RA'ANANA, Israel and RIVER EDGE, New Jersey, April 30,
2018 /PRNewswire/ -- Mer Telemanagement Solutions
Ltd. (MTS) (Nasdaq Capital Market: MTSL), a global provider of
telecommunications expense management (TEM), enterprise mobility
management (EMM) solutions, and video advertising solutions for
online and mobile platforms, today released its financial results
for the fourth quarter and the year ended December 31, 2017.
![MTS Logo MTS Logo](http://mma.prnewswire.com/media/462544/MTS_Logo.jpg)
MTS's revenues for the fourth quarter of 2017 totaled
$1.7 million, down 19% sequentially,
as compared with $2.1 million for the
third quarter of 2017 and down 57.5% from $4.0 million for the fourth quarter of 2016. Net
loss for the quarter totaled $(833,000), or $(0.27) per diluted share, compared with a net
loss of $(4.5) million, or
$(1.55) per diluted share, for the
fourth quarter of 2016. On a non-GAAP basis (excluding stock-based
compensation expenses, amortization of intangible assets,
reorganization costs, goodwill and technology impairment charges,
the impact of the US tax reform and a loss from discontinued
operations), net loss for the fourth quarter was $(798,000), or $(0.26) per diluted share, compared with a net
loss of $(432,000), or $(0.15) per diluted share, for the fourth quarter
of 2016.
MTS's full-year 2017 revenues totaled $8.6 million compared with $14.1 million for 2016. Net loss for the period
was $(1.8) million, or $(0.59) per diluted share, compared with a net
loss of $(5.2) million or
($1.85) per diluted share for 2016.
On a non-GAAP basis (excluding stock-based compensation expenses,
amortization of intangible assets, reorganization costs, goodwill
and technology impairment charges, the impact of the US tax reform
and a loss from discontinued operations), the Company recorded a
net loss of $(1.6) million, or
$(0.54) per diluted share in 2017,
compared with a net loss of $(375,000), or $(0.13) per diluted share in 2016.
All numbers relating to the Company's ordinary shares and
earnings per share have been adjusted to reflect a 1-for-3 reverse
stock split that became effective on September 6, 2017.
As of December 31, 2017 and
December 31, 2016, the Company had
cash and cash equivalents of approximately $1.3 and $ 1.5
million, respectively. The Company incurred losses for the
year ended December 31, 2017, amounting to $(1.8) million and has an accumulated deficit of
$26.5 million. In addition, the
Company incurred negative cash flows from operations of
$0.7 million for the year ended
December 31, 2017. Those factors
raise substantial doubt about the Company's ability to continue as
a going concern. While the Company is exploring various financing
alternatives to raise additional funds to support its operations,
there can be no assurance that additional financing will be
available on satisfactory terms, or at all. If the Company is
unable to secure needed financing, management may be forced to take
additional actions, which may include significantly reducing its
anticipated level of expenditures.
Commenting on the results, Mr. Roy
Hess, Chief Executive Officer of MTS, said, "Our results in
2017 reflect the execution and substantial reduction of our ongoing
operating expenses and our efforts to maintain our operating
margins in the face of the inherent risks and business fluctuations
that we face. We are now concentrating on growing our core
business. As a result of the weakness in the operations of
the Vexigo business unit during the last six months, we took
additional steps to reduce its operational expenses."
"The telecommunications side of our business continues to be
stable. During 2017 we released a new version of our
innovative eXsight Unified Communications and Collaboration
(UC&C) Management Solution, which enables companies to increase
efficiencies and reduce costs. We are also moving forward to
enhance our telecommunication product lines while exploring the
potential for new opportunities with our partners and customers.
Overall, we remain focused on our core business lines while closely
monitoring and reducing our overall costs." concluded Mr. Hess.
The Company further announced today that Alon Mualem, the Company's Chief Financial
Officer, will leave the Company in the coming months to pursue new
career opportunities. The Board has named Ofira Bar to fill the role of Chief Financial
Officer on an interim basis, effective following the filing of the
Company's annual report. Prior to joining MTS, Ms. Bar was chief
financial officer of H.T.S Market, Ltd., an internet marketing firm
and corporate controller of EZTD Inc. (OTCMKTS: EZTD). In addition,
Ms. Bar served as an audit team manager of public and private
companies at Kesselman and Kesselman, Certified Public Accountants
(Isr.), a member firm of PricewaterhouseCoopers International
Limited. Ms. Bar holds a B.A. degree in Accounting and Economics
from Tel Aviv University and is
licensed as a Certified Public Accountant in Israel. "We are pleased to welcome
Ofira Bar to the MTS senior
management team. In her new role, Ofira will be responsible for all
our financial activities and we all wish her great success," said
Roy Hess, CEO of MTS.
