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| Press Release - July 19, 2004 |
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Yoqneam, Israel, July 19, 2004 MIND CTI Reports $1.6 Million Net Income for Q2 2004 MIND Exceeds Guidance on Second Quarter EPS 8th Consecutive Profitable Quarter Driven by MIND’s Unique Business Model Operating Income Margin of 17% Key Highlights
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 second quarter ended June 30, 2004. Monica Eisinger, President and CEO, commented: “Once again we continue to execute our trend of improved results, by growing both revenues and operating income. Over the last three quarters we have improved operating margins from 12, to 15 and 17 percent respectively. We believe that this accelerates our plan to reach over 20% operating margins in the long term. Our second quarter results reflect mainly our customers’ confidence in our solutions and the focused sales efforts in Europe. The IP infrastructure acceptance and our reputation of providing stable, scalable and easy-to-implement solutions for mediation, provisioning and billing for this space help us expand our revenue. In order to address future needs of both existing customers and new opportunities and in order to better support our growing customer base, we continue to enhance both our product offering and our work force. We are in a continuous process of increasing our employee force that is expected to reach over 250 people by the end of the year. MIND is a reputable niche player in a huge space, the billing world, and we expect to persevere in gaining market share.” As of June 30, 2004, we had 217 employees in our offices in Israel, Romania, the United States and China. Financial Highlights of Q2 2004
Sales Highlights During the second quarter, our bookings included four new customer wins, as well as three major license upgrades:
Revenue Distribution for Q2 2004 Revenue from our customer care and billing software totaled $3.73 million, while revenue from our enterprise call management software was $588 thousand. The revenue breakdown from our business lines of products was $2.8 million, or 65%, from licenses, $1.1 million, or 26%, from maintenance and $382 thousand, or 9%, from services. Conference Call Information MIND will host a conference call on July 20, at 8:30 a.m., Eastern Standard Time, to discuss the Company's second quarter and 2004 results and 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.
MIND C.T.I. LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30 December 31,
----------------
2004 2003 2003
----------------------------
(Unaudited) (Audited)
----------------------------
U.S. $ in thousands
----------------------------
A s s e t s
CURRENT ASSETS:
Cash and cash equivalents $8,181 $8,305 $4,391
Accounts receivable:
Trade 2,351 1,628 2,181
Interest accrued on long-term bank
deposits 483 (a)367 (a)482
Other 827 797 864
Inventories 11 14 11
----------------------------
T o t a l current assets 11,853 11,111 7,929
LONG-TERM BANK DEPOSITS 47,400 (a)37,000 (a)40,000
PROPERTY AND EQUIPMENT, net of
accumulated depreciation
and amortization 1,623 1,301 1,182
OTHER ASSETS, net of
accumulated amortization 804 938 868
----------------------------
T o t a l assets $61,680 $50,350 $49,979
============================
Liabilities and shareholders' equity
CURRENT LIABILITIES -
Accounts payable and accruals:
Trade $1,321 $585 $718
Other 3,443 2,711 2,723
----------------------------
T o t a l current liabilities 4,764 3,296 3,441
BANK LOANS 10,000
EMPLOYEE RIGHTS UPON RETIREMENT 1,061 933 998
----------------------------
T o t a l liabilities 15,825 4,229 4,439
----------------------------
SHAREHOLDERS' EQUITY:
Share capital 53 52 53
Additional paid-in capital 58,634 61,090 58,514
Accumulated deficit (12,832) (15,021) (13,027)
----------------------------
T o t a l shareholders' equity 45,855 46,121 45,540
----------------------------
T o t a l liabilities and
shareholders' equity $61,680 $50,350 $49,979
============================
(a) Reclassified.
