MTS Announces 2019 Fourth Quarter Financial Results

|Mar 24|magazine20 min read

RA'ANANA, Israel and POWDER SPRINGS, Georgia, March 24, 2020 /PRNewswire/ -- Mer Telemanagement Solutions Ltd. (MTS) (Nasdaq Capital Market: MTSL), a global provider of telecommunications expense management (TEM), call accounting and contact center software, today released its financial results for the three and twelve months ended December 31, 2019.

 

 

The Company recorded revenues of $1.4 million for the three months ended December 31, 2019, compared with $1.6 million for the three months ended December 31, 2018. The Company recorded net income of $99,000 for the three months ended December 31, 2019, or $0.02 per diluted share, compared with net income of $110,000, or $0.03 per diluted share, for the comparable period in 2018. In the three months ended December 31, 2019, the Company had net income from continuing operations of $46,000 compared to net income from continuing operations of $48,000 in the comparable period in 2018. The Company recognized net income from discontinued operations of $53,000 in the three months ended December 31, 2019, compared to net income from discontinued operations of $62,000 in the comparable period in 2018.

The Company recorded revenues of $5.2 million for the year ended December 31, 2019, compared with $5.9 million for the comparable period in 2018. The Company incurred a net loss of $(135,000), or $(0.03) per diluted share, for the year ended December 31, 2019, compared with a net loss of $(1.2) million, or ($0.34) per diluted share, in the comparable period in 2018. Net loss from continuing operations was $(192,000) for the year ended December 31, 2019, compared with a net loss from continuing operations of $(886,000) in the comparable period in 2018. On a non-GAAP basis (as described and reconciled below), the Company had net income from continuing operations of $79,000, or $0.02 per diluted share, for the year ended December 31, 2019, compared with a net loss from continuing operations of $(776,000), or $(0.23) per diluted share, for the comparable period in 2018.

During 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 share purchase agreement with the institutional investor includes a greenshoe option, exercisable until April 30, 2020, for future investment of up to $1.5 million in the Company's preferred shares at a price per preferred share of $1.14. During 2019, the institutional investor partially exercised its greenshoe option and purchased 692,983 convertible preferred shares in consideration for $790,000.

Commenting on the results, Mr. Roy Hess, Chief Executive Officer of MTS, said, "Our results in 2019 reflect the efficiency plan we implemented during 2019 in order to adjust our expenses to our new line of business and to improve our operation margins. We recently entered the field of omnichannel contact center software. In June 2019, we introduced Omnis - Contact Center Software with "Out-Of-The-Box" capabilities and open channel architecture. During the end of 2019 we started to see initial revenues from this new product, which we consider to be our main growth engine in the coming years. As previously reported, we are also continuing our efforts to find  a suitable M&A candidate for our company which will enhance shareholder value."

About MTS

Mer Telemanagement Solutions Ltd. (MTS) is focused on innovative products and services for enterprises in the area of telecom expense management (TEM), call accounting and contact center software. 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.

Forward Looking Statements

Certain matters discussed in this news release are forward-looking statements that involve a number of risks and uncertainties including, but not limited to, the Company's ability to achieve  profitable operations, its ability  to continue to operate as a going concern, its ability to continue to meet NASDAQ continued listing requirements,  customer acceptance of new products, the effects of the spread of Coronavirus (COVID-19) and future measures taken by authorities in the countries in which we operate on our operations, the demand for our products and our customers' economic condition, 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,  general economic conditions and other risk factors detailed in the Company's annual report and other filings with the United States Securities and Exchange Commission.   

 

CONSOLIDATED BALANCE SHEET

U.S. dollars in thousands





December 31,



2019


2018



Unaudited


Audited

ASSETS










CURRENT ASSETS:





Cash and cash equivalents


$              1,732


$             1,150

Restricted cash


1,464


1,380

Trade receivables (net of allowance for doubtful accounts of $65
at December 31, 2019 and 2018)


499


604

Other accounts receivable and prepaid expenses


236


101

Assets of discontinued operations


172


187






Total current assets


4,103


3,422






SEVERANCE PAY FUND


653


541






PROPERTY AND EQUIPMENT, NET


62


60






OTHER ASSETS:





Intangible assets, net


-


21

Goodwill


3,225


3,479






Total other assets


3,225


3,500






Total assets


$              8,043


$             7,523


 

 

 

