RA'ANANA, Israel and RIVER EDGE,
New Jersey, Nov. 30, 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 third quarter of 2017.
MTS's revenues for the third quarter of 2017 totaled
$2.1 million compared with
$3.3 million in the third quarter of
2016 and $2.4 million in the second
quarter of 2017. On a GAAP basis, the Company's net loss for the
quarter totaled ($127,000), or
($0.04) per diluted share, compared
with ($494,000), or ($0.17) per diluted share, for the third quarter
of 2016. On a non-GAAP basis (as described and reconciled
below), the Company posted net loss for the third quarter of
$(120,000), or ($0.04) per diluted share, compared with net loss
of $(237,000), or ($0.08) per diluted share, for the third quarter
of 2016.
Revenues for the nine months ended September 30, 2017 were $6.9 million compared with $10.0 million for the comparable period in 2016.
Net loss for the nine months ended September
30, 2017 was $(935,000), or
($0.32) per diluted share, compared
with a net loss of $(740,000) or
($0.27) per diluted share in the
comparable period in 2016. On a non-GAAP basis (as described and
reconciled below), net loss for the nine months ended September 30, 2017 was $(806,000), or ($0.27) per diluted share, compared with net
income of $57,000, or $0.02 per diluted share, for the comparable
period in 2016.
Shortly after the conclusion of the third quarter, a customer of
Vexigo notified us that they were withholding payment related to
prior activities. We did not recognize the related revenues and
deferred the related cost of revenues. Our inability to recognize
the affected revenues and cost of revenues negatively impacted our
revenues and margins in the third quarter.
As of September 30, 2017 and
December 31, 2016, we had cash and
cash equivalents of approximately $1.5
million. The Company expects to explore various financing
alternatives to raise additional funds to support its operations in
2018. 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.
All numbers relating to our 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.
Commenting on the results, Mr. Roy
Hess, Chief Executive Officer of MTS, said, "Our results in
the last two quarters reflects 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 the core business. While our Vexigo operating unit
has focused on its core digital advertising business, we took
additional steps to reduce its operational expenses during the
fourth quarter as due to certain weaknesses in its operations
during the third quarter."
"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. 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.
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 need to obtain additional funding,
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
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2017
|
|
2016
|
|
|
Unaudited
|
|
Audited
|
ASSETS
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
1,538
|
|
$
1,508
|
Restricted
cash
|
|
1,064
|
|
504
|
Restricted marketable
securities
|
|
-
|
|
136
|
Trade receivables,
net
|
|
1,775
|
|
5,305
|
Other accounts
receivable and prepaid expenses
|
|
462
|
|
343
|
|
|
|
|
|
Total current
assets
|
|
4,839
|
|
7,796
|
|
|
|
|
|
LONG-TERM
ASSETS:
|
|
|
|
|
Severance pay
fund
|
|
814
|
|
752
|
|
|
|
|
|
|
|
|
|
|
PROPERTY AND EQUIPMENT,
NET
|
|
162
|
|
198
|
|
|
|
|
|
|
|
|
|
|
OTHER
ASSETS:
|
|
|
|
|
Goodwill
|
|
3,479
|
|
3,479
|
Other intangible
assets, net
|
|
46
|
|
63
|
|
|
|
|
|
Total other
assets
|
|
3,525
|
|
3,542
|
|
|
|
|
|
Total assets
|
|
$
9,340
|
|
$
12,288
|
CONSOLIDATED
BALANCE SHEETS
|
|
U.S. dollars in
thousands
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
|
2017
|
|
2016
|
|
|
|
Unaudited
|
|
Audited
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
Trade payables
|
|
$
1,581
|
|
$
4,086
|
|
Deferred revenues
|
|
1,592
|
|
1,374
|
|
Accrued expenses and other liabilities
