ROSH PINA, Israel, May 31, 2013 (GLOBE NEWSWIRE) -- On Track Innovations Ltd. ("OTI") (Nasdaq:OTIV) today reported first quarter 2013 revenue of $8.6 million, and cash, cash equivalents and short-term investments of $17 million as of March 31, 2013.
Ofer Tziperman, Chief Executive Officer, commented: "the first quarter results are indicative of the efforts taken by the management and Board of Directors to decrease operating expenses while implementing a new strategy and exhausting ways to capitalize on our extensive IP. Obviously, the second part of the equation is increasing revenues and we are working diligently on doing just that. We are aiming our efforts to generate growth and build shareholder value."
Q1 2013 Financial Highlights
- Revenues were $8.6M, a decrease of 32% from $12.6M in Q1 2012.
- Gross profit was 49%, compared to 50% for the same period last year.
- Operating expenses decreased by 25% to $6.5M, from $8.8M for the same period last year.
- Net loss attributable to shareholders was $3M, up from $2.6M for the same period last year.
- Adjusted EBITDA loss was $1.8M compared to $1.7M for the same period last year.
- Cash, cash equivalents and short-term investments were $17 million as of March 31, 2013.
The balance sheet includes amounts relating to potential termination benefits for former management. The Company is reviewing the termination provisions of former management's employment agreements.
Adoption of US GAAP
Due to the changes in the composition of the Company's Board of Directors, including the election of eight new US directors on December 30, 2012, the Company will no longer qualify as a 'Foreign Private Issuer' as of June 30, 2013 and will be required to report as a domestic issuer starting on January 1, 2014. As reported on May 31, 2012, effective as of January 1, 2012, the Company adopted International Financial Reporting Standards ("IFRS") as published by the International Accounting Standards Board. However, as a domestic issuer, the Company will no longer be entitled to prepare its financial results in accordance with IFRS. Therefore, the Company has decided to adopt US GAAP and accordingly to prepare its financial statements for the fiscal year ended December 31, 2012 and thereafter in accordance with US GAAP.
It should be noted that the financial results for the first, second and third quarter of 2012 that were previously published were prepared in accordance with IFRS. The financial results for the first quarter of 2012 that appear in this press release were prepared in accordance with US GAAP.
Use of Non-GAAP Financial Information
This press release contains certain non-GAAP measures, namely, Adjusted Earnings before Interest, Income Tax, Depreciation and Amortization ("Adjusted EBITDA"). Adjusted EBITDA represents earnings before interest1, income tax, depreciation and amortization, and further eliminates the effect of share-based compensation expense. OTI believes that Adjusted EBITDA 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.
Management Discussion and Webcast Information
Shareholders and other parties can submit their questions about the company and its financial reports to ir@otiglobal.com. A prepared statement and answers will be provided by OTI's management on June 17, 2013 at 9am ET.
| Deadline for inquiries submission: | June 7, 2013, 5pm ET, midnight Israel |
| Management discussion available: | June 17, 2013, 9am ET, 4pm Israel to June 24, 2013 midnight ET. |
| Telephone Replay: | Toll Free 1-888-326-9310 (U.S.) or 1-800-270-077 (Israel) |
| Webcast: | http://www.otiglobal.com/Investors_Introduction |
About On Track Innovations Ltd.
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 payment solutions, national electronic ID systems, 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. Visit the website: 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 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 the Company's efforts to decrease operating expenses, implementation of a strategy and exhausting ways to capitalize on the Company's IP, increase revenues and generate growth and build shareholders equity. 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, 2012, 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.
The content of websites or website links mentioned or provided herein is not part of this press release.
1 "Financial expenses"
| ON TRACK INNOVATIONS LTD. | ||
| CONDENSED CONSOLIDATED BALANCE SHEET | ||
| (In thousands, except share and per share data) | ||
| March 31 | December 31 | |
| 2013 | 2012 | |
| (Unaudited) | (Audited) | |
| Assets | ||
| Current assets | ||
| Cash and cash equivalents | $ 8,930 | $ 9,304 |
| Short-term investments | 8,065 | 8,712 |
| Trade receivables (net of allowance for doubtful accounts of $430 and $431 as of March 31, 2013 and December 31, 2012, respectively) | 4,245 | 7,516 |
| Other receivables and prepaid expenses | 3,541 | 5,349 |
| Short term restricted deposit for employees benefit | 2,745 | 2,922 |
| Inventories | 6,416 | 7,049 |
| Total current assets | 33,942 | 40,852 |
| Long term restricted deposit for employees benefit | 1,072 | 1,099 |
| Severance pay deposits | 870 | 836 |
| Property, plant and equipment, net | 12,429 | 13,074 |
| Intangible assets, net | 627 | 656 |
| Goodwill | 485 | 485 |
| Total Assets | $ 49,425 | $ 57,002 |
| ON TRACK INNOVATIONS LTD. | ||
| CONDENSED CONSOLIDATED BALANCE SHEET | ||
| (In thousands, except share and per share data) | ||
| March 31 | December 31 | |
