RA'ANANA, Israel and RIVER EDGE,
N.J., Nov. 5, 2015
/PRNewswire/ -- Mer Telemanagement Solutions Ltd. (MTS) (Nasdaq
Capital Market: MTSL), a provider of online video
advertising and telecommunications expense management/billing
solutions and services, today announced its financial results for
the third quarter and first nine months of 2015.
Vexigo Acquisition: MTS's third quarter results
consolidate the results of Vexigo, which was acquired on
April 1, 2015. The Company's
nine-month results consolidate Vexigo's second and third quarter
results. According to the rules of business combination accounting,
the total purchase price for the acquisition was allocated to the
assets acquired and liabilities assumed based on a Purchase Price
Allocation ("PPA") study. As a result, the Company's consolidated
intangible assets were significantly affected, as well as
shareholders equity and the accounting for other payments due to
Vexigo's former shareholders.
Q3 Results: MTS's revenues for the third
quarter of 2015 totaled $3.8 million
compared with $1.8 million for the
third quarter of 2014. Net loss for the quarter was $405,000, or $0.05
per diluted share, compared with a net loss of $458,000, or $0.10
per diluted share, for the third quarter of 2014. On a non-GAAP
basis (as described and reconciled below), net loss for the quarter
was $163,000, or $0.02 per diluted share, compared with a net loss
of $387,000, or $0.08 per diluted share, for the third quarter of
2014.
Nine-Month Results: Revenues for the first nine
months of 2015 totaled $10.5 million
compared with $5.3 million for the
first nine months of 2014. Net loss for the period was $880,000, or $0.13
per diluted share, compared with a net loss of $1.1 million, or $0.23 per diluted share, for the first nine
months of 2014. On a non-GAAP basis (as described and reconciled
below), net income for the period totaled $132,000, or $0.02
per diluted share, compared with a net loss of $872,000, or $0.19
per diluted share, for the first nine months of 2014.
Accounting Policies for Video Advertising
Revenues and Cost
of Revenues: According to
standard industry accounting policies, the Company accounts for
part of its Video Advertising revenues and cost of revenues that
derive from third-party arrangements on a net basis. If these
revenues had been presented on a gross basis, Video Advertising
revenues and cost of revenues in 2015 would have increased by
$699,000 in the third quarter and by
$1.0 million during the nine months
period, while gross profit would have remained unchanged.
Postponement of Installment Payments pursuant to the
Vexigo Transaction: As previously
announced, the former direct and indirect shareholders of Vexigo
and current shareholders of MTS agreed to an extension of the
payment schedule for the consideration payable to them in order to
improve the Company's working capital.
Comments of Management: Commenting on the results,
Mr. Lior Salansky, CEO of MTS, said,
"During the third quarter, we continued to progress with our plan
to establish Vexigo as a leading player in the Video Advertising
space, while also delivering strong revenues from our TEM and
Billing business. Since acquiring Vexigo at the beginning of Q2, we
have been investing in advertising technology that incorporates Big
Data analytics into Vexigo's cutting-edge Real-Time Bidding (RTB)
Optimization technology, creating a differentiated service that we
plan to roll out early in 2016. While Video Advertising revenues
were weak in July and August, they strengthened significantly in
September and October. We expect to benefit from the market's
winter-holiday strength and future growth potential. In parallel,
our TEM and Billing division delivered a good quarter based on the
continued stability of our TEM sales, increased by a large
end-of-project delivery. We continue to shift clients to the cloud
with multi-year service contracts, in line with our strategy to
further enhance the division's visibility and predictability,"
concluded Mr. Salansky.
Non-GAAP Financial Measures:
This release includes non-GAAP net income and basic and diluted
earnings per share. These non-GAAP measures exclude the following
items:
- M&A expenses related to the acquisition of Vexigo
- Amortization of purchased intangible assets (net of tax
affect)
- Stock based compensation expenses
MTS's management believes that the presentation of non-GAAP
measures provides useful information to investors and management
regarding financial and business trends relating to the Company's
results of operations as well as the net amount of cash generated
by its business operations. These non-GAAP financial measures are
not in accordance with, or an alternative for, generally accepted
accounting principles and may be different from non-GAAP financial
measures used by other companies. In addition, these non-GAAP
financial measures are not based on any comprehensive set of
accounting rules or principles. MTS believes that non-GAAP
financial measures should only be used to evaluate the Company's
results of operations in conjunction with the corresponding GAAP
measures.
