OTI REPORTS FIRST QUARTER 2011 FINANCIAL RESULTS
- Revenues of $12 Million
- Gross Margin of 53%
- Strong Balance Sheet with $37.2 Million in Cash, Cash Equivalents and Short Term Investments
ISELIN, N.J., – May 24, 2011 – On Track Innovations Ltd. (OTI) (Nasdaq GM: 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.”
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
Established in 1990, OTI (NASDAQ GM: 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.
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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.