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 November 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 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 Third Quarter 2005 Financial Results
dated November 14, 2005.
ITEM 1
Press Release Source: Mer Telemanagement Solutions Ltd.
MTS Reports Third Quarter 2005 Financial Results
Monday November 14, 7:00 am ET
- Revenues Rise 21% Year-Over-Year -
RA'ANANA, Israel, Nov. 14 /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 third quarter
ended September 30, 2005.
Revenues for the third quarter were $3.0 million, compared to $2.49 million
reported in the third quarter of 2004, an increase of 21%.
Net loss for the quarter was $698,000 ($0.13 basic and diluted net loss per
ordinary share), compared to a net loss of $716,000 ($0.15 basic and diluted net
loss per ordinary share) for the third quarter of 2004. Additionally, net loss
for the third quarter was an improvement from the second quarter of 2005, when
the net loss was $1.15 million ($0.24 basic and diluted net loss per ordinary
share).
Eytan Bar, President and Chief Executive Officer, commented, "MTS continued to
see positive revenue growth in the third quarter, driven by increased sales of
our Interconnect and Billing solutions to the service provider and carrier
markets and our Telecommunications Expense Management (TEM) solutions for the
enterprise market. In addition, we improved our bottom line performance.
"MTS' new solutions, such as the Interconnect Billing and Invoice Management
solution, will provide the cornerstone for strong growth in the future,"
continued Mr. Bar. "Our pipeline of orders continues to grow, and the feedback
we are receiving from customers and channel partners is very positive. The last
five consecutive quarters of revenue growth reinforces our conviction that MTS
has the right strategy for the future."
Gross profit for the third quarter rose 18% to $2.1 million, which compares to
gross profit of $1.8 million reported in the third quarter of 2004 and a 10%
increase over the $1.9 million reported in the second quarter of 2005. The
improvement in gross profit is as the result of increased revenues from products
and services.
Research and development expenses increased three-fold to $1.3 million compared
to the $414,000 (after a one-time R&D capitalization of $386,000) reported in
the third quarter of 2004, and rose 11% over the $1.2 million reported in the
second quarter of this year. The sharp year-over-year increase in R&D expenses
relates primarily to the continued integration of the TeleKnowledge R&D group as
well as to the Company's continuing investment in product development.
Selling and marketing expenses were $984,000 in the third quarter, reflecting a
44% decline year-over-year, compared to $1.8 million reported in the third
quarter of 2004, and a 28% decline compared to the second quarter of 2005. 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 vendors for various
initiatives.
Shlomi Hagai, Corporate COO & CFO, stated, "MTS ended the third quarter with a
healthy, accumulated backlog of orders of approximately $1.5 million. We believe
that our commitment to monitor and maintain expenses will allow us to continue
to improve our bottom line performance going forward."
MTS' cash and cash equivalents, including marketable securities, were $3.83
million as of September 30, 2005. The Company improved its cash position in the
third quarter through private placement of ordinary shares and warrants that
raised $2.6 million (net of issuance costs of approximately $200,000).
"During the third quarter, we raised cash to allow us to further execute our
growth strategy and to fund expanding activities in R&D and sales and marketing
in the future. Our improved third quarter results demonstrate that our
investment in these operational activities is paying off, and we believe that
continued investment will drive future growth and ultimately improved operating
results," concluded Mr. Hagai.
Nine Months Results
Revenues for the first nine months of FY 2005 were $8.55 million, compared to
$6.84 million reported in the first nine months of FY 2004, an increase of 25%.
Net loss for the period was $3.9 million ($0.79 basic and diluted net loss per
ordinary share), compared to a net loss of $1.8 million ($0.40 basic and diluted
net loss per ordinary share) in the comparable period of FY 2004.
Conference Call Information
MTS will conduct a teleconference to discuss the third quarter results on
Monday, November 14, 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 Monday, November
14, 2005, until 11:59 PM ET on Monday, November 21. 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
#1707145.
About MTS
Mer Telemanagement Solutions Ltd. is a global provider of business support
systems (BSS) for comprehensive telecommunication management and customer care &
billing solutions. MTS' BSS 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 Capital Market (symbol MTSL). 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,
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
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
Three months ended Nine months ended Year ended
September 30, September 30, December 31,
2005 2004 2005 2004 2004
Unaudited Audited
Revenues from
products
and services $3,013 $2,485 $8,551 $6,836 $9,413
Cost of revenues
from products
and services 885 674 2,592 1,721 2,814
Gross profit 2,128 1,811 5,959 5,115 6,599
Operating expenses:
Research and
development, net 1,294 414 3,804 1,517 2,362
Selling and
marketing 984 1,762 3,881 4,284 6,300
General and
administrative 588 532 2,310 1,419 2,101
Total operating
expenses 2,866 2,708 9,995 7,220 10,763
Operating loss (738) (897) (4,036) (2,105) (4,164)
Financial income
(expenses), net (9) 27 21 46 78
Other income
(expenses), net 1 15 75 (15) -
Loss before taxes
on income (746) (855) (3,940) (2,074) (4,086)
Taxes on income - 1 - 3 266
(746) (856) (3,940) (2,077) (4,352)
Equity in earnings
of affiliate 48 140 59 235 225
Net loss $(698) $(716) $(3,881) $(1,842) $(4,127)
Net loss per share:
Basic and diluted
net loss per
Ordinary share $(0.13) $(0.15) $(0.79) $(0.40) $(0.89)
Weighted average
number of Ordinary
shares used in
computing basic
and diluted loss
per share 5,306,565 4,638,004 4,885,710 4,629,523 4,634,413
INTERIM CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
September 30, December 31,
2005 2004 2004
Unaudited Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $3,712 $7,459 $3,814
Marketable securities 118 1,443 1,057
Trade receivables, net 1,888 1,320 1,348
Other accounts receivable
and prepaid expenses 390 674 391
Inventories 161 189 178
Total current assets 6,269 11,085 6,788
LONG- TERM INVESTMENTS:
Investment in an affiliate 1,738 1,926 2,119
Long-term loans, net of
current maturities 9 70 45
Severance pay fund 480 548 535
Other investments 387 373 373
Total long-term investments 2,614 2,917 3,072
PROPERTY AND EQUIPMENT, NET 573 539 581
OTHER ASSETS:
Goodwill 3,626 2,025 3,415
Other intangible assets, net 1,081 475 1,394
Deferred income taxes 73 105 73
Total other assets 4,780 2,605 4,882
Total assets $14,236 $17,146 $15,323
INTERIM CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share and per share data)
September 30, December 31,
2005 2004 2004
Unaudited Audited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term loans $ - $2 $ -
Trade payables 688 839 719
Accrued expenses and other liabilities 2,396 1,478 2,042
Deferred revenues 968 1,450 1,254
Total current liabilities 4,052 3,769 4,015
ACCRUED SEVERANCE PAY 685 680 651
SHAREHOLDERS' EQUITY:
Share capital -
Ordinary shares of NIS 0.01 par
value - Authorized: 12,000,000
shares; Issued: 5,734,304 shares
at September 30, 2005 and
4,648,804 shares at December 31,
2004; Outstanding: 5,723,504
shares at September 30, 2005
and 4,638,004 at December 31,
2004 17 14 14
Additional paid-in capital 15,917 12,654 12,879
Treasury shares (29) (29) (29)
Deferred stock compensation (159) - (208)
Accumulated other comprehensive
income (loss) (19) 120 348
Accumulated deficit (6,228) (62) (2,347)
Total shareholders' equity 9,499 12,697 10,657
Total liabilities and
shareholders' equity $14,236 $17,146 $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: November 14, 2005