MTS Announces 2018 Second Half Year Financial Results

RA'ANANA, Israel and POWDER SPRINGS, Georgia, April 5, 2019 /PRNewswire/ -- Mer Telemanagement Solutions Ltd. (MTS) (Nasdaq Capital Market: MTSL), a global provider of telecommunications expense management (TEM) and call accounting software and services, today released its financial results for the six and twelve months ended December 31, 2018.

MTS recorded revenues of $3 million for the six months ended December 31, 2018, up 3.4% sequentially, as compared with $2.9 million for the six months ended June 30, 2018, and down 4.46% from $3.14 million for the six months ended December 31, 2017. MTS incurred a net loss of $(121,000) for the six months ended December 31, 2018, or $(0.03) per diluted share compared with a net loss of $(960,000), or $(0.32) per diluted share, for the comparable period in 2017. On a non-GAAP basis (as described and reconciled below), MTS posted a net loss of $(9,000), or $(0.00) per diluted share, for the six months ended December 31, 2018 compared with a net loss of $(585,000), or $(0.19) per diluted share, for the comparable period in 2017.

MTS's revenues for the year ended December 31, 2018 totaled $5.9 million compared with revenues of $6.8 million for the comparable period in 2017. Net loss for the period was $(1.2) million, or $(0.34) per diluted share, compared with a net loss of $(1.8) million or ($0.59) per diluted share for 2017. On a non-GAAP basis, MTS recorded a net loss of $(776,000), or $(0.23) per diluted share, in 2018 compared with a net loss of $(343,000), or $(0.12) per diluted share for the comparable period in 2017.

As of December 31, 2018, the Company had cash and cash equivalents of approximately $1.2 million. The Company's loss of $(1.2) million and negative cash flows from operations of $1.6 million for the year ended December 31, 2018,and accumulated deficit of $27.4 million, raise substantial doubt about the Company's ability to continue as a going concern.

During October and June 2018 an institutional investor invested, $1.5 million in a newly-created class of convertible preferred shares and $0.2 million in ordinary shares of the Company, at a price per preferred share and ordinary share of $1.14. The preferred shares are convertible into ordinary shares on a one to one basis.

As previously published, the stock purchase agreement with the institutional investor includes a Greenshoe option exercisable until October 2019 for future investment of up to $1.5 million in the Company's preferred shares at a price per preferred share of $1.14.

On March 29, 2019, the institutional investor exercised its green shoe option in part and purchased 109,649 convertible preferred shares in consideration of $125,000.

Commenting on the results, Mr. Roy Hess, Chief Executive Officer of MTS, said, "Our results in 2018 reflect our efforts to maintain our operating margins in light of the business pressures that we face. As a result of the continuing weakness in the Vexigo business unit and the industry in which it operates, we, as previously announced, sold the business unit to a third party in June 2018. The telecommunications side of our business continues to be stable as we have maintained a high level of customer satisfaction. We are now focused on exploring various lines of business to either develop organically or acquire." 

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: [were all of these charges incurred in 2018 – if not delete the reference

  • Stock based compensation expenses
  • Amortization of purchased intangible assets (net of tax effect)
  • Reorganization and other non-recurring costs
  • Impact of the US tax reform

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) is focused on innovative products and services for enterprises in the area of telecom expense management (TEM) and call accounting. 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




















December 31,


December 31,



2018


2017



      Unaudited


 Audited

ASSETS












CURRENT ASSETS:






Cash and cash equivalents


$       1,150



$       1,165

Restricted cash


1,380



1,058

Trade receivables, net


604



564

Other accounts receivable and prepaid expenses


101



74

Assets of discontinued operations


151



1,301







Total current assets


3,386



4,162







Severance pay Fund


541



856







PROPERTY AND EQUIPMENT, NET


60



107







OTHER ASSETS:






Goodwill


3,479



3,479

Other intangible assets, net


21



42







Total other assets


3,500



3,521







Total assets


$         7,487



$       8,646









 

 

 

CONSOLIDATED BALANCE SHEETS

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













December 31,


December 31,



2018


2017



Unaudited


 Audited

LIABILITIES AND SHAREHOLDERS' EQUITY










CURRENT LIABILITIES:





