MTS Announces Full Year and Fourth Quarter 2012 Financial Results
Year over Year Operating Income Increased 410%; Simple Mobile has Notified the Company that it Intends to Migrate Our Hosted Billing Services to their Own Platform and the Company does Not Expect the Contract to be Renewed after Year-End 2013
RA'ANANA, Israel, March 19, 2013 /PRNewswire/ --
MTS - MER Telemanagement Solutions Ltd. (NASDAQ Capital Market: MTSL), a global provider of Mobile Virtual Network Enabler (MVNE), Mobile Money and telecommunications expense management (TEM) solutions and services, today announced its financial results for the fourth quarter and the year ended December 31, 2012.
Revenues for the year ended December 31, 2012 were $13.1 million, compared with revenues of $12.0 million in 2011. Revenues for the fourth quarter of 2012 were $3.5 million, compared with revenues of $3.2 million in the fourth quarter of 2011.
The Company's operating profit was $2.0 million for the year ended December 31, 2012 compared with an operating profit of $401,000 for the same period last year. Net income for the year ended December 31, 2012 was $1.4 million or $0.30 per diluted share, compared with net income of $387,000 or $0.09 per diluted share in 2011. On a non-GAAP basis, excluding a non-recurring tax charge related to an Israeli court ruling related to the 1997 to 1999 tax years, net income for the year ended December 31, 2012 was $2.4 million or $0.54 per diluted share, compared with net income of $387,000 or $0.09 per diluted share in 2011. Net income for the year ended December 31, 2012 was negatively affected by a non-recurring tax charge of approximately $1.05 million as a result of the Israeli court tax ruling with respect to the 1997 to 1999 period. Net income for the year ended December 31, 2011 was negatively affected by legal expenses and settlement costs of approximately $640,000 relating to an alleged patent infringement claim.
The Company's operating profit was $548,000 in the fourth quarter of 2012 compared to an operating loss of $38,000 for the fourth quarter of 2011. Net income for the fourth quarter, after the $604,000 non-recurring tax charge, was $351,000 or $0.08 per diluted share, compared with a net loss of $201,000 or ($0.05) per diluted share in the fourth quarter of 2011. On a non-GAAP basis, excluding the non-recurring tax charge related to the court ruling, net income for the fourth quarter of 2012 was $955,000 or $0.20 per diluted share, compared with net loss of $201,000 or ($0.05) per diluted share in the fourth quarter of 2011.
As previously announced in October 2012, we entered into a one-year renewal of our agreement with Simple Mobile, now part of TracFone, to provide hosted billing services for minimum monthly payments of $300,000 during the year ending December 31, 2013. Recently, we were advised that TracFone intends to migrate the hosted billing services into their own platform. It is unlikely that we will receive significant revenues from TracFone in 2014.
"Our fourth quarter results showed continued improvements in our financial results and indicators as a result of the increase in our Mobile Virtual Network Enabler (MVNE) activity and the Telecom Expense Management opportunities through partners, new customer acquisitions and expanding customer base," said Eytan Bar, CEO of MTS.
"As we previously announced, we completed the first deployments of our Mobile Money solution for a customer in Africa and recently we were able to sign up a new MVNO customer in the U.S. for our MVNE managed services model with a minimum total value of approximately $500,000 over three year period. We are seeing other opportunities in the TEM, MVNE and Mobile Money markets and are working diligently to convert these opportunities into new contracts," concluded Mr. Bar.
