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OTI Reports Second Quarter 2013 Financial Results

Stocks in this article: OTIV

ROSH PINA, Israel, Aug. 28, 2013 (GLOBE NEWSWIRE) -- On Track Innovations Ltd. (OTI) (Nasdaq:OTIV), a global provider of near field communication (NFC) and cashless payment solutions, reported financial results for the second quarter ended June 30, 2013.

Q2 2013 Operational Highlights

  • Received a 30,000 unit order for OTI's NFC and contactless payment readers from a leading provider of integrated technology solutions.  
  • ASEC S.A., OTI's wholly owned subsidiary, was awarded three multi-million dollar projects as an e-ticketing operator for mass transit systems throughout Poland. The contract value of the three projects total more than $50 million over a five to ten year period.  
  • City of Portsmouth, N.H. implemented EasyPark, OTI's cashless parking payment solution.  
  • Retained Global IP Law Group, a leading international IP-focused law firm, to lead OTI's new intellectual property monetization campaign.  
  • Received favorable Markman hearing decision in patent infringement suit again T-Mobile USA.  
  • Strengthened leadership team with appointments of Dimitrios Angelis as chairman of the board, Shay Tomer as chief financial offer, Shlomi Eytan as chief sales and marketing officer, and Hanan Caspi as vice president of operations.

Q2 2013 Financial Highlights

  • Revenues in the second quarter of 2013 increased 19% to $9.2 million from $7.7 million in the same period last year.  
  • Gross margin in the second quarter of 2013 increased to 56.7% from 45.7% in the same period last year.  
  • Operating expenses in the second quarter of 2013 decreased 8% to $7.2 million from $7.9 million in the second quarter of 2012. The decrease was mainly attributable to lower headcount and reduced management costs.   
  • Net loss in the second quarter of 2013 improved to $2.3 million from $4.8 million in the same period last year.  
  • Adjusted EBITDA loss in the second quarter of 2013 totaled $1.5 million compared to an adjusted EBITDA loss of $3.5 million in the second quarter of 2012. The improvement was due to the increase in revenues and reduced operating expenses (see discussion about the presentation of adjusted EBITDA, a non-GAAP term, below).  
  • Cash and cash equivalents, and short-term investments at June 30, 2013 totaled $9.7 million. During the quarter, the company used cash to purchase equipment to support the expansion of its mass transit projects in Poland, and to repay short-term bank loans. 

Management Commentary

"The second quarter results were consistent with our expectations and do not reflect our recent initiatives to divest non-core, B2C operations," said Ofer Tziperman, OTI's CEO. "The divestitures of Parx France and SmartID mark an important step in executing OTI's new strategic plan of reducing unnecessary costs and focusing on our core business of providing NFC-based contactless payment technology and solutions. By optimizing our operational structure, we can better leverage our core competencies in these areas, which we believe will drive long-term growth and sustained profitability.

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