Attached files
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| 8-K - 8-K - ON TRACK INNOVATIONS LTD | zk1516755.htm |
Exhibit 99.1
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Press Release
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oti Reports First Quarter 2015 Financial Results
Rosh Pina, Israel – May 12, 2015 – On Track Innovations Ltd. (oti) (NASDAQ: OTIV), a global provider of near field communication (NFC) and cashless payment solutions, reported financial results for the first quarter ended March 31, 2015.
Q1 2015 Operational Highlights
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·
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Received favorable ruling from the U.S. District Court, Southern District of New York, that certain mobile phones sold by T-Mobile USA, Inc. enabled with NFC technology infringe oti's U.S. Patent No. 6,045,043.
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·
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Deployed the oti WAVE NFC payment system to Taiwan Mobile Payment Co., a consortium of regional banks in Taiwan.
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·
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Introduced TRIO Countertop, a new version of its popular TRIO reader designed to address the fast growing market for EMV-compliant cashless payment readers.
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·
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Awarded a global tender for EasyFuel Plus from an emerging multinational oil company, which will provide NFC-based petroleum payment and management capabilities to the oil company’s retail operations that currently spans three major global regions.
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·
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Secured a five-year contract extension from the Local Government Economic Services of the Local Authority Ltd. for oti's EasyPark parking management system.
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Q1 2015 Financial Details
Total revenues decreased 4% to $5.0 million from $5.2 million in the same year-ago period.
Gross profit was $2.5 million (50% of revenue) compared to $2.6 million (50% of revenue) in the same year-ago period, with the decrease primarily due to lower revenues.
Operating expenses decreased 19% to $4.3 million from $5.4 million in the same year-ago period, primarily attributable to lower general and administrative expenses as well as patent-related expenses.
Net loss from continuing operations totaled $2.1 million or $(0.05) per share, an improvement from a net loss from continuing operations of $3.0 million or $(0.09) per share in the same year-ago period.
Adjusted EBITDA loss from continuing operations totaled $1.1 million, an improvement compared to an adjusted EBITDA loss from continuing operations of $1.7 million in the same year-ago period (see discussion about the presentation of adjusted EBITDA from continuing operations, a non-GAAP financial measure, below).
At quarter-end, cash and cash equivalents, and short-term investments totaled $15.8 million.
Management Commentary
“The first quarter was in line with our expectations, with meaningful progress across all of our key corporate initiatives, including generating greater operating efficiencies through productivity gains,” commented oti CEO, Ofer Tziperman. “The significant reduction in net cash consumed from operations as well as the decrease in our total operating expenses by 14% sequentially and 19% year-over-year demonstrates our success with these efforts.
“Externally, we have continued to expand our key global partnerships and distribution channels, and this has attracted strong interest from leading industry players, including major vending machine manufacturers and operators, as well as additional global channel partners.
“Our R&D team is working diligently to meet the strict timelines for project development and integration with various customers and strategic partners, and we expect to convert these engagements into meaningful sales over the coming quarters.
“We are also working to certify new solutions with the major card associations. oti has a long history of innovation and industry firsts, and we expect these new solutions to further our technology leadership in the NFC reader market.
“We have also been moving forward with protecting our unique IP that represents this leadership position in the NFC market, and this was highlighted during the quarter with the favorable ruling from the U.S. District Court against T-Mobile USA.”
Conference Call
oti management will hold a conference call on Thursday, May 14, 2015 at 10:30 a.m. Eastern time to discuss these results.
Investors and analysts are encouraged to submit questions they would like the company to address on the call. Please submit your questions to ir@otiglobal.com by 5:00 p.m. Eastern time today, May 12, 2015.
Date: Thursday, May 14, 2015
Time: 10:30 a.m. Eastern time (7:30 a.m. Pacific time)
Listen-only U.S. dial-in: 877-407-0784
Listen-only international dial-in: 201-689-8560
Webcast: Click here
To listen to the call, dial the conference telephone number 10 minutes prior to start time. An operator will register your name and organization. If you have any difficulty connecting, please contact Liolios Group at 1-949-574-3860.