| 2013 | 2012 | |
| (Unaudited) | (Audited) | |
| Liabilities and Equity | ||
| Current Liabilities | ||
| Short-term bank credit and current maturities of long-term bank loans | $ 6,542 | $ 7,368 |
| Trade payables | 8,158 | 10,696 |
| Accrued severance pay | 3,326 | 3,539 |
| Other current liabilities | 9,780 | 10,971 |
| Total current liabilities | 27,806 | 32,574 |
| Long-Term Liabilities | ||
| Long-term loans, net of current maturities | 2,147 | 2,224 |
| Accrued severance pay | 2,114 | 2,032 |
| Deferred tax liability | 50 | 53 |
| Total long-term liabilities | 4,311 | 4,309 |
| Total Liabilities | 32,117 | 36,883 |
| Equity | ||
| Shareholders' Equity | ||
| Ordinary shares of NIS 0.1 par value: Authorized – 50,000,000 shares as of March 31, 2013 and December 31, 2012; issued: 33,273,011 and 32,938,011 shares as of March 31, 2013 and December 31, 2012, respectively; outstanding: 32,094,312 and 31,759,312 shares as of March 31, 2013 and December 31, 2012, respectively | 829 | 820 |
| Additional paid-in capital | 211,112 | 210,853 |
| Treasury shares at cost - 1,178,699 shares as of March 31, 2013 and December 31, 2012. | (2,000) | (2,000) |
| Accumulated other comprehensive income (loss) | (9) | 36 |
| Accumulated deficit | (192,137) | (189,131) |
| Shareholder's equity | 17,795 | 20,578 |
| Non-controlling interest | (487) | (459) |
| Total Equity | 17,308 | 20,119 |
| Total Liabilities and Equity | $ 49,425 | $ 57,002 |
| ON TRACK INNOVATIONS LTD. | ||
| CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS | ||
| (In thousands, except share and per share data) | ||
| Three months ended March 31 | ||
| 2013 | 2012 | |
| (Unaudited) | (Unaudited) | |
| Revenues | ||
| Sales | $ 7,549 | $ 11,342 |
| Licensing and transaction fees | 1,078 | 1,262 |
| Total revenues | 8,627 | 12,604 |
| Cost of revenues | ||
| Cost of sales | 4,367 | 6,322 |
| Total cost of revenues | 4,367 | 6,322 |
| Gross profit | 4,260 | 6,282 |
| Operating expenses | ||
| Research and development | 1,712 | 2,343 |
| Selling and marketing | 2,721 | 3,633 |
| General and administrative | 2,067 | 2,728 |
| Amortization of intangible assets | 25 | 49 |
| Total operating expenses | 6,525 | 8,753 |
| Operating loss | (2,265) | (2,471) |
| Financial expense, net (*) | (601) | (96) |
| Loss before taxes on income | (2,866) | (2,567) |
| Taxes on income | (173) | (21) |
| Net loss | (3,039) | (2,588) |
| Net loss attributable to noncontrolling interest | 33 | 34 |
| Net loss attributable to shareholders | $ (3,006) | $ (2,554) |
| (*) includes in Q1 2013, $437 finance expenses resulted from exchange rate differentials. | ||
| Basic and diluted net loss attributable to shareholders per ordinary share |
$ (0.09) |
$ (0.08) |
| Weighted average number of ordinary shares used in computing basic and diluted net loss per ordinary share | 32,440,428 | 32,065,343 |
| 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 March 31 | ||
| 2013 | 2012 | |
| (Unaudited) | (Unaudited) | |
| Net Loss | $ (3,039) | $ (2,588) |
| Financial expenses, net | 601 | 96 |
| Depreciation | 400 | 386 |
| Taxes on income | 173 | 21 |
| Amortization expenses | 25 | 49 |
| TOTAL EBITDA | $ (1,840) | $ (2,036) |
| Stock based compensation | $ 84 | $ 294 |
| TOTAL ADJUSTED EBITDA | $ (1,756) | $ (1,742) |
| ON TRACK INNOVATIONS LTD. | ||
| CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS | ||
| (In thousands, except share and per share data) | ||
| Three months ended March 31 | ||
| 2013 | 2012 | |
| (Unaudited) | (Unaudited) | |
| Cash flows from operating activities | ||
| Net loss | $ (3,039) | $ (2,588) |
| 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 | 84 | 294 |
| Amortization of intangible assets | 25 | 49 |
| Depreciation | 400 | 386 |
| Changes in operation assets and liabilities: | ||
| Accrued severance pay, net | (20) | 460 |
| Accrued interest and linkage differences | (90) | 2 |
| Decrease in deferred tax liability | (3) | (3) |
| Decrease (Increase) in trade receivables, net | 3,239 | (122) |
| Decrease (Increase) in other receivables and prepaid expenses | 1,596 | (522) |
| Decrease in inventories | 555 | 1,235 |
| Decrease in trade payables | (2,121) | (517) |
| Increase (decrease) in other current liabilities | (1,133) | 1,254 |
| Net cash used in continuing operating activities | (507) | (72) |
| Cash flows from investing activities | ||
| Purchase of property and equipment | (165) | (115) |
| Purchase of short term investments | (243) | (295) |
| Proceeds from restricted deposit for employee benefit | 306 | -- |
| Proceeds from maturity and sale of short term investments | 924 | 6,945 |
| Net cash provided by investing activities | 822 | 6,535 |
| Cash flows from financing activities | ||
| Decrease in short-term bank credit, net | (221) | (242) |
| Proceeds from long-term bank loans | 26 | 275 |
| Repayment of long-term bank loans | (587) | (613) |
| Proceeds from exercise of options and warrants, net | 184 | 4 |
| Net cash used in) financing activities | (598) | (576) |
| Cash flows from discontinued operations | ||
| Net cash used in discontinued operating activities | -- | (150) |
| Total net cash used in discontinued activities | -- | (150) |
| Effect of exchange rate changes on cash | (91) | 177 |
| Increase (decrease) in cash and cash equivalents | (374) | 5,914 |
| Cash and cash equivalents at the beginning of the period | 9,304 | 12,517 |
| Cash and cash equivalents at the end of the period | $ 8,930 | $ 18,431 |