MTSL MER Telemanagement Solutions Ltd

RA'ANANA, Israel, August 12 /PRNewswire-FirstCall/ -- MTS - Mer Telemanagement Solutions Ltd. (Nasdaq Capital Market: MTSL), a global provider of business support systems (BSS) for comprehensive telecommunication management, telecommunications expense management (TEM) solutions and customer care & billing (CC&B) solutions, today announced its financial results for the three and six month periods ended June 30, 2009. Revenues for the second quarter of 2009 were $2.9 million, compared with $2.4 million for the same quarter last year. The Company's operating loss was $394,000 in the second quarter of 2009 compared to an operating loss of $113,000 for the second quarter of 2008. Net loss for the second quarter was $414,000 or $0.05 per diluted share, compared with a net loss of $156,000 or $0.02 per diluted share in the second quarter of 2008. Revenues for the six month period ended June 30, 2009 were $5.7 million, compared with $4.8 million for the comparable period in 2008. Net loss for the six months ended June 30, 2009 was $678,000 or $0.08 per diluted share, compared with a net profit of $183,000 or $0.03 per diluted share in the comparable period in 2008. The results for the three and six month periods ended June 30, 2009 include the operations of the AnchorPoint business that was acquired in December 2008. The results for the six month periods ended June 30, 2008 include a capital gain of approximately $382,000 from the sale of our ownership interest in cVidya Networks Inc. The Company ended the second quarter with approximately $1.8 million in cash and cash equivalents, including marketable securities. "This quarter's results were negatively affected by the unstable market and economic environment as well as the impact of the integration of the AnchorPoint operations and the resulting higher amortization of intangible assets." said Mr. Lior Salansky, MTS President. "We are committed to closely monitoring our operating expenses and reducing our overall costs in order to overcome the unstable economic environment" concluded Mr. Salansky. About MTS Mer Telemanagement Solutions Ltd. (MTS) is a worldwide provider of innovative solutions for comprehensive telecommunications expense management (TEM) used by enterprises, and for business support systems (BSS) used by information and telecommunication service providers. Since 1984, MTS Telecommunications' expense management solutions have been used by thousands of enterprises and organizations to ensure that their telecommunication services are acquired, provisioned, and invoiced correctly. In addition, the MTS's Application Suite has provided customers with a unified view of telecommunication usage, proactive budget control, personal call management, employee cost awareness and more. AnchorPoint TEM solutions that MTS acquired on December 2008 enable enterprises to gain visibility and control of strategic assets that drive key business processes and crucial competitive advantage. The AnchorPoint's software, consulting and managed services solutions - including integrated Invoice, Asset, and Usage Management and Business Analytics tools -- provide professionals at every level of the organization with rapid access to concise, actionable data. MTS's solutions for Information and Telecommunication Service Providers are used worldwide by wireless and wireline service providers for interconnect billing, partner revenue management and for charging and invoicing their customers. MTS has pre-configured solutions to support emerging carriers of focused solutions (e.g. IPTV, VoIP, WiMAX, MVNO) to rapidly install a full-featured and scaleable solution. Headquartered in Israel, MTS markets its solutions through wholly owned subsidiaries in the United States, Hong Kong, The Netherlands, and Brazil, as well as 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 June 30, December 31, 2009 2008 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 1,585 $ 2,009 Restricted Marketable securities 198 196 Trade receivables, net 1,490 1,223 Unbilled receivables 20 133 Other accounts receivable and prepaid expenses 448 318 Inventories 82 112 Total current assets 3,823 3,991 LONG-TERM ASSETS: Severance pay fund 778 682 Other investments 33 5 Deferred income taxes 40 40 Total long-term assets 851 727 PROPERTY AND EQUIPMENT, NET 256 227 OTHER ASSETS: Goodwill 3,479 3,479 Other intangible assets, net 2,006 2,198 Total other assets 5,485 5,677 Total assets $ 10,415 $ 10,622 CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands (except share and per share data) June 30, December 31, 2009 2008 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short term bank credit $ 45 $ 45 Trade payables 432 712 Accrued expenses and other liabilities 2,895 2,638 Deferred revenues 2,697 2,323 Total current liabilities 6,069 5,718 LONG-TERM LIABILITIES - Accrued severance pay 1,162 1,105 COMMITMENTS AND CONTINGENT LIABILITIES SHAREHOLDERS' EQUITY: Share capital 26 26 Additional paid-in capital 19,456 19,410 Treasury shares (29) (29) Accumulated other comprehensive income 1 (16) Accumulated deficit (16,270) (15,592) Total shareholders' equity 3,184 3,799 Total liabilities and shareholders' equity $ 10,415 $ 10,622 CONSOLIDATED STATEMENTS OF OPERATIONS U.S. dollars in thousands (except share and per share data) Six months ended Three months ended June 30, June 30, 2009 2008 2009 2008 Revenues: Product sales $ 2,741 $ 2,918 $ 1,442 $ 1,391 Services 2,977 1,905 1,484 1,024 Total revenues 5,718 4,823 2,926 2,415 Cost of revenues: Product sales 1,005 723 531 327 Services 1,003 333 538 203 Total cost of revenues 2,008 1,056 1,069 530 Gross profit 3,710 3,767 1,857 1,885 Operating expenses: Research and development, net of grants from the OCS 1,047 1,412 527 688 Selling and marketing 1,517 1,016 740 482 General and administrative 1,862 1,477 984 828 Total operating expenses 4,426 3,905 2,251 1,998 Operating loss (716) (138) (394) (113) Financial income (expenses), net 38 (61) (20) (43) Capital gain on sale of investment - 382 - - Income (loss) before taxes on income (678) 183 (414) (156) Tax on income, net - - - - Net income (loss) $ (678) $ 183 $ (414) $ (156) Net Income (loss) per share: Basic and diluted net income (loss) per Ordinary share $ (0.08) $ 0.03 $ (0.05) $ (0.02) Weighted average number of Ordinary shares used in computing basic and diluted net loss per share 8,917,950 6,350,768 8,917,950 6,523,845 Contacts: Company: Alon Mualem CFO Tel: +972-9-7777-540 Email: DATASOURCE: MTS-MER Telemanagement Solutions Ltd CONTACT: Contacts: Company: Alon Mualem, CFO, Tel: +972-9-7777-540, Email:

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