EX-99.1 2 v402901_ex99-1.htm EXHIBIT 99.1

 

EXHIBIT 99.1

 

MIND CTI Reports Record Revenue of $25 Million in 2014

 

*Board Declares Cash Dividend

 

 

Yoqneam, Israel, February 26, 2015 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 as well as unified communications analytics and call accounting solutions for enterprises, today announced results for the fourth quarter and year ended December 31, 2014.

 

The following will summarize our business in the fourth quarter of 2014 and provide a more detailed review of the financial results for the quarter. The financial results can be found in the Investors section www.mindcti.com/investor/PressReleases.asp and in our Form 6-K.

 

Financial Highlights of Q4 2014

·Revenues of close to $6.5 million, same as the third quarter of 2014, and up 28% from $5.1 million in the fourth quarter of 2013.
·Operating income was $2.5 million, up 15% sequentially from the third quarter of 2014 and compared to $1.0 million in the fourth quarter of 2013.
·Net income of $1.9 million or $0.10 per share, compared to $1.0 million or $0.05 per share in the fourth quarter of 2013.
·One modest win and multiple upgrades.

 

As of December 31, 2014 we had 352 employees, the same as of December 31, 2013.

 

Year 2014 Financial Highlights

·Revenues of $25 million, up 35% from $18.5 million in 2013.
·Operating income was $7.5 million, or 29.8% of revenue, compared to $2.2 million, or 11.7% of revenue, in 2013.
·Net income of $5.5 million, or $0.29 per share, compared to $2.2 million or $0.12 per share in 2013.
·Cash flow from operating activities was $3.8 million, compared to $5.2 million in 2013.
·Cash position of approximately $19.3 million as of December 31, 2014.

 

Monica Iancu, CEO, commented: “We are pleased that in 2014 we succeeded to translate the large deals we signed in 2013 into revenues through successful execution of the implementation of our projects milestones. While in 2014 we reached exceptional revenues and operating margins, some new deals that we expected to close in 2014 were delayed, thus our booking is lower than a year ago.”

 

Revenue Distribution for Q4 2014

Revenues in the Americas represented 54.5% of total revenues, revenues in Europe represented 34.2% and revenues in Israel represented 6.6% of total revenues.

 

Revenues from our customer care and billing software totaled $5.5 million, or 85% of total revenues, while revenues from our enterprise call accounting software were $1.0 million, or 15% of total revenues.

 

Revenues from licenses were $1.2 million, or 18% of total revenues, while revenues from maintenance and additional services were $5.3 million, or 82% of total revenues.

 

Revenue Distribution for Full Year 2014

Revenues in the Americas represented 57.6%, revenues in Europe represented 28.6% and revenues in Israel represented 9.0% of total revenue.

 

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Revenues from our customer care and billing software totaled $21.0 million, or 84% of total revenues, compared with $14.2 million, or 77% of total revenues in 2013, while revenues from our enterprise call accounting software were $4.0 million, or 16% of total revenue, compared with $4.3 million or 23% of total revenues in 2013.

 

Revenues from licenses were $5.4 million, or 21.6% of total revenues, compared with $4.6 million, or 25% of total revenues in 2013 while revenues from maintenance and additional services were $19.6 million, or 78.4%, compared with $13.9 million or 75% of total revenues in 2013.

 

New Wins & Follow-on Orders in Q4 2014

In the fourth quarter we had one modest new win as well as some major upgrades from existing customers, the upgrades mainly for service enhancements and additional functionalities.

 

The new win is with a leading European global financial services company. PhonEX-ONE has been chosen for its advanced telecom business analysis and cost control management solution for global organizations.

 

One major upgrade includes enhancement of the MIND system to distinguish between data services (Internet, MMS, VoLTE), and to authorize and rate these differently. MIND will provide different configurable authorization amounts for “capping” the data services that will be offered by this customer.

 

Dividend Distribution

Since July 2003, when we first adopted a dividend policy, according to which we declare, subject to specific Board approval and applicable law, a dividend distribution once per year, we have distributed 11 yearly dividends with an average of 21 cents per share.

 

We continue to believe that our annual dividends enhance shareholders value and we plan to continue with yearly distributions.

 

Taking into consideration our dividend policy and the remaining cash after the distribution, our Board declared on February 26, 2015 a gross dividend of $0.30 per share. The record date for the dividend will be March 12, 2015 and the payment date will be March 26, 2015. Tax will be withheld at a rate of about 24%.

 

Investing in R&D

In order to maintain a state-of-the-art technology, each year we invest in R&D, sometimes adding new modules, sometimes in order to be compliant with new standards and many times to keep up with the new tools and new platforms that we use to build upon.

