* Revenues of $16.9 million
* Gross margin increased to 46%
* GAAP net loss decreased by 29% compared to
the first half of 2008
FORT LEE, N.J., Aug. 25, 2009 (GLOBE NEWSWIRE) -- 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 first half ended June 30, 2009. Following are various financial measures that compare the first half of 2009 to the first half of 2008.
* Total revenues were $16.9 million, a 17% decrease from last year.
* Gross margin increased to 46% vs. 36% last year.
* Gross profit was $7.7 million, a 6% increase compared to $7.2
million last year.
* Non-GAAP operating expenses were $13.8 million, a 5% decrease
compared to $14.5 million last year. GAAP operating expenses were
$16.3 million, a 15% decrease compared to $19.1 million last
year.
* Non-GAAP operating loss was $6.1 million, a 17% decrease compared
to $7.3 million last year. GAAP operating loss was $8.6 million,
a 28% decrease compared to $11.8 million last year.
* Non-GAAP net loss was $6.4 million, a 20% decrease compared to
$8.0 million last year. GAAP net loss was $8.9 million, a 29%
decrease compared to $12.5 million last year.
* Cash, cash equivalents and short term investments were $21.9
million.
Oded Bashan, Chairman and Chief Executive Officer of OTI, said: "The first six months of 2009 presented challenges resulting from the global economic crisis. It has strengthened our commitment to successfully execute our focused and clear strategy. The results show continued improvement in gross margin and further reduction in operating expenses, which have helped us to further reduce our net loss despite the lower than expected revenues."
Mr. Bashan continued: "Our main and most important goal is to bring OTI to operating breakeven position as quickly as possible. We plan to get there by further reducing our operating expenses, focusing on high margin projects with recurring revenues, continuing to build strong IP portfolio and product line and focusing on successful execution of projects that will contribute to OTI's growth over the next 12-24 months."
"Based on the higher than expected decline in revenues in the first half, which is mainly attributed to the revenue reduction in the OEM and payments business segments and the delays in customers' projects timetables, we are updating our target revenues for this year to $34 million."
With regards to OTI's share repurchase program, OTI's Board of Directors has recently approved a detailed plan. Execution of the plan shall be subject to applicable laws.
Conference call and Webcast Information
The Company has scheduled a conference call and simultaneous Webcast for August 25, 2009, at 9:00 AM EDT to discuss operating results and future outlook. To participate, call: 1-888-281-1167 (U.S. toll free), 1-800-270-345 (Israel toll free). To listen to the Webcast, 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 September 1st, by calling U.S.: 1-888-326-9310 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 EITF 96-18, 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 ongoing 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 are provided later in this press release.
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. For example, forward-looking statements include statements regarding our goals, beliefs, future growth strategies, objectives, plans or current expectations such as those statements regarding our goal to bring OTI to operating breakeven position, the steps we take or intend to take to achieve operating breakeven position and the timing for achieving it, or our statement regarding our revenues target for 2009. 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 the 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, 2008 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 STATEMENT OF OPERATIONS
(In thousands, except share and per share data)
Six months ended Three months ended
June 30 June 30
----------------------- -----------------------
2009 2008 2009 2008
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ----------- ----------- -----------
Revenues
Sales $ 15,687 $ 18,948 $ 6,807 $ 10,202
Licensing and
transaction fees 1,200 1,338 743 763
----------- ----------- ----------- -----------
Total revenues 16,887 20,286 7,550 10,965
----------- ----------- ----------- -----------
Cost of revenues
Cost of sales 9,197 13,041 4,191 6,703
----------- ----------- ----------- -----------
Total cost of
revenues 9,197 13,041 4,191 6,703
----------- ----------- ----------- -----------
Gross profit 7,690 7,245 3,359 4,262
----------- ----------- ----------- -----------
Operating expenses
Research and
development 4,553 5,901 2,337 2,904
Selling and marketing 6,182 5,175 2,813 2,798
General and
administrative 5,002 7,349 2,456 3,755
Amortization of
intangible assets 515 658 251 329
----------- ----------- ----------- -----------
Total operating
expenses 16,252 19,083 7,857 9,786
----------- ----------- ----------- -----------
Operating loss (8,562) (11,838) (4,498) (5,524)
Financial expense,
net (378) (566) (585) (90)
----------- ----------- ----------- -----------
Loss before taxes on
income (8,940) (12,404) (5,083) (5,614)
Taxes on income 42 122 19 59
Equity in loss of
affiliate -- (250) -- (127)
----------- ----------- ----------- -----------
Net loss (8,898) (12,532) (5,064) (5,682)
Net loss attributable
to noncontrolling
interest 141 -- 97 --
----------- ----------- ----------- -----------
Net loss attributable
to shareholders (8,757) (12,532) (4,967) (5,682)
=========== =========== =========== ===========
Basic and diluted net
loss attributable to
shareholders per
ordinary share
Basic and diluted net
loss attributable to
shareholders per
ordinary share $ (0.40) $ (0.64) $ (0.22) $ (0.29)
=========== =========== =========== ===========
Weighted average
number of ordinary
shares used in
computing basic and
diluted net loss per
ordinary share 22,027,070 19,708,825 22,266,869 19,861,051
=========== =========== =========== ===========
ON TRACK INNOVATIONS LTD.
