PR Newswire | Nov 18, 2020 01:01PM EST

11/18 12:00 CST

MTS Announces 2020 Second quarter Financial Results POWDER SPRINGS, Ga. and RA'ANANA, Israel, Nov. 18, 2020

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.

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, 2020compared 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 $ (0.12) $ (0.04) $ (0.11) $ ( 0.02)operations

Basic and diluted net loss per share from discontinued (0.00) (0.00) (0.00) ( 0.00)operations

Basic and dilutednet loss per share $ (0.12) $ $ ( 0.11) $ ( 0.02) (0.04)

Weighted average number of shares used in computing 5,645,400 4,698,440 5,669,621 4,783,115 basic and diluted net loss per share

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

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

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) $ $ ( 65) (4)

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 5,645,400 4,698,440 5,669,621 4,783,115non-GAAP basic and diluted net loss per share

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SOURCE Mer Telemanagement Solutions Ltd. (MTS)