OTI Reports FY 2011 Financial Results
March 07 2012 - 7:00AM
- Revenues of $51.3M with Gross Margin of 51%
- Revenues from Licensing and Transaction Fees up 199% to
$12.1M
- Strong Balance Sheet with $28.5M in Cash, Cash Equivalents and
Short Term Investments
On Track Innovations Ltd. ("OTI") (Nasdaq:OTIV), designs, develops
and markets secure identification, payment and transaction
processing technologies and solutions for use in secure ID, NFC ,
payment, petroleum and loyalty applications based on its extensive
patent and IP portfolio, today announced its results for the fourth
quarter and FY 2011 ended December 31, 2011.
The following are various financial figures that compare FY 2011
to FY 2010, unless noted otherwise.
2011 Highlights:
- Total revenues of $51.3M decreased 4% vs. $53.6M last year.
Revenues for Q4 2011 were $16.0M, up 60% compared to $10.0M in Q4
2010.
- Revenues from Licensing and Transaction Fees increased by 199%
to $12.1M vs. $4.0M last year.
- Gross margin was 51% for 2011.
- GAAP operating expenses increased by 9% to $32.7M vs. $30.1M
last year. Non-GAAP operating expenses increased by 16% to $30.3M
compared to $26.1M last year.
- GAAP operating loss was $6.4M, compared to GAAP operating loss
of $1.2M last year. Non-GAAP operating loss was $4.0M, compared to
non-GAAP operating profit of $2.8M last year.
- Q4 GAAP operating profit was $634,000, compared to GAAP
operating loss of $2.6M last year. Q4 non-GAAP operating profit was
$1.1M, compared to non-GAAP operating loss of $1.8M last year.
- GAAP net loss attributable to shareholders was $6.9M, a 12%
increase compared to $6.2M last year.
- Strong balance sheet with cash, cash equivalents and short-term
investments of $28.5M at December 31, 2011.
Oded Bashan, Chairman and Chief Executive Officer of OTI,
commented, "In 2011 there was a significant increase in our
licensing and transaction fees revenues with expansion of our
customer base. We had revenues coming from a larger number of new
programs and existing projects expanding and progressing to
commercial deployment."
Mr. Bashan continued: "We are launching a cost cutting program
that we believe will streamline our operations by the end of the
year and includes amongst other, some workforce reduction,
consolidation and reduction in low margin operations, outsourcing
and partnerships with third parties."
Mr. Bashan concluded: "Revenues for 2012 are expected to be
about $50M with gross margin of 50-52% and we expect to be able to
reduce our operating expenses level to $26M for the year
(excluding stock options compensation and amortization of
intangible assets expenses)."
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with
generally accepted accounting principles, or GAAP, OTI uses
non-GAAP measures of operating expenses, operating income, net
income and earnings per share, which are adjustments from results
based on GAAP to exclude non-cash stock-based compensation expenses
related to employees and non employees in accordance with the
requirements of Accounting Standards Codification ("ASC") Topic 718
(originally issued as SFAS No. 123(R)) and ASC Subtopic 505-50 -
Equity-Based Payments to Non-Employees (formerly EITF 96-18);
amortization of intangible assets; and results from discontinued
operations. OTI management believes the non-GAAP financial
information provided in this release provides meaningful
supplemental information regarding our performance and enhances the
understanding of the Company's on-going economic performance. The
presentation of this non-GAAP financial information is not intended
to be considered in isolation or as a substitute for results
prepared in accordance with GAAP. Management uses both GAAP and
non-GAAP information in evaluating and operating the business and
as such deemed it important to provide all this information to
investors. Reconciliations between GAAP measures and non-GAAP
measures are provided later in this press release.
Conference Call and Webcast Information
OTI will host a conference call and simultaneous Webcast today
at 9:00 AM ET to discuss its operating results and the company's
outlook. Details are as follows:
Dial in #: |
Toll Free 1-888-407-2553
(U.S.) or 1-800-227-297 (Israel) |
Live Webcast/Replay:
|
http://www.otiglobal.com/Investors_Introduction |
Telephone Replay: |
1-888-295-2634 (U.S. toll
free) until midnight 3/14/12 |
About On Track Innovations Ltd.
(www.otiglobal.com)
On Track Innovations Ltd. ("OTI") designs,
develops and markets secure identification, payment and transaction
processing technologies and solutions for use in secure ID, payment
and loyalty applications based on its extensive patent and IP
portfolio. OTI combines state-of-the-art, contactless
microprocessor-based technologies and enabling hardware with
proprietary software applications to deliver high performance,
end-to-end solutions that are secure, robust and scalable. OTI
solutions have been deployed around the world to address homeland
security, national ID, medical ID, NFC, contactless payment and
loyalty applications, petroleum payment, parking and mass transit
ticketing. OTI markets and supports its solutions through a global
network of regional offices and
alliances.
