Yoqneam, Israel, October 25, 2004- MIND C.T.I. LTD. (NASDAQ: MNDO), a leading global provider of real-time mediation, provisioning, rating, billing and customer care solutions for pre-paid and post-paid voice, data and video, today announced results for the third quarter ended September 30, 2004.
Monica Eisinger, President and CEO, commented: "Our conservative approach in building our business continues to prove itself as ideal for the existing environment. We believe that MIND gained market share during the last two years and continues to do so. Our product-based approach and our customer-oriented business model enabled us to grow revenues for the tenth consecutive quarter. At the same time, the lasting challenging global environment created acquisition targets at reasonable valuations and we strive to locate the right addition that will enable us to significantly further enlarge the company.
MIND's know-how in the IP space enables us to successfully deploy "best-in-class" solutions for Service Enabling of IP services in the wireless arena and convergent billing for carriers that provide both traditional and IP services. We expect that our cost structure and our high gross margins will enable us to reach over 20% operating margins in the near future."
New Executive Addition
We are in a continuous process of gradually increasing the company size and continue to add experienced people to further support the growth and strengthen our management team. Our new CTO, Mr. Doron Segal, brings vast experience with design and implementation of complex telco-grade systems. Recently Mr. Segal was AVP at Comverse, with responsibility for technical requirements and system level design for most Comverse products and customer projects. As the company CTO he will be responsible for the system architecture, product design and maintaining MIND's technological leadership.
As of September 30, 2004, we had 243 employees in our offices in Israel, Romania, the United States and China.
Financial Highlights of Q3 2004
Sales Highlights
During the third quarter, our bookings included five new customer wins, as well as four license upgrades:
Revenue Distribution for Q3 2004
Revenue from our customer care and billing software totaled $4.01 million, while revenue from our enterprise call management software was $597 thousand. The revenue breakdown from our business lines of products was $2.9 million, or 64%, from licenses, $1.2 million, or 25%, from maintenance and $506 thousand, or 11%, from services.
Conference Call Information
MIND will host a conference call on October 26, at 8:30 a.m., Eastern Standard Time, to discuss the Company's third quarter and 2004 results as well as other financial and business information. The call will be carried live on the Internet via www.fulldisclosure.com and the MIND website, www.mindcti.com. For those unable to listen to the live web cast, a replay will be available.
About MIND
MIND is a leading global provider of real-time mediation, rating, billing and customer care solutions for pre-paid and post-paid voice, data and content. Our customers include worldwide leading carriers servicing millions of subscribers, using our end-to-end solutions for the deployment of new services. MIND operates from offices in Europe, the United States, China and Israeli headquarters.
For financial information, reports and presentations, please visit the Investor Relations site: http://www.mindcti.com/ir
Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995: All statements other than historical facts included in the foregoing press release regarding the Company's business strategy are "forward looking statements." These statements are based on management's beliefs and assumptions and on information currently available to management. Forward-looking statements are not guarantees of future performance, and actual results may materially differ. The forward looking statements involve risks, uncertainties, and assumptions, including the risks discussed in the Company's filings with the United States Securities Exchange Commission. The Company does not undertake to update any forward-looking information.
For more information please contact:
Andrea Dray
MIND CTI Ltd.
Tel: +972-4-993-6666
investor@mindcti.com
| September 30 | December 31 | ||
| 2004 | 2003 | 2003 | |
| (Unaudited) | (Unaudited) | (Audited) | |
| U.S. $ in thousands | |||
| A s s e t s | |||
| CURRENT ASSETS: | |||
Cash and cash equivalents | $7,870 | $6,085 | $4,391 |
Accounts receivable: | |||
Trade | 3,071 | 1,476 | 2,181 |
Interest accrued on long-term bank deposits | 1,511 | *958 | *482 |
Other | 800 | 848 | *864 |
Inventories | 11 | 14 | 11 |
