OTI announced financial results for the quarter ended 31 March 2001 with
significant increases in both revenue and gross profit.
— Revenues for the quarter are up 297% to US $4.07 million (1Q2000 US $1.025
— Gross profit ahead 356% to $1.94 million (1Q2000 US $0.425 million).
— Operating expenses remain at a consistent level of $5.11 million according
to the company’s corporate strategy and level of operations and thus the
operating loss for the three months ended March 31, 2001 were $3.171 million.
— Net loss of $3.219 million (1Q2000 US $3 million) in line with company
expectations as a result of operating expenses and the inclusion of e-Smart’s
operating loss of $0.642 million. Given the current economic situation and
OTI’s conservative financial approach, the company has taken an additional
provision for bad debt in the amount of $0.5 million for customers who have
paid within 180 days and who the company believes might not have adequate
— These results are in line with the company’s expectations to break even and
reach profitability for the fourth quarter of 2001.
“We are continuing to grow and meet projections,” said Oded Bashan, President
and CEO of OTI. “Our revenues have almost quadrupled, and we have strengthened
our global operations and marketing network. We have launched additional
products that strengthen our position as the technology leader in our
OTI has initiated an expansion strategy in 2000 that has revolved around
investing in R&D, expanding marketing infrastructure and increasing the global
operations. As a result of such expansion, the company has reached a strategic
level of operation that incurs operating expenses of approximately $5 million
Revenues for the quarter ended 31 March 2001 were $4.07 million, an
297% compared with US$1.02 million for 1Q2000. The gross profit for the
grew by 356% to $1.94 million compared with $0.42 million in 1Q2000.
Research & development expenses increased by 82% to $1.4 million from $0.79
million in 1Q2000. Marketing expenses rose by 66% to $2.306 million from
million in the same period, while general and administrative expenses
by 70% to $1.089 million compared with $0.64 million in 1Q2000.
The net loss for 1Q2001 was $3.219 million (1Q2000 US$3 million) up from
$2.993 million in the previous quarter. The increase in net loss was strongly
related to the investments made in marketing, infrastructure, and global
expansion including acquisitions, and research & development. These are
expenses and are in line with OTI’s expansion strategy. In addition, given the
current economic situation and OTI’s conservative financial outlook, the
company has taken an additional provision for bad debt in the amount of $0.5
million for customers who have not paid within 180 days and who the company
believes might not have adequate securities.
Reflecting the company’s strategy, the operating expenses remain at the same
level as in 4Q2000. The company ended 1Q2001 with operating expenses of $5.11
million and operating losses of $3.17 million. Including e-Smart’s loss of
$0.642 million OTI finished 1Q2001 with a net loss of $3.219 million.
OTI ended 1Q2001 with cash, cash equivalents, and short-term investments of
$15.5 million and total assets of $41.3 million.
Some of the major developments during the first quarter include
— Xerox Connect and OTI are providing payment and information solutions for
the U.S. campus market. The relationship provides end-to-end solutions for
universities and corporate campuses.
— City of Tel Aviv will equip two additional country clubs with OTI’s
contactless smart card campus solution.
— OTI and P-Card System will jointly launch the first Europe-wide
currency-independent contact/contactless smart card solution to issuers
— OTI acquired the remaining 49 percent of leading European smart card system
integrator InterCard Kartensysteme GmbH and electronic smart card hardware
manufacturer InterCard System Electronic GmbH.
— e-Smart System will commence a field test for OTI’s smart card and readers
for use in an automated fare collection service in CKI’s toll bridge in Panyu,
Guandong province of China.
— MediKredit Integrated Healthcare Solutions (Pty) Ltd and OTI Africa began a
pilot project for the introduction of OTI’s Medical Management Application.
— The Israel Postal Authorities are to market and distribute EasyPark
electronic parking cards nationwide.
— OTI launched its Saturn Reader, the first fully integrated smart card
to accept both ISO 7816 contact cards and ISO 14443 Type A, B, and D
— OTI will provide the first contactless smart card supporting public-key
infrastructure (PKI) encryption, used for digital certificates in such secure
environments as Internet transactions and in government agencies.
— Hindustan Petroleum Corporation Ltd. (HPCL) is launching a
contactless smart card program throughout India offering a payment and loyalty
solution for use at HPCL’s retail petroleum stations.
Established in 1990, OTI (On Track Innovations) designs and develops
contactless microprocessor-based smart card technology to address the needs of
a wide variety of markets. Applications developed by OTI include product
solutions for mass transit, parking, gas management systems, loyalty schemes,
ID and secure campuses. OTI has regional offices in the US, Europe, Asia
Pacific, and Africa to market and support its products. The company was
the prestigious ESCAT Award for smart card innovation in both 1998 and 2000.
Visit OTI on the Internet at www.oti.co.il.