 

In 2014, along with supporting the additional needs defined by our customers, we invested significantly in a massive upgrade of the MINDBill infrastructure that includes technology updates of the entire spectrum, including application infrastructure, application server and database upgrades and improved monitoring.

 

New Office in Romania

Lately we started to analyze the option to open a new MIND office location in East Europe in order to enlarge and diversify our teams, mainly in the Professional Services department.

 

We checked the availability of qualified resources and office space in several locations, and we decided that Suceava, Romania is the preferred location. Our second location in Romania started to operate on February 16, 2015.

 

Monica concluded: “We are pleased as always with the growing recurring revenues and the follow-on orders that reconfirm our customer satisfaction. We operate in a very active market that shows continuous demand for our products and services and we expect that in 2015 we will be able to close new deals and significant follow-on orders. The valuable customer base, well supported by our devoted professional team and the ongoing investment in development of enhanced functionality and state-of-the-art technology are the basis for our expected long-term continuous performance.”

 

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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 unified communications analytics and call accounting solutions for enterprises. MIND provides a complete range of billing applications for any business model (license, managed service or complete outsourced billing service) for Wireless, Wireline, Cable, IP Services and Quad-play carriers in more than 40 countries around the world. A global company, with over thirteen years of experience in providing solutions to carriers and enterprises, MIND operates from offices in the United States, 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.

 

For more information please contact:

Andrea Dray

MIND CTI Ltd.

Tel: +972-4-993-6666

investor@mindcti.com

 

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MIND C.T.I. LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

   Three months   Year 
   ended   ended 
   December 31   December 31 
   2014   2013   2014   2013 
   U.S. $ in thousands 
   (except per share data) 
                 
Revenues  $6,519   $5,086   $25,020   $18,480 
Cost of revenues   2,559    1,923    9,950    7,871 
Gross profit   3,960    3,163    15,070    10,609 
                     
Research and development expenses   776    1,280    4,539    5,030 
Selling and marketing expenses   291    446    1,140    1,694 
General and administrative expenses   379    459    1,934    1,726 
Operating income   2,514    978    7,457    2,159 
                     
Financial income (expenses) - net   (130)   2    (306)   163 
Income before taxes on income   2,384    980    7,151    2,322 
                     
Income tax expenses (benefits)   486    (37)   1,668    137 
                     
Net Income  $1,898   $1,017   $5,483   $2,185 
                     
Earnings per ordinary share:                    
Basic and Diluted  $0.10   $0.05   $0.29   $0.12 
                     
Weighted average number of ordinary shares used in computation of earnings per ordinary share - in thousands:                    
                     
Basic   19,010    18,885    18,949    18,869 
                     
Diluted   19,114    18,897    19,032    18,890 

 

* Certain comparative figures have been reclassified to conform to the current year presentation.

 

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MIND C.T.I. LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   December 31,   December 31, 
   2014   2013 
   U.S. $ in thousands 
Assets          
CURRENT ASSETS:          
Cash and cash equivalents  $8,100   $8,212 
Short term bank deposits   4,551    8,266 
Marketable securities   5,038    2,836 
Accounts receivable:          
Trade   2,595    1,241 
Other   234    165 
Prepaid expenses   384    221 
Deferred cost of revenues   21    63 
Deferred income taxes   175    256 
Inventory   10    10 
Total current assets   21,108    21,270 
           
INVESTMENTS AND OTHER NON CURRENT ASSETS:          
Marketable securities - available-for-sale   1,574    517 
Severance pay fund   1,597    1,673 
Deferred cost of revenues   -    44 
Deferred income taxes   20    40 
PROPERTY AND EQUIPMENT, net of accumulated depreciation
and amortization		   618    650 
GOODWILL   5,430    5,430 
Total assets  $30,347   $29,624 
           
Liabilities and shareholders’ equity          
CURRENT LIABILITIES :          
Accounts payable and accruals:          
Trade  $138   $525 
Other   2,306    1,153 
Deferred revenues   3,671    4,796 
Total current liabilities   6,115    6,474 
LONG TERM LIABILITIES :          
Deferred revenues   134    357 
Employee rights upon retirement   1,687    1,804 
Total liabilities   7,936    8,635 
           
SHAREHOLDERS’ EQUITY:          
Share capital   54    54 
Additional paid-in capital   25,724    30,196 
Accumulated other comprehensive income (loss)   (63)   31 
Differences from translation of foreign currency financial statements
of a subsidiary		   (877)   (958)
Treasury shares   (1,863)   (2,287)
Accumulated deficit   (564)   (6,047)
Total shareholