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| Press Release - April 20, 2005 |
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Yoqneam, Israel, April 20, 2005 MIND CTI Reports EPS of 5 cents in Q1 2005 * Positive Operating Cash Flow of $2 Million 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 first quarter ended March 31, 2005. Key Highlights of Q1 2005
Monica Eisinger, MIND chairperson and chief executive officer, commented: “After over two years of strong growth the market is showing some signs of fatigue this quarter, with both existing and potential customers delaying commitments. We are encouraged by a slight improvement towards the end of the quarter and expect to see sequential revenue growth in the second quarter. We are pleased that we maintained positive operating income and we believe that we maintained our market share. We continue to believe that the migration to converged networks is irreversible and we continue to invest in expanding our solutions to the new growing needs of billing for triple-play (voice, data and video). With an eye on expenses, we continue to recruit senior executives as we believe that the company will need a skilled management team to take advantage of the growth opportunities over the next few quarters and years. Although normal fluctuations in the business should be expected, we believe the long-term carrier migration to IP will result in revenue growth and profitability enhancement over the next few years." Revenue Distribution for Q1 2005 The geographic revenue breakdown, as a percentage of total revenues, was as follows: sales in Europe represented 48%, the Americas represented 14%, Africa represented 12%, APAC represented 16% and Israel represented 10%. Revenue from our customer care and billing software totaled $2.34 million, while revenue from our enterprise call management software was $741 thousand. The revenue breakdown from our business lines of products was $1.54 million, or 50%, from licenses, $1.28 million, or 41%, from maintenance and $265 thousand, or 9%, from services. New Board Member At the Annual General Meeting held in April 2005, Mr. Menahem Shalgi was elected as an outside director of the company. Mr. Menahem Shalgi is a senior Amdocs Inc. (NYSE: DOX) veteran, and brings over three decades of software and telecom industry experience. Mr. Shalgi recently served as Amdocs' VP Business Development and M&A. He was responsible for leading the company's new businesses strategy and in addition, Mr. Shalgi was responsible for investments and acquisitions. Prior to assuming the role of corporate Business Development and M&A, Mr. Shalgi was Amdocs VP and Executive Account Manager, responsible for Marketing, Sales, Development and Support for large international accounts. New Executive Addition We continue to add experienced people to further strengthen our management team. In April 2005 Mr. Benny Rosenbaum joined us to serve as COO, a new position at MIND. Prior to joining our company, he was CEO of a start-up in the Enterprise Software field and prior to that he was employed by Magic Software (NASDAQ: MGIC) for 14 years, where he served in various Sales, Business Development and Branch management positions. As of March 31, 2005, we had 252 employees in our offices in Israel, Romania, the United States and China. Conference Call Information MIND will host a conference call on April 21, at 8:30 a.m., Eastern Time, to discuss the Company's first quarter results and other financial and business information, including trends and guidance for the near future. 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
March 31 December 31,
--------------------- ------------
2005 2004 2004
--------- ----------- ------------
(Unaudited) (Audited)
--------------------- ------------
U.S. $ in thousands
----------------------------------
A s s e t s
CURRENT ASSETS:
Cash and cash equivalents $5,828 $5,945 $18,687
Accounts receivable:
Trade 1,780 1,660 3,418
Interest accrued on long-term
bank deposits 833 1,227 242
Other 455 889 773
Inventories 19 11 18
--------- ----------- ------------
T o t a l current assets 8,915 9,732 23,138
LONG-TERM BANK DEPOSITS 40,000 37,000 30,000
PROPERTY AND EQUIPMENT, net of
accumulated depreciation and