About MTS
Mer Telemanagement Solutions Ltd. (MTS) provides video
advertising solutions for online and mobile platforms and TEM and
Billing solutions and services.
MTS's Vexigo (www.vexigo.com) subsidiary creates highly
sophisticated video advertising solutions for online and mobile
platforms, and leverages them to offer advertising optimization
services to advertisers and website owners.
MTS's Telecommunications business provides innovative products
and services for enterprises in the areas of telecom expense
management (TEM), enterprise mobility management (EMM), mobile
virtual network operators/enablers (MVNO/MVNE) and IOT/M2M
enablement for mobile service providers.
Headquartered in Israel, MTS
markets its solutions through wholly-owned subsidiaries in
Israel, the U.S and Hong Kong, as well as through distribution
channels. For more information please visit the MTS web site:
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
|
|
|
September
30,
|
|
December
31,
|
|
|
2015
|
|
2014
|
ASSETS
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
Cash and cash
equivalents
|
|
$ 4,409
|
|
$ 4,864
|
Restricted
cash
|
|
215
|
|
648
|
Restricted marketable
securities
|
|
123
|
|
136
|
Trade receivables,
net
|
|
2,861
|
|
579
|
Other accounts
receivable and prepaid expenses
|
|
438
|
|
75
|
|
|
|
|
|
Total current
assets
|
|
8,046
|
|
6,302
|
|
|
|
|
|
LONG-TERM
ASSETS:
|
|
|
|
|
Severance pay
fund
|
|
652
|
|
604
|
|
|
|
|
|
|
|
|
|
|
PROPERTY AND EQUIPMENT,
NET
|
|
173
|
|
118
|
|
|
|
|
|
|
|
|
|
|
OTHER INTANGIBLE ASSETS
AND GOODWILL
|
|
19,218
|
|
3,868
|
|
|
|
|
|
Total assets
|
|
$
28,089
|
|
$
10,892
|
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEETS
|
U.S. dollars in
thousands (except share and per share data)
|
|
|
September
30,
|
|
December
31,
|
|
|
2015
|
|
2014
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
Trade
payables
|
|
$
2,220
|
|
$
254
|
Accrued expenses and
other liabilities (*)
|
|
6,884
|
|
2,252
|
Deferred
revenues
|
|
1,925
|
|
1,706
|
Deferred
tax
|
|
101
|
|
-
|
Liabilities of
discontinued operations
|
|
189
|
|
282
|
|
|
|
|
|
Total current
liabilities
|
|
11,319
|
|
4,494
|
|
|
|
|
|
LONG-TERM
LIABILITIES
|
|
|
|
|
Accrued severance
pay
|
|
776
|
|
712
|
Other liabilities
(**)
|
|
5,590
|
|
-
|
Deferred tax
liability
|
|
460
|
|
54
|
Total long-term
liabilities
|
|
6,826
|
|
766
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
|
Share
capital
|
|
22
|
|
13
|
Additional paid-in capital
|
|
25,580
|
|
20,400
|
Treasury
shares
|
|
(29)
|
|
(29)
|
Accumulated other
comprehensive loss
|
|
(5)
|
|
(8)
|
Accumulated
deficit
|
|
(15,624)
|
|
(14,744)
|
|
|
|
|
|
Total shareholders'
equity
|
|
9,944
|
|
5,632
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
|
$
28,089
|
|
$
10,892
|
|
|
|
|
|
|
|
(*) Including $4,406
of contingent earn-out payments and amounts owed to Vexigo's former
shareholders as part of Vexigo acquisition.
