SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of March, 2004
ON TRACK INNOVATIONS
LTD.
(Name of Registrant)
Z.H.R. Industrial Zone, P.O. Box 32, Rosh-Pina, Israel, 12000
(Address of Principal Executive Office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes o No x
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes o No x
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):
ON TRACK INNOVATIONS LTD.
6-K ITEM
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| ON TRACK INNOVATIONS LTD. (Registrant) BY: /S/ Oded Bashan —————————————— Oded Bashan President, Chief Executive Officer and Chairman |
Date: March 22, 2004
|
Press Release |
| OTI Contact: | Agency Contacts: |
| Galit Mendelson | Paul Holm and Maggie Johns |
| Director of Corporate Communication | PortfolioPR |
| 212-421-0333 | 212 736 9224 |
| galit@otiglobal.com | pholm@portfoliopr.com / mjohns@portfoliopr.com |
OTI REPORTS PROFITABLE
FOURTH QUARTER
STRONG YEAR-END FINANCIAL RESULTS FOR FY 2003
Fourth Quarter Record
Revenues Climb 46% to $5.8M,
Gross Profit $3.3M, $102K Net Profit;
FY 2003 Revenues of $19.6M, $10.1 Gross Profit, Net Loss Drops 43% to $3.6M
Cupertino, CA– March 22, 2004 –On Track Innovations, Ltd. (NASDAQ: OTIV; Prime Standard (Frankfurt): OT5), a global leader in contactless microprocessor-based smart card solutions, today announced its consolidated financial results for the fourth quarter and fiscal year ended December 31, 2003.
Revenues for the fourth quarter of 2003 rose 46% to a record $5.8 million, from $3.9 million for the fourth quarter of 2002. Gross profit for the fourth quarter was $3.3 million up 78% from $1.9 million in the fourth quarter of 2002. Gross margin was 57% as compares to 47% in the fourth quarter last year. Operating profit for the fourth quarter reached $315,000 compared to a loss of $(1.2) million in the fourth quarter of last year. Net profit for the fourth quarter was $102,000, compared to a net loss of $(2.0) million in the fourth quarter of 2002. Cash and cash equivalents at year ended December 31, 2003 increased by 352% or $7.6 million to a level of $9.7 million at December 31, 2003 compared to $2.1 million at December 31, 2002.
Revenues for FY 2003 increased by 9% (or by $1.6 million) to $19.6 million from $18.0 million in FY 2002. Gross profit for FY 2003 was up 20% (or by $1.6 million) to $10.1 million from $8.5 million in the same period last year. Operating loss for fiscal year 2003 decreased by 43% (or by $1.8 million) to $(2.3) million from $(4.1) million in FY 2002. Net loss for the period dropped by 43% or $2.6 million from the same period last year, from $(6.2) million to $(3.6) million in FY 2003, and net loss per share for the period was down to $(1.52) from $(3.76) in fiscal year 2002. Net cash provided by operating activities in fiscal year 2003 was positive and summed to $267,000.
The increases in revenues and gross profit, together with the sharp decrease in operating loss, reflect OTI’s ongoing business developments, including its previously announced decision to focus on higher margin projects and recurring revenue models that generate service fees from ongoing customer services, technical support and transaction fees.
During the fourth quarter of 2003, several key business developments took place that advanced OTI towards its goal of becoming a leading provider of contactless microprocessor-based smart card solutions:
| • | OTI’s EasyFuel Petroleum Payment Solution entered the European Market with its first gas station network being installed in Spain. |
| • | OTI and Scheidt & Bachmann formed an alliance to provide mass transit ticketing solutions, with first implementation in the Houston Area Transit Authority with contactless ticketing solutions. |
| • | OTI installed its EasyFuel Wireless Petroleum Payment Solution in a chain of gas stations in Mexico. |
| • | OTI was named to Deloitte & Touche – Brightman Almagor Technology Fast 50 List of Fastest Growing Israeli Tech Companies. |
| • | Atmel and OTI’s contactless solution was selected for use in MasterCard PayPass contactless payment rollout in the US. |
More recently, OTI announced record volume growth of its Petroleum Payment Solution implemented by BP, the successful pilot study and beginning of implementation of its MediSmart Solution to CareCross HealthCare Network in South Africa, and the installation in Turkey of the 200th gas station with its Petroleum Payment System.
