SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
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 February 2006
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 F-3
Registration Statement File No. 333-128225 and 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 Fourth Quarter and Fiscal Year 2005 Financial
Results dated February 9, 2006.
ITEM 1
Press Release Source: MTS - Mer Telemanagement Solutions Ltd.
MTS Reports Fourth Quarter and Fiscal Year 2005 Financial Results
Thursday February 9, 7:00 am ET
- Q4 Revenues Rise 17% Year-Over-Year; Full Year Revenues Rise 23%
Year-Over-Year -
RA'ANANA, Israel, Feb. 9 /PRNewswire-FirstCall/ -- MTS - Mer Telemanagement
Solutions Ltd. (Nasdaq: MTSL - News), a global provider of Business Support
Systems (BSS) for comprehensive Telecommunication Management and Customer Care &
Billing solutions, today reported its financial results for the fourth quarter
and fiscal year ended December 31, 2005.
Revenues for the fourth quarter were $3.0 million, compared to $2.58 million
reported in the fourth quarter of 2004, an increase of 17%.
Net loss for the quarter was $335,000 ($0.06 basic and diluted net loss per
ordinary share), compared to a net loss of $2.29 million ($0.49 basic and
diluted net loss per ordinary share) for the fourth quarter of 2004. The
quarterly net loss continued to narrow on a sequential basis, as the Company
reported a net loss of $698,000 in the third quarter of 2005.
Eytan Bar, President and Chief Executive Officer, commented, "During 2005, MTS
made significant progress in improving its fundamental position by delivering
state-of-the-art products and technologies and instituting disciplined cost and
expense management. We ended the year with a solid performance in the fourth
quarter, demonstrating year-over-year improvement in revenues and on the bottom
line.
"We continued to capitalize on opportunities in the enterprise market, and now
have an installed base of more than 100 customers using our new, enhanced
solutions. We also made progress in the service provider market, as the value of
our late 2004 acquisition of TeleKnowledge continued to provide an effective
launching pad for us to penetrate this new vertical market. Our superior and
robust end-to-end solutions uniquely designed to meet service providers' needs
and specifications have received positive reaction and are generating strong
interest from prospects, as they prove beneficial to existing customers and
channel partners.
Mr. Bar concluded, "MTS' targeted market segments -- enterprises and service
providers -- continue to represent significant growth opportunities, driven in
large part by our customers' need to reduce telecommunications expenses and
improve efficiency. The work we did in the past year to enhance and introduce
superior products, as well as the partner relationships we have cultivated over
the years with OEMs and worldwide distributors and resellers convince us that we
are well positioned to capture significant opportunities in the market."
Gross profit for the fourth quarter rose 47% to $2.2 million, which compares to
gross profit of $1.5 million reported in the fourth quarter of 2004 and a 10%
sequential improvement over the $2.0 million reported in the third quarter of
2005. The year-over-year improvement in gross profit is the result of both the
increased revenues from products and services and a decline of direct expenses.
Total operating expenses for the quarter were $2.4 million, which represents a
33% decline year-over-year. The improvement is primarily the result of MTS'
commitment to disciplined cost and expense management.
Research and development expenses rose 13% to $953,000 compared to the $845,000
reported in the fourth quarter of 2004, but declined 15% sequentially from the
$1.12 million reported in the third quarter 2005. The continued year- over-year
increase relates primarily to MTS' continued investment in product development.
R&D expenses for the fourth quarter are net of $130,000 grants from the Israeli'
Office of Chief Scientist that were approved during the fourth quarter of 2005.
Selling and marketing expenses were $916,000 in the fourth quarter, reflecting a
54% decline year-over-year, compared to $2.0 million reported in the fourth
quarter of 2004, and a 7% decline sequentially. The further reduction in selling
and marketing expenses is the result of MTS' focus on investing in growth
markets and targeted geographic areas, as well as the Company's ability to form
partnerships with leading OEMs and vendors for various initiatives.
MTS ended the fourth quarter with a healthy, accumulated backlog of orders of
approximately $2.6 million. The backlog represents orders booked by the Company
but not yet recognized as revenue through the end of 2005.
MTS' cash and cash equivalents, including marketable securities, were $3.32
million as of December 31, 2005.
Shlomi Hagai, Corporate COO & CFO, stated, "MTS has delivered improved top line
performance for the past six quarters and improved the bottom line for the past
three quarters. As a result of these top-line gains, we were able to maintain
our aggressive investment in new product development projects and still improve
bottom line performance. The cash we raised in the third quarter will allow us
to further execute our growth strategy and to fund expanding activities in R&D
and sales and marketing. We expect these investments to produce increased sales
and ultimately improved operating results in 2006."
Full Year 2005 Results
Revenues for the full year were $11.56 million, compared to $9.41 million for
the full year 2004.
