OTI Reports First Quarter 2011 Financial Results
24 May 2011 - 9:30PM
- Revenues of $12 Million
- Gross Margin of 53%
- Strong Balance Sheet with $37.2
Million in Cash, Cash Equivalents and Short Term Investments
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 results of operations, revenues and gross margins
slightly better than originally expected by the company for the
first quarter ended March 31, 2011. The following are various
financial figures that compare first quarter of 2011 to 2010.
- Total revenues of $12 million, a 17% decrease compared to $14.4
million last year.
- Revenues from Licensing and Transaction Fees of $1.2 million, a
32% increase compared to $874,000 last year.
- Gross margin was 53% for the first quarter of 2011.
- Non-GAAP operating expenses of $6.8 million, a 4% decrease
compared to $7.1 million last year. GAAP operating expenses of $7.4
million, a 9% decrease compared to $8.2 million last year.
- Non-GAAP operating loss of $445,000, compared to non-GAAP
operating profit of $1.2 million last year. GAAP operating loss was
$1.1 million, compared to GAAP operating profit of $75,000 last
year.
- Strong balance sheet with cash, cash equivalents and short-term
investments of $37.2 million as of March 31, 2011.
Oded Bashan, Chairman and CEO of OTI, said: "We have opened 2011
with slightly higher revenues than expected by the company. The
company is financially stronger, which will help us cope better
with the growing pipeline of opportunities. We are introducing new
products to existing growing markets such as the COPNI; we are
establishing strategic channel partnerships to bring the various
products to market. We maintain the previously provided guidance of
annual operating profitability for 2011 on a non-GAAP basis with
revenues expected to be back-loaded and grow from 2010 revenues to
$55-$60 million."
Discontinued Operations
During the fourth calendar quarter of 2009, the Company signed
an agreement for the sale of the assets of OTI's subsidiary
Millennium Card's Technology Ltd ("MCT") including the machinery
and inlay production IP of OTI to SMARTRAC NV. Results for the
discontinued operations have been separated and are presented
separately.
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 operating expenses, operating income, net
income and earnings per share, which are adjustments from results
based on GAAP to exclude non-cash equity-based compensation charges
related to employees and non employees in accordance with the
requirements of Accounting Standards Codification ("ASC") Topic 718
(originally issued as SFAS No. 123(R)) and ASC Subtopic 505-50 -
Equity-Based Payments to Non-Employees (formerly EITF 96-18);
amortization of intangible assets; and results from discontinued
operations. 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. Reconciliations between GAAP measures and non-GAAP
measures are provided later in this press release.
Conference call and Webcast Information
The Company has scheduled a conference call and simultaneous Web
cast for May 24, 2011, at 9:00 AM ET 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). To listen to the
Web cast, use the following link:
http://www.otiglobal.com/Investors_Introduction
For those unable to participate, the teleconference will be
available for replay until midnight May 31st, by calling U.S.
1-888-295-2634 on the web at:
http://www.otiglobal.com/Investors_Introduction
About OTI
Established in 1990, OTI (Nasdaq: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 and
loyalty programs. 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 www.otiglobal.com, the
content of which is not part of this press release.
The On Track Innovations Ltd. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=5736
(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. Forward-looking statements include statements
regarding our goals, beliefs, future growth strategies, objectives,
products, plans, future results of operations or current
expectations. For example, we are using forward-looking statements
when we say that we maintain the previously provided guidance of
annual operating profitability on a non-GAAP basis with revenues
expected to be back-loaded and grow to $55-$60 million for the year
or when we discuss our unique position and our ability to cope
