MIND CTI Reports Results for Q3 2012
Yoqneam, Israel, November 6, 2012 — 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 third quarter of 2012.
The following will summarize our business in the third quarter of 2012 and provide a more detailed review of the financial results for the quarter. Full financial results can be found in the Investors section www.mindcti.com/investor/PressReleases.asp and in our Form 6-K.
Financial Highlights
| · | Revenues were $4.71 million, compared with $4.63 million in the third quarter of 2011 and $5.29 million in the second quarter of 2012. |
| · | Operating income was $1.15 million, or 24% of revenue, compared with $992 thousand in the third quarter of 2011. |
| · | Net income was $1.25 million or $0.07 per share, compared with $891 thousand in the third quarter of 2011 or $0.05 per share. |
| · | Cash flow from operating activities was $181 thousand. |
| · | One new customer and multiple follow-on orders. |
| · | Cash position of $17.93 million on September 30, 2012. |
Revenue Distribution for Q3 2012
Sales in the Americas represented 57.7%, sales in Europe represented 27.7% and sales in Israel represented 8.7% of total revenue.
Revenue from customer care and billing software totaled $3.58 million, while revenue from enterprise call accounting software was $1.13 million.
Revenue from licenses was $1.1 million, or 23.2% of total revenue, while revenue from maintenance and additional services was $3.61 million, or 76.8%.
New Win
The new win is with a customer that is a well-known global technology leader who selected MIND’s PhonEX ONE Call Accounting solution, to support the global roll out of Cisco Telephony providing management reports on network utilization, general telephony traffic and costs throughout its worldwide organization. PhonEX ONE was chosen after a long selection process mainly as a result of its wealth of configurable reports and flexible functionality as well as its close integration with Cisco equipment. This win adds to a previously announced major global implementation with another worldwide technology leader. MIND has a proven record of providing a centralized call accounting solution that can successfully monitor and report on large size global deployments.
Monica Iancu, MIND CEO, commented: “As we previously announced, mainly due to consolidation of platforms at existing customers, some agreements were not renewed in 2012 and we feel the negative impact on our revenues and profitability.
As we support a more comprehensive functionality, our projects become more complex and the risk of on-time and on-budget implementation increases. The customers that implement larger size deals conduct lengthy and complex processes and our cost increases as the length of the complete process increases. We need to support each opportunity during the time required for the customer to determine their specifications and the time required for the customer to build up their network infrastructure and of course through the deployment and the first few months after going live. At the same time, competition is intense and the pricing for each project needs to be modest in order to win.
As always we focus on our targets: satisfied customers, successful project implementations, winning new business and profitability. "
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
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
| September 30, | December 31, | |||||||
| 2012 | 2011 | |||||||
| (Unaudited) | (Audited) | |||||||
| U.S. $ in thousands | ||||||||
| Assets | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 13,532 | $ | 13,866 | ||||
| Short term bank deposits | 3,902 | 4,275 | ||||||
| Available for sale securities | - | 409 | ||||||
