MTS Announces 2019 Fourth Quarter Financial Results
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.
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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
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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 $65 499 604
at December 31, 2019 and 2018)
Other accounts receivable and prepaid expenses 236 101
Assets of discontinued operations 172 187
Total current assets 4,103 3,422
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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
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Total assets $8,043 $7,523
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CONSOLIDATED BALANCE SHEET
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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
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LONG-TERM LIABILITIES:
Accrued severance pay 831 722
Deferred tax liability 163 181
Total long-term liabilities 994 903
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COMMITMENTS AND CONTINGENT LIABILITIES
SHAREHOLDERS' EQUITY:
Share capital -
Ordinary shares of NIS 0.03 par value: Authorized: 17,000,000 shares at 30 27
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
Preferred Shares of NIS 0.03 par value: Authorized: 3,000,000 shares at 16 10
December 31, 2019 and 2018; Issued and Outstanding: 2,008,772 and
1,315,789 shares at December 31, 2019 and 2018, respectively
Additional paid-in capital 30,635 29,807
Treasury shares at cost (1,800 Ordinary shares at December 31, 2019 and (29) (29)
2018)
Accumulated deficit (27,547) (27,412)
Total shareholders' equity 3,105 2,403
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Total liabilities and shareholders' equity $8,043 $7,523
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CONSOLIDATED STATEMENTS OF OPERATIONS
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U.S. dollars in thousands (except share and per share data)
Twelve months ended Three months ended
December 31, 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
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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
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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
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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
57 (284) 53 62
Income (loss) from discontinued operations
$(135) $(1,170) $99 $110
Net income (loss)
Net loss per share:
Basic and diluted net profit (loss) per share from continuing $(0.04) $(0.26) $0.01 $0.02
operations
Basic and diluted net profit (loss) per share from 0.01 (0.08) 0.01 0.01
discontinued operations
Basic and diluted net loss per share $(0.03) $(0.34) $0.02 $0.03
Weighted average number of shares used in computing 5,013,374 3,435,161 5,444,806 4,200,755
basic and diluted net profit (loss) per share
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
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U.S. dollars in thousands (except share and per share data)
Twelve months ended Three months ended
December 31, 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
$0.02 $(0.23) $0.11 $0.02
Non-GAAP basic and diluted net profit (loss) per share
5,013,374 3,435,161 5,444,806 4,200,755
Weighted average number of shares used in computing
non-GAAP basic and diluted net profit (loss) per share
Contacts:
Ofira Bar
CFO
Tel: +972-9-7777-540
Email: ofira.bar@mtsint.com
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SOURCE Mer Telemanagement Solutions Ltd. (MTS)
