On Track Innovations Ltd. (OTI) (NASDAQ: OTIV; Prime Standard (Frankfurt): OT5), a global leader in contactless microprocessor-based smart card solutions for homeland security, micropayments and petroleum payment, today reported operating results for the first quarter, ended March 31, 2004. Total revenues for the first quarter were $5,302,000 up from $4,729,000 in the first quarter of 2003.
Net loss for the first quarter was $(1,989,000) or ($0.39) per share, including $(659,000) in non-recurring expenses related to restructuring and raising of capital, compared with $(1,149,000) or $(0.63) for the same period in 2003. Net loss for the quarter excluding expenses related to restructuring and raising of capital was $(1,330,000). Cash and cash equivalents for the first quarter were $13,692,000 a 41% increase from $9,712,000 at the end of the FY2003. Increases in revenues for the quarter are the result of OTI’s focus on developing marketing alliances, as well as its business model of generating higher margin service fees and transaction fees that result in recurring revenues.
Several petroleum payment business developments took place in the first quarter. The Company reported record volume growth by BP South Africa, from 100 million liters (26.5 million gallons) in 2002 to 175 million liters (46.2 million gallons) in 2003, with OTI’s petroleum payment solution, branded by BP as FuelMaster. OTI also reported the installation of the 200th gas station in Turkey using OTI’s petroleum payment system. In addition, the Company recently announced that it had entered into an agreement with Sasol Oil (NYSE:SSL), the largest oil company in South Africa, to create a large network of on-road retail convenience centers equipped with OTI’s petroleum payment solution.
Increasing its ability to provide micropayments solutions, OTI teamed up with the global payment technology leader Hypercom Corporation (NYSE:HYC) to deliver contactless electronic card payment terminals that will help to expand merchant and consumer use of contactless payment programs such as MasterCard’s PayPassTM.
OTI also extended its SmartID product line this quarter. The Company was awarded a contract to provide MediSmart solution consisting of contactless smart cards, readers and related software to the leading primary health care provider in South Africa, the CareCross HealthCare Network. The MediSmart program provides personal identification, medical records and benefit information that are secured using contactless card with biometric verification. The initial hardware installations in healthcare facilities are scheduled to begin during the second half of the year.
In addition, the Xinhua News agency in China reported that new electronic ID cards carrying OTI’s technology would be issued to 200,000 residents of two of Shanghai’s districts during the first half of this year as part of the first phase of the China ID program.
Recently, OTI announced it had completed equity financing of $15.1 million to institutional investors. The funds will be used to support large scale implementation of one or more new projects that OTI is about to undertake for its customers, to enable OTI to increase its role in the delivery channel for the different projects, and to support OTI’s strategic growth in other respects. Expenses relating to raising and corporate restructuring of capital have an impact on OTI’s operating expenses for the first and second quarter.
Oded Bashan, President and CEO of OTI said, “Over the course of the past year, OTI has continued to focus on forming marketing alliances in the micropayments, petroleum payments, homeland security and ID applications markets. We’re implementing a business model that focuses on higher margin, service fees and recurring transaction and license fees. I am confident that these strategic shifts and corporate restructuring will better position the company for the future.”
The Company has scheduled a conference call and simultaneous Webcast for Tuesday, June 1, 2004, which will be hosted by Oded Bashan, President and CEO, Guy Shafran, CFO, and Ohad Bashan, President OTI America, for 10:00 AM EDT to discuss operating results and future outlook. To participate, call: 1-800-963-8290 (U.S. toll free), 1-800-931-5196 (Israel toll free), 0-800-182-1463 (Germany toll free), or 1-973- 409-9260 (standard international) ID Code: 481430. To attend the Webcast, use the following links:
Real Player Webstream Link:
Windows Media Webstream Link: http://orion.calleci.com/servlet/estreamgetevent?id=3823&folder=webstream
For those unable to participate, the teleconference will be available for replay for 48 hours by calling U.S: 877-519-4471 or International: 973-341-3080 and entering the PIN number # 4814309.
Established in 1990, OTI (NASDAQ: OTIV, Prime Standard: OT5) 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, micropayments, 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 prestigious ESCAT Award for smart card innovation in both 1998 and 2000. Major clients include: MasterCard International, Atmel, BP, Scheidt & Bachmann, EDS, Repsol and the Government of Israel. For more information on OTI, visit www.otiglobal.com http://www.otiglobal.com.