ROSH PINA, Israel, Nov. 7,
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 third quarter ended September 30, 2018.
Operational Updates:
- OTI delivered a total of more than 3,000 advanced payment
systems to Japan.
- OTI delivered approximately 8,000 advanced contactless readers
to the widespread Russian retail self-service market.
- The Company received the MIR National Card Payment System
organization certification, a key component of effectively
penetrating the strategic Russian unattended payment market.
- In August, Apriva released a white paper affirming its ongoing
partnership with OTI for deploying next generation self-serve and
vending technologies, enabling OTI to offer merchants a
pre-certified, off-the-shelf EMV solution for self-service
kiosks.
- In October, OTI was granted the Interbank Network Interac
certification, allowing Canadian businesses to integrate OTI's
secure cashless payment solutions into vending machines, kiosks and
other unattended devices throughout the significant Canadian
market.
Management Commentary
"I am pleased to announce another quarter of continued
operational execution, highlighted by our robust sequential and
year-over-year revenue growth," said Shlomi
Cohen, Chief Executive Officer of On Track Innovations. "The
third quarter revenue of $6.5 million
represents the highest third quarter revenue achieved since 2013.
We continued to make notable progress on several key fronts,
primarily through successful sales efforts in Japan and the United
States.
"Alongside success in our existing markets, we continued to
expand our efforts to new international markets – as evidenced
through the granting of the MIR certification in Russia, where we delivered almost 8,000
advanced contactless readers in the third quarter, as well as the
Interac certification in Canada.
Both of these certifications are crucial to successfully operating
in these countries, allowing our sales team to now focus their
efforts on well-suited opportunities abroad.
"We also experienced our fourth consecutive quarter of positive
adjusted EBITDA while expanding our recurring revenue base by 19%
on an absolute dollar basis to $1.5
million per quarter, compared to $1.2
million in same year ago period. We also reduced our debt by
89% in the quarter when compared to the prior quarter, with total
debt now standing at just $0.5
million.
"Our ability to maintain a significant technological advantage
over the competition while diligently managing our expenses has
positioned us well for continued revenue growth and shareholder
value creation over the long-term," concluded Cohen.
Q3 2018 Financial Highlights
- Total revenue in the third quarter of 2018 increased 39% to
$6.5 million, compared to
$4.7 million in the same year-ago
period.
- Recurring revenues, on an absolute dollar basis, increased by
19% to $1.5 million, compared to
$1.2 million in the same year-ago
period.
- Gross profit in the third quarter of 2018 was $3.4 million, or 53% of revenues, compared to
$2.5 million, or 53% of revenues, in
the same year-ago period.
- Net loss from continuing operations in the third quarter of
2018 was $158,000, or $(0.00) per share, compared to a net loss from
continuing operations of $573,000, or
($0.01) per share, in the same
year-ago period.
- Adjusted EBITDA in the third quarter of 2018 was $362,000, compared with adjusted EBITDA loss of
$74,000 in the same year-ago
period.
- Cash, cash equivalents and short-term investments at
September 30, 2018 totaled
$5.9 million, compared to
$8.8 million at June 30, 2018 and $8.7
million at September 30, 2017.
Debt at the end of the third quarter of 2018 decreased by 89% to
$0.5 million, compared to
$4.5 million at the end of the second
quarter of 2018.
