OTI Reports Third Quarter 2016 Financial Results
ROSH PINA, Israel, Nov 09, 2016 (GLOBE NEWSWIRE via COMTEX) --
On Track Innovations Ltd. (OTI) OTIV, -0.28% a global provider of near field communication (NFC) and cashless payment solutions, today reported financial results for the third quarter ended September 30, 2016.
Achieved GAAP net profits from continuing operations in Q3 and EBITDA profitability for Q3
Increased revenues and gross profits compared to prior quarter, marking 4th consecutive quarter of financial improvements in continuing operations
Increased focus on core businesses by completing the divestiture of its parking business
Increased new purchase orders for future deliveries of cashless payment readers during Q3 by 288% compared to Q2 2016
Achieved FeliCa certification for OTI SATURN 8700 contactless reader, opening opportunities for large sales in Japanese market
Received Letter of Intent from a major Japanese retailer to purchase 10,000 FeliCa-certified contactless readers and telemetry systems; initial units to be delivered in 2017
Q3 2016 Financial Details
Total revenues increased 16% to $5.6 million from $4.8 million in the prior quarter, and increased 64% from $3.4 million in the same year-ago period.
Gross profit was $3.0 million (54.3% of revenue) compared to $1.9 million (54.5% of revenue) in the same year-ago period. This marked an increase in gross profits of 24% over the prior quarter and 64% from the same period a year ago.
Operating expenses decreased 32% to $2.8 million from $4.1 million in the same year-ago period.
Net income from continuing operations totaled $207,000, or $0.01 per share, an improvement from a net loss from continuing operations of $2.4 million, or $(0.06) per share, in the same year-ago period.
Net loss totaled $72,000, an improvement from a net loss of $2.0 million, or $(0.05) per share, in the same year-ago period.
Adjusted EBITDA from continuing operations improved to a profit of $713,000, up from a loss of $1.1 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 increased 16% to $12.9 million, compared to $11.2 million at the end of the prior quarter.
Management Commentary
"In the third quarter we achieved profitability both in our continuing operations on a GAAP basis and overall profitability in non-GAAP EBITDA. Moreover, our adjusted EBITDA profit spans the first nine months of 2016. This is a significant accomplishment, given that we have achieved this while aligning our business into high-margin, recurring revenue products and solutions and divesting businesses that are not aligned with our long term growth strategy," said Shlomi Cohen, OTI CEO. "Profits were driven by double digit growth in revenues, increased gross profits, and reductions in operating expenses."
"Our continued commitment to cost cutting and operational efficiencies decreased operating expenses when compared both to the prior quarter and the year-ago period. The third quarter of 2016 marked the lowest quarterly operating expenses for OTI in more than two years. Focusing resources on our core technologies, we sold our parking business which reduced expenses and freed up cash for reinvestment into our faster growing, higher margin businesses."
"Over the past four quarters, our most important and significant focus has been on moving from being a product company to a leading solutions company in the unattended payment market. Significant new contracts and our corresponding financial improvements reflect this change. During the third quarter we achieved a significant growth in the sale of our cashless readers and received purchase orders for future deliveries in the coming quarters including a letter of intent for the sale of 10,000 contactless readers in Japan, where we expect a larger number of opportunities to develop as a result of our recent receipt of FeliCa certification."
"Looking ahead to what we anticipate will become a multi-billion dollar market in the Internet of Things and wearable payment devices, during the third quarter we made significant progress toward launching Pay Capsule-Flex. One of the smallest payment devices in the world, Pay Capsule-Flex can turn any product and fashion garment into a payment device. We expect to launch our wearable payment ring product in the next few months."
"As a result of our efforts during the last year and our intended continuation of these efforts, we anticipate a stable, long term adjusted EBITDA profitability in the beginning of 2017."
Conference CallOTI will hold a conference call today (November 9, 2016) at 10:30 a.m. Eastern time to discuss these results. OTI CEO Shlomi Cohen and CFO Yishay Curelaru will host the presentation, followed by a question and answer period.
Date: Wednesday, November 9, 2016
Time: 10:30 a.m. Eastern time
U.S. dial-in: (844) 348-3791
International dial-in: +1 (216) 562-0484
Conference ID: 5955774
