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Operating Highlights of Q1 2009

• Revenues were $4.1 million, compared with $5.1 million in the first quarter of 2008.
• Operating income, excluding amortization of intangible assets of $80 thousand and equity-based compensation expense of $35 thousand, was $404 thousand, or 9.8 % of revenue.
• GAAP operating income was $289 thousand, or 7.0 % of revenue.
• Non-GAAP net income was $327 thousand or $0.02 per share.
• GAAP net income was $212 thousand or $0.01 per share.
• Cash flow from operating activities was $596 thousand.
• Backlog as of March 31, 2009 includes $7.7 million that is expected to be billed by year-end.
• Cash position increased to $9.9 million as of March 31, 2009, after a $151 thousand expenditure for the buyback of 224 thousand Company shares in the first quarter.

Monica Eisinger, Chairperson and CEO, commented: “We are very pleased that we anticipated the market deterioration and planned accordingly way ahead. We have implemented efficient steps to lower our expenses and we already see some of the results of these steps in our operating income. We will continue to strive to improve our non-GAAP operating margins and maintain positive cash flow. As we mentioned through the last year, the credit markets’ situation impacts economic activity around the world and the effect on our potential customers’ decision timing and our existing customers’ spending decisions is apparent. We remain confident in our long-term strategy, prospects and future and in the meantime, we are satisfied with our persistent revenue and our cash flow. ”

Revenue Distribution for Q1 2009
Sales in the Americas represented 41.1% and sales in Europe represented 48.9 % of total revenue and the rest divided between Israel, Africa and Asia-Pacific.

Revenue from customer care and billing software totaled $3.5 million, while revenue from enterprise call management software was $645 thousand. The revenue from licenses was $1.5 million, or 36.6 % and revenue of $2.6 million, or 63.4 % from maintenance and additional services.

Buyback
In September 2008 MIND announced its intention to execute for the first time a buyback program. At that time, the Board of Directors authorized a plan for the repurchase of up to 2.1 million of the Company’s ordinary shares in the open market, in an amount in cash of up to $2.8 million. On February 18, 2009, the Board approved an increase in the number of the Company’s shares to be purchased pursuant to the buyback program, in the amount of up to $1.2 million, as part of the original $2.8 million amount, which was previously approved.

The buyback started in November 2008 and the Company has purchased until March 31, 2009 a total of 2.3 million ordinary shares for a total of approximately $1.8 million.

Under the repurchase program, share purchases may be made from time to time depending on market conditions, share price, trading volume and other factors. The repurchase may be suspended from time to time or discontinued.

We continue to believe that in light of current share prices, the history of positive cash flow from operations and the Company’s resources, the purchase of the Company’s shares is a good investment and is in the best interest of the Company. We continue to believe that at this time the repurchase of our stock at these prices will deliver value to our shareholders and it is the most appropriate use of our resources.

Auction Rate Investments
As previously announced, on February 20, 2008, we filed a Statement of Claim with the Financial Industry Regulatory Authority and commenced arbitration proceedings against Credit Suisse, the bank that invested funds in asset backed auction rate securities called “Mantoloking CDO” on behalf of the Company. 

Recently we were advised that the Mantoloking CDO #564616AB6 has been downgraded to Ca by Moody’s. The security is rated CC by S&P. Meanwhile, we continue to receive interest payments every month on the held security.

We intend to pursue the arbitration vigorously. The arbitration hearing that was scheduled for June 2009 is now delayed until November – December 2009, but no predictions of the timing of a resolution or possible outcomes can be made at this time.