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| Press Release - July 19, 2005 |
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Yoqneam, Israel, July 19, 2005 MIND CTI Reports 20% Operating Income and EPS of 5 cents in Q2 2005 * 11% sequential revenue growth MIND C.T.I. LTD. (NASDAQ: MNDO), a leading global provider of real-time mediation, rating, billing and customer care solutions for pre-paid and post-paid voice, data and content, today announced results for the second quarter ended June 30, 2005. Key Highlights of Q2 2005
We believe that the demand for our solutions continues and in order to address future needs of both existing customers and new opportunities we continue to invest significantly in enhancing our product offering. At the same time we continue to build the organization and add experienced people to our team. We have a large and stable customer base and we expect the trend of customer license and services additions and upgrades to continue and add to the revenue increase in the long term." Revenue Distribution for Q2 2005 The geographic revenue breakdown, as a percentage of total revenues, was as follows: sales in Europe represented 41%, the Americas represented 25%, Africa represented 20%, APAC represented 8% and Israel represented 6%. Revenue from our customer care and billing software totaled $2.88 million, while revenue from our enterprise call management software was $547 thousand. The revenue breakdown from our business lines of products was $1.72 million, or 50%, from licenses, $1.11 million, or 33%, from maintenance and $582 thousand, or 17%, from services. New Executive Addition In the second half of 2004 we initiated a process of organizing the company for future growth. For the last three quarters we added each quarter executives with experience in our field and background from larger organizations. In July 2005 Yossi Shoval joined our company as VP Strategic Business Alliances. Prior to joining our company, he was Director at Amdocs with responsibility for strategic alliances. Prior to that he served at Comverse as AVP with responsibility for the Comverse partnership program. Yossi holds an MBA from Heriot-Watt University in Scotland and a BA in Economics form Tel Aviv University. As of June 30, 2005, we had 257 employees in our offices in Israel, Romania, the United States and China. Conference Call Information MIND will host a conference call on July 20, at 8:30 a.m., Eastern Time, to discuss the Company's second quarter results and other financial and business information, including trends and guidance for the near future. 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,
2005 2004 2004
---------- ---------- ----------
(Unaudited) (Audited)
---------- ---------- ----------
U.S. $ in thousands
Assets
CURRENT ASSETS:
Cash and cash equivalents $ 6,354 $ 8,181 $ 18,687
Accounts receivable:
Trade 2,518 2,351 3,418
Interest accrued on long-term
bank deposits 29 483 242
Other 726 827 773
Inventories 19 11 18
---------- ---------- ----------
Total current assets 9,646 11,853 23,138
LONG-TERM BANK DEPOSITS 40,000 47,400 30,000
PROPERTY AND EQUIPMENT, net of
accumulated depreciation and
amortization 1,885 1,623 1,790
OTHER ASSETS, net of accumulated
amortization 553 804 788
---------- ---------- ----------
Total assets $ 52,084 $ 61,680 $ 55,716
========== ========== ==========
Liabilities and shareholders' equity
CURRENT LIABILITIES:
Accounts payable and accruals:
Trade $ 338 $ 1,321 $ 466
Deferred revenues 1,515 1,973 1,680
Other 1,721 1,470 2,124
---------- ---------- ----------
Total current liabilities 3,574 4,764 4,270
BANK LOANS 10,000
EMPLOYEE RIGHTS UPON RETIREMENT 1,118 1,061 1,200
---------- ---------- ----------
Total liabilities 4,692 15,825 5,470
---------- ---------- ----------
SHAREHOLDERS' EQUITY:
Share capital 53 53 53
Additional paid-in capital 59,357 58,634 59,079
Accumulated deficit (12,018) (12,832) (8,886)
---------- ---------- ----------
Total shareholders' equity 47,392 45,855 50,246
---------- ---------- ----------
Total liabilities and
shareholders' equity $ 52,084 $ 61,680 $ 55,716
========== ========== ==========
MIND C.T.I. LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Six months Three months Year ended
ended June 30, ended June 30, Dec. 31,
2005 2004 2005 2004 2004
------- ------- ------- ------- -------
