ROSH PINNA, Israel, March 21,
2018 /PRNewswire/ -- On Track Innovations Ltd. (OTI)
(NASDAQ: OTIV), a global provider of near field communication (NFC)
and cashless payment solutions, has provided a business update
and announced financial results for the fourth quarter and full
year ended December 31, 2017.
2017 Company Highlights:
- Revenues in 2017 grew by 9% to $22.4
million, compared to $20.6
million in 2016.
- Recurring revenues accounted for 23% of total revenues in
2017,
- Gross margin in 2017 increased by 125 basis points to 50.9%,
compared to 49.6% in 2016.
- Net loss totaled $598,000, or
$(0.01) per share, compared to a net
loss of $860,000 or $(0.02) per share in 2016.
- Adjusted EBITDA (a non-GAAP financial metric) improved
significantly to $240,000, compared
to adjusted EBITDA loss of $241,000.
2017 marks OTI's first year of
positive adjusted EBITDA in the Company's 28-year operating
history.
- Sales of contactless NFC readers to the "smart" ATM market in
2017 increased significantly to 10,000 units, compared to 1,800
units in 2016.
- OTI's fueling division grew revenues by 24% to $5.1 million in 2017, compared to $4.1 in 2016.
Management Commentary
"Two years ago, we decided to make a strategic shift from being
a product company, to one focused on utilizing software and
offering a complete, turnkey solution for customers," said
Shlomi Cohen, Chief Executive
Officer of OTI. "Although this process took time, we were confident
that this strategy would ultimately increase our value proposition,
while generating steady, recurring revenues at higher margins than
we've previously experienced. Over this two-year period, we
increased our revenues by more than 21%, reduced our debt by 11%,
cut operating costs by more than 21% and decreased our net losses
by 92%.
"In 2017 alone, we grew revenue by 9%, which is particularly
impressive given that 24% of sales in 2016, or $4.9 million, did not re-occur in 2017 due to
certain customer transitions.
Cohen, continued: "We expect 2018 to be a breakout year for OTI,
driven by particular strength in our 'smart' cashless ATM readers
-- which grew five-fold in 2017, continued growth in our fueling
division -- which grew revenues over 24% in 2017, traction with our
cryptocurrency efforts, and accelerated penetration in Japan."
"As a pioneer and leader in the cashless payment solutions
arena, we strongly believe that our technology will continue
bringing tremendous value to our industry while generating
predictable, high-margin, recurring revenues for the Company and
great value for our shareholders."
Full Year 2017 Financial Details
- Revenue increased to $22.4
million in 2017, compared to $20.6
million in 2016.
- Gross margin increased to 50.9% of revenue in 2017, compared to
49.6% in 2016.
- Operating expenses in 2017 totaled $12.7
million, compared to $12.1
million in 2016.
- Net loss in 2017 totaled $0.6
million, or $(0.01) per share,
compared to a net loss of $0.9
million or $(0.02) per share
in 2016.
- Adjusted EBITDA (a non-GAAP financial term as noted below)
totaled $240,000 in 2017, compared
with adjusted EBITDA loss of $241,000
in 2016.
Q4 2017 Financial Details
- Total revenue in the fourth quarter increased to $6.7 million, compared to $4.7 million for the prior quarter and
$5.6 million in the same year-ago
period.
- Gross margin totaled 48% of revenue in the fourth quarter,
compared to 43% in the same year-ago period.
- Operating expenses totaled $3.5
million in the fourth quarter, compared to $3.4 million in the same year-ago period.
- Net loss in the fourth quarter totaled $0.7 million, or $(0.02) per share, compared to a net loss of
$1.2 million or $(0.03) per share in the same year-ago
period.
- Adjusted EBITDA totaled $63,000
in the fourth quarter, compared with an adjusted EBITDA loss of
$ 515,000 in the same year-ago
period.
Conference Call
Management will host an investor conference call at 9:00 a.m. Eastern time on March 21, 2018, to discuss OTI's fourth quarter
and full year 2017 financial results, provide a corporate update,
and conclude with a Q&A from participants. To participate,
please use the following information:
Date: Wednesday, March 21,
2018
Time: 9:00 a.m. Eastern time
U.S. Dial-in: 1-877-870-4263
International Dial-in: 1-412-317-0790
Webcast: https://www.webcaster4.com/Webcast/Page/1720/24729
Please dial in at least 10 minutes before the start of the call
and request to join the "On Track Innovations Q4 2017 Earnings
Conference Call" to ensure timely participation.
The conference call will be available for replay by clicking
here and via the investor relations section of the company's
website.