Conference Call
Management will host an investor conference call at 9:00 a.m. EST on November
7, 2018, to discuss OTI's third 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, November 7,
2018
Time: 9:00 a.m. Eastern Standard Time
(6:00 a.m. Pacific Standard Time)
U.S. Dial-in: 1-888-317-6002
International Dial-in: 1-412-317-5245
Webcast: https://www.webcaster4.com/Webcast/Page/1720/27970
Please dial in at least 10 minutes before the start of the call
and request to join the "On Track Innovations Q3 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 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 tables
reflects selected On Track Innovations Ltd. non-GAAP results
reconciled to GAAP results:
|
(US dollars in
thousands)
|
|
|
|
|
Three months ended
Sept. 30,
|
Nine months ended
Sept. 30,
|
|
2018
|
2017
|
2018
|
2017
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|
|
|
|
|
Net (loss)
income
|
$
(184)
|
$
868
|
$
(797)
|
$
96
|
|
|
|
|
|
Net loss (income)
from discontinued operations
|
26
|
(1,441)
|
114
|
(1,365)
|
Financial expenses,
net
|
2
|
126
|
129
|
236
|
Depreciation
|
342
|
295
|
1,022
|
878
|
Taxes on
income
|
111
|
12
|
73
|
68
|
Total EBITDA FROM
CONTINUING OPERATIONS
|
$
297
|
$
(140)
|
$
541
|
$
(87)
|
|
|
|
|
|
Other
expenses
|
-
|
-
|
70
|
-
|
Stock-based
compensation
|
65
|
66
|
180
|
240
|
Total adjusted
EBITDA FROM CONTINUING OPERATIONS
|
$
362
|
$
(74)
|
$
791
|
$
153
|
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," "believe," "should," "can" or similar expressions, we
are making forward-looking statements. For example, we are using
forward-looking statements when we discuss, among others: the
importance of the MIR certification in Russia and the Interac certification in
Canada for the successful
operation in these countries, future opportunities and revenue
growth and shareholder value creation over the long-term due to our
ability to maintain a significant technological advantage over the
competition while diligently managing our
expenses. 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)
|
|
|
|
|
|
|
September 30,
2018
|
December 31,
2017
|
Assets
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
|
$
4,514
|
$
6,742
|
Short-term
investments
|
|
1,391
|
3,331
|
Trade receivables
(net of allowance for doubtful
|
|
|
|
accounts of
$619 and $568 as of September 30, 2018
|
|
|
|
and December
31, 2017, respectively)
|
|
4,026
|
5,827
|
Other receivables and
prepaid expenses
|
|
2,676
|
1,563
|
Inventories
|
|
3,356
|
3,009
|
|
|
|
|
Total current
assets
|
|
15,963
|
20,472
|
|
|
|
|
|
|
|
|
Long-term
restricted deposit for employees benefit
|
|
468
|
498
|
|
|
|
|
Severance pay
deposits
|
|
358
|
405
|
|
|
|
|
Property, plant
and equipment, net
|
|
5,246
|
5,859
|
|
|
|
|
Intangible assets,
net
|
|
264
|
336
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
22,299
|
$
27,570
|
ON TRACK
INNOVATION LTD.
|
INTERIM UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEET
|
(US dollars in
thousands)
|
|
|
|
|
September 30,
2018
|
December 31,
2017
|
Liabilities and
Equity
|
|
|
|
|
|
Current
Liabilities
|
|
|
Short-term bank
credit and current maturities
|
|
|
of long-term
bank loans
|
$
504
|
$
4,181
|
Trade
payables
|
6,670
|
6,264
|
Other current
liabilities
|
2,133
|
2,421
|
|
|
|
Total current
liabilities
|
9,307
|
12,866
|
|
|
|
Long-Term
Liabilities
|
|
|
Long-term loans, net
of current maturities
|
8
|
814
|
Accrued severance
pay
|
874
|
939
|
Deferred tax
liability
|
452
|
500
|
Total long-term
liabilities
|
1,334
|
2,253
|
|
|
|
Total
Liabilities
|
10,641
|
15,119
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
Equity
|
|
|
Shareholders'
Equity
|
|
|
Ordinary shares of
NIS 0.1 par value:
|
|
|
Authorized:
50,000,000 shares as of September 30, 2018 and
|
|
|
December 31, 2017;
issued: 42,473,076 and 42,353,077 shares as
|
|
|
of September 30, 2018
and December 31, 2017, respectively;
|
|
|
outstanding:
41,294,377 and 41,174,378 shares
|
|
|
as of September 30,
2018, and December 31, 2017, respectively
|
1,068
|
1,064
|
Additional paid-in
capital
|
224,968
|
224,758
|
Treasury shares at
cost - 1,178,699 shares as of September 30,
|
|
|
2018 and
December 31, 2017
|
(2,000)
|
(2,000)
|
Accumulated other
comprehensive loss
|
(901)
|
(691)
|
Accumulated
deficit
|
(211,477)
|
(210,680)
|
Total