Commenting on fourth quarter and fiscal year 2003 operating results, Oded Bashan, President and CEO of OTI stated, “2003 was a year in which we began seeing the success of projects in development for several years. It has been a year of building alliances, developing and fine-tuning our product offerings, and launching long-term projects. We have been busy installing infrastructure, finalizing client needs and completing pilot studies. During the year, we continued our focus on improving cash flow, operating margins, and balance sheet items. Most important, the fourth quarter was our first profitable quarter, with a strong increase in profit margins. In 2004 we will continue our focus on the three main vertical market applications of petroleum payment (EasyFuel), Credentialing, ID and personnel authentication (SmartID), and cash replacement for small ticket items (micropayments), to maintain the strong progress that we made in these key areas in 2003.”
The Company will host a webcast/conference call to discuss these results on Monday, March 22nd, at 10:00AM, EST; 16:00 Germany time; 17:00 Israel time. To participate, please go to http://www.otiglobal.com/exhib_fr_left.htm or call: 1-800-865-4425 (U.S. toll free) 1-800-931-5196 (Israel toll free) 0-800-182-1463 (Germany toll free) 1-973- 409-9262 (standard international) ID Code: 4606516 The conference call will also be available for replay starting 12PM EDT on the day of the call for 48 hours by calling U.S: 877-519-4471 All Other International; 973-341-3080.
About OTI
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 micropayments, mass
transit ticketing, parking, petroleum payment systems, loyalty programs, ID 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.
(TABLES TO FOLLOW)
This press release contains forward-looking statements. Such statements are subject to certain risks and uncertainties, such as market acceptance of new products and our ability to execute production on orders, which could cause actual results to differ materially from those in the statements included in this press release. Although OTI believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. OTI disclaims any intention or obligation to update or revise any forward-looking statements, which speak only as of the date hereof, whether as a result of new information, future events or otherwise.
This press release and other releases are available on www.otiglobal.com and www.portfoliopr.com
ON TRACK INNOVATIONS
LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
US dollars in thousands, except share and per share data
| December 31 | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2003 |
2002 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 9,712 | $ | 2,145 | ||||
| Short-term investments | 999 | 1,664 | ||||||
| Trade receivables (net of allowance for doubtful | ||||||||
| accounts of $244 and $ 282 as of December 31, 2002 | ||||||||
| and 2003, respectively) | 3,223 | 1,982 | ||||||
| Other receivables and prepaid expenses | 881 | 838 | ||||||
| Inventories | 4,069 | 4,192 | ||||||
| Total current assets | 18,884 | 10,821 | ||||||
| Severance Pay Deposits Fund | 906 | 743 | ||||||
| Property, Plant and Equipment, Net | 5,770 | 6,559 | ||||||
| Other Intangible Assets, Net | 325 | 513 | ||||||
| Goodwill | 5,383 | 5,383 | ||||||
| Total assets | $ | 31,268 | $ | 24,019 | ||||
| Liabilities and Shareholders' Equity | ||||||||
| Current Liabilities | ||||||||
| Short-term bank credit and current maturities | ||||||||
| of long-term bank loans | $ | 1,751 | $ | 2,520 | ||||
| Trade payables | 3,339 | 2,176 | ||||||
| Other current liabilities | 2,624 | 2,175 | ||||||
| Total current liabilities | 7,714 | 6,871 | ||||||
| Long-Term Liabilities | ||||||||
| Long-term loans, net of current maturities | 3,121 | 4,006 | ||||||
| Convertible notes | - | 169 | ||||||
| Deferred revenues | - | 716 | ||||||
| Accrued severance pay | 1,130 | 1,216 | ||||||
| Total long-term liabilities | 4,251 | 6,107 | ||||||
| Commitments and Contingencies | ||||||||
| Shareholders' Equity | ||||||||
| Ordinary shares of NIS 0.1 par value: Authorized - | ||||||||
| 5,000,000 and 10,000,000 shares as of December 31, 2002 | ||||||||
| and 2003, respectively; issued and outstanding - 1,817,156 | ||||||||
| and 4,778,715 shares as of December 31, 2002 and 2003, respectively | 119 | 52 | ||||||
| Additional paid-in capital | 59,965 | 48,147 | ||||||
| Deferred stock compensation | (1,257 | ) | (1,115 | ) | ||||
| Accumulated other comprehensive income | 287 | 201 | ||||||
| Accumulated deficit | (39,811 | ) | (36,244 | ) | ||||
| Total shareholder's equity | 19,303 | 11,041 | ||||||
| Total liabilities and shareholders' equity | $ | 31,268 | $ | 24,019 | ||||
ON TRACK INNOVATIONS
Ltd.