better with the growing pipeline of opportunities. 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, market acceptance of 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
20-F for the year ended December 31, 2010 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 INNOVATIONS LTD. |
CONDENSED CONSOLIDATED BALANCE
SHEET |
(In thousands, except share and
per share data) |
|
|
March 31 |
December 31 |
|
2011 |
2010 |
|
(Unaudited) |
(Audited) |
Assets |
|
|
|
|
|
Current assets |
|
|
Cash and cash equivalents |
$ 26,286 |
$ 15,409 |
Short-term investments |
10,880 |
8,594 |
Trade receivables (net of allowance for
doubtful accounts of $263 and $2,832 as of March 31, 2011 and
December 31, 2010, respectively) |
9,031 |
5,072 |
Receivables from sale of operation |
1,864 |
2,336 |
Other receivables and prepaid expenses |
2,164 |
1,532 |
Inventories |
9,036 |
8,448 |
|
|
|
Total current assets |
59,261 |
41,391 |
|
|
|
Severance pay deposits
fund |
1,384 |
1,355 |
|
|
|
|
|
|
Property, plant and equipment,
net |
15,450 |
14,826 |
|
|
|
Intangible assets, net |
996 |
942 |
|
|
|
Goodwill |
465 |
-- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
$ 77,556 |
$ 58,514 |
|
ON TRACK INNOVATIONS LTD. |
CONDENSED CONSOLIDATED BALANCE
SHEET |
(In thousands, except share and
per share data) |
|
|
|
|
March 31 |
December 31 |
|
2011 |
2010 |
|
(Unaudited) |
(Audited) |
Liabilities
and Equity |
|
|
|
|
|
Current Liabilities |
|
|
Short-term bank credit and current maturities
of long-term bank loans |
$ 5,493 |
$ 6,881 |
Trade payables |
8,713 |
6,874 |
Other current liabilities |
11,033 |
8,954 |
Total current liabilities |
25,239 |
22,709 |
|
|
|
Long-Term Liabilities |
|
|
Long-term loans, net of current
maturities |
4,841 |
5,189 |
Accrued severance pay |
3,927 |
3,727 |
Deferred tax liability |
74 |
84 |
Total long-term liabilities |
8,842 |
9,000 |
|
|
|
Total Liabilities |
34,081 |
31,709 |
|
|
|
Liabilities related to discontinued
operation |
567 |
689 |
|
|
|
Commitments and
Contingencies |
|
|
|
|
|
Equity |
|
|
Shareholders' Equity |
|
|
Ordinary shares of NIS 0.1 par value:
Authorized – 50,000,000 shares as of March 31, 2011 and December
31, 2010; issued: 31,705,166 and 25,384,010 shares as of March 31,
2011 and December 31, 2010, respectively; outstanding: 31,142,691
and 24,821,535 shares as of March 31, 2011 and December 31,
2010, respectively |
792 |
610 |
Additional paid-in capital |
208,479 |
190,933 |
Treasury shares at cost –562,475 shares as of
March 31, 2011 and December 31, 2010. |
(1,136) |
(1,136) |
Accumulated other comprehensive income |
856 |
645 |
Accumulated deficit |
(165,924) |
(164,812) |
Shareholder's equity |
43,067 |
26,240 |
Non-controlling
interest |
(159) |
(124) |
|
|
|
Total Equity |
42,908 |
26,116 |
|
|
|
|
|
|
Total Liabilities and
Equity |
$ 77,556 |
$ 58,514 |
|
ON TRACK INNOVATIONS LTD. |
GAAP CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS |
(In thousands, except share and
per share data) |
|
|
Three months ended
March 31 |
|
2011 |
2010 |
|
(Unaudited) |
(Unaudited) |
Revenues |
|
|
Sales |
$ 10,870 |
$ 13,540 |
Licensing and transaction fees |
1,153 |
874 |
|
|
|
Total revenues |
12,023 |
14,414 |
|
|
|
Cost of revenues |
|
|
Cost of sales |
5,708 |
6,158 |
Total cost of revenues |
5,708 |
6,158 |
|
|
|
Gross profit |
6,315 |
8,256 |
Operating expenses |
|
|
Research and development |
2,197 |
2,048 |
Selling and marketing |
2,841 |
3,733 |
General and administrative |
2,255 |
2,256 |
Amortization of intangible assets |
151 |
144 |
|
|
|
Total operating
expenses |
7,444 |
8,181 |
|
|
|
Operating profit (loss) |
(1,129) |
75 |
Financial income (expense), net |
49 |
(545) |
|
|
|
Loss before taxes on
income |
(1,080) |
(470) |
|
|
|
Taxes on income |
(65) |
(82) |
|
|
|
Net loss from continuing
operations |
(1,145) |
(552) |
Net profit from discontinued
operations |
-- |
59 |
|
|
|
Net loss |
(1,145) |
(493) |
|
|
|
Net loss attributable to noncontrolling
interest |
33 |
9 |
Net loss attributable to
shareholders |
$ (1,112) |
$ (484) |
|
|
|
Basic and diluted net profit (loss)
attributable to shareholders per ordinary share |
|
|
From continuing operations |
$ (0.04) |
$ (0.02) |
From discontinued operations |
$ -- |
$ 0.00 |
|
$ (0.04) |
$ (0.02) |
Weighted average number of ordinary shares
used in computing basic net profit (loss) per ordinary share |
29,494,848 |
24,155,916 |
Weighted average number of ordinary shares
used in computing diluted net profit (loss) per ordinary share |
