ROSH PINA, ISRAEL — (Marketwired) — 03/25/15 — (NASDAQ: OTIV), a global provider of near field communication (NFC) and cashless payment solutions, reported financial results for the fourth quarter and fiscal year ended December 31, 2014.
Partnered with Cubic Transportation Systems to integrate oti–s WAVE NFC device into Cubic–s NextWave mobile mass transit platform
Major African capital city selected EasyPark to support 300,000+ drivers
Launched UNO, the industry–s most compact multi-purpose NFC payment reader
TRIO cashless payment reader received industry-wide certification for major credit card transactions
Revenues increased 4% to $5.5 million from the prior quarter, and decreased 12% from $6.2 million in the same year-ago period. The decrease from the year-ago period was primarily due to a decrease in sales in the U.S. market.
Gross profit was $2.5 million (46% of revenue) compared to $3.1 million (49% of revenue) in the same year-ago period. The decrease was primarily due to lower revenues and a greater mix of lower margin product sales.
Operating expenses totaled $5.0 million compared to $7.1 million in the same year-ago period. The decrease was primarily attributable to a decrease in general and administrative expenses and patent-related expenses. Q4 2013 operating expenses included an impairment and amortization of intangible assets and goodwill expenses of $826,000.
Net loss from continuing operations totaled $2.6 million or $(0.08) per share. This compares to net loss from continuing operations of $4.1 million or $(0.12) per share in the same year-ago period.
Adjusted EBITDA loss from continuing operations totaled $1.6 million compared to an adjusted EBITDA loss from continuing operations of $2.1 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 $16.4 million.
Revenues increased 16% to $23.1 million from $19.9 million in 2013. The improvement was driven by an increase in NFC reader sales in the U.S. market and WAVE NFC device sales.
Gross profit increased 3% to $11.1 million (48% of revenue) from $10.7 million (54% of revenue) in the same year-ago period. The increase was primarily due to the higher revenues, offset by greater mix of lower margin product sales.
Operating expenses totaled $20.6 million compared to $16.5 million in the same year-ago period. 2013 operating expenses were offset by $4.2 million in “other operating income, net” due to a write-off of provisions for former executives– termination following a settlement. Excluding the “other operating income, net” in the year-ago period, 2014 operating expenses were flat despite the increase in non-cash stock-based compensation, as well as continued investment in sales and marketing resources related to the company–s sales growth initiatives in new and existing markets.
Net loss from continuing operations totaled $10.2 million or $(0.30) per share compared to a net loss from continuing operations of $6.9 million or $(0.21) per share in 2013.
Adjusted EBITDA loss from continuing operations totaled $5.8 million compared to an adjusted EBITDA loss from continuing operations of $2.1 million in 2013.
“The fourth quarter was consistent with our expectations as well as the outlook we provided in November,” said oti CEO Ofer Tziperman. “While at the beginning of 2014 we expected to achieve a higher growth rate than 16%, we were not in a position to anticipate the slowdown of market participation leading up to the launch of Apple Pay and industry rumors around its underlying technology possibly not being NFC-based. While we believe the future of NFC was never reliant on Apple–s decision, their adoption of NFC reaffirms the tremendous value of oti–s 20-year investment in NFC technology and supports the long-term vision shared by our partners and customers.
“Despite the delay of some related orders in the second half of 2014, interest in our industry-leading NFC readers and WAVE devices is growing globally. In fact, we have and continue to be approached by leading players in the industry, including major vending machine manufacturers and operators, as well as global channel partners.
“These major players are interested in deploying oti–s line of cashless payment readers, and are currently in various stages of testing and integration. In terms of revenue expectations, is important to note that the typical sales cycle and implementation process for a major new customer can take 12 months or longer. However, we are working diligently to convert these engagements into meaningful sales in 2015 and beyond, and this increased activity strengthens our confidence that oti will be a major player in the fast growing market for cashless payment readers.”
oti management will hold a conference call on Monday, March 30, 2015 at 10:00 a.m. Eastern time to discuss these results.
Investors and analysts are requested to submit questions they would like the company to address on the call. Please submit your questions to by tomorrow, March 26 at 4:00 p.m. Eastern time.
Date: Monday, March 30, 2015
Time: 10:00 a.m. Eastern time (7:00 a.m. Pacific time)
Listen-only U.S. dial-in: 1-877-407-0784
Listen-only international dial-in: 1-201-689-8560
Webcast: Click
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 April 30, 2015.
U.S. replay dial-in: 1-877-870-5176
International replay dial-in: 1-858-384-5517
Replay ID: 13604246
Webcast: Click
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 and patent litigation and maintenance 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. (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 .
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 certain expectations that the company will be able to convert its customer engagements into meaningful sales in 2015 and beyond; succeed in becoming a major player in the fast growing market for cashless payment readers. 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, 2013, 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.
Scott Liolios or Matt Glover
Liolios Group, Inc.
949-574-3860
Inbar Ben-Hur
oti Marketing Communication Manager
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