A replay of the call will be available after 1:00 p.m. Eastern time on the same day through June 14, 2015.
U.S. replay dial-in: 877-870-5176
International replay dial-in: 858-384-5517
Replay ID: 13608464
Webcast: Click here
Use of Non-GAAP Financial Information
This press release contains certain non-GAAP measures, namely, adjusted EBITDA from continuing operation, or adjusted earnings from continuing operation 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 share-based compensation expense, patent litigation and maintenance expenses and other non-recurring expenses. OTI believes that adjusted EBITDA from continuing operations should be considered in evaluating the company's operations since it provides a clearer indication of OTI’s operating results. This measure should be considered in addition to results prepared in accordance with US GAAP, but should not be considered a substitute for the US GAAP results. The non-GAAP measures included in this press release have been reconciled to the US GAAP results in the tables below.
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)
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Three months ended March 31
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2015
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2014
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(Unaudited)
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(Unaudited)
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Net loss
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$ | (1,760 | ) | $ | (3,358 | ) | ||
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Net (profit) loss from discontinued operations
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(362 | ) | 344 | |||||
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Financial expenses, net
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225 | 104 | ||||||
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Depreciation
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298 | 331 | ||||||
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Taxes on income
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19 | 118 | ||||||
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TOTAL EBITDA FROM CONTINUING OPERATIONS
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$ | (1,580 | ) | $ | (2,461 | ) | ||
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Patent litigation and maintenance
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176 | 639 | ||||||
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Other expenses
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77 | - | ||||||
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Stock based compensation
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180 | 156 | ||||||
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TOTAL ADJUSTED EBITDA FROM CONTINUING OPERATIONS
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$ | (1,147 | ) | $ | (1,666 | ) | ||
About OTI
On Track Innovations Ltd. (oti) is a leader in contactless and NFC applications based on its extensive patent and IP portfolio. oti's field-proven innovations have been deployed around the world to address NFC and other cashless payment solutions, petroleum payment and management, cashless parking fee collection systems and mass transit ticketing. oti markets and supports its solutions through a global network of regional offices and alliances. For more information, visit www.otiglobal.com.
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 words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or similar expressions are used, the company is 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. Such forward-looking statements used in this press release include, but are not necessarily limited to statements regarding our success in making further progress in our corporate initiatives, or generating greater operating efficiencies, or further success in decreasing our cash consumption from operations, or decreasing our operating expenses in the future, if any, or our expectations that we will successfully gain future sources of revenues from existing or potential future partnerships and distribution channels, including with major vending machine manufacturers and operators or global channel partners, or our expectations that our R&D team will actually succeed meeting the timelines for project development and integration with our customers and strategic partners and convert such engagements into meaningful revenues in the near or mid future, or our expectations in successfully certifying new solutions with major card associations to further our technology leadership in the NFC reader market, or regarding the development and potential benefits from protecting our unique intellectual property, or IP, in the U.S. or elsewhere. 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, as well as oti’s 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, 2014, and in subsequent filings with the Securities and Exchange Commission. Although the company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can provide no assurance that 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.
Investor Contact:
Scott Liolios or Matt Glover
Liolios Group, Inc.
949-574-3860
OTIV@liolios.com
Press Contact:
Inbar Ben-Hur
oti Marketing Communication Manager
inbar@otiglobal.com
ON TRACK INNOVATIONS LTD.