Mr. Mualem will support an orderly transition of his overall
responsibilities and will be available to consult on ongoing
matters during the interim period. "On behalf of everyone at MTS, I
want to thank Alon for his service and substantial contributions to
the Company since he joined us in 2007 and wish him great success
in his new professional path," said Mr. Haim Mer, the Company's Chairman of the
Board.
Non-GAAP Financial Measures: This release includes
non-GAAP net loss and basic and diluted net loss per share. These
non-GAAP measures exclude the following items:
- Stock based compensation expenses
- Amortization of purchased intangible assets (net of tax
effect)
- Reorganization and other non-recurring costs
- Impairment of goodwill and technology (net of tax effect)
- Re-evaluation of contingent consideration
- Net income (loss) from discontinued operations
- Impact of the US tax reform
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. See below for a reconciliation of GAAP to non-GAAP
measures.
About MTS
Mer Telemanagement Solutions Ltd. (MTS) provides call accounting
and TEM solutions and services and digital advertising solutions
for online and mobile platforms.
MTS's telecommunications business is focused on innovative
products and services for enterprises in the area of telecom
expense management (TEM) and Call Accounting. 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.
MTS's Vexigo (www.vexigo.com) subsidiary provides digital
advertising solutions for online and mobile platforms, and
leverages them to offer advertising optimization services to
advertisers and website owners.
Certain matters discussed in this news release are
forward-looking statements that involve a number of risks and
uncertainties including, but not limited to, doubts about the
Company's ability to continue as a going concern, the need to
obtain additional funding, 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,
|
December
31,
|
|
2017
|
2016
|
|
Unaudited
|
Audited
|
ASSETS
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
Cash and cash
equivalents
|
$
1,328
|
$
1,508
|
Restricted
cash
|
1,068
|
504
|
Restricted marketable
securities
|
-
|
136
|
Trade receivables,
net
|
1,391
|
5,305
|
Other accounts
receivable and prepaid expenses
|
334
|
343
|
|
|
|
Total current
assets
|
4,121
|
7,796
|
|
|
|
LONG-TERM
ASSETS:
|
|
|
Severance pay
fund
|
856
|
752
|
|
|
|
PROPERTY AND EQUIPMENT,
NET
|
148
|
198
|
|
|
|
OTHER
ASSETS:
|
|
|
Goodwill
|
3,479
|
3,479
|
Other intangible
assets, net
|
42
|
63
|
|
Total other
assets
|
3,521
|
3,542
|
|
|
|
Total assets
|
$
8,646
|
$
12,288
|
CONSOLIDATED
BALANCE SHEETS
|
U.S. dollars in
thousands (except share and per share data)
|
|
|
December
31,
|
December
31,
|
|
2017
|
2016
|
|
Unaudited
|
Audited
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
Trade
payables
|
$
1,288
|
$
4,086
|
Deferred
revenues
|
1,744
|
1,374
|
Accrued expenses and
other liabilities
|
2,498
|
3,756
|
Liabilities of
discontinued operations
|
185
|
132
|
|
|
|
Total current
liabilities
|
5,715
|
9,348
|
|
|
|
LONG-TERM
LIABILITIES
|
|
|
Accrued severance
pay
|
1,073
|
914
|
Deferred tax
liability
|
146
|
166
|
|
Total long-term
liabilities
|
1,219
|
1,080
|
|
|
|
COMMITMENTS AND
CONTINGENT LIABILITIES
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
Share
capital
|
25
|
23
|
Additional paid-in
capital
|
28,188
|
26,569
|
Treasury
shares
|
(29)
|
(29)
|
Accumulated other
comprehensive income (loss)
|
-
|
1
|
Accumulated
deficit
|
(26,472)
|
(24,704)
|
|
|
|
Total shareholders'
equity
|
1,712
|
1,860
|
|
|
|
Total liabilities and
shareholders' equity
|
$
8,646
|
$
12,288
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
