RA'ANANA, Israel and
RIVER EDGE, New Jersey,
Aug. 10, 2017 /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 second
quarter of 2017.
MTS's revenues for the second quarter of 2017 totaled
$2.4 million compared with
$3.4 million in the second quarter of
2016 and $2.4 million in the first
quarter of 2017. After a net loss of $(899,000), or $(0.10) per diluted share, for the first quarter
of 2017, we are pleased to announce that the Company recorded net
income of $91,000 for the second
quarter, or $0.01 per diluted share
compared with a net loss of $(22,000), or $(0.00) per diluted share for the second quarter
of 2016. On a non-GAAP basis (as described and reconciled
below), the Company posted net loss for the second quarter of
$(179,000), or ($0.02) per diluted share, compared with net
income of $262,000, or $0.03 per diluted share, for the second quarter
of 2016.
Revenues for the six months ended June
30, 2017 were $4.8 million
compared with $6.7 million for the
comparable period in 2016. Net loss for the six months ended
June 30, 2017 was $(808,000), or ($0.09) per diluted share, compared with a net
loss of $(246,000) or ($0.03) per diluted share in the comparable
period in 2016. On a non-GAAP basis (as described and reconciled
below), net loss for the six months ended June 30, 2017 was $(686,000), or ($0.08) per diluted share, compared with net
income of $294,000, or $0.04 per diluted share, for the comparable
period in 2016.
Commenting on the results, Mr. Haim
Mer, Chairman of the Board of MTS, said, "Our return to
profitable operations in the second quarter reflects our successful
execution of the operating plan that we announced last quarter. We
reduced our ongoing operating expenses substantially in the second
quarter and are working diligently to maintain our operating
margins in the face of the inherent business risks and fluctuations
that we face. We are now concentrating on growing the business.
Our Vexigo operating unit has focused on its core digital
advertising business and we have been successful in initiating
steps to connect more partners. We believe brand safety is
extremely important, and we are working to guarantee even higher
quality traffic to customers. These efforts are succeeding in
increasing our video advertising volume."
"The telecommunications side of our business continues to be
stable as we have maintained a high level of satisfaction from our
customer base. We also 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," said Mr. Mer.
As previously announced, the Company received NASDAQ Staff
Determination letters indicating that it is not in compliance with
NASDAQ's minimum shareholders' equity and share price continued
listing requirements. The Company submitted its plan to regain
compliance with the minimum $2.5
million in shareholders' equity requirement as set forth in
NASDAQ Marketplace Rule 4320(e)(2)(B), and it received a notice
from the Listing Qualifications Department of NASDAQ advising that
it has until August 15, 2017 to
regain compliance. The plan to regain compliance, which includes
the conversion of $1.2 million in
debt into equity and the sale of $400,000 of ordinary shares in a private
placement, is detailed in the Company's Proxy Statement for its
Annual General Meeting of Shareholders to be held on August 13, 2017, that was furnished to the
Securities and Exchange Commission on June
29, 2017.
Subsequent to the mailing of the proxy material, the proposed
conversion of $1.2 million of debt
held by former Vexigo shareholders into 1.2 million ordinary shares
of the Company was amended to provide that the debt would be
converted into five year warrants which provide for the issuance of
1.2 million ordinary shares for no additional consideration. The
warrants are subject to a two-year lock-up period. Subject to the
debt conversion consummation and the approval at the Annual General
Meeting, the Company expects to raise $400,000 in a private placement to several board
members, certain former shareholders and beneficial shareholders of
Vexigo Ltd. and a former officer of the Company.
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:
- Amortization of purchased intangible assets (net of tax
effect)
- Stock based compensation expenses
- Reorganization and other non-recurring costs
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 digital
advertising solutions for online and mobile platforms and call
accounting and TEM solutions and services.
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.
MTS's telecommunications business provides innovative products
and services to enterprises for their call accounting and for
management of their telecom expenses (TEM).
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.
