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| Press Release - February 10, 2004 |
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Yoqneam, Israel, February 10, 2004 MIND CTI Reports 42% Rise in Revenue * Sequential revenue growth of 8% * MIND expects Q1 2004 revenue of $3.8-$3.9 million * Board declares cash dividend Key Highlights 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, 2003. Monica Eisinger, President and CEO, commented: “Our fourth quarter results reflect the continued acceptance of our solutions and our market leadership in real-time billing for convergent VoIP networks. During the quarter, we continued to deploy expansions of license and services to key customers as well as new projects. Looking ahead, we expect to see new customer wins, especially in the VoIP area and continued growth in customer extensions as a result of our increased activity in Europe and Latin America. Our proven ability to deliver product-based solutions in short deployment time, positions us well to capitalize on the growth of IP services deployments. We are confident in our strategy and that we can leverage the current improvement in the market to achieve growth in the coming quarters." As of December 31, 2003, we had 183 employees in our offices in the United States, Romania, China and Israel. Financial Highlights of Q4 2003 Year 2003 Financial Highlights Revenue Distribution for Q4 2003 The geographic revenue breakdown, as a percentage of total revenues, was as follows: sales in Europe represented 62%, Africa represented 20%, the Americas represented 11% and Israel represented 7%. Revenue from our customer care and billing software totaled $2.95 million, while revenue from our enterprise call management software was $687 thousand. The revenue breakdown from our business lines of products was $2.45 million, or 67%, from licenses, $783 thousand, or 22%, from maintenance and $410 thousand, or 11%, from services. Revenue Distribution for Full Year 2003 The geographic revenue breakdown, as a percentage of total revenues, was as follows: sales in Europe represented 47%, the Americas represented 18%, Africa represented 15%, APAC represented 12% and Israel represented 8%. Revenue from our customer care and billing software totaled $10.39 million, while revenue from our enterprise call management software was $2.55 million. The revenue breakdown from our business lines of products was $8.11 million, or 63%, from licenses, $3.37 million, or 26%, from maintenance and $1.46 thousand, or 11%, 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 10, 2004, the Board declared a cash dividend in the amount equal to our 2003 net income, which is approximately $3.63 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 $0.13 per share will be distributable to shareholders, subject to an Israeli withholding tax of 15%. Accordingly, each shareholder will receive $0.1105 per share after deduction of taxes required by the Israeli Tax Authority. The record date for the dividend will be February 24, 2004, at 5:00 p.m. (New York time) and the payment date will be March 8, 2004. Conference Call Information MIND will host a conference call on February 11, at 8:30 a.m., Eastern Standard Time, to discuss the Company's fourth quarter and 2003 results and other financial and business information. 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
December 31, September 30,
----------------------
2003 2002 2003
----------- ---------- -------------
(Audited) (Unaudited)
---------------------- -------------
U.S. $ in thousands
------------------------------------
A s s e t s
CURRENT ASSETS:
Cash and cash equivalents 4,391 11,312 6,085
Accounts receivable:
Trade 2,181 2,026 1,476
Other 864 658 848
Inventories 11 14 14
----------- ---------- -------------
T o t a l current assets 7,447 14,010 8,423
LONG-TERM BANK DEPOSITS 40,482 31,631 40,958
PROPERTY AND EQUIPMENT , net 1,182 1,363 1,230
OTHER ASSETS, net of accumulated
amortization 868 963 886
T o t a l assets 49,979 47,967 51,497
=========== ========== =============
Liabilities and shareholders' equity
CURRENT LIABILITIES -
accounts payable and accruals:
Trade 718 167 224
Other 2,723 2,509 3,198
----------- ---------- -------------
T o t a l current
