TTI Telecom Reports Third Quarter 2007 Financial Results

Q3 Net Income $1 Million


PETACH TIKVA, Israel, Nov. 14, 2007 (PRIME NEWSWIRE) -- TTI Team Telecom International Ltd. (Nasdaq:TTIL), ('the Company'), a global supplier of Operations Support Systems (OSS) to communications service providers, today announced results for the third quarter and nine months ended September 30, 2007.

Total revenues for the third quarter were $11.7 million, compared with $11.3 million in the second quarter of 2007, and $11.0 million for the third quarter of 2006. Total operating expenses were $6.0 million, compared to $6.3 million in the second quarter and $6.9 million in the third quarter of 2006.

Operating income for the quarter was $437,000 compared with $42,000 in the second quarter and an operating loss of $2.3 million for the third quarter last year. Net income was $1.0 million, or $0.05 per basic and diluted share, compared to $856,000, or $0.05 per basic and $0.04 per diluted share for the second quarter of 2007 and a net loss of $1.8 million, or $0.09 per basic and diluted share in the third quarter of 2006.

Total Revenues for the nine months ended September 30, 2007 were $33.7 million, compared to $36.0 million in the nine months ended September 30, 2006. Total operating expenses for the period were $18.1 million, compared to $19.3 million in the first nine months of 2006.

Operating income for the period was $62,000 compared with an operating loss of $1.4 million in the comparable period in 2006. Net income was $1.8 million, or $0.10 per basic and diluted share, compared to a net loss of $786,000, or $0.04 per basic and diluted share for the first nine months of 2006.

As of September 30, 2007, the Company had approximately $31 million in cash and liquid investments.

Commenting on the results, Meir Lipshes, Chairman and CEO of TTI Telecom, stated, "We are pleased with our results for the third quarter, which reflect the continued improvement of the Company, both sequentially and on a year-over-year basis. Our net income for the quarter was slightly over $1 million, compared to a loss of nearly $1.8 million in the third quarter of 2006. This dramatic turnaround is indicative of the success of our efforts to reduce costs and improve the overall efficiency of the organization."

Lipshes added, "We continue making progress with our OSS and Fault Management solutions, having recently added several important customers which we hope to announce during the fourth quarter. We believe our technology is gaining recognition among telecom carriers and enterprise operators as an optimal solution to enhance and bring value to multi-vendor, multi-technology network environments. We have several important projects underway and are excited about what the future holds for TTI."

Conference Call Information:

A conference call has been scheduled for 9:00am ET today, November 14, 2007, during which management will discuss the Company's performance for the quarter. The call can be accessed via live webcast through the Investor Relations section of the TTI Telecom web site, www.tti-telecom.com and at www.kcsa.com. A telephone replay of the call will also be available starting two hours after the completion of the call until 11:59pm ET on, November 23, 2007. To access the replay, please dial +1.877-519-4471 (International dialers can call +1.973-341-3080), participant code: 9447864. The webcast of the conference call will be archived on the TTI Telecom and KCSA web sites for 90 days.

About TTI Telecom:

TTI Team Telecom International Ltd. ("TTI Telecom") is a leading provider of next generation Operations Support Systems (OSS) to communications service providers worldwide. The company's Netrac portfolio delivers an automated, proactive and customer-centric approach to service assurance and network management.

Anchored by market-leading service assurance solutions -- Fault Management (FaM) and Performance Management (PMM) -- that give customers an end-to-end view of their network, TTI Telecom's Netrac enables service providers to reduce operating costs, enhance profitability and launch new, revenue-generating services more rapidly. Netrac is compatible with multiple technologies and industry standards, and is uniquely positioned to bridge legacy, next-generation, convergent, and IMS Networks. TTI Telecom's customer base consists of tier-one and tier-two service providers globally, including large incumbents in the Americas, Europe and Asia-Pacific.

Forward-looking statements in this release involve a number of risks and uncertainties including, but not limited to, product demand, pricing, market acceptance, changing economic conditions, risks in product and technology development, the effect of the Company's accounting policies as well as certain other risk factors which are detailed in the Company's SEC filings.



