SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 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 May, 2009
ECTEL LTD.
(Translation of Registrant`s Name into English)
10 Amal Street
Park Afek
Rosh Ha'ayin 48092
ISRAEL
(Address of Principal Corporate Offices)
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 the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities and 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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Attached hereto and incorporated by reference herein is a press release issued by ECtel Ltd. on May 6, 2009 announcing "ECtel Presents First Quarter 2009 Financial Results". Such press release is hereby incorporated by reference into the Registrant`s Registration Statement on Form S-8, Registration No. 333-127576.
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SIGNATURE
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.
ECTEL LTD.
(Registrant)
By: //s//____________________________________
Michael Neumann
Senior Vice President and
Chief Financial Officer
Dated: May 7, 2009
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Index to Exhibits
Exhibit No. Exhibit
1 Press Release issued May 6, 2009
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ECtel Presents First Quarter 2009 Financial Results
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ROSH HA'AYIN, Israel, May 6, 2009. ECtel Ltd. (NASDAQ: ECTX), a leading global provider of Integrated Revenue Management (TM) (IRM(TM)) solutions, today reported its financial results for the first quarter of 2009.
First Quarter Highlights
o Revenues $3.4 million
o Book-to-bill substantially higher than one; order backlog grows for second consecutive quarter
o Gross margin reaches 44%, similar as first quarter 2008 and up from 34% in fourth quarter 2008
o Non-GAAP operating loss narrows to $1.6 million; GAAP operating loss narrows to $1.8 million
o Positive impact of comprehensive efficiency measures, stronger US dollar and reversal of provisions
o Reiterate aim to achieve non-GAAP breakeven in the second half of 2009
Financial Results
Revenues for the first quarter of 2009 totaled $3.4 million, compared to $6.5 million in the first quarter of 2008, and $4.8 million in the fourth quarter 2008. Despite strong bookings during the first quarter, revenues continued to be impacted by the longer product implementation cycles.
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 $1.6 million, compared to a non-GAAP operating loss of $1.8 million in the first quarter of 2008 and a $3.0 million non-GAAP operating loss in the fourth quarter of 2008. Non-GAAP operating results were positively impacted by initial savings on the efficiency plan instituted in the fourth quarter of last year, a stronger US dollar and the reversal of accounting provisions, mainly for 2008 bonuses which were ultimately not distributed. The non-GAAP net loss for the first quarter of 2009 totaled $1.4 million, or $0.09 per share, compared with a non-GAAP net loss of $1.1 million, or $0.07 per share, in the first quarter of 2008. Non-GAAP net loss for the fourth quarter 2008 totaled $2.9 million, or $0.18 per share.
GAAP operating loss for the first quarter of 2009 totaled $1.8 million, compared to an operating loss of $2.0 million in the first quarter of 2008 and an operating loss of $3.2 million for the fourth quarter of 2008. GAAP net loss for the first quarter of 2009 totaled $1.6 million, or $0.10 per share, compared to a net loss $1.3 million or $0.08 per share in the first quarter of 2008. Net loss for the fourth quarter 2008 totaled $3.4 million or $0.21 per share.
Cash, cash equivalents, and marketable bonds and securities as of March 31, 2009 were $14.8 million or $0.91 per share, compared to $17.6 million or $1.08 per share as of December 31, 2008.
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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 December 2007 and 2008. The accompanying tables provide a full reconciliation from GAAP to Non-GAAP results.
"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 Itzik Weinstein, President and CEO of ECtel. "Revenues for the quarter were on the lower end of expectations. However, the strong pickup in demand enabled us to meet booking targets with five new customers choosing our products, a key achievement in the current climate, with book to bill totaling at well over one."
"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 10:00 am ET (9:00am CT, 7:00am PT, and 5:00pm Israel time) to discuss its first quarter results. Itzik Weinstein President & CEO and Mickey Neumann, Senior Vice President & CFO will co-host the call. To participate in the call, please dial one of the following numbers:
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: 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, Europe and Asia. For more information, visit www.ectel.com
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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 Israel and risks associated with operating businesses in the international market. These and other risks are discussed at greater length in the Company`s annual report on Form 20-F and other filings with the Securities and Exchange Commission. ECtel may elect to update these forward-looking statements at some point in the future, however the Company specifically disclaims any obligation to do so and undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
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 | |
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ECtel Ltd.
