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