OTI Reports FY2003 Midyear Financial Results Six Month Gross Profit Up 24%, Operating Loss Down 46%; Net Loss Decreased 28% - - - - - Strong Progress in Petroleum Payment Management, Micropayments and SmartID Markets
8/25/2003 1:00:00 AM
ROSH PINA, Isael, Aug 25, 2003 /PRNewswire-FirstCall via COMTEX/ -- On Track Innovations, Ltd. (Nasdaq: OTIV; Prime Standard (Frankfurt): OT5), a global leader in contactless microprocessor-based smart card solutions, today announced its consolidated financial results for the six months and second quarter ended June 30, 2003.
Revenues for the first six months of 2003 were $9.7 million, up 1% compared to the first six months of 2002. Gross profit for first half of 2003 was $5.3 million, up 24% from $4.3 million in the first half last year. Operating loss for the first half of 2003 decreased 46% to $1.1 million, from $2.0 million in the first half of last year. Net loss per share for the first half was $(1.00) compared to $(1.64) per share in the first half of 2002.
Revenues for the second quarter of 2003 were $5.0 million, compared to $4.7 million for the prior quarter, and $5.5 million for the second quarter of 2002. Gross profit for the second quarter was $2.9 million up from $2.4 million in the prior quarter and $2.3 million in the second quarter last year. Operating loss for the second quarter decreased to $450,000 from $654,000 in the previous quarter and $749,000 in the second quarter of last year. Net loss for the second quarter decreased to $724,000, or $(0.38) per share, compared to $1.1 million, or $(0.63) per share, in the previous quarter, and $1.4 million, or $(0.88) per share, in the second quarter of 2002.
The increases in gross profit, together with the sharp decrease in operating loss, are indicative of the ongoing business developments at OTI. It reflects the previously announced decision by OTI to focus on higher margin projects and recurring revenue models that generate service fees from ongoing customer services, technical support and transaction fees. In addition, for the six-months ended June 30, 2003 and for the second quarter in 2003, research and development cost net of the participation of the chief scientist compared to the same periods in 2002 decreased by 28% and 30%, respectively. The R&D decrease is also a part of the financial discipline/cost cutting program instituted company-wide.
During the second quarter of 2003, several key business developments took place that served to advance OTI towards its goal of becoming a leading provider of contactless microprocessor-based smart card solutions:
As first reported in April, the Company is providing integrated point-of- sale solutions to Loews Cineplex as part of MasterCard`s PayPass(TM) trial in Orlando, Florida. Representing an industry first, OTI has developed a reader for MasterCard PayPass that allows customers to pay for admission tickets, as well as their snacks at the concession stands, by simply placing their MasterCard PayPass enabled payment cards in front of a glass window. The unique OTI SMART Antenna allows the card readers to function smoothly through the glass so that the payment card never has to leave the customer`s hand. OTI`s technology is an integral part of MasterCard`s PayPass program, with different applications using varying components and services. For example, OTI has provided a turnkey PayPass drive-thru solution for one local Orlando retailer.
In April, the Company announced that ABSA, the largest commercial bank in South Africa, with the largest fuel card customer base in the country, has joined OTI`s FuelMaster Express Program that is geared towards private motorists. In 2003, the Company expects approximately 170 million liters (45 million gallons) of fuel to be dispensed through the FuelMaster Systems, where OTI receives a volume-based and monthly management fee for back-office service. In June, OTI announced the commercial launch of OTI`s next-gen EasyFuel product geared towards the U.S. and European markets: a wireless secured contactless petroleum payment solution. Recently, the Company announced that the San Francisco Bay Area Rapid Transit District (BART) has chosen OTI to provide ISO 14443 compliant contactless solutions for use in BART`s SFO Airline Employee Discount Program. In addition, OTI reported that it has delivered the SmartID products for the border control center at the Erez checkpoint between Gaza Strip and Israel, which controls the entrance and exit of approximately 120,000 daily workers while assuring a completely secure, exceptionally fast border crossing.
Commenting on the first half of 2003 operating results, Oded Bashan, President and CEO of OTI stated, "The first half of 2003, saw OTI make continuous progress in its key business areas of petroleum payment management, mass transit, ID security/access control, and micro-payments. During the first half of 2003, our operating loss decreased by 46% and our gross margin increased from 44% to 54%. Going forward, we expect to see additional initiatives come to fruition, as well as the introduction of several new products developed via our leading-edge R&D capabilities. "
The Company will host a webcast/conference call to discuss these results on Monday, August 25th, at 10:00 AM, EDT; 16:00 Germany time; 17:00 Israel time. To participate, please go to http://www.otiglobal.com/exhib_fr_left.htm call: 1-877-356-9548 (U.S. toll free), 0-800-181-5287 (Germany toll free), 1-800-945-7877 (Israel toll free), 1-706 679 0587 (international), ID Code: 2212395.
The conference call will also be available for replay starting 12 PM EDT on the day of the call until September 24th, by calling 1-800-642-1687 (U.S.), +1 706 645 9291 (international).
About OTI
Established in 1990, OTI (Nasdaq: OTIV, Prime Standard: OT5) 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 micropayments, mass transit ticketing, parking, petroleum payment systems, loyalty programs, ID and secure campuses. OTI has a global network of regional offices to market and support its products. The company was awarded the prestigious ESCAT Award for smart card innovation in both 1998 and 2000. Major clients include: MasterCard, BP, First Data Resources, Repsol, the Government of Israel and ICTS. For more information on OTI, visit www.otiglobal.com.
