Israel-based contactless and NFC vendor On Track Innovations today reported revenue fell by 22% in 2012 to US$40 million, and losses widened to $17.4 million for the year.
The struggling vendor, which announced March 11 the appointment of a new CEO to replace co-founder Oded Bashan–who was effectively ousted from the post in December by a dissident shareholders group–had delayed the release of its 2012 results.
The results released today are provisional. The OTI board is believed to be reviewing the company’s books and deciding how much it might agree to give Bashan in severance pay. It noted in its announcement today that the company is “reviewing the termination provisions of former management’s employment agreements and assessing the amount of the provisions necessary.” The decision on severance might also include Bashan’s son, Ohad, who resigned in December, as well, as president and chief marketing officer.
The company’s stock closed down by 4.4% on the Nasdaq exchange today at $1.08. The share price has been generally falling since eight new board members were elected Dec. 30 as part of the dissident shareholder action.
OTI shares had once traded at a high of more than $16, in 2005. But the company under Oded Bashan has never turned a year-end profit in its 23-year history.
The new board members hope to capitalize on what they believe are valuable early NFC patents.
“The new board of directors has been working diligently to identify and assess all possible solutions to maximize value for OTI’s shareholders,” said board member Jeffery Eberwein in a statement today. “We believe the company’s main strength lies in its technological achievements, which has led to the company establishing an extensive patent and IP portfolio. We would like to build on these strengths by capitalizing on past R&D investments and expanding the global reach with more business development and sales efforts.”
Chuck Gillman, who with Eberwein helped lead the dissident shareholders group, earlier told NFC Times the board plans to keep OTI intact and try to turn it around, though speculation persists that the board will try to sell the company or part of its assets.
The board earlier this month named Ofer Tziperman, 50, as its new CEO. After leaving OTI for 11 years, Tziperman returned in 2011 to become president of OTI’s parking payments business, Parx, which runs the vendor’s EasyPark electronic parking metering and payments product line.
Parx represents a small portion of the company's business and is not central to OTI's core contactless microprocessor and NFC technology, however.
The company today reported that the full-year revenue of $40 million was down from $51.3 million in 2011. Fourth quarter revenue dropped by 36% to $10.3 million, compared with the same period last year.
The full-year net loss of $17.4 million was higher than a $7 million loss OTI recorded in 2011. OTI said it lost $8 million during the fourth quarter of 2012 alone, compared with a net profit of $465,000 for the same period in 2011.