MTS Announces Third Quarter 2013 Financial Results

              MTS Announces Third Quarter 2013 Financial Results

MTS Reports Operating Profit of $391,000 for the Third Quarter

PR Newswire

RA'ANANA, Israel, Nov. 7, 2013

RA'ANANA, Israel, Nov. 7, 2013 /PRNewswire/ --MTS – Mer Telemanagement
Solutions Ltd. (Nasdaq Capital Market: MTSL), a global provider of Mobile
Virtual Network Enabler (MVNE), Mobile Money and telecommunications expense
management (TEM) solutions and services, today announced its financial results
for the third quarter of 2013.

Revenues for the third quarter of 2013 were $3.0 million, compared with $3.4
million in revenues during the same quarter last year and revenues of $3.1
million in the second quarter of 2013. The Company's operating profit was
$391,000 in the third quarter of 2013 compared to an operating profit of
$697,000 for the third quarter of 2012 and $377,000 in the second quarter of
2013. Net income for the third quarter was $274,000 or $0.06 per diluted
share, compared with net income of $245,000 or $0.05 per diluted share in the
third quarter of 2012 and $309,000 or $0.07 per diluted share in the second
quarter of 2013.

Revenues for the nine month period ended September 30, 2013 were $9.4 million,
compared with $9.6 million for the comparable period in 2012. Net income for
the nine months ended September 30, 2013 was $927,000 or $0.20 per diluted
share, compared with net income of $1,015,000 or $0.22 per diluted share in
the comparable period in 2012.

As of September 30, 2013, we had cash and marketable securities of $5.8
million as compared to $4.3 million as at December 31, 2012. During the nine
month period ended September 30, 2013 we had operating cash flow of $1.4
million, as compared to $1.3 million during the nine month period ended
September 30, 2012.

"As previously announced, during 2013 we signed up four new MVNO customers in
the U.S. for our MVNE managed services model and two Mobile Money customers in
Africa. The contracts with the MVNO and Mobile Money customers provide for
revenues based on volume ("pay as you grow" model), with a minimum monthly
revenues over a contract period. We expect that some of these signed up
contracts will become operational by the end of this year. None of the
contracts, on a standalone basis, provides for material minimum deliverables"
said Eytan Bar, CEO of MTS.

"We are continuing to see opportunities in the TEM, MVNE and Mobile Money
markets, both directly and through partners, and are working diligently to
convert these opportunities into new contracts. In parallel, we are closely
monitoring our operating expenses and are making the necessary adjustments to
our staffing and expenses." concluded Mr. Bar. 

About MTS

Mer Telemanagement Solutions Ltd. (MTS) is a worldwide provider of Telecom
Expense Management (TEM) and Mobile Virtual Network Enablers (MVNE) and Mobile
Money services and solutions used by mobile service providers.

The MTS TEM Suite solution enables enterprises to gain visibility and control
of strategic fixed and mobile telecom assets, services and IT security
policies that drive key business processes and crucial competitive advantage.
The MTS cloud, consulting and managed services solutions -- including
integrated management of invoices, assets, wireless, optimization, usage,
mobile device management (MDM), procurement, help desk and bill payment ,along
with dashboards and reporting tools -- provide professionals at every level of
the organization with rapid access to concise, actionable data.

MTS's solutions for telecommunication service providers are used worldwide by
wireless and wireline service providers for interconnect billing, partner
revenue management and for charging and invoicing their customers. MTS
provides MVNE service to allow quick launch of new MVNO initiatives in a pay
as you grow and revenue share models. In addition, MTS has pre-configured
solutions to support emerging carriers of focused solutions (e.g. IPTV, VoIP,
WiMAX, MVNO) to rapidly install a full-featured and scalable solution.

Headquartered in Israel, MTS markets its solutions through wholly owned
subsidiaries in the United States, Hong Kong and distribution channels. 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: 

Alon Mualem
CFO
Tel: +972-9-7777-540
Email: Alon.Mualem@mtsint.com



CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
                                       September 30,     December 31,
                                       2013              2012
ASSETS
CURRENT ASSETS:
Cash and cash equivalents              $    5,674    $        4,190
Restricted cash                        146               38
Restricted marketable securities       154               139
Trade receivables, net                 738               1,066
Deferred income tax                    77                371
Other accounts receivable and prepaid  223               175
expenses
Total current assets                   7,012             5,979
LONG-TERM ASSETS:
Severance pay fund                     745               658
Other investments                      -                 4
Total long-term assets                 745               662
PROPERTY AND EQUIPMENT, NET            199               245
OTHER ASSETS:
Goodwill                               3,479             3,479
Other intangible assets, net           614               759
Total other assets                     4,093             4,238
Total assets                           $     12,049  $       11,124



CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share and per share data)
                                 September 30,        December 31,
                                 2013                  2012
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES:
Trade payables                   $       214     $        279
Accrued expenses and other       2,095                 2,393
liabilities
Deferred revenues                1,763                 1,648
Liabilities of discontinued      435                   435
operations
Total current liabilities        4,507                 4,755
LONG-TERM LIABILITIES -
Accrued severance pay            864                   800
COMMITMENTS AND CONTINGENT
LIABILITIES
SHAREHOLDERS' EQUITY:
Share capital                    13                    13
Additional paid-in capital       20,278                20,120
Treasury shares                  (29)                  (29)
Accumulated other comprehensive  29                    5
income
Accumulated deficit              (13,613)              (14,540)
Total shareholders' equity       6,678                 5,569
Total liabilities and            $      12,049   $        11,124
shareholders' equity



CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
                             Nine months ended       Three months ended

                             September 30,           September 30,
                             2013        2012        2013        2012
Revenues:
Services                     $  7,846  $  7,026  $  2,520  $  2,515
Product sales                1,511       2,622       440         870
Total revenues               9,357       9,648       2,960       3,385
Cost of revenues:
Services                     2,628       2,458       799         846
Product sales                599         887         172         269
Total cost of revenues       3,227       3,345       971         1,115
Gross profit                 6,130       6,303       1,989       2,270
Operating expenses:
Research and development,    1,019       1,003       351         299
net of grants from the OCS
Selling and marketing        1,576       1,600       448         557
General and administrative   2,347       2,206       799         717
Total operating expenses     4,942       4,809       1,598       1,573
Operating profit             1,188       1,494       391         697
Financial income             68          (20)        31          1
(expenses), net
Income before taxes on       1,256       1,474       422         698
income
Tax on income, net           329         459         148         453
Net income                   $  927    $  1,015  $  274    $  245
Net Income per share:
Basic net income per         $  0.20   $  0.23   $  0.06   $  0.05
Ordinary share
Dilute net income per        $  0.20   $  0.22   $  0.06   $  0.05
Ordinary share
Weighted average number of
Ordinary shares used in      4,657,507   4,462,807   4,665,557   4,470,306
 computing basic net
income per share
Weighted average number of
Ordinary shares used in      4,718,788   4,525,694   4,679,174   4,533,193
 computing and diluted
net income per share

SOURCE MTS - Mer Telemanagement Solutions Ltd.

Website: http://www.mtsint.com