MIND CTI Reports EPS of 5 Cents for the Second Quarter of 2011
* Cash Flow from Operating Activities of $2.5 Million in First Half of 2011
Conference Call Scheduled for August 4, 2011 at 8:30 AM Eastern Time
Yoqneam, Israel, August 4, 2011 — MIND C.T.I. LTD. (NasdaqGM:MNDO), a leading provider of convergent end-to-end billing and customer care product based solutions for service providers as well as telecom expense management (call accounting) solutions, today announced results for the second quarter 2011.
Key Highlights
· | Revenues were $4.55 million, compared with $4.9 million in the second quarter of 2010. |
· | Operating income was $843 thousand, or 18.5 % of revenue. |
· | Net income was $967 thousand or $0.05 per share. |
· | Cash flow from operating activities was $1.25 million. |
· | One new customer and multiple follow-on orders. |
· | Backlog as of June 30, 2011 includes $8.6 million that is expected to be billed by year-end, compared to $7.9 million on June 30, 2010. |
· | Cash position (including available for sale securities) of $17.5 million on June 30, 2011, after completion of the yearly dividend distribution and related tax payments in March and April 2011 respectively. |
Monica Iancu, Chairperson and CEO, commented: "While revenues were below our expectations, we are encouraged by the continued follow-on business and the opportunities in our pipeline. Similar to last quarter, the decreased revenue is mainly the result of delays in one project implementation by a customer for reasons that are not in our control. The increased backlog reflects this revenue slippage and we expect to see the implementation completed over the next 2-3 quarters."
Revenue Distribution Based on Revenue for Q2 2011
Sales in the Americas represented 51.4% and sales in Europe represented 34.6% of total revenue and the rest divided between Israel, Africa and Asia-Pacific.
Revenue from customer care and billing software totaled $3.64 million, while revenue from enterprise call accounting software was $907 thousand.
New Win and Multiple Follow-on Orders
In the second quarter of 2011 MIND secured one new win with a provider of wire line and wireless services in the US region, operating both GSM and CDMA networks. This new customer has selected us to provide a complete prepaid platform based on our powerful real-time rating.
The follow-on orders include two large upgrades for two US mobile carriers; one for system enhancements and the other is an upgrade to a newer product release.
Conference Call Information
MIND will host a conference call on August 4, 2011 at 8:30 a.m., Eastern Time, to discuss the Company's second quarter 2011 results and other financial and business information. The call will be carried live on the Internet via www.earnings.com and the MIND website, www.mindcti.com. For those unable to listen to the live web cast, a replay will be available.
Full financial results can be found in the Investors section www.mindcti.com/investor/PressReleases.asp and in our Form 6-K as well.
About MIND
MIND CTI Ltd. is a leading provider of convergent end-to-end billing and customer care product based solutions for service providers as well as telecom expense management (call accounting) solutions. MIND provides a complete range of billing applications for any business model (license, managed service or complete outsourced billing service) for Wireless, Wireline, VoIP and Quad-play carriers in more than 40 countries around the world. A global company, with over twelve years of experience in providing solutions to carriers and enterprises, MIND operates from offices in the United States, UK, Romania and Israel.
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.
Follow MIND on Twitter @mindcti
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For more information please contact:
Andrea Dray
MIND CTI Ltd.
