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First Quarter Highlights
- Revenues $3.4 million
- Book-to-bill substantially higher than one; order backlog
grows for second consecutive quarter
- Gross margin reaches 44%, similar as first quarter 2008 and
up from 34% in fourth quarter 2008
- Non-GAAP operating loss narrows to $1.6 million; GAAP
operating loss narrows to $1.8 million
- Positive impact of comprehensive efficiency measures,
stronger US dollar and reversal of provisions
- Reiterate aim to achieve non-GAAP breakeven in the second
half of 2009
Financial Results
Revenues for the first quarter of 2009 totaled
Gross margin for the first quarter 2009 totaled to 44%, compared to the 44% in the first quarter of 2008, and 34% margin in the fourth quarter 2008.
Non-GAAP operating loss for the first quarter of 2009 totaled
GAAP operating loss for the first quarter of 2009 totaled
Cash, cash equivalents, and marketable bonds and securities as of
ECtel's non-GAAP net income differs from results reported under U.S.
GAAP. This is due to adjustments made for amortization of acquisition related
intangible assets, share-based compensation expenses, and the impact of the
permanent impairment charge and recovery related to certain securities in
"The current environment and need for revenue assurance and management
solutions is supporting continuing demand for our products, although we are
experiencing longer product implementation cycles with customers" commented
"While our firm order backlog grew significantly this quarter, the macro climate took its toll on certain of our customers resulting in payment collection issues. We believe that payment will be received during this year, and are therefore working closely with our customers to help them navigate their liquidity issues," added Mr. Weinstein. "Looking ahead, we aim to leverage this growing demand to increase backlog and visibility. We remain committed to meet our goal of achieving non-GAAP break-even in the second half of 2009, both as the recent orders translate into revenues, and as we continue to very prudently manage expenses, while preserving cash where possible."
Conference call
ECtel management will host a teleconference later today at
From the United States: 1-866-345-5855
From Israel: 03-918-0610
From the United Kingdom: 0800-4048-418
All other international callers: +972-3-918-0610
A Webcast replay of the earnings call will be available after the call on the Company's web site at: http://www.ectel.com.
About ECtel Ltd.
ECtel (NASDAQ:ECTX) is a leading global provider of Integrated Revenue
Management(TM) (IRM(TM)) solutions for communications service providers. A
pioneering market leader for nearly 20 years, ECtel offers carrier-grade
solutions that enable wireline, wireless, converged and next generation
operators to fully manage their revenue and cost processes. ECtel serves
prominent Tier One operators, and has more than 100 implementations in over
50 countries worldwide. Established in 1990, ECtel maintains offices and
presence in the Americas,
ECtel Forward-Looking Statement
Certain statements contained in this release contain forward-looking
information with respect to plans, projections or future performance and
products of the Company, the occurrence of which involves certain risks and
uncertainties. Although we believe the expectations reflected in such
forward-looking statements are based upon reasonable assumptions, we can give
no assurance that our expectations will be obtained or that any deviations
will not be material. Such statements involve risks and uncertainties that
may cause future results to differ from those anticipated. These risks
include, but are not limited to, the effects of general economic conditions,
the current slow-down in expenditures by telecom operators, adverse effects
of market competition and the impact of competitive pricing and offerings,
the possible non-reoccurrence of sales to existing customers, the possible
inability to recognize revenue in future periods as anticipated, the
unpredictability of the telecom market, product and market acceptance risks,
ability to complete development and market introduction of new products,
fluctuations in quarterly and annual results of operations, dependence on
several large customers, commercialization and technological difficulties,
risks related to our operations in
ECtel Ltd.
Consolidated Balance Sheets
$ in thousands
March 31, December 31,
2009 2008
Assets
Current assets
Cash and cash equivalents 7,011 8,452
Short-term investments 2,544 1,011
Receivables:
Trade, net 10,290 10,904
Other 892 1,177
Related parties 302 247
Work in progress 559 475
Inventories 2,507 2,247
Total current assets 24,105 24,513
Long-term marketable securities 5,233 8,172
Long-term other assets 901 1,193
Property, plant and equipment, net 2,180 2,282
Goodwill 12,796 12,792
Other intangible assets, net 762 812
Total assets 45,977 49,764
Liabilities and Shareholders' Equity
Current liabilities
Trade payables 4,258 5,126
Related parties 13 31
Advances from customers 543 596
Other payables and accrued liabilities 5,797 6,707
Total current liabilities 10,611 12,460
Long-term liabilities
Liability for employee severance benefits 1,531 2,018
Total liabilities 12,142 14,478
Total shareholders' equity, net 33,835 35,286
Total liabilities and shareholders' equity 45,977 49,764
ECtel Ltd.
Consolidated Statements of Operations - GAAP
$ in thousands except share and per share data
Three months ended Three months
ended
March 31, December 31,
2009 2008 2008
Revenues 3,382 6,505 4,768
Cost of revenues 1,898 3,654 3,161
Gross profit 1,484 2,851 1,607
Research and development
costs, net 789 1,189 987
Selling and marketing
Expenses 1,437 1,747 1,793
General and administrative
expenses 960 1,850 2,021
Amortization of
acquisition-related
intangible assets 50 23 50
Operating loss (1,752) (1,958) (3,244)
Financial income, net 135 241 66
Other income, net - 430 (236)
Loss before taxes (1,617) (1,287) (3,414)
Income tax (expense) benefit - - (20)
Net loss (1,617) (1,287) (3,434)
Basic and diluted loss per
Share (0.10) (0.08) (0.21)
Weighted average number of
shares outstanding used to
compute basic and diluted
loss per share 16,281,898 16,686,401 16,281,898
ECtel Ltd.
