Yoqneam, Israel, February 8, 2005- 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 fourth quarter and year ended December 31, 2004.
Monica Eisinger, President and CEO, commented: "During 2004 we continued to successfully execute on our plan of growth and improved profitability. In 2004 we have reached our goals - sequential revenue growth, 16 new customers, over 20% operating income in Q4 2004 and expansion of the workforce.
Looking ahead, we expect to see four to five new customer wins per quarter, mainly in the VoIP area. At the same time the timing of both the order and revenue recognition for our solutions may be delayed as it occurs typically only after other vendors have provided the network infrastructure, a process that is subject to delay. MIND is not providing guidance for the first quarter at this time, due to uncertainty in the revenue recognition timing for two large recent wins. Delayed delivery by the equipment vendor of the hardware comprising the customer's network infrastructure might delay the acceptance process in one project and internal customer's issues might delay the delivery in the second case.
We have the right ingredients: our sophisticated technology, our proven ability to deliver solutions on time and our worldwide team. We believe that in the long term we will continue along the same path that we have built for over two years."
As of December 31, 2004, we had 252 employees in our four offices.
Financial Highlights of Q4 2004
Year 2004 Financial Highlights
Revenue Distribution for Q4 2004
The geographic revenue breakdown, as a percentage of total revenues, was as follows: sales in Europe represented 80%, the Americas represented 4%, Africa represented 9%, APAC represented 3% and Israel represented 4%.
Revenue from our customer care and billing software totaled $4.34 million, while revenue from our enterprise call management software was $536 thousand. The revenue breakdown from our business lines of products was $3.28 million, or 67%, from licenses, $1.22 million, or 25%, from maintenance and $380 thousand, or 8%, from services.
Revenue Distribution for Full Year 2004
The geographic revenue breakdown, as a percentage of total revenues, was as follows: sales in Europe represented 67%, the Americas represented 12%, Africa represented 10%, APAC represented 6% and Israel represented 5%.
Revenue from our customer care and billing software totaled $15.23 million, while revenue from our enterprise call management software was $2.58 million. The revenue breakdown from our business lines of products was $11.7 million, or 66%, from licenses, $4.43 million, or 25%, from maintenance and $1.68 thousand, or 9%, from services.
Dividend Distribution
As previously announced, the Company adopted a dividend policy on July 15, 2003 according to which, subject to Board approval prior to each dividend declaration and subject to the Companies Law, the Company will declare a cash dividend once per calendar year in an amount equal to the Company's net profits for the preceding calendar year.
On February 8, 2005, the Board declared a cash dividend in the amount equal to our 2004 net income, which is approximately $6.88 million. After deduction of a 25% tax payable by the Company on the amount of the dividend (because the dividend is from income that was tax exempt), a cash dividend of $0.24 per share will be distributable to shareholders, subject to an Israeli withholding tax of 15%. Accordingly, each shareholder will receive $0.204 per share after deduction of taxes required by the Israeli Tax Authority.
The record date for the dividend will be March 1, 2004, at 5:00 p.m. Eastern Standard Time and the payment date will be March 15, 2004.
Conference Call Information MIND will host a conference call on February 9, at 8:30 a.m., Eastern Standard Time, to discuss the Company's fourth quarter and 2004 results and other financial and business information. The call will be carried live on the Internet via http://www.fulldisclosure.com and the MIND website, http://www.mindcti.com. For those unable to listen to the live web cast, a replay will be available.
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:
Andrea Dray
MIND CTI Ltd.