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 we use words such
as "believe," "expect," "anticipate," "intend," "plan," "estimate"
or similar expressions, we are making forward-looking
statements. Because such statements deal with future events
and are 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 include statements
regarding our goals, beliefs, future growth strategies, objectives,
products, plans, and future results of operations or current
expectations. 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, market
acceptance of 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 20-F for the year ended
December 31, 2010, 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, we can give no assurance that our
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.
The content of websites or website links mentioned or provided
herein are not part of this press release.
(TABLES TO FOLLOW)
|
ON TRACK INNOVATIONS LTD. |
CONDENSED CONSOLIDATED BALANCE
SHEET |
(In thousands, except share and
per share data) |
|
|
December
31 |
|
2010 |
2011 |
|
(Audited) |
(Unaudited) |
|
|
|
Assets |
|
|
|
|
|
Current assets |
|
|
Cash and cash equivalents |
$ 15,409 |
$ 12,517 |
Short-term investments |
8,594 |
15,952 |
Trade receivables (net of allowance for
doubtful accounts of $2,832 and $233 as of December 31, 2010
and December 31, 2011, respectively) |
5,072 |
11,328 |
Receivables from sale of operation |
2,336 |
-- |
Other receivables and prepaid expenses |
1,532 |
1,947 |
Inventories |
8,448 |
8,196 |
|
|
|
Total current assets |
41,391 |
49,940 |
|
|
|
Severance pay deposits
fund |
1,355 |
1,473 |
|
|
|
|
|
|
Property, plant and equipment,
net |
14,826 |
13,227 |
|
|
|
Intangible assets, net |
942 |
609 |
|
|
|
Goodwill |
-- |
485 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
$ 58,514 |
$ 65,734 |
|
ON TRACK INNOVATIONS LTD. |
CONDENSED CONSOLIDATED BALANCE
SHEET |
(In thousands, except share and
per share data) |
|
|
December
31 |
|
2010 |
2011 |
|
(Audited) |
(Unaudited) |
Liabilities
and Equity |
|
|
|
|
|
Current Liabilities |
|
|
Short-term bank credit and current maturities
of long-term bank loans |
$ 6,881 |
$ 6,793 |
Trade payables |
6,874 |
8,441 |
Other current liabilities |
8,954 |
5,315 |
Total current liabilities |
22,709 |
20,549 |
|
|
|
Long-Term Liabilities |
|
|
Long-term loans, net of current
maturities |
5,189 |
4,026 |
Accrued severance pay |
3,727 |
4,502 |
Deferred tax liability |
84 |
65 |
Total long-term liabilities |
9,000 |
8,593 |
|
|
|
Total Liabilities |
31,709 |
29,142 |
|
|
|
Liabilities related to discontinued
operation |
689 |
150 |
|
|
|
Commitments and
Contingencies |
|
|
|
|
|
Equity |
|
|
Shareholders' Equity |
|
|
Ordinary shares of NIS 0.1 par value:
Authorized – 50,000,000 shares as of December 31, 2010 and December
31, 2011; issued: 25,384,010 and 32,313,761 shares as of December
31, 2010 and December 31, 2011, respectively; outstanding:
24,821,535 and 31,135,062 shares as of December 31, 2010 and
December 31, 2011, respectively |
610 |
808 |
Additional paid-in capital |
190,933 |
209,741 |
Treasury shares at cost – 562,475 and
1,178,699 shares as of December 31, 2010 and December 31, 2011,
respectively |
(1,136) |
(2,000) |
Accumulated other comprehensive income
(loss) |
645 |
(83) |
Accumulated deficit |
(164,812) |
(171,737) |
Shareholder's equity |
26,240 |
36,729 |
Non-controlling
interest |
(124) |
(287) |
|
|
|
Total Equity |
26,116 |
36,442 |
|
|
|
|
|
|
Total Liabilities and
Equity |
$ 58,514 |
$ 65,734 |
|
ON TRACK INNOVATIONS LTD. |
GAAP CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS |
(In thousands, except share and
per share data) |
|
|
Year ended
December 31 |
Three months
ended December 31 |
|
2010 |
