On Track Innovations Ltd. (OTI) (Nasdaq:OTIV), a global leader in contactless microprocessor-based smart card solutions for homeland security, payments, petroleum payments and other applications, announced its consolidated financial results for the first quarter ended March 31, 2009.
Total revenues for the first quarter were $9.3 million, similar to the first quarter of 2008.
Gross margin for the first quarter increased to 46% compared to 32% in the same quarter last year.
Strong balance sheet with $25.8 million in cash, cash equivalents and short term investments.
Non-GAAP operating expenses for the first quarter were $7.2 million, compared to $7.3 million in the same quarter last year. Operating expenses for the first quarter on a GAAP basis were $8.4 million, a 10% decrease compared to $9.3 million in the first quarter of 2008.
Non-GAAP operating loss for the first quarter was $2.8 million, a 34% decrease compared to $4.3 million in the same quarter last year. Operating loss for the first quarter on a GAAP basis was $4.1 million, a 36% decrease compared to $6.3 million in same quarter last year.
Non-GAAP net loss for the quarter was $2.6 million, a 46% decrease compared to $4.8 million in the first quarter of 2008. GAAP net loss for the first quarter was $3.8 million, a 44% decrease compared to $6.9 million in the first quarter of 2008.
Oded Bashan, Chairman and Chief Executive Officer of OTI, said: “Our first quarter results are in line with OTI’s strategy to focus on improved margins, reduction in operating expenses, specifically in R&D and G&A, and the continued focus on marketing and sales, all resulting in further decrease in the operating loss and in the level of cash burn. Our target is to further reduce operating expenses on a non-GAAP basis to reach $25 million annually.”
Following the disclosure made by the company in its 2008 annual results filed with the Securities and Exchange Commission on March 24, 2009, on Form 6-K that the company may recognize an impairment charge against its goodwill and other intangible assets (amounting to $28.1 million), the company recently completed impairment testing as of December 31, 2008, according to which OTI will record a $25.6 million impairment charge, of which $24.2 million and $1.4 million for goodwill and intangible assets, respectively. The goodwill impairment charge was driven by the decline in OTI’s stock price and the deteriorating global economy. The impairment charges are noncash accounting adjustment to the Company’s balance sheet and profit and loss report, that do not affect cash flow, liquidity or OTI’s non-GAAP results. The impairment charges will be reflected in OTI’s audited GAAP financial consolidated results as of December 31, 2008 attached to Form 20-F to be filed with the U.S. Securities Exchange Commission and are reflected in the reports attached below.
Further to the disclosure made by the company in December 2008 regarding the share repurchase program, the Israeli District court approved the repurchase by the Company of its ordinary shares in a total amount of up to $2 million. OTI’s Board of Directors will further discuss the program details, conditions and scope, all subject to regulatory requirements. However, as reported previously, the Company is not obligated to acquire any specific number of shares, and the program may be suspended or discontinued at any time.
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, loyalty programs and secure campuses. 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 complete details on OTI’s performance visit CardData (www.carddata.com).
