On Track Innovations Ltd., a global leader in contactless microprocessor-based smart card solutions for homeland security, payments, petroleum payments and other applications, today announced its consolidated financial results for the fourth quarter and fiscal year ended December 31, 2006.
– Revenues: Revenues for the year ended December 31, 2006 were $40.6 million, an increase of 14% compared to $35.7 million in the same period last year. Revenues for the fourth quarter reached $13.2 million, an increase of 42% compared to $9.3 million in the same period last year.
– Gross Margin: Gross margin for the year ended December 31, 2006 was 46% compared to 39% in the same period last year. Gross margin for the fourth quarter was 48% compared to 52% in the fourth quarter of 2005.
– GAAP Net Income (Loss): GAAP net loss for the year decreased to $(6.6) million from $(9.1) million in the same period last year. GAAP net loss for the fourth quarter was $(0.3) million, a substantial decrease compared to $(2.3) million in the fourth quarter last year.
– Non-GAAP Net Income (Loss): Non-GAAP net loss for the year ended December 31, 2006 was $(3.4) million, a substantial decrease compared to $(8.4) million in the same period last year. Non GAAP net income for the fourth quarter was $0.5 million compared to a net loss of $(1.9) million in the fourth quarter last year.
– GAAP Net Income (Loss) per Share: GAAP loss per share for the year was $(0.47) compared to $(0.96) in the same period last year. GAAP loss per share for the fourth quarter was $(0.02), compared to $(0.22) in the fourth quarter of 2005.
– Non-GAAP Income (Loss) per Share: Non-GAAP net loss per share for the year was $(0.25), compared to $(0.88) in the same period last year. NonÃÂÃÂÃÂâÃÂÃÂâÃÂGAAP net income per share for the fourth quarter was $0.03 compared to a net loss per share of $(0.18) for the same period last year.
– Strong Balance Sheet with cash, equivalents and short term investment totaling $48.3 Million.
– GAAP operating expenses: GAAP operating expenses for the year were $26.8 million compared to $24.2 million for the same period last year. GAAP operating expenses for the fourth quarter were $6.8 million compared to $7.3 million for the same period last year.
– Non-GAAP Operating Expenses: $ 23.6 million for the year ended December 31, 2006 compared to $23.5 million for the same period last year. Non-GAAP operating expenses for the fourth quarter were $6.0 million compared to $6.9 million in the same period last year.
Non-GAAP results for the fourth quarter and fiscal year ended December 31, 2006 excludes the impact of SFAS 123(R) and amortization of intangible assets. Non-GAAP results for the fourth quarter and fiscal year of 2005 excludes amortization of intangible assets. Please see the attached tables for a full reconciliation of GAAP to Non-GAAP results.
Commenting on the results, Oded Bashan, Chairman, President & CEO of OTI, said, “We are pleased with the company results in 2006, we had good revenue performance, improved gross margin, which, together with our ability to control operating expenses on a Non-GAAP basis, enabled us to significantly reduce our GAAP loss and achieve a net profit on a non-GAAP basis. The modest decline in cash primarily reflects the need to invest in working capital to support large projects in hand and future growth.
“Looking ahead, we believe the two strategic acquisitions we completed during 2006 will enhance our capabilities in both the payments and ID markets and position us to increase market share and expand the number of opportunities. The primary impact of the SuperCom IPS assets acquisition will occur in the second half of 2007.
“While quarter to quarter lumpiness is characteristic of the early-stage markets in which we participate, we see no major changes in business conditions in any of our vertical markets and we expect to achieve our long term growth trend of 20%-25% for 2007, we expect the second half to be significantly stronger than the first half and growth to be driven mainly by the petroleum and ID markets as well as expansion in the payment markets.”
About OTI
Established in 1990, OTI (NASDAQ: OTIV) 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 petroleum payment systems, homeland security solutions, electronic passports and IDs, payments, mass transit ticketing, parking and loyalty programs. OTI has a global network of regional offices to market and support its products. The company was awarded the Frost & Sullivan 2005 and 2006 Company of the Year Award in the field of smart cards. For more information on OTI, visit www.otiglobal.com.
