YOKNEAM, Israel, March 18, 2020 /PRNewswire/ -- On Track
Innovations Ltd. ("OTI") (OTCQX: OTIVF) (the "Company"
or "OTI"), a global provider of near field communication
(NFC) and cashless payment solutions, today provided a
business update and announced financial results for the fourth
quarter and full year ended December 31,
2019.
Management Commentary
Mr. Yehuda Holtzman, OTI's
CEO, commented, "Since joining OTI, I have come to realize that
we have a very strong team of employees, excellent technology and
much unrealized potential. In the past few months, together with
the management team, we have been working on updating our strategy
for the coming years, which we believe will enable us to realize
that potential and resume our growth, and ultimately create
shareholder value. We look forward to sharing more details in the
coming quarters."
Following OTI's sale of its MediSmart division in the fourth
quarter of 2018, the financial results of MediSmart are included as
discontinued operations and all the prior periods' information has
been reclassified to conform with the current period's
presentation.
Fourth Quarter 2019 Financial Results Summary
- Revenue in the quarter was $3.8
million, compared to $4.5
million in the fourth quarter of 2018.
- Recurring revenues were $1.1
million (28% of total revenues), compared to $1.2 million (26% of total revenues) in the
fourth quarter of 2018.
- Gross profit in the quarter was $1.6
million, or 42% of revenues, compared to $2.2 million, or 48% of revenues, in the fourth
quarter of 2018.
- Operating expenses totaled $3.1
million in the quarter, compared to operating expenses of
$3.0 million in the same year-ago
quarter.
- Net loss from continuing operations was $1.6 million, compared to a loss of $0.9 million in the same year-ago quarter.
- Net loss was $2.0 million, or
loss of $0.05 per share, compared to
a net income of $0.5 million, or
$0.01 per share, in the same year-ago
quarter.
- Adjusted EBITDA loss from continuing operations was
$1.1 million in the quarter, compared
to adjusted EBITDA loss of $0.5
million in the same year-ago quarter.
Full Year 2019 Financial Results Summary
- Total revenue in 2019 was $14.8
million, compared to $21.9
million in 2018.
- Gross profit in 2019 was $7.3
million, or 49% of revenues, compared to $11.2 million, or 51% of revenues in 2018.
- Operating expenses totaled $12.1
million in 2019, compared to operating expenses of
$13.1 million in 2018. Operating
expenses in 2019 included a gain of $0.3
million related to the sale of a building by OTI's South
African subsidiary.
- Net loss from continuing operations in 2019 was $5.2 million, compared to a loss of $1.9 million in 2018.
- Net loss in 2019 was $5.9
million, or loss of $0.14 per
share, compared to a net loss of $0.3
million, or loss of $0.01 per
share, in 2018.
- Adjusted EBITDA loss from continuing operations in 2019 was
$3.8 million, compared to an adjusted
EBITDA loss of $0.4 million in
2018.
- As of December 31, 2019, the
company had cash and cash equivalents and short-term investments of
$4.8 million.
Conference Call
Management will host a pre-recorded conference call for
investors on Monday, March 23, 2020 at 9:00 am Eastern Time, to discuss the financial
results, provide a corporate update, and conclude with a Q&A
session.
Investors and analysts are encouraged to submit questions they
would like management to address on the call. Please submit
questions to oti@gkir.com by Thursday, March
19, 2020 at 5:00 p.m. Eastern
time. OTI has been holding conference calls in this
format during the current transition period and intends to return
to the more traditional live format in the coming quarters.
To listen, please use the following dial-in information:
U.S. Dial-in: 1-888-317-6002
International Dial-in: +1-412-317-5245
Webcast:
https://www.webcaster4.com/Webcast/Page/1720/33248
Please dial in a few minutes before the start of the call and
request to join the "On Track Innovations 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.
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. 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," "look forward," "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 Company's long-term strategy, the realization of the
Company's potential, the resumption of the Company's growth, and
the creation of 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. 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.
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
(income) expenses, net which includes a gain of $0.3 million related to the sale of a building by
OTI's South African subsidiary. 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 table below.
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):
ON TRACK INNOVATIONS
LTD.
