ROSH PINA, Israel, Aug. 8,
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 second quarter ended June 30, 2018.
Operational Updates:
- In June, OTI received a purchase order for more than 3,000
cashless payment systems from Japan via its partner, Billing Systems
Cooperation (TSEL 3623), a leading payment service provider. OTI
will recognize a one-time sale, followed by a high-margin,
recurring revenue stream over the long-term. By the end of the
third quarter of 2018, OTI will have delivered a total of more than
10,000 advanced payment systems to Japan.
- Expanded footprint in Poland
through new government contracts:
-
- In April, OTI secured a 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.
- In May, OTI signed one-year, $500,000 agreement to provide intermediation in
the sale of train tickets for trains operated by Mazowieckie
Railways in Poland. OTI will
provide service to the Masovian Card and sharing information via
the infokiosk using 84 ticket vending machines.
- In June, OTI secured a four-year service contract with
the Mazowieckie Railways company to provide and maintain their
Smart Cart IT system in support of electronic ticket sales in
Poland's largest and most populous
province.
- In June, OTI received two technology awards from Global Brand
Publications (GBR):
-
- OTI PetroSmart, OTI's South
Africa based fuel management subsidiary, was named "Most
Innovative Technology Company" in Africa.
- OTI Europa, OTI's European subsidiary, was named "Most
Innovative Cashless Payment Solutions Provider" in Europe.
- In July, OTI received a purchase order for 5,000 advanced
contactless readers to the widespread Russian retail self-service
market. OTI has also applied for the Russian Mir certification, a
Payment System Established by The Central Bank of Russia. The company expects greater
penetration once the Mir certification is officially approved.
Management Commentary
"We've continued to experience strong operational execution in
our business, evidenced by several purchase orders and contracts in
some of our key target markets, including Poland, Japan, and most recently, Russia," said Shlomi
Cohen, Chief Executive Officer of On Track Innovations. "As
part of these initiatives, we have continued to invest in our
growing list of esteemed certifications, and most recently applied
for the Russian Mir certification that we expect to receive in
short order, which most likely accelerate penetration in this key
market. In fact, we've identified Russia as a potential strategic market for
OTI, and in July, we received a purchase order for 5,000 advanced
contactless readers to the widespread Russian retail self-service
market.
"In the first half of 2018, we recognized revenues of more than
$12.0 million, representing growth of
10% from the year-ago period, and experienced our third consecutive
quarter of positive Adjusted EBITDA results as we drive towards
profitability. Looking towards the third quarter of 2018, we are
expecting double-digit revenue growth compared to the third quarter
of 2017 as a result of execution across all business units as we
continue gaining market share in the cashless payments arena."
Financial Summary
- Total revenue in the second quarter of 2018 was $6.2 million, compared to $6.9 million in the same year-ago period.
Revenues in the first half of 2018 increased 10% to $12.0 million, compared to $11.0 million in the first half of 2017.
- Recurring revenues accounted for 24% of total revenues in the
first half of 2018, compared to 23% of total revenues in the first
half of 2017. On an absolute dollar basis, recurring revenues
increased by 14% to $2.9 million,
compared to $2.5 million.
- Gross profit in the second quarter of 2018 was $3.2 million, or 52% of revenues, compared to
$3.5 million, or 50% of revenues, in
the same year-ago period. In the first half of 2018, gross profit
increased 11% to $6.3 million, or 52%
of total revenues, compared to $5.7
million, or 52% of revenues, in the same year-ago
period.
- Net loss from continuing operations in the second quarter of
2018 was $230,000, or $(0.01) per share, compared to a net income from
continuing operations of $86,000, or
$0.00 per share, in the same year-ago
period. Net loss from continuing operations in the first half of
2018 was $525,000, or $(0.01) per share, compared to a net loss from
continuing operations of $696,000, or
$(0.02) per share, in the same
year-ago period.
- Positive adjusted EBITDA in the second quarter of 2018 was
$315,000, compared with a positive
adjusted EBITDA of $536,000 in the
same year-ago period. Positive adjusted EBITDA in the first half of
2018 increased to $429,000, compared
to a positive adjusted EBITDA of $227,000 in the same year-ago period.
- Cash and cash equivalents and short-term investments at
June 30, 2018 totaled $8.8 million, compared to $10.5 million at March 31,
2018 and $10.1 million at
December 31, 2017. Debt at the end of
the second quarter of 2018 decreased to $4.5
million, compared to $4.9
million at the end of the first quarter of 2018.