                  TTI TEAM TELECOM INTERNATIONAL LTD.
                         STATEMENTS OF INCOME
 ---------------------------------------------------------------------
                    (in thousands of U.S. dollars)

                       Three Months Ended        Nine Months Ended
                       ------------------        -----------------
                          September 30,             September 30,
                          -------------             -------------
                       2007         2006         2007         2006
                       ----         ----         ----         ----
                           Unaudited                 Unaudited
                           ---------                 ---------
 Revenues
 Product            $     6,367  $     6,027  $    18,718  $    21,766
 Services                 5,374        4,932       15,005       14,239
                    -----------  -----------  -----------  -----------

 Total revenues          11,741       10,959       33,723       36,005
                    -----------  -----------  -----------  -----------

 Cost of revenues:
 Product                  3,225        3,986        9,150       11,128
 Services                 2,062        2,341        6,405        6,925
                    -----------  -----------  -----------  -----------

 Total cost of
  revenues                5,287        6,327       15,555       18,053
                    -----------  -----------  -----------  -----------

 Gross profit             6,454        4,632       18,168       17,952
                    -----------  -----------  -----------  -----------

 Operating
  expenses:
 Research and
  development             2,443        2,533        6,788        6,914
 Sales and
  marketing               2,064        2,632        5,567        7,702
 General and
  administrative          1,510        1,762        5,751        4,710
                    -----------  -----------  -----------  -----------

 Total operating
  expenses                6,017        6,927       18,106       19,326
                    -----------  -----------  -----------  -----------

 Operating income
  (loss)                    437       (2,295)          62       (1,374)
 Financial income,
  net                       540           90        1,559          151
 Other income                --           --           33           --
                    -----------  -----------  -----------  -----------

 Income (loss)
  before taxes on
  income                    977       (2,205)       1,654       (1,223)
 Taxes on income            (38)        (450)        (175)        (437)
                    -----------  -----------  -----------  -----------

 Net income (loss)  $     1,015  $    (1,755) $     1,829  $      (786)
                    ===========  ===========  ===========  ===========

 Net income (loss)
  attributed to
  preferred shares  $       157  $      (325) $       284  $      (145)
                    ===========  ===========  ===========  ===========

 Net income (loss)
  available to
  ordinary shares   $       858  $    (1,430) $     1,545  $      (641)
                    ===========  ===========  ===========  ===========


 Basic income
  (loss) per share
  attributable to
  ordinary
  shareholders      $      0.05  $     (0.09) $      0.10  $     (0.04)
                    ===========  ===========  ===========  ===========

 Diluted income
  (loss) per share
  attributable to
  ordinary
  shareholders      $      0.05  $     (0.09) $      0.10  $     (0.04)
                    ===========  ===========  ===========  ===========

 Weighted average
  number of shares
  used for computing
  net income
  (loss) per share
  attributed to
  ordinary
  shareholders
 Basic               16,000,579   15,417,249   16,000,481   14,891,202
                    ===========  ===========  ===========  ===========

 Diluted             16,286,891   15,417,249   16,164,073   14,891,202
                    ===========  ===========  ===========  ===========



                 TTI TEAM TELECOM INTERNATIONAL LTD.
                      CONSOLIDATED BALANCE SHEET
 ---------------------------------------------------------------------
                    (in thousands of U.S dollars)

                                                   Sept. 30,   Dec. 31,
                                                     2007       2006
                                                    -------    -------
                                                   Unaudited
                                                    -------
 ASSETS

 CURRENT ASSETS:
 Cash and cash equivalents                          $30,825    $31,410
 Short term deposits                                     87        984
 Trade receivables                                    6,792      4,664
 Unbilled receivables                                 2,899      2,834
 Related parties                                        392        373
 Other accounts receivable and prepaid expenses       1,606      2,265
                                                    -------    -------

 Total current assets                                42,601     42,530
                                                    -------    -------

 LONG-TERM INVESTMENTS:
 Long term deposits                                      97         97
 Investment in affiliate                                165        165
 Severance pay fund                                   3,621      3,627
 Long-term receivables                                   --      3,324
                                                    -------    -------

 Total long-term investments                          3,883      7,213
                                                    -------    -------

 PROPERTY AND EQUIPMENT:
 Cost                                                25,651     23,612
 Less - accumulated depreciation                     20,142     19,770
                                                    -------    -------

