|oti Reports 58% Revenue Increase for Second Quarter 2014|
Q2 2014 Operational Highlights
Launched Trio modular payments reader, which handles multiple payment methods in a single solution for the growing self-service markets. Received an initial commercial order from Vianet for oti's new Trio modular payment reader. Vianet plans to initially install the readers in vending machines in Europe starting Q3 2014. oti PetroSmart was awarded a major 15-year contract from a government ministry in Southern Africa to supply its EasyFuel Plus management system. Signed a five-year contract to help manage more than 5,000 on-street parking spaces in Arlington County, Virginia. Signed a 20-year contract to co-manage the parking operations for Elbasan, a city in central Albania. Expanded the capabilities and use of the 84 transit ticket vending machines operated by oti's electronic ticket systems subsidiary, ASEC S.A., for the Mazovia Railway System in Poland.
Q2 2014 Financial Highlights
Revenues in the second quarter of 2014 increased 38% sequentially and 58% from the same year-ago period to $7.2 million. The significant improvement was primarily driven by NFC readers sold to the U.S. market and first deliveries of oti's Wave device to Asia. Gross profit in the second quarter of 2014 increased 26% to $3.3 million (46% of revenue) from $2.6 million (58% of revenue) in the same year-ago period. Total operating expenses in the second quarter of 2014 were $5.3 million compared to $5.0 million in the same year-ago period. The slight increase was primarily due to higher sales and marketing expenses designed to accelerate oti's growth, offset by a 20% decrease in general and administrative expenses. Net loss from continuing operations in the second quarter of 2014 totaled $2.3 million or $(0.07) per share, an improvement from a net loss from continuing operations of $2.6 million or $(0.08) per share in the same period last year. Adjusted EBITDA loss from continuing operations in the second quarter of 2014 totaled $1.0 million, a significant improvement from an adjusted EBITDA loss from continuing operations of $1.8 million in the same year-ago period (see discussion about the presentation of adjusted EBITDA from continuing operations, a non-GAAP term, below). At quarter-end, cash and cash equivalents, and short-term investments totaled $10.6 million.
"During Q2 we made strong progress executing on our plan to grow our core cashless payment solutions business," said the company's CEO Ofer Tziperman. "This was demonstrated by the 58% revenue increase in the quarter, driven by our industry-leading technology and expanded salesforce.
"The quarter was also highlighted by several customer wins across all of our verticals. This included the first order for our new Trio modular reader.
"We plan to build on this operational and financial momentum and take advantage of the strong industry tailwinds in the cashless payments space.
"Given this tremendous market opportunity, coupled with our focus and leaner, highly capable team, we continue believe we will be able to deliver at least 30% revenue growth in 2014, as well as achieve positive adjusted EBITDA on a quarterly basis by Q1 2015."