Reconciliation of GAAP to non-GAAP PresentationTo supplement the consolidated financial results prepared in accordance with GAAP, we include adjusted Net Income (Loss), adjusted Basic Net Earnings (Loss) Per Share and adjusted Diluted Net Earnings (Loss) Per Share, which are non-GAAP financial measures. These non-GAAP financial measures consist of GAAP financial measures adjusted for amortization of acquisition-related intangible assets, share-based compensation expenses and the impact of the permanent impairment charge related to certain securities.
These non-GAAP financial measures exclude the effects of aforesaid elements because we believe these excluded costs are not related to our operating performance and measures. Also, it provides consistent and comparable measures to help investors understand our current and future operating performance that our management uses as a basis for planning and forecasting future periods.
These non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies and should not be regarded as a replacement for corresponding GAAP measures.
The following table reconciles adjusted Net Income (Loss), adjusted Basic Net Earnings (Loss) Per Share and adjusted Diluted Net Earnings (Loss) Per Share to Net Income (Loss), Basic Net Earnings (Loss) Per Share and Diluted Net Earnings (Loss) Per Share, and the line items contributing to such figures, respectively, in each case the most directly comparable GAAP measure ($ in thousands, except share and per share data).
Three months ended
March 31, 2009
GAAP Adj. NON-GAAP
Revenues 3,382 3,382
Cost of revenues 1,898 (8) (*) 1,890
Gross profit 1,484 8 1,492
Research and
development costs, net 789 - 789
Selling and
marketing expenses 1,437 (28) (*) 1,409
General and administrative
expenses 960 (83) (*) 877
Amortization of
acquisition-related
intangible assets
50 (50) (**) -
Operating loss (1,752) 169 (1,583)
Financial income, net 135 135
Other income (expenses) - - -
Income tax expenses - - -
Net loss (1,617) 169 (1,448)
Basic and diluted
loss per share (0.10) (0.09)
Weighted average
number of shares
outstanding used to
compute basic and
diluted loss per share 16,281,898 16,281,898
- Table Continued -
Three months ended
December 31, 2008
GAAP Adj. NON-GAAP
Revenues 4,768 4,768
Cost of revenues 3,161 (8) (*) 3,153
Gross profit 1,607 8 1,615
Research and
development costs, net 987 - 987
Selling and
marketing expenses 1,793 (27) (*) 1,766
General and administrative
expenses 2,021 (186) (*) 1,835
Amortization of
acquisition-related
intangible assets
50 (50) (**) -
Operating loss (3,244) 271 (2,973)
Financial income, net 66 - 66
Other income (expenses) (236) 236 -
Income tax expenses (20) - (20)
Net loss (3,434) 507 (2,927)
Basic and diluted loss per
share (0.21) (0.18)
Weighted average
number of shares
outstanding used to
compute basic and
diluted loss per share 16,281,898 16,281,898
(*) Share-based compensation expenses
(**) Amortization of other assets related to Telesoft and Compwise
ECtel Ltd.
Consolidated Statements of Cash Flows
$ in thousands
Three months ended Three months
ended
March 31, December 31,
2009 2008 2008
Cash flows from operating activities
Net loss for the period (1,617) (1,287) (3,434)
Adjustments to reconcile net loss to
cash used in operating activities:
Depreciation and amortization 179 137 178
Loss on sale of long-term marketable
securities - 20 74
Loss on disposal of property, plant
and equipment - 20 -
Premium amortization of long-term
marketable securities - (21) -
Decrease in trade receivables 610 840 850
Decrease (increase) in other
receivables 198 (150) 117
Share-based compensation expenses 119 136 221
Decrease (increase) in inventories (260) (113) 221
Increase in work in progress (84) (695) (111)
Increase (decrease) in trade payables (860) 655 784
Increase (decrease) in advances from
customers (53) 145 (25)
Decrease (increase) decrease in
related parties, net (73) (108) 143
Increase (decrease) in other payables
and accrued liabilities (740) 57 (1,054)
Impairment of Auction Rate Securities - - 236
Increase (decrease) in liability for
employee severance benefits, net (295) 116 125
Net cash used in operating activities (2,876) (248) (1,675)
ECtel Ltd.
Consolidated Statements of Cash Flows (cont'd)
$ in thousands
Three months ended Three months
ended
March 31, December 31,
2009 2008 2008
Cash flows from investing
activities
Investment in short-term
investments, net - 8,130 -
Investment in property,
plant and equipment (35) (49) (96)
Long-term deposits (funding)
withdrawal 17 (9) 8
Proceeds from maturity
of long-term
marketable securities 3,000 2,180 10,895
Investment in long-term
Marketable securities (1,547) (7,100) (4,170)
Net cash provided by
Investing activities 1,435 3,152 6,637
Cash flows from financing
activities
Repurchase of shares - - (320)
Net cash provided by financing
activities - - (320)
Net increase (decrease) in
cash and cash equivalents (1,441) 2,904 4,642
Cash and cash equivalents at
beginning of the period 8,452 5,668 3,810
Cash and cash equivalents
at end of the period 7,011 8,572 8,452
Company Contacts:
Mickey Neumann, Senior Vice President and CFO
Tel: +972-3-9002115
Email: Mickeyne@ectel.com
ir@ectel.com
IR Contacts:
Ehud Helft \ Kenny Green
GK Investor Relations
Tel: +1-617-418-3096 \ +1-646-201-9246
Email: info@gkir.com
SOURCE ECtel Ltd