RECONCILIATION BETWEEN GAAP TO NON-GAAP
UNAUDITED STATEMENT OF OPERATIONS
(In thousands, except share and per share data)
Six months
ended
June 30,
2009
Adjustments
GAAP Non-GAAP
Revenues
Sales $ 15,687 -- $ 15,687
Licensing and transaction fees 1,200 -- 1,200
----------- -----------
Total revenues 16,887 16,887
----------- -----------
Cost of Revenues
Cost of sales 9,197 (28)(a) 9,169
----------- -----------
Total cost of revenues 9,197 (28) 9,169
----------- -----------
Gross profit 7,690 28 7,718
----------- -----------
Operating Expenses
Research and development 4,553 (1,141)(a) 3,412
Selling and marketing 6,182 (351)(a) 5,831
General and administrative 5,002 (468)(a) 4,534
Amortization of intangible assets 515 (515)(b) --
=========== ===========
Total operating expenses 16,252 (2,475) 13,777
----------- -----------
Operating loss (8,562) 2,503 (6,059)
Financial expenses, net (378) -- (378)
----------- ----------- -----------
Loss before taxes on income (8,940) 2,503 (6,437)
Taxes on income 42 -- 42
----------- ----------- -----------
Net loss $ (8,898) $ 2,503 $ (6,395)
Net loss attributable to
noncontrolling interest 141 -- 141
----------- ----------- -----------
Net loss attributable to
shareholders $ (8,757) $ 2,503 $ (6,254)
=========== =========== ===========
Basic and diluted net loss
attributable to shareholders
per ordinary share $ (0.40) $ 0.12 $ (0.28)
----------- ----------- -----------
Weighted average number of
ordinary shares used in
computing basic and diluted net
loss per ordinary share 22,027,070 22,027,070
=========== ===========
ON TRACK INNOVATIONS LTD.
RECONCILIATION BETWEEN GAAP TO NON-GAAP
UNAUDITED STATEMENT OF OPERATIONS
(In thousands, except share and per share data)
Three months
ended
June 30,
2009
Adjustments
GAAP Non-GAAP
Revenues
Sales $ 6,807 -- $ 6,807
Licensing and transaction fees 743 -- 743
----------- -----------
Total revenues 7,550 7,550
----------- -----------
Cost of Revenues
Cost of sales 4,191 (13)(a) 4,178
----------- -----------
Total cost of revenues 4,191 (13) 4,178
----------- -----------
Gross profit 3,359 13 3,372
----------- -----------
Operating Expenses
Research and development 2,337 (558)(a) 1,779
Selling and marketing 2,813 (209)(a) 2,604
General and administrative 2,456 (254)(a) 2,202
Amortization of intangible assets 251 (251)(b) --
=========== ===========
Total operating expenses 7,857 (1,272) 6,585
----------- -----------
Operating loss (4,498) 1,285 (3,213)
Financial expenses, net (585) -- (585)
----------- ----------- -----------
Loss before taxes on income (5,083) 1,285 (3,798)
Taxes on income 19 -- 19
----------- ----------- -----------
Net loss $ (5,064) $ 1,285 $ (3,779)
Net loss attributable to
noncontrolling interest 97 -- 97
----------- ----------- -----------
Net loss attributable to
shareholders $ (4,967) $ 1,285 $ (3,682)
=========== =========== ===========
Basic and diluted net loss
attributable to shareholders per
ordinary share $ (0.22) $ 0.05 $ (0.17)
----------- ----------- -----------
Weighted average number of
ordinary shares used in computing
basic and diluted net loss per
ordinary share 22,266,869 22,266,869
=========== ===========
(a) The effect of stock-based compensation in accordance with SFAS
123(R) and EITF 96-18.