| Accounts receivable: | ||||||||
| Trade | 1,702 | 1,763 | ||||||
| Other | 227 | 271 | ||||||
| Prepaid expenses | 138 | 51 | ||||||
| Deferred cost of revenues | 543 | 1,056 | ||||||
| Deferred taxes | 192 | 192 | ||||||
| Inventories | 29 | 29 | ||||||
| Total current assets | 20,265 | 21,912 | ||||||
| INVESTMENTS AND OTHER NON CURRENT ASSETS: | ||||||||
| Available for sale securities | 494 | 473 | ||||||
| Severance Pay Fund | 1,265 | 1,213 | ||||||
| Deferred cost of revenues | - | 28 | ||||||
| Deferred taxes | 85 | 85 | ||||||
| PROPERTY AND EQUIPMENT, net of accumulated depreciation | ||||||||
| and amortization | 703 | 880 | ||||||
| GOODWILL | 5,430 | 5,430 | ||||||
| Total assets | $ | 28,242 | $ | 30,021 | ||||
| Liabilities and shareholders’ equity | ||||||||
| CURRENT LIABILITIES : | ||||||||
| Accounts payable and accruals: | ||||||||
| Trade | $ | 183 | $ | 749 | ||||
| Other | 1,551 | 1,214 | ||||||
| Deferred revenues | 2,584 | 2,950 | ||||||
| Total current liabilities | 4,318 | 4,913 | ||||||
| LONG TERM LIABILITIES : | ||||||||
| Deferred revenues | 658 | 633 | ||||||
| Employee rights upon retirement | 1,558 | 1,456 | ||||||
| Total liabilities | 6,534 | 7,002 | ||||||
| SHAREHOLDERS’ EQUITY: | ||||||||
| Share capital | 54 | 54 | ||||||
| Additional paid-in capital | 30,118 | *30,057 | ||||||
| Accumulated other comprehensive income | 7 | (70 | ) | |||||
| Differences from translation of foreign currency financial statements of a subsidiary | (1,036 | ) | (1,149 | ) | ||||
| Treasury shares | (2,363 | ) | *(2,400 | ) | ||||
| Accumulated deficit | (5,072 | ) | (3,473 | ) | ||||
| Total shareholders’ equity | 21,708 | 23,019 | ||||||
| Total liabilities and shareholders’ equity | $ | 28,242 | $ | 30,021 | ||||
* Certain comparative figures have been reclassified to conform to the current year presentation.
MIND C.T.I. LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Nine months | Three months | Year ended | ||||||||||||||||||
| ended September 30 | ended September 30 | December 31, | ||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | 2011 | ||||||||||||||||
| (Unaudited) | (Audited) | |||||||||||||||||||
| U.S. $ in thousands | ||||||||||||||||||||
| (except per share data) | ||||||||||||||||||||
| Revenues | $ | 15,255 | $ | 13,970 | $ | 4,709 | $ | 4,627 | $ | 19,245 | ||||||||||
| Less: stock- based compensation granted to a customer | - | 332 | - | - | 332 | |||||||||||||||
| 15,255 | 13,638 | 4,709 | 4,627 | 18,913 | ||||||||||||||||
| Cost of revenues | 6,358 | 4,540 | 1,577 | 1,477 | 6,476 | |||||||||||||||
| Gross profit | 8,897 | 9,098 | 3,132 | 3,150 | 12,437 | |||||||||||||||
| Research and development expenses | 3,435 | 3,595 | 1,109 | 1,211 | 4,673 | |||||||||||||||
| Selling and marketing expenses | 1,147 | 1,421 | 405 | 469 | 1,995 | |||||||||||||||
| General and administrative expenses | 1,321 | 1,325 | 470 | 478 | 1,834 | |||||||||||||||
| Operating income | 2,994 | 2,757 | 1,148 | 992 | 3,935 | |||||||||||||||
| Financial income (expenses) - net | 191 | 327 | 167 | (76 | ) | 171 | ||||||||||||||
| Income before taxes on income | 3,185 | 3,084 | 1,315 | 916 | 4,106 | |||||||||||||||
| Income tax expense (benefit) | 279 | 64 | 68 | 25 | (185 | ) | ||||||||||||||
| Net income | $ | 2,906 | $ | 3,020 | $ | 1,247 | $ | 891 | $ | 4,291 | ||||||||||
| Earning per ordinary share: | ||||||||||||||||||||
| Basic and diluted | $ | 0.15 | $ | 0.16 | $ | 0.07 | $ | 0.05 | $ | 0.23 | ||||||||||
| Weighted average number of ordinary shares used in computation of earnings per ordinary share - | ||||||||||||||||||||
| in thousands: | ||||||||||||||||||||
| Basic | 18,763 | 18,662 | 18,775 | 18,727 | 18,679 | |||||||||||||||
| Diluted | 18,838 | 18,847 | 18,864 | 18,812 | 18,803 | |||||||||||||||