Tel: +972-4-993-6666
investor@mindcti.com
MIND C.T.I. LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, | December 31, | |||||||
2011 | 2010 | |||||||
(Unaudited) | (Audited) | |||||||
U.S. $ in thousands | ||||||||
Assets | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 12,083 | $ | 17,582 | ||||
Short term bank deposits | 3,404 | 2,905 | ||||||
Available for sale securities | 493 | - | ||||||
Accounts receivable: | ||||||||
Trade | 1,699 | 1,585 | ||||||
Other | 265 | 154 | ||||||
Prepaid expenses | 115 | 164 | ||||||
Deferred cost of revenues | 282 | 199 | ||||||
Inventories | 30 | 30 | ||||||
Total current assets | 18,371 | 22,619 | ||||||
INVESTMENTS AND OTHER NON CURRENT ASSETS: | ||||||||
Available for sale securities | 1,544 | - | ||||||
Severance Pay Fund | 1,469 | 1,512 | ||||||
Deferred cost of revenues | 47 | 66 | ||||||
PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization | 793 | 834 | ||||||
GOODWILL | 5,430 | 5,430 | ||||||
Total assets | $ | 27,654 | $ | 30,461 | ||||
Liabilities and shareholders’ equity | ||||||||
CURRENT LIABILITIES : | ||||||||
Accounts payable and accruals: | ||||||||
Trade | $ | 326 | $ | 244 | ||||
Other | 1,374 | 1,236 | ||||||
Deferred revenues | 2,882 | 3,020 | ||||||
Total current liabilities | 4,582 | 4,500 | ||||||
LONG TERM LIABILITIES : | ||||||||
Deferred revenues | 321 | 276 | ||||||
Employee rights upon retirement | 1,723 | 1,702 | ||||||
Total liabilities | 6,626 | 6,478 | ||||||
SHAREHOLDERS’ EQUITY: | ||||||||
Share capital | 54 | 54 | ||||||
Additional paid-in capital | 30,281 | 35,633 | ||||||
Accumulated other comprehensive income | 51 | - | ||||||
Differences from translation of foreign currency financial statements of a subsidiary | (1,069 | ) | (1,140 | ) | ||||
Treasury shares | (2,654 | ) | (2,800 | ) | ||||
Accumulated deficit | (5,635 | ) | (7,764 | ) | ||||
Total shareholders’ equity | 21,028 | 23,983 | ||||||
Total liabilities and shareholders’ equity | $ | 27,654 | $ | 30,461 |
* Certain comparative figures have been reclassified to conform to the current year presentation.
MIND C.T.I. LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Six months | Three months | Year ended | ||||||||||||||||||
ended June 30 | ended June 30 | December 31, | ||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2010 | ||||||||||||||||
(Unaudited) | (Audited) | |||||||||||||||||||
U.S. $ in thousands | ||||||||||||||||||||
(except per share data) | ||||||||||||||||||||
Revenues | $ | 9,343 | $ | 10,180 | $ | 4,552 | $ | 4,902 | $ | 19,886 | ||||||||||
Less: stock- based compensation granted to a customer | 332 | - | - | - | - | |||||||||||||||
9,011 | 10,180 | 4,552 | 4,902 | 19,886 | ||||||||||||||||
Cost of revenues | 3,063 | 3,378 | 1,673 | 1,704 | 6,167 | |||||||||||||||
Gross profit | 5,948 | 6,802 | 2,879 | 3,198 | 13,719 | |||||||||||||||
Research and development expenses | 2,384 | 1,972 | 1,165 | 891 | 4,057 | |||||||||||||||
Selling and marketing expenses | 952 | 1,120 | 448 | 503 | 2,119 | |||||||||||||||
General and administrative expenses | 847 | 855 | 423 | 421 | 1,555 | |||||||||||||||
Impairment of goodwill | - | - | - | - | 586 | |||||||||||||||
Impairment of intangible asset | - | - | - | - | 407 | |||||||||||||||
Operating income | 1,765 | 2,855 | 843 | 1,383 | 4,995 | |||||||||||||||
Financial income (expenses) - net | 403 | (167 | ) | 153 | (73 | ) | 49 | |||||||||||||
Income before taxes on income | 2,168 | 2,688 | 996 | 1,310 | 5,044 | |||||||||||||||
Taxes on income | 39 | 48 | 29 | 26 | 188 | |||||||||||||||
Net income | $ | 2,129 | $ | 2,640 | $ | 967 | $ | 1,284 | $ | 4,856 | ||||||||||
Earning per ordinary share: | ||||||||||||||||||||
Basic and diluted | $ | 0.11 | $ | 0.14 | $ | 0.05 | $ | 0.07 | $ | 0.26 | ||||||||||
