EX-99.1 2 tv518223_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

MTS+Slogan

 

MTS Announces 2018 Second Half Year Financial Results

 

Ra’anana, Israel / Powder Springs, Georgia, USA - April 4, 2019 - Mer Telemanagement Solutions Ltd. (MTS) (Nasdaq Capital Market: MTSL), a global provider of telecommunications expense management (TEM) and call accounting software and services, today released its financial results for the six and twelve months ended December 31, 2018.

 

MTS recorded revenues of $3 million for the six months ended December 31, 2018, up 3.4% sequentially, as compared with $2.9 million for the six months ended June 30, 2018, and down 4.46% from $3.14 million for the six months ended December 31, 2017. MTS incurred a net loss of $(121,000) for the six months ended December 31, 2018, or $(0.03) per diluted share compared with a net loss of $(960,000), or $(0.32) per diluted share, for the comparable period in 2017. On a non-GAAP basis (as described and reconciled below), MTS posted a net loss of $(9,000), or $(0.00) per diluted share, for the six months ended December 31, 2018 compared with a net loss of $(585,000), or $(0.19) per diluted share, for the comparable period in 2017.

 

MTS’s revenues for the year ended December 31, 2018 totaled $5.9 million compared with revenues of $6.8 million for the comparable period in 2017. Net loss for the period was $(1.2) million, or $(0.34) per diluted share, compared with a net loss of $(1.8) million or ($0.59) per diluted share for 2017. On a non-GAAP basis, MTS recorded a net loss of $(776,000), or $(0.23) per diluted share, in 2018 compared with a net loss of $(343,000), or $(0.12) per diluted share for the comparable period in 2017.

 

As of December 31, 2018, the Company had cash and cash equivalents of approximately $1.2 million. The Company’s loss of $(1.2) million and negative cash flows from operations of $1.6 million for the year ended December 31, 2018,and accumulated deficit of $27.4 million, raise substantial doubt about the Company's ability to continue as a going concern.

During October and June 2018 an institutional investor invested, $1.5 million in a newly-created class of convertible preferred shares and $0.2 million in ordinary shares of the Company, at a price per preferred share and ordinary share of $1.14. The preferred shares are convertible into ordinary shares on a one to one basis.

 

As previously published, the stock purchase agreement with the institutional investor includes a Greenshoe option exercisable until October 2019 for future investment of up to $1.5 million in the Company’s preferred shares at a price per preferred share of $1.14.

On March 29, 2019, the institutional investor exercised its green shoe option in part and purchased 109,649 convertible preferred shares in consideration of $125,000.

 

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, we, as previously announced, sold the business unit to a third party in June 2018. The telecommunications side of our business continues to be stable as we have maintained a high level of customer satisfaction. We are now focused on exploring various lines of business to either develop organically or acquire.”

 

 

 

 

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: [were all of these charges incurred in 2018 – if not delete the reference

 

·Stock based compensation expenses

·Amortization of purchased intangible assets (net of tax effect)

·Reorganization and other non-recurring costs

·Impact of the US tax reform

 

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.

 

Contacts:

Ofira Bar

CFO

Tel: +972-9-7777-540

Email: ofira.bar@mtsint.com

 

 

 

 

CONSOLIDATED BALANCE SHEETS 

U.S. dollars in thousands

 

    December 31,     December 31,  
    2018     2017  
    Unaudited     Audited  
ASSETS                
                 
CURRENT ASSETS:                
Cash and cash equivalents   $ 1,150     $ 1,165  
Restricted cash     1,380       1,058  
Trade receivables, net     604       564  
Other accounts receivable and prepaid expenses     101       74  
Assets of discontinued operations     151       1,301  
                 
Total current assets     3,386       4,162  
                 
Severance pay Fund     541       856  
                 
PROPERTY AND EQUIPMENT, NET     60       107  
                 
OTHER ASSETS:                
Goodwill     3,479       3,479  
Other intangible assets, net     21       42  
                 
Total other assets     3,500       3,521  
                 
Total assets   $ 7,487     $ 8,646  

 

 

 

 

CONSOLIDATED BALANCE SHEETS

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

 

    December 31,     December 31,  
    2018     2017  
    Unaudited     Audited  
LIABILITIES AND SHAREHOLDERS' EQUITY                
                 
