On Track Innovations (NASDAQ:OTIV)
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From Jul 2019 to Jul 2024
Annual revenues of $43.5 million; Fourth quarter revenues climb to $13 million
FORT LEE, N.J., March 6 /PRNewswire-FirstCall/ -- On Track Innovations Ltd. (OTI) (NASDAQ:OTIV), a global leader in contactless microprocessor-based smart card solutions for homeland security, payments, petroleum payments and other applications, today announced its consolidated financial results for the fourth quarter and fiscal year ended December 31, 2007. Revenues for the year ended December 31, 2007 were $43.5 million, an increase of 7% compared to $40.6 million in the same period last year. Revenues for the fourth quarter reached $13.0 million, a decrease of 1% compared to $13.2 million in the same period last year. Gross margin for the year ended December 31, 2007 was 40% compared to 46% in the same period last year. Gross margin for the fourth quarter was 43% compared to 48% in the fourth quarter of 2006.
"2007 was a challenging year for OTI. It was characterized by OTI expanding and strengthening our infrastructure to support the company's future growth," said Oded Bashan, Chairman and CEO, OTI. "During the year we experienced delays in multiple projects, but despite the delays we were able to grow revenues by 7% for the year and limit our cash burn to $6.4 million dollars. Our gross margin was 40% for the year and we continue to have a strong and healthy balance sheet with $42 Million in cash, cash equivalents and short term investment, and $118 Million in total assets."
"Our results reflect the fact that OTI is involved in large scale projects that are characterized by long implementation cycles that may create delays, particularly, when governments or banks are involved," said Mr. Bashan. "I am pleased to state that in our belief, most of the significant delays are behind us and we are optimistic about the advancement of the company. We estimate that 2008 will be a turning point year in terms of the overall performance, showing a clear path to profitability, improved gross margins,, reduction in cash based expenses, expansion of the projects pipeline, more projects that are generating high margin recurring revenues and overall will reflect a revenue growth of about 10% compared to 2007 with most of the growth expected in the second half of the year."
Conference call and Webcast Information
The Company has scheduled a conference call and simultaneous Web cast for Thursday, March 6, 2008, which will be hosted by Oded Bashan, Chairman and CEO, Ohad Bashan, President, and Guy Shafran, CFO, for 9:00 AM EST to discuss operating results and future outlook. To participate, call: 1-888-407-2553 (U.S. toll free), 1-800-227-297 (Israel toll free), 0-800-182-6846 (Germany toll free).
To listen to the Web cast, use the following link: http://www.otiglobal.com/content.aspx?id=226
For those unable to participate, the teleconference will be available for replay until midnight March 13th, by calling U.S.: 1-888-295-2634 on the web at: http://www.otiglobal.com/content.aspx?id=226
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, OTI uses non-GAAP measures of gross profit, net income and earnings per share, which are adjustments from results based on GAAP to exclude non-cash equity-based compensation charges in accordance with SFAS 123(R) and amortization of intangible assets. OTI management believes the non-GAAP financial information provided in this release provides meaningful supplemental information regarding our performance and enhances the understanding of the Company's on-going economic performance. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Management uses both GAAP and non-GAAP information in evaluating and operating the business and as such deemed it important to provide all this information to investors.
About OTI
Established in 1990, OTI (NASDAQ GM: OTIV) designs, develops and markets secure contactless microprocessor-based smart card technology to address the needs of a wide variety of markets. Applications developed by OTI include product solutions for petroleum payment systems, homeland security solutions, electronic passports and IDs, payments, mass transit ticketing, parking, loyalty programs and secure campuses. OTI has a global network of regional offices to market and support its products. The company was awarded the Frost & Sullivan 2005 and 2006 Company of the Year Award in the field of smart cards.
For more information on OTI, visit http://www.otiglobal.com/, the content of which is not part of this press release.
