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MTS Announces 2020 Second quarter Financial Results

·7 min read

POWDER SPRINGS, Ga. and RA'ANANA, Israel, Nov. 18, 2020 /PRNewswire/ -- Mer Telemanagement Solutions Ltd. (MTS) (Nasdaq Capital Market: MTSL), a global provider of telecommunications expense management (TEM), call accounting and contact centre software, today released its financial results for the three and six months ended June 30, 2020.

MTS logo
MTS logo

The Company recorded revenues of $948,000 for the three months ended June 30, 2020, compared with $1,317,000 for the three months ended June 30, 2019. Net loss from continuing operation, including one-time non-cash impairment charges of $617,000, amounted to $628,000 or $0.11 per diluted share for the three months ended June 30, 2020 compared with a net loss from continuing operation of $76,000, or $0.02 per diluted share, for the comparable period in 2019. On a non-GAAP basis (as described and reconciled below), the Company incurred a net loss of $4,000 or $0.00 per diluted share, for the three months ended June 30, 2020 compared with a net loss of $65,000, or $0.01 per diluted share, for the comparable period in 2019.

The Company recorded revenues of $2.1 million for the six months ended June 30, 2020 compared with $2.6 million for the comparable period in 2019. Net loss from continuing operation, including one-time, non-cash impairment charges of $617,000 amounted to $660,000, or $0.12 per diluted share, for the six months ended June 30, 2020 compared with a net loss from continuing operation of $206,000, or $0.04 per diluted share for the comparable period in 2019. On a non-GAAP basis (as described and reconciled below), the Company posted a net loss of $29,000, or $0.01 per diluted share for the six months ended June 30, 2020 compared with a net loss of $183,000, or $0.03 per diluted share for the comparable period in 2019.

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. During 2020 and 2019, the institutional investor partially exercised its greenshoe option and purchased additional $1.5 million of the convertible preferred shares, which are convertible into ordinary shares on a one for one basis.

Commenting on the results, Mr. Roy Hess, Chief Executive Officer of MTS, said, "Our results in 2020 reflect the efficiency plan we implemented during 2019 in order to adjust our operating expenses attributable to the declining sales and to improve our operating margins. Excluding the impact of the one-time non-cash impairment charges, our net loss for the quarter was $4,000 on a non-GAAP basis In June 2019, we introduced Omnis - Contact Center Software with "Out-Of-The-Box" capabilities and open channel architecture. We have begun to see initial revenues from this new product, whose introduction has been hampered by the constraints arising from the spread of COVID-19. 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.

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 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.

Contacts:

Ofira Bar
CFO
Tel: +972-9-7777-540
Email: ofira.bar@mtsint.com


CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands




June 30,


December, 31



2020


2019



(Unaudited)


(Audited)

ASSETS










CURRENT ASSETS:





Cash and cash equivalents


$ 2,210


$ 1,732

Restricted cash


431


1,464

Trade receivables


414


499

Other accounts receivable and prepaid expenses


221


236

Assets of discontinued operations


178


172






Total current assets


3,454


4,103






SEVERANCE PAY FUND


350


653






PROPERTY AND EQUIPMENT, NET


49


62






GOODWILL


2,608


3,225






Total assets


$ 6,461


$ 8,043

CONSOLIDATED BALANCE SHEETS





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










June 30,


December 31,



2020


2019



(Unaudited)


(Audited)






LIABILITIES AND SHAREHOLDERS' EQUITY










CURRENT LIABILITIES:





Trade payables


$ 110


$ 149

Deferred revenues


1,020


962

Accrued expenses and other liabilities


1,202


2,317

Liabilities of discontinued operations


488


516






Total current liabilities


2,820


3,944






LONG-TERM LIABILITIES:





Accrued severance pay


417


831

Deferred tax liability


55


163






Total long-term liabilities


472


994






COMMITMENTS AND CONTINGENT LIABILITIES










SHAREHOLDERS' EQUITY:





Share capital -





Ordinary shares


37


30

Preferred Shares


15


16

Additional paid-in capital


31,354


30,635

Treasury shares at cost


(29)


(29)

Accumulated deficit


(28,208)


(27,547)






Total shareholders' equity


3,169


3,105






Total liabilities and shareholders' equity


$ 6,461


$ 8,043

CONSOLIDATED STATEMENTS OF OPERATIONS

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




Six months ended


Three months ended



June 30,


June 30,



2020


2019


2020


2019



Unaudited

Revenues:









Services


$ 1,815


$ 2,258


$ 913


$ 1,120

Product sales


288


342


35


197










Total revenues


2,103


2,600


948


1,317










Cost of revenues:









Services


693


785


321


393

Product sales


173


196


80


98










Total cost of revenues


866


981


401


491










Gross profit


1,237


1,619


547


826










Operating expenses:









Research and development


-


268


-


135

Selling and marketing


459


553


194


267

General and administrative


937


978


482


484

Goodwill impairment


617


-


617


-










Total operating expenses


2,013


1,799


1,293


886










Operating loss


(776)


(180)


(746)


(60)

Financial income (expenses), net


8


(25)


10


(15)










Loss before taxes on income


(768)


(205)


(736)


(75)

Taxes on income (tax benefit), net


(108)


1


(108)


1










Net loss from continuing operations


(660)


(206)


(628)


(76)

Loss from discontinued operations


(1)


(14)


(13)


(16)

Net loss


$ (661)


$ (220)


$ (641)


$ (92)










Net loss per share:









Basic and diluted net loss per share from continuing
operations


$ (0.12)


$ (0.04)


$ (0.11)


$ ( 0.02)

Basic and diluted net loss per share from discontinued
operations


(0.00)


(0.00)


(0.00)


( 0.00)

Basic and dilutednet loss per share


$ (0.12)


$ (0.04)


$ ( 0.11)


$ ( 0.02)

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


5,645,400


4,698,440


5,669,621


4,783,115

RECONCILIATION OF GAAP TO NON-GAAP RESULTS


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










Six months ended
June 30,


Three months ended
June 30,




2020


2019


2020


2019






Unaudited













GAAP net loss from continuing operations


(660)


(206)


(628)


(76)


Stock-based compensation expenses


14


13


7


6


Intangible assets amortization, net of tax effects


-


10


-


5


Goodwill impairment, net of tax effect


617


-


617


-












Non-GAAP net loss


$ (29)


$ ( 183)


$ (4)


$ ( 65)












Net loss per share:




















GAAP basic and diluted net loss per share


$ (0.12)


$ (0.04)


$ (0.11)


$ (0.02)


Non-GAAP basic and diluted net loss per share


$ (0.01)


$ (0.03)


$ (0.00)


$ (0.01)



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


5,645,400


4,698,440


5,669,621


4,783,115


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View original content:http://www.prnewswire.com/news-releases/mts-announces-2020-second-quarter-financial-results-301176282.html

SOURCE Mer Telemanagement Solutions Ltd. (MTS)