MTSL MER Telemanagement Solutions Ltd

RA'ANANA, Israel, May 9 /PRNewswire-FirstCall/ -- MTS - Mer Telemanagement Solutions Ltd. (NASDAQ:MTSL), a global provider of business support systems (BSS( for comprehensive telecommunication management and customer care & billing (CC&B) solutions, today announced its financial results for the first quarter of 2007. Revenues for the first quarter of 2007 were $2.45 million, compared with revenues of $2.8 million in the first quarter of 2006. Operating loss for the first quarter of 2007 was $602,000 compared with a loss of $588,000 in the first quarter of 2006. Net loss for the first quarter was $585,000 or ($0.10) per diluted share, compared with a net loss of $485,000 or ($0.08) per diluted share in the first quarter of 2006. MTS ended the quarter with approximately $1.9 million in cash and cash equivalents, including marketable securities. MTS ended the first quarter with an accumulated backlog of orders of approximately $1 million. The backlog represents orders booked but not yet recognized as revenue (excluding deferred maintenance revenues) as of March 31, 2007. Mr. Eytan Bar, President and CEO of MTS said, "We gained market visibility and were exposed to a solid pipeline for the billing market, in the IPTV, mobile, and WiMax areas. We also increased our business opportunities in the field of Interconnect Billing following the successful implementation of this product by one of our customers, Bezeq International. As a result, additional sales opportunities have opened for our company. In the area of Telecommunications Expense Management (TEM), we concluded the first installations of our Invoice Management solution. During the first quarter of 2007, we didn't succeed in converting a number of business opportunities in the different segments of the market in which we operate into orders that would lead to revenues for our company. Nevertheless, we expect to penetrate the market in the next few quarters. We see the market opportunities and are ready to leverage our solutions," concluded Mr. Bar. Conference Call Information MTS will conduct a teleconference to discuss the first quarter results on Wednesday, May 9 at 11:00 a.m Eastern Time/6:00 p.m Israel time. To access the conference call, please dial +1-800-909-5202 (U.S.), +1-785-830-7975 (international), at least 10 minutes prior to commencement of the call. Reference the MTS conference call or conference ID #MULTIVU A replay of the call will be available from May 9 through 11:59 p.m. EST on May 16. To access the replay, please dial +1-800-839-2670. About MTS Mer Telemanagement Solutions Ltd. (MTS) is a global provider of business support systems for comprehensive telecommunication management and customer care & billing solutions. MTS' business support system is a full-featured customized solution for telecommunications management, Interconnect and customer care & billing. Its telecommunications expense management solution is used by corporations and organizations to improve the efficiency and performance of all telecommunication and information technology operations, and to significantly reduce associated costs. Its service providers and carriers solutions are used to support sophisticated billing, web-based self-provisioning, partners management and interconnect billing. Headquartered in Israel, MTS markets through wholly owned subsidiaries in the United States, Hong Kong, Holland, and Brazil, and 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: http://www.mtsint.com/ Certain matters discussed in this news release are forward-looking statements that involve a number of risks and uncertainties including, but not limited to, risks in product development plans and schedules, rapid technological change, changes and delays in product approval and introduction, customer acceptance of new products, the impact of competitive products and pricing, market acceptance, the lengthy sales cycle, proprietary rights of the Company and its competitors, risk of