This press release contains forward-looking statements. Such statements are subject to certain risks and uncertainties, such as market acceptance of new products and our ability to execute production on orders, which could cause actual results to differ materially from those in the statements included in this press release. Although OTI believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. 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 otherwise.
This press release and other releases are available on www.otiglobal.com and www.portfoliopr.com
ON TRACK INNOVATIONS LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
US dollars in thousands
June 30 December 31
2003 2002
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $926 $2,145
Short-term investments 1,673 1,664
Trade receivables (net of allowance for doubtful
accounts of $274 and $244 as of June 30, 2003
and December 31, 2002, respectively) 2,174 1,982
Other receivables and prepaid expenses 1,086 838
Inventories 4,216 4,192
Total current assets 10,075 10,821
SEVERANCE PAY DEPOSITS 881 743
PROPERTY, PLANT AND EQUIPMENT, NET 6,087 6,559
OTHER INTANGIBLE ASSETS, NET 419 513
GOODWILL 5,383 5,383
Total assets $22,845 $24,019
LIABILITIES AND SHAREHOLDERS` EQUITY
CURRENT LIABILITIES
Short-term bank credit and current maturities
of long-term bank loans $3,037 $2,520
Trade payables 2,566 2,176
Other current liabilities 1,572 2,175
Total current liabilities 7,175 6,871
LONG-TERM LIABILITIES
Long-term bank loans, net of current maturities 3,465 4,006
Convertible notes 190 169
Deferred revenues - 716
Accrued severance pay 1,405 1,216
Total long-term liabilities 5,060 6,107
SHAREHOLDERS` EQUITY
Ordinary share of NIS 0.1 par value:
Authorized - 5,000,000 shares as of
December 31, 2002 and June 30, 2003;
Issued and Outstanding - 1,817,156 and 2,312,622
as of December 31, 2002 and June 30, 2003,
respectively 63 52
Additional paid-in capital 49,296 48,147
Deferred stock compensation (894) (1,115)
Accumulated other comprehensive income 262 201
Accumulated deficit (38,117) (36,244)
Total shareholder`s equity 10,610 11,041
Total liabilities and shareholders` equity $22,845 $24,019
For the six For the three For the year
months ended months ended ended
June 30 June 30 December 31
2003 2002 2003 2002 2002
(Unaudited) (Unaudited) (Audited)
REVENUES
Products $8,794 $8,626 $4,710 $5,038 $15,492
Non-recurring
engineering 195 305 21 - 952
Licensing and
transaction fees 409 281 188 129 651
Customer service and
technical support 341 444 91 326 868
Total revenues 9,739 9,656 5,010 5,493 17,963
COST OF REVENUES
Products 4,194 5,066 2,051 2,957 8,740
Non-recurring
engineering 64 50 5 - 216
Licensing and
transaction fees - - - - -
Customer service and
technical support 176 259 44 192 546
Total cost of
revenues 4,434 5,375 2,100 3,149 9,502
Gross profit 5,305 4,281 2,910 2,344 8,461
OPERATING EXPENSES
Research and
development 1,765 2,449 758 1,207 4,459
Less - participation
by the Office of the
Chief Scientist 364 498 120 292 1,103
Research and
development, net 1,401 1,951 638 915 3,356
Selling and
marketing 2,147 1,830 1,181 856 3,869
General and
administrative 2,767 2,468 1,494 1,275 5,183
Amortization of
intangible assets 94 67 47 47 161
Total operating
expenses 6,409 6,316 3,360 3,093 12,569
Operating loss (1,104) (2,035) (450) (749) (4,108)
Financial income
(expenses), net (544) 212 (345) 72 41
Other expenses, net (225) (758) (4) (736) (1,955)
Loss before
taxes on
income (1,873) (2,581) (799) (1,413) (6,022)
Tax benefit
(taxes on income) - (3) 75 19 (207)
(1,873) (2,584) (724) (1,394) (6,229)
Minority interest - (19) - - (19)
Net loss $(1,873) $(2,603) $(724) $(1,394) $(6,248)
Basic and diluted
net loss per share $(1.00) $(1.64) $(0.38) $(0.88) $(3.76)
Weighted average
number of shares
used in computing
net loss per
shares - basic and
diluted 1,876,942 1,589,677 1,902,396 1,590,044 1,661,170
OTI Contact: Agency Contacts:
Galit Mendelson Paul Holm and Matthew Karsh
Director of Corporate Communication PortfolioPR
212-531-3247 212 736 9224
galit@otiglobal.com pholm@portfoliopr.com /
mkarsh@portfoliopr.com
SOURCE On Track Innovations, Ltd.
Galit Mendelson, Director of Corporate Communication of On
Track Innovations, Ltd., +1-212-531-3247, galit@otiglobal.com; or Paul Holm,
pholm@portfoliopr.com, or Matthew Karsh, mkarsh@portfoliopr.com,
both of PortfolioPR, +1-212-736-9224, for On Track Innovations, Ltd.
http://www.otiglobal.com
Copyright (C) 2003 PR Newswire. All rights reserved |
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