Consolidated Balance Sheets
$ in thousands
| March 31, | December 31, | |
| | | |
| | | |
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 | | | |
| | | |
Total current assets | | | |
| | | |
| | | |
Long-term marketable securities | | | |
| | | |
Long-term other assets | | | |
| | | |
Property, plant and equipment, net | | | |
| | | |
Goodwill | | | |
| | | |
Other intangible assets, net | | | |
| | | |
| | | |
Total assets | | | |
| | |
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 | | |
| | |
Total current liabilities | | |
| | |
Long-term liabilities | | |
Liability for employee severance benefits | | |
| | |
Total liabilities | | |
| | |
Total shareholders` equity, net | | |
| | |
Total liabilities and shareholders` equity | | |
| | | | |
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ECtel Ltd.
Consolidated Statements of Operations - GAAP
$ in thousands except share and per share data
| Three months ended | Three months ended |
| | |
| | | |
| | | |
Revenues | 3,382 | 6,505 | 4,768 |
Cost of revenues | | | |
| | | |
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 | | | |
| | | |
Operating loss | (1,752) | (1,958) | (3,244) |
Financial income, net | 135 | 241 | 66 |
Other income, net | | | |
| | | |
Loss before taxes | (1,617) | (1,287) | (3,414) |
| | | |
Income tax (expense) benefit | | | |
| | | |
Net loss | | | |
| | | |
Basic and diluted loss per share | | | |
| | | |
Weighted average number of shares outstanding used to compute basic and diluted loss per share | | | |
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ECtel Ltd.
Reconciliation of GAAP to non-GAAP Presentation
To 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 | Three months ended | |
| | | |
| | | | | | | |
| | | | | | | | |
Revenues | 3,382 | | | 3,382 | 4,768 | | | 4,768 |
Cost of revenues | | | (*) | | | | (*) | |
| | | | | | | | |
Gross profit | 1,484 | 8 | | 1,492 | 1,607 | 8 | | 1,615 |
| | | | | | | | |
Research and development costs, net | 789 | - | | 789 | 987 | - | | 987 |
Selling and marketing expenses | 1,437 | (28) | (*) | 1,409 | 1,793 | (27) | (*) | 1,766 |
General and administrative expenses | 960 | (83) | (*) | 877 | 2,021 | (186) | (*) | 1,835 |
Amortization of acquisition-related intangible assets | | | (**) | | | | (**) | |
| | | | | | | | |
Operating loss | (1,752) | 169 | | (1,583) | (3,244) | 271 | | (2,973) |
Financial income, net | 135 | | | 135 | 66 | - | | 66 |
Other income (expenses) | - | - | | - | (236) | 236 | | - |
Income tax expenses | | | | | | | | |
| | | | | | | | |
Net loss | | | | | | | | |
Basic and diluted loss per share | | | | | | |
Weighted average number of shares outstanding used to compute basic and diluted loss per share | | | | | | |
| | | | | | | | | | | | | | | | |
(*) Share-based compensation expenses
(**) Amortization of other assets related to Telesoft and Compwise
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ECtel Ltd.
Consolidated Statements of Cash Flows
$ in thousands
| Three months ended | Three months ended |
| | |
| | | |
| | | |
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 | | | |
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ECtel Ltd.
Consolidated Statements of Cash Flows (cont'd)
$ in thousands
| Three months ended | Three months ended |
| | |
| | | |
| | | |
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 | | | |
| | | |
Net cash provided by investing activities | | | |
| | | |
| | | |
Cash flows from financing activities | | | |
| | | |
Repurchase of shares | | | |
| | | |
Net cash provided by financing activities | | | |
| | | |
Net increase (decrease) in cash and cash equivalents | (1,441) | 2,904 | 4,642 |
| | | |
Cash and cash equivalents at beginning of the period | | | |
| | | |
Cash and cash equivalents at end of the period | | | |
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