CONSOLIDATED BALANCE SHEET

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





December 31,



2019


2018



Unaudited


Audited

LIABILITIES AND SHAREHOLDERS' EQUITY










CURRENT LIABILITIES:





Trade payables


$                149


$                 164

Deferred revenues


962


1,053

Accrued expenses and other liabilities


2,317


2,394

Liabilities of discontinued operations


516


606






Total current liabilities


3,944


4,217






LONG-TERM LIABILITIES:





Accrued severance pay


831


722

Deferred tax liability


163


181






Total long-term liabilities


994


903






COMMITMENTS AND CONTINGENT LIABILITIES










SHAREHOLDERS' EQUITY:





Share capital -





Ordinary shares of NIS 0.03 par value: Authorized: 17,000,000 shares at
December 31, 2019 and 2018; Issued: 3,614,208 and 3,296,123 shares at
December 31, 2019 and 2018, respectively; Outstanding: 3,612,408 and
3,294,323 shares at December 31, 2019 and 2018, respectively


30


27

Preferred Shares of NIS 0.03 par value: Authorized: 3,000,000 shares at
December 31, 2019 and 2018; Issued and Outstanding: 2,008,772 and
1,315,789 shares at December 31, 2019 and 2018, respectively


16


10

Additional paid-in capital


30,635


29,807

Treasury shares at cost (1,800 Ordinary shares at December 31, 2019 and
2018)


(29)


(29)

Accumulated deficit


(27,547)


(27,412)






Total shareholders' equity


3,105


2,403






Total liabilities and shareholders' equity


$               8,043


$            7,523


 

 

CONSOLIDATED STATEMENTS OF OPERATIONS

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





Twelve months ended
December 31,


Three months ended
December 31,



2019


2018


2019


2018



Unaudited


Audited


Unaudited


Audited

Revenues:









Services


$          4,273


$          4,843


$          1,079


$          1,230

Product sales


920


1,018


274


323










Total revenues


5,193


5,861


1353


1553










Cost of revenues:









Services


1,486


1,719


336


420

Product sales


371


430


83


105










Total cost of revenues


1,857


2,149


419


525










Gross profit


3,336


3,712


934


1028










Operating expenses:









Research and development


545


825


137


153

Selling and marketing


817


1,471


253


276

General and administrative


2,144


2,239


465


484










Total operating expenses


3,506


4,545


855


913










Operating income (loss)


(170)


(823)


79


115

Financial income (expenses), net


(18)


(17)


9


(18)










Income (loss) before taxes on income


(188)


(840)


88


97

Taxes on income, net


4


46


42


49










Net income (loss) from continuing operations


(192)


(886)


46


48

 

Income (loss) from discontinued operations


57


(284)


53


62

 

Net income (loss)


$            (135)


$         (1,170)


$                99


$             110










Net loss per share:









Basic and diluted net profit (loss) per share from continuing
operations


$           (0.04)


$            (0.26)


$            0.01


$            0.02

Basic and diluted net profit (loss) per share from
discontinued operations


0.01


(0.08)


0.01


0.01

Basic and diluted net loss per share


$               (0.03)


$               (0.34)


$             0.02


$             0.03

Weighted average number of shares used in computing
      basic and diluted net profit (loss) per share


5,013,374


3,435,161


5,444,806


4,200,755

 

 

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

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





Twelve months ended
December 31,


Three months ended
December 31,




2019


2018


2019


2018




Unaudited


Unaudited


Unaudited


Unaudited












GAAP net income (loss) from continuing operations


(192)


(886)


46


48


Stock-based compensation expenses


47


89


8


22


Intangible assets amortization, net of tax effects


21


21


6


6


Goodwill impairment, net of tax effect


203


-


-


-












Non-GAAP net income (loss)


$    79


$          (776)


$           60


$              76












Net loss per share:




















GAAP basic and diluted net profit (loss) per share)


$          0.04


$         (0.26)


$          0.01


$             0.02


 

Non-GAAP basic and diluted net profit (loss) per share


$          0.02


$         (0.23)


$          0.11


$             0.02


 

Weighted average number of shares used in computing
non-GAAP basic and diluted net profit (loss) per share


5,013,374


3,435,161


5,444,806


4,200,755


 

Contacts:   
Ofira Bar                                                                      
CFO                                         
Tel: +972-9-7777-540                                                  
Email: [email protected]

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SOURCE Mer Telemanagement Solutions Ltd. (MTS)