ROSH PINNA, Israel, May 9,
2018 /PRNewswire/ -- On Track Innovations Ltd. (OTI)
(NASDAQ: OTIV) (the "Company" or "OTI"), a global
provider of near field communication (NFC) and cashless payment
solutions, has provided a business update and announced
financial results for the first quarter ended March 31, 2018.
Company Highlights:
- Revenues in Q1 2018 grew by 46% to $5.9
million, compared to $4.0
million in Q1 2017.
- Net loss in Q1 2018 was $333,000,
or $(0.01) per share, compared to a
net loss of $865,000, or $(0.02) per share in Q1 2017.
- Positive adjusted EBITDA of $114,000 in Q1 2018, compared with an adjusted
EBITDA loss of $309,000 in the same
year-ago period.
- Launched the first cryptocurrency payment solution for
automated machines and the micropayment market.
- Expanded footprint in Poland
through new government contracts, including:
-
- Recurring revenue contract with the Polish National Post Office
(Poczta Polska S.A.) to manage Warsaw's public transportation "Smart City"
card program (i.e. purchase or refill cards for travel via train,
bus, or other mode of public transportation). OTI will be providing
both the payment portion, as well as the software, in 272 terminals
throughout post offices in Warsaw,
whereby OTI will manage and control the entire sales and payment
process.
- The design and implementation of the Kasa + passenger
support service system
- Received the following significant purchase orders:
-
- 8,000 UNO 8 Readers for the "Smart ATM" market
- 2,000 cashless payment systems for use in the nascent Japanese
market
- More than 10,000 TRIO readers for use in the North American
retail market
- 1,000 OtiMetry Cashless Payment Solution kits to Polish vending
giant AUTOMAT-SPEC
Management Commentary
"The first quarter of 2018 was highlighted by our strong
operational execution and growth across several of our business
units," said Shlomi Cohen, Chief
Executive Officer of OTI. "This is evidenced by our first quarter
revenue growth of 46% and second quarter in a row of positive
adjusted EBITDA results as move towards profitability.
"Our continued penetration of public transit markets in
Poland and cashless readers in
several key global markets, such as Japan and North
America, are very promising, while our growing recurring
revenue base -- which accounted for 24% of revenues in the first
quarter -- provides us with predictable, high-margin cash flow. In
addition, we have several groundbreaking initiatives -- such as our
cryptocurrency payment solution for automated machines and the
micropayment market -- which to the best of our knowledge is the
first and only of its kind available on the market today.
"As a thought leader in the cashless payment solutions arena, we
are confident that our continued innovation and operational
execution across all business units has put OTI in a position to
continue gaining market share and generate significant value for
its shareholders."
Q1 2018 Financial Highlights
- Total revenue in the first quarter of 2018 increased by 46% to
$5.9 million, compared to
$4.0 million in the same year-ago
period. The increase was primarily driven by the retail and mass
transit ticketing segment of the business, which grew revenues 65%
to $4.5 million in Q1 2018, compared
to $2.7 million in the same year-ago
period.
- Recurring revenues accounted for 24% of total revenues in Q1
2018, compared to 20% of total revenues in the prior quarter.
- Gross profit increased to $3.1
million (53% of revenues), a 40% increase over $2.2 million (55% of revenues) in the same
year-ago period.
- Operating expenses totaled $3.4
million in the first quarter, compared to $2.9 million in the same year-ago period.
- Net loss in Q1 2018 totaled $333,000, or $(0.01) per share, compared to a net loss of
$865,000 or $(0.02) per share in the same year-ago
period.
- Positive adjusted EBITDA totaled $114,000 in Q1 2018, compared with an adjusted
EBITDA loss of $309,000 in the same
year-ago period.
- Cash and cash equivalents at March 31,
2018 totaled $10.5 million,
compared to $10.1 million at
December 31, 2017.
- Positive net cash provided by continuing operation activities
totaled $0.9 million in Q1 2018,
compared to negative net cash used by totaled $0.7 million in the same year-ago period.