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, patent
litigation and maintenance expenses and other expenses. OTI
believes that adjusted EBITDA from continuing operations should be
considered in evaluating the Company's operations since it provides
a clearer indication of the Company's operating results. This
measure should be considered in addition to results prepared in
accordance with US GAAP, but should not be considered a substitute
for the US GAAP results. The non-GAAP measures included in this
press release have been reconciled to the US GAAP results in the
tables below.
ON TRACK INNOVATIONS
LTD.
|
RECONCILIATION OF
NON-GAAP ADJUSTMENT
|
The following table
reflects selected On Track Innovations Ltd. non-GAAP results
reconciled to GAAP results:
|
(US dollars in
thousands)
|
|
|
|
Year ended December
31
|
Three months ended
December 31
|
|
|
2017
|
2016
|
2017
|
2016
|
|
|
|
|
|
|
Net
loss
|
|
$
(598)
|
$
(860)
|
$
(693)
|
$
(1,209)
|
|
|
|
|
|
|
Net (income)
loss from discontinued operations
|
|
(1,085)
|
(1,509)
|
280
|
16
|
Financial
expenses, net
|
|
340
|
396
|
104
|
211
|
Depreciation
|
|
1,172
|
1,172
|
293
|
261
|
Taxes on
income
|
|
74
|
82
|
6
|
22
|
|
|
|
|
|
|
Total EBITDA FROM
CONTINUING OPERATIONS
|
|
$
(97)
|
$
(719)
|
$
(10)
|
$
(699)
|
|
|
|
|
|
|
Patent litigation and
maintenance
|
|
$
31
|
$
48
|
$
7
|
$
11
|
Other expenses,
net
|
|
52
|
191
|
52
|
108
|
Stock based
compensation
|
|
254
|
239
|
14
|
65
|
Total adjusted
EBITDA FROM CONTINUING OPERATIONS
|
|
$
240
|
$
(241)
|
$
63
|
$
(515)
|
About On Track Innovations Ltd
On Track Innovations (OTI) is a global leader in the design,
manufacture, and sale of secure cashless payment solutions using
contactless NFC technology with an extensive patent and IP
portfolio. OTI's field-proven innovations have been deployed around
the world to address cashless payment, automated retail, and
petroleum markets. OTI distributes and supports its solutions
through a global network of regional offices and alliances. OTI is
the proud recipient of the 2017 AI Award for Best Cashless Payment
Solutions Provider – Israel. For
more information, visit www.otiglobal.com.
Safe Harbor / 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,"
"would," "should," "will," "can" or similar expressions, we are
making forward-looking statements. For example, we are using
forward-looking statements when we discuss, among others: our
expectations regarding our growth or profitability, traction with
our cryptocurrency efforts, and accelerated penetration in
Japan and our expectation of
bringing tremendous value to our industry while generating
predictable, high-margin, recurring revenues for the Company and
great value for our shareholders. Forward-looking statements
are made as of the date of this document and are inherently subject
to risks and uncertainties which could cause actual results to
differ materially from those in the forward-looking
statements. Additional factors that could cause actual
results to differ materially from those anticipated by our
forward-looking statements are stated under the captions "Risk
Factors" in our most recent Annual Report (Form 10-K) and other
known and unknown uncertainties and risk factors including those
detailed from time to time in the Company's filings with the
Securities and Exchange Commission. Forward-looking
statements are made as of the date of this release, and we
expressly disclaim any obligation or undertaking to update
forward-looking statements. The reader is cautioned not to place
undue reliance on forward-looking statements.
ON TRACK
INNOVATION LTD.
|
CONDENSED
CONSOLIDATED BALANCE SHEET
|
(US dollars in
thousands)
|
|
|
|
December
31
|
|
|
2017
|
2016
|
Assets
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
|
$
6,742
|
$
5,952
|
Short-term
investments
|
|
3,331
|
5,585
|
Trade receivables
(net of allowance for doubtful
|
|
|
|
accounts of
$568 and $720 as of December 31, 2017
|
|
|
|
and December
31, 2016, respectively)
|
|
5,827
|
5,620
|
Other receivables and
prepaid expenses
|
|
1,563
|
1,638
|
Inventories
|
|
3,009
|
3,069
|
|
|
|
|
Total current
assets
|
|
20,472
|
21,864
|
Long term
restricted deposit for employees benefit
|
|
498
|
453
|
|
|
|
|
Severance pay
deposits
|
|
405
|
322
|
|
|
|
|
Property, plant
and equipment, net
|
|
5,859
|
5,788
|
|
|
|
|
Intangible assets,
net
|
|
336
|
278
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
27,570
|
$
28,705
|
|
|
|
|
|
ON TRACK INNOVATION
LTD.
