ROSH PINA, ISRAEL, March 25, 2002 (PRIMEZONE) -- OTI (GER:OT5), the global provider of contactless smart card technology and product solutions, today announced financial results for the year ended December 31, 2001. The results reflect the difficult economic environment. Some of the company's most important customers have delayed their orders, and a major account was canceled completely, thus affecting the ability to meet the financial expectations OTI had set for the year, as already announced in October 2001. Nevertheless and unlike the majority of the competition, OTI has managed to continue its growth path, achieving revenues of US $20.92 million (+35%). In the meanwhile the company continued to reduce operating costs, focusing on bringing the company to profitability at operational activities in the second half of 2002.
Financial Highlights for the Fiscal Year 2001:
-- Revenues for 2001 up 35% to US $20.92 million (2000: US $15.5
million).
-- Gross profit ahead 20% to $9.68 million (2000: $8.05 million).
-- Operating loss increased by 24% to $9.32 million (2000: $7.49
million).
-- Net loss for 2001 up 54% to $11.9 million (2000: $7.7 million).
-- Loss per share was ($0.77) (2000: ($0.52)).
-- Cash, cash equivalents, and short-term investments at the end of
2001 totaled $8.0 million, with total assets of $31.5 million
(2000: $17.48 million and $40.65 million, respectively).
Revenues and losses were affected by the fact that a large customer, P-Card, was experiencing financial difficulties and as a result, an order in the amount of US $6 million was cancelled. In addition, the figures contain an extraordinary one time write-off of about US $1.6 million, with respect to our process of share offering, these expenses are mostly connected to actions that were held last year and the increase of the provision for doubtful accounts amounting to US $0.5 million.
Financial Highlights for the Fourth Quarter of 2001:
-- Revenues for Q4 2001 up 22% to US $5.9 million (Q4 2000: US $4.8
million).
-- Gross profit decreased 6% to US $2.52 million (Q4 2000: US $2.68
million).
-- Operating loss decreased by 31% to $1.93 million (Q4 2000: $2.80
million).
-- Net loss for Q4 2001 increased by 41% to US $3.39 million (Q4
2000: $2.4 million) including US $1.6 million accounting write-
offs.
-- Loss per share was US ($0.22) (Q4 2000: US ($016)).
"With a solid worldwide infrastructure installed, OTI strengthened its position and solidified its business while reducing costs," said Oded Bashan, President and CEO of OTI. "Despite the overall worldwide economic downturn we are very pleased that we are able to grow our revenues over last year."
Financial Review:
Revenues for the year ended December 31, 2001 were $20.92 million, an increase of 35% compared with $15.5 million for 2000. The gross profit for the year grew by 20% to $9.68 million compared with $8.05 million in 2000.
Research & development expenses net of payments received from the office of the chief scientist increased by 58% to $6.14 million from $3.88 million in 2000. Marketing expenses decreased by 4% to $7.17 million from $7.4 million in the same period, while general and administrative expenses increased 22% to US $4.58 million compared with $3.8 million in 2000.
Operating loss increased by 24% to $9.32 million (2000: $7.49 million).
Net loss for 2001 was $11.9 million up from $7.7 million, for a net loss of $(0.77) per share.
Major Developments:
Some of the major developments during the year include:
-- OTI acquired the remaining 49 percent of leading European smart
card system integrator, InterCard Kartensysteme GmbH, and
electronic smart card hardware manufacturer, InterCard System
Electronic GmbH.
-- OTI Africa has strengthened its cooperation with BP South Africa
and extended its network to 6 countries, about 500 stations.
-- EasyPark was established nationwide in Israel, gaining the Israel
Post Authority as a major distribution partner.
-- EasyPark has been selected as a finalist for the SESAME 2001 award
for Best Application - Transportation at the CARTES 2001 Trade
Show.
-- OTI launched its Saturn Reader, the first fully integrated smart
card reader to accept both ISO 7816 contact cards and ISO 14443
Type A, B, and D contactless cards.
-- OTI will provide the first contactless smart card supporting
public-key infrastructure (PKI) encryption, used for digital
certificates in such secure environments as Internet transactions
and in government agencies.
-- OTI opened its new facilities on its existing site in Rosh Pina,
Israel.
Mr. Ariel Sharon, Israel's Prime Minister, was in attendance at the opening ceremony held on December 11, 2001.
Company Outlook
Today the company is in a better position than it was at the beginning of 2001. Especially in the market of security ID, OTI is facing globally a strong demand for high technology smart card based solutions. The company expects to continue its growth path during 2002 and is aiming to reach profitability, at least at the operational activities for the second half of the year. This will be reached by the improvement of the turnover on the one hand and by a further reducing of the operational costs on the other.
A copy of the 2001 Annual Report will be available on the OTI website at www.oti.co.il or at our Listing Agent offices at Dresdner Bank AG, Jurgen-Ponto-Platz 1, 60301 Frankfurt am Main
To outline in detail the financial statement for fiscal 2001 the management of OTI invites all interested parties to an annual analyst and press conference to be held in Frankfurt at 12:00 p.m. today.
About OTI
Established in 1990, OTI (On Track Innovations) designs and develops contactless microprocessor-based smart card technology to address the needs of a wide variety of markets. Applications developed by OTI include product solutions for mass transit, parking, gas management systems, loyalty schemes, ID and secure campuses. OTI has regional offices in the US, Europe, Asia Pacific, and Africa to market and support its products. The company was awarded the prestigious ESCAT Award for smart card innovation in both 1998 and 2000. Visit OTI on the Internet at www.oti.co.il.
This press release contains forward-looking statements, which reflect management's best judgment based on factors currently known. Such statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from those in the statements included in this press release. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. OTI disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.