ROSH HA'AYIN, Israel, November 5 /PRNewswire-FirstCall/ -- ECtel Ltd.ECTX, a leading global provider of Integrated Revenue Management(TM) (IRM(R)) solutions, today reported its financial results for the thirdquarter of 2009.
(Logo: http://www.newscom.com/cgi-bin/prnh/20010807/FLTU015LOGO )
Recent Developments
On October 22, 2009, the Company announced that it has entered into adefinitive merger agreement for the acquisition of the Company by cVidyaNetworks Inc., a global leader in telecom revenue management, riskmanagement, and dealer management solutions, in a cash transaction valued at$21 million (less the Company's transaction-related expenses of approximately$430 thousand). Consequently, the Company recorded a non-cash $12.8 milliongoodwill impairment charge under operating expenses.
Third Quarter Financial Results
Revenues for the third quarter of 2009 totaled $4.2 million, compared to$7.1 million in the third quarter of 2008, and compared to $5.7 million inthe second quarter of 2009. Gross margin for the third quarter of 2009totaled 53%, compared to 50% in the third quarter of 2008, and compared to60% in the prior quarter.
Non-GAAP operating loss for the third quarter of 2009 totaled $643thousand, compared to a non-GAAP operating loss of $1.7 million in the thirdquarter of 2008, and compared to a non-GAAP operating income of $65 thousandin the second quarter of 2009.
Non-GAAP net income for the third quarter of 2009 totaled $760 thousand,or $0.05 per share, compared to a non-GAAP net loss of $1.6 million, or $0.10per share in the third quarter of 2008, and compared to a non-GAAP net incomeof $51 thousand, or $0.00 per share, in the second quarter of 2009.
GAAP operating loss for the third quarter of 2009 totaled $13.6 million,compared to an operating loss of $2.0 million in the third quarter of 2008,and compared to an operating loss of $0.1 million in the prior quarter. GAAPoperating loss for the quarter included the said $12.8 million goodwillimpairment charge. GAAP net loss for the third quarter of 2009 totaled $12.2million, or $0.75 loss per share, compared to a $1.9 million net loss, or$0.11 loss per share, in the third quarter of 2008, and compared to $0.2million net loss, or $0.01 loss per share, in the second quarter of 2009.GAAP net loss for the quarter included the recognition of an unrecognized taxbenefit of approximately $1.4 million (of which approximately $0.2 million isinterest related to the unrecognized tax benefit, recorded under financialincome), due to the settlement of tax matters.
Cash, cash equivalents, and marketable bonds and securities as ofSeptember 30, 2009 were $14.5 million or $0.89 per share, compared to $14.3million or $0.88 per share as of June 30, 2009.
About ECtel Ltd.
ECtel ECTX is a leading global provider of Integrated RevenueManagement(TM) (IRM(R)) solutions for communications service providers. Apioneering market leader for nearly 20 years, ECtel offers carrier-gradesolutions that enable wireline, wireless, converged and next generationoperators to fully manage their revenue and cost processes. ECtel servesprominent Tier One operators, and has more than 100 implementations in over50 countries worldwide. Established in 1990, ECtel maintains offices andpresence in the Americas, Europe and Asia. For more information, visithttp://www.ectel.com. On October 22, 2009, the Company announced that it hasentered into a definitive merger agreement for the acquisition of the Companyby cVidya Networks Inc., a global leader in telecom revenue management, riskmanagement, and dealer management solutions, in a cash transaction valued at$21 million (less the Company's transaction-related expenses that exceed anaggregate amount of US$350,000 plus VAT, currently estimated to be in anapproximate amount of US$430,000). The closing of the transaction is subjectto the approval of ECtel's shareholders, certain regulatory approvals andnotifications and the satisfaction of other customary closing conditions.
Use of Non-GAAP Measures
Non-GAAP operating income (loss) and net income (loss) are measures whichdo not include charges for the goodwill impairment, amortization ofacquisition-related intangible assets and share-based compensation expense.Non-GAAP financial measures are not meant to be considered in isolation or asa substitute for comparable GAAP measures, and should be read only inconjunction with the Company's consolidated financial statements prepared inaccordance with GAAP. The Company's management regularly uses supplementalnon-GAAP financial measures internally to understand, manage and evaluate theCompany's business and make operating decisions. A reconciliation betweennon-GAAP operating income (loss) and net income (loss) and GAAP operatingincome (loss) and net income (loss) is provided in a table immediatelyfollowing the Condensed Statements of Operations.