amortization 1,810 1,508 1,790
OTHER ASSETS, net of accumulated
amortization 644 824 788
--------- ----------- ------------
T o t a l assets $51,369 $49,064 $55,716
========= =========== ============
Liabilities and shareholders'
equity
CURRENT LIABILITIES -
accounts payable and accruals:
Trade $363 $530 $466
Deferred revenues 1,578 1,878 1,680
Other 1,891 1,425 2,124
--------- ----------- ------------
T o t a l current
liabilities 3,832 3,833 4,270
EMPLOYEE RIGHTS UPON RETIREMENT 1,139 1,009 1,200
--------- ----------- ------------
T o t a l liabilities 4,971 4,842 5,470
--------- ----------- ------------
SHAREHOLDERS' EQUITY:
Share capital 53 53 53
Additional paid-in capital 59,343 58,591 59,079
Accumulated deficit (12,998) (14,422) (8,886)
--------- ----------- ------------
T o t a l shareholders'
equity 46,398 44,222 50,246
--------- ----------- ------------
T o t a l liabilities and
shareholders' equity $51,369 $49,064 $55,716
========= =========== ============
MIND C.T.I. LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months Year ended
ended March 31 December 31,
------------------
2005 2004 2004
---------- ------- -------------
(Unaudited) (Audited)
------------------ -------------
U.S. $ in thousands
(except per share data)
--------------------------------
REVENUES $3,082 $4,005 $17,806
COST OF REVENUES 804 1,001 4,394
---------- ------- -------------
GROSS PROFIT 2,278 3,004 13,412
RESEARCH AND DEVELOPMENT EXPENSES 998 951 3,833
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES:
Selling 593 1,117 4,517
General and administrative 360 334 1,864
---------- ------- -------------
OPERATING INCOME 327 602 3,198
FINANCIAL AND OTHER INCOME - net 719 790 3,841
---------- ------- -------------
INCOME BEFORE TAXES ON INCOME 1,046 1,392 7,039
TAXES ON INCOME 15 51 162
---------- ------- -------------
NET INCOME $1,031 $1,341 $6,877
========== ======= =============
EARNING PER SHARE:
Basic $0.05 $0.06 $0.33
========== ======= =============
Diluted $0.05 $0.06 $0.32
========== ======= =============
WEIGHTED AVERAGE NUMBER OF
ORDINARY SHARES USED IN
COMPUTATION OF EARNINGS PER
SHARE - IN THOUSANDS:
Basic 21,364 20,762 21,089
========== ======= =============
Diluted 21,679 21,287 21,468
========== ======= =============
MIND C.T.I. LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months Year ended
ended March 31 December 31,
-----------------
2005 2004 2004
--------- ------- -------------
(In thousands of U.S. dollars)
-------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $1,031 $1,341 $6,877
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 180 187 680
Accrued severance pay (61) 17 202
Capital loss (gain) on sale
of property and equipment - net (23) 6 (7)
Changes in operating asset
and liability items:
Decrease (increase) in
accounts receivable:
Trade 1,638 521 (1,237)
Interest accrued on long-term
bank deposits (591) (871) 240
Other 318 (31) 93
Increase (decrease) in
accounts payable and accruals:
Trade (103) (188) (252)
Other (335) 580 1,081
Increase in Inventories (1) (7)
--------- ------- -------------
Net cash provided by operating
activities 2,053 1,562 7,670
--------- ------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and
equipment (216) (470) (1,226)
Amounts funded in respect of
accrued severance pay 94 (6) (120)
Investment in long-term bank
deposits (10,000) (40,000)
Withdrawal of long-term bank
deposits 3,126 50,000
Proceeds from sale of property
and equipment 89 1 145
--------- ------- -------------
Net cash provided by (used in)
investing activities (10,033) 2,651 8,799
--------- ------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Employee stock options
exercised and paid 264 77 563
Dividend paid (5,143) (2,736) (2,736)
--------- ------- -------------
Net cash used in financing
activities (4,879) (2,659) (2,173)
--------- ------- -------------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (12,859) 1,554 14,296
BALANCE OF CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD 18,687 4,391 4,391
--------- ------- -------------
BALANCE OF CASH AND CASH
EQUIVALENTS AT END OF PERIOD $5,828 $5,945 $18,687
========= ======= =============
About MIND MIND CTI Ltd. (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:
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