|oti Reports Fourth Quarter and Full Year 2013 Financial Results|
Q4 2013 Operational Highlights
Divested SmartID division for $10 million in cash at closing, $7.5 million in future payments and $5 million in potential earn outs, allowing oti to refocus on its core business of providing cashless payment technology and solutions.
Formed a strategic agreement with Wayne, a GE business and an innovator of fuel dispensers and forecourt technologies, to supply oti's EasyFuel Plus Automatic Vehicle Identification components for the Wayne Fusion™ forecourt systems that will be sold globally.
oti's line of Saturn NFC-enabled payment terminals and software was certified by ISIS, a mobile commerce joint venture between AT&T Mobility, T-Mobile USA, and Verizon Wireless.
MasterCard certified oti's WAVE device, the industry's first audio jack plug-in NFC payment solution and the only to receive certification from a major payment company.
Signed an agreement with ABnote to offer oti's WAVE device to enable NFC payment within ABnote's new mobile wallet offering.
Deployed payment system for a consortium of regional banks in Hong Kong, Taiwan and Macao through new channel partner, Tradelink Electronic Commerce.
Received purchase orders of more than $1 million for EasyFuel Plus from customers, including a major global supply chain provider.
Signed a $10 million minimum purchase contract to supply NFC readers to one of oti's U.S. channel partners in the unattended retail market in North America.
Q4 2013 Financial Highlights
Revenues in the fourth quarter of 2013 increased 22% to $6.2 million from $5.1 million in the same year-ago period. The increase was mainly driven by a 60% increase in revenue in oti's retail segment from NFC readers sold to the U.S. market.
Gross margin in the fourth quarter of 2013 was 49.5% compared to 49.2% in the fourth quarter of 2012.
Operating expenses in the fourth quarter of 2013 decreased 32% to $7.1 million from $10.4 million in the same year-ago period.
Net income attributable to shareholders in the fourth quarter of 2013 totaled $482,000 or $0.02 per share, a significant improvement from a net loss attributable to shareholders of $8.0 million or $(0.25) per share in the same period last year.
Adjusted EBITDA loss from continuing operations in the fourth quarter of 2013 totaled $2.9 million, an improvement from an adjusted EBITDA loss from continuing operations of $7.4 million in the fourth quarter of 2012 (see discussion about the presentation of adjusted EBITDA from continuing operations, a non-GAAP term, below).
Cash and cash equivalents, and short-term investments at December 31, 2013 totaled $17.6 million, an improvement from $9.7 million at the end of the prior quarter. The increase was due to the $10 million upfront payment received from the sale of oti's SmartID division.
Full Year 2013 Financial Highlights
Revenues in 2013 increased 20% to $19.9 million from $16.6 million in 2012. The improvement was primarily due to increased revenues from NFC readers sold to the U.S. and European markets.
Gross margin in 2013 was 54.0% compared to 56.0% in 2012.
Operating expenses in 2013 decreased 38% to $16.5 million from $26.6 million in 2012.
Net loss attributable to shareholders in 2013 totaled $3.0 million or $(0.09) per share, an improvement from a net loss attributable to shareholders of $17.4 million or $(0.54) per share in the same period last year.
Adjusted EBITDA loss from continuing operations in 2013 totaled $3.5 million, an improvement from an adjusted EBITDA loss from continuing operations of $15.4 million in 2012.
"2013 marked a transformational year in the financial and operational development of oti," said the company's CEO Ofer Tziperman. "We made strong progress executing our new strategic plan of refocusing on our core business of cashless payment technology while reducing unnecessary costs.
"The 60% increase in our retail segment revenue was driven primarily by strong demand for our NFC readers in U.S. and European markets. Our improved operational efficiency and the divesture of non-core businesses helped decrease our total operating expenses in 2013. These trends also reveal our effective attention to both cost controls and operational scalability, as we increase our topline and diversify our revenue base within the cashless payments market.
"Our expectations for 2014 remain high as we build upon the momentum we've established, and we see a widening pipeline of opportunities ahead. As global demand for NFC-based technologies continues to build, we are well positioned with industry-leading solutions and a strengthening customer base. We believe these key factors and strong industry tailwinds will help us expand our market share, drive revenue and achieve sustainable profitability."