- Revenues Rise 41% Year-Over-Year - RA'ANANA, Israel, Aug. 11
/PRNewswire-FirstCall/ -- MTS -- Mer Telemanagement Solutions Ltd.
(Nasdaq SmallCap: MTSL), a global provider of Operations Support
Systems (OSS) for comprehensive Telecommunication Management and
Customer Care & Billing solutions, today reported its financial
results for the quarter ended June 30, 2005. Revenues for the
second quarter were $2.8 million, compared to $2.0 million reported
in the second quarter of 2004, an increase of 41%. Net loss for the
quarter was $1.15 million ($0.24 basic and diluted net loss per
ordinary share), compared to a net loss of $929,000 ($0.20 basic
and diluted net loss per ordinary share) for the second quarter of
2004. Eytan Bar, President and Chief Executive Officer of MTS,
commented, "We continued to experience revenue and backlog growth
in the second quarter, driven by increased sales of our billing
solutions to the service provider and carrier markets. In addition,
we increased our penetration of the enterprise market, and launched
our latest suite of telemanagement products, the Invoice Management
Solution, as part of the total Telecommunications Expense
Management Solution for Enterprises." "MTS' overall business
continues to expand and we are executing our growth strategy as
planned," continued Mr. Bar. "Our pipeline of orders is developing
nicely and we are expanding our sales channels through strategic
partnerships with market leading companies. Furthermore, the
investments we made in R&D and sales and marketing over the
past year are now supporting our expansion initiatives." Gross
profit for the second quarter rose 31% to $1.94 million as a result
of increased sales of products and services. This compares to gross
profit of $1.49 million reported in the second quarter of 2004 and
$ 1.89 million in the first quarter of 2005. Research and
development expenses doubled to $1.17 million compared to the
$569,000 reported in the second quarter of 2004, but declined 13%
compared to the $1.34 million reported in the first quarter of this
year. The sharp year- over-year increase in R&D expenses
relates primarily to the continued integration of TeleKnowledge's
R&D group, as well as to the Company's continuing investment in
product development. Selling and marketing expenses were $1.37
million in the second quarter, reflecting a modest decline
year-over-year, compared to $1.40 million reported in the second
quarter of 2004, and a 10% decline compared to the first quarter of
2005. The continued reduction in selling and marketing demonstrates
MTS' commitment to focus on the growing areas of its business.
Shlomi Hagai, Corporate COO & CFO, stated, "MTS ended the
second quarter with a healthy, accumulated backlog of orders of
approximately $2 million, compared to $1 million at the end of the
first quarter. In addition, this marks the third consecutive
quarter in which we have grown our order backlog. Moreover, it is
the fourth consecutive quarter in which we have experienced revenue
growth. We believe that our commitment to bring spending more in
line with revenue generation positions us well for the future."
MTS' cash and cash equivalents, including marketable securities,
were $1.88 million as of June 30, 2005. The Company improved its
cash position on August 10, 2005 when it entered into definitive
agreements with institutional and private investors for a private
placement of ordinary shares and warrants that raised $2.8 million.
If the warrants are exercised in full the Company will raise an
additional $1.5 million. "We plan to use the proceeds from this
financing to execute our growth strategy and to fund expanding
activities in R&D and sales and marketing. We believe that our
investment in these operational activities will drive future growth
and ultimately improve our operating results," concluded Mr. Hagai.
Six Months Results Revenues for the first six months of FY 2005
were $5.5 million, compared to $4.3 million reported in the first
six months of FY 2004, an increase of 27%. Net loss for the period
was $3.2 million ($0.68 basic and diluted net loss per ordinary
share), compared to the net loss of $1.1 million ($0.24 basic and
diluted net loss per ordinary share) for comparable period of FY
2004. Conference Call Information MTS will conduct a teleconference
to discuss the second quarter results on Thursday, August 11, at
11:00 AM Eastern Time (18:00 Israel Time). To access the call,
please dial 1-877-270-4109 from the US or Canada (toll free),
1-809- 315-341 from Israel (toll free), or 1-706-679-0560 from
other locations approximately 5-10 minutes prior to the starting
time. A replay of the call also will be available from 2:00 PM ET
on Thursday, August 11, 2005, until 11:59 PM ET on Thursday, August
18. To access the replay please, dial 1-800-642-1687 from the US or
Canada (toll free), 1-809- 315-356 from Israel (toll free), or
1-706-645-9291 from other locations and enter conference
ID#7748694. About MTS Mer Telemanagement Solutions Ltd. is a global
provider of operations support systems (OSS) for comprehensive
telecommunication management and customer care & billing
solutions. MTS' OSS is a full-featured customized solution for
telecommunications management and customer care & billing. Its
telecommunications enterprise resource planning (ERP) application
suite is used by corporations and organizations to improve the
efficiency and performance of all telecommunication and information
technology (IT) operations, and to significantly reduce associated
costs. Its affordable customer care and billing (CC&B)
solutions are used by service providers and operators to support
sophisticated billing, web-based self-provisioning and other
revenue-generating applications. 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, and other PABX vendors. Its legacy call
accounting solutions have been installed by over 60,000 customers
in 60 countries. MTS' shares are traded on the Nasdaq SmallCap
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. Contacts: Company
Investor Relations: Shlomi Hagai Kathy Price Corporate COO &
CFO Managing Director MTS - MER Telemanagement Solutions The Anne
McBride Company, Inc. Tel: +972-9762-1733 Tel: 212-983-1702 ext.
