MIND CTI Reports Fourth Quarter and Full Year 2021 Results
*Board Declares Cash Dividend
Yoqneam, Israel, March 10, 2022 MIND C.T.I. LTD. – (NasdaqGM: MNDO), a leading provider of convergent end-to-end prepaid/postpaid billing and customer care product based solutions for service providers, unified communications analytics and call accounting solutions for enterprises as well as enterprise messaging solutions, today announced results for its fourth quarter of 2021 and its full year ended December 31, 2021.
The following will summarize our business in the fourth quarter of 2021 and provide a more detailed review of the financial results for the quarter and for the full year. Full financial results can be found in the Company News section of our website at http://www.mindcti.com/company/news/ and in our Form 6-K.
Financial Highlights of Q4 2021
- Revenues of $6.0 million, compared to $5.8 million in the fourth quarter of 2020.
- Operating income of $1.6 million, or 27% of total revenue, compared to $1.3 million, or 23% of revenue in the fourth quarter of 2020.
- Net income of $1.5 million or $0.08 per share, compared to $1.4 million or $0.07 per share in the fourth quarter of 2020.
- Cash flow from operating activities of $2.5 million, compared to $2.3 million in the fourth quarter of 2020.
Financial Highlights of Full Year 2021
- Revenues of $26.3 million, compared to $23.4 million in 2020, with the increase attributed to the messaging segment.
- Operating income of $6.8 million, or 25.9% of total revenue, compared to $5.5 million, or 23.0% of total revenue in 2020.
- Net income of $5.9 million, or $0.30 per share, compared to $5.4 million, or $0.27 per share in 2020.
- Cash flow from operating activities of $6.9 million, compared to $6.5 million in 2020.
- Cash position of approximately $18.5 million as of December 31, 2021.
Monica Iancu, MIND CTI’s Chief Executive Officer, commented: “2021 was a record year for MIND’s revenue. As previously announced, our messaging segment was favorably impacted by campaigns carried out by a few customers. The unprecedented growth we encountered in Q2 and Q3, in our messaging segment, was temporary in nature. The messaging markets, unlike our traditional ones, are difficult to predict, as external factors have a strong impact on both revenues and margins. As the proportion of our messaging business, out of our total revenue, increases, we expect our business results to present higher volatility in revenues, margins, and cash flows compared to past years. Our telecom markets continue to be challenging, with low demand and strong competition, and we expect to eventually experience negative business impact from these continuous trends.
“The political situation in Eastern Europe (Ukraine) is very sad but has no immediate direct effect on our business, as we have no operations and no customers in Russia or Ukraine.
“It is our strategy to pursue acquisitions that could be a source of growth, as well as to continue with our dividend policy, and at the same time invest in new technologies to enhance our offering.”
Revenue Distribution for Q4 2021
Revenues in Europe represented 53% (including the Message Mobile and GTX revenues in Germany that represented 42%), revenues in the Americas represented 38%, and revenues in the rest of the world represented 9% of our total revenues.
Revenues from our customer care and billing software were $2.9 million, or 48% of total revenues, revenues from enterprise messaging and payment solutions were $2.5 million, or 42% of total revenues, and revenues from our enterprise call accounting software were $0.6 million, or 10% of total revenues.
Revenues from maintenance and additional services were $5.6 million, or 93% of total revenues, while revenues from licenses were $0.4 million, or 7% of total revenues.
Revenue Distribution for Full Year 2021
Revenues in Europe represented 56% (including the Message Mobile and GTX revenues in Germany that represented 45%), revenues in the Americas represented 36%, and revenues in the rest of the world represented 8% of our total revenues.
Revenues from our customer care and billing software were $12.1 million, or 46% of total revenues, revenues from enterprise messaging and payment solutions were $12.0 million, or 46% of total revenues, and revenues from enterprise call accounting software were $2.2 million, or 8% of our total revenues.
Revenues from maintenance and additional services were $24.8 million, or 94%, compared to $22 million or 94% of total revenues in 2020, while revenues from licenses were $1.5 million, or 6% of total revenues, compared to $1.4 million, or 6% of total revenues in 2020.
Dividend Distribution
Since July 2003, when we first adopted a dividend policy, we performed 19 distributions, including one special dividend. We continue to believe that our annual dividends enhance shareholder value.
Taking into consideration our dividend policy and the remaining cash after the distribution, our Board of Directors declared on March 10, 2022, a gross dividend of $0.26 per share. The record date for the dividend will be March 24, 2022 and the payment date will be April 6, 2022. Tax will be withheld at a rate of 22%.