OTI Contact: Investor Relations
Galit Mendelson Miri Segal
Director of Corporate Communications Strategic Growth International
201 944 5200 ext. 111 212 838 1444
(TABLES TO FOLLOW)
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. 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. For example, forward-looking statements include statements regarding our goals, beliefs, future growth strategies, objectives, plans or current expectations. Forward-looking statements could be impacted by the effects of the protracted evaluation and validation period in the U.S. contactless payment cards market , our inability to successfully integrate the purchase of assets of SuperCom or to otherwise achieve the expected benefits of the acquisition, to close to due a failure to satisfy closing conditions, market acceptance of new and existing products and our ability to execute production on orders, as well as the other risk factors discussed in OTI's Annual Report on Form 20-F for the year ended December 31, 2006, which is on file with the Securities and Exchange Commission. Although OTI believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. 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 INNOVATIONS LTD
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except share and per share data)
Year ended Three months ended
December 31 December 31
2006 2007 2006 2007
Revenues
Sales $35,171 $40,854 $10,417 $12,237
Licensing and transaction fees 5,382 2,631 2,775 779
Total revenues 40,553 43,485 13,192 13,016
Cost of Revenues
Cost of sales 21,871 25,918 6,911 7,451
Total cost of revenues 21,871 25,918 6,911 7,451
Gross profit 18,682 17,567 6,281 5,565
Operating Expenses
Research and development, net 7,065 12,265 1,811 4,062
Selling and marketing 7,072 9,670 1,952 2,812
General and administrative 11,948 17,593 2,771 4,149
Amortization of intangible
assets 821 1,314 328 264
Gain from sale of subsidiaries (122) - - -
Total operating expenses 26,784 40,842 6,798 11,351
Operating loss (8,102) (23,275) (517) (5,786)
Financial income, net 1,712 1,862 434 390
Other expenses, net (75) (136) (95) (25)
Loss before taxes on
income and minority interests (6,465) (21,549) (178) (5,421)
Income tax benefit 323 226 9 29
Minority shares in loss 625 1.038 32 -
of subsidiary
Equity in loss of affiliate (1,087) (358) (118) (86)
Net loss $(6,604) $(20,643) $(255) $(5,478)
Basic and diluted net loss
per ordinary share from:
Net loss $(0.47) $(1.09) $(0.02) $(0.29)
Weighted average number
of ordinary shares used
in computing basic and
diluted net loss per
ordinary share 13,919,958 18,896,214 15,309,225 19,220,122
ON TRACK INNOVATIONS LTD
RECONCILIATION BETWEEN GAAP TO NON-GAAP
STATEMENT OF OPERATIONS
(In thousands, except share and per share data)
Year ended December
31, 2007
GAAP Adjustments Non-GAAP
Revenues
Sales $40,854 - $40,854
Licensing and transaction fees 2,631 - 2,631
Total revenues 43,485 43,485
Cost of Revenues
Cost of sales 25,918 (46)(a) 25,872
Total cost of revenues 25,918 (46) 25,872
Gross profit 17,567 46 17,613
Operating Expenses
Research and development 12,265 (2,320)(a) 9,945
Selling and marketing 9,670 (449)(a) 9,221
General and administrative 17,593 (2,378)(a) 15,215
Amortization of intangible
assets 1,314 (1,314)(b) -
Total operating expenses 40,842 (6,461) 34,381
Operating loss (23,275) 6,507 (16,768)
Financial income, net 1,862 - 1,862
Other expenses, net (136) - (136)
Loss before taxes on income
and minority interests (21,549) 6,507 (15,042)
Taxes on income 226 - 226
Minority interests 1,038 - 1,038
Equity in loss of affiliate (358) - (358)
Net loss $(20,643) $6,507 $(14,136)
Basic and diluted net loss
per ordinary share $(1.09) $0.34 $(0.75)
Weighted average number of
ordinary shares used in
computing basic and
diluted net loss
per ordinary share 18,896,214 18,896,214
(a) The effect of stock-based compensation. The Company adopted the
provisions of Statement of Financial Accounting Standards No. 123(R),
"Share-Based Payment" on January 1, 2006 using the modified-
prospective transition method.
(b) The effect of amortization of intangible assets.
ON TRACK INNOVATIONS LTD
RECONCILIATION BETWEEN GAAP TO NON-GAAP
STATEMENT OF OPERATIONS
(In thousands, except share and per share data)
Three Months
Ended
GAAP December 31, 2007 Non-GAAP
Adjustments
Revenues
Sales $12,237 - $12,237
Licensing and transaction fees 779 - 779
Total revenues 13,016 13,016
Cost of Revenues
Cost of sales 7,451 (7)(a) 7,444
Total cost of revenues 7,451 (7) 7,444
Gross profit 5,565 7 5,572
Operating Expenses
Research and development 4,062 (687)(a) 4,062
Selling and marketing 2,812 (209)(a) 2,812
General and administrative 4,149 (482)(a) 4,149
Amortization of intangible
assets 328 (328)(b) -
Total operating expenses 11,351 (1,706) 11,023
Operating gain (loss) (5,786) 1,713 (5,786)
Financial income, net 390 - 390
Other expenses, net (25) - (25)
Gain (Loss) before taxes on
income and minority interests (5,421) 1,713 (3,708)
Tax on income 29 - 29
Minority interests - - -
Equity in loss of affiliate (86) - (86)
Net Income(loss) $(5,478) $1,713 $(3,765)
Basic and diluted net loss
per ordinary share $(0.29) $0.09 $(0.20)
Weighted average number of
ordinary shares used in
computing basic and diluted
net loss per ordinary share 19,220,122 19,220,122
(a) The effect of stock-based compensation. The Company adopted the
provisions of Statement of Financial Accounting Standards No. 123(R),
"Share-Based Payment" on January 1, 2006 using the modified-
prospective transition method.