(b) The effect of amortization of intangible assets.
ON TRACK INNOVATIONS LTD
RECONCILIATION BETWEEN GAAP TO NON-GAAP
UNAUDITED STATEMENT OF OPERATIONS
(In thousands, except share and per share data)
Six months
ended
June 30,
2008
Adjustments
GAAP Non-GAAP
Revenues
Sales $ 18,948 -- $ 18,948
Licensing and transaction fees 1,338 -- 1,338
----------- -----------
Total revenues 20,286 20,286
----------- -----------
Cost of Revenues
Cost of sales 13,041 (30)(a) 13,011
----------- -----------
Total cost of revenues 13,041 (30) 13,011
----------- -----------
Gross profit 7,245 30 7,275
----------- -----------
Operating Expenses
Research and development 5,901 (1,735)(a) 4,166
Selling and marketing 5,175 (925)(a) 4,250
General and administrative 7,349 (1,225)(a) 6,124
Amortization of intangible assets 658 (658)(b) --
----------- =========== -----------
Total operating expenses 19,083 (4,543) 14,540
----------- -----------
Operating loss (11,838) 4,573 (7,265)
Financial expenses, net (566) -- (566)
----------- ----------- -----------
Loss before taxes on income and
minority interests (12,404) 4,573 (7,831)
Taxes on income 122 -- 122
Equity in loss of affiliate (250) -- (250)
----------- ----------- -----------
Net loss $ (12,532) $ 4,573 $ (7,959)
Net loss attributable to
noncontrolling interest -- -- --
----------- ----------- -----------
Net loss attributable to
shareholders $ (12,532) $ 4,573 $ (7,959)
=========== =========== ===========
Basic and diluted net loss
attributable to shareholders per
ordinary share $ (0.64) $ 0.24 $ (0.40)
----------- ----------- -----------
Weighted average number of
ordinary shares used in
computing basic and diluted
net loss per ordinary share 19,708,825 19,708,825
----------- -----------
(c) The effect of stock-based compensation in accordance with SFAS
123(R) and EITF 96-18.
(d) The effect of amortization of intangible assets.
ON TRACK INNOVATIONS LTD.
RECONCILIATION BETWEEN GAAP TO NON-GAAP
UNAUDITED STATEMENT OF OPERATIONS
(In thousands, except share and per share data)
Three months
ended
June 30,
2008
Adjustments
GAAP Non-GAAP
Revenues
Sales $ 10,202 -- $ 10,202
Licensing and transaction fees 763 -- 763
----------- -----------
Total revenues 10,965 10,965
----------- -----------
Cost of Revenues
Cost of sales 6,703 (15)(a) 6,688
----------- -----------
Total cost of revenues 6,703 (15) 6,688
----------- -----------
Gross profit 4,262 15 4,277
----------- -----------
Operating Expenses
Research and development 2,904 (930)(a) 1,974
Selling and marketing 2,798 (635)(a) 2,163
General and administrative 3,755 (651)(a) 3,104
Amortization of intangible assets 329 (329)(b) --
----------- -----------
Total operating expenses 9,786 (2,545) 7,241
----------- -----------
Operating loss (5,524) 2,560 (2,964)
Financial expenses, net (90) -- (90)
----------- ----------- -----------
Loss before taxes on income and
minority interests (5,614) 2,560 (3,054)
Taxes on income 59 -- 59
Equity in loss of an affiliate (127) -- (127)
----------- ----------- -----------
Net loss $ (5,682) $ 2,560 $ (3,122)
Net loss attributable to
noncontrolling interest -- -- --
----------- ----------- -----------
Net loss attributable to
shareholders $ (5,682) $ 2,560 $ (3,122)
=========== =========== ===========
Basic and diluted net loss per
ordinary share $ (0.29) $ 0.13 $ (0.16)
----------- ----------- -----------
Weighted average number of
ordinary shares used in
computing basic and diluted
net loss per ordinary share 19,861,051 19,861,051
=========== ===========
(a) The effect of stock-based compensation in accordance with SFAS
123(R) and EITF 96-18.
(b) The effect of amortization of intangible assets.