and its consolidated subsidiaries
CONSOLIDATED FINANCIAL STATEMENTS OF OPERATIONS
US dollars in thousands except per share data
| For the three months ended December 31 |
For the year ended December 31 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2003 |
2002 |
2003 |
2002 | |||||||||||
| Revenues | ||||||||||||||
| Products | $ | 4,828 | $ | 2,981 | $ | 17,245 | $ | 15,492 | ||||||
| Non-recurring engineering | 16 | 457 | 284 | 952 | ||||||||||
| Licensing and transaction fees | 196 | 242 | 808 | 651 | ||||||||||
| Customer service and technical support | 738 | 268 | 1,258 | 868 | ||||||||||
| Total revenues | 5,778 | 3,948 | 19,595 | 17,963 | ||||||||||
| Cost of Revenues | ||||||||||||||
| Products | 2,057 | 1,803 | 8,678 | 8,740 | ||||||||||
| Non-recurring engineering | 5 | 134 | 109 | 216 | ||||||||||
| Customer service and technical support | 397 | 149 | 691 | 546 | ||||||||||
| Total cost of revenues | 2,459 | 2,086 | 9,478 | 9,502 | ||||||||||
| Gross profit | 3,319 | 1,862 | 10,117 | 8,461 | ||||||||||
| Operating Expenses | ||||||||||||||
| Research and development | 719 | 1,011 | 3,159 | 4,459 | ||||||||||
| Less - participation by the Office of | ||||||||||||||
| the Chief Scientist | 335 | 330 | 853 | 1,103 | ||||||||||
| Research and development, net | 384 | 681 | 2,306 | 3,356 | ||||||||||
| Selling and marketing | 1,127 | 852 | 4,092 | 3,869 | ||||||||||
| General and administrative | 1,446 | 1,472 | 5,853 | 5,183 | ||||||||||
| Amortization of goodwill and intangible | ||||||||||||||
| assets | 47 | 47 | 188 | 161 | ||||||||||
| Other expenses | - | - | - | - | ||||||||||
| Total operating expenses | 3,004 | 3,052 | 12,439 | 12,569 | ||||||||||
| Operating gain (loss) | 315 | (1,190 | ) | (2,322 | ) | (4,108 | ) | |||||||
| Financial income (expenses), net | (212 | ) | (36 | ) | (897 | ) | 41 | |||||||
| Other expenses, net | 96 | (620 | ) | (244 | ) | (1,955 | ) | |||||||
| Gain (Loss) before income taxes | 199 | (1,846 | ) | (3,463 | ) | (6,022 | ) | |||||||
| Tax benefit (taxes on income) | (97 | ) | (196 | ) | (104 | ) | (207 | ) | ||||||
| 102 | (2,042 | ) | (3,567 | ) | (6,229 | ) | ||||||||
| Minority interest in losses (earnings) | ||||||||||||||
| Of subsidiaries | - | - | - | (19 | ) | |||||||||
| Net gain (loss) | $ | 102 | $ | (2,042 | ) | $ | (3,567 | ) | $ | (6,248 | ) | |||