RECONCILIATION OF NON-GAAP ADJUSTMENTS
(US dollars in thousands)
|
|
|
|
|
|
|
Year ended
December 31
|
Three months ended
December 31
|
|
2019
|
2018
|
2019
|
2018
|
|
|
|
|
|
Net (loss)
income
|
$
(5,889)
|
$
(263)
|
$
(2,035)
|
$
533
|
|
|
|
|
|
Net loss
(income) from discontinued operations
|
714
|
(1,625)
|
435
|
(1,395)
|
Financial
expenses, net
|
397
|
228
|
198
|
98
|
Depreciation
|
1,270
|
1,328
|
319
|
307
|
Income tax
benefit, net
|
(57)
|
(301)
|
(82)
|
(34)
|
|
|
|
|
|
Total EBITDA FROM
CONTINUING OPERATIONS
|
$
(3,565)
|
$
(633)
|
$
(1,165)
|
$
(491)
|
|
|
|
|
|
Other (income)
expenses, net
|
(341)
|
33
|
(6)
|
(37)
|
Stock based
compensation
|
125
|
234
|
29
|
54
|
Total adjusted
EBITDA FROM CONTINUING OPERATIONS
|
$
(3,781)
|
$
(366)
|
$
(1,142)
|
$
(474)
|
ON TRACK INNOVATION
LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
(US dollars in thousands)
|
|
|
|
|
|
|
December
31
|
|
|
2019
|
2018
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
|
$
2,543
|
$
4,827
|
Short-term
investments
|
|
2,305
|
1,078
|
Trade receivables
(net of allowance for doubtful
|
|
|
|
accounts of
$612 and $555 as of December 31, 2019
|
|
|
|
and December
31, 2018, respectively)
|
|
2,430
|
4,530
|
Other receivables and
prepaid expenses
|
|
1,822
|
2,060
|
Inventories
|
|
3,332
|
3,527
|
|
|
|
|
Total current
assets
|
|
12,432
|
16,022
|
|
|
|
|
Long term
restricted deposit for employee benefits
|
|
477
|
451
|
|
|
|
|
Severance pay
deposits
|
|
383
|
375
|
|
|
|
|
Property, plant
and equipment, net
|
|
3,694
|
5,033
|
|
|
|
|
Intangible assets,
net
|
|
733
|
241
|
|
|
|
|
Right-of-use
assets due to operating leases
|
|
2,134
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
19,853
|
$
22,122
|
|
|
|
|
ON TRACK INNOVATION
LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
(US dollars in thousands except share data)
|
|
|
December
31
|
|
2019
|
2018
|
Liabilities
and Equity
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
Short-term bank
credit and current maturities
|
|
|
|
of long-term
bank loans
|
$
2,478
|
$
260
|
|
Trade
payables
|
4,126
|
4,712
|
|
Other current
liabilities
|
3,054
|
3,622
|
|
Total current
liabilities
|
9,658
|
8,594
|
|
|
|
|
|
Long-Term
Liabilities
|
|
|
|
Long-term loans, net
of current maturities
|
22
|
39
|
|
Long-term liabilities
due to operating leases, net of current maturities
|
1,483
|
-
|
|
Accrued severance
pay
|
884
|
853
|
|
Deferred tax
liability
|
416
|
445
|
|
Total long-term
liabilities
|
2,805
|
1,337
|
|
|
|
|
|
Total
Liabilities
|
12,463
|
9,931
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
Shareholders'
Equity
|
|
|
|
Ordinary shares of
NIS 0.1 par value: Authorized –
|
|
|
|
50,000,000
shares as of December 31, 2019 and
|
|
|
|
2018; issued:
47,963,076 and 42,473,076
|
|
|
|
shares as of
December 31, 2019 and 2018,
|
|
|
|
respectively;
outstanding: 46,784,377 and 41,294,377 shares
|
|
|
|
as of December
31, 2019 and 2018, respectively
|
1,226
|
1,068
|
|
Additional paid-in
capital
|
225,970
|
225,022
|
|
Treasury shares at
cost - 1,178,699 shares as of December 31,
|
|
|
|
2019 and
2018
|
(2,000)
|
(2,000)
|
|
Accumulated other
comprehensive loss
|
(974)
|
(956)
|
|
Accumulated
deficit
|
(216,832)
|
(210,943)
|
|
|
|
|
|
Total
Equity
|
7,390
|
12,191
|
|
|
|
|
|
Total Liabilities
and Equity
|
$
19,853
|
$
22,122
|
|
|
|
|
|
|
|
|
ON TRACK INNOVATIONS
LTD.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(US dollars in thousands except share data)
|
|
|
|
|
Year ended
December 31
|
Three months ended
December 31
|
|
2019
|
2018
|
2019
|
2018
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
Sales
|
$
9,983
|
$
16,725
|
$
2,697
|
$
3,372
|
|
Licensing and
transaction fees
|
4,768
|
5,153
|
1,060
|
1,156
|
|
Total
revenues
|
14,751
|
21,878
|
3,757
|
4,528
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
|
|
|
|
Total cost of
revenues
|
7,455
|
10,710
|
2,182
|
2,360
|
|
|
|
|
|
|
|
Gross
profit
|
7,296
|
11,168
|
1,575
|
2,168
|
|
Operating
expenses
|
|
|
|
|
|
Research and
development
|
3,334
|
3,175
|
806
|
782
|
|
Selling and
marketing
|
5,026
|
5,940
|
1,228
|
1,240
|
|
General and
administrative
|