|
|
CONDENSED
CONSOLIDATED BALANCE SHEET
|
|
(US dollars in
thousands except share data)
|
|
|
|
|
|
December
31
|
|
|
|
2017
|
|
2016
|
|
Liabilities
and Equity
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
Short-term bank
credit and current maturities
|
|
|
|
|
|
of long-term
bank loans
|
|
$
4,181
|
|
$
4,369
|
|
Trade
payables
|
|
6,264
|
|
6,957
|
|
Other current
liabilities
|
|
2,421
|
|
2,822
|
|
Total current
liabilities
|
|
12,866
|
|
14,148
|
|
|
|
|
|
|
|
Long-Term
Liabilities
|
|
|
|
|
|
Long-term loans, net
of current maturities
|
|
814
|
|
1,215
|
|
Accrued severance
pay
|
|
939
|
|
811
|
|
Deferred tax
liability
|
|
500
|
|
373
|
|
Total long-term
liabilities
|
|
2,253
|
|
2,399
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
15,119
|
|
16,547
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
|
Ordinary shares of
NIS 0.1 par value: Authorized –
|
|
|
|
|
|
50,000,000
shares as of December 31, 2017 and
|
|
|
|
|
|
2016; issued:
42,353,077 and 42,243,075
|
|
|
|
|
|
shares as of
December 31, 2017 and 2016,
|
|
|
|
|
|
respectively;
outstanding: 41,174,378 and 41,064,376 shares
|
|
|
|
|
|
as of
December 31, 2017 and 2016, respectively
|
|
1,064
|
|
1,061
|
|
Additional paid-in
capital
|
|
224,758
|
|
224,415
|
|
Treasury shares at
cost - 1,178,699 shares as of December 31,
|
|
|
|
|
|
2017 and
2016
|
|
(2,000)
|
|
(2,000)
|
|
Accumulated other
comprehensive loss
|
|
(691)
|
|
(1,236)
|
|
Accumulated
deficit
|
|
(210,680)
|
|
(210,082)
|
|
|
|
|
|
|
|
Total
Equity
|
|
12,451
|
|
12,158
|
|
|
|
|
|
|
|
Total Liabilities
and Equity
|
|
$
27,570
|
|
$
28,705
|
ON TRACK
INNOVATIONS LTD.
|
|
CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
|
|
(US dollars in
thousands except share data)
|
|
|
|
|
Year ended December
31
|
Three months ended
December 31
|
|
|
2017
|
2016
|
2017
|
2016
|
|
Revenues
|
|
|
|
|
|
Sales
|
$
17,299
|
$
14,721
|
$
5,428
|
$
4,312
|
|
Licensing and
transaction fees
|
5,083
|
5,843
|
1,318
|
1,274
|
|
Total
revenues
|
22,382
|
20,564
|
6,746
|
5,586
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
|
|
|
|
Cost of
sales
|
10,996
|
10,111
|
3,528
|
3,194
|
|
Cost of licensing and
transaction fees
|
-
|
250
|
-
|
-
|
|
Total cost of
revenues
|
10,996
|
10,361
|
3,528
|
3,194
|
|
|
|
|
|
|
|
Gross
profit
|
11,386
|
10,203
|
3,218
|
2,392
|
|
Operating
expenses
|
|
|
|
|
|
Research and
development
|
3,305
|
2,810
|
891
|
738
|
|
Selling and
marketing
|
5,633
|
5,546
|
1,487
|
1,572
|
|
General and
administrative
|
3,633
|
3,499
|
1,084
|
923
|
|
Patent litigation and
maintenance
|
31
|
48
|
7
|
11
|
|
Other expenses
(income), net
|
52
|
191
|
52
|
108
|
|
|
|
|
|
|
|
Total operating
expenses
|
12,654
|
12,094
|
3,521
|
3,352
|
|
|
|
|
|
|
|
Operating loss
from continuing operations
|
(1,268)
|
(1,891)
|
(303)
|
(960)
|
|
Financial expense,
net
|
(341)
|
(396)
|
(104)
|
(211)
|
|
|
|
|
|
|
|
Loss from
continuing operations before taxes on income
|
(1,609)
|
(2,287)
|
(407)
|
(1,171)
|
|
Taxes on
income
|
(74)
|
(82)
|
(6)
|
(22)
|
|
|
|
|
|
|
|
Net loss from
continuing operations
|
(1,683)
|
(2,369)
|
(413)
|
(1,193)
|
|
Total income
(loss) from discontinued operations
|
1,085
|
1,509
|
(280)
|
(16)
|
|
Net
loss
|
(598)
|
(860)
|
(693)
|
(1,209)
|
|
|
|
|
|
|
|
Net loss (income)
attributable to no controlling interest
|
-
|
32
|
-
|
-
|
|
Net loss
attributable to shareholders
|
$
(598)
|
$
(828)
|
$
(693)
|
$
(1,209)
|
|
|
|
|
|
|
|
Basic and diluted
net income (loss) attributable to
|
|
|
|
|
|
shareholders
per ordinary share
|
|
|
|
|
|
From continuing
operations
|
$
(0.04)
|
$
(0.06)
|
$
(0.01)
|
$
(0.03)
|
|
From discontinued
operations
|
$
0.03
|
$
0.04
|
$
(0.01)
|
$
*
|
|
|
$
(0.01)
|
$
(0.02)
|
$
(0.02)
|
$
(0.03)
|
|
Weighted average
number of ordinary shares used in
computing basic and diluted net profit (loss) per ordinary
share
|
41,109,875
|
40,914,558
|
41,140,356
|
40,972,006
|
|
|
* Less than $0.01 per
ordinary share.