liabilities 3,441 2,676 3,422
ACCRUED SEVERANCE PAY 998 809 942
----------- ---------- -------------
T o t a l liabilities 4,439 3,485 4,364
----------- ---------- -------------
SHAREHOLDERS' EQUITY:
Share capital 52 52 52
Additional paid-in capital 58,515 61,090 61,187
Accumulated deficit (13,027) (16,660) (14,106)
----------- ---------- -------------
T o t a l shareholders'
equity 45,540 44,482 47,133
----------- ---------- -------------
T o t a l liabilities and
shareholders' equity 49,979 47,967 51,497
=========== ========== =============
MIND C.T.I. LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Twelve months Three months
ended ended
December 31, December 31,
----------------- -----------------
2003 2002 2003 2002
------- ------- ------- -------
(Audited) (Unaudited)
----------------- -----------------
U.S. $ in thousands (except per
share data)
-----------------------------------
REVENUES $12,936 $10,008 $ 3,642 $ 2,561
COST OF REVENUES 3,208 2,479 902 606
------- ------- ------- -------
GROSS PROFIT 9,728 7,529 2,740 1,955
RESEARCH AND DEVELOPMENT
EXPENSES - net 3,319 3,723 889 820
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES:
Selling 4,065 4,154 1,120 758
General and administrative 1,149 1,279 296 271
------- ------- ------- -------
OPERATING INCOME (LOSS) 1,195 (1,627) 435 106
FINANCIAL AND OTHER INCOME - net 2,607 2,078 738 943
------- ------- ------- -------
INCOME BEFORE TAXES ON INCOME 3,802 451 1,173 1,049
TAXES ON INCOME 169 117 94 117
------- ------- ------- -------
NET INCOME $ 3,633 $ 334 $ 1,079 $ 932
======= ======= ======= =======
EARNINGS PER ORDINARY
SHARE:
Basic $ 0.18 $ 0.02 $ 0.06 $ 0.05
======= ======= ======= =======
Diluted $ 0.17 $ 0.02 $ 0.05 $ 0.04
======= ======= ======= =======
WEIGHTED AVERAGE NUMBER OF
ORDINARY SHARES USED IN
COMPUTATION OF EARNING PER
ORDINARY SHARE - IN THOUSANDS:
Basic 20,732 20,677 20,744 20,677
======= ======= ======= =======
Diluted 21,143 20,761 21,170 20,761
======= ======= ======= =======
MIND C.T.I. LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended Three months ended
December 31 December 31
------------------- ------------------
2003 2002 2003 2002
--------- --------- --------- --------
(U.S. dollars in thousands)
--------------------------------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $ 3,633 $ 334 $ 1,079 $ 932
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and
amortization 806 944 189 203
Deferred income taxes - net (8) 16
Compensation expense
resulting from options
granted to employees 138 31
Accrued severance pay 189 37 56 46
Capital loss (gain) on
sale of property and
equipment - net (35) 14 (24) 4
Interest accrued on short-
term bank deposits (2,159) (1,631) (657) (807)
Changes in operating asset
and liability items:
Decrease (increase) in
accounts receivable:
Trade (155) 888 (705) 603
Other (198) 281 (16) 96
Increase (decrease) in
accounts payable and
Accruals:
Trade 551 (318) 494 (306)
Other 214 1,023 (475) 257
Decrease in inventories 3 12 3 14
--------- --------- --------- --------
Net cash provided by (used
in) operating activities 2,841 1,738 (56) 1,073
--------- --------- --------- --------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of property and
equipment (499) (180) (117) (40)
Investment in short-term bank
deposits (77,000) (30,000) (37,000)
Withdrawal of long-term
bank deposits 70,308 38,133
Severance pay funded (105) (37) (32) (33)
Proceeds from sale of fixed
assets 109 49 50
--------- --------- --------- --------
Net cash provided by (used
in) investing activities (7,187) (30,168) 1,034 (73)
--------- --------- --------- --------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Employee stock options
exercised and paid 354 19 257 12
Reduction of premium share (2,929) (2,929)
--------- --------- --------- --------
Net cash provided by (used in)
financing activities (2,575) 19 (2,672) 12
--------- --------- --------- --------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (6,921) (28,411) (1,694) 1,012
BALANCE OF CASH AND CASH
EQUIVALENTS AT BEGINNING OF
PERIOD 11,312 39,723 6,085 10,300
--------- --------- --------- --------
BALANCE OF CASH AND CASH
EQUIVALENTS AT END OF
PERIOD $ 4,391 $ 11,312 $ 4,391 $11,312
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