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MER Telemanagement Solutions -- >>> MTS Announces Third Quarter 2012 Financial Results



Year over Year Quarterly Revenues Increased 12% and Operating Income Increased 180%; Generated $1.3 Million of Free Cash Flow During the First Nine Months of 2012; The Company Recorded a Non-Recurring Charge of $0.45 Million Due to a Tax Ruling



Press Release: MTS-MER Telemanagement Solutions Ltd

Nov 8, 2012



http://finance.yahoo.com/news/mts-announces-third-quarter-2012-130000906.html



RA'ANANA, Israel, November 8, 2012 /PRNewswire/ --

MTS - Mer Telemanagement Solutions Ltd. (Nasdaq Capital Market: MTSL), a global provider of MVNE services and telecommunications expense management (TEM) services and solutions, today announced its financial results for the third quarter of 2012.

Revenues for the third quarter of 2012 were $3.4 million, compared with $3.0 million in revenues during the same quarter last year and revenues of $3.3 million in the second quarter of 2012. The Company's operating profit was $692,000 in the third quarter of 2012 compared to an operating profit of $244,000 for the third quarter of 2011 and $517,000 in the second quarter of 2012. On a non-GAAP basis, excluding the non-recurring tax charge related to a court ruling, net income for the third quarter of 2012 was $691,000 or $0.15 per diluted share, compared with net income of $226,000 or $0.05 per diluted share in the third quarter of 2011 and $460,000 or $0.10 per diluted share in the second quarter of 2012. Net income for the third quarter, after a $446,000 non-recurring tax charge, was $245,000 or $0.05 per diluted share, compared with net income of $226,000 or $0.05 per diluted share in the third quarter of 2011 and $460,000 or $0.10 per diluted share in the second quarter of 2012.

Revenues for the nine months period ended September 30, 2012 were $9.6 million, compared with $8.8 million for the comparable period in 2011. The Company's operating profit was $1.5 million for the nine months period ended September 30, 2012 compared to an operating profit of $439,000 for the same period last year. On a non-GAAP basis, excluding the non-recurring tax charge related to the court ruling, net income for the nine months ended September 30, 2012 was $1.5 million or $0.32 per diluted share, compared with net income of $588,000 or $0.13 per diluted share in the comparable period of 2011. Net income for the nine months ended September 30, 2012 was $1.0 million or $0.22 per diluted share, compared with net income of $588,000 or $0.13 per diluted share in the comparable period in 2011.

Net income for the third quarter and for the nine months period ending September 30, 2012 was negatively affected by a non-recurring tax charge of approximately $446,000, as a result of a court ruling relating to the Company's appeal of a tax ruling of the Israeli tax authorities that was issued with respect to the 1997 to 1999 period. The Company has not as yet received an assessment from the tax authorities.

As of September 30, 2012, we had cash and marketable securities of $4.6 million as compared to $3.4 million as at December 31, 2011. During the nine month period ended September 30, 2012 we had positive operating cash flow of $1.3 million, as compared to positive operating cash flow of $800,000 during the nine month period ended September 30, 2011.

"Our third quarter results represent continued improvements in our financial results and indicators as a result of our efforts to develop our Mobile Virtual Network Enabler (MVNE) activity and the Telecom Expense Management opportunities through partners, new customer acquisitions and expanding our existing customer base" said Eytan Bar, CEO of MTS.

"As we previously announced, we extended our largest existing MVNO services contract, with minimum revenues of $3.6 million during 2013. In addition, following last quarter's announcement that we signed a new managed service agreement, we recently were able to successfully launch our MVNE service with this new MVNO in the US. The Company sees other opportunities in this market and we are working diligently to turn them into new contracts. We are looking forward to improving both our top and bottom line performance," concluded Mr. Bar.

Non-GAAP Financial Measures

This release includes non-GAAP net income and diluted earnings per share financial measures. These non-GAAP measures exclude a non-recurring tax charge.

The Company'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 financial condition and results of operations.

These non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. The Company believes that non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP measures. Please refer to the reconciliation of GAAP to Non-GAAP table below.

About MTS

Mer Telemanagement Solutions Ltd. (MTS) is a worldwide provider of innovative products and services for comprehensive telecom expense management (TEM) and enterprise mobility management (EMM) solutions used by enterprises, telecom billing solutions used by telecommunication service providers, and mobile virtual network operators and enablers (MVNO/MVNE) solutions used by mobile service providers.

Headquartered in Israel, MTS markets its solutions through wholly owned subsidiaries in the United States, Hong Kong and The Netherlands as well as through OEM partnerships with Siemens, Phillips, NEC and other vendors. MTS shares are traded on the NASDAQ Capital Market (symbol MTSL). For more information please visit the MTS web site: http://www.mtsint.com.

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