ROSH PINA, ISRAEL--(Marketwired - Mar 23, 2016) - On Track Innovations Ltd. (oti), 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, 2015.
Q4 2015 Operational Highlights
- Introduced a new product lineup developed to support entry into new growth markets and industry verticals, including ATM, kiosk and gaming.
- Outsourced manufacturing and production to third-party vendors, allowing for greater efficiency, reduced operating cost and higher margins.
- Exhibited with Nidec Sankyo Corporation, a leading provider of card readers and unit of Nidec Corporation, at Money20/20, the world's largest event focused on payments and financial services innovation. oti's new Pay Capsule was well received by attendees, partners and prospective customers.
Q4 2015 Financial Details
Total revenues increased 52% to $5.7 million from $3.8 million in the previous quarter and 5% from $5.5 million in the same year-ago period.
Gross profit increased 39% to $2.9 million (51% of revenue) from $2.1 million (55% of revenue) in the previous quarter and up 15% from $2.5 million (46% of revenue) in the same year-ago period.
Operating expenses totaled $4.1 million, declining 6% from $4.4 million in the previous quarter and down 19% from $5.0 million in the same year-ago period.
Net loss from continuing operations totaled $1.4 million or $(0.03) per share, an improvement from a net loss from continuing operations of $2.4 million or $(0.06) per share in the prior quarter, and a net loss from continuing operations of $2.6 million or $(0.08) per share in the same year-ago period.
Adjusted EBITDA loss from continuing operations improved to $789,000 from a loss of $1.2 million in the prior quarter, and from a loss of $1.6 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 totaled $10.9 million, compared to $11.5 million at the end of the prior quarter.
Full Year 2015 Financial Details
Total revenues decreased 14% to $19.9 million from $23.1 million in 2014.
Gross profit was $10.1 million (51% of revenue) compared to $11.1 million (48% of revenue) in 2014
Operating expenses were $17.4 million, a decrease of 15% from $20.6 million in 2014.
Net loss from continuing operations totaled $8.0 million or $(0.20) per share, compared to a net loss from continuing operations of $10.2 million or $(0.30) per share in 2014.
Adjusted EBITDA loss from continuing operations improved to $3.8 million from a loss of $5.8 million in 2014.
Management Commentary
"2015 marked a transformational period in oti's financial and operational development," said company CEO, Shlomi Cohen. "We implemented key strategic initiatives designed to optimize our manufacturing processes, accelerate growth and reduce costs.
"Our success in these endeavors was reflected in our improving financial performance, highlighted by topline growth in Q4, as well as dramatically lower operating expenses and improved gross margins in both the fourth quarter and full year. In fact, our total operating expenses for 2015 decreased 15% year-over-year, and we achieved a 53% year-over-year reduction in cash used by our operations.
"We reapportioned some of these cost savings to strengthen our sales organization in terms of both personnel and geographic reach. Our sales and marketing team has increased over the last six months, reflecting a transition to a more capable and expanded sales organization that can better capitalize on the strong growth and tailwinds in the cashless payment market.
"Our recent customer wins and new strategic partnerships demonstrate the effectiveness of our expanded sales capabilities and new go-to-market strategy. These wins also demonstrate the demand for our new products, which all together have allowed us to enter new verticals and geographic regions, including Spain, Portugal, Italy and the Czech Republic. oti's solutions are now distributed in two of the top six vending markets in Europe, which account for approximately one million machines. Collectively, our Pan European distributor network represents an incremental two million vending machines opportunity for oti.
"Allowing us to more fully capitalize on these opportunities in Europe, we recently received the 'green light' to support payment-processing services for vending and kiosk operators in the European Union. In collaboration with a multinational bank and a leading payment processor, we can now offer a greatly simplified setup and maintenance process as a 'one-stop-shop' for operators that is unparalleled in our industry. In addition to expanding our market opportunity, it also adds another significant recurring revenue stream for oti.
"Along this line, a key measure of our success in 2016 will be our ability to establish and expand recurring revenue sources that will provide greater revenue visibility and predictability. We anticipate that our new partnership with Apriva will begin to contribute recurring revenue in the second half of the year.
"We entered 2016 with a considerably expanded product portfolio along with a strong pipeline of new business -- key ingredients for our long-term success. Our strategic plan for 2016 involves accelerating our growth, generating recurring revenue, and reducing expenses. We are confident the successful execution of this plan will position oti as a growing technology leader in the revolutionary Internet of Things. While there is more work ahead, we are in an ideal position to capitalize on the global multi-billion dollar cashless payment market and deliver long-term growth in shareholder value." Full report.
