Exhibit 99.1




On Track Innovations Ltd. Reports

Second Quarter 2019 Financial Results


37% sequential growth in revenue and strong improvement in gross margin


Rosh Pina, Israel – August 7, 2019 – On Track Innovations Ltd. (“OTI”) (NASDAQ: OTIV) (the “Company” or “OTI”), a global provider of near field communication (NFC) and cashless payment solutions, today provided a business update and announced financial results for the second quarter ended June 30, 2019.




Revenues of $4.1 million in the second quarter, growth of 37% compared to the first quarter of 2019 and a decrease of 28% compared to the second quarter of last year.


Gross margin at 58% in the second quarter, at a multi-year high, in part due to growing portion of recurring revenue out of the total.


Continued tight control over operating expenses which decreased by 6% in the first half of 2019, versus the same period in 2018.


Delivered globally more than 10,000 advanced contactless readers to the smart ATMs market, more than 8,000 advanced payment readers to the Russian market, and more than 1,000 advanced payment systems to the Japanese unattended retail market.


Management Commentary


Mr. Assaf Cohen, OTI’s Interim CEO, commented, “We are pleased with the recovery in our results in the second quarter. The increase in revenue over the prior quarter gives us confidence that the issue we faced in the U.S. from the impact of tariffs is now behind us, and we have regained our positive momentum. Furthermore, in line with our long-term strategy, the recurring portion of our revenues continues to grow, and this has allowed us to see a solid improvement in the gross margin.”


Mr. Cohen continued, “I would like to wish Mr. Shlomi Cohen, our former CEO, the best of luck in future with all his endeavors and thank him for the years he invested in OTI, in stabilizing the business and advancing its strategy. The Board is working to find a suitable replacement in the coming months.”


Following OTI’s sale of its MediSmart division in the fourth quarter of 2018, the financial results of Medismart are included as discontinued operations and all the prior periods’ information has been reclassified to conform with the current period’s presentation.


Second quarter 2019 financial results summary


Total revenue in the quarter was $4.1 million, compared to $5.7 million in the same year-ago quarter. Revenues in the prior quarter were $3.0 million, and current quarter revenues represent a 37% sequential improvement.


Recurring revenues were $1.2 million (29% of total revenues), compared to $1.4 million (24% of total revenues) in the second quarter of 2018.







Gross profit in the quarter was $2.4 million, or 58% of revenues, compared to $2.9 million, or 50% of revenues, in the second quarter of 2018.


Operating expenses totaled $3.2 million in the quarter, compared to $3.3 million in the same year-ago quarter.


Loss from continuing operations was $849,000 compared to $399,000 in the same year-ago quarter.


Net loss was $899,000, or loss of $0.02 per share, compared to a net loss of $280,000, or loss of $0.01 per share, in the same year-ago quarter. Net loss in the prior quarter amounted to $1.7 million, or loss of $0.04 per share.


Adjusted EBITDA loss from continuing operations was $442,000 in the quarter, compared to adjusted EBITDA of $32,000 in the same year-ago quarter. Adjusted EBITDA loss in the prior quarter was $1.1 million.


As of the end of the quarter, the company had cash and cash equivalents and short-term investments of $5.7 million.


Conference Call


Management will host an investor conference call at 9:00 a.m. Eastern Time on August 12, 2019, to discuss the financial results, provide a corporate update, and conclude with a recorded Q&A session.


Investors and analysts are encouraged to submit questions they would like the Interim CEO to address on the call. Please submit questions to oti_questions@gkir.com by Thursday, August 8, 2019 at 5:00 p.m. Eastern time. OTI intends to hold conference calls in this format during the CEO transition phase and expects to return to the live format, upon the appointment of a permanent CEO.


To listen, please use the following dial-in information:


U.S. Dial-in: 1-888-317-6002

International Dial-in: +1-412-317-5245

Webcast: https://www.webcaster4.com/Webcast/Page/1720/30987


Please dial in a few minutes before the start of the call and request to join the “On Track Innovations Earnings Conference Call” to ensure timely participation.


The conference call will be available for replay by clicking here and via the investor relations section of the company’s website.







About On Track Innovations Ltd


On Track Innovations (OTI) is a global leader in the design, manufacture, and sale of secure cashless payment solutions using contactless NFC technology. OTI’s field-proven innovations have been deployed around the world to address cashless payment, automated retail and petroleum markets. OTI distributes and supports its solutions through a global network of regional offices and alliances. OTI is the proud recipient of the 2017 AI Award for Best Cashless Payment Solutions Provider – Israel. For more information, visit www.otiglobal.com.