4,112
|
3,981
|
1,031
|
981
|
|
Other
(income)expenses, net
|
(341)
|
33
|
(6)
|
(37)
|
|
|
|
|
|
|
|
Total operating
expenses
|
12,131
|
13,129
|
3,059
|
2,966
|
|
|
|
|
|
|
|
Operating loss
from continuing operations
|
(4,835)
|
(1,961)
|
(1,484)
|
(798)
|
|
|
|
|
|
|
|
Financial expense,
net
|
(397)
|
(228)
|
(198)
|
(98)
|
|
Loss from
continuing operations before taxes on income
|
(5,232)
|
(2,189)
|
(1,682)
|
(896)
|
|
|
|
|
|
|
|
Income tax benefit,
net
|
57
|
301
|
82
|
34
|
|
|
|
|
|
|
|
Net loss from
continuing operations
|
(5,175)
|
(1,888)
|
(1,600)
|
(862)
|
|
Total (loss)
income from discontinued operations
|
(714)
|
1,625
|
(435)
|
1,395
|
|
Net (loss)
income
|
$
(5,889)
|
$
(263)
|
$
(2,035)
|
$
533
|
|
|
|
|
|
|
|
Basic and diluted
net (loss) income attributable to
|
|
|
|
|
|
shareholders
per ordinary share
|
|
|
|
|
|
From continuing
operations
|
$
(0.12)
|
$
(0.05)
|
$
(0.04)
|
$
(0.02)
|
|
From discontinued
operations
|
$
(0.02)
|
$
0.04
|
$
(0.01)
|
$
0.03
|
|
|
$
(0.14)
|
$
(0.01)
|
$
(0.05)
|
$
0.01
|
|
Weighted average
number of ordinary shares used in computing basic and diluted net
(loss) income per ordinary share
|
41,385,856
|
41,268,984
|
41,621,116
|
41,260,426
|
|
|
|
|
|
|
|
ON TRACK INNOVATION
LTD.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
(US dollars in thousands)
|
|
|
|
Year ended
December 31
|
|
|
2019
|
2018
|
2017
|
Cash flows from
continuing operating activities
|
|
|
|
Net loss from
continuing operations
|
$
(5,175)
|
$
(1,888)
|
$
(2,385)
|
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
|
125
|
234
|
254
|
(Gain) loss on sale
of property and equipment
|
(328)
|
(37)
|
52
|
Accrued interest and
linkage differences, net
|
(36)
|
19
|
(6)
|
Depreciation and
amortization
|
1,270
|
1,328
|
1,172
|
Deferred tax
benefits, net
|
(25)
|
(477)
|
(165)
|
|
|
|
|
Changes in
operating assets and liabilities:
|
|
|
|
Change in accrued
severance pay, net
|
23
|
(57)
|
45
|
Decrease (increase)
in trade receivables, net
|
1,646
|
1,118
|
(124)
|
Decrease (increase)
in other receivables and prepaid expenses
|
228
|
350
|
(838)
|
Decrease (increase)
in inventories
|
184
|
(573)
|
110
|
Decrease in trade
payables
|
(507)
|
(2,089)
|
(644)
|
Decrease in other
current liabilities
|
(270)
|
(110)
|
(597)
|
Net cash used in
continuing operating activities
|
(2,865)
|
(2,182)
|
(3,126)
|
|
|
|
|
Cash flows from
continuing investing activities
|
|
|
|
|
|
|
|
Purchase of property
and equipment and intangible assets
|
(1,155)
|
(636)
|
(293)
|
Proceeds from sale of
property, plant and equipment
|
1,102
|
68
|
17
|
Change in short-term
investments, net
|
(1,369)
|
1,495
|
1,773
|
Proceeds from
restricted deposit for employee benefits
|
10
|
8
|
44
|
Net cash (used in)
provided by continuing investing activities
|
(1,412)
|
815
|
1,302
|
|
|
|
|
Cash flows from
continuing financing activities
|
|
|
|
Increase (decrease)
in short-term bank credit, net
|
2,450
|
(3,554)
|
(335)
|
Repayment of
long-term bank loans
|
(270)
|
(1,064)
|
(632)
|
Proceeds from
issuance of shares, net of issuance expenses
|
981
|
-
|
-
|
Proceeds from
exercise of options and warrants
|
-
|
34
|
92
|
|
|
|
|
Net cash provided by
(used in) continuing financing activities
|
3,161
|
(4,584)
|
(875)
|
|
|
|
|
Cash flows from
discontinued operations
|
|
|
|
Net cash (used in)
provided by discontinued operating activities
|
(1,344)
|
750
|
2,311
|
Net cash provided by
discontinued investing activities
|
-
|
2,750
|
-
|
|
|
|
|
Total net cash
(used in) provided by discontinued operations
|
(1,344)
|
3,500
|
2,311
|
Effect of exchange
rate changes on cash and cash equivalents
|
3
|
(243)
|
687
|
|
|
|
|
(Decrease)
increase in cash, cash equivalents and restricted
cash
|
(2,457)
|
(2,694)
|
299
|
Cash, cash
equivalents and restricted cash - beginning of the
year
|
5,105
|
7,799
|
7,500
|
|
|
|
|
Cash, cash
equivalents and restricted cash at the end of the
year
|
$
2,648
|
$
5,105
|
$
7,799
|
|
|
|
|
|
|
|
Investor Relations Contact:
Ehud Helft
GK Investor & Public Relations
+1-646-201-9246
oti@gkir.com
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SOURCE On Track Innovations Ltd. (OTI)