable to shareholders |
|
$ |
(865 |
) |
|
$ |
(865 |
) |
| Basic and diluted net loss attributable
to |
|
|
|
|
| shareholders per ordinary
share |
|
|
|
|
| From continuing operations |
|
$ |
(0.02 |
) |
|
$ |
(0.02 |
) |
| From discontinued operations |
|
$ |
|
** |
|
|
$ |
|
** |
|
| |
|
$ |
(0.02 |
) |
|
$ |
|
(0.02 |
) |
| Weighted average number of ordinary shares used in computing basic and
diluted net loss per ordinary share |
|
|
41,079,580 |
|
|
40,874,474 |
|
* Reclassified to conform with the current period presentation.
** Less than $0.01 per ordinary share. |
| ON TRACK INNOVATION LTD. |
| INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF
CASH FLOW |
| (In thousands, except share and per share data) |
| |
|
|
|
| |
|
Three months ended
March 31 |
| |
|
2017 |
2016* |
| |
|
|
|
| Cash flows from continuing operating
activities |
|
|
|
| Net loss from continuing operations |
|
$ |
(782 |
) |
|
$ |
(784 |
) |
| Adjustments required to reconcile net loss to |
|
|
|
| net cash used in continuing operating activities: |
|
|
|
| Stock-based compensation related to options issued |
|
|
|
| to employees and others |
|
|
90 |
|
|
27 |
|
| Accrued interest and linkage differences, net |
|
|
(26 |
) |
|
(7 |
) |
| Depreciation |
|
|
281 |
|
|
308 |
|
| Deferred tax, net |
|
|
9 |
|
|
16 |
|
| |
|
|
|
| |
|
|
|
| Changes in operating assets and liabilities: |
|
|
|
| Accrued severance pay, net |
|
|
28 |
|
|
(146 |
) |
| Decrease (increase) in trade receivables, net |
|
|
423 |
|
|
(1,341 |
) |
| (Increase) decrease in other receivables and prepaid
expenses |
|
|
(234 |
) |
|
2 |
|
| (Increase) decrease in inventories |
|
|
(343 |
) |
|
346 |
|
| (Decrease) increase in trade payables |
|
|
(693 |
) |
|
575 |
|
| Increase (decrease) in other current liabilities |
|
|
569 |
|
|
(180 |
) |
| Net cash used in continuing operating activities |
|
|
(678 |
) |
|
(1,184 |
) |
| |
|
|
|
| Cash flows from continuing investing
activities |
|
|
|
| Purchase of property and equipment |
|
|
(35 |
) |
|
(83 |
) |
| Change in short-term investments, net |
|
|
1,651 |
|
|
901 |
|
| Proceeds from restricted deposit for employee benefits |
|
|
44 |
|
|
- |
|
| Investment in capitalized product costs |
|
|
(88 |
) |
|
(54 |
) |
| Net cash provided by continuing investing activities |
|
|
1,572 |
|
|
764 |
|
| |
|
|
|
| Cash flows from continuing financing
activities |
|
|
|
| Increase in short-term bank credit, net |
|
|
112 |
|
|
286 |
|
| Proceeds from long-term bank loans |
|
|
- |
|
|
27 |
|
| Repayment of long-term bank loans |
|
|
(222 |
) |
|
(263 |
) |
| Proceeds from exercise of options and warrants |
|
|
2 |
|
** |
| |
|
|
|
| Net cash (used in) provided by continuing financing
activities |
|
|
(108 |
) |
|
50 |
|
| |
|
|
|
| Cash flows from discontinued operations |
|
|
|
| Net cash used in discontinued operating activities |
|
|
(68 |
) |
|
(109 |
) |
| Net cash used in discontinued investing activities |
|
|
- |
|
|
(61 |
) |
| Total net cash used in discontinued
operations |
|
|
(68 |
) |
|
(170 |
) |
| |
|
|
|
|
|
| Effect of exchange rate changes on cash and cash equivalents |
|
|
239 |
|
|
143 |
|
| |
|
|
|
| Increase (decrease) in cash and cash
equivalents |
|
|
957 |
|
|
(397 |
) |
| Cash and cash equivalents at the beginning of the
period |
|
|
5,952 |
|
|
5,450 |
|
| |
|
|
|
| Cash and cash equivalents at the end of the
period |
|
$ |
6,909 |
|
|
$ |
5,053 |
|
* Reclassified to conform with the current period
presentation.
** Less than $1.
|
|
OTI Press Contact Neil Barr Director of Marketing +972-4-686-8004 press@otiglobal.com
