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MTS Announces Second Quarter 2012 Financial Results
Aug 16, 2012 (04:08 PM EDT)


Year over Year Quarterly Revenues Increased 10% and Operating Income Increased 170%; Earnings per Share for the Six Month Period Increased 110% to $0.17; Generated $1 Million of Free Cash Flow during the First Six Months of 2012

RA'ANANA, Israel, August 16, 2012 /PRNewswire/ --

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 second quarter of 2012.

Revenues for the second quarter of 2012 were $3.3 million, compared with $3.0 million in revenues during the same quarter last year and revenues of $3.0 million in the first quarter of 2012. The Company's operating profit was $517,000 in the second quarter of 2012 compared to an operating profit of $191,000 for the second quarter of 2011 and $280,000    in the first quarter of 2012. Net income for the second quarter was $460,000 or $0.10 per diluted share, compared with net income of $229,000 or $0.05 per diluted share in the second quarter of 2011 and $310,000 or $0.07 per diluted share in the first quarter of 2012. Revenues for the six month period ended June 30, 2012 were $6.3 million, compared with $5.8 million for the comparable period in 2011. Net income for the six months ended June 30, 2012 was $770,000 or $0.17 per diluted share, compared with net income of $362,000 or $0.08 per diluted share in the comparable period in 2011.

As of June 30, 2012, we had cash and marketable securities of $4.3 million as compared to $3.4 million as at December 31, 2011. During the six month period ended June 30, 2012 we had positive operating cash flow of $1.0 million, as compared to positive operating cash flow of $535,000 during the six month period ended June 30, 2011.

"Our second quarter results represent continued improvements in our financial results and indicators as a result of our efforts to develop our Telecom Expense Management opportunities through partners, new customer acquisitions and expanding our existing customer base," said Eytan Bar, CEO of MTS.

"In addition, our company's Billing and Mobile Virtual Network Operator (MVNO) activity as a managed service has grown and we were able to sign an additional managed service agreement with a new MVNO in the U.S. and we see other opportunities in this market. We are looking forward to improving both our top and bottom line performance," concluded Mr. Bar.

About MTS

Mer Telemanagement Solutions Ltd. (MTS) is a worldwide provider of innovative products and services for comprehensive telecom expense management (TEM) and enterprise mobility management (EMM) solutions, telecom billing solutions used by telecommunication service providers and mobile virtual network operators and enablers (MVNO/MVNE) solutions used by mobile service providers.

The MTS TEM Suite solution enables enterprises to gain visibility and control of strategic fixed and mobile telecom assets, services and IT security policies that drive key business processes and crucial competitive advantage. The MTS cloud, consulting and managed services solutions -- including integrated management of invoices, assets, wireless, optimization, usage, mobile device management (MDM), procurement, help desk and bill payment ,along with dashboards and reporting tools -- provide professionals at every level of the organization with rapid access to concise, actionable data.

MTS's solutions for 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 provides MVNE service to allow quick launch of new MVNO initiatives in a pay as you grow and revenue share models.  In addition, 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 scalable solution.

Headquartered in Israel, MTS markets its solutions through wholly owned subsidiaries in the United States, Hong Kong and The Netherlands 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,
                                                          2012          2011
    ASSETS
 
    CURRENT ASSETS:
    Cash and cash equivalents                            $ 4,192       $ 3,269
    Restricted cash                                          242            45
    Restricted marketable securities                         127           127
    Trade receivables, net                                   684           854
    Other accounts receivable and prepaid expenses           143            88
    Inventories                                                7             5
 
    Total current assets                                   5,395         4,388
 
    LONG-TERM ASSETS:
    Severance pay fund                                       655           619
    Other investments                                          4             6
    Deferred income taxes                                     31            31
 
    Total long-term assets                                   690           656
 
    PROPERTY AND EQUIPMENT, NET                              204           161
 
    OTHER ASSETS:
    Goodwill                                               3,479         3,479
    Other intangible assets, net                             873         1,050
 
    Total other assets                                     4,352         4,529
 
    Total assets                                        $ 10,641       $ 9,734
 


CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands (exceptshare and per share data)

                                                 June 30,        December 31,
                                                   2012              2011
    LIABILITIES AND SHAREHOLDERS' EQUITY
 
    CURRENT LIABILITIES:
    Trade payables                                 $ 254             $ 326
    Accrued expenses and other liabilities         2,566             2,354
    Deferred revenues                              1,937             2,025
    Liabilities of discontinued operations           435               435
 
    Total current liabilities                      5,192             5,140
 
    LONG-TERM LIABILITIES -
    Accrued severance pay                            805               762
 
    COMMITMENTS AND CONTINGENT LIABILITIES
 
    SHAREHOLDERS' EQUITY:
    Share capital                                     13                13
    Additional paid-in capital                    19,811            19,773
    Treasury shares                                  (29)              (29)
    Accumulated other comprehensive income           (15)              (19)
    Accumulated deficit                          (15,136)          (15,906)
 
    Total shareholders' equity                     4,644             3,832
 
    Total liabilities and shareholders'
    equity                                      $ 10,641           $ 9,734
 


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,
                                2012         2011       2012         2011
    Revenues:
    Product sales             $ 1,753      $ 2,007      $ 921        $ 994
    Services                    4,511        3,828      2,359        2,044
 
    Total revenues              6,264        5,835      3,280        3,038
 
    Cost of revenues:
    Product sales                 618          581        351          268
    Services                    1,613        1,320        795          719
 
    Total cost of revenues      2,231        1,901      1,146          987
 
    Gross profit                4,033        3,934      2,134        2,051
 
    Operating expenses:
    Research and
    development, net of
    grants from the OCS           704          945        330          470
    Selling and marketing       1,043        1,026        519          518
    General and
    administrative              1,489        1,768        768          872
 
    Total operating expenses    3,236        3,739      1,617        1,860
 
    Operating profit              797          195        517          191
    Financial income
    (expenses), net               (21)          90        (53)          31
    Capital gain on sale of
    investment                      -           78          -            1
 
    Income before taxes on
    income                        776          363        464          223
    Tax on income (benefit),
    net                             6            1          4           (6)
 
    Net income                  $ 770        $ 362      $ 460        $ 229
 
    Net Income per share:
 
    Basic and diluted net
    income per Ordinary
    share                      $ 0.17       $ 0.08     $ 0.10       $ 0.05
 
    Weighted average number
    of Ordinary shares used
    in computing basic and
    diluted net income per
    share                   4,459,057    4,459,057  4,459,057    4,459,057
 


 

Company Contact:

Alon Mualem                        
CFO                
Tel: +972-9-7777-540                    
Email: Alon.Mualem@mtsint.com         

SOURCE MTS-MER Telemanagement Solutions Ltd