ROSH PINA, ISRAEL — (Marketwired) — 03/23/16 — (NASDAQ: 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, 2015.

Introduced a 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 , the world–s largest event focused on payments and financial services innovation. oti–s new was well received by attendees, partners and prospective customers.

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.

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.

“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.”

oti will hold a conference call today (March 23, 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, March 23, 2016
Time: 10:30 a.m. Eastern time
U.S. dial-in: 1-877-407-0784
International dial-in: 1-201-689-8560

Please call the conference telephone number 10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios at 949-574-3860.

A replay of the call will be available after 1:30 p.m. Eastern time through April 23, 2016.

U.S. replay dial-in: 1-877-870-5176
International replay dial-in: 1-858-384-5517
Replay ID: 13632167

This press release contains certain non-GAAP measures, namely, adjusted EBITDA from continuing operations, or adjusted earnings from continuing operations before interest, income tax, depreciation and amortization. Adjusted EBITDA from continuing operations represents earnings before interest or financing expenses, income tax, depreciation and amortization, and further eliminates the effect of share-based compensation expense, patent litigation and maintenance expenses and other expenses. oti believes that adjusted EBITDA from continuing operations should be considered in evaluating the company–s operations since it provides a clearer indication of oti–s operating results. This measure should be considered in addition to results prepared in accordance with US GAAP, but should not be considered a substitute for the US GAAP results. The non-GAAP measures included in this press release have been reconciled to the US GAAP results in the tables below.

On Track Innovations Ltd. (oti) is a leader in contactless and NFC applications based on its extensive patent and IP portfolio. oti–s field-proven innovations have been deployed around the world to address NFC and other cashless payment solutions, petroleum payment and management, cashless parking fee collection systems and mass transit ticketing. oti markets and supports its solutions through a global network of regional offices and alliances. For more information, visit , the content of which is not part of this press release.

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 words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or similar expressions are used, the company is making forward-looking statements. For example, forward-looking statements include statements regarding our intent to rollout new products and our position to capitalize on the cashless payment market. 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 could be impacted by the effects of the protracted evaluation and validation periods in the U.S. and other markets for contactless payment cards, as well as oti–s 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 10-K for the year ended December 31, 2014, and in subsequent filings with the Securities and Exchange Commission. Although the company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can provide no assurance that 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.

Scott Liolios or Matt Glover
Liolios Group, Inc.
949-574-3860

Nir (Neil) Barr
oti Marketing Director
+972-4-686-8004

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