29,494,848 |
26,865,470 |
|
ON TRACK INNOVATIONS LTD. |
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
December 31 |
|
2011 |
2010 |
|
(Unaudited) |
(Unaudited) |
|
|
|
Operating expenses |
|
|
GAAP operating expenses |
$ 7,444 |
$ 8,181 |
Less: |
|
|
Stock based compensation
expenses |
(531) |
(976) |
Amortization of intangible
assets |
(151) |
(144) |
|
|
|
Non GAAP Operating expenses |
$ 6,762 |
$ 7,061 |
|
|
|
Operating profit (loss) |
|
|
GAAP Operating profit (loss) |
$ (1,129) |
$ 75 |
Plus: |
|
|
Stock based compensation
expenses |
533 |
982 |
Amortization of intangible
assets |
151 |
144 |
|
|
|
Non GAAP Operating
profit (loss) |
$ (445) |
$ 1,201 |
|
|
|
Net profit (loss) attributable to
shareholders |
|
|
GAAP Net loss attributable to
shareholders |
$ (1,112) |
$ (484) |
Plus: |
|
|
Stock based compensation
expenses |
533 |
982 |
Amortization of intangible
assets |
151 |
144 |
Net profit from discontinued
operations |
-- |
(59) |
|
|
|
Non GAAP net profit (loss) attributable
to shareholders |
$ (428) |
$ 583 |
|
|
|
Basic net profit (loss) attributable
to shareholders per ordinary share |
|
|
GAAP Basic net loss attributable to
shareholders per ordinary share |
$ (0.04) |
$ (0.02) |
Plus: |
|
|
Stock based compensation
expenses |
0.02 |
0.04 |
Amortization of intangible
assets |
0.01 |
0.00 |
Net profit from discontinued
operations |
-- |
0.00 |
Non GAAP Basic net profit (loss)
attributable to shareholders per ordinary share |
$ (0.01) |
$ 0.02 |
|
ON TRACK INNOVATIONS LTD. |
CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS |
(In thousands, except share and
per share data) |
|
|
Three months ended
March 31 |
|
2011 |
2010 |
|
(Unaudited) |
(Unaudited) |
Cash flows from operating
activities |
|
|
Net loss from continuing operations |
$ (1,145) |
$ (552) |
Adjustments required to reconcile net loss to
net cash provided by (used in) operating activities: |
|
|
Stock-based compensation related to options
and shares issued to employees and others |
533 |
982 |
Gain on sale of property and equipment |
(4) |
(6) |
Amortization of intangible assets |
151 |
144 |
Depreciation |
429 |
370 |
|
|
|
Accrued severance pay, net |
171 |
78 |
Accrued interest and linkage differences on
long-term loans |
47 |
14 |
Decrease in deferred tax liability |
(10) |
(9) |
linkage differences on receivable from sale
of operation |
(151) |
-- |
Decrease (increase) in trade receivables,
net |
(3,896) |
2,217 |
Increase in other receivables and prepaid
expenses |
(614) |
(68) |
Increase in inventories |
(351) |
(2,804) |
Increase (decrease) in trade payables |
1,569 |
(1,543) |
Increase in other current liabilities |
2,010 |
10,664 |
Net cash provided by (used in) continuing
operating activities |
(1,261) |
9,487 |
|
|
|
Cash flows from investing
activities |
|
|
|
|
|
Purchase of property and equipment |
(582) |
(179) |
Purchase of available-for-sale
securities |
(2,449) |
(2,830) |
Acquisition of business operation |
(400) |
-- |
Proceeds from maturity and sale of
available-for-sale securities |
178 |
984 |
Other, net |
7 |
6 |
Net cash used in continuing investing
activities |
(3,246) |
(2,019) |
|
|
|
|
|
|
Cash flows from financing
activities |
|
|
Decrease in short-term bank credit, net |
(1,852) |
(972) |
Proceeds from long-term bank loans |
151 |
419 |
Repayment of long-term bank loans |
(336) |
(110) |
Proceeds from issuance of shares, net of
issuance expenses |
16,644 |
-- |
Proceeds from exercise of options and
warrants, net |
189 |
18 |
Net cash provided by (used in) continuing
financing activities |
14,796 |
(645) |
|
|
|
Cash flows from discontinued
operations |
|
|
Net cash used in discontinued operating
activities |
(122) |
(306) |
Net cash provided by discontinued investing
activities |
623 |
-- |
Total net cash provided by (used in)
discontinued activities |
501 |
(306) |
|
|
|
Effect of exchange rate changes on cash |
87 |
(15) |
|
|
|
Increase in cash and cash
equivalents |
10,877 |
6,502 |
Cash and cash equivalents at the
beginning of the period |
15,409 |
26,884 |
|
|
|
Cash and cash equivalents at the end
of the period |
$ 26,286 |
$ 33,386 |
CONTACT: OTI Contact:
Galit Mendelson
Vice President of Corporate Relations
732 429 1900 ext. 111
galit@otiglobal.com
Investor Relations:
Miri Segal
MS-IR LLC
917-607-8654
msegal@ms-ir.com
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