MTS-Mer Telemanagement Solutions Ltd. (Nasdaq Capital Market: MTSL), a global provider of business support systems (BSS) for comprehensive telecommunication management and customer care & billing (CC&B) solutions, today announces its financial results for the second quarter of 2006, ended June 30, 2006.
Revenues for the second quarter were $2.7 million, compared with revenues of $2.8 million in the second quarter of 2005. Revenues for the six month period ended June 30, 2006 were $5.52 million, compared with revenues of $5.54 for the 2005 six month period.
Net loss for the second quarter was $448,000 or $0.08 diluted per share, a significant decline of more than 60% compared with a net loss of $1.15 million or $0.24 diluted per share, in the second quarter of 2005. Net loss for the six month period ended June 30, 2006 was $933,000, or $0.16 diluted per share, a significant decline, as well, of more than 70% compared with a net loss of $3.18 million or $0.68 diluted per share, for the 2005 six month period.
The considerable improvement in the company’s operating results is primarily attributable to the precise execution of a long-term strategic plan. The key element is the constant monitoring of and reduction in expenses in order to achieve sustainable growth.
MTS ended the second quarter with an accumulated backlog of orders of approximately $2.0 million. The backlog represents orders booked but not yet recognized as revenue as of June 30, 2006.
At the end of July, 2006, MTS acquired certain telecom expense management software assets of TelSoft Solutions, Inc. as well as assuming a certain amount of their liabilities. The acquisition expands MTS’ US market share, as well as, broadens its customer base and marketing channels.
Eytan Bar, President and Chief Executive Officer, commented, “We continued to execute according to our strategic plan, to achieve profitability through organic growth and acquisitions, which will better position us for the future.”
Conference Call Information
MTS will conduct a teleconference to discuss the second quarter results on Thursday, August 10 at 11:00 a.m Eastern Time/6:00 p.m Israel time.
To access the conference call, please dial +1-877-707-9628 (U.S.), +1-785-832-0301 (international), at least 10 minutes prior to commencement of the call. Reference the MTS conference call or conference ID #MTS.
A replay of the call will be available from August 10 through 11:59 p.m. EST on August 17. To access the replay, please dial +1-800-283-8520.
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
Year
ended
Six months ended Three months ended December
June 30, June 30, 31,
2006 2005 2006 2005 2005
Unaudited
Revenues $ 5,518 $ 5,538 $ 2,704 $ 2,812 $ 11,563
Cost of
revenues (*) 1,828 1,893 (**) 894 1,006 3,802
Gross
profit 3,690 3,645 1,810 1,806 7,761
Operating expenses:
Research and
development,
net (*) 1,958 2,324 (**) 898 1,030 4,395
Selling and
marketing (*) 1,583 2,897 (**) 753 1,370 4,797
General and
administrative (*) 1,208 1,722 (**) 630 677 2,830
Total
operating
expenses 4,749 6,943 2,281 3,077 12,022
Operating loss (1,059) (3,298) (471) (1,271) (4,261)
Financial
income
(expenses),
net 11 104 (26) 83 53
Loss before
taxes on
income (1,048) (3,194) (497) (1,188) (4,208)
Taxes on
income 3 – – – 10
Loss before
equity in
earnings
(losses) of
affiliate (1,051) (3,194) (497) (1,188) (4,218)
Equity in
earnings
(losses) of
affiliate 118 11 49 39 2
Net loss $ (933) $ (3,183) $ (448) $ (1,149) $ (4,216)
Basic and
diluted net
loss per share $ (0.16) $ (0.68) $ (0.08) $ (0.24) $ (0.83)
Weighted
average number
of Ordinary
shares used in
computing
basic and
diluted net
loss per share 5,754,186 4,675,283 5,763,845 4,712,561 5,092,117
(*) Including stock-based employee compensation in the amounts of $15, $60, $10 and $46 in cost of revenues, research and development, selling and marketing and general and administrative, respectively.