T o t a l current assets | 13,263 | 8,423 | 7,929 |
| LONG-TERM BANK DEPOSITS | 47,000 | *40,000 | *40,000 |
| PROPERTY AND EQUIPMENT, net ofaccumulated depreciation and amortization | 1,768 | 1,230 | 1,182 |
| OTHER ASSETS, net of accumulated amortization | 785 | 886 | 868 |
T o t a l assets | $62,816 | $51,497 | $49,979 |
| Liabilities and shareholders' equity | |||
| CURRENT LIABILITIES - | |||
Accounts payable and accruals: | |||
Trade | $322 | $224 | $718 |
Other | 3,619 | 3,198 | 2,723 |
T o t a l current liabilities | 3,941 | 3,422 | 3,441 |
| BANK LOANS | 10,000 | ||
| EMPLOYEE RIGHTS UPON RETIREMENT | 1,117 | 942 | 998 |
T o t a l liabilities | 15,058 | 4,364 | 4,439 |
| SHAREHOLDERS' EQUITY: | |||
Share capital | 53 | 52 | 53 |
Additional paid-in capital | 58,728 | 61,187 | 58,514 |
Accumulated deficit | -11,023 | -14,106 | -13,027 |
T o t a l shareholders' equity | 47,758 | 47,133 | 45,540 |
| To t a l liabilities and shareholders' equity | $62,816 | $51,497 | $49,979 |
| Nine months ended September 30 |
Three months ended September 30 |
Year ended December 31, | ||||
| 2004 | 2003 | 2004 | 2003 | 2003 | ||
| (Unaudited) | (Unaudited) | (Audited) | ||||
| U.S. $ in thousands (except per share data) | ||||||
| REVENUES | $12,926 | $9,294 | $4,602 | $3,363 | $12,936 | |
| COST OF REVENUES | 3,189 | 2,306 | 1,102 | 852 | 3,208 | |
| GROSS PROFIT | 9,337 | 6,988 | 3,500 | 2,511 | 9,728 | |
| RESEARCH AND DEVELOPMENT EXPENSES - net | 2,870 | 2,430 | 1,024 | 848 | 3,319 | |
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: | ||||||
Selling | 3,460 | 2,945 | 1,130 | 1,067 | 4,065 | |
General and administrative | 1,243 | 853 | 537 | 296 | 1,149 | |
| OPERATING INCOME | 2,164 | 760 | 809 | 300 | 1,195 | |
| FINANCIAL AND OTHER INCOME - net | 2,697 | 1,869 | 1,044 | 618 | 2,607 | |
| INCOME BEFORE TAXES ON INCOME | 4,861 | 2,629 | 1,853 | 918 | 3,802 | |
| TAXES ON INCOME | 121 | 75 | 44 | 3 | 169 | |
| NET INCOME | $4,740 | $2,554 | $1,809 | $915 | $3,633 | |
| EARNING PER SHARE: | ||||||
| Basic | $0.23 | $0.12 | $0.09 | $0.04 | $0.18 | |
| Diluted | $0.22 | $0.12 | $0.08 | $0.04 | $0.17 | |
| WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES USED IN COMPUTATION OF EARNINGS PER ORDINARY SHARE - IN THOUSANDS: | ||||||
| Basic | 21,056 | 20,690 | 21,089 | 20,703 | 20,732 | |
| Diluted | 21,511 | 21,173 | 21,486 | 21,183 | 21,143 | |
| Nine months ended September 30 |
Three months ended September 30 |
Year ended December 31, | ||||
| 2004 | 2003 | 2004 | 2003 | 2003 | ||
| (Unaudited) | (Unaudited) | (Audited) | ||||
| U.S. $ in thousands | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net Income | $4,740 | $2,554 | $1,809 | $915 | $3,633 | |
Adjustments to reconcile net income to net cash provided by or used in operating activities: | ||||||
Depreciation and amortization | 520 | 617 | 172 | 199 | 806 | |
Accrued severance pay - net | 119 | *133 | 62 | *9 | 189 | |
Capital gain on sale of property and equipment - net | -12 | -11 | -18 | -7 | -35 | |
Changes in operating asset and liability items: | ||||||
Decrease (increase) in accounts receivable: | ||||||
Trade | -890 | 550 | -720 | 152 | -155 | |
Interest accrued on long-term bankdeposits | -1,029 | -1,502 | -628 | -578 | 1,149 | |
Other | 64 | -190 | 27 | -114 | (206) | |
Decrease in Inventories | 3 | |||||
Increase (decrease) in accounts | ||||||
payable and accruals: | ||||||
Trade | -396 | 57 | -999 | -360 | 551 | |
Other | 896 | 689 | 176 | 536 | 214 | |
Net cash provided by (used in) operating activities | 4,012 | 2,897 | -119 | 752 | 6,149 | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Purchase of property and equipment | -1,030 | -382 | -328 | -90 | -499 | |
Amounts withdrawal (funded) in respect of accrued severance pay | -67 | *(73) | -37 | *2 | -105 | |
Investments in long-term bank deposits | -10,000 | -40,000 | -3,000 | -77,000 | ||
Withdrawal of long-term bank deposits | 3,000 | 32,175 | 67,000 | |||
Proceeds from sale of property and equipment | 86 | 59 | 79 | 19 | 109 | |
Net cash used in investing activities | -8,011 | -8,221 | -286 | -3,069 | -10,495 | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Bank loans received | 10,000 | |||||
Employee stock options exercised and paid | 214 | 97 | 94 | 97 | 354 | |
Dividend paid | -2,736 | -2,929 | ||||
Net cash provided by (used in) financing activities | 7,478 | 97 | 94 | 97 | -2,575 | |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 3,479 | -5,227 | -311 | -2,220 | -6,921 | |
| BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 4,391 | 11,312 | 8,181 | 8,305 | 11,312 | |
| BALANCE OF CASH AND CASH EQUIVALENTS AT END OF PERIOD | $7,870 | $6,085 | $7,870 | $6,085 | $4,391 | |