Changes in Management Team
During 2021, Ran Mendelaw, (45), re-joined us as Chief Financial Officer, bringing over 18 years of experience in accounting, financial management and public companies. Ran served as MIND’s CFO from May 2018 until June 2019. Prior to that, he served as a group controller in a public industrial company and for ten years as senior manager at PwC Israel. Mr. Mendelaw holds a B.A. degree in Accounting and Economics from Haifa University and he is a Certified Public Accountant in Israel.
MIND C.T.I. LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| U.S. dollars in thousands (except per share data) | ||||||||||||||||
| REVENUES | $ | 5,966 | $ | 5,819 | $ | 26,331 | $ | 23,374 | ||||||||
| COST OF REVENUES | 2,669 | 2,819 | 12,450 | 11,153 | ||||||||||||
| GROSS PROFIT | 3,297 | 3,000 | 13,881 | 12,221 | ||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Research and development | 940 | 1,027 | 4,048 | 3,963 | ||||||||||||
| Selling and marketing | 354 | 114 | 1,403 | 973 | ||||||||||||
| General and administrative | 373 | 522 | 1,602 | 1,822 | ||||||||||||
| Total operating expenses | 1,667 | 1,663 | 7,053 | 6,758 | ||||||||||||
| OPERATING INCOME | 1,630 | 1,337 | 6,828 | 5,463 | ||||||||||||
| FINANCIAL INCOME, net | 38 | 184 | 55 | 379 | ||||||||||||
| INCOME BEFORE TAXES ON INCOME | 1,668 | 1,521 | 6,883 | 5,842 | ||||||||||||
| TAXES ON INCOME | 143 | 131 | 936 | 459 | ||||||||||||
| NET INCOME | $ | 1,525 | $ | 1,390 | $ | 5,947 | $ | 5,383 | ||||||||
| EARNINGS PER SHARE – in U.S. dollars: |
||||||||||||||||
| Basic | $ | 0.08 | $ | 0.07 | $ | 0.30 | $ | 0.27 | ||||||||
| Diluted | $ | 0.08 | $ | 0.07 | $ | 0.29 | $ | 0.27 | ||||||||
| WEIGHTED AVERAGE NUMBER OF SHARES USED IN COMPUTATION OF EARNINGS PER SHARE – in thousands: |
||||||||||||||||
| Basic | 20,039 | 19,934 | 20,006 | 19,907 | ||||||||||||
| Diluted | 20,250 | 20,138 | 20,270 | 20,138 | ||||||||||||
MIND C.T.I. LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| December 31, | ||||||||
| 2021 | 2020 | |||||||
| U.S. dollars in thousands | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 4,182 | $ | 8,260 | ||||
| Short-term bank deposits | 14,071 | 7,180 | ||||||
| Marketable securities | 208 | 1,576 | ||||||
| Accounts receivable, net: | ||||||||
| Trade | 1,803 | 2,134 | ||||||
| Other | 145 | 269 | ||||||
| Prepaid expenses | 124 | 273 | ||||||
| Total current assets | 20,533 | 19,692 | ||||||
| INVESTMENTS AND OTHER NON-CURRENT ASSETS: | ||||||||
| Severance pay fund | 2,325 | 1,823 | ||||||
| Deferred income taxes | 184 | 127 | ||||||
| Property and equipment, net of accumulated depreciation and amortization | 175 | 159 | ||||||
| Right-of-use assets, net of accumulated depreciation | 1,463 | 1,775 | ||||||
| Intangible assets, net of accumulated amortization | 522 | 702 | ||||||
| Goodwill | 7,929 | 8,139 | ||||||
| Total assets | $ | 33,131 | $ | 32,417 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable and accruals: | ||||||||
| Trade | $ | 839 | $ | 1,278 | ||||
| Other | 2,265 | 1,908 | ||||||
| Current maturities of lease liabilities | 376 | 346 | ||||||
| Deferred revenues | 2,155 | 2,113 | ||||||
| Total current liabilities | 5,635 | 5,645 | ||||||
| LONG-TERM LIABILITIES: | ||||||||
| Deferred revenues | 154 | 85 | ||||||
| Lease liabilities, net of current maturities | 1,098 | 1,492 | ||||||
| Employee rights upon retirement | 2,361 | 1,865 | ||||||
| Deferred income taxes | 157 | 211 | ||||||
| Total liabilities | 9,405 | 9,298 | ||||||
| SHAREHOLDERS’ EQUITY: | ||||||||
| Share capital | 54 | 54 | ||||||
| Additional paid-in capital | 27,324 | 27,202 | ||||||
| Accumulated other comprehensive loss | (836 | ) | (522 | ) | ||||
| Accumulated deficit | (1,722 | ) | (2,472 | ) | ||||
| Treasury shares | (1,094 | ) | (1,143 | ) | ||||
| Total shareholders’ equity | 23,726 | 23,119 | ||||||
| Total liabilities and shareholders’ equity | $ | 33,131 | $ | 32,417 | ||||
MIND C.T.I. LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| U.S. dollars in thousands | ||||||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||
