OTI Reports Third Quarter 2017 Financial Results

ROSH PINNA, Israel, Nov. 8, 2017 /PRNewswire/ -- On Track Innovations Ltd. (OTI) (NASDAQ: OTIV), a global provider of near field communication (NFC) and cashless payment solutions, reported financial results for the third quarter ended September 30, 2017.

Q3 2017 Operational Highlights

  • First major delivery to 365 Retail Markets, our strategic MicroMarket partner in the U.S.
  • Received second batch purchase order of 2,000 cashless payment systems from the Japanese market
  • Received multiple purchase orders totaling 7,000 OTI advanced contactless readers in the ATM global market
  • Received a sizable purchase order for a rollout of our EasyFuelPlus solution in the Indian market

Financial Details

  • Revenues for the third quarter were $4.7 million, a decrease of 17% from Q3 last year. For the first 9 months of 2017, our revenues increased by 4% to $15.6 million from $15.0 million in the same year-ago period
  • Gross margin increased to 53% of revenue compared to 50% of revenue last quarter
  • Operating expenses decreased 12% to $2.9 million from $3.3 million in the prior quarter
  • Net income totaled $868,000 compared to net loss of $67,000 in the same year-ago period

Management Commentary - Shlomi Cohen (OTI CEO)

"The third quarter of 2017 marks a significant milestone in our plan to bring OTI to its full potential. Third quarter revenues were $4.7 million.  This reflects the quarter to quarter lumpiness as we shift our customer base to purchasers of complete solutions.  With this shift, we continue to grow the portion of our sales that derive from recurring revenues and to increase our gross margin."

"A major area of growth is in the ATM vertical, where we continue to increase sales and deployments and expect to reach an installment base of over 10,000 OTI advanced contactless readers in the ATM market globally by the end of 2017. This marks a significant landmark as we complete development and enhancement of our ATM-specific reader product, and we expect to see a ramp-up in ATM orders over the years to come."

"We are similarly optimistic about petroleum product sales through our PetroSmart subsidiary.  As a result of long term efforts, we expect to see PetroSmart enter new strategic markets in the coming quarters and complete deliveries to new customers and markets." 

"We can see the results of our hard work in our new verticals and markets as we look into our order pipeline for the year to come and continue to believe that we will be able to present a positive adjusted EBITDA in 2017." 

Conference Call

OTI will hold a conference call on Wednesday, November 8th at 9:00 AM EST to discuss results for the third quarter of 2017.

OTI CEO Shlomi Cohen and CFO Yishay Curelaru will host the presentation, followed by a question and answer period.

Date: Wednesday, November 8, 2017
Time: 9:00 AM Eastern Standard Time (EST)
Toll-Free Dial-In Number: 1-877-870-4263
International Dial-In Number: 1-412-317-0790
Conference Title: On Track Innovations Ltd. Q3 Earnings Conference Call

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 before the start time and request to be joined to the "On Track Innovations Ltd. Q3 Earnings Conference Call".

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 useful 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. GAP results in the tables below.

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. For example, we are using forward-looking statements when we discuss our expectations regarding our potential, growth, profitability or increasing our sales or margins, new pipeline, opportunities and orders, new customers and markets and a positive adjusted EBITDA in 2017. 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 could be impacted by the effects of the protracted evaluation and validation periods in the U.S. and other markets for contactless payment cards, or 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, 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.

 

 

 

ON TRACK INNOVATION LTD.

INTERIM UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET

(In thousands, except share and per share data)









September 30,

    December 31,




2017

2016


Assets










Current assets





Cash and cash equivalents


$     6,000

$      5,952


Short-term investments


2,667

5,585


Trade receivables (net of allowance for doubtful





 accounts of $638 and $720 as of September 30, 2017





 and December 31, 2016, respectively)


5,470

5,620


Other receivables and prepaid expenses


3,963

1,638


Inventories


3,818

3,069







Total current assets


21,918

21,864












Long-term restricted deposit for employees benefit


494

453







Severance pay deposits


353

322







Property, plant and equipment, net


5,824

5,788







Intangible assets, net


337

278











































































































Total Assets


$      28,926

$      28,705












 

 

ON TRACK INNOVATION LTD.

INTERIM UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET

(In thousands, except share and per share data)






September 30,

December 31,


2017

2017

Liabilities and  Equity






Current Liabilities



Short-term bank credit and current maturities



  of long-term bank loans

$          4,389

$          4,369

Trade payables

6,898

6,957

Other current liabilities

2,482

2,822




Total current liabilities

13,769

14,148




Long-Term Liabilities



Long-term loans, net of current maturities

889

1,215

Accrued severance pay

914

811

Deferred tax liability

477

373

Total long-term liabilities

2,280

2,399




Total Liabilities

16,049

16,547







Commitments and Contingencies






Equity



Shareholders' Equity



Ordinary shares of NIS 0.1 par value: Authorized –



50,000,000 shares as of September 30, 2017, and



December 31, 2016; issued: 42,313,077 and 42,243,075 shares as



of September 30, 2017, and December 31, 2016, respectively;



outstanding: 41,134,378          and 41,064,376 shares



as of September 30, 2017 and December 31, 2016, respectively

1,063

1,061

Additional paid-in capital

224,676

224,415

Treasury shares at cost - 1,178,699 shares as of September 30,



   2017 and December 31, 2016

(2,000)

(2,000)

Accumulated other comprehensive loss

(876)

(1,236)

Accumulated deficit

(209,986)

(210,082)

Total Equity

12,877

12,158




Total Liabilities and Equity

$       28,926

$      28,705

 

 

ON TRACK INNOVATION LTD.

INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except share and per share data)



Three months ended
September 30,

Nine months ended
September 30,


2017

2016

2017

2016






Revenues





Sales

$      3,445

$      3,463

$     11,871

$     10,409

Licensing and transaction fees

1,225

2,133

3,765

4,569






Total revenues

4,670

5,596

15,636

14,978






Cost of revenues





Cost of sales

2,192

2,557

7,468

7,167

Total cost of revenues

2,192

2,557

7,468

7,167






Gross profit

2,478

3,039

8,168

7,811

Operating expenses





Research and development

823

604

2,414

2,072

Selling and marketing

1,332

1,300

4,166

3,974

General and administrative

758

787

2,553

2,613

Other expenses

-

83

-

83






Total operating expenses

2,913

2,774

9,133

8,742






Operating (loss) income from continuing operations

(435)

265

(965)

(931)

Financial expenses, net

(126)

(30)

(236)

(185)






Profit (loss) from continuing operations





 before taxes on income

(561)

235

(1,201)

(1,116)

Income tax

(12)

(28)

(68)

(60)






Net (loss) income from continuing operations

(573)

207

(1,269)

(1,176)

Net income (loss) from discontinued operations

1,441

(279)

1,365

1,525






Net income (loss)

868

(72)

96

349






Net loss attributable to noncontrolling interest

-

5

-

32

Net income (loss) attributable to shareholders

$          868

$       (67)

$           96

$       381

 

Basic and diluted net gain (loss) attributable to shareholders per ordinary share





From continuing operations

(0.01)

0.01

(0.03)

(0.03)

From discontinued operations

0.03

(0.01)

0.03

0.04







$           0.02

$               (*)

              (*)

$           0.01






Weighted average number of ordinary shares





 used in computing basic net (loss)





 income per ordinary share

41,122,965

40,914,258

41,099,603

40,895,268






Weighted average number of ordinary shares





 used in computing diluted net (loss)





 income per ordinary share

41,122,965

41,667,258

41,099,603

40,895,268






(*) Less than $0.01 per ordinary share.

 

 

ON TRACK INNOVATIONS LTD.

INTERIM 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)



Three months ended September 30,

Nine months ended September 30,


2017

2016

2017

2016


(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Net Income (Loss)

868

$       (72)

$             96

$             349






Net (income) loss from discontinued operations

(1,441)

279

(1,365)

(1,525)

Financial expenses, net

126

30

236

185

Depreciation

295

293

878

911

Taxes on income

12

28

68

60

Total EBITDA FROM CONTINUING OPERATIONS

$          (140)

$          558

$            (87)

$            (20)






Other expenses

-

83

-

83

Stock-based compensation

66

69

240

174

Total adjusted EBITDA FROM CONTINUING OPERATIONS

$          (74)

$               710

$             153

$             237










 

 

ON TRACK INNOVATION LTD.

INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW

(In thousands, except share and per share data)




Nine months ended September 30,


2017

2016

Cash flows from continuing operating activities



Net loss from continuing operations

$              (1,269)

$              (1,176)

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

238

174

Depreciation

878

911

Deferred tax, net

37

60

(Gain) loss on sale of property and equipment

(9)

83

Accrued interest and linkage differences, net

(41)

19




Changes in operating assets and liabilities:



Accrued severance pay, net

72

(152)

Decrease (increase)  in trade receivables, net

187

(1,376)

(Increase) in other receivables and prepaid expenses

(435)

(16)

(Increase) decrease in inventories

(710)

246

(Decrease) increase in trade payables

(611)

1,024

(Decrease) in other current liabilities

(777)

(408)

Net cash used in continuing operating activities

(2,440)

(611)




Cash flows from continuing investing activities






Purchase of property and equipment

(160)

(185)

Proceeds from sale of property and equipment

14

1,779

Change in short-term investments, net

2,917

(502)

Investment in capitalized product costs

(185)

(139)

Proceeds from restricted deposit for employees benefit

44

142

Net cash provided by continuing investing activities

2,630

1,095




Cash flows from continuing financing activities



(Decrease) increase  in short-term bank credit, net

(72)

287

Proceeds from long-term bank loans

-

27

Repayment of long-term bank loans

(469)

(1,368)

Proceeds from exercise of options and warrants

25

37

Net cash  used in continuing financing activities

(516)

(1,017)




Cash flows from discontinued operations



Net cash used in discontinued operating activities

(86)

(183)

Net cash provided by discontinued investing activities

-

2,152




Total net cash (used in)  provided by discontinued operations

(86)

1,969




Effect of exchange rate changes on cash and cash equivalents

460

51




Increase in cash and cash equivalents

48

1,487

Cash and cash equivalents at the beginning of the period

5,952

5,450




Cash and cash equivalents at the end of the period

6,000

$               6,937

(*)           Less than $1.

 

 

 

Contact:
OTI Press Contact
Neil Barr
Director of Marketing
+972-4-686-8004
press@otiglobal.com

 

View original content:http://www.prnewswire.com/news-releases/oti-reports-third-quarter-2017-financial-results-300551753.html

SOURCE On Track Innovations Ltd



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