212 Email: Email: CONSOLIDATED STATEMENTS OF OPERATIONS U.S.
Dollars in thousands (except share data) Three months ended Six
months ended Year ended June 30, June 30, December 31, 2005 2004
2005 2004 2004 Unaudited Revenues from products and services $2,812
$1,992 $5,538 $4,351 $9,413 Cost of revenues from products and
services 869 506 1,707 1,047 2,814 Gross profit 1,943 1,486 3,831
3,304 6,599 Operating expenses: Research and development 1,167 569
2,510 1,103 2,362 Selling and marketing 1,370 1,397 2,897 2,522
6,300 General and administrative 677 490 1,722 887 2,101 Total
operating expenses 3,214 2,456 7,129 4,512 10,763 Operating loss
(1,271) (970) (3,298) (1,208) (4,164) Financial income, net 11 (8)
30 19 78 Other income (expenses), net 72 2 74 (30) -- Loss before
taxes on income (1,188) (976) (3,194) (1,219) (4,086) Taxes on
income -- 2 -- 2 266 (1,188) (978) (3,194) (1,221) (4,352) Equity
in earnings of affiliate 39 49 11 95 225 Net loss $(1,149) $(929)
$(3,183) $(1,126) $(4,127) Net loss per share: Basic and diluted
net loss per Ordinary share $ (0.24) $(0.20) $(0.68) $(0.24)
$(0.89) Weighted average number of Ordinary shares used in
computing basic and diluted net loss per share 4,712,561 4,633,471
4,675,283 4,629,082 4,634,413 CONSOLIDATED BALANCE SHEETS U.S.
Dollars in thousands (except share data) June 30, December 31, 2005
2004 2004 Unaudited ASSETS CURRENT ASSETS: Cash and cash
equivalents $1,750 $8,461 $3,814 Marketable securities 126 1,498
1,057 Trade receivables, net 1,853 1,069 1,348 Other accounts
receivable and prepaid expenses 408 580 391 Inventories 180 193 178
Total current assets 4,317 11,801 6,788 LONG- TERM INVESTMENTS:
Investment in an affiliate 1,707 1,760 2,119 Long-term loans, net
of current maturities 26 73 45 Severance pay fund 518 565 535 Other
investments 373 371 373 Total long-term investments 2,624 2,769
3,072 PROPERTY AND EQUIPMENT, NET 583 460 581 OTHER ASSETS:
Goodwill 3,511 2,025 3,415 Other intangible assets, net 1,169 128
1,394 Deferred income taxes 73 105 73 Total other assets 4,753
2,258 4,882 Total assets $12,277 $17,288 $15,323 CONSOLIDATED
BALANCE SHEETS U.S. Dollars in thousands (except share data) June
30, December 31, 2005 2004 2004 Unaudited LIABILITIES AND
SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of
long-term loans $- $4 $- Trade payables 727 311 719 Accrued
expenses and other liabilities 2,197 1,722 2,042 Deferred revenues
1,144 1,218 1,254 Total current liabilities 4,068 3,255 4,015
LONG-TERM LIABILITIES: Accrued severance pay 660 647 651 Total
long-term liabilities 660 647 651 SHAREHOLDERS' EQUITY: Share
capital - Ordinary shares of NIS 0.01 par value - Authorized:
12,000,000 shares; Issued: 4,796,304 shares at June 30, 2005 and
4,648,804 shares at December 31,2004; Outstanding: 4,785,504 shares
at June 30, 2005 and 4,638,004 at December 31, 2004 15 14 14
Additional paid-in capital 13,267 12,638 12,879 Treasury shares
(29) (20) (29) Deferred stock compensation (176) - (208)
Accumulated other comprehensive income 2 100 348 Retained earnings
(accumulated deficit) (5,530) 654 (2,347) Total shareholders'
equity 7,549 13,386 10,657 Total liabilities and shareholders'
equity $12,277 $17,288 $15,323 DATASOURCE: Mer Telemanagement
Solutions Ltd. CONTACT: Shlomi Hagai, Corporate COO & CFO, MTS
- MER Telemanagement Solutions, +972-9762-1733, ; or Kathy Price,
Managing Director of The Anne McBride Company, Inc.,
+1-212-983-1702 ext. 212, , for Mer Telemanagement Solutions Ltd.
Web site: http://www.mtsint.com/
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