2011 |
2010 |
2011 |
|
(Audited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
Revenues |
|
|
|
|
Sales |
$ 49,590 |
$ 39,200 |
$ 8,804 |
$ 7,959 |
Licensing and transaction fees |
4,037 |
12,055 |
1,239 |
8,083 |
Total revenues |
53,627 |
51,255 |
10,043 |
16,042 |
|
|
|
|
|
Cost of revenues |
|
|
|
|
Cost of sales |
24,748 |
24,225 |
4,732 |
6,158 |
Cost of licensing and transaction fees |
-- |
714 |
-- |
714 |
Total cost of revenues |
24,748 |
24,939 |
4,732 |
6,872 |
|
|
|
|
|
Gross profit |
28,879 |
26,316 |
5,311 |
9,170 |
Operating expenses |
|
|
|
|
Research and development |
8,373 |
9,163 |
2,194 |
2,458 |
Selling and marketing |
11,643 |
13,705 |
2,127 |
3,595 |
General and administrative |
9,479 |
9,346 |
3,443 |
2,386 |
Amortization of intangible assets |
575 |
507 |
144 |
97 |
|
|
|
|
|
Total operating
expenses |
30,070 |
32,721 |
7,908 |
8,536 |
|
|
|
|
|
Operating profit (loss) |
(1,191) |
(6,405) |
(2,597) |
634 |
Financial expense, net |
(1,397) |
(419) |
(580) |
(150) |
|
|
|
|
|
Profit (loss) before taxes on
income |
(2,588) |
(6,824) |
(3,177) |
484 |
Taxes on income |
(411) |
(269) |
(246) |
(127) |
|
|
|
|
|
Net profit (loss) from continuing
operations |
(2,999) |
(7,093) |
(3,423) |
357 |
Net loss from discontinued
operations |
(3,292) |
-- |
(835) |
-- |
|
|
|
|
|
Net profit (loss) |
(6,291) |
(7,093) |
(4,258) |
357 |
Net loss attributable to
noncontrolling interest |
102 |
168 |
38 |
108 |
Net profit (loss) attributable to
shareholders |
$ (6,189) |
$ (6,925) |
$ (4,220) |
$ 465 |
|
|
|
|
|
Basic and diluted net profit (loss)
attributable to shareholders per ordinary share |
|
|
|
|
From continuing operations |
$ (0.12) |
$ (0.22) |
$ (0.14) |
$ 0.01 |
From discontinued operations |
$ (0.13) |
$ -- |
$ (0.03) |
$ -- |
|
$ (0.25) |
$ (0.22) |
$ (0.17) |
$ 0.01 |
Weighted average number of ordinary shares
used in computing basic net profit (loss) per ordinary share |
24,615,526 |
31,524,719 |
25,137,031 |
32,051,476 |
Weighted average number of ordinary shares
used in computing diluted net profit (loss) per ordinary share |
24,615,526 |
31,524,719 |
25,137,031 |
33,459,677 |
|
ON TRACK INNOVATIONS LTD. |
UNAUDITED RECONCILIATION OF
NON-GAAP ADJUSTMENT |
The following tables reflect
selected On Track Innovations Ltd, non-GAAP results reconciled to
GAAP results: |
(In thousands, except share and
per share data) |
|
|
Year ended
December 31 |
Three months
ended December 31 |
|
2010 |
2011 |
2010 |
2011 |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
|
|
|
|
|
Operating expenses |
|
|
|
|
GAAP operating expenses |
$ 30,070 |
$ 32,721 |
$ 7,908 |
$ 8,536 |
Less: |
|
|
|
|
Stock based compensation expenses |
(3,394) |
(1,909) |
(660) |
(338) |
Amortization of intangible assets |
(575) |
(507) |
(144) |
(97) |
|
|
|
|
|
Non GAAP Operating expenses |
$ 26,101 |
$ 30,305 |
$ 7,104 |
$ 8,101 |
|
|
|
|
|
Operating profit (loss) |
|
|
|
|
GAAP Operating profit (loss) |
$ (1,191) |
$ (6,405) |
$ (2,597) |
$ 634 |
Plus: |
|
|
|
|
Stock based compensation expenses |
3,419 |
1,933 |
665 |
345 |
Amortization of intangible assets |
575 |
507 |
144 |
97 |
|
|
|
|
|
Non GAAP Operating
profit (loss) |
$ 2,803 |
$ (3,965) |
$ (1,788) |
$ 1,076 |
|
|
|
|
|
Net profit (loss) attributable to
shareholders |
|
|
|
|
GAAP Net profit (loss) attributable to
shareholders |
$ (6,189) |
$ (6,925) |
$ (4,220) |
$ 465 |
Plus: |
|
|
|
|
Stock based compensation expenses |
3,419 |
1,933 |
665 |
345 |
Amortization of intangible assets |
575 |
507 |
144 |
97 |
Net loss from discontinued
operations |
3,292 |
-- |
835 |
-- |
|
|
|
|
|
Non GAAP net profit (loss) attributable
to shareholders |
$ 1,097 |
$ (4,485) |
$ (2,576) |
$ 907 |
|
|
|
|
|
Basic net profit (loss) attributable
