MTS Announces Third Quarter 2012 Financial Results

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.

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