CONSOLIDATED
BALANCE SHEETS
|
U.S. dollars in
thousands
|
|
|
|
June
30,
|
December
31,
|
|
|
2017
|
2016
|
|
|
Unaudited
|
Audited
|
ASSETS
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
|
$
1,461
|
$
1,508
|
Restricted
cash
|
|
416
|
504
|
Restricted marketable
securities
|
|
-
|
136
|
Trade receivables,
net
|
|
2,907
|
5,305
|
Other accounts
receivable and prepaid expenses
|
|
477
|
343
|
|
|
|
|
Total current
assets
|
|
5,261
|
7,796
|
|
|
|
|
LONG-TERM
ASSETS:
|
|
|
|
Severance pay
fund
|
|
804
|
752
|
|
|
|
|
|
|
|
|
PROPERTY AND EQUIPMENT,
NET
|
|
191
|
198
|
|
|
|
|
|
|
|
|
OTHER
ASSETS:
|
|
|
|
Goodwill
|
|
3,479
|
3,479
|
Other intangible
assets, net
|
|
52
|
63
|
|
|
|
|
Total other
assets
|
|
3,531
|
3,542
|
|
|
|
|
Total assets
|
|
$
9,787
|
$
12,288
|
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEETS
|
U.S. dollars in
thousands (except share and per share data)
|
|
|
|
June
30,
|
December
31,
|
|
|
2017
|
2016
|
|
|
Unaudited
|
Audited
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
Trade
payables
|
|
$
2,844
|
|
$
4,086
|
Deferred
revenues
|
|
1,638
|
|
1,374
|
Accrued expenses and
other liabilities
|
|
1,740
|
|
2,554
|
Liabilities related
to Vexigo acquisition
|
|
1,216
|
|
1,202
|
Liabilities of
discontinued operations
|
|
132
|
|
132
|
|
|
|
|
Total current
liabilities
|
|
7,570
|
9,348
|
|
|
|
|
LONG-TERM
LIABILITIES
|
|
|
|
Accrued severance
pay
|
|
1,024
|
914
|
Deferred tax
liability
|
|
166
|
166
|
Total long-term
liabilities
|
|
5,454
|
4,582
|
|
|
|
|
COMMITMENTS AND
CONTINGENT LIABILITIES
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
Share
capital
|
|
24
|
23
|
Additional paid-in
capital
|
|
26,539
|
26,569
|
Treasury
shares
|
|
(29)
|
(29)
|
Accumulated other
comprehensive income
|
|
5
|
1
|
Accumulated
deficit
|
|
(25,512)
|
(24,704)
|
|
|
|
|
|
|
Total shareholders'
equity
|
|
1,027
|
1,860
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
|
$
9,787
|
$
12,288
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
U.S. dollars in
thousands (except share and per share data)
|
|
|
|
Six months
ended
June
30,
|
|
Three months
ended
June
30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues:
|
|
|
|
|
|
|
|
|
Services
|
|
$
2,918
|
|
$
2,909
|
|
$
1,557
|
|
$
1,478
|
Product
sales
|
|
712
|
|
608
|
|
236
|
|
405
|
Video
Advertising
|
|
1,197
|
|
3,214
|
|
622
|
|
1,504
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
4,827
|
|
6,731
|
|
2,415
|
|
3,387
|
|
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
Services
|
|
735
|
|
1,399
|
|
270
|
|
698
|
Product
sales
|
|
185
|
|
287
|
|
90
|
|
143
|
Video
Advertising
|
|
1,138
|
|
1,315
|
|
514
|
|
535
|
|
|
|
|
|
|
|
|
|
Total cost of
revenues
|
|
2,058
|
|
3,001
|
|
874
|
|
1,376
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
2,769
|
|
3,730
|
|
1,541
|
|
2,011
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Research and
development
|
|
1,274
|
|
1,092
|
|
517
|
|
573
|
Selling and
marketing
|
|
928
|
|
1,128
|
|
403
|
|
551
|
General and
administrative
|
|
1,487
|
|
1,681
|
|
563
|
|
841
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
3,689
|
|
3,901
|
|
1,483
|
|
1,965
|
|
|
|
|
|
|
|
|
|
Operating profit
(loss)
|
|
(920)
|
|
(171)
|
|
58
|
|
46
|
Financial income
(expenses), net
|
|
114
|
|
6
|
|
35
|
|
(28)
|
|
|
|
|
|
|
|
|
|
Income (loss) before
taxes on income
|
|
(806)
|
|
(165)
|
|
93
|
|
18
|
Taxes on
income
|
|
2
|
|
81
|
|
2
|
|
40
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
(808)
|
|
$
(246)
|
|
$
91
|
|
$
(22)
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
income (loss) per Ordinary share
|
|
$
(0.09)
|
|
$
(0.03)
|
|
$
0.01
|
|
$
(0.00)
|
|
|
|
|
|
|
|
|
|
Weighted average number
of Ordinary shares used in computing basic and diluted net income
(loss) per share
|
|
8,728,544
|
|
8,119,776
|
|
8,754,157
|
|
8,353,207
|
RECONCILIATION OF
GAAP TO NON-GAAP RESULTS
|
U.S. dollars in
thousands (except share and per share data)
|
|
|
|
Six months
ended
June
30,
|
|
Three months
ended
June
30,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
|
(808)
|
|
(246)
|
|
91
|
|
(22)
|
|
Stock-based
compensation expenses
|
|
(30)
|
|
122
|
|
(45)
|
|
75
|
|
Intangible assets
amortization, net of tax effects
|
|
11
|
|
418
|
|
5
|
|
209
|
|
Reorganization and
other non-recurring costs
|
|
141
|
|
-
|
|
(230)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income
(loss)
|
|
$
(686)
|
|
$
294
|
|
$
(179)
|
|
$
262
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP basic and
diluted net income (loss) per ordinary share
|
|
$
(0.09)
|
|
$
(0.03)
|
|
$
0.01
|
|
$
(0.00)
|
|
Non-GAAP basic and
diluted net income (loss) per ordinary share
|
|
$
(0.08)
|
|
$
0.04
|
|
$
(0.02)
|
|
$
0.03
|
|
Weighted average
number of ordinary shares used in
computing non-GAAP
basic net income(loss) per share
|
|
8,728,544
|
|
8,119,776
|
|
8,754,157
|
|
8,353,207
|
|
Weighted average
number of ordinary shares used in
computing non-GAAP
diluted net income (loss) per share
|
|
8,728,544
|
|
8,119,776
|
|
8,754,157
|
|
8,353,207
|
|
Contacts:
Alon
Mualem
CFO
Tel:
+972-9-7777-540
Email: alon.mualem@mtsint.com
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content:http://www.prnewswire.com/news-releases/mts-announces-second-quarter-2017-financial-results-300502599.html
SOURCE Mer Telemanagement Solutions Ltd.