| Net income | $ | 1,525 | $ | 1,390 | $ | 5,947 | $ | 5,383 | ||||||||
| Adjustments to reconcile net income to net cash provided | ||||||||||||||||
| by operating activities: | ||||||||||||||||
| Depreciation and amortization | 47 | 46 | 194 | 200 | ||||||||||||
| Accrued severance pay | 15 | 37 | 83 | 118 | ||||||||||||
| Deferred income taxes, net | (37 | ) | (30 | ) | (96 | ) | (128 | ) | ||||||||
| Unrealized gain from marketable securities, net | 7 | (16 | ) | 1 | (51 | ) | ||||||||||
| Realized gain on sale of property and equipment | – | – | (3 | ) | – | |||||||||||
| Realized gain on sale of marketable securities, net | – | – | (3 | ) | (25 | ) | ||||||||||
| Employees share-based compensation expenses | 39 | 42 | 171 | 213 | ||||||||||||
| Changes in operating asset and liability items: | ||||||||||||||||
| Increase in accounts receivable: | ||||||||||||||||
| Trade | 420 | 750 | 243 | 1,073 | ||||||||||||
| Other | 116 | 339 | 117 | 323 | ||||||||||||
| Decrease (increase) in prepaid expenses: | 80 | (43 | ) | 149 | (45 | ) | ||||||||||
| Increase (decrease) in accounts payable and accruals: | ||||||||||||||||
| Trade | (513 | ) | (774 | ) | (363 | ) | (901 | ) | ||||||||
| Other | (357 | ) | 116 | 399 | 58 | |||||||||||
| Change in operating lease liability | 6 | 38 | (52 | ) | 78 | |||||||||||
| Increase in deferred revenues | 1,130 | 419 | 111 | 203 | ||||||||||||
| Net cash provided by operating activities | 2,478 | 2,314 | 6,898 | 6,499 | ||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||
| Purchase of property and equipment | (49 | ) | (8 | ) | (82 | ) | (68 | ) | ||||||||
| Proceeds from sale of property and equipment | – | – | 3 | – | ||||||||||||
| Severance pay fund | (21 | ) | (31 | ) | (89 | ) | (126 | ) | ||||||||
| Proceeds from sale of marketable securities | – | 51 | 1,370 | 545 | ||||||||||||
| Investment in short-term bank deposits | (4,730 | ) | (2,080 | ) | (6,891 | ) | (385 | ) | ||||||||
| Net cash used in investing activities | (4,800 | ) | (2,068 | ) | (5,689 | ) | (34 | ) | ||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||
| Dividend paid | – | – | (5,197 | ) | (4,775 | ) | ||||||||||
| Net cash used in financing activities | – | – | (5,197 | ) | (4,775 | ) | ||||||||||
| TRANSLATION ADJUSTMENTS ON CASH AND CASH EQUIVALENTS | (16 | ) | 54 | (90 | ) | 91 | ||||||||||
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (2,338 | ) | 300 | (4,078 | ) | 1,781 | ||||||||||
| BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
6,520 | 7,960 | 8,260 | 6,479 | ||||||||||||
| BALANCE OF CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ | 4,182 | $ | 8,260 | $ | 4,182 | $ | 8,260 | ||||||||
About MIND
MIND CTI Ltd. is a leading provider of convergent end-to-end billing and customer care product-based solutions for service providers, unified communications analytics and call accounting solutions for enterprises as well as enterprise messaging solutions. MIND provides a complete range of billing applications for any business model (license, SaaS, managed service or complete outsourced billing service) for Wireless, Wireline, Cable, IP Services and Quad-play carriers. A global company, with over twenty years of experience in providing solutions to carriers and enterprises, MIND operates from offices in the United States, Romania, Germany, 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”, including estimations relating to the impact of the recent political situation in Ukraine, the impact of the COVID-19 pandemic and mitigation measures in connection thereto, expectations of the results of the Company’s business optimization initiative, integration of the company’s acquisitions and its projected outlook and results of operations. 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, but not limited to, the impact of the COVID-19 pandemic on our customers and economic conditions in our key markets, as well as the risks discussed in the Company’s annual report and other 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