MTS Announces First Quarter 2010 Financial Results

RA'ANANA, Israel, May 13, 2010 /PRNewswire-FirstCall/ -- MTS - Mer Telemanagement Solutions Ltd. (Nasdaq Capital Market: MTSL), a global provider of business support systems (BSS) for comprehensive telecommunication management, telecommunications expense management (TEM) solutions and customer care & billing (CC&B) solutions, today announced its financial results for the first quarter of 2010.

Revenues for the first quarter of 2010 were $2.9 million, compared with $2.8 million in revenues during the same quarter last year and revenues of $2.7 million in the fourth quarter of 2009.

The Company's operating profit was $33,000 in the first quarter of 2010 compared to an operating loss of $322,000 for the first quarter of 2009. Net loss for the first quarter was $2,000 or $(0.00) per diluted share, compared with a net loss of $264,000 or $(0.06) per diluted share in the first quarter of 2009. All numbers relating to our ordinary shares and earnings per share have been adjusted to reflect the reverse stock split that became effective on March 2, 2010.

"Our first quarter results were generally in line with our expectations for improved operating results. They reflect the focus we placed on improving our implementation processes while closely monitoring our overall costs," said Eytan Bar, CEO of MTS. "The Company sees market opportunities and is ready to leverage our solutions. NEC America recently launched a Telecom Expense Management services powered by our AnchorPoint solution and in addition we became a Gold partner with Panasonic Communications for our call accounting solution. These two partnerships reflect our strategy to grow our Telecom Expense Management activity through business partners. In addition, we successfully implemented an MVNO billing solution in a managed services model for a client in the U.S." concluded Mr.Bar.

The Company also announces today that Mr. Lior Salansky has determined to resign from his position as president of the Company to pursue other business opportunities. Mr. Salansky will continue to contribute his experience in his role as a director of the Company.

About MTS

Mer Telemanagement Solutions Ltd. (MTS) is a worldwide provider of innovative solutions for comprehensive telecommunications expense management (TEM) used by enterprises, and for business support systems (BSS) used by information and telecommunication service providers.

Since 1984, MTS Telecommunications' expense management solutions have been used by thousands of enterprises and organizations to ensure that their telecommunication services are acquired, provisioned, and invoiced correctly. In addition, the MTS's Application Suite has provided customers with a unified view of telecommunication usage, proactive budget control, personal call management, employee cost awareness and more.

AnchorPoint TEM solutions enable enterprises to gain visibility and control of strategic assets that drive key business processes and crucial competitive advantage. The AnchorPoint's software, consulting and managed services solutions -- including integrated Invoice, Asset, and Usage Management and Business Analytics tools -- provide professionals at every level of the organization with rapid access to concise, actionable data.

MTS's solutions for Information and 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 has pre-configured solutions to support emerging carriers of focused solutions (e.g. IPTV, VoIP, WiMAX, MVNO) to rapidly install a full-featured and scaleable solution.

Headquartered in Israel, MTS markets its solutions through wholly owned subsidiaries in the United States, Hong Kong and The Netherlands as well as through OEM partnerships with Siemens, Phillips, NEC and other vendors. 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


                                                   March 31,    December 31,
                                                       2010         2009
    ASSETS
    CURRENT ASSETS:
    Cash and cash equivalents                       $ 1,923      $ 2,173
    Restricted marketable securities                    243          227
    Trade receivables, net                              567          771
    Unbilled receivables                                 55           10
    Other accounts receivable and prepaid
    expenses                                            304          376
    Inventories                                          44           39
    Total current assets                              3,136        3,596
    LONG-TERM ASSETS:
    Severance pay fund                                  774          767
    Other investments                                    30           31
    Deferred income taxes                                35           35
    Total long-term assets                              839          833
    PROPERTY AND EQUIPMENT, NET                         145          175
    OTHER ASSETS:
    Goodwill                                          3,479        3,479
    Other intangible assets, net                      1,705        1,807
    Total other assets                                5,184        5,286
    Total assets                                    $ 9,304      $ 9,890



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

                                                March 31,       December 31,
                                                    2010           2009
    LIABILITIES AND SHAREHOLDERS' EQUITY
    CURRENT LIABILITIES:
    Trade payables                                $ 331           $ 432
    Accrued expenses and other liabilities        2,246           2,531
    Deferred revenues                             2,541           2,741
    Total current liabilities                     5,118           5,704
    LONG-TERM LIABILITIES -
    Accrued severance pay                         1,053           1,071
    COMMITMENTS AND CONTINGENT LIABILITIES
    SHAREHOLDERS' EQUITY:
    Share capital                                    13              13
    Additional paid-in capital                   19,577          19,577
    Treasury shares                                 (29)            (29)
    Accumulated other comprehensive income           13              23
    Accumulated deficit                         (16,471)        (16,469)
    Total shareholders' equity                    3,133           3,115
    Total liabilities and shareholders' equity  $ 9,304         $ 9,890



                    CONSOLIDATED STATEMENTS OF OPERATIONS
    U.S. dollars in thousands (except share and per share data)

                                               Three months ended
                                                   March 31,
                                               2010         2009
    Revenues:
    Product sales                           $ 1,117      $ 1,299
    Services                                  1,761        1,493
    Total revenues                            2,878        2,792
    Cost of revenues:
    Product sales                               404          474
    Services                                    844          465
    Total cost of revenues                    1,248          939
    Gross profit                              1,630        1,853
    Operating expenses:
    Research and development, net of
    grants from the OCS                         325          520
    Selling and marketing                       437          777
    General and administrative                  835          878
    Total operating expenses                  1,597        2,175
    Operating income (loss)                      33         (322)
    Financial income (expenses), net            (33)          58
    Loss before taxes on income                   -         (264)
    Tax on income, net                           (2)           -
    Net loss                                   $ (2)      $ (264)
    Net loss per share:
    Basic and diluted net loss per
    Ordinary share                          $ (0.00)     $ (0.06)
    Weighted average number of Ordinary
    shares used in computing basic and
    diluted net loss per share            4,458,976    4,458,976



    Company Contacts:
    Alon Mualem
    CFO
    Tel: +972-9-7777-540
    Email: [email protected]

SOURCE MTS-MER Telemanagement Solutions Ltd