Net loss for the full year was $4.2 million ($0.83 basic and diluted net loss
per ordinary share), compared to a net loss of $4.13 million ($0.89 basic and
diluted net loss per ordinary share) for the full year 2004.
Conference Call Information
MTS will conduct a teleconference to discuss the fourth quarter and fiscal year
2005 results on, Thursday February 9, 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), 1-809-457-877 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,
February 9, 2006, until 11:59 PM ET on Thursday, February 16. To access the
replay please, dial 1-800-642-1687 from the US or Canada (toll free), 1-809-
458-731 from Israel (toll free), or 1-706-645-9291 from other locations and
enter conference ID #5040984.
About MTS
Mer Telemanagement Solutions Ltd. (MTS) is a global provider of business support
systems for comprehensive telecommunication management and customer care &
billing solutions. MTS' business support system is a full-featured customized
solution for telecommunications management, Interconnect and customer care &
billing. Its telecommunications expense management solution is used by
corporations and organizations to improve the efficiency and performance of all
telecommunication and information technology operations, and to significantly
reduce associated costs. Its service providers and carriers solutions are used
to support sophisticated billing, web-based self- provisioning, partners
management and interconnect billing.
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, 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
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 Global Consulting Group
Tel: +972-9762-1733 Tel: +1 646-284-9430
Email: Shlomi.Hagai@mtsint.com Email: kprice@hfgcg.com
Mer Telemanagement Solutions Ltd. and Its Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
Three months ended Year ended
December 31, December 31,
2005 2004 2005 2004
Unaudited Audited
Revenues from products and
services $3,012 $2,577 $11,563 $9,413
Cost of revenues from products
and services 848 1,093 3,802 2,814
Gross profit 2,164 1,484 7,761 6,599
Operating expenses:
Research and development, net 953 845 4,395 2,362
Selling and marketing 916 2,016 4,797 6,300
General and administrative 520 682 2,830 2,101
Total operating expenses 2,389 3,543 12,022 10,763
Operating loss (225) (2,059) (4,261) (4,164)
Financial income (expenses), net (49) 32 (28) 78
Other income (expenses), net 6 15 81 -
Loss before taxes on income (268) (2,012) (4,208) (4,086)
Taxes on income 10 263 10 266
(278) (2,275) (4,218) (4,352)
Equity in earnings of
affiliate (57) (10) 2 225
Net loss ($335) ($2,285) ($4,216) ($4,127)
Net loss per share:
Basic and diluted net loss per
Ordinary share ($0.06) ($0.49) ($0.83) ($0.89)
Weighted average number of
Ordinary shares used in
computing basic and dilute
loss per share 5,724,504 4,638,004 5,092,117 4,634,413
Mer Telemanagement Solutions Ltd. and Its Subsidiaries
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
December 31
2005 2004
Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $3,191 $3,814
Marketable securities 132 1,057
Trade receivables (net of allowance
for doubtful accounts of $370 and
$402 at December 31, 2004 and 2005,
respectively) 1,999 1,348
Other accounts receivable and prepaid
expenses 491 391
Inventories 181 178
Total current assets 5,994 6,788
LONG-TERM INVESTMENTS:
Investment in an affiliate 1,615 2,119
Long-term loans, net of current maturities 3 45
Severance pay fund 478 535
Other investments 347 373
Total long-term investments 2,443 3,072
PROPERTY AND EQUIPMENT, NET 571 581
OTHER ASSETS:
Goodwill 3,700 3,415
Other intangible assets, net 993 1,394
Deferred income taxes 115 73
Total other assets 4,808 4,882
Total assets $13,816 $15,323
Mer Telemanagement Solutions Ltd. and Its Subsidiaries
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share and per share data)
December 31
2005 2004
Audited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short term bank credit $ 47 $ -
Trade payables 735 719
Accrued expenses and other
liabilities 2,259 2,042
Deferred revenues 888 1,254
Total current liabilities 3,929 4,015
LONG-TERM LIABILITIES:
Accrued severance pay 713 651
Total long-term liabilities 713 651
SHAREHOLDERS' EQUITY:
Share capital -
Ordinary shares of NIS 0.01 par value
- Authorized: 12,000,000 shares at
December 31, 2004 and 2005; Issued:
4,648,804 and 5,744,304 shares at
December 31, 2004 and 2005,
respectively; Outstanding: 4,638,004
and 5,733,504 shares at December 31,
2004 and 2005, respectively 17 14
Additional paid-in capital 15,966 12,879
Treasury shares (10,800 and 10,800
shares at December 31, 2004 and
2005, respectively) (29) (29)
Deferred stock compensation (142) (208)
Accumulated other comprehensive income (loss) (75) 348
Accumulated deficit (6,563) (2,347)
Total shareholders' equity 9,174 10,657
Total liabilities and shareholders'
equity $13,816 $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
------------
Eytan Bar
President and
Chief Executive Officer
Date: February 9, 2006