MTS Announces Half Year 2018 Financial Results

MTS Announces Half Year 2018 Financial Results
MTS Announces Half Year 2018 Financial Results

 

RA'ANANA, Israel and RIVER EDGE, New Jersey, Sept. 7, 2018 /PRNewswire/ -- Mer Telemanagement Solutions Ltd. (MTS) (Nasdaq Capital Market: MTSL), a global provider of telecommunications expense management (TEM) and call accounting, today released its financial results for the six months ended June 30, 2018.

Mer Telemanagement Solutions Ltd Logo (PRNewsfoto/Mer Telemanagement Solutions Lt)

The Company recorded revenues of $2.9 million for the six months ended June 30, 2018 compared with $3.6 million for the six months ended June 30, 2017. The Company incurred a net loss of $1 million for the six months ended June 30, 2018, or $(0.34) per diluted share compared with a net loss of $(808,000), or $(0.28) per diluted share, for the comparable period in 2017. On a non-GAAP basis (as described and reconciled below), the Company posted a net loss of $785,000, or $(0.25) per diluted share, for the six months ended June 30, 2018 compared with net income of $65,000, or $0.02 per diluted share, for the comparable period in 2017.

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 during 2018, we, as previously announced, sold its operation to a third party. The telecommunications side of our business continues to be stable as we have maintained a high level of customer satisfaction. As further indicated below, we are now focused on regaining compliance with NASDAQ's listing requirements." 

As previously announced, the Company received a 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 November 5, 2018 to regain compliance. The Company's plan to regain compliance is based in part on various cost-cutting measures, including a reduction in number of personnel that was implemented in the second quarter of this year, and other steps to regain profitability in 2018. In addition, the Company has entered into a letter of intent with an institutional investor that has agreed to invest $1,500,000 in consideration for the Company issuing a new class of convertible preferred stock. Such issuance, which was approved by the Board of Directors of the Company on June 18, 2018, will require shareholder approval, which is expected to be obtained in the early Fall. The investor has also already invested an additional $200,000 in consideration for the issuance of 175,439 of the Company's Ordinary Shares at the end of June, 2018. As a result of this expected aggregate capital infusion of $1.7 million, the Company expects to regain compliance with the $2.5 million stockholders' equity requirement. No assurance can be given that the Company and the investor will enter into a definitive agreement or that shareholder approval will be obtained to effectuate the proposed issuance.

The Company's history of losses from operations, accumulated deficit and its cash position as of June 30, 2018 of approximately $680,000 raise substantial doubt about the Company's ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due.

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
  • Loss from discontinued operation

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




June 30,


December 31,



2018


2017



    Unaudited


       Audited

ASSETS










CURRENT ASSETS:





Cash and cash equivalents


$ 679


$    1,175

Restricted cash


1,138


1,058

Trade receivables, net


299


564

Other accounts receivable and prepaid expenses


92


63

Assets of discontinued operations


278


1,301

Total current assets


2,486


4,161






LONG-TERM ASSETS:





Severance pay fund


677


856






PROPERTY AND EQUIPMENT, NET


87


108











OTHER ASSETS:





Goodwill


3,479


3,479

Other intangible assets, net


31


42






Total other assets


3,510


3,521






Total assets


$ 6,760


$    8,646







 

 

CONSOLIDATED BALANCE SHEETS


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






June 30,


December 31,




2018


2017




    Unaudited


Audited


LIABILITIES AND SHAREHOLDERS' EQUITY












CURRENT LIABILITIES:






Trade payables


$      201


$         307


Deferred revenues


1,517


1,744


Accrued expenses and other liabilities


2,231


2,284


Liabilities of discontinued operations


631


1,380








Total current liabilities


4,580


5,715








LONG-TERM LIABILITIES






Accrued severance pay


890


1,073


Deferred tax liability


144


146


Total long-term liabilities


1,034


1,219








COMMITMENTS AND CONTINGENT LIABILITIES












SHAREHOLDERS' EQUITY:






Share capital


27


25


Additional paid-in capital


28,439


28,188


Treasury shares


(29)


(29)


Accumulated deficit


(27,291)


(26,472)








Total shareholders' equity


1,146


1,712








Total liabilities and shareholders' equity


$     6,760


$     8,646


 

 

CONSOLIDATED STATEMENTS OF OPERATIONS


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






Six months ended




June 30,




2018


2017


Revenues:






Services


$     2,341


$      2,918


Product sales


535


712








Total revenues


2,876


3,631








Cost of revenues:






Services


935


734


Product sales


213


185








Total cost of revenues


1,148


919








Gross profit


1,728


2,712








Operating expenses:






Research and development


505


906


Selling and marketing


857


764


General and administrative


1,224


879


Total operating expenses


2,586


2,549








Operating profit (loss)


(858)


163


Financial income, net


8


12


Income (loss) before taxes on income


(850)


175


Taxes (benefit) on income


(5)


2


Net income (loss) from continuing operations


$        (845)


$         173


Loss from discontinued operations


(204)


(981)


Net loss


$    (1,049)


(808)








Net loss per share:






Basic net (loss) per Ordinary share from continuing
operations


$       (0.27)


$        0.06


Basic net loss per Ordinary share from
discontinued operations


$       (0.07)


$       (0.34)


Basic net loss per Ordinary share


$       (0.34)


$       (0.28)


Diluted net (loss) per Ordinary share from
continuing operations


$       (0.27)


$        0.05


Diluted net loss per Ordinary share from
discontinued operations


$       (0.07)


$       (0.34)


Diluted and net loss per Ordinary share


$       (0.34)


$       (0.28)


Weighted average number of Ordinary shares used 
in computing basic net loss per share


3,120,833


2,909,515


Weighted average number of Ordinary shares used 
in computing diluted net loss per share


3,120,833


3,309,515


 

 

RECONCILIATION OF GAAP TO NON-GAAP RESULTS


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








Six months ended




June 30,




2018


2017








GAAP net income (loss) from continuing   
operations


(845)


173








Stock-based compensation expenses


50


(30)


Intangible assets amortization, net of tax effects


10


11


Reorganization and other non-recurring costs


-


(89)








Non-GAAP net income (loss) 


$  (785)


$     65








GAAP basic net earnings (loss) per ordinary
share from continuing operations


$       (0.27)


$       0.06








GAAP diluted net earnings (loss) per ordinary
share from continuing operations


$       (0.27)


$       0.05








Non-GAAP basic net earnings (loss) per
ordinary share 


$       (0.25)


$       0.02








Non-GAAP diluted net earnings (loss) per
ordinary share 


$       (0.25)


$       0.02








Weighted average number of ordinary shares
used in computing non-GAAP basic (loss) per
share


3,120,833


2,909,515








Weighted average number of ordinary shares
used in computing non-GAAP diluted net
earnings (loss) per share


3,120,833


3,309,515


 

 

Contact: 
Ofira Bar, CFO    
Tel: +972-9-7777-540  

 

Cision View original content with multimedia:http://www.prnewswire.com/news-releases/mts-announces-half-year-2018-financial-results-300708795.html

SOURCE Mer Telemanagement Solutions Ltd. (MTS)

This article was written by cool news network.

Get the latest news delivered to your inbox

Follow us on social media networks

PREV Financialinsiders.com Earnings Recap Week Ending September 7th, 2017
NEXT Hydro-Québec's net income for the first six months up $365 million from 2017