U.S. dollars in
thousands (except share and per share data)
|
|
|
|
|
Twelve months
ended
|
Three months
ended
|
|
December
31,
|
December
31,
|
|
2017
|
2016
|
2017
|
2016
|
|
Unaudited
|
Audited
|
Unaudited
|
Unaudited
|
Revenues:
|
|
|
|
|
Services
|
$
5,467
|
$
5,985
|
$
1,253
|
$
1,568
|
Product
sales
|
1,306
|
1,566
|
268
|
589
|
Video
Advertising
|
1,853
|
6,501
|
183
|
1,872
|
|
|
|
|
|
Total
revenues
|
8,626
|
14,052
|
1,704
|
4,029
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
Services
|
1,646
|
2,248
|
489
|
112
|
Product
sales
|
412
|
460
|
123
|
22
|
Video
Advertising
|
1,453
|
4,205
|
156
|
2000
|
|
|
|
|
|
Total cost of
revenues
|
3,511
|
6,913
|
768
|
2,134
|
|
|
|
|
|
Gross profit
|
5,115
|
7,139
|
936
|
1,895
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Research and
development
|
2,145
|
2,763
|
403
|
1,022
|
Selling and
marketing
|
1,829
|
2,343
|
478
|
641
|
General and
administrative
|
3,009
|
3,472
|
864
|
947
|
Goodwill and
technology impairments, net of change in contingent earn-out
consideration
|
-
|
4,245
|
-
|
4,245
|
|
|
|
|
|
Total operating
expenses
|
6,983
|
12,823
|
1,745
|
6,855
|
|
|
|
|
|
Operating
loss
|
(1,868)
|
(5,684)
|
(809)
|
(4,960)
|
Financial income
(expenses), net
|
144
|
(17)
|
17
|
(17)
|
|
|
|
|
|
Loss before taxes on
income
|
(1,724)
|
(5,701)
|
(792)
|
(4,977)
|
Tax benefit,
net
|
(9)
|
(507)
|
(12)
|
(523)
|
|
|
|
|
|
Net loss from
continuing operations
|
(1,715)
|
(5,194)
|
(780)
|
(4,454)
|
|
Loss from discontinued
operations
|
(53)
|
(27)
|
(53)
|
(27)
|
Net loss
|
$
(1,768)
|
$
(5,221)
|
$
(833)
|
$
(4,481)
|
|
|
|
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
|
|
Basic and diluted net
loss per share (*)
|
$
(0.59)
|
$
(1.85)
|
$
(0.27)
|
$
(1.55)
|
Weighted average number
of Ordinary shares used in computing basic and diluted net
loss per share (*)
|
2,991,547
|
2,817,427
|
3,118,884
|
2,897,285
|
|
|
|
|
|
* After giving effect
to the reverse stock split from September 6, 2017
|
|
|
|
|
RECONCILIATION OF
GAAP TO NON-GAAP RESULTS
|
U.S. dollars in
thousands (except share and per share data)
|
|
|
Twelve months
ended December 31,
|
Three months
ended December 31,
|
|
2017
|
2016
|
2017
|
2016
|
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
|
|
|
|
|
GAAP net
loss
|
(1,768)
|
(5,221)
|
(833)
|
(4,481)
|
Stock-based
compensation expenses
|
1
|
223
|
30
|
53
|
Intangible assets
amortization, net of tax effects
|
21
|
836
|
4
|
209
|
Video Advertising
technology impairment, net of tax
effect
|
-
|
3,279
|
-
|
3,279
|
Goodwill impairment,
net of evaluation of contingent
consideration
|
-
|
481
|
-
|
481
|
Impact of the US tax
reform (a)
|
(52)
|
-
|
(52)
|
-
|
Loss from discontinued
operations
|
53
|
27
|
53
|
27
|
Reorganization and
other non-recurring costs
|
141
|
-
|
-
|
-
|
|
|
|
|
|
Non-GAAP net
loss
|
$
(1,604)
|
$
(375)
|
$
(798)
|
$
(432)
|
|
|
|
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
|
|
GAAP basic and
diluted net loss per ordinary share (*)
|
$
(0.59)
|
$
(1.85)
|
$
(0.27)
|
$
(1.55)
|
|
|
|
|
|
Non-GAAP basic and
diluted net loss per ordinary share
(*)
|
$
(0.54)
|
$
(0.13)
|
$
(0.26)
|
$
(0.15)
|
|
|
|
|
|
Weighted average
number of ordinary shares used in computing non-GAAP basic and diluted net loss per
share (*)
|
2,991,547
|
2,817,427
|
3,118,884
|
2,897,285
|
|
|
|
|
|
* After giving effect
to the reverse stock split from September 6, 2017
|
|
|
|
|
Contacts:
Alon
Mualem
CFO
Tel:
+972-9-7777-540
Email: alon.mualem@mtsint.com
View original
content:http://www.prnewswire.com/news-releases/mts-announces-full-year-and-fourth-quarter-2017-financial-results-300638868.html
SOURCE Mer Telemanagement Solutions Ltd. (MTS)