Investor Relations Contact:


Gavriel Frohwein

GK Investor & Public Relations

+1 646 688 3559



Safe Harbor / Forward-Looking Statements


This press release contains express or implied forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws. Whenever we use words such as “will,” “look forward,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “believe,” “should,” “can” or similar expressions, we are making forward-looking statements. For example, we are using forward-looking statements when we discuss, among others: the Company’s belief that the impact of tariffs is now behind it, and continued positive momentum.  Because such statements deal with future events and are based on OTI’s current expectations, they are subject to various risks and uncertainties and actual results, performance or achievements of OTI could differ materially from those described in or implied by the statements in this press release. Additional factors that could cause actual results to differ materially from those anticipated by our forward-looking statements are stated under the captions “Risk Factors” in our most recent Annual Report (Form 10-K) and other known and unknown uncertainties and risk factors including those detailed from time to time in the Company’s filings with the Securities and Exchange Commission.  Forward-looking statements are made as of the date of this release, and we expressly disclaim any obligation or undertaking to update forward-looking statements. The reader is cautioned not to place undue reliance on forward-looking statements.


Use of Non-GAAP Financial Information


This press release contains certain non-GAAP measures, namely, adjusted EBITDA from continuing operations, or adjusted earnings from continuing operations before interest, income tax, depreciation and amortization. Adjusted EBITDA from continuing operations represents earnings before interest or financing expenses, income tax, depreciation and amortization, and further eliminates the effect of patent litigation expenses, stock-based compensation expense and other expenses. Patent litigation expenses and other expenses are presented only at the end of each year, as we do not consider their impact on quarterly results to be material. OTI believes that adjusted EBITDA from continuing operations should be considered in evaluating the Company’s operations since it provides a clear indication of the Company’s operating results. This measure should be considered in addition to results prepared in accordance with U.S. GAAP, but should not be considered a substitute for the U.S. GAAP results. The non-GAAP measures included in this press release have been reconciled to the U.S. GAAP results in the tables below.









The following table reflects selected On Track Innovations Ltd. non-GAAP results reconciled to GAAP results:

(US dollars in thousands)


   Three months ended
June 30,
   Six months ended
June 30,
   2019   2018   2019   2018 
   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited) 
Net loss  $(899)  $(280)  $(2,644)  $(613)
Net loss (income) from discontinued operations   50    (119)   243    (186)
Financial expenses, net   37    95    106    127 
Depreciation and amortization   323    345    643    680 
Taxes on income    3      (141)    8      (265)
Total EBITDA FROM CONTINUING OPERATIONS  $(486)  $(100)  $(1,644)  $(257)
Other expenses   -    70    -    70 
Stock-based compensation   44    62    90    115 
Total adjusted EBITDA FROM CONTINUING OPERATIONS  $(442)  $32   $(1,554)  $(72)









(US dollars in thousands)


   June 30,   December 31, 
   2019   2018 
Current assets        
Cash and cash equivalents  $3,575   $4,827 
Short-term investments   2,105    1,078 
Trade receivables (net of allowance for doubtful accounts of $564 and $555 as of June 30, 2019 and December 31, 2018, respectively)   2,793    4,530 
Other receivables and prepaid expenses   1,457    2,060 
Inventories   4,929    3,527 
Asset held for sale   764    - 
Total current assets   15,623    16,022 
Long-term restricted deposit for employees benefit   463    451 
Severance pay deposits   394    375 
Property, plant and equipment, net   3,981    5,033 
Intangible assets, net   262    241 
Right-of-use assets   1,696    - 
Total Assets  $22,419   $22,122 









(US dollars in thousands)


   June 30,   December 31, 
   2019   2018 
Liabilities and Equity        
Current Liabilities        
Short-term bank credit and current maturities of long-term bank loans  $2,811   $260 
Trade payables   5,226    4,712 
Other current liabilities   2,248    3,622 
Total current liabilities   10,285    8,594 
Long-Term Liabilities          
Long-term loans, net of current maturities   27    39 
Long-term liabilities due to operating leases, net of current maturities   1,092    - 
Accrued severance pay   916    853 
Deferred tax liability   424    445 
Total long-term liabilities   2,459    1,337 
Total Liabilities   12,744    9,931 
Commitments and Contingencies          
Ordinary shares of NIS 0.1 par value; Authorized:          
50,000,000 shares as of June 30, 2019 and December 31, 2018; issued: 42,503,076 and 42,473,076 shares as of June 30, 2019 and December 31, 2018, respectively; outstanding: 41,324,377 and 41,294,377 shares as of June 30, 2019, and December 31, 2018, respectively   1,069    1,068 
Additional paid-in capital   225,111    225,022 
Treasury shares at cost - 1,178,699 shares as of June 30, 2019 and December 31, 2018   (2,000)   (2,000)
Accumulated other comprehensive loss   (918)   (956)
Accumulated deficit   (213,587)   (210,943)
Total Equity   9,675    12,191 
Total Liabilities and Equity  $22,419   $22,122 