(b) The effect of amortization of intangible assets.
ON TRACK INNOVATIONS LTD
RECONCILIATION BETWEEN GAAP TO NON-GAAP
STATEMENT OF OPERATIONS
(In thousands, except share and per share data)
Year ended December
31, 2006
GAAP Adjustments Non-GAAP
Revenues
Sales $35,171 - $35,171
Licensing and transaction fees 5,382 - 5,382
Total revenues 40,553 40,553
Cost of Revenues
Cost of sales 21,871 (15)(a) 21,856
Total cost of revenues 21,871 (15) 21,856
Gross profit 18,682 15 18,697
Operating Expenses
Research and development 7,065 (1,046)(a) 6,019
Selling and marketing 7,072 (115)(a) 6,957
General and administrative 11,948 (1,179)(a) 10,769
Amortization of intangible 821 (821)(b)
assets -
Gain from sale of subsidiaries (122) - (122)
Total operating expenses 26,784 (3,161) 23,623
Operating loss (8,102) 3,176 (4,926)
Financial income, net 1,712 - 1,712
Other expenses, net (75) - (75)
Loss before taxes on income
and minority interests (6,465) 3,176 (3,289)
Taxes on income 323 - 323
Minority interests 625 - 625
Equity in loss of affiliate (1,087) - (1,087)
Net loss $(6,604) $3,176 $(3,428)
Basic and diluted net loss
per ordinary share $(0.47) $0.22 $(0.25)
Weighted average number of
ordinary shares
used in computing basic
and diluted net loss
per ordinary share 13,919,958 13,919,958
(a) The effect of stock-based compensation. The Company adopted the
provisions of Statement of Financial Accounting Standards No. 123(R),
"Share-Based Payment" on January 1, 2006 using the modified-
prospective transition method.
(b) The effect of amortization of intangible assets.
ON TRACK INNOVATIONS LTD
RECONCILIATION BETWEEN GAAP TO NON-GAAP
STATEMENT OF OPERATIONS
(In thousands, except share and per share data)
Three Months
Ended
December 31, 2006
GAAP Adjustments Non-GAAP
Revenues
Sales $10,417 - $10,417
Licensing and transaction fees 2,775 - 2,775
Total revenues 13,192 13,192
Cost of Revenues
Cost of sales 6,911 (4)(a) 6,907
Total cost of revenues 6,911 (4) 6,907
Gross profit 6,281 4 6,285
Operating Expenses
Research and development 1,811 (248)(a) 1,563
Selling and marketing 1,952 (17)(a) 1,935
General and administrative 2,771 (262)(a) 2,509
Amortization of intangible 264 (264)(b) -
assets
Total operating expenses 6,798 791 6,007
Operating gain (loss) (517) 795 278
Financial income, net 434 - 434
Other expenses, net (95) - (95)
Gain (Loss) before taxes on
income and minority interests (178) 795 617
Tax on income 9 - 9
Minority interests 32 - 32
Equity in loss of affiliate (118) - (118)
Net Income(loss) $(255) $795 $540
Basic and diluted net
income (loss) per ordinary
share $(0.02) $0.05 $0.03
Weighted average number
of ordinary shares used
in computing basic net
loss per ordinary share 15,309,225 15,309,225
Weighted average number
of ordinary shares used
in computing diluted net
loss per ordinary share 15,309,225 15,978,747
(a) The effect of stock-based compensation. The Company adopted the
provisions of Statement of Financial Accounting Standards No. 123(R),
"Share-Based Payment" on January 1, 2006 using the modified-
prospective transition method.
(b) The effect of amortization of intangible assets.
