ROSH PINNA, Israel, Aug. 9,
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 second quarter ended June 30, 2017.
Q2 2017 Operational Highlights
- Delivered first batch of 3,000 payment systems to the Japanese
market.
- Signed global supply agreement with Dover Fueling Solutions,
facilitating entry into North American fueling market
- Announced with Apriva the launch of a semi-integrated solution
for unattended market
Q2 2017 Financial Details
- Total quarterly revenue increased to $6.9 million, a 73% increase from $4.0 million in the prior quarter and a 44%
increase from $4.8 million in the
same year-ago period.
- Gross profit increased to $3.5
million (50% of revenues), a 56% increase over $2.2 million (55% of revenues) in the prior
quarter and an increase of 42% over $2.5
million (51% of revenues) in the same year-ago period.
- Net income from continuing operations totaled $86,000 or $0.002
per share, an improvement from a net loss from continuing
operations of $782,000 or
$(0.02) per share in the prior
quarter and an improvement from a net loss from continuing
operations of $598,000 or
$(0.02) per share in the same
year-ago period.
- Adjusted EBITDA income from continuing operations improved to
$536,000, an improvement from a loss
of $309,000 in the prior quarter and
an improvement from a loss of $133,000 in the same year-ago period (see
discussion about the presentation of adjusted EBITDA from
continuing operations, a non-GAAP financial measure, below).
Management Commentary - Shlomi
Cohen (OTI CEO)
"The second quarter of 2017 marks
a significant milestone in our plan to bring OTI to its full
potential. We are pleased to report quarterly revenues
of more than $6.9 million dollars and
quarterly positive adjusted EBITDA income of more than $500,000. This represents not only the highest
quarterly revenue level since we started our overhaul of OTI's
operations two years ago, but also the highest quarterly revenue
achieved since the second quarter of 2014."
"Our achievements for the second quarter of 2017 result from
significant growth in both our retail segment and petroleum
segment. In our retail segment, we saw increased sales and
the delivery of new products into new and expanding markets and
verticals together with outstanding achievement to recover in very
short time on lost accounts. In the US market alone we saw a growth
of 200% in our reader sales compared to the prior quarter. In our
PetroSmart division, we saw during the second quarter of 2017 a
revenue growth of more than 100% compared to the first quarter,
resulting from long-term efforts to grow existing and new
opportunities. In total the second quarter of 2017 presented an
increase in revenues of more than 70% compared to the prior quarter
and more than 40% compared to the second quarter of 2016 together
with positive adjusted EBITDA."
"We followed our plans, executed our strategy, and delivered the
expected results. For the long term, I strongly believe that we
will continue to see growth within our different verticals and
present a positive adjusted EBITDA in 2017."
Conference Call
OTI will hold a conference call on
Wednesday, August 9 at 9:00 AM EDT to discuss results for the second
quarter of 2017.
OTI CEO Shlomi Cohen and CFO
Yishay Curelaru will host the
presentation, followed by a question and answer period.
Date: Wednesday, August 9th,
2017
Time: 9:00 AM Eastern Daylight Time (EDT)
Toll-Free Dial-In Number: 1-877-870-4263
International Dial-In Number: 1-412-317-0790
Conference Title: On Track Innovations Ltd. Q2 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 prior
to the start time and request to be joined to the "On Track
Innovations Ltd. Q2 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 clear 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 INNOVATION
LTD.
|
|
INTERIM UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEET
|
|
(In thousands, except
share data)
|
|
|
|
|
|
|
June
30,
|
December
31,
|
|
|
2017
|
2016
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
6,242
|
$
5,952
|
|
Short-term
investments
|
|
3,084
|
5,585
|
|
Trade receivables
(net of allowance for doubtful
|
|
|
|
|
accounts of
$694 and $720 as of June 30, 2017
|
|
|
|
|
and December
31, 2016, respectively)
|
|
6,843
|
5,620
|
|
Other receivables and
prepaid expenses
|
|
1,554
|
1,638
|
|
Inventories
|
|
3,180
|
3,069
|
|
|
|
|
|
Total current
assets
|
|
20,903
|
21,864
|
|
|
|
|
|
|
|
|
|
Long-term
restricted deposit for employees benefit
|
|
500
|
453
|
|
|
|
|
|
Severance pay
deposits
|
|
355
|
322
|
|
|
|
|
|
Property, plant
and equipment, net
|
|
5,967
|
5,788
|
|
|
|
|
|
Intangible assets,
net
|
|
351
|
278
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
28,076
|
$
28,705
|
|
ON TRACK INNOVATION
LTD.
