MTS Announces First Quarter 2012 Financial Results

RA'ANANA, Israel, May 10, 2012 /PRNewswire/ --

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 2012.

Revenues for the first quarter of 2012 were $3.0 million, compared with $2.8 million in revenues during the same quarter last year. The Company's operating profit was $280,000 in the first quarter of 2012, compared to operating profit of $4,000 for the first quarter of 2011. Net income for the first quarter was $310,000, or $0.07 per diluted share, compared to net income of $133,000, or $0.03 per diluted share, in the first quarter of 2011. As of March 31, 2012, MTS had cash and marketable securities of $3.5 million as compared to $3.4 million as of December 31, 2011.

"Our first quarter results were in line with our expectations for improved operating results. The Company is continuing to develop its Telecom Expense Management opportunities through partners, new customer acquisitions and expanding our existing customer base. In addition, the Company's Billing and Mobile Virtual Network Operator (MVNO) activity has grown both as a licensed offering and as a managed service. We are looking forward to improving both our top and bottom line performance," said Eytan Bar, CEO of MTS.

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, 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.

MTS TEM Suite solutions enable enterprises to gain visibility and control of strategic assets that drive key business processes and crucial competitive advantage. The MTS software, consulting and managed services solutions -- including integrated Invoice, Asset, Wireless, 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      December
                                                             31,          31,
                                                            2012         2011
    ASSETS
 
    CURRENT ASSETS:
    Cash and cash equivalents                            $ 3,362      $ 3,269
    Restricted cash                                           87           45
    Restricted marketable securities                         136          127
    Trade receivables, net                                 1,093          854
    Other accounts receivable and prepaid
    expenses                                                 151           88
    Inventories                                                4            5
 
    Total current assets                                   4,833        4,388
 
    LONG-TERM ASSETS:
    Severance pay fund                                       655          619
    Other investments                                          4            6
    Deferred income taxes                                     31           31
 
    Total long-term assets                                   690          656
 
    PROPERTY AND EQUIPMENT, NET                              176          161
 
    OTHER ASSETS:
    Goodwill                                               3,479        3,479
    Other intangible assets, net                             962        1,050
 
    Total other assets                                     4,441        4,529
 
    Total assets                                        $ 10,140      $ 9,734
 

CONSOLIDATED BALANCE SHEETS

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

                                                      March 31,       December 31,
                                                           2012           2011
    LIABILITIES AND SHAREHOLDERS' EQUITY
 
    CURRENT LIABILITIES:
    Trade payables                                        $ 248         $ 326
    Accrued expenses and other liabilities                2,266         2,354
    Deferred revenues                                     2,207         2,025
    Liabilities of discontinued operations                  435           435
 
    Total current liabilities                             5,156         5,140
 
    LONG-TERM LIABILITIES
    Accrued severance pay                                   811           762
 
    COMMITMENTS AND CONTINGENT LIABILITIES
 
    SHAREHOLDERS' EQUITY:
    Share capital                                            13            13
    Additional paid-in capital                           19,792        19,773
    Treasury shares                                         (29)          (29)
    Accumulated other comprehensive loss                     (7)          (19)
    Accumulated deficit                                 (15,596)      (15,906)
 
    Total shareholders' equity                            4,173         3,832
 
    Total liabilities and 
    shareholders' equity                               $ 10,140       $ 9,734
 

CONSOLIDATED STATEMENTS OF OPERATIONS

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

                                                           Three months ended
                                                                March 31,
                                                            2012         2011
    Revenues:
    Product sales                                         $ 833       $ 1,013
    Services                                              2,151         1,784
 
    Total revenues                                        2,984         2,797
 
    Cost of revenues:
    Product sales                                           268           313
    Services                                                817           601
 
    Total cost of revenues                                1,085           914
 
    Gross profit                                          1,899         1,883
 
    Operating expenses:
    Research and development, net of grants from the
    OCS                                                     374           475
    Selling and marketing                                   524           508
    General and administrative                              721           896
 
    Total operating expenses                              1,619         1,879
 
    Operating income                                        280             4
    Financial income, net                                    32            59
    Other income, net                                         -            77
 
    Income before taxes on income                           312           140
    Taxes on income, net                                      2             7
 
    Net income                                            $ 310         $ 133
 
    Net income per Ordinary share:
 
    Basic and diluted net income per Ordinary share      $ 0.07        $ 0.03
 
    Weighted average number of Ordinary shares used
    in computing basic and diluted net income per
    share                                             4,459,057     4,459,057
 

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

SOURCE MTS-MER Telemanagement Solutions Ltd