Conference Call
Management will host an investor conference call at 9:00 a.m. Eastern time on May 9, 2018, to discuss OTI's first quarter 2018
financial results, provide a corporate update, and conclude with a
Q&A from participants. To participate, please use the following
information:
Date: Wednesday, May 9, 2018
Time: 9:00 a.m. Eastern time
U.S. Dial-in: 1-888-317-6002
International Dial-in: 1-412-317-5245
Webcast: https://www.webcaster4.com/Webcast/Page/1720/25625
Please dial in at least 10 minutes before the start of the call
and request to join the "On Track Innovations Q1 2018 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 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.
|
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)
|
|
|
Three months ended
March 31
|
|
2018
|
2017
|
|
(Unaudited)
|
(Unaudited)
|
Net
loss
|
$
(333)
|
$
(865)
|
|
|
|
Net loss from
discontinued operations
|
38
|
83
|
Financial
expenses, net
|
32
|
71
|
Depreciation
|
335
|
281
|
Taxes on
income
|
(11)
|
31
|
|
|
|
Total EBITDA
From continuing operations
|
$
61
|
$
(399)
|
|
|
|
Stock-based
compensation
|
53
|
90
|
Total adjusted
EBITDA From continuing operations
|
$
114
|
$
(309)
|
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. 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 express or implied 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," "predict," "expect," "anticipate,"
"intend," "plan," "estimate," "would," "should," "will," "can,"
"promising" 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,
our expectations regarding future product launches and growth into
new markets 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.
|
INTERIM UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEET
|
(US dollars in
thousands)
|
|
|
|
|
March 31
|
December
31
|
|
|
|
2018
|
2017
|
Assets
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
8,378
|
$
6,742
|
Short-term
investments
|
|
|
2,157
|
3,331
|
Trade receivables
(net of allowance for doubtful
|
|
|
|
|
accounts of
$566 and 568 as of March 31, 2018
|
|
|
|
|
and December
31, 2017, respectively)
|
|
|
4,897
|
5,827
|
Other receivables and
prepaid expenses
|
|
|
1,280
|
1,563
|
Inventories
|
|
|
3,051
|
3,009
|
|
|
|
|
|
Total current
assets
|
|
|
19,763
|
20,472
|
|
|
|
|
|
|
|
|
|
|
Long-term
restricted deposit for employees benefit
|
|
|
491
|
498
|
|
|
|
|
|
Severance pay
deposits
|
|
|
400
|
405
|
|
|
|
|
|
Property, plant
and equipment, net
|
|
|
5,979
|
5,859
|
|
|
|
|
|
Intangible assets,
net
|
|
|
296
|
336
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
|
$
26,929
|
$
27,570
|
ON TRACK INNOVATION
LTD.
|
INTERIM UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEET
|
(US dollars in
thousands)
|
|
|
|
|
March 31
|
December
31
|
|
|
|
2018
|
2017
|
Liabilities
and Equity
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
Short-term bank
credit and current maturities
|
|
|
|
|
of long-term
bank loans
|
|
|
$
4,244
|
$
4,181
|
Trade
payables
|
|
|
5,969
|
6,264
|
Other current
liabilities
|
|
|
2,397
|
2,421
|
|
|
|
|
|
Total current
liabilities
|
|
|
12,610
|
12,866
|
|
|
|
|
|
Long-Term
Liabilities
|
|
|
|
|
Long-term loans, net
of current maturities
|
|
|
694
|
814
|
Accrued severance
pay
|
|
|
932
|
939
|
Deferred tax
liability
|
|
|
464
|
500
|
Total long-term
liabilities
|
|
|
2,090
|
2,253
|
|
|
|
|
|
Total
Liabilities
|
|
|
14,700
|
15,119
|
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies, see note 5
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
Ordinary shares of
NIS 0.1 par value: Authorized –
|
|
|
|
|
50,000,000 shares as
of March 31, 2018 and
|
|
|
|
|
December 31, 2017;
issued: 42,353,077 shares as
|
|
|
|
|
of March 31, 2018 and
December 31, 2017;
|
|
|
|
|
outstanding:
41,174,378 shares
|
|
|
|
|
as of March 31,
2018 and December 31, 2017
|
|
|
1,064
|
1,064
|
Additional paid-in
capital
|
|
|
224,811
|
224,758
|
Treasury shares at
cost - 1,178,699 shares as of March 31,
|
|
|
|
|
2018 and
December 31, 2017
|
|
|
(2,000)
|
(2,000)
|
Accumulated other
comprehensive loss
|
|
|
(633)
|
(691)
|
Accumulated
deficit
|
|
|
(211,013)
|
(210,680)
|
Total
Equity
|
|
|
12,229
|
12,451
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
and Equity
|
|
|
$
26,929
|
$
27,570
|
ON TRACK INNOVATION
LTD.
