SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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F O R M 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of August 2005
MER TELEMANAGEMENT SOLUTIONS LTD.
(Name of Registrant)
22 Zarhin Street, Ra'anana 43662, Israel
(Address of Principal Executive Office)
Indicate by check mark whether the registrant files or will
file annual reports under cover of Form 20-F or Form
40-F.
Form 20-F [X] Form 40-F [ ]
Indicate by check mark if the registrant is submitting the
Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]
Indicate by check mark if the registrant is submitting the
Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]
Indicate by check mark whether by furnishing the information
contained in this Form, the registrant is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the Securities
Exchange Act of 1934.
Yes [ ] No [X]
If "Yes" is marked, indicate below the file number assigned to
the registrant in connection with Rule 12g3-2(b): 82-_________
This Form 6-K is being incorporated by reference into the Registrant's Form S-8
Registration Statements File Nos. 333-12014 and 333-123321.
MER Telemanagement Solutions Ltd.
6-K Items
1. Press Release re MTS Reports Second Quarter 2005 Financial Results dated
August 11, 2005.
ITEM 1
Press Release Source: Mer Telemanagement Solutions Ltd.
MTS Reports Second Quarter 2005 Financial Results
Thursday August 11, 8:30 am ET
- Revenues Rise 41% Year-Over-Year -
RA'ANANA, Israel, Aug. 11 /PRNewswire-FirstCall/ -- MTS -- Mer Telemanagement
Solutions Ltd. (Nasdaq SmallCap: MTSL - News), a global provider of Operations
Support Systems (OSS) for comprehensive Telecommunication Management and
Customer Care & Billing solutions, today reported its financial results for the
quarter ended June 30, 2005.
Revenues for the second quarter were $2.8 million, compared to $2.0 million
reported in the second quarter of 2004, an increase of 41%.
Net loss for the quarter was $1.15 million ($0.24 basic and diluted net loss per
ordinary share), compared to a net loss of $929,000 ($0.20 basic and diluted net
loss per ordinary share) for the second quarter of 2004.
Eytan Bar, President and Chief Executive Officer of MTS, commented, "We
continued to experience revenue and backlog growth in the second quarter, driven
by increased sales of our billing solutions to the service provider and carrier
markets. In addition, we increased our penetration of the enterprise market, and
launched our latest suite of telemanagement products, the Invoice Management
Solution, as part of the total Telecommunications Expense Management Solution
for Enterprises."
"MTS' overall business continues to expand and we are executing our growth
strategy as planned," continued Mr. Bar. "Our pipeline of orders is developing
nicely and we are expanding our sales channels through strategic partnerships
with market leading companies. Furthermore, the investments we made in R&D and
sales and marketing over the past year are now supporting our expansion
initiatives."
Gross profit for the second quarter rose 31% to $1.94 million as a result of
increased sales of products and services. This compares to gross profit of $1.49
million reported in the second quarter of 2004 and $ 1.89 million in the first
quarter of 2005.
Research and development expenses doubled to $1.17 million compared to the
$569,000 reported in the second quarter of 2004, but declined 13% compared to
the $1.34 million reported in the first quarter of this year. The sharp year-
over-year increase in R&D expenses relates primarily to the continued
integration of TeleKnowledge's R&D group, as well as to the Company's continuing
investment in product development.
Selling and marketing expenses were $1.37 million in the second quarter,
reflecting a modest decline year-over-year, compared to $1.40 million reported
in the second quarter of 2004, and a 10% decline compared to the first quarter
of 2005. The continued reduction in selling and marketing demonstrates MTS'
commitment to focus on the growing areas of its business.
Shlomi Hagai, Corporate COO & CFO, stated, "MTS ended the second quarter with a
healthy, accumulated backlog of orders of approximately $2 million, compared to
$1 million at the end of the first quarter. In addition, this marks the third
consecutive quarter in which we have grown our order backlog. Moreover, it is
the fourth consecutive quarter in which we have experienced revenue growth. We
believe that our commitment to bring spending more in line with revenue
generation positions us well for the future."
MTS' cash and cash equivalents, including marketable securities, were $1.88
million as of June 30, 2005. The Company improved its cash position on August
10, 2005 when it entered into definitive agreements with institutional and
private investors for a private placement of ordinary shares and warrants that
raised $2.8 million. If the warrants are exercised in full the Company will
raise an additional $1.5 million.
"We plan to use the proceeds from this financing to execute our growth strategy
and to fund expanding activities in R&D and sales and marketing. We believe that
our investment in these operational activities will drive future growth and
ultimately improve our operating results," concluded Mr. Hagai.
Six Months Results
Revenues for the first six months of FY 2005 were $5.5 million, compared to $4.3
million reported in the first six months of FY 2004, an increase of 27%.
Net loss for the period was $3.2 million ($0.68 basic and diluted net loss per
ordinary share), compared to the net loss of $1.1 million ($0.24 basic and
diluted net loss per ordinary share) for comparable period of FY 2004.
Conference Call Information
MTS will conduct a teleconference to discuss the second quarter results on
Thursday, August 11, at 11:00 AM Eastern Time (18:00 Israel Time). To access the
call, please dial 1-877-270-4109 from the US or Canada (toll free), 1-809-
315-341 from Israel (toll free), or 1-706-679-0560 from other locations
approximately 5-10 minutes prior to the starting time.
A replay of the call also will be available from 2:00 PM ET on Thursday, August
11, 2005, until 11:59 PM ET on Thursday, August 18. To access the replay please,
dial 1-800-642-1687 from the US or Canada (toll free), 1-809- 315-356 from
Israel (toll free), or 1-706-645-9291 from other locations and enter conference
ID#7748694.