CURRENT LIABILITIES:                
Trade payables   $ 164     $ 308  
Deferred revenues     1,053       1,744  
Accrued expenses and other liabilities     2,394       2,283  
Liabilities of discontinued operations     570       1,380  
                 
Total current liabilities     4,181       5,715  
                 
LONG-TERM LIABILITIES                
Accrued severance pay     722       1,073  
Deferred tax liability     181       146  
                 
Total long-term liabilities     903       1,219  
                 
COMMITMENTS AND CONTINGENT LIABILITIES                
                 
SHAREHOLDERS' EQUITY:                
Ordinary shares     27       25  
Preferred shares     10          
Additional paid-in capital     29,807       28,188  
Treasury shares     (29 )     (29 )
Accumulated deficit     (27,412 )     (26,472 )
                 
Total shareholders' equity     2,403       1,712  
                 
Total liabilities and shareholders' equity   $ 7,487     $ 8,646  

 

 

 

 

CONSOLIDATED STATEMENTS OF OPERATIONS

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

 

   

Twelve months ended

December 31,

   

Six months ended

December 31,

 
    2018     2017     2018     2017  
    Unaudited     Audited     Unaudited     Unaudited  
Revenues:                                
Services   $ 4,843     $ 5,467     $ 2,502     $ 2,549  
Product sales     1,018       1,306       483       594  
                                 
Total revenues     5,861       6,773       2,985       3,143  
                                 
Cost of revenues:                                
Services     1,719       1,646       784       912  
Product sales     430       412       217       227  
                                 
Total cost of revenues     2,149       2,058       1,001       1,139  
                                 
Gross profit     3,712       4,715       1,984       2,004  
                                 
Operating expenses:                                
Research and development     825       1,645       320       739  
Selling and marketing     1,471       1,529       614       765  
General and administrative     2,239       1,966       1,015       1,087  
                                 
Total operating expenses     4,545       5,140       1,949       2,591  
                                 
Operating profit (loss)     (823 )     (425 )     35       (587 )
Financial income (expenses), net     (17 )     14       (25 )     (1 )
                                 
Loss before taxes on income     (840 )     (411 )     10       (588 )
Taxes on income (tax benefit), net     46       (9 )     51       (14 )
                                 
Net loss from continuing operations     (886 )     (402 )     (41 )     (574 )
 Loss from discontinued operations     (284 )     (1,366 )     (80 )     (386 )
 Net loss   $ (1,170 )   $ (1,768 )   $ (121 )   $ (960 )
                                 
Net loss per share:                                
Basic and diluted net loss per share from continuing operations   $ (0.26 )   $ (0.13 )   $ (0.02 )   $ (0.19 )
Basic and diluted net loss per share from discontinued operations     (0.08 )     (0.46 )     (0.01 )     (0.13 )
Basic and diluted net loss per share (*)   $ (0.34 )   $ (0.59 )   $ (0.03 )   $ (0.32 )
Weighted average number of shares used in computing basic and diluted net loss per share (*)     3,435,161       2,991,547       3,747,855       3,073,117  

 

* After giving effect to the reverse stock split from September 6, 2017

 

 

 

 

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

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

 

  

Twelve months ended

December 31,

  

Six months ended

December 31,

 
   2018   2017   2018   2017 
   Unaudited   Unaudited   Unaudited   Unaudited 
                 
GAAP net income (loss) from continuing   operations   (886)   (402)   (41)   (574)
Stock-based compensation expenses   89    1    39    31 
Intangible assets amortization, net of tax effects   21    21    11    11 
Impact of the US tax reform (a)   -    (52)   -    (52)
Reorganization and other non-recurring costs   -    89    -    - 
                     
Non-GAAP net profit (loss)  $(776)  $(343)  $9   $(585)
                     
Net loss per share:                    
                     
GAAP basic and diluted net loss per share (*)  $(0.26)  $(0.13)  $(0.02)  $(0.19)
 Non-GAAP basic and diluted net loss per share (*)  $(0.23)  $(0.12)  $0.00   $(0.19)
Weighted average number of shares used in computing non-GAAP basic and diluted net loss per share (*)   3,435,161    2,991,547    3,747,855    3,073,117 

 

* After giving effect to the reverse stock split from September 6, 2017.