|
|
INTERIM UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEET
|
|
(In thousands, except
share data)
|
|
|
|
|
June
30,
|
December
31,
|
|
2017
|
2016
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
Short-term bank
credit and current maturities
|
|
|
|
of long-term
bank loans
|
$
4,663
|
$
4,369
|
|
Trade
payables
|
7,104
|
6,957
|
|
Other current
liabilities
|
1,991
|
2,822
|
|
|
|
|
Total current
liabilities
|
13,758
|
14,148
|
|
|
|
|
Long-Term
Liabilities
|
|
|
|
Long-term loans, net
of current maturities
|
1,041
|
1,215
|
|
Accrued severance
pay
|
918
|
811
|
|
Deferred tax
liability
|
452
|
373
|
|
Total long-term
liabilities
|
2,411
|
2,399
|
|
|
|
|
Total
Liabilities
|
16,169
|
16,547
|
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
Equity
|
|
|
|
Shareholders'
Equity
|
|
|
|
Ordinary shares of
NIS 0.1 par value: Authorized –
|
|
|
|
50,000,000 shares as
of June 30, 2017 and
|
|
|
|
December 31, 2016;
issued: 42,288,077 and 42,243,075 shares as
|
|
|
|
of June 30, 2017 and
December 31, 2016, respectively;
|
|
|
|
outstanding:
41,109,378 and 41,064,376 shares
|
|
|
|
as of June 30, 2017
and December 31, 2016, respectively
|
1,062
|
1,061
|
|
Additional paid-in
capital
|
224,603
|
224,415
|
|
Treasury shares at
cost - 1,178,699 shares as of June 30,
|
|
|
|
2017 and
December 31, 2016
|
(2,000)
|
(2,000)
|
|
Accumulated other
comprehensive loss
|
(904)
|
(1,236)
|
|
Accumulated
deficit
|
(210,854)
|
(210,082)
|
|
Total
Equity
|
11,907
|
12,158
|
|
|
|
|
Total Liabilities
and Equity
|
$
28,076
|
$
28,705
|
|
ON TRACK INNOVATION
LTD.
|
|
INTERIM UNAUDITED
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
|
|
(In
thousands)
|
|
|
|
|
|
|
Three months ended
June 30,
|
Six months ended
June 30,
|
|
|
2017
|
2016*
|
2017
|
2016*
|
|
Revenues
|
|
|
|
|
|
|
Sales
|
|
$
5,646
|
$
3,584
|
$
8,426
|
$
6,946
|
|
Licensing and
transaction fees
|
|
1,300
|
1,226
|
2,540
|
2,436
|
|
|
|
|
|
|
|
Total
revenues
|
|
6,946
|
4,810
|
10,966
|
9,382
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
|
|
|
|
|
Cost of
sales
|
|
3,476
|
2,360
|
5,276
|
4,609
|
|
Total cost of
revenues
|
|
3,476
|
2,360
|
5,276
|
4,609
|
|
|
|
|
|
|
|
Gross
profit
|
|
3,470
|
2,450
|
5,690
|
4,773
|
|
Operating
expenses
|
|
|
|
|
|
|
Research and
development
|
|
889
|
747
|
1,591
|
1,468
|
|
Selling and
marketing
|
|
1,492
|
1,321
|
2,834
|
2,674
|
|
General and
administrative
|
|
939
|
902
|
1,795
|
1,826
|
|
Total operating
expenses
|
|
3,320
|
2,970
|
6,220
|
5,968
|
|
|
|
|
|
|
|
Operating income
(loss) from continuing operations
|
|
150
|
(520)
|
(530)
|
(1,195)
|
|
Financial expenses,
net
|
|
(39)
|
(62)
|
(110)
|
(155)
|
|
Income (loss) from
continuing operations
|
|
|
|
|
|
|
before taxes
on income
|
|
111
|
(582)
|
(640)
|
(1,350)
|
|
Income tax
|
|
(25)
|
(16)
|
(56)
|
(32)
|
|
Net income (loss)
from continuing operations
|
|
86
|
(598)
|
(696)
|
(1,382)
|
|
Net income (loss)
from discontinued operations
|
|
7
|
1,947
|
(76)
|
1,803
|
|
Net income
(loss)
|
|
93
|
1,349
|
(772)
|
421
|
|
Net (income) loss
attributable to non-controlling interest
|
|
-
|
(36)
|
-
|
27
|
|
Net income (loss)
attributable to shareholders
|
|
$
93
|
$
1,313
|
$
(772)
|
$
448
|
|
Basic and diluted
net income (loss)
attributable to shareholders per ordinary
share
|
|
|
|
|
|
|
From continuing
operations
|
|
**
|
(0.02)
|
(0.02)
|
(0.03)
|
|
From discontinued
operations
|
|
**
|
0.05
|
**
|
0.04
|
|
|
$ **
|
$
0.03
|
$
(0.02)
|
$
0.01
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares
used in computing basic and diluted net
income (loss) per ordinary share
|
|
41,095,788
|
40,896,863
|
41,087,729
|
40,885,668
|
|
|
|
|
|
|
|
* Reclassified to
conform with the current period presentation.
