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On Track Innovations Ltd. (OTI) (NASDAQ: OTIV) (the “Company” or “OTI“), a global provider of near field communication (NFC) and cashless payment solutions, has provided a business update and announced financial results for the third quarter ended September 30, 2018.
Operational Updates:
- OTI delivered a total of more than 3,000 advanced payment systems to Japan.
- OTI delivered approximately 8,000 advanced contactless readers to the widespread Russian retail self-service market.
- The Company received the MIR National Card Payment System organization certification, a key component of effectively penetrating the strategic Russian unattended payment market.
- In August, Apriva released a white paper affirming its ongoing partnership with OTI for deploying next generation self-serve and vending technologies, enabling OTI to offer merchants a pre-certified, off-the-shelf EMV solution for self-service kiosks.
- In October, OTI was granted the Interbank Network Interac certification, allowing Canadian businesses to integrate OTI’s secure cashless payment solutions into vending machines, kiosks and other unattended devices throughout the significant Canadian market.
Management Commentary
“I am pleased to announce another quarter of continued operational execution, highlighted by our robust sequential and year-over-year revenue growth,” said Shlomi Cohen, Chief Executive Officer of On Track Innovations. “The third quarter revenue of $6.5 million represents the highest third quarter revenue achieved since 2013. We continued to make notable progress on several key fronts, primarily through successful sales efforts in Japan and the United States.
“Alongside success in our existing markets, we continued to expand our efforts to new international markets – as evidenced through the granting of the MIR certification in Russia, where we delivered almost 8,000 advanced contactless readers in the third quarter, as well as the Interac certification in Canada. Both of these certifications are crucial to successfully operating in these countries, allowing our sales team to now focus their efforts on well-suited opportunities abroad.
“We also experienced our fourth consecutive quarter of positive adjusted EBITDA while expanding our recurring revenue base by 19% on an absolute dollar basis to $1.5 million per quarter, compared to $1.2 million in same year ago period. We also reduced our debt by 89% in the quarter when compared to the prior quarter, with total debt now standing at just $0.5 million.
“Our ability to maintain a significant technological advantage over the competition while diligently managing our expenses has positioned us well for continued revenue growth and shareholder value creation over the long-term,” concluded Cohen.
Q3 2018 Financial Highlights
- Total revenue in the third quarter of 2018 increased 39% to $6.5 million, compared to $4.7 million in the same year-ago period.
- Recurring revenues, on an absolute dollar basis, increased by 19% to $1.5 million, compared to $1.2 million in the same year-ago period.
- Gross profit in the third quarter of 2018 was $3.4 million, or 53% of revenues, compared to $2.5 million, or 53% of revenues, in the same year-ago period.
- Net loss from continuing operations in the third quarter of 2018 was $158,000, or $(0.00) per share, compared to a net loss from continuing operations of $573,000, or ($0.01) per share, in the same year-ago period.
- Adjusted EBITDA in the third quarter of 2018 was $362,000, compared with adjusted EBITDA loss of $74,000 in the same year-ago period.
- Cash, cash equivalents and short-term investments at September 30, 2018 totaled $5.9 million, compared to $8.8 million at June 30, 2018 and $8.7 million at September 30, 2017. Debt at the end of the third quarter of 2018 decreased by 89% to $0.5 million, compared to $4.5 million at the end of the second quarter of 2018.
Full report.
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