|
|
2,321
|
|
2,554
|
|
Liabilities related to Vexigo acquisition
|
|
-
|
|
1,202
|
|
Liabilities of discontinued operations
|
|
132
|
|
132
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
5,626
|
|
9,348
|
|
|
|
|
|
|
|
LONG-TERM
LIABILITIES
|
|
|
|
|
|
Accrued severance pay
|
|
1,034
|
|
914
|
|
Deferred tax liability
|
|
166
|
|
166
|
|
|
|
|
|
|
|
Total long-term
liabilities
|
|
1,200
|
|
1,080
|
|
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
|
|
Share
capital
|
|
25
|
|
23
|
|
Additional paid-in
capital
|
|
28,160
|
|
26,569
|
|
Treasury
shares
|
|
(29)
|
|
(29)
|
|
Accumulated other
comprehensive income (loss)
|
|
(3)
|
|
1
|
|
Accumulated
deficit
|
|
(25,639)
|
|
(24,704)
|
|
|
|
|
|
|
|
Total shareholders'
equity
|
|
2,514
|
|
1,860
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
|
$
9,340
|
|
$
12,288
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
U.S. dollars in
thousands (except share and per share data)
|
|
|
|
|
|
|
|
Nine months
ended
|
|
Three months
ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues:
|
|
|
|
|
|
|
|
|
Services
|
|
$
4,214
|
|
$
4,417
|
|
$
1,296
|
|
$
1,508
|
Product
sales
|
|
1,038
|
|
977
|
|
326
|
|
369
|
Video
Advertising
|
|
1,670
|
|
4,629
|
|
473
|
|
1,415
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
6,922
|
|
10,023
|
|
2,095
|
|
3,292
|
|
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
Services
|
|
1,157
|
|
2,136
|
|
422
|
|
737
|
Product
sales
|
|
289
|
|
438
|
|
104
|
|
151
|
Video
Advertising
|
|
1,297
|
|
2,205
|
|
159
|
|
890
|
|
|
|
|
|
|
|
|
|
Total cost of
revenues
|
|
2,743
|
|
4,779
|
|
685
|
|
1,778
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
4,179
|
|
5,244
|
|
1,410
|
|
1,514
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Research and
development
|
|
1,742
|
|
1,741
|
|
468
|
|
649
|
Selling and
marketing
|
|
1,351
|
|
1,702
|
|
423
|
|
574
|
General and
administrative
|
|
2,145
|
|
2,525
|
|
658
|
|
844
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
5,238
|
|
5,968
|
|
1,549
|
|
2,067
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
(1,059)
|
|
(724)
|
|
(139)
|
|
(553)
|
Financial income
(expenses), net
|
|
127
|
|
-
|
|
13
|
|
(6)
|
|
|
|
|
|
|
|
|
|
Loss before taxes on
income
|
|
(932)
|
|
(724)
|
|
(126)
|
|
(559)
|
Taxes on
income
|
|
3
|
|
16
|
|
1
|
|
(65)
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
(935)
|
|
$
(740)
|
|
$
(127)
|
|
$
(494)
|
|
|
|
|
|
|
|
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss
per Ordinary share (*)
|
|
$
(0.32)
|
|
$
(0.27)
|
|
$
(0.04)
|
|
$
(0.17)
|
|
|
|
|
|
|
|
|
|
Weighted average number
of Ordinary shares used in
computing basic and diluted net loss
per
share (*)
|
|
2,947,469
|
|
2,789,206
|
|
3,022,916
|
|
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)
|
|
|
|
|
|
|
|
|
|
Nine months
ended
|
|
Three months
ended
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
loss
|
|
(935)
|
|
(740)
|
|
(127)
|
|
(494)
|
|
Stock-based
compensation expenses
|
|
(29)
|
|
170
|
|
1
|
|
48
|
|
Intangible assets
amortization, net of tax effects
|
|
17
|
|
627
|
|
6
|
|
209
|
|
Reorganization and
other non-recurring costs
|
|
141
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income
(loss)
|
|
$
(806)
|
|
$
57
|
|
$
(120)
|
|
$
(237)
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP basic and
diluted net (loss) per ordinary share (*)
|
|
$
(0.32)
|
|
$
(0.27)
|
|
$
(0.04)
|
|
$
(0.17)
|
|
Non-GAAP basic and diluted net income (loss) per
ordinary share (*)
|
|
$
(0.27)
|
|
$
0.02
|
|
$
(0.04)
|
|
$
(0.08)
|
|
Weighted average number of ordinary shares used in
computing non-GAAP basic and
diluted net income (loss)
per share (*)
|
|
2,947,469
|
|
2,789,206
|
|
3,022,916
|
|
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-third-quarter-2017-financial-results-300564729.html
SOURCE Mer Telemanagement Solutions Ltd. (MTS)