Conference Call
Management will host an investor conference call at 9:00 a.m. Eastern time on August 8, 2018, to discuss OTI's second 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, August 8,
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/1720/26753
Please dial in at least 10 minutes before the start of the call
and request to join the "On Track Innovations Q2 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 clear 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
June 30,
|
Six months ended
June 30,
|
|
2018
|
2017
|
2018
|
2017
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|
|
|
|
|
Net (loss)
income
|
$
(280)
|
$
93
|
$
(613)
|
$
(772)
|
|
|
|
|
|
Net loss (income)
from discontinued operations
|
50
|
(7)
|
88
|
76
|
Financial expenses,
net
|
95
|
39
|
127
|
110
|
Depreciation
|
345
|
302
|
680
|
583
|
Taxes on
income
|
(27)
|
25
|
(38)
|
56
|
TOTAL EBITDA FROM
CONTINUING OPERATIONS
|
$
183
|
$
452
|
$
244
|
$
53
|
|
|
|
|
|
Other
expenses
|
70
|
-
|
70
|
-
|
Stock-based
compensation
|
62
|
84
|
115
|
174
|
TOTAL ADJUSTED
EBITDA FROM CONTINUING OPERATIONS
|
$
315
|
$
536
|
$
429
|
$
227
|
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 "will," "expect," "anticipate," "intend," "plan,"
"estimate," "would," "should," "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 delivery of our payment
systems to Japan, receipt of the
Russian Mir certification in short order and its potential effect
on our penetration to the Russian market, our drive towards
profitability and our expectations for revenue growth in Q3
compared to Q2 and market share gaining in the cashless payments
arena and our expectations regarding future growth into new markets
such as the Russian market. 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)
|
|
|
|
June 30,
|
December
31,
|
|
|
2018
|
2017
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
|
$
6,592
|
$
6,742
|
Short-term
investments
|
|
2,161
|
3,331
|
Trade receivables
(net of allowance for doubtful
|
|
|
|
accounts of
$550 and $568 as of June 30, 2018
|
|
|
|
and December
31, 2017, respectively)
|
|
5,536
|
5,827
|
Other receivables and
prepaid expenses
|
|
2,168
|
1,563
|
Inventories
|
|
3,313
|
3,009
|
|
|
|
|
Total current
assets
|
|
19,770
|
20,472
|
|
|
|
|
|
|
|
|
Long-term
restricted deposit for employees benefit
|
|
473
|
498
|
|
|
|
|
Severance pay
deposits
|
|
384
|
405
|
|
|
|
|
Property, plant
and equipment, net
|
|
5,401
|
5,859
|
|
|
|
|
Intangible assets,
net
|
|
313
|
336
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
26,341
|
$
27,570
|
ON TRACK
INNOVATION LTD.
|
INTERIM UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEET
|
(US dollars in
thousands)
|
|
|
|
|
June 30,
|
December
31,
|
|
2018
|
2017
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
Current
Liabilities
|
|
|
Short-term bank
credit and current maturities
|
|
|
of long-term
bank loans
|
$
3,974
|
$
4,181
|
Trade
payables
|
6,418
|
6,264
|
Other current
liabilities
|
2,441
|
2,421
|
|
|
|
Total current
liabilities
|
12,833
|
12,866
|
|
|
|
Long-Term
Liabilities
|
|
|
Long-term loans, net
of current maturities
|
477
|
814
|
Accrued severance
pay
|
890
|
939
|
Deferred tax
liability
|
408
|
500
|
Total long-term
liabilities
|
1,775
|
2,253
|
|
|
|
Total
Liabilities
|
14,608
|
15,119
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Ordinary shares of
NIS 0.1 par value: Authorized –
|
|
|
50,000,000 shares as
of June 30, 2018 and
|
|
|
December 31, 2017;
issued: 42,473,076 and 42,353,077 shares as
|
|
|
of June 30, 2018 and
December 31, 2017, respectively;
|
|
|
outstanding:
41,294,377 and 41,174,378 shares
|
|
|
as of June 30, 2018,
and December 31, 2017, respectively
|
1,068
|
1,064
|
Additional paid-in
capital
|
224,903
|
224,758
|
Treasury shares at
cost - 1,178,699 shares as of June 30,
|
|
|
2018 and
December 31, 2017
|
(2,000)
|
(2,000)
|
Accumulated other
comprehensive loss
|
(945)
|
(691)
|
Accumulated
deficit
|
(211,293)
|
(210,680)
|
Total
Equity
|
11,733
|
12,451
|
|
|
|
Total Liabilities
and Equity
|
$
26,341
|
$
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
June 30,
|
Six months ended
June 30,
|
|
|
2018
|
2017
|
2018
|
2017