|
(**) Including $5,508
of contingent long term earn-out payments to Vexigo's former
shareholders.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
U.S. dollars in
thousands (except share and per share data)
|
|
|
Nine
months ended September 30,
|
|
Three months
ended September
30,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Telecom
Services
|
|
$
4,599
|
|
$
4,257
|
|
$
1,917
|
|
$
1,409
|
|
Telecom Product
sales
|
|
1,185
|
|
1,080
|
|
305
|
|
401
|
|
Video Advertising
(1)
|
|
4,692
|
|
-
|
|
1,604
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
10,476
|
|
5,337
|
|
3,826
|
|
1,810
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
|
Telecom
Services
|
|
2,283
|
|
1,825
|
|
1,083
|
|
620
|
|
Telecom Product
sales
|
|
468
|
|
395
|
|
209
|
|
83
|
|
Video Advertising
(1)
|
|
3,096
|
|
-
|
|
1,200
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of
revenues
|
|
5,847
|
|
2,220
|
|
2,492
|
|
703
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
4,629
|
|
3,117
|
|
1,334
|
|
1,107
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
1,271
|
|
1,090
|
|
507
|
|
440
|
|
Selling and
marketing
|
|
1,619
|
|
1,356
|
|
555
|
|
413
|
|
General and
administrative
|
|
2,693
|
|
1,705
|
|
757
|
|
684
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
5,583
|
|
4,151
|
|
1,819
|
|
1,537
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
(954)
|
|
(1,034)
|
|
(485)
|
|
(430)
|
|
Financial income
(expenses), net
|
|
21
|
|
(46)
|
|
(30)
|
|
(40)
|
|
|
|
|
|
|
|
|
|
|
|
Loss before taxes on
income
|
|
(933)
|
|
(1,080)
|
|
(515)
|
|
(470)
|
|
Income tax expense
(benefit), net
|
|
40
|
|
9
|
|
(59)
|
|
2
|
|
Net loss from
continuing operations
|
|
(973)
|
|
(1,089)
|
|
(456)
|
|
(472)
|
|
Net income from
discontinued operations
|
|
93
|
|
14
|
|
51
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
(880)
|
|
$
(1,075)
|
|
$
(405)
|
|
$
(458)
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss per Ordinary share
|
|
$
(0.13)
|
|
$
(0.23)
|
|
$
(0.05)
|
|
$
(0.10)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of Ordinary shares used in
computing basic and diluted net loss per share
|
|
6,906,838
|
|
4,670,336
|
|
8,043,290
|
|
4,667,235
|
|
|
(1) A portion of
Video Advertising revenues and their associated cost of revenues
for the three and nine months periods ended September 30, 2015 are
presented on a net basis, based on current arrangement with certain
publishers. If such revenues and cost of revenues were presented on
a gross basis this would increase both Video Advertising revenues
and cost of revenues by $699 in the third quarter and $1,004 during
the nine months periods ended September 30, 2015, with no change to
gross profit.
|
RECONCILIATION OF
GAAP TO NON-GAAP RESULTS
|
U.S. dollars in
thousands (except share and per share data)
|
|
|
Nine months
ended September
30,
|
|
Three months
ended September
30,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
GAAP Net
loss
|
|
(880)
|
|
(1,075)
|
|
(405)
|
|
(458)
|
|
M&A expenses
related to the acquisition of Vexigo Ltd
|
|
424
|
|
-
|
|
-
|
|
-
|
|
Stock-based
compensation expenses
|
|
123
|
|
71
|
|
51
|
|
27
|
|
Intangible assets
amortization
|
|
465
|
|
132
|
|
191
|
|
44
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net
income ( loss )
|
|
$ 132
|
|
$
(872)
|
|
$
(163)
|
|
$
(387)
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net loss
per Ordinary share
|
|
$
(0.13)
|
|
$
(0.23)
|
|
$
(0.05)
|
|
$
(0.10)
|
|
Non-GAAP diluted net
income (loss) per Ordinary share
|
|
$
0.02
|
|
$
(0.19)
|
|
$
(0.02)
|
|
$
(0.08)
|
|
Weighted average number
of Ordinary shares used in computing Non-GAAP diluted net income
(loss) per share
|
|
6,960,738
|
|
4,670,336
|
|
8,043,290
|
|
4,667,235
|
|
|
|
|
|
|
|
|
|
|
|
|
Contacts:
Company:
Alon Mualem
CFO
Tel: +972-9-7777-540
Email: Alon.Mualem@mtsint.com
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/mts-announces-third-quarter-2015-financial-results-300173193.html
SOURCE MTS-MER Telemanagement Solutions Ltd