ON TRACK INNOVATIONS LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except share and per share data)
June 30 December 31
2009 2008
----------- -----------
(Unaudited) (Audited)
----------- -----------
Assets
Current assets
Cash and cash equivalents $ 21,863 $ 27,196
Short-term investments 46 904
Trade receivables (net of allowance for
doubtful accounts of $3,313 and $3,315 as of
June 30, 2009 And December 31, 2008,
respectively) 4,742 4,567
Other receivables and prepaid expenses 3,928 2,994
Inventories 12,771 12,343
----------- -----------
Total current assets 43,350 48,004
----------- -----------
Severance pay deposits fund 1,166 1,189
Investment in an affiliated company -- --
Property, plant and equipment, net 18,169 18,613
Intangible assets, net 1,989 2,503
Goodwill -- --
----------- -----------
Total assets $ 64,674 $ 70,309
=========== ===========
ON TRACK INNOVATIONS LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except share and per share data)
June 30 December 31
2009 2008
----------- -----------
(Unaudited) (Audited)
----------- -----------
Liabilities and Shareholders' Equity
Current Liabilities
Short-term bank credit and current maturities
of long-term bank loans $ 5,994 $ 4,984
Trade payables 7,646 8,071
Other current liabilities 3,720 3,517
----------- -----------
Total current liabilities 17,360 16,572
----------- -----------
Long-Term Liabilities
Long-term loans, net of current maturities 1,859 1,762
Accrued severance pay 3,419 3,672
Deferred tax liability 159 202
----------- -----------
Total long-term liabilities 5,437 5,636
----------- -----------
Total liabilities 22,797 22,208
----------- -----------
Commitments and Contingencies
Equity
Shareholders' Equity
Ordinary shares of NIS 0.1 par value:
Authorized - 50,000,000 shares as of June 30,
2009 and December 31, 2008; issued 22,874,684
and 21,534,788 shares as of June 31, 2009 and
December 31, 2008, respectively; outstanding
22,874,684 and 21,495,409 shares as of June
30, 2009 and December 31, 2008, respectively 542 508
Additional paid-in capital 185,236 182,944
Accumulated other comprehensive loss 26 (325)
Accumulated deficit (144,198) (135,441)
----------- -----------
Shareholder's equity 41,606 47,686
----------- -----------
Noncontrolling interest 271 415
----------- -----------
Total equity 41,877 48,101
----------- -----------
Total liabilities and shareholders' equity $ 64,674 $ 70,309
=========== ===========
ON TRACK INNOVATIONS LTD.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands, except share and per share data)
Six months ended
June 30
-----------------------
2009 2008
----------- -----------
(Unaudited) (Unaudited)
----------- -----------
Cash flows from operating activities
Net loss $ (8,898) $ (12,532)
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 1,988 3,916
Equity in loss of affiliate -- 250
Amortization of intangible assets 515 658
Depreciation 1,293 1,707
Accrued severance pay, net (230) 390
Decrease in deferred tax liabilities (43) (125)
Decrease (increase) in trade receivables (122) 1,328
Increase in other receivables and prepaid
expenses (877) (248)
Decrease (increase) in inventories (257) 403
Decrease in trade payables (553) (2,713)
Increase (decrease) in other current
liabilities 206 (206)
Other, net (11) 34
----------- -----------
Net cash used in operating activities (6,989) (7,138)
----------- -----------
Cash flows from investing activities
Acquisition of a consolidated subsidiary, net
of cash acquired -- (565)
Proceeds from maturity of available -for sale
securities 1,372 4,290
Purchase of available-for sale securities (514) (20,097)
Purchase of property and equipment (553) (643)
Other, net -- 21
----------- -----------
Net cash provided by (used in) investing
activities 305 (16,994)
----------- -----------
Cash flows from financing activities
Increase in short-term bank credit, net 936 594
Proceeds from long-term bank loans 368 --
Repayment of long-term bank loans (257) (214)
Exercise of options and warrants 250 388
----------- -----------
Net cash provided by financing activities 1,297 768
----------- -----------
Effect of exchange rate changes on cash 54 25
----------- -----------
Decrease in cash and cash equivalents (5,333) (23,339)
Cash and cash equivalents at the beginning of
the period 27,196 35,470
----------- -----------
Cash and cash equivalents at the end of the
period $ 21,863 $ 12,131
=========== ===========