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
Sales
|
|
$
4,656
|
$
5,646
|
$
9,137
|
$
8,426
|
Licensing and
transaction fees
|
|
1,498
|
1,300
|
2,879
|
2,540
|
|
|
|
|
|
|
Total
revenues
|
|
6,154
|
6,946
|
12,016
|
10,966
|
|
|
|
|
|
|
Cost of
revenues
|
|
|
|
|
|
Cost of
sales
|
|
2,973
|
3,476
|
5,727
|
5,276
|
Total cost of
revenues
|
|
2,973
|
3,476
|
5,727
|
5,276
|
|
|
|
|
|
|
Gross
profit
|
|
3,181
|
3,470
|
6,289
|
5,690
|
Operating
expenses
|
|
|
|
|
|
Research and
development
|
|
815
|
889
|
1,645
|
1,591
|
Selling and
marketing
|
|
1,463
|
1,492
|
3,108
|
2,834
|
General and
administrative
|
|
1,065
|
939
|
1,972
|
1,795
|
Total operating
expenses
|
|
3,343
|
3,320
|
6,725
|
6,220
|
|
|
|
|
|
|
Operating (loss)
income from continuing operations
|
|
(162)
|
150
|
(436)
|
(530)
|
Financial expenses,
net
|
|
(95)
|
(39)
|
(127)
|
(110)
|
(Loss) income from
continuing operations
|
|
|
|
|
|
before taxes
on income
|
|
(257)
|
111
|
(563)
|
(640)
|
Income tax
|
|
27
|
(25)
|
38
|
(56)
|
Net (loss) income
from continuing operations
|
|
(230)
|
86
|
(525)
|
(696)
|
Net (loss) income
from discontinued operations
|
|
(50)
|
7
|
(88)
|
(76)
|
Net (loss)
income
|
|
$
(280)
|
$
93
|
$
(613)
|
$
(772)
|
Basic and diluted
net loss attributable
to shareholders per ordinary share
|
|
|
|
|
|
From continuing
operations
|
|
(0.01)
|
*
|
(0.01)
|
(0.02)
|
From discontinued
operations
|
|
*
|
*
|
*
|
*
|
|
|
|
|
|
|
|
|
$
(0.01)
|
$
*
|
$
(0.01)
|
$
(0.02)
|
|
|
|
|
|
|
Weighted average
number of ordinary shares
used in computing basic and diluted net income
(loss) per ordinary share
|
|
41,271,644
|
41,095,788
|
41,243,169
|
41,087,729
|
|
|
|
|
|
|
*
Less than $0.01 per ordinary share.
|
|
|
|
|
|
ON TRACK
INNOVATION LTD.
|
INTERIM UNAUDITED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
|
(US dollars in
thousands)
|
|
|
|
Six months ended June
30,
|
|
|
2018
|
2017
|
Cash flows from
continuing operating activities
|
|
|
|
Net loss from
continuing operations
|
|
$
(525)
|
$
(696)
|
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
|
|
115
|
174
|
Accrued interest and
linkage differences, net
|
|
7
|
(47)
|
Depreciation and
amortization
|
|
680
|
583
|
Deferred tax,
net
|
|
(54)
|
21
|
Gain on sale of fixed
assets
|
|
(17)
|
(7)
|
|
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Accrued severance
pay, net
|
|
(28)
|
74
|
Decrease (increase)
in trade receivables, net
|
|
963
|
(1,151)
|
(Increase) decrease
in other receivables and prepaid expenses
|
|
(658)
|
90
|
Increase in
inventories
|
|
(344)
|
(47)
|
Increase (decrease)
in trade payables
|
|
445
|
(396)
|
Decrease in other
current liabilities
|
|
(650)
|
(855)
|
Net cash used in
continuing operating activities
|
|
(66)
|
(2,257)
|
|
|
|
|
Cash flows from
continuing investing activities
|
|
|
|
Purchase of property
and equipment, net
|
|
(414)
|
(98)
|
Change in short-term
investments, net
|
|
1,173
|
2,500
|
Investment in
capitalized product costs
|
|
(87)
|
(157)
|
Proceeds from
restricted deposit for employee benefits
|
|
-
|
44
|
Proceeds from sale of
fixed assets
|
|
17
|
12
|
Net cash provided by
continuing investing activities
|
|
689
|
2,301
|
|
|
|
|
Cash flows from
continuing financing activities
|
|
|
|
(Decrease) increase
in short-term bank credit, net
|
|
(80)
|
213
|
Repayment of
long-term bank loans
|
|
(348)
|
(374)
|
Proceeds from
exercise of options
|
|
34
|
15
|
Net cash used in
continuing financing activities
|
|
(394)
|
(146)
|
|
|
|
|
Cash flows from
discontinued operations
|
|
|
|
Net cash used in
discontinued operating activities
|
|
(107)
|
(71)
|
|
|
|
|
Total net cash
used in discontinued operations
|
|
(107)
|
(71)
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
(288)
|
463
|
|
|
|
|
(Decrease)
increase in cash, cash equivalents and restricted
cash
|
|
(166)
|
290
|
Cash, cash
equivalents and restricted cash-beginning of the
period
|
|
7,799
|
(*)
7,500
|
|
|
|
|
Cash, cash
equivalents and restricted cash-end of the period
|
|
$
7,633
|
$
(*) 7,790
|
(*) Reclassified to conform with the current period
presentation.
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-second-quarter-2018-financial-results-300691359.html
SOURCE On Track Innovations Ltd. (OTI)