Contactless microprocessor firm On Track Innovations (OTI) has announced its results for the first half ended June 30, 2009, showing a fall in revenues but an increase in gross profit.
The company, which produces technologies for the ePassport, ID, homeland security, payment, transit, parking and loyalty markets, saw revenues fall to US$16.9 million, a 17% decrease from last year. Gross margin grew from 36% in 2008 to 46% this year. Gross profit was US$7.7 million, a 6% increase compared to US$7.2 million last year.
Non-GAAP operating expenses were US$13.8 million, a decline of 5% on last year’s US$14.5 million. Its GAAP operating expenses of US$16.3 million represented a 15% fall on 2008’s US$19.1 million.
Non-GAAP operating loss over the year declined by 17% from US$7.3 million to US$6.1 million, while the GAAP operating loss fell by 28% from US$11.8 million to US$8.6 million.
“The first six months of 2009 presented challenges resulting from the global economic crisis,” says Oded Bashan, chairman and chief executive officer of OTI. “It has strengthened our commitment to successfully execute our focused and clear strategy. The results show continued improvement in gross margin and further reductions in operating expenses, which have helped us to further reduce our net loss despite the lower than expected revenues.”
He adds: “Our main and most important goal is to bring OTI to operating breakeven position as quickly as possible. We plan to get there by further reducing our operating expenses, focusing on high margin projects with recurring revenues, continuing to build a strong IP portfolio and product line and focusing on successful execution of projects that will contribute to OTI’s growth over the next 12-24 months.
“Based on the higher than expected decline in revenues in the first half, which is mainly attributed to the revenue reduction in the OEM and payments business segments and the delays in customers’ projects timetables, we are updating our target revenues for this year to US$34 million.”