(**) Including stock-based employee compensation in the amounts of $5, $45, $(3) and $21 in cost of revenues, research and development, selling and marketing and general and administrative, respectively.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share and per share data)
June 30, December
2006 2005 31, 2005
Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,635 $ 1,750 $ 3,191
Marketable securities 142 126 132
Trade receivables, net 2,280 1,853 1,895
Unbilled receivables 448 – 104
Other accounts receivable and prepaid
expenses 690 408 491
Inventories 152 180 181
Total current assets 5,347 4,317 5,994
LONG- TERM INVESTMENTS:
Investment in an affiliate 1,777 1,707 1,615
Long-term loans, net of current maturities – 26 3
Severance pay fund 607 518 478
Other investments 365 373 347
Total long-term investments 2,749 2,624 2,443
PROPERTY AND EQUIPMENT, NET 500 583 571
OTHER ASSETS:
Goodwill 3,877 3,511 3,700
Other intangible assets, net 817 1,169 993
Deferred income taxes 115 73 115
Total other assets 4,809 4,753 4,808
Total assets $ 13,405 $ 12,277 $ 13,816
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share and per share data)
June 30, December 31,
2006 2005 2005
Unaudited
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Trade payables $ 605 $ 727 $ 735
Accrued expenses and other
liabilities 2,395 2,197 2,306
Deferred revenues 891 1,144 888
Total current liabilities 3,891 4,068 3,929
LONG-TERM LIABILITIES:
Accrued severance pay 876 660 713
Total long-term liabilities 876 660 713
SHAREHOLDERS’ EQUITY:
Share capital –
Ordinary shares of NIS 0.01 par value
– Authorized: 12,000,000 shares at
June 30, 2006 and 2005 and December
31, 2005; Issued: 5,774,645,
4,796,304 and 5,744,304 shares at
June 30, 2006 and 2005 and December
31, 2005; Outstanding: 5,763,845,
4,785,504 and 5,733,504 shares at
June 30, 2006 and 2005 and December
31, 2005 17 15 17
Additional paid-in capital 16,016 13,267 15,966
Treasury shares (10,800 Ordinary
shares) (29) (29) (29)
Deferred stock compensation – (176) (142)
Accumulated other comprehensive
income (loss) 130 2 (75)
Accumulated deficit (7,496) (5,530) (6,563)
Total shareholders’ equity 8,638 7,549 9,174
Total liabilities and shareholders’
equity $ 13,405 $ 12,277 $ 13,816
About MTS
Mer Telemanagement Solutions Ltd. (MTS) is a worldwide provider of innovative solutions for comprehensive telecommunications expense management (TEM) used by enterprises, and for business support systems (BSS) used by information and telecommunication service providers.
Since 1984, MTS Telecommunications’ expense management solutions have been used by thousands of enterprises and organizations to ensure that their telecommunication services are acquired, provisioned, and invoiced correctly. In addition, the MTS’s Application Suite has provided customers with a unified view of telecommunication usage, proactive budget control, personal call management, employee cost awareness and more.
MTS’s solutions for Information and Telecommunication Service Providers are used worldwide by wireless and wireline service providers for interconnect billing, partner revenue management and for charging and invoicing their customers. MTS has pre-configured solutions to support emerging carriers of focused solutions (e.g. IPTV, VoIP, MVNO) to rapidly install a full-featured and scaleable solution. MTS’s unique technology reduces integration risks and lessens revenue leakage by using the very same system to manage retail and wholesale business as well as supporting multiple business units. Total cost of ownership (TCO) is reduced by providing web-based customer self-care and provisioning.
Headquartered in Israel, MTS markets its solutions through wholly owned subsidiaries in the United States, Hong Kong, The Netherlands, and Brazil, as well as through OEM partnerships with Siemens, Phillips, NEC and other vendors. MTS shares are traded on the NASDAQ Capital Market (symbol MTSL). For more information please visit the MTS web site: www.mtsint.com.