(US dollars in thousands, except share and per share data)


   Three months ended
June 30,
   Six months ended
June 30,
   2019   *2018   2019   *2018 
Sales  $2,933   $4,352   $4,655   $8,593 
Licensing and transaction fees   1,183    1,387    2,474    2,658 
Total revenues   4,116    5,739    7,129    11,251 
Cost of revenues                    
Cost of sales   1,742    2,849    3,112    5,481 
Total cost of revenues   1,742    2,849    3,112    5,481 
Gross profit   2,374    2,890    4,017    5,770 
Operating expenses                    
Research and development   817    806    1,688    1,626 
Selling and marketing   1,320    1,464    2,605    3,109 
General and administrative   1,046    1,065    2,011    1,972 
Total operating expenses   3,183    3,335    6,304    6,707 
Operating loss from continuing operations   (809)   (445)   (2,287)   (937)
Financial expenses, net   (37)   (95)   (106)   (127)
Loss from continuing operations                    
before taxes on income   (846)   (540)   (2,393)   (1,064)
Income tax   (3)   141    (8)   265 
Loss from continuing operations   (849)   (399)   (2,401)   (799)
Net (loss) income  from discontinued operations   (50)   119    (243)   186 
Net loss  $(899)  $(280)  $(2,644)  $(613)
Basic and diluted net (loss) income attributable to shareholders per ordinary share                    
From continuing operations   (0.02)   (0.01)   (0.06)   (0.02)
From discontinued operations   






   $(0.02)  $(0.01)  $(0.06)  $(0.01)
Weighted average number of ordinary shares used in computing basic and diluted net (loss) income per ordinary share   41,300,641    41,271,644    41,297,526    41,243,169 


*Reclassified to conform with the current period presentation.
**Less than $0.01 per ordinary share.









(US dollars in thousands)


   Six months ended June 30, 
   2019   *2018 
Cash flows from continuing operating activities        
Net loss from continuing operations  $(2,401)  $(799)
Adjustments required to reconcile net loss to net cash used in continuing operating activities:          
Stock-based compensation related to options issued to employees and others   90    115 
Accrued interest and linkage differences, net   (18)   7 
Depreciation and amortization   643    680 
Deferred tax benefits, net   (24)   (281)
Gain on sale of fixed assets   (2)   (17)
Changes in operating assets and liabilities:          
Accrued severance pay, net   44    (28)
Decrease in trade receivables, net   1,254    1,051 
Decrease in other receivables and prepaid expenses   597    249 
Increase in inventories   (1,405)   (344)
Increase (decrease) in trade payables   585    (567)
Decrease in other current liabilities   (540)   (528)
Net cash used in continuing operating activities   (1,177)   (462)
Cash flows from continuing investing activities          
Purchase of property and equipment   (221)   (414)
Change in short-term investments, net   (1,190)   1,173 
Investment in capitalized product costs   (120)   (87)
Proceeds from restricted deposit for employee benefits   10    - 
Proceeds from sale of fixed assets   10    17 
Net cash (used in) provided by continuing investing activities   (1,511)   689 
Cash flows from continuing financing activities          
Increase (decrease) in short-term bank credit, net   2,747    (80)
Repayment of long-term bank loans   (233)   (348)
Proceeds from exercise of options   -    34 
Net cash provided by (used in) continuing financing activities   2,514    (394)
Cash flows from discontinued operations          
Net cash (used in) provided by discontinued operating activities   (1,304)   289 
Total net cash (used in) provided by discontinued operations   (1,304)   289 
Effect of exchange rate changes on cash and cash equivalents   53    (288)
Decrease in cash, cash equivalents and restricted cash   (1,425)   (166)
Cash, cash equivalents and restricted cash-beginning of the period   5,105    7,799 
Cash, cash equivalents and restricted cash-end of the period  $3,680   $7,633 


(*)Reclassified to conform with the current period presentation.






The following information was filed by On Track Innovations Ltd (OTIV) on Wednesday, August 7, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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