ECtel Forward-Looking Statement
Certain statements contained in this release contain forward-lookinginformation with respect to plans, projections or future performance andproducts of the Company, the occurrence of which involves certain risks anduncertainties. Although we believe the expectations reflected in suchforward-looking statements are based upon reasonable assumptions, we can giveno assurance that our expectations will be obtained or that any deviationswill not be material. Such statements involve risks and uncertainties thatmay cause future results to differ from those anticipated. These risksinclude, but are not limited to, the effects of general economic conditions,the possible slow-down in expenditures by telecom operators, adverse effectsof market competition and the impact of competitive pricing and offerings,the reoccurrence of sales to existing customers, the ability to recognizerevenue in future periods as anticipated, the unpredictability of the telecommarket, product and market acceptance risks, the ability to completedevelopment and market introduction of new products, fluctuations inquarterly and annual results of operations, dependence on several largecustomers, commercialization and technological difficulties, risks related toour operations in Israel and risks associated with operating businesses inthe international market. These and other risks are discussed at greaterlength in the Company's annual report on Form 20-F and other filings with theSecurities and Exchange Commission. ECtel disclaims any obligation to updatethese forward-looking statements and undertakes no obligation to publiclyrelease any revisions to these forward-looking statements to reflect eventsor circumstances after the date hereof or to reflect the occurrence ofunanticipated events.
ECtel Ltd. Consolidated Balance Sheets $ in thousands September 30 June 30 December 31 2009 2009 2008 Assets Current assets Cash and cash equivalents 7,222 6,126 8,452 Short-term investments 3,554 4,556 1,011 Receivables: Trade, net 9,656 11,006 10,904 Other 707 606 1,177 Related parties 489 487 247 Work in progress 740 308 475 Inventories 2,398 2,931 2,247 Total current assets 24,766 26,020 24,513 Long-term marketable securities 3,688 3,656 8,172 Long-term other assets 1,332 1,240 1,193 Property, plant and equipment, net 2,034 2,122 2,282 Goodwill - 12,796 12,792 Other intangible assets, net 662 712 812 Total assets 32,482 46,546 49,764 Liabilities and Shareholders' Equity Current liabilities Trade payables 4,702 4,545 5,126 Related parties 38 57 31 Advances from customers 994 844 596 Other payables and accrued liabilities 2,867 5,410 6,707 Total current liabilities 8,601 10,856 12,460 Long-term liabilities Liability for employee severance benefits 1,968 1,746 2,018 Total liabilities 10,569 12,602 14,478 Total shareholders' equity, net 21,913 33,944 35,286 Total liabilities and shareholders' equity 32,482 45,977 49,764 ECtel Ltd. Consolidated Statements of Operations $ in thousands except share and per share data Three months Nine months Three months ended ended ended September September June 30 30 30 2009 2008 2009 2008 2009 Revenues 4,187 7,056 13,233 20,216 5,664 Cost of revenues 1,952 3,543 6,102 10,510 2,252 Gross profit 2,235 3,513 7,131 9,706 3,412 Research and development costs 683 1,084 2,081 3,561 609 Selling and marketing expenses 1,298 2,848 4,584 6,860 1,849 General and administrative expenses 1,002 1,502 3,009 5,061 1,047 Goodwill impairment 12,796 - 12,796 - - Amortization of acquisition-related intangible assets 50 50 150 114 50 Operating loss (13,594) (1,971) (15,489) (5,890) (143) Financial income (loss), net 165 72 286 587 (14) Other income (loss), net (*) (1) - (1) 431 - Loss before taxes (13,430) (1,899) (15,204) (4,872) (157) Income tax benefit 1,239 - 1,239 - - Net loss (12,191) (1,899) (13,965) (4,872) (157) Basic loss per share (0.75) (0.11) (0.86) (0.29) (0.01) Diluted loss per share (0.75) (0.11) (0.86) (0.29) (0.01) Weighted average number of shares outstanding used to compute basic (loss) earnings per share 16,281,898 16,557,856 16,281,898 16,557,856 16,281,898 Weighted average number of shares outstanding used to compute diluted (loss) earnings per share 16,281,898 16,557,856 16,281,898 16,557,856 16,281,898 (*) includes $450 thousand gain on sale of