ON TRACK INNOVATIONS LTD
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except share and per share data)
December 31,
2006 2007
Assets
Current assets
Cash and cash equivalents $30,049 $35,470
Short-term investments 18,232 6,379
Trade receivables (net of allowance
for doubtful accounts of $234 and $2,767
as of December 31, 2006 and 2007, respectively) 10,155 8,028
Other receivables and prepaid expenses 2,109 3,636
Inventories 10,344 13,242
Total current assets 70,889 66,755
Severance pay deposits fund 1,087 1,576
Long-term receivables 1,043 -
Investment in an affiliated company 1,627 1,382
Property, plant and equipment, net 13,318 20,851
Intangible assets, net 5,823 4,509
Goodwill 23,387 23,387
Total assets $117,174 $118,460
ON TRACK INNOVATIONS LTD
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except share and per share data)
December 31,
2006 2007
Liabilities and Shareholders' Equity
Current Liabilities
Short-term bank credit and current maturities
of long-term bank loans $498 $5,336
Trade payables 6,869 10,291
Other current liabilities 3,331 5,344
Total current liabilities 10,698 20,971
Long-Term Liabilities
Long-term loans, net of current maturities 2,117 2,432
Accrued severance pay 3,209 3,981
Deferred tax liabilities 992 728
Total long-term liabilities 6,318 7,141
Total liabilities 17,016 28,112
Commitments and Contingencies
Minority interests 1,004 -
Shareholders' Equity
Ordinary shares of NIS 0.1 par value: Authorized -
50,000,000 shares as of December 31, 2006 and
December 31, 2007; issued 18,592,880
and 19,627,068 shares as of December 31, 2006
and December 31, 2007, respectively; outstanding
18,243,539 and 19,434,011 shares
as of December 31, 2006 and December 31, 2007,
respectively 431 454
Additional paid-in capital 163,102 174,494
Accumulated other comprehensive income 424 846
Accumulated deficit (64,803) (85,446)
Total shareholder's equity 99,154 90,348
Total liabilities and shareholders' equity $117,174 $118,460
ON TRACK INNOVATIONS LTD
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands, except share and per share data)
Year ended December 31,
2006 2007
Cash flows from operating activities
Net loss $(6,604) $(20,643)
Adjustments required to reconcile net loss to
net cash used in operating activities:
Stock-based compensation related to options and
shares issued
to employees and others 3,783 6,947
Gain from sale of subsidiaries (122) -
Loss on sale of property and equipment 44 13
Amortization of intangible assets 821 1,314
Depreciation 1,862 2,580
Equity in net losses of an affiliated company 1,087 358
Accrued severance pay, net 796 283
Minority share in loss of subsidiaries (625) (1,038)
Accrued interest and linkage differences on
long-term loans (254) (294)
Increase (decrease) in deferred tax liabilities (216) (262)
Decrease ( increase) in trade receivables (1,873) 104
Increase (decrease) in allowance for doubtful
account (551) 2,533
Decrease (increase) in other receivables and
prepaid expenses 1,142 (686)
Increase in inventories (3,204) (2,776)
Increase in trade payables 2,558 3,314
Increase (decrease) in other current liabilities (2,147) 1,966
Net cash used in operating activities (3,503) (6,287)
Cash flows from investing activities
Receipts on account of loans and receivables 350 837
Acquisition of business operations, net of cash
acquired (23) -
Sale of a consolidated subsidiary, net of cash
disposed of (105) -
Purchase of property and equipment (3,107) (6,190)
Purchase of available-for-sale securities (23,643) (136,094)
Proceeds from maturity of available-for-sale
securities 25,446 148,049
Other, net (9) -
Net cash provide by (used in) investing
activities (1,091) 6,602
Cash flows from financing activities
Increase (decrease) in short-term bank credit, net (231) 4,804
Proceeds from long-term bank loans 978 739
Repayment of long-term bank loans (570) (495)
Proceeds from minority in subsidiary 1,548 -
Proceeds from exercise of options and warrants, net 3,196 11
Net cash provided by financing activities 4,921 5,059
Effect of exchange rate changes on cash 65 47
Increase in cash and cash equivalents 392 5,421
Cash and cash equivalents at the beginning of
the year 29,657 30,049
Cash and cash equivalents at the end of the year $30,049 $35,470
DATASOURCE: On Track Innovations Ltd.
CONTACT: Galit Mendelson, Director of Corporate Communications of On
Track Innovations Ltd., +1-201-944-5200, ext. 111, ;
Investor Relations, Miri Segal, Strategic Growth International, +1-212-838-
1444,
Web site: http://www.otiglobal.com/
http://www.otiglobal.com/content.aspx?id=226