Q3 2005 ECtel Earnings Conference Call - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

OPERATOR: Welcome to the ECtel third quarter 2005 results conference call. All participants are as present in a listen-only mode. Following managements formal presentation instructions will be given for the question-and-answer session. As a reminder, this conference is being recorded, November 14, 2005. I will now hand the call over to Miss Danit Hakimian, Investor Relations Coordinator. Miss Hakimian?

DANIT HAKIMIAN, INVESTOR RELATIONS COORDINATOR, ECTEL: Thank you , Mike, and hello everyone. Earlier this morning ECtel announced results for the third quarter ended September 30, 2005. I trust that most of you have by now seen a copy of the press release. But if you have not you may view it in the Investor Relations section of our web site at www.ectel.com under quarterly results. On the call today are Eitan Naor, President and Chief Executive Officer; and Ron Fainaro, Senior Vice President and Chief Financ -- Financial Officer. Before we get started I would like to refer you to our Safe Harbor statement. Specifically I advise you to some of the information we are provided during the conference call may contain forward-looking information with respect to plans, projections or future performance of the Company, the occurrence of such involved risks and uncertainties including but not limited to the Company ability to successfully execute its growth plan, the ability to recognize revenue in future periods as anticipated, the possible slowdown if -- in expeditial by telecom operators, the unpredictability of the telecom market, product and market acceptance risks and ability to complete development of new products, the impact of competitive pricing and offering fluctuation in quarterly and annual reports of corporation, dependence on several large customers, commercialization and technological difficulties, risks related to our operations in Israel and other risks related detailed in the Company's annual reports on Form 28 and other filings with the Securities and Exchange Commission. ECtel undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the dates here of or to reflect the occurrence of anticipated events. I would like now to turn the call over to Mr. Eitan Naor, President and CEO. Eitan?

EITAN NAOR, PRESIDENT AND CEO, ECTEL: Thank you, Danit. Good morning everyone and thanks for joining us for our third quarter of 2005 conference call. During the third quarter we successfully increased our revenues both sequentially and year-over-year. We increased our gross margin. We reduced our net loss and generated positive cash flow. Revenues for the quarter reached $6.2 million, a 10% sequential increase and a 140% year-over-year increase. Our gross margin increased to 53% from 50% in the per -- in the previous quarter. We reduced our net loss to $0.1 million and we generated positive cash flow of $1.1 million.

Our booking level this quarter was lower than planned mainly to use of delaying closing some of the deals and longer sales cycles. However, this has not changed our perception of the market opportunities and the quality of our pipeline. We are still optimistic about our ability to close the pending deals. With an excellent technology foundation, a broad customer base and a strong financial position we are continuing to develop and demonstrate our technological innovations.

Two weeks ago we had the annual users meetings in Athens, Greece. This is the first users meetings in three years and I'm proud to note that this was a definite success. Over 100 customers and business partners from over 50 operators worldwide attended the event. The users event was yet another step in our Company's dedication to long-term customer relationship and intimacy. The large attendance by so many significant operators demonstrates the strength of our install base.

We are currently unveiling three major initiatives. The first is our integrated revenue management, in short IRM, product framework. Today more than ever operators are seeking tighter financial control over multiple aspects of their business thereby challenging managers throughout the enterprise to their limits. The need for a comprehensive solution that can handle many revenue management programs under one roof is greater than ever. Our new IRM framework answers this need. It includes products, technologies and professional services that enable communication service providers to deploy, execute and oversee multiple revenue management programs faster and easier than before . The new offering facilitates the establishment of an enterprise revenue management operation that provides better executive visibility on all aspects of revenue streams and empowers the CSPs to effectively and proactively address the challenge of revenue leakages. It is a regulatory compliance revenue management solution and provides a 360-degree view of the operators revenues and costs, enabling them to practice proactive revenue management.

This new framework supports state-of-the-art networks such as IP, voice-over IP, 2.5 and 3G for both prepaid and postpaid services and features the flexible architecture assuring operators a safe investment and smooth migration into the next generation network services. Operators moving towards integrating all existing -- existing and future revenue management programs can initially implement any part …