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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 2004
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- ____________
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MER Telemangement Solutions Ltd.
6-K Items
1. Press Release re MTS Reports Second Quarter 2004 Results dated August 4,
2004.
ITEM 1
Press Release Source: MTS - Mer Telemanagement Solutions Ltd.
MTS Reports Second Quarter 2004 Results
Wednesday August 4, 9:45 am ET
Continues Investments in Sales, Marketing and R&D
RA'ANANA, Israel, Aug. 4 /PRNewswire-FirstCall/ -- MTS - Mer Telemanagement
Solutions Ltd. (Nasdaq: 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 second quarter
of 2004.
Revenues for the second quarter were $2.0 million compared with $2.2 million for
the second quarter of 2003. Revenues for the first six months of 2004 were
relatively flat compared to the prior year's period at $4.4 million.
Net loss for the quarter was $0.9 million or $(0.20) per share, compared with a
net loss of $10,000, or $0.00 per share, for the second quarter of 2003. Net
loss for the six-month period of 2004 was $1.1 million or $(0.24) per share
compared to net income of $4,000 or $0.00 per share for the same period in 2003.
Eytan Bar, MTS's President and Chief Executive Officer commented: "Although
disappointing, the decrease in revenues for the quarter was a result of the
continued implementation of our turnaround plan. The Company's new focus on
larger and higher revenues generating enterprise and service provider solutions
has extended our sales cycle. This revenue decrease and our continued
investments in sales, marketing and research and development have impacted
bottom line results for the quarter."
The Company's gross profit for the second quarter was $1.5 million compared to
$1.8 million in the second quarter of 2003. Six-month gross profit was $3.3
million compared to $3.5 million in the prior year's period.
During the second quarter, the Company's investment in research and development
totaled $0.6 million, an increase from $0.4 million for the second quarter of
2003. Research and development expenses for the first six-months of 2004 were
$1.1 million compared to $0.8 million in the 2003 period.
Selling and marketing expenses for the quarter increased to $1.4 million from
$1.1 million in the prior year's quarter. Six-month selling and marketing
expenses were $2.5 million compared to $2.0 million for the first six months of
2003.
"We have added a total of 27 new employees across research and development,
sales and professional services over the course of the quarter," noted Mr. Bar.
"Our continued investments in these areas are part of our strategy to achieve a
robust and comprehensive product offering, a sales force targeted to our key
markets and enhanced customer service capabilities."
During the quarter, MTS announced the expansion of its product offering to
include billing, rating and customer care. "Integrating these new functions into
our existing solutions, created a unique full-featured, cost-effective
Operations Support Systems and Billing Support Systems solution for service
providers and carriers" stated Mr. Bar.
Operating loss for the quarter totaled $970,000 compared with $88,000 for the
second quarter of 2003. Operating loss for the six-month period totaled $1.2
million compared to $0.3 million for the same period in 2003.
Yossi Brikman, Corporate COO & CFO, noted that the Company ended the quarter
with approximately $10.0 million in cash and cash equivalents, including
marketable securities.
"We continue to execute our turnaround strategy and invest in the business,"
concluded Mr. Bar. "We are adding to our global sales force, extending our
product capabilities, building upon our professional services platform and
expanding partner and reseller agreements. We remain committed to the enterprise
and service provider markets and pursuing new contracts. We are optimistic as we
look to the future for MTS."
The Company will conduct a teleconference to discuss the results today,
Wednesday, August 4th, at 11:00 AM Eastern Time (18:00 Israel Time). To
participate please dial 1-800-792-0846 from the US or Canada (toll free),
1-800-945-1221 From Israel (toll free), or +1-706-634-1485 from other locations
approximately 5 minutes prior to the starting time. A replay of the call will be
available from 2:00pm ET on Wednesday, August 4, 2004, until 11:00pm ET on
Wednesday, August 11. To access the replay please dial 1-800-642-1687 from the
US or Canada (toll free), 1-800-945-8731 from Israel (toll free), or
+1-706-645-9291 from other locations.
