OTI Reports FY 2011 Financial Results

On Track Innovations Ltd. ("OTI") (Nasdaq:OTIV), designs, develops and markets secure identification, payment and transaction processing technologies and solutions for use in secure ID, NFC , payment, petroleum and loyalty applications based on its extensive patent and IP portfolio, today announced its results for the fourth quarter and FY 2011 ended December 31, 2011.

The following are various financial figures that compare FY 2011 to FY 2010, unless noted otherwise.

2011 Highlights

•     Total revenues of $51.3M decreased 4% vs. $53.6M last year. Revenues for Q4 2011 were $16.0M, up 60% compared to $10.0M in Q4 2010.
•     Revenues from Licensing and Transaction Fees increased by 199% to $12.1M vs. $4.0M last year.
•     Gross margin was 51% for 2011.
•     GAAP operating expenses increased by 9% to $32.7M vs. $30.1M last year. Non-GAAP operating expenses increased by 16% to $30.3M compared to $26.1M last year.
•     GAAP operating loss was $6.4M, compared to GAAP operating loss of $1.2M last year. Non-GAAP operating loss was $4.0M, compared to non-GAAP operating profit of $2.8M last year.
•     Q4 GAAP operating profit was $634,000, compared to GAAP operating loss of $2.6M last year. Q4 non-GAAP operating profit was $1.1M, compared to non-GAAP operating loss of $1.8M last year.
•     GAAP net loss attributable to shareholders was $6.9M, a 12% increase compared to $6.2M last year.
•     Strong balance sheet with cash, cash equivalents and short-term investments of $28.5M at December 31, 2011.

Oded Bashan, Chairman and Chief Executive Officer of OTI, commented, "In 2011 there was a significant increase in our licensing and transaction fees revenues with expansion of our customer base. We had revenues coming from a larger number of new programs and existing projects expanding and progressing to commercial deployment."

Mr. Bashan continued: "We are launching a cost cutting program that we believe will streamline our operations by the end of the year and includes amongst other, some workforce reduction, consolidation and reduction in low margin operations, outsourcing and partnerships with third parties."

Mr. Bashan concluded: "Revenues for 2012 are expected to be about $50M with gross margin of 50-52% and we expect to be able to reduce our operating expenses level to $26M for the year (excluding stock options compensation and amortization of intangible assets expenses)."

About On Track Innovations Ltd.

On Track Innovations Ltd. ("OTI") designs, develops and markets secure identification, payment and transaction processing technologies and solutions for use in secure ID, payment and loyalty applications based on its extensive patent and IP portfolio. OTI combines state-of-the-art, contactless microprocessor-based technologies and enabling hardware with proprietary software applications to deliver high performance, end-to-end solutions that are secure, robust and scalable. OTI solutions have been deployed around the world to address homeland security, national ID, medical ID, NFC, contactless payment and loyalty applications, petroleum payment, parking and mass transit ticketing. OTI markets and supports its solutions through a global network of regional offices and alliances.