OTI Reports Fourth Quarter and Full Year 2016 Financial Results
ROSH PINNA, Israel, March 22, 2017 (GLOBE NEWSWIRE) -- On Track Innovations Ltd. (OTI) (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, 2016.
Q4 2016 Operational Highlights
Great promise and progress in Japan. Following the execution of a letter of intent announced in Q4 2016 for 10,000 otiMetry systems during the coming three years, a formal purchase order was received in early 2017.
Growth in the deployment of our otiMetry solutions, which generate recurring revenue in addition to associated product sales.
Q4 2016 Financial Details
Total quarterly revenue of $5.6 million, a year-over-year increase of 3%.
Operating expenses decreased 10% to $3.4 million from $3.7 million in the same year-ago period.
Cash and cash equivalents, and short-term investments at December 31, 2016 totaled $11.5 million, which was up 6% from the end of the prior year.
Full Year 2016 Financial Details
Revenue increased 11% to $20.6 million from $18.5 million in 2015.
Gross profit increased 10% to $10.2 million compared to $9.3 million in 2015.
Operating expenses decreased $4.0 million or 25% to $12.1 million from $16.1 million last year.
Net loss from continuing operations totaled $2.4 million or $(0.06) per share, a 68% improvement from a net loss from continuing operations of $7.5 million or $(0.18) per share in 2015.
Adjusted EBITDA loss from continuing operations improved 93% to $241,000 from a loss of $3.4 million in 2015.
Management Commentary - Shlomi Cohen (OTI CEO)
“We are proud to report the 5th quarter in a row of improvement in nearly all aspects of our results, as well as significant improvement in our year-over-year results,” said Mr. Cohen. “Our financial results for 2016 were strong across the board. We increased our revenues by more than 11%, maintained our gross margin levels, reduced our debt by 10%, and dramatically decreased our net losses by 88% and our adjusted EBITDA losses by 93%. This is a remarkable achievement as it was accomplished in a year in which our primary focus was on restructuring and on establishing and maintaining operational efficiency. We strongly believe that during 2017 we will present a positive adjusted EBITDA.”
“The year-over-year improvements are very meaningful to us as they demonstrate how far we have come over the last eighteen months in our work to put OTI on the path towards consistent profitable growth. Because of our significant efforts to reduce costs, optimize our operations, focus our product offering, and increase our sales, we were able to deliver over 90% improvement in adjusted EBITDA loss from 2015 and reach near break-even adjusted EBITDA for the full year.”
“We have also made significant improvements on the products, sales and operational fronts. The most notable and promising progress came in Japan. Following on our receipt of FeliCa certification for our reader, we received in late 2016 a letter of intent from a major Japanese retailer to purchase 10,000 otiMetry systems consisting of our FeliCa certified readers and our GoBox Multi-Service Telemetry Gateway during the coming three years. This letter of intent was followed by a formal purchase order in early 2017. We see this as great progress into a very promising market. As a result of our continuing work to develop a sales pipeline in the Japanese market together with our partner, Billing Systems, we believe that this market will deliver additional opportunities in the months and years to come.”
“2016 was also very productive on the product front as we got off to a strong start in transitioning from being a simple hardware supplier to a full solution provider offering vending operators and other partners a one-stop-shop for their payment solutions and services. In Europe, we have seen growth in the deployment of our otiMetry solutions which allow us to generate recurring revenue in addition to the revenue associated with product sales.”
“We have put greater emphasis and importance on expanding and diversifying our customer base both globally in places such as Japan and Europe and in North America where we have successfully positioned OTI and our products for entry into the growing kiosk or self-checkout market. Through our work with North American channel partners, earlier this year we received several purchase orders for the supply of thousands of advanced self-checkout payment systems to leading U.S. based kiosk operators and fast food chains. We believe that these first purchase orders are only the beginning of OTI’s entry into this key vertical and we believe that during the coming year we will see continued acceleration and sales to this market.”
“We have also made progress in our wearables business. Following the launch in May 2016 of our Pay Capsule Flex payment enabler inserts and our Pay Enabled platform, in November we launched a smart payment ring utilizing our technology. This demonstrates our ability to turn any product and fashion garment into a payment device. With our wearable cashless payments technology successfully demonstrated, we have increased our business development and sales efforts for our Pay Enabled products and we believe that these efforts will yield results.”
Conference Call
OTI will hold a conference call on Wednesday, March 22nd at 9:00 AM EDT to discuss results for the fourth quarter and fiscal year ended December 31, 2016. Financial results will be issued in a press release prior to the call.
