MTS Announces Third Quarter 2010 Financial Results

RA'ANANA, Israel, November 11, 2010 /PRNewswire-FirstCall/ -- 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 third quarter of 2010.

Revenues for the third quarter of 2010 were $2.7 million, compared with $3.0 million in revenues during the same quarter last year. The Company's operating loss was $28,000 in the third quarter of 2010 compared to an operating profit of $33,000 for the third quarter of 2009. Net income for the third quarter was $14,000 or $0.00 per diluted share, compared with a net loss of $31,000 or $(0.01) per diluted share in the third quarter of 2009.

Revenues for the nine month period ended September 30, 2010 were $8.6 million, compared with $8.7 million for the comparable period in 2009. Net income for the nine months ended September 30, 2010 was $59,000 or $0.01 per diluted share, compared with a net loss of $709,000 or ($0.16) per diluted share in the comparable period in 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.

"The Company continues to develop Telecom Expense Management opportunities through partners and existing customers. In addition, the Company's Billing and Mobile Virtual Network Operator's (MVNO) activity has grown both as a licensed offering and as a managed service," 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, 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

                                                        September   December
                                                               30,       31,
                                                              2010      2009
    ASSETS

    CURRENT ASSETS:
    Cash and cash equivalents                              $ 1,761   $ 2,173
    Restricted marketable securities                           136       227
    Trade receivables, net                                     848       771
    Unbilled receivables                                        42        10
    Other accounts receivable and prepaid expenses             210       376
    Inventories                                                 29        39

    Total current assets                                     3,026     3,596

    LONG-TERM ASSETS:
    Severance pay fund                                         767       767
    Other investments                                           30        31
    Deferred income taxes                                       35        35

    Total long-term assets                                     832       833

    PROPERTY AND EQUIPMENT, NET                                136       175

    OTHER ASSETS:
    Goodwill                                                 3,479     3,479
    Other intangible assets, net                             1,507     1,807

    Total other assets                                       4,986     5,286

    Total assets                                           $ 8,980   $ 9,890


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

                                                 September         December
                                                       30,              31,
                                                      2010             2009
    LIABILITIES AND SHAREHOLDERS' EQUITY

    CURRENT LIABILITIES:
    Trade payables                                   $ 297            $ 432
    Accrued expenses and other liabilities           2,185            2,531
    Deferred revenues                                2,273            2,741

    Total current liabilities                        4,755            5,704

    LONG-TERM LIABILITIES -
    Accrued severance pay                            1,036            1,071

    COMMITMENTS AND CONTINGENT LIABILITIES

    SHAREHOLDERS' EQUITY:
    Share capital                                       13               13
    Additional paid-in capital                      19,652           19,577
    Treasury shares                                    (29)             (29)
    Accumulated other comprehensive income             (37)              23
    Accumulated deficit                            (16,410)         (16,469)

    Total shareholders' equity                       3,189            3,115

    Total liabilities and shareholders' equity     $ 8,980          $ 9,890



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


                               Nine months ended        Three months ended
                                 September 30,             September 30,
                              2010          2009        2010          2009

    Revenues:
    Product sales          $ 3,283       $ 4,014       $ 897       $ 1,273
    Services                 5,340         4,689       1,793         1,712

    Total revenues           8,623         8,703       2,690         2,985

    Cost of revenues:
    Product sales            1,196         1,392         369           387
    Services                 2,134         1,550         752           547

    Total cost of
    revenues*                3,330         2,942       1,121           934

    Gross profit             5,293         5,761       1,569         2,051

    Operating expenses:
    Research and
    development, net of
    grants from the OCS      1,100         1,568         429           521
    Selling and
    marketing*               1,877         2,186         596           669
    General and
    administrative           2,269         2,690         572           828

    Total operating
    expenses                 5,246         6,444       1,597         2,018

    Operating profit
    (loss)                      47          (683)        (28)           33
    Financial income
    (expenses), net             25           (26)         43           (64)
    Capital gain on sale
    of investment                -             -           -             -

    Income (loss) before
    taxes on income             72          (709)         15           (31)
    Tax on income               13             -           1             -

    Net income (loss)         $ 59        $ (709)       $ 14         $ (31)

    Net Income (loss) per
    share:

    Basic and diluted net
    income (loss) per
    Ordinary share          $ 0.01       $ (0.16)     $ 0.00       $ (0.01)

    Weighted average
    number of Ordinary
    shares used in
    computing basic and
    diluted net loss per
    share                4,458,975     4,458,975   4,458,975     4,458,975

    * Reclassified to conform with current period presentation.



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

SOURCE MTS-MER Telemanagement Solutions Ltd