operations in Israel, government regulations, dependence on third parties to manufacture products, general economic conditions and other risk factors detailed in the Company's filings with the United States Securities and Exchange Commission. CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands December 31, March 31, 2006 2006 2007 Audited Unaudited ASSETS CURRENT ASSETS: Cash and cash equivalents $ 1,474 $ 2,438 $ 1,674 Short-term bank deposits 100 - 100 Marketable securities 159 134 125 Trade receivables, net 2,484 2,298 1,964 Unbilled receivables 51 146 188 Other accounts receivable and prepaid expenses 763 425 416 Inventories 138 169 148 Total current assets 5,169 5,610 4,615 LONG- TERM INVESTMENTS: Investment in an affiliate 1,598 1,795 1,648 Severance pay fund 673 514 702 Other investments 366 365 367 Deferred income taxes 112 115 105 Total long-term investments 2,749 2,789 2,822 PROPERTY AND EQUIPMENT, NET 439 544 385 OTHER ASSETS: Goodwill 4,058 3,787 4,069 Other intangible assets, net 1,639 905 1,502 Total other assets 5,697 4,692 5,571 Total assets $ 14,054 $ 13,635 $ 13,393 CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands (except share and per share data) December 31, March 31, 2006 2006 2007 Audited Unaudited LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short term bank credit and current maturities on bank loan $ 421 $ - $ 669 Trade payables 510 665 471 Accrued expenses and other liabilities 2,507 2,402 2,414 Deferred revenues 1,545 868 1,493 Total current liabilities 4,983 3,935 5,047 LONG-TERM LIABILITIES: Long term bank loan 583 - 333 Accrued severance pay 946 770 1,004 Total long-term liabilities 1,529 770 1,337 SHAREHOLDERS' EQUITY: Share capital - Ordinary shares of NIS 0.01 par value - Authorized: 12,000,000 shares at December 31, 2006 and March 31, 2006 and 2007; Issued: 5,784,645, 5,774,645 and 5,784,645 shares at December 31, 2006 and March 31, 2006 and 2007, respectively; Outstanding: 5,773,845, 5,763,845 and 5,773,845 shares at December 31, 2006 and March 31, 2006 and 2007, respectively 17 17 17 Additional paid-in capital 16,109 15,964 16,132 Treasury shares (10,800 Ordinary shares) (29) (29) (29) Accumulated other comprehensive income 254 26 283 Accumulated deficit (8,809) (7,048) (9,394) Total shareholders' equity 7,542 8,930 7,009 Total liabilities and shareholders' equity $ 14,054 $ 13,635 $ 13,393 CONSOLIDATED STATEMENTS OF OPERATIONS U.S. dollars in thousands (except share and per share data) Year ended Three months ended December 31, March 31, 2006 2006 2007 Audited Unaudited Revenues $ 10,484 $ 2,814 $ 2,446 Cost of revenues *) 3,355 *) 934 *) 628 Gross profit 7,129 1,880 1,818 Operating expenses: Research and development, net *) 3,633 *) 1,060 *) 886 Selling and marketing *) 3,078 *) 830 *) 836 General and administrative *) 2,651 *) 578 *) 698 Total operating expenses 9,362 2,468 2,420 Operating loss (2,233) (588) (602) Financial income (expenses), net (54) 37 (15) Loss before taxes on income (2,287) (551) (617) Taxes on income 118 3 - Loss before equity in earnings of affiliate (2,405) (554) (617) Equity in earnings of affiliate 159 69 32 Net loss $ (2,246) $ (485) $ (585) Net loss per share: Basic and diluted net loss per Ordinary share $ (0.39) $ (0.08) $ (0.10) Weighted average number of Ordinary shares used in computing basic and diluted net loss per share 5,762,311 5,744,864 5,773,845 *) Including stock-based employee compensation in the amounts of $ 4, $ 6, $ 4 and $ 9 for the 3 months period ended March 31, 2007 (December 31, 2006 - $ 21, $ 101, $ 17 and $ 71 and March 31, 2006 - $ 10, $ 15, $ 13 and $ 25) in cost of revenues, research and development, selling and marketing and general and administrative, respectively. Contacts: Company: Shlomi Hagai Corporate COO & CFO Tel: +972-9-762-1733 Email: DATASOURCE: MTS-MER Telemanagement Solutions Ltd CONTACT: Contacts: Company: Shlomi Hagai, Corporate COO & CFO, Tel: +972-9-762-1733, Email:

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