INTERIM UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except share and per share data)
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March 31
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December 31
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2015
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2014
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Assets
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Current assets
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Cash and cash equivalents
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$ | 5,569 | $ | 5,351 | ||||
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Short-term investments
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10,245 | 11,048 | ||||||
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Trade receivables (net of allowance for doubtful
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accounts of $667 and $671 as of March 31, 2015
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and December 31, 2014, respectively)
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3,385 | 4,299 | ||||||
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Other receivables and prepaid expenses
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2,890 | 2,530 | ||||||
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Inventories
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3,153 | 3,703 | ||||||
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Total current assets
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25,242 | 26,931 | ||||||
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Long term restricted deposit for employees benefit
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544 | 555 | ||||||
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Severance pay deposits
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524 | 614 | ||||||
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Property, plant and equipment, net
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8,556 | 9,234 | ||||||
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Intangible assets, net
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6 | - | ||||||
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Deferred tax asset
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44 | 47 | ||||||
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Total Assets
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$ | 34,916 | $ | 37,381 | ||||
ON TRACK INNOVATIONS LTD.
INTERIM UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except share and per share data)
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March 31
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December 31
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2015
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2014
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| Liabilities and Equity | ||||||||
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Current Liabilities
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Short-term bank credit and current maturities
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of long-term bank loans
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$ | 4,115 | $ | 3,617 | ||||
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Trade payables
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6,667 | 7,306 | ||||||
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Other current liabilities
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2,572 | 2,656 | ||||||
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Total current liabilities
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13,354 | 13,579 | ||||||
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Long-Term Liabilities
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Long-term loans, net of current maturities
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1,870 | 2,161 | ||||||
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Accrued severance pay
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1,316 | 1,456 | ||||||
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Deferred tax liability
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297 | 302 | ||||||
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Total long-term liabilities
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3,483 | 3,919 | ||||||
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Total Liabilities
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16,837 | 17,498 | ||||||
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Equity
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Shareholders' Equity
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Ordinary shares of NIS 0.1 par value: Authorized –
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50,000,000 shares as of March 31, 2015 and
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December 31, 2014; issued: 41,996,602 shares as
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of March 31, 2015 and December 31, 2014;
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outstanding: 40,817,903 shares
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as of March 31, 2015 and December 31, 2014
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1,055 | 1,055 | ||||||
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Additional paid-in capital
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224,414 | 224,234 | ||||||
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Treasury shares at cost - 1,178,699 shares as of March 31,
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2015 and December 31, 2014
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(2,000 | ) | (2,000 | ) | ||||
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Accumulated other comprehensive loss
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(1,024 | ) | (800 | ) | ||||
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Accumulated deficit
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(203,872 | ) | (202,103 | ) | ||||
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Total Shareholder’s equity
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18,573 | 20,386 | ||||||
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Non-controlling interest
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(494 | ) | (503 | ) | ||||
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Total Equity
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18,079 | 19,883 | ||||||
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Total Liabilities and Equity
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$ | 34,916 | $ | 37,381 | ||||
ON TRACK INNOVATIONS LTD.
INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except share and per share data)
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Three months ended March 31
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2015
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2014
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Revenues
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Sales
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$ | 3,597 | $ | 3,838 | ||||
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Licensing and transaction fees
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1,378 | 1,360 | ||||||
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Total revenues
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4,975 | 5,198 | ||||||
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Cost of revenues
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Cost of sales
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2,505 | 2,600 | ||||||
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Total cost of revenues
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2,505 | 2,600 | ||||||
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Gross profit
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2,470 | 2,598 | ||||||
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Operating expenses
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Research and development
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968 | 1,160 | ||||||
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Selling and marketing
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1,886 | 2,120 | ||||||
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General and administrative
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1,241 | 1,471 | ||||||
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Patent litigation and maintenance
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176 | 639 | ||||||
| Other expenses | 77 | - | ||||||
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Total operating expenses
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4,348 | 5,390 | ||||||
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Operating loss from continuing operations
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(1,878 | ) | (2,792 | ) | ||||
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Financial expense, net
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(225 | ) | (104 | ) | ||||
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Loss from continuing operations before taxes on income
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(2,103 | ) | (2,896 | ) | ||||
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Income tax
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(19 | ) | (118 | ) | ||||
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Net loss from continuing operations
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(2,122 | ) | (3,014 | ) | ||||
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Net profit (loss) from discontinued operations
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362 | (344 | ) | |||||
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Net loss
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(1,760 | ) | (3,358 | ) | ||||
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Net income attributable to noncontrolling interest
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(9 | ) | (6 | ) | ||||
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Net loss attributable to shareholders
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$ | (1,769 | ) | $ | (3,364 | ) | ||
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Basic and diluted net profit (loss) attributable to
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shareholders per ordinary share
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From continuing operations
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$ | (0.05 | ) | $ | (0.09 | ) | ||
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From discontinued operations
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$ | 0.01 | $ | (0.01 | ) | |||
| $ | (0.04 | ) | $ | (0.10 | ) | |||
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Weighted average number of ordinary shares used in computing
basic and diluted net loss per ordinary share
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40,856,403 | 33,196,098 | ||||||
ON TRACK INNOVATION LTD.
INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
(In thousands, except share and per share data)
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Three months ended March 31
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2015
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2014
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Cash flows from continuing operating activities
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Net loss from continuing operations
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$ | (2,122 | ) | $ | (3,014 | ) | ||
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Adjustments required to reconcile net loss to
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net cash used in continuing operating activities:
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Stock-based compensation related to options and shares issued
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to employees
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180 | 156 | ||||||
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Gain on sale of property and equipment
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- | (5 | ) | |||||
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Depreciation
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298 | 331 | ||||||
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Changes in operating assets and liabilities:
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Accrued severance pay, net
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(20 | ) | 25 | |||||
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Accrued interest and linkage differences
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(2 | ) | 7 | |||||
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Deferred tax, net
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19 | 43 | ||||||
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Decrease in trade receivables
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1,383 | 192 | ||||||
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Decrease (increase) in other receivables and prepaid expenses
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31 | (163 | ) | |||||
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Decrease (increase) in inventories
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501 | (313 | ) | |||||
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Decrease in trade payables
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(288 | ) | (316 | ) | ||||
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(Decrease) increase in other current liabilities
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(148 | ) | 46 | |||||
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Net cash used in continuing operating activities
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(168 | ) | (3,011 | ) | ||||
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Cash flows from continuing investing activities
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Purchase of property and equipment
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(111 | ) | (98 | ) | ||||
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Purchase of short term investments
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(1,200 | ) | (2,000 | ) | ||||
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Purchase of intangible assets
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(6 | ) | - | |||||
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Proceeds from maturity or sale of short term investments
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2,016 | 518 | ||||||
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Proceeds from sale of property and equipment
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- | 5 | ||||||
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Net cash provided by (used in) continuing investing activities
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699 | (1,575 | ) | |||||
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Cash flows from continuing financing activities
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Increase (decrease) in short-term bank credit, net
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108 | (142 | ) | |||||
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Proceeds from long-term bank loans
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- | 12 | ||||||
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Repayment of long-term bank loans
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(229 | ) | (208 | ) | ||||
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Proceeds from exercise of options
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- | 225 | ||||||
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Net cash used in continuing financing activities
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(121 | ) | (113 | ) | ||||
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Cash flows from discontinued operations
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Net cash used in discontinued operating activities
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(25 | ) | (874 | ) | ||||
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Net cash provided by discontinued investing activities
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- | 695 | ||||||
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Net cash used in discontinued financing activities
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- | (154 | ) | |||||
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Total net cash used in discontinued operations
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(25 | ) | (333 | ) | ||||
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Effect of exchange rate changes on cash and cash equivalents
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(167 | ) | 130 | |||||
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Increase (decrease) in cash and cash equivalents
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218 | (4,902 | ) | |||||
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Cash and cash equivalents at the beginning of the period
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5,351 | 14,962 | ||||||
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Cash and cash equivalents at the end of the period
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$ | 5,569 | $ | 10,060 | ||||