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
U.S., 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 stock exchange (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.
MER TELEMANAGEMENT SOLUTIONS LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
June 30, December 31,
2004 2003 2003
Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $8,461 $8,775 $8,684
Marketable securities 1,498 1,532 1,644
Trade receivables, net 1,069 1,097 1,391
Other accounts receivable
and prepaid expenses 580 528 566
Inventories 193 228 193
Total current assets 11,801 12,160 12,478
LONG-TERM INVESTMENTS:
Investment in an affiliate 1,760 1,528 1,859
Long-term loans,
net of current maturities 73 109 95
Severance pay fund 565 607 564
Other investments 371 376 368
Total long-term investments 2,769 2,620 2,886
PROPERTY AND EQUIPMENT, NET 460 552 482
OTHER ASSETS:
Goodwill 2,025 2,025 2,025
Other intangible assets, net 128 283 206
Deferred income taxes 105 173 105
Total other assets 2,258 2,481 2,336
Total assets $17,288 $17,813 $18,182
MER TELEMANAGEMENT SOLUTIONS LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share data)
June 30, December 31,
2004 2003 2003
Unaudited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term loans $4 $8 $8
Trade payables 311 400 393
Accrued expenses and
other liabilities 1,722 1,372 1,421
Deferred revenues 1,218 1,173 1,219
Total current liabilities 3,243 2,953 3,041
LONG-TERM LIABILITIES:
Long-term loans,
net of current maturities - 4 -
Accrued severance pay 647 785 677
Total long-term liabilities 647 789 677
SHAREHOLDERS' EQUITY:
Share capital -
Ordinary shares of NIS 0.01 par
value - Authorized:
12,000,000 shares; Issued: 4,648,804
and 4,631,471 shares at June 30, 2004
and December 31, 2003, respectively;
Outstanding: 4,641,804 and
4,624,471 shares at June 30, 2004
and December 31, 2003, respectively 14 14 14
Additional paid-in capital 12,638 12,450 12,603
Treasury shares (20) - (20)
Accumulated other comprehensive
income (loss) 100 (90) 87
Retained earnings 654 1,697 1,780
Total shareholders' equity 13,386 14,071 14,464
Total liabilities and
shareholders' equity $17,288 $17,813 $18,182
MER TELEMANAGEMENT SOLUTIONS LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share data)
Six months Three months Year
ended ended ended
June 30, June 30, December 31,
2004 2003 2004 2003 2003
Unaudited
Revenues from products
and services $4,351 $4,433 $1,992 $2,193 $9,230
Cost of revenues from
products and services 1,047 951 506 411 1,849
Gross profit 3,304 3,482 1,486 1,782 7,381
Operating expenses:
Research and
development 1,103 827 569 387 1,825
Selling and marketing 2,522 1,979 1,397 1,061 3,916
General and
administrative 887 905 490 422 1,830
Total operating
expenses 4,512 3,711 2,456 1,870 7,571
Operating loss (1,208) (229) (970) (88) (190)
Financial income
(expenses), net 19 38 (8) 21 124
Other income
(expenses), net (30) 6 2 6 6
Loss before taxes
on income (1,219) (185) (976) (61) (60)
Taxes on income 2 (2) 2 (2) 198
(1,221) (183) (978) (59) (258)
Equity in earnings
of affiliate 95 187 49 49 345
Net income (loss) $(1,126) $4 $(929) $(10) $87
Net earnings (loss) per share:
Basic and diluted net
earnings (loss)
per Ordinary share $(0.24) $ - $(0.20) $ - $0.02
Weighted average
number of Ordinary
shares used in
computing basic
net earning (loss)
per share 4,629,082 4,633,666 4,633,471 4,619,538 4,617,099
Weighted average
number of Ordinary
shares used in
computing diluted
net earning (loss)
per share 4,629,082 4,633,666 4,633,471 4,619,538 4,628,249
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/Yossi Brikman
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Yossi Brikman
Chief Financial Officer
Date: August 4, 2004