ROSH PINA, Israel, Aug. 8, 2018 -- On Track Innovations Ltd. (OTI) (the "Company" or "OTI"), a global provider of near field communication (NFC) and cashless payment solutions, has provided a business update and announced financial results for the second quarter ended June 30, 2018.
- In June, OTI received a purchase order for more than 3,000 cashless payment systems from Japan via its partner, Billing Systems Cooperation (TSEL 3623), a leading payment service provider. OTI will recognize a one-time sale, followed by a high-margin, recurring revenue stream over the long-term. By the end of the third quarter of 2018, OTI will have delivered a total of more than 10,000 advanced payment systems to Japan.
- Expanded footprint in Poland through new government contracts:
- In April, OTI secured a recurring revenue contract with the Polish National Post Office (Poczta Polska S.A.) to manage Warsaw's public transportation "Smart City" card program (i.e. purchase or refill cards for travel via train, bus, or other mode of public transportation). OTI will be providing both the payment portion, as well as the software, in 272 terminals throughout post offices in Warsaw, whereby OTI will manage and control the entire sales and payment process.
- In May, OTI signed one-year, $500,000 agreement to provide intermediation in the sale of train tickets for trains operated by Mazowieckie Railways in Poland. OTI will provide service to the Masovian Card and sharing information via the infokiosk using 84 ticket vending machines.
- In June, OTI secured a four-year service contract with the Mazowieckie Railways company to provide and maintain their Smart Cart IT system in support of electronic ticket sales in Poland's largest and most populous province.
- In June, OTI received two technology awards from Global Brand Publications (GBR):
- OTI PetroSmart, OTI's South Africa based fuel management subsidiary, was named "Most Innovative Technology Company" in Africa.
- OTI Europa, OTI's European subsidiary, was named "Most Innovative Cashless Payment Solutions Provider" in Europe.
- In July, OTI received a purchase order for 5,000 advanced contactless readers to the widespread Russian retail self-service market. OTI has also applied for the Russian Mir certification, a Payment System Established by The Central Bank of Russia. The company expects greater penetration once the Mir certification is officially approved.
Management Commentary
"We've continued to experience strong operational execution in our business, evidenced by several purchase orders and contracts in some of our key target markets, including Poland, Japan, and most recently, Russia," said Shlomi Cohen, Chief Executive Officer of On Track Innovations. "As part of these initiatives, we have continued to invest in our growing list of esteemed certifications, and most recently applied for the Russian Mir certification that we expect to receive in short order, which most likely accelerate penetration in this key market. In fact, we've identified Russia as a potential strategic market for OTI, and in July, we received a purchase order for 5,000 advanced contactless readers to the widespread Russian retail self-service market.
"In the first half of 2018, we recognized revenues of more than $12.0 million, representing growth of 10% from the year-ago period, and experienced our third consecutive quarter of positive Adjusted EBITDA results as we drive towards profitability. Looking towards the third quarter of 2018, we are expecting double-digit revenue growth compared to the third quarter of 2017 as a result of execution across all business units as we continue gaining market share in the cashless payments arena."