|
ON TRACK
INNOVATION LTD.
|
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOW
|
(US dollars in
thousands)
|
|
|
Year ended December
31
|
|
2017
|
2016
|
2015
|
Cash flows from
continuing operating activities
|
|
|
|
Net loss from
continuing operations
|
$
(1,683)
|
$
(2,369)
|
$
(7,492)
|
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
|
254
|
239
|
463
|
Loss (gain) on sale
of property and equipment
|
52
|
83
|
(4)
|
Accrued interest and
linkage differences, net
|
(6)
|
56
|
27
|
Depreciation
|
1,172
|
1,172
|
1,224
|
Deferred tax,
net
|
47
|
82
|
122
|
|
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Accrued severance
pay, net
|
45
|
(183)
|
(109)
|
(Increase) decrease
in trade receivables, net
|
(225)
|
(3,493)
|
2,020
|
(Increase) decrease
in other receivables and prepaid expenses
|
(110)
|
290
|
394
|
Decrease (increase)
in inventories
|
112
|
(112)
|
370
|
(Decrease) increase
in trade payables
|
(1,428)
|
1,793
|
(1,298)
|
(Decrease) increase
in other current liabilities
|
(518)
|
300
|
325
|
Net cash used in
continuing operating activities
|
(2,288)
|
(2,142)
|
(3,958)
|
|
|
|
|
Cash flows from
continuing investing activities
|
|
|
|
|
|
|
|
Purchase of property
and equipment
|
(293)
|
(311)
|
(1,515)
|
Proceeds from sale of
property, plant and equipment
|
17
|
1,779
|
38
|
Change in short-term
investments, net
|
2,264
|
(116)
|
5,598
|
Investment in
capitalized product costs
|
(239)
|
(188)
|
(200)
|
Investment in
restricted deposit for employee benefits
|
-
|
(44)
|
(281)
|
Proceeds from
restricted deposit for employee benefits
|
44
|
142
|
144
|
Net cash provided by
continuing investing activities
|
1,793
|
1,262
|
3,784
|
|
|
|
|
Cash flows from
continuing financing activities
|
|
|
|
(Decrease) increase
in short-term bank credit, net
|
(335)
|
1,018
|
(422)
|
Proceeds from
long-term bank loans
|
-
|
27
|
1,480
|
Repayment of
long-term bank loans
|
(632)
|
(1,581)
|
(747)
|
Proceeds from
exercise of options and warrants
|
92
|
177
|
*
|
|
|
|
|
Net cash (used in)
provided by continuing financing activities
|
(875)
|
(359)
|
311
|
|
|
|
|
Cash flows from
discontinued operations
|
|
|
|
Net cash provided by
(used in) discontinued operating activities
|
1,473
|
(283)
|
(581)
|
Net cash provided by
discontinued investing activities
|
-
|
2,292
|
795
|
Total net cash
provided by discontinued operations
|
1,473
|
2,009
|
214
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
687
|
(268)
|
(252)
|
|
|
|
|
Increase in cash
and cash equivalents
|
790
|
502
|
99
|
Cash and cash
equivalents at the beginning of the year
|
5,952
|
5,450
|
5,351
|
|
|
|
|
Cash and cash
equivalents at the end of the year
|
$
6,742
|
$
5,952
|
$
5,450
|
|
|
|
|
* Less
than $1.
|
Investor Relations Contact:
Greg Falesnik
MZ North America
+1-949-385-6449
Greg.Falesnik@mzgroup.us
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content:http://www.prnewswire.com/news-releases/on-track-innovations-ltd-reports-fourth-quarter-and-full-year-2017-financial-results-300617385.html
SOURCE On Track Innovations Ltd. (OTI)