MTSL MER Telemanagement Solutions Ltd

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

F O R M 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of November 2015

 

MER TELEMANAGEMENT SOLUTIONS LTD.

(Name of Registrant)

 

14 Hatidhar Street, Ra'anana 4366516, Israel

(Address of Principal Executive Office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F x      Form 40-F ¨

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨

 

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨

 

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes ¨     No x

 

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ____________

 

This Form 6-K is being incorporated by reference into the Registrant’s Form S-8 Registration Statements File Nos. 333-123321 and 333-180369.

 

 

MER Telemanagement Solutions Ltd.

 

6-K Item

 

1. MTS Announces Third Quarter 2015 Financial Results

 

 

SIGNATURE

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

  

	MER TELEMANAGEMENT SOLUTIONS LTD.
		(Registrant)
		By:	/s/ Alon Mualem
			Alon Mualem
			Chief Financial Officer

 

 

Date: November 5, 2015

 

 

Exhibit 1

 

MTS Announces Third Quarter 2015 Financial Results

 

-

Video Advertising Division: Investment in Technology that Incorporates Big Data Analysis and Leading-Edge RTB (Real Time Bidding) Solution –

-

Telecommunications Division: Stable Performance, Revenue Increase From Completion of Large Project –

 

Ra’anana, Israel / River Edge, NJ, USA – November 5, 2015 – 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.

 

Contacts:

Company:

Alon Mualem

CFO

Tel: +972-9-7777-540

Email: Alon.Mualem@mtsint.com

 

 

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