|
INTERIM UNAUDITED
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
|
(US dollars in
thousands, except share and per share data)
|
|
|
|
Three months ended
March 31
|
|
|
2018
|
2017
|
Revenues
|
|
|
|
Sales
|
|
$
4,481
|
$
2,780
|
Licensing and
transaction fees
|
|
1,381
|
1,240
|
|
|
|
|
Total
revenues
|
|
5,862
|
4,020
|
|
|
|
|
Cost of
revenues
|
|
|
|
Cost of
sales
|
|
2,754
|
1,800
|
Total cost of
revenues
|
|
2,754
|
1,800
|
|
|
|
|
Gross
profit
|
|
3,108
|
2,220
|
Operating
expenses
|
|
|
|
Research and
development
|
|
830
|
702
|
Selling and
marketing
|
|
1,645
|
1,342
|
General and
administrative
|
|
907
|
856
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
3,382
|
2,900
|
|
|
|
|
Operating loss
from continuing operations
|
|
(274)
|
(680)
|
Financial expenses,
net
|
|
(32)
|
(71)
|
|
|
|
|
Loss from
continuing operations before taxes on income
|
|
(306)
|
(751)
|
|
|
|
|
Income tax benefits
(expenses)
|
|
11
|
(31)
|
|
|
|
|
Net loss from
continuing operations
|
|
(295)
|
(782)
|
Net loss from
discontinued operations
|
|
(38)
|
(83)
|
|
|
|
|
Net
loss
|
|
$
(333)
|
$
(865)
|
Basic and diluted
net loss attributable to
|
|
|
|
shareholders
per ordinary share
|
|
|
|
From continuing
operations
|
|
$
(0.01)
|
$
(0.02)
|
From discontinued
operations
|
|
$
*
|
$
*
|
|
|
$
(0.01)
|
$
(0.02)
|
Weighted average
number of ordinary shares used in
computing basic and diluted net loss per ordinary share
|
|
41,214,378
|
41,079,580
|
|
|
|
|
* Less than $0.01 per
ordinary share.
|
ON TRACK INNOVATION
LTD.
|
INTERIM UNAUDITED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
|
(US dollars in
thousands)
|
|
|
|
Three months ended
March 31
|
Three months ended
March 31
|
|
2018
|
2017
|
|
|
|
|
Cash flows from
continuing operating activities
|
|
|
|
Net loss from
continuing operations
|
|
$
(295)
|
$
(782)
|
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
|
|
53
|
90
|
Accrued interest and
linkage differences, net
|
|
14
|
(26)
|
Depreciation and
amortization
|
|
335
|
281
|
Deferred tax,
net
|
|
(11)
|
9
|
|
|
|
|
|
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Accrued severance
pay, net
|
|
(3)
|
28
|
Decrease in trade
receivables, net
|
|
944
|
423
|
Decrease (increase)
in other receivables and prepaid expenses
|
|
301
|
(234)
|
Increase in
inventories
|
|
(35)
|
(343)
|
Decrease in trade
payables
|
|
(401)
|
(693)
|
(Decrease) increase
in other current liabilities
|
|
(51)
|
569
|
Net cash provided by
(used in) continuing operating activities
|
|
851
|
(678)
|
|
|
|
|
Cash flows from
continuing investing activities
|
|
|
|
Purchase of property
and equipment
|
|
(322)
|
(35)
|
Change in short-term
investments, net
|
|
1,164
|
1,651
|
Proceeds from
restricted deposit for employee benefits
|
|
-
|
44
|
Investment in
capitalized product costs
|
|
(13)
|
(88)
|
|
|
|
|
Net cash provided by
continuing investing activities
|
|
829
|
1,572
|
|
|
|
|
Cash flows from
continuing financing activities
|
|
|
|
Increase in
short-term bank credit, net
|
|
33
|
112
|
Repayment of
long-term bank loans
|
|
(144)
|
(222)
|
Proceeds from
exercise of options and warrants
|
|
-
|
2
|
Net cash used in
continuing financing activities
|
|
(111)
|
(108)
|
|
|
|
|
Cash flows from
discontinued operations
|
|
|
|
Net cash used in
discontinued operating activities
|
|
(16)
|
(68)
|
|
|
|
|
Total net cash
used in discontinued operations
|
|
(16)
|
(68)
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
63
|
239
|
|
|
|
|
Increase in cash,
cash equivalents and restricted cash
|
|
1,616
|
957
|
Cash, cash
equivalents and restricted cash-beginning of the
period
|
|
7,799
|
(*)
7,500
|
|
|
|
|
Cash, cash
equivalents and restricted cash-end of the period
|
|
$
9,415
|
$
(*)
8,457
|
(*)
Reclassified to conform with the current period presentation, based
on Accounting Standards Update 2016-18,
Statement of Cash Flows (Topic 230)
|
Investor Relations Contact:
Greg Falesnik
MZ North America
1-949-385-6449
Greg.Falesnik@mzgroup.us
View original
content:http://www.prnewswire.com/news-releases/on-track-innovations-ltd-reports-first-quarter-2018-financial-results-300645301.html
SOURCE On Track Innovations Ltd. (OTI)