Trade payables


$              164


$            308

Deferred revenues


1,053


1,744

Accrued expenses and other liabilities


2,394


2,283

Liabilities of discontinued operations


570


1,380






Total current liabilities


4,181


5,715






LONG-TERM LIABILITIES





Accrued severance pay


722


1,073

Deferred tax liability


181


146

Total long-term liabilities


903


1,219






COMMITMENTS AND CONTINGENT LIABILITIES










SHAREHOLDERS' EQUITY:





Ordinary shares


27


25

Preferred shares


10



Additional paid-in capital


29,807


28,188

Treasury shares


(29)


(29)

Accumulated deficit


(27,412)


(26,472)






Total shareholders' equity


2,403


1,712






Total liabilities and shareholders' equity


$              7,487


$           8,646

 

 

 


CONSOLIDATED STATEMENTS OF OPERATIONS

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













Twelve months ended December 31,


Six months ended December 31,



2018


2017


2018


2017



Unaudited


Audited


Unaudited


Unaudited

Revenues:









Services


$          4,843


$          5,467


$          2,502


$          2,549

Product sales


1,018


1,306


483


594










Total revenues


5,861


6,773


2,985


3,143










Cost of revenues:









Services


1,719


1,646


784


912

Product sales


430


412


217


227










Total cost of revenues


2,149


2,058


1,001


1,139










Gross profit


3,712


4,715


1,984


2,004










Operating expenses:









Research and development


825


1,645


320


739

Selling and marketing


1,471


1,529


614


765

General and administrative


2,239


1,966


1,015


1,087










Total operating expenses


4,545


5,140


1,949


2,591










Operating profit (loss)


(823)


(425)


35


(587)

Financial income (expenses), net


(17)


14


(25)


(1)










Loss before taxes on income


(840)


(411)


10


(588)

Taxes on income (tax benefit), net


46


(9)


51


(14)










Net loss from continuing operations


(886)


(402)


(41)


(574)

Loss from discontinued operations


(284)


(1,366)


(80)


(386)

Net loss


$              (1,170)


$          (1,768)


$            (121)


$            (960)










Net loss per share:









Basic and diluted net loss per share from continuing
operations


$                (0.26)


$           (0.13)


$           (0.02)


$           (0.19)

Basic and diluted net loss per share from discontinued
operations


(0.08)


(0.46)


(0.01)


(0.13)

Basic and dilutednet loss per share(*)


$                (0.34)


$           (0.59)


$           (0.03)


$           (0.32)

Weighted average number of shares used in computing
basic and diluted net loss per share (*)


3,435,161


2,991,547


3,747,855


3,073,117




























* 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)















Twelve months ended
December 31,


Six months ended
December 31,




2018


2017


2018


2017




Unaudited


Unaudited


Unaudited


Unaudited












GAAP net income (loss) from continuing operations


(886)


(402)


(41)


(574)


Stock-based compensation expenses


89


1


39


31


Intangible assets amortization, net of tax effects


21


21


11


11


Impact of the US tax reform (a)


-


(52)


-


(52)


Reorganization and other non-recurring costs


-


89


-


-












Non-GAAP net profit (loss)


$          (776)


$           (343)


$                 9


$              (585)












Net loss per share:




















GAAP basic and diluted net loss per share (*)


$         (0.26)


$          (0.13)


$          (0.02)


$             (0.19)


Non-GAAP basic and diluted net loss per share (*)


$         (0.23)


$          (0.12)


$            0.00


$             (0.19)


Weighted average number of shares used in computing
non-GAAP basic and diluted net loss per share (*)


3,435,161


2,991,547


3,747,855


3,073,117






















* After giving effect to the reverse stock split from September 6, 2017












 

 

Contacts:                                                       
Ofira Bar                                                                    
CFO                                       
Tel: +972-9-7777-540                                                
Email: ofira.bar@mtsint.com

 

Cision View original content:http://www.prnewswire.com/news-releases/mts-announces-2018-second-half-year-financial-results-300825330.html

SOURCE Mer Telemanagement Solutions Ltd. (MTS)

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