About MTS
Mer Telemanagement Solutions Ltd. is a global provider of operations support
systems (OSS) for comprehensive telecommunication management and customer care &
billing solutions. MTS' OSS is a full-featured customized solution for
telecommunications management and customer care & billing. Its
telecommunications enterprise resource planning (ERP) application suite is used
by corporations and organizations to improve the efficiency and performance of
all telecommunication and information technology (IT) operations, and to
significantly reduce associated costs. Its affordable customer care and billing
(CC&B) solutions are used by service providers and operators to support
sophisticated billing, web-based self-provisioning and other revenue-generating
applications.
Headquartered in Israel, MTS markets through wholly owned subsidiaries in the
United States, Hong Kong, Holland, and Brazil, and through OEM partnerships with
Siemens, Phillips, and other PABX vendors. Its legacy call accounting solutions
have been installed by over 60,000 customers in 60 countries. MTS' shares are
traded on the Nasdaq SmallCap Market (symbol MTSL). For more information please
visit the MTS web site: http://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,
risks in product development plans and schedules, rapid technological change,
changes and delays in product approval and introduction, 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, government regulations, dependence on third
parties to manufacture products, general economic conditions and other risk
factors detailed in the Company's filings with the United States Securities and
Exchange Commission.
Contacts:
Company Investor Relations:
Shlomi Hagai Kathy Price
Corporate COO & CFO Managing Director
MTS - MER Telemanagement Solutions The Anne McBride Company, Inc.
Tel: +972-9762-1733 Tel: 212-983-1702 ext. 212
Email: Shlomi.Hagai@mtsint.com Email: kprice@annemcbride.com
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. Dollars in thousands (except share data)
Three months ended Six months ended Year ended
June 30, June 30, December 31,
2005 2004 2005 2004 2004
Unaudited
Revenues from products
and services $2,812 $1,992 $5,538 $4,351 $9,413
Cost of revenues from
products and services 869 506 1,707 1,047 2,814
Gross profit 1,943 1,486 3,831 3,304 6,599
Operating expenses:
Research and
development 1,167 569 2,510 1,103 2,362
Selling and
marketing 1,370 1,397 2,897 2,522 6,300
General and
administrative 677 490 1,722 887 2,101
Total operating
expenses 3,214 2,456 7,129 4,512 10,763
Operating loss (1,271) (970) (3,298) (1,208) (4,164)
Financial income, net 11 (8) 30 19 78
Other income
(expenses), net 72 2 74 (30) --
Loss before taxes on
income (1,188) (976) (3,194) (1,219) (4,086)
Taxes on income -- 2 -- 2 266
(1,188) (978) (3,194) (1,221) (4,352)
Equity in earnings
of affiliate 39 49 11 95 225
Net loss $(1,149) $(929) $(3,183) $(1,126) $(4,127)
Net loss per share:
Basic and diluted net
loss per Ordinary
share $ (0.24) $(0.20) $(0.68) $(0.24) $(0.89)
Weighted average number
of Ordinary shares used
in computing basic and
diluted net loss
per share 4,712,561 4,633,471 4,675,283 4,629,082 4,634,413
CONSOLIDATED BALANCE SHEETS
U.S. Dollars in thousands (except share data)
June 30, December 31,
2005 2004 2004
Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $1,750 $8,461 $3,814
Marketable securities 126 1,498 1,057
Trade receivables, net 1,853 1,069 1,348
Other accounts receivable and
prepaid expenses 408 580 391
Inventories 180 193 178
Total current assets 4,317 11,801 6,788
LONG- TERM INVESTMENTS:
Investment in an affiliate 1,707 1,760 2,119
Long-term loans, net of current
maturities 26 73 45
Severance pay fund 518 565 535
Other investments 373 371 373
Total long-term investments 2,624 2,769 3,072
PROPERTY AND EQUIPMENT, NET 583 460 581
OTHER ASSETS:
Goodwill 3,511 2,025 3,415
Other intangible assets, net 1,169 128 1,394
Deferred income taxes 73 105 73
Total other assets 4,753 2,258 4,882
Total assets $12,277 $17,288 $15,323
CONSOLIDATED BALANCE SHEETS
U.S. Dollars in thousands (except share data)
June 30, December 31,
2005 2004 2004
Unaudited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of
long-term loans $- $4 $-
Trade payables 727 311 719
Accrued expenses and other
liabilities 2,197 1,722 2,042
Deferred revenues 1,144 1,218 1,254
Total current liabilities 4,068 3,255 4,015
LONG-TERM LIABILITIES:
Accrued severance pay 660 647 651
Total long-term liabilities 660 647 651
SHAREHOLDERS' EQUITY:
Share capital -
Ordinary shares of NIS 0.01 par
value - Authorized: 12,000,000
shares; Issued: 4,796,304 shares
at June 30, 2005 and 4,648,804
shares at December 31,2004;
Outstanding: 4,785,504 shares at
June 30, 2005 and 4,638,004 at
December 31, 2004 15 14 14
Additional paid-in capital 13,267 12,638 12,879
Treasury shares (29) (20) (29)
Deferred stock compensation (176) - (208)
Accumulated other comprehensive
income 2 100 348
Retained earnings
(accumulated deficit) (5,530) 654 (2,347)
Total shareholders' equity 7,549 13,386 10,657
Total liabilities and
shareholders' equity $12,277 $17,288 $15,323
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
MER TELEMANAGEMENT SOLUTIONS LTD.
(Registrant)
By: /s/Eytan Bar
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Eytan Bar
President and
Chief Executive Officer
Date: August 11, 2005