(Unaudited) (Unaudited) (Audited)
U.S. $ in thousands (except per share data)
REVENUES $ 6,504 $ 8,324 $ 3,422 $ 4,319 $17,806
COST OF REVENUES 1,607 2,087 803 1,086 4,394
------- ------- ------- ------- -------
GROSS PROFIT 4,897 6,237 2,619 3,233 13,412
RESEARCH AND DEVELOPMENT
EXPENSES - net 2,109 1,846 1,110 845 3,833
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES:
Selling 1,020 2,330 428 1,263 4,517
General and
administrative 753 706 394 372 1,864
------- ------- ------- ------- -------
OPERATING INCOME 1,015 1,355 687 753 3,198
FINANCIAL AND OTHER
INCOME - net 1,021 1,653 303 863 3,841
------- ------- ------- ------- -------
INCOME BEFORE TAXES
ON INCOME 2,036 3,008 990 1,616 7,039
TAXES ON INCOME 25 77 10 26 162
------- ------- ------- ------- -------
NET INCOME $ 2,011 $ 2,931 $ 980 $ 1,590 $ 6,877
======= ======= ======= ======= =======
EARNING PER SHARE:
Basic $ 0.09 $ 0.14 $ 0.05 $ 0.08 $ 0.33
======= ======= ======= ======= =======
Diluted $ 0.09 $ 0.14 $ 0.05 $ 0.07 $ 0.32
======= ======= ======= ======= =======
WEIGHTED AVERAGE NUMBER OF
ORDINARY SHARES USED IN
COMPUTATION OF EARNINGS
PER ORDINARY SHARE
- IN THOUSANDS:
Basic 21,417 21,040 21,453 21,064 21,089
======= ======= ======= ======= =======
Diluted 21,574 21,538 21,558 21,535 21,468
======= ======= ======= ======= =======
MIND C.T.I. LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months Three months Year ended
ended June 30, ended June 30, Dec. 31,
2005 2004 2005 2004 2004
------- ------- ------- ------- -------
(Unaudited) (Unaudited) (Audited)
U.S. $ in thousands
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Income $ 2,011 $ 2,931 $ 980 $ 1,590 $ 6,877
Adjustments to
reconcile net income
to net cash provided
by or used in operating
activities:
Depreciation and
amortization 338 348 158 161 680
Accrued severance
pay - net 12 57 73 40 202
Capital loss (gain)
on sale of property
and equipment - net (30) 6 (7) (7)
Changes in operating
asset and liability
items:
Decrease (increase) in
accounts receivable:
Trade 900 (170) (738) (391) (1,237)
Interest accrued
on long-term
bank deposits 213 (1) 804 744 240
Other 47 37 (271) 68 93
Increase (decrease)
in accounts
payable and accruals:
Trade (128) 603 (25) 791 (252)
Other (568) 722 (233) (160) 1,081
Increase in
Inventories (1) (7)
------- ------- ------- ------- -------
Net cash provided by
operating activities 2,794 4,533 741 2,843 7,670
------- ------- ------- ------- -------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of property
and equipment (421) (702) (205) (232) (1,226)
Amounts withdrawal
(funded) in respect of
accrued severance pay 41 (30) (53) (24) (120)
Investments in long-
term bank deposits (10,000) (10,400) (10,400) (40,000)
Withdrawal of long-
term bank deposits 3,000 50,000
Proceeds from sale of
property and equipment 118 7 29 6 145
------- ------- ------- ------- -------
Net cash provided by
(used in) investing
activities (10,262) (8,125) (229) (10,650) 8,799
------- ------- ------- ------- -------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Bank loans received 10,000 10,000
Employee stock options
exercised and paid 278 118 14 43 563
Dividend paid (5,143) (2,736) (2,736)
------- ------- ------- ------- -------
Net cash provided by
(used in) financing
activities (4,865) 7,382 14 10,043 (2,173)
------- ------- ------- ------- -------
NET INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS (12,333) 3,790 526 2,236 14,296
BALANCE OF CASH AND CASH
EQUIVALENTS AT BEGINNING
OF PERIOD 18,687 4,391 5,828 5,945 4,391
------- ------- ------- ------- -------
BALANCE OF CASH AND CASH
EQUIVALENTS AT END OF
PERIOD $ 6,354 $ 8,181 $ 6,354 $ 8,181 $18,687
======= ======= ======= ======= =======
About MIND MIND CTI Ltd. (http://www.mindcti.com) is a leading global provider of real-time billing and customer care solutions for pre-paid and post-paid voice, data and video. Since 1997 MIND has been a pioneer in enabling the VoIP technology for emerging and incumbent service providers. MIND solutions include “best-in-class” solutions for Service Enabling of IP services in the wireless arena, end-to-end convergent billing solutions and internal billing for large enterprises. MIND operates from offices in Europe, Israel, the United States and China. 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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