to shareholders per ordinary share |
|
|
|
|
GAAP Basic net profit (loss) attributable
to shareholders per ordinary share |
$ (0.25) |
$ (0.22) |
$ (0.17) |
$ 0.01 |
Plus: |
|
|
|
|
Stock based compensation expenses |
0.14 |
0.06 |
0.03 |
0.01 |
Amortization of intangible assets |
0.02 |
0.02 |
0.01 |
0.01 |
Net loss from discontinued
operations |
0.13 |
-- |
0.03 |
-- |
Non GAAP Basic net profit (loss)
attributable to shareholders per ordinary share |
$ 0.04 |
$ (0.14) |
$ (0.10) |
$ 0.03 |
|
ON TRACK INNOVATIONS LTD. |
CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS |
(In thousands, except share and
per share data) |
|
|
Year ended
December 31 |
|
2010 |
2011 |
|
(Audited) |
(Unaudited) |
|
|
|
Cash flows from operating
activities |
|
|
Net loss from continuing operations |
$ (2,999) |
$ (7,093) |
Adjustments required to reconcile net loss to
net cash used in continuing operating activities: |
|
|
Stock-based compensation related to options
and shares issued to employees and others |
3,419 |
1,933 |
Loss (gain) on sale of property and
equipment |
(3) |
24 |
Amortization of intangible assets |
575 |
507 |
Depreciation |
1,553 |
1,679 |
|
|
|
Changes in operation assets and
liabilities: |
|
|
Accrued severance pay, net |
111 |
657 |
Accrued interest and linkage differences on
long-term loans |
164 |
(370) |
Decrease in deferred tax liability |
(36) |
(19) |
Linkage differences on receivable from sale
of operation |
-- |
(68) |
Decrease (increase) in trade receivables |
1,484 |
(6,392) |
Increase in allowance for doubtful
accounts |
29 |
28 |
Decrease (increase) in other receivables and
prepaid expenses |
892 |
(452) |
Decrease (increase) in inventories |
(2,377) |
219 |
Increase (decrease) in trade payables |
(2,704) |
2,159 |
Decrease in other current liabilities |
(7,020) |
(3,693) |
Net cash used in continuing operating
activities |
(6,912) |
(10,881) |
|
|
|
Cash flows from investing
activities |
|
|
|
|
|
Acquisition of business operation |
-- |
(400) |
Purchase of property and equipment |
(2,346) |
(1,191) |
Payment of contingent consideration in
connection with the purchase of a subsidiary |
(186) |
-- |
Purchase of short term investments |
(5,230) |
(14,697) |
Proceeds from maturity or sale short term
investments |
2,013 |
7,420 |
Other, net |
20 |
93 |
Net cash used in continuing investing
activities |
(5,729) |
(8,775) |
|
|
|
|
|
|
Cash flows from financing
activities |
|
|
Decrease in short-term bank credit, net |
(311) |
(1,510) |
Proceeds from long-term bank loans |
4,650 |
2,814 |
Repayment of long-term bank loans |
(1,031) |
(2,146) |
Proceeds from issuance of shares, net of
issuance expenses |
-- |
16,619 |
Payments to acquire treasury shares |
(1,136) |
(864) |
Proceeds from receipt on account of shares
and exercise of options and warrants, net |
80 |
208 |
Net cash provided by continuing financing
activities |
2,252 |
15,121 |
|
|
|
Cash flows from discontinued
operations |
|
|
Net cash used in discontinued operating
activities |
(3,305) |
(539) |
Net cash provided by discontinued investing
activities |
2,300 |
2,404 |
Total net cash provided by (used in)
discontinued activities |
(1,005) |
1,865 |
|
|
|
Effect of exchange rate changes on cash |
(81) |
(222) |
|
|
|
Decrease in cash and cash
equivalents |
(11,475) |
(2,892) |
Cash and cash equivalents at the
beginning of the year |
26,884 |
15,409 |
|
|
|
Cash and cash equivalents at the end
of the year |
$ 15,409 |
$ 12,517 |
CONTACT: OTI Contacts:
Galit Mendelson
VP, Corporate Relations
732 429 1900 ext. 111
galit@otiglobal.com
Jay M. Meier
SVP, Business Development & Investor Relations
OTI America, Inc.
732 429 1900 ext. 104
jaym@otiglobal.com
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