patent. ECtel Ltd. Reconciliation of GAAP to Non-GAAP Measures $ in thousands except share and per share data Three months Nine months Three months ended ended ended September September June 30 30 30 2009 2008 2009 2008 2009 GAAP gross profit 2,235 3,513 7,131 9,706 3,412 Stock-based compensation 7 16 22 50 7 Non-GAAP gross profit 2,242 3,529 7,153 9,756 3,419 GAAP operating expenses 15,829 5,484 22,620 15,596 3,555 Stock-based compensation: Research and development costs - 3 - 9 - Selling and marketing expenses 26 135 80 193 26 General and administrative expenses 72 89 280 402 125 Goodwill impairment 12,796 - 12,796 - - Amortization of acquisition-related intangible assets 50 50 150 114 50 Non-GAAP operating expenses 2,885 5,207 9,314 14,878 3,354 GAAP operating loss (13,594) (1,971) (15,489) (5,890) (143) Non-GAAP operating income (loss) (643) (1,678) (2,161) (5,122) 65 GAAP net loss (12,191) (1,899) (13,965) (4,872) (157) Stock-based compensation 105 243 382 654 158 Goodwill impairment 12,796 - 12,796 - - Amortization of acquisition-related intangible assets 50 50 150 114 50 Non-GAAP net income (loss) 760 (1,606) (637) (4,104) 51 Non-GAAP Basic earnings (loss) per share 0.05 (0.10) (0.04) (0.25) 0.00 Non-GAAP Diluted earnings (loss) per share 0.05 (0.10) (0.04) (0.25) 0.00 Weighted average number of shares outstanding used to compute both GAAP and Non-GAAP basic earnings (loss) per share 16,281,898 16,557,856 16,281,898 16,557,856 16,281,898 ECtel Ltd. Consolidated Statements of Cash Flows $ in thousands Three Nine Three months months months ended ended ended September September June 30 30 30 2009 2008 2009 2008 2009 Cash flows from operating activities Net loss for the period (12,191) (1,899) (13,965) (4,872) (157) Adjustments to reconcile net (loss) income to cash provided by (used in) operating activities: Depreciation and amortization 184 200 552 501 189 Goodwill impairment 12,796 - 12,796 - - Loss on sale of long-term marketable securities 25 - 25 20 - Loss on disposal of property, plant and equipment - - - 20 - Premium amortization of long-term marketable securities - - - (21) - Decrease (increase) in trade receivables 1,350 (2,943) 1,244 (3,117) (716) Decrease (increase) in other receivables (101) 1,272 63 485 (34) Share-based compensation expenses 105 243 382 536 158 Decrease (increase) in inventories 533 (194) (151) (221) (424) Decrease (increase) in work in progress (432) 293 (265) (82) 251 Increase (decrease) in trade payables 175 51 (426) (393) 259 Increase (decrease) in advances from customers 150 94 398 (345) 301 Increase in related parties, net (21) (327) (235) (360) (141) Increase (decrease) in other payables and accrued liabilities (2,543) 196 (3,035) 412 248 Increase (decrease) in liability for employee severance benefits, net 135 (29) (597) 164 (437) Net cash provided by (used in) operating activities 165 (3,043) (3,214) (7,273) (503) ECtel Ltd. Consolidated Statements of Cash Flows (cont'd) $ in thousands Three Nine Three months months months ended ended ended September September June 30 30 30 2009 2008 2009 2008 2009 Cash flows from investing activities Investment in short-term investments, net - - (3,544) 8,130 (1,997) Investment in property, plant and equipment (64) (206) (152) (587) (53) Payments in consideration with acquisition of the assets of Compwise - - - (1,313) - Long-term deposits withdrawal (funding) (5) 1 10 47 (2) Proceeds from maturity of long-term marketable securities 1,000 3,016 5,670 8,166 1,670 Investment in long-term marketable securities - - - (8,841) - Net cash provided by (used in) investing activities 931 2,811 1,984 5,602 (382) Cash flows from financing activities Repurchase of shares - (187) - (187) - Net cash used in financing activities - (187) - (187) - Net increase (decrease) in cash and cash equivalents 1,096 (419) (1,230) (1,858) (885) Cash and cash equivalents at beginning of the period 6,126 4,229 8,452 5,668 7,011 Cash and cash equivalents at end of the period 7,222 3,810 7,222 3,810 6,126 Company Contacts: IR Contacts: Mickey Neumann Ehud Helft \ Kenny Green Senior Vice President and CFO GK Investor Relations Tel: +972-3-9002115 Tel: +1-617-418-3096 \ Email: Mickeyne@ectel.com; ir@ectel.com +1-646-201-9246 Email: info@gkir.com
SOURCE ECtel Ltd
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