|
|
** 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)
|
|
|
Three months ended
June 30,
|
Six months ended
June 30,
|
|
2017
|
2016
|
2017
|
2016
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|
|
|
|
|
|
Net Income
(Loss)
|
$
93
|
$
1,349
|
$
(772)
|
$
421
|
|
|
|
|
|
|
Net (income) loss
from discontinued operations
|
(7)
|
(1,947)
|
76
|
(1,803)
|
|
Financial expenses,
net
|
39
|
62
|
110
|
155
|
|
Depreciation
|
302
|
309
|
583
|
617
|
|
Taxes on
income
|
25
|
16
|
56
|
32
|
|
Total EBITDA FROM
CONTINUING OPERATIONS
|
$
452
|
$
(211)
|
$
53
|
$
(578)
|
|
|
|
|
|
|
Stock-based
compensation
|
84
|
78
|
174
|
105
|
|
TOTAL ADJUSTED
EBITDA FROM CONTINUING
OPERATIONS
|
$
536
|
$
(133)
|
$
227
|
$
(473)
|
|
ON TRACK INNOVATION
LTD.
|
|
INTERIM UNAUDITED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
|
|
(In
thousands)
|
|
|
|
Six months ended
June 30,
|
|
|
2017
|
2016*
|
|
|
|
|
|
Cash flows from
continuing operating activities
|
|
|
|
|
Net loss from
continuing operations
|
|
$
(696)
|
$
(1,382)
|
|
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
|
|
174
|
105
|
|
Accrued interest and
linkage differences, net
|
|
(47)
|
55
|
|
Depreciation
|
|
583
|
617
|
|
Deferred tax,
net
|
|
21
|
32
|
|
Gain on sale of fixed
assets
|
|
(7)
|
-
|
|
|
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accrued severance
pay, net
|
|
74
|
(151)
|
|
Increase in trade
receivables, net
|
|
(1,151)
|
(1,115)
|
|
Decrease in other
receivables and prepaid expenses
|
|
90
|
215
|
|
(Increase) decrease
in inventories
|
|
(47)
|
590
|
|
(Decrease) increase
in trade payables
|
|
(396)
|
290
|
|
Decrease in other
current liabilities
|
|
(855)
|
(453)
|
|
Net cash used in
continuing operating activities
|
|
(2,257)
|
(1,197)
|
|
|
|
|
|
Cash flows from
continuing investing activities
|
|
|
|
|
Purchase of property
and equipment, net
|
|
(98)
|
(139)
|
|
Change in short-term
investments, net
|
|
2,500
|
(884)
|
|
Investment in
capitalized product costs
|
|
(157)
|
(98)
|
|
Proceeds from
restricted deposit for employee benefits
|
|
44
|
-
|
|
Advance payment from
sale of property
|
|
-
|
396
|
|
Proceeds from sale of
fixed assets
|
|
12
|
-
|
|
|
|
|
|
Net cash provided by
(used in) continuing investing activities
|
|
2,301
|
(725)
|
|
|
|
|
|
Cash flows from
continuing financing activities
|
|
|
|
|
Increase in
short-term bank credit, net
|
|
213
|
81
|
|
Proceeds from
long-term bank loans
|
|
-
|
27
|
|
Repayment of
long-term bank loans
|
|
(374)
|
(538)
|
|
Proceeds from
exercise of options and warrants
|
|
15
|
**
|
|
Net cash used in
continuing financing activities
|
|
(146)
|
(430)
|
|
|
|
|
|
Cash flows from
discontinued operations
|
|
|
|
|
Net cash used in
discontinued operating activities
|
|
(71)
|
(214)
|
|
Net cash provided by
discontinued investing activities
|
|
-
|
1,949
|
|
Total net cash
(used in) provided by discontinued operations
|
|
(71)
|
1,735
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
463
|
(17)
|
|
|
|
|
|
Increase
(decrease) in cash and cash equivalents
|
|
290
|
(634)
|
|
Cash and cash
equivalents at the beginning of the period
|
|
5,952
|
5,450
|
|
|
|
|
|
Cash and cash
equivalents at the end of the period
|
|
$
6,242
|
$
4,816
|
|
|
|
|
|
(*) Reclassified to
conform with the current period presentation
|
|
(**) Less than
$1
|
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 growth or profitability, new
opportunities, a positive adjusted EBITDA in 2017 and delivery
long-term shareholder value. 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.
OTI Investor Contact
ir@otiglobal.com
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-second-quarter-2017-financial-results-300501814.html
SOURCE On Track Innovations Ltd (OTI)