MIND C.T.I. LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Year
Six months Three months ended
ended June 30 ended June 30 December
--------------------------- 31,
2004 2003 2004 2003 2003
------------------------------------
(Unaudited) (Unaudited) (Audited)
------------------------------------
U.S. $ in thousands
(except per share data)
------------------------------------
REVENUES $8,324 $5,931 $4,319 $3,107 $12,936
COST OF REVENUES 2,087 1,454 1,086 780 3,208
------------------------------------
GROSS PROFIT 6,237 4,477 3,233 2,327 9,728
RESEARCH AND DEVELOPMENT
EXPENSES - net 1,846 1,582 895 805 3,319
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES:
Selling 2,330 1,878 1,213 966 4,065
General and administrative 706 557 372 291 1,149
------------------------------------
OPERATING INCOME 1,355 460 753 265 1,195
FINANCIAL AND OTHER INCOME - net 1,653 1,251 863 571 2,607
------------------------------------
INCOME BEFORE TAXES ON INCOME 3,008 1,711 1,616 836 3,802
TAXES ON INCOME 77 72 26 30 169
------------------------------------
NET INCOME $2,931 $1,639 $1,590 $806 $3,633
====================================
EARNING PER SHARE:
Basic $0.14 $0.08 $0.08 $0.04 $0.18
====================================
Diluted $0.14 $0.08 $0.07 $0.04 $0.17
====================================
WEIGHTED AVERAGE NUMBER OF
ORDINARY SHARES USED IN
COMPUTATION OF EARNINGS PER
ORDINARY SHARE - IN THOUSANDS:
Basic 21,040 20,686 21,064 20,686 20,732
====================================
Diluted 21,538 20,881 21,535 20,881 21,143
====================================
MIND C.T.I. LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Year
Six months Three months ended
ended June 30 ended June 30 December
------------------------------ 31,
2004 2003 2004 2003 2003
----------------------------------------
(Unaudited) (Unaudited) (Audited)
----------------------------------------
U.S. $ in thousands
----------------------------------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Income $2,931 $1,639 $1,590 $806 $3,633
Adjustments to reconcile net
income to net cash provided
by or used in operating
activities:
Depreciation and
amortization 348 418 161 202 806
Accrued severance pay -
net 57 124 40 92 189
Capital loss (gain) on
sale of property
and equipment - net 6 (4) 2 (35)
Changes in operating
asset and liability
items:
Decrease (increase) in
accounts receivable:
Trade (170) 398 (391) (106) (155)
Interest accrued on
long-term bank
deposits (1) 1,264 744 (367) 1,149
Other 37 (139) 68 126 (206)
Decrease in Inventories 3
Increase (decrease) in
accounts payable and
accruals:
Trade 603 417 791 334 551
Other 720 203 (160) (220) 214
----------------------------------------
Net cash provided by
operating activities 4,531 4,320 2,843 869 6,149
----------------------------------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of property and
equipment (702) (292) (232) (146) (499)
Amounts funded in respect of
accrued severance pay (30) (75) (24) (55) (105)
Investments in long-term
bank deposits (10,400)(37,000)(10,400)(37,000)(77,000)
Withdrawal of long-term bank
deposits 3,000 30,000 67,000
Proceeds from sale of
property and equipment 7 40 6 11 109
----------------------------------------
Net cash used in investing
activities (8,125) (7,327)(10,650)(37,190)(10,495)
----------------------------------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Bank loans received 10,000 10,000
Employee stock options
exercised and paid 120 43 354
Dividend paid (2,736) (2,929)
----------------------------------------
Net cash provided by (used in)
financing activities 7,384 10,043 (2,575)
----------------------------------------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 3,790 (3,007) 2,236 (36,321) (6,921)
BALANCE OF CASH AND CASH
EQUIVALENTS AT BEGINNING
OF PERIOD 4,391 11,312 5,945 44,626 11,312
----------------------------------------
BALANCE OF CASH AND CASH
EQUIVALENTS AT END OF PERIOD $8,181 $8,305 $8,181 $8,305 $4,391
========================================
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:
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