Tel: +972-4-993-6666
investor@mindcti.com
| December 31 | September 30 | ||
| 2004 | 2003 | 2004 | |
| U.S. $ in thousands | |||
| A s s e t s | |||
| CURRENT ASSETS: | |||
Cash and cash equivalents |
18,687 | 4,391 | 7,870 |
Accounts receivable: |
|||
Trade |
3,418 | 2,181 | 3,071 |
Interest accrued on long-term bank deposits |
242 | 482 | 1,511 |
Other |
773 | 864 | 800 |
Inventories |
18 | 11 | 11 |
T o t a l current assets |
23,138 | 7,929 | 13,263 |
| LONG-TERM BANK DEPOSITS | 30,000 | 40,000 | 47,000 |
| PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization | 1,790 | 1,182 | 1,768 |
| OTHER ASSETS, net of accumulated amortization | 788 | 868 | 785 |
T o t a l assets |
55,716 | 49,979 | 62,816 |
| Liabilities and shareholders' equity | |||
| CURRENT LIABILITIES - | |||
accounts payable and accruals: |
|||
Trade |
466 | 718 | 322 |
Deferred revenues |
1,680 | 1,607 | 1,675 |
Other |
2,124 | 1,116 | 1,944 |
T o t a l current liabilities |
4,2701 | 3,441 | 3,941 |
| BANK LOANS | 10,000 | ||
| EMPLOYEE RIGHTS UPON RETIREMENT | 1,200 | 998 | 1,117 |
T o t a l current liabilities |
5,470 | 4,439 | 15,058 |
| SHAREHOLDERS' EQUITY: | |||
Share capital |
53 | 53 | 53 |
Additional paid-in capital |
59,079 | 58,514 | 58,728 |
Accumulated deficit |
(8,886) | (13,027) | (11,023) |
T o t a l shareholders' equity |
50,246 | 45,540 | 47,758 |
To t a l liabilities and shareholders' equity |
55,716 | 49,979 | 62,816 |
| Twelve months ended June 30 | Three months ended June 30 | ||||
| 2004 | 2003 | 2004 | 2003 | ||
| (Unaudited) | (Unaudited) | ||||
| U.S. $ in thousands (except per share data) | |||||
| REVENUES | $ 17,806 | $ 12,936 | $ 4,880 | $ 3,642 | |
| COST OF REVENUES | 4,394 | 3,208 | 1,205 | 902 | |
| GROSS PROFIT | 13,412 | 9,728 | 3,675 | 2,740 | |
| RESEARCH AND DEVELOPMENT EXPENSES - net | 3,833 | 3,319 | 963 | 889 | |
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: | |||||
Selling |
4,517 | 4,065 | 1,057 | 1,120 | |
General and administrative |
1,864 | 1,149 | 621 | 296 | |
| OPERATING INCOME | 3,198 | 1,195 | 1,034 | 435 | |
| FINANCIAL AND OTHER INCOME - net | 3,841 | 2,607 | 1,144 | 738 | |
| INCOME BEFORE TAXES ON INCOME | 7,039 | 3,802 | 2,178 | 1,173 | |
| TAXES ON INCOME | 162 | 169 | 41 | 94 | |
| NET INCOME | $ 6,877 | $ 3,633 | $ 2,137 | $ 1,079 | |
| EARNING (LOSS) PER SHARE | |||||
| Basic | $0.33 | $0.18 | $0.10 | $0.05 | |
| Diluted | $0.32 | $0.17 | $0.10 | $0.05 | |
| WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES USED IN COMPUTATION OF EARNINGS (LOSS) PER ORDINARY SHARE - IN THOUSANDS: | |||||
Basic |
21,089 | 20,732 | 21,184 | 20,744 | |
Diluted |
21,468 | 21,143 | 21,585 | 21,170 | |
| Years ended December 31 | Three months ended December 31 | ||||
| 2004 | 2003 | 2004 | 2003 | ||
| U.S. $ in thousands (except per share data) | |||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||
Net Income |
$ 6,877 | $ 3,633 | $ 2,137 | $ 1,079 | |
Adjustments to reconcile net income or loss to net cash provided by or used in operating activities: |
|||||
Depreciation and amortization |
680 | 806 | 160 | 189 | |
Deferred income taxes - net |
l | (8) | |||
Accrued severance pay - net |
202 | 189 | 83 | 56 | |
Capital loss (gain) on sale of property and equipment - net |
(7) | (35) | 5 | (24) | |
Changes in operating asset and liability items: |
|||||
Decrease (increase) in accounts receivable: |
|||||
Trade |
(1,237) | (155) | (347) | (705) | |
Interest accrued on short-term bank deposits |
240 | 1,149 | 1,269 | 2,651 | |
Other |
93 | (198) | 27 | (16) | |
accruals: |
|||||
Trade |
(252) | 551 | 144 | 494 | |
Other |
1,081 | 214 | 268 | (475) | |
Decrease (increase) in Inventories |
(7) | 3 | (7) | 3 | |
Net cash provided by operating activities |
7,670 | 6,149 | 3,739 | 3,252 | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||
Purchase of property and equipment |
(1,226) | (499) | (196) | (117) | |
Amounts funded in respect of accrued severance pay |
(120) | (105) | (53) | (32) | |
Investment in short-term bank deposits |
(40,000) | (77,000) | (30,000) | (37,000) | |
Withdrawal of long-term bank deposits |
50,000 | 67,000 | 47,000 | 34,825 | |
Proceeds from sale of fixed assets |
145 | 109 | 59 | 50 | |
Net cash used in (provided by) investing activities |
8,799 | (10,495) | 16,810 | (2,274) | |
| CASH FLOWS FROM FINANCING ACTIVITIES - | |||||
employee stock options exercised and paid |
563 | 354 | 351 | 257 | |
Dividend paid |
(2,736) | (2,929) | (2,929) | ||
Short term bank loans |
(10,083) | ||||
| Net cash provided by (used in) financing activities | (2,173) | (2,575) | (9,732) | (2,672) | |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 14,296 | (6,921) | 10,817 | (1,694) | |
| BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 4,391 | 11,312 | 7,870 | 6,085 | |
| BALANCE OF CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 18,687 | $ 4,391 | $ 18,687 | $ 4,391 | |