 Property and equipment, net                          5,509      3,842
                                                    -------    -------

 Total Assets                                       $51,993    $53,585
                                                    =======    =======

 LIABILITIES AND SHAREHOLDERS' EQUITY

 CURRENT LIABILITIES:
 Trade payables                                     $ 2,241    $ 2,508
 Related parties                                        890         40
 Deferred revenues                                    4,518      8,333
 Other accounts payable and accrued expenses          6,623      7,187
                                                    -------    -------

 Total current liabilities                           14,272     18,068
                                                    -------    -------

 ACCRUED SEVERANCE PAY                                5,299      5,022
                                                    -------    -------

 SHAREHOLDERS' EQUITY:
 Share capital:                                       2,595      2,594
 Additional paid-in capital                          75,056     74,919
 Accumulated deficit                                (45,229)   (47,018)
                                                    -------    -------

 Total shareholders' equity                          32,422     30,495
                                                    -------    -------

 Total liabilities and shareholders' equity         $51,993    $53,585
                                                    =======    =======




                    TTI TELECOM INTERNATIONAL LTD.
                 CONSOLIDATED STATEMENTS OF CASH FLOWS
 ---------------------------------------------------------------------
                    (in thousands of U.S. dollars)

                                                Nine months ended
                                                -----------------
                                                  September 30,
                                                  -------------
                                                2007           2006
                                             ---------      ---------
                                             Unaudited      Unaudited
                                             ---------      ---------

     Cash flows from operating activities:
 -----------------------------------------

 Net income (loss)                          $  1,829        $   (786)
 Adjustments to reconcile net                              
  income (loss) to net cash 
  provided by (used in) operating 
  activities:                          
 Depreciation and amortization                 1,491           1,872
 Gain from sale of property and                            
  equipment                                     (215)            (58)
 Accrued interest on short - term                          
  bank deposits                                   (4)            (18)
 Severance pay, net                              283             398
 Decrease (increase) in trade                              
  receivables                                 (2,128)            221
 Increase in unbilled receivables                (65)         (2,869)
 Decrease  in long term trade and                          
  unbilled receivables                         3,324             769
 Decrease  in other accounts                               
  receivable and prepaid expenses                659             547
 Increase (decrease) in trade                              
  payables                                      (267)            523
 Increase  in related parties                    831           1,067
 Decrease in deferred revenues                (3,815)         (3,411)
 Decrease in other accounts payable                        
  and accrued expenses                          (604)         (1,041)
 Stock based compensation                        131             382
 Loss  from sale of marketable                             
  securities                                      --             330
 Amortization of premium and                               
  accretion of accrued interest                            
  on available for sale                                    
  marketable securities                           --             732
                                            --------        --------
 Net cash provided by (used in)                            
  operating activities                         1,450          (1,342)


                                                           
     Cash flows from investing activities:  
 -----------------------------------------
                                                           
 Investment in short-term and                              
  long-term bank deposits                     (2,000)           (188)
 Investment in available-for-sale                          
  marketable securities                           --         (10,203)
 Proceeds from sale and redemption                         
  of available-for-sale                                    
  marketable securities                           --          21,334
 Proceeds from short-term and                              
  long-term bank deposits                      2,901           1,283
 Proceeds from sale of property                            
  and equipment                                  342             101
 Purchase of property and                                  
  equipment                                   (3,285)         (1,306)
                                            --------        --------
 Net cash provided by (used in)                            
  investing activities                        (2,042)         11,021


                                                           
     Cash flows from financing activities:              
 -----------------------------------------
                                                           
 Proceeds from issuance of                                 
  preferred A convertible shares                           
  and warrants, net                                7           1,068
                                            --------        --------
                                                           
 Net cash provided by financing                            
  activities                                       7           1,068
                                            --------        --------
                                                           
 Increase (decrease) in cash and                           
  cash equivalents                              (585)         10,747
                                                           
 Cash and cash equivalents at the                          
  beginning of the period                     31,410          18,034
                                            --------        --------
                                                           
 Cash and cash equivalents at the                          
  end of the period                         $ 30,825        $ 28,781
                                            ========        ========


            

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