MIND C.T.I. LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Nine months | Three months | Year ended | ||||||||||||||||||
| ended September 30 | ended September 30 | December 31, | ||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | 2011 | ||||||||||||||||
| (Unaudited) | (Audited) | |||||||||||||||||||
| U.S. $ in thousands | ||||||||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||||||
| Net income | $ | 2,906 | $ | 3,020 | $ | 1,247 | $ | 891 | $ | 4,291 | ||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||||
| Depreciation and amortization | 212 | 222 | 67 | 72 | 295 | |||||||||||||||
| Financial loss (income) from available for sale securities | (3 | ) | 19 | - | - | 47 | ||||||||||||||
| Deferred income taxes, net | - | - | - | - | (277 | ) | ||||||||||||||
| Accrued severance pay | 130 | (90 | ) | 48 | (51 | ) | (138 | ) | ||||||||||||
| Capital loss (gain) on sale of property and equipment - net | 2 | (19 | ) | 9 | - | (19 | ) | |||||||||||||
| Employees share-based compensation expenses | 61 | 44 | 19 | 11 | 61 | |||||||||||||||
| Stock- based compensation granted to a customer (deducted from revenues) | - | 332 | - | - | 332 | |||||||||||||||
| Realized loss on sale of available for sale securities | 24 | - | - | - | 61 | |||||||||||||||
| Changes in operating asset and liability items: | ||||||||||||||||||||
| Decrease (increase) in accounts receivable: | ||||||||||||||||||||
| Trade | 61 | (86 | ) | (368 | ) | 19 | (168 | ) | ||||||||||||
| Other | 90 | (129 | ) | 96 | (8 | ) | (167 | ) | ||||||||||||
| Decrease (increase) in prepaid expenses and deferred charges | 454 | (275 | ) | (48 | ) | (261 | ) | (705 | ) | |||||||||||
| Decrease in inventories | - | - | - | - | 1 | |||||||||||||||
| Increase (decrease) in accounts payable and accruals: | ||||||||||||||||||||
| Trade | (570 | ) | 73 | (375 | ) | (8 | ) | 505 | ||||||||||||
| Other | 335 | 159 | 57 | 23 | (22 | ) | ||||||||||||||
| Increase (decrease) in deferred revenues | (345 | ) | (471 | ) | (571 | ) | (378 | ) | 288 | |||||||||||
| Net cash provided by operating activities | 3,357 | 2,799 | 181 | 310 | 4,385 | |||||||||||||||
| Cash flows from investing activities: | ||||||||||||||||||||
| Purchase of property and equipment | (113 | ) | (217 | ) | (13 | ) | (48 | ) | (401 | ) | ||||||||||
| Purchase of available for sale securities | - | (2,505 | ) | - | (500 | ) | (2,505 | ) | ||||||||||||
| Sale of available for sale securities | 444 | - | - | - | 1,445 | |||||||||||||||
| Severance pay funds | (80 | ) | 140 | (36 | ) | 37 | 191 | |||||||||||||
| Decrease (Increase) in deposits, net | 408 | (1,223 | ) | (1,549 | ) | (712 | ) | (1,393 | ) | |||||||||||
| Proceeds from sale of property and equipment | 76 | 79 | 37 | - | 79 | |||||||||||||||
| Net cash provided by (used in) investing activities | 735 | (3,726 | ) | (1,561 | ) | (1,223 | ) | (2,584 | ) | |||||||||||
| Cash flows from financing activities: | ||||||||||||||||||||
| Employee stock options exercised and paid | 37 | 398 | 5 | 1 | 399 | |||||||||||||||
| Dividend paid | (4,505 | ) | (5,968 | ) | - | - | (5,968 | ) | ||||||||||||
| Net cash used in financing activities | (4,468 | ) | (5,570 | ) | 5 | 1 | (5,569 | ) | ||||||||||||
| Translation adjustments on cash and Cash equivalents | 42 | 74 | 23 | (12 | ) | 52 | ||||||||||||||
| Increase (decrease) in cash and cash equivalents | (334 | ) | (6,423 | ) | (1,352 | ) | (924 | ) | (3,716 | ) | ||||||||||
| Balance of cash and cash equivalents at beginning of period | 13,866 | 17,582 | 14,884 | 12,083 | 17,582 | |||||||||||||||
| Balance of cash and cash equivalents at end of period | $ | 13,532 | $ | 11,159 | $ | 13,532 | $ | 11,159 | $ | 13,866 | ||||||||||