Weighted average number of ordinary shares used in computation of earnings per ordinary share -in thousands: | ||||||||||||||||||||
Basic | 18,629 | 18,442 | 18,696 | 18,455 | 18,467 | |||||||||||||||
Diluted | 18,882 | 18,549 | 19,028 | 18,594 | 18,613 |
MIND C.T.I. LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months | Three months | Year ended | ||||||||||||||||||
ended June 30 | ended June 30 | December 31, | ||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2010 | ||||||||||||||||
(Unaudited) | (Audited) | |||||||||||||||||||
U.S. $ in thousands | ||||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Net income | $ | 2,129 | $ | 2,640 | $ | 967 | $ | 1,284 | $ | 4,856 | ||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||||
Depreciation and amortization | 150 | 348 | 75 | 168 | 582 | |||||||||||||||
Financial income from available for sale securities | 19 | - | 19 | - | - | |||||||||||||||
Impairment of goodwill | - | - | - | - | 586 | |||||||||||||||
Impairment of intangible asset | - | - | - | - | 407 | |||||||||||||||
Accrued severance pay | (39 | ) | 111 | 8 | 32 | 134 | ||||||||||||||
Capital gain on sale of equipment – net | (19 | ) | (15 | ) | (10 | ) | (11 | ) | (15 | ) | ||||||||||
Employees share-based compensation expenses | 33 | 60 | 13 | 18 | 139 | |||||||||||||||
Stock- based compensation granted to a customer (deducted from revenues) | 332 | - | - | - | - | |||||||||||||||
Changes in operating asset and liability items: | ||||||||||||||||||||
Decrease (increase) in accounts receivable: | ||||||||||||||||||||
Trade | (105 | ) | (88 | ) | (185 | ) | (436 | ) | (352 | ) | ||||||||||
Other | (121 | ) | 47 | (85 | ) | 32 | 44 | |||||||||||||
Decrease (increase) in prepaid expenses and deferred charges | (14 | ) | (98 | ) | (18 | ) | 201 | (74 | ) | |||||||||||
Decrease in inventories | - | - | - | - | 4 | |||||||||||||||
Increase (decrease) in accounts payable and accruals: | ||||||||||||||||||||
Trade | 81 | (2 | ) | 91 | 71 | (207 | ) | |||||||||||||
Other | 136 | (37 | ) | 33 | (74 | ) | (336 | ) | ||||||||||||
Increase (decrease) in deferred revenues | (93 | ) | 715 | 345 | (50 | ) | 536 | |||||||||||||
Net cash provided by operating activities | 2,489 | 3,681 | 1,253 | 1,235 | 6,304 | |||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Purchase of available for sale securities | (2,005 | ) | - | - | - | - | ||||||||||||||
Purchase of property and equipment | (169 | ) | (112 | ) | (91 | ) | (77 | ) | (171 | ) | ||||||||||
Severance pay funds | 103 | (84 | ) | 3 | (38 | ) | (208 | ) | ||||||||||||
Proceeds from (investment in) short term bank deposits | (511 | ) | 665 | (661 | ) | (453 | ) | (722 | ) | |||||||||||
Proceeds from sale of property and equipment | 79 | 40 | 60 | 28 | 40 | |||||||||||||||
Net cash provided by (used in) investing activities | (2,503 | ) | 509 | (689 | ) | (540 | ) | (1,061 | ) | |||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Employee stock options exercised and paid | 397 | 67 | 149 | 67 | 75 | |||||||||||||||
Dividend paid | (5,968 | ) | (3,686 | ) | (1,259 | ) | (3,686 | ) | (3,686 | ) | ||||||||||
Net cash used in financing activities | (5,571 | ) | (3,619 | ) | (1,110 | ) | (3,619 | ) | (3,611 | ) | ||||||||||
Translation adjustments on cash and Cash equivalents | 86 | (82 | ) | 15 | (3 | ) | (45 | ) | ||||||||||||
Increase (decrease) in cash and cash equivalents | (5,499 | ) | 489 | (531 | ) | (2,927 | ) | 1,587 | ||||||||||||
Balance of cash and cash equivalents at beginning of period | 17,582 | 15,995 | 12,614 | 19,411 | 15,995 | |||||||||||||||
Balance of cash and cash equivalents at end of period | $ | 12,083 | $ | 16,484 | $ | 12,083 | $ | 16,484 | $ | 17,582 |