About MTS
Mer Telemanagement Solutions Ltd. (MTS) is a worldwide provider of Telecom Expense Management (TEM) and Mobile Virtual Network Operators and Enablers (MVNO/MVNE) and Mobile Money services and 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 distribution channels. 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
December 31, December 31,
2012 2011
____________ ____________
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 4,190 $ 3,269
Restricted cash 38 45
Restricted marketable securities 139 127
Trade receivables, net 1,066 854
Deferred income tax 371 -
Other accounts receivable and prepaid expenses 175 93
_______ _______
Total current assets 5,979 4,388
LONG-TERM ASSETS:
Severance pay fund 658 619
Other investments 4 6
Deferred income taxes - 31
_______ _______
Total long-term assets 662 656
_______ _______
PROPERTY AND EQUIPMENT, NET 245 161
_______ _______
OTHER ASSETS:
Goodwill 3,479 3,479
Other intangible assets, net 759 1,050
_______ _______
Total other assets 4,238 4,529
_______ _______
Total assets $ 11,124 $ 9,734
======= =======
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (exceptshare and per share data)
December 31, December 31,
2012 2011
_____________ ____________
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $ 279 $ 326
Accrued expenses and other liabilities 2,393 2,354
Deferred revenues 1,648 2,025
Liabilities of discontinued operations 435 435
______ ______
Total current liabilities 4,755 5,140
______ ______
LONG-TERM LIABILITIES -
Accrued severance pay 800 762
______ ______
COMMITMENTS AND CONTINGENT LIABILITIES
SHAREHOLDERS' EQUITY:
Share capital 13 13
Additional paid-in capital 20,120 19,773
Treasury shares (29) (29)
Accumulated other comprehensive income 5 (19)
Accumulated deficit (14,540) (15,906)
______ ______
Total shareholders' equity 5,569 3,832
______ ______
Total liabilities and shareholders'
equity $ 11,124 $ 9,734
====== ======
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
Year ended Three months ended
December 31, December 31,
2012 2011 2012 2011
_______ ______ ______ ______
Revenues:
Product sales $ 3,665 $ 3,828 $ 1,043 $ 895
Services 9,461 8,175 2,435 2,264
______ ______ ______ ______
Total revenues 13,126 12,003 3,478 3,159
______ ______ ______ ______
Cost of revenues:
Product sales 1,154 1,105 267 269
Services 3,340 2,836 882 854
______ ______ ______ ______
Total cost of
revenues 4,494 3,941 1,149 1,123
______ ______ ______ ______
Gross profit 8,632 8,062 2,329 2,036
______ ______ ______ ______
Operating expenses:
Research and
development, net of
grants from the OCS 1,329 1,909 326 464
Selling and marketing 2,457 1,905 857 440
General and
administrative 2,804 3,847 598 1170
______ ______ ______ ______
Total operating
expenses 6,590 7,661 1,781 2,074
______ ______ ______ ______
Operating profit
(loss) 2,042 401 548 (38)
Financial income
(expenses), net 60 2 80 (77)
Capital gain on sale
of investment in
affiliate - 78 - -
______ ______ ______ ______
Income (loss) before
taxes on income 2,102 481 628 (115)
Tax on income 736 10 277 2
Net income (loss)
from continuing
operations $ 1,366 $ 471 $ 351 $ (117)
Net loss from ======= ====== ====== ======
discontinued
operations - (84) - (84)
Net income (loss) $ 1,366 $ 387 $ 351 $ (201)
======= ====== ====== ======
Basic and diluted net
income (loss) per
Ordinary share $ 0.30 $ 0.09 $ 0.08 $ (0.05)
======= ====== ====== ======
Weighted average
number of Ordinary
shares used in
computing basic net
income (loss) per
share 4,478,677 4,459,057 4,539,323 4,459,057
========= ========= ========= =========
Weighted average
number of Ordinary
shares used in
computing diluted net
income (loss) per
share 4,531,384 4,459,057 4,669,887 4,459,057
========= ========= ========= =========
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
U.S. dollars in thousands (except share and per share data)
Year ended Three months ended
December 31, December 31,
2012 2011 2012 2011
_______ ______ ______ ______
GAAP Net Income 1,366 387 351 (201)
Tax charge related to
court ruling 1,050 - 604 -
_______ ______ ______ ______
Non-GAAP Net income $ 2,416 $ 387 $ 955 $ (201)
======= ====== ====== =======
Net Income per share:
GAAP diluted net
income per Ordinary
share $ 0.30 $ 0.09 $ 0.08 $ (0.05)
Non-GAAP diluted net ======= ====== ====== =======
income per Ordinary
share $ 0.54 $ 0.09 $ 0.20 $ (0.05)
Weighted average ======= ====== ====== =======
number of Ordinary
shares used in
computing GAAP and
Non-GAAP diluted net
income per share 4,531,384 4,459,057 4,669,887 4,459,057
========= ========= ========= =========
Contacts:
Alon Mualem
CFO
Tel: +972-9-7777-540
Email: [email protected]
SOURCE MTS-MER Telemanagement Solutions Ltd
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