Equity
|
11,658
|
12,451
|
|
|
|
Total Liabilities
and Equity
|
$
22,299
|
$
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
September 30,
|
Nine months
ended
September 30,
|
|
2018
|
2017
|
2018
|
2017
|
|
|
|
|
|
Revenues
|
|
|
|
|
Sales
|
$
5,020
|
$
3,445
|
$
14,157
|
$
11,871
|
Licensing and
transaction fees
|
1,453
|
1,225
|
4,332
|
3,765
|
|
|
|
|
|
Total
revenues
|
6,473
|
4,670
|
18,489
|
15,636
|
|
|
|
|
|
Cost of
revenues
|
|
|
|
|
Cost of
sales
|
3,051
|
2,192
|
8,778
|
7,468
|
Total cost of
revenues
|
3,051
|
2,192
|
8,778
|
7,468
|
|
|
|
|
|
Gross
profit
|
3,422
|
2,478
|
9,711
|
8,168
|
Operating
expenses
|
|
|
|
|
Research and
development
|
777
|
823
|
2,422
|
2,414
|
Selling and
marketing
|
1,592
|
1,332
|
4,700
|
4,166
|
General and
administrative
|
1,098
|
758
|
3,070
|
2,553
|
|
|
|
|
|
Total operating
expenses
|
3,467
|
2,913
|
10,192
|
9,133
|
|
|
|
|
|
Operating loss
from continuing operations
|
(45)
|
(435)
|
(481)
|
(965)
|
Financial expenses,
net
|
(2)
|
(126)
|
(129)
|
(236)
|
|
|
|
|
|
Loss from
continuing operations
|
|
|
|
|
before taxes
on income
|
(47)
|
(561)
|
(610)
|
(1,201)
|
Income tax
|
(111)
|
(12)
|
(73)
|
(68)
|
|
|
|
|
|
Net loss from
continuing operations
|
(158)
|
(573)
|
(683)
|
(1,269)
|
Net (loss) income
from discontinued operations
|
(26)
|
1,441
|
(114)
|
1,365
|
|
|
|
|
|
Net (loss)
income
|
(184)
|
868
|
(797)
|
96
|
|
|
|
|
|
Basic and diluted
net gain (loss) attributable to shareholders per ordinary
share
|
|
|
|
|
From continuing
operations
|
(*)
|
(0.01)
|
(0.02)
|
(0.03)
|
From discontinued
operations
|
(*)
|
0.03
|
(*)
|
0.03
|
|
$
(*)
|
$
0.02
|
$
(0.02)
|
$
(*)
|
|
|
|
|
|
Weighted average
number of ordinary shares
|
|
|
|
|
used in
computing basic and diluted net (loss)
|
|
|
|
|
income per
ordinary share
|
41,294,377
|
41,122,965
|
41,260,426
|
41,099,603
|
|
|
|
|
|
(*) Less than $0.01
per ordinary share.
|
ON TRACK
INNOVATION LTD.
|
INTERIM UNAUDITED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
|
(US dollars in
thousands)
|
|
|
|
Nine months ended
September 30,
|
|
2018
|
2017
|
Cash flows from
continuing operating activities
|
|
|
Net loss from
continuing operations
|
$
(683)
|
$
(1,269)
|
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
|
180
|
238
|
Depreciation and
amortization
|
978
|
878
|
Deferred tax,
net
|
(20)
|
37
|
Gain on sale of
property and equipment
|
(25)
|
(9)
|
Accrued interest and
linkage differences, net
|
-
|
(41)
|
|
|
|
Changes in operating
assets and liabilities:
|
|
|
Accrued severance
pay, net
|
(19)
|
72
|
Decrease in trade
receivables, net
|
1,744
|
187
|
Increase in other
receivables and prepaid expenses
|
(1,162)
|
(435)
|
Increase in
inventories
|
(381)
|
(710)
|
Increase (decrease)
in trade payables
|
668
|
(611)
|
Decrease in other
current liabilities
|
(273)
|
(777)
|
Net cash provided by
(used in) continuing operating activities
|
1,007
|
(2,440)
|
|
|
|
Cash flows from
continuing investing activities
|
|
|
|
|
|
Purchase of property
and equipment
|
(467)
|
(160)
|
Proceeds from sale of
property and equipment
|
52
|
14
|
Change in short-term
investments, net
|
1,195
|
2,917
|
Investment in
capitalized certification costs
|
(92)
|
(185)
|
Proceeds from
restricted deposit for employees benefit
|
8
|
44
|
Net cash provided by
continuing investing activities
|
696
|
2,630
|
|
|
|
Cash flows from
continuing financing activities
|
|
|
Decrease in
short-term bank credit, net
|
(3,449)
|
(72)
|
Repayment of
long-term bank loans
|
(979)
|
(469)
|
Proceeds from
exercise of options and warrants
|
34
|
25
|
Net cash used in
continuing financing activities
|
(4,394)
|
(516)
|
|
|
|
Cash flows from
discontinued operations
|
|
|
Net cash used in
discontinued operating activities
|
(115)
|
(86)
|
|
|
|
Total net cash
used in discontinued operations
|
(115)
|
(86)
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(187)
|
460
|
|
|
|
(Decrease)
increase in cash, cash equivalents and restricted
cash
|
(2,993)
|
48
|
|
|
|
Cash, cash
equivalents and restricted cash - beginning of the
period
|
7,799
|
(*) 7,500
|
|
|
|
Cash, cash
equivalents and restricted cash - end of the
period
|
$
4,806
|
$
(*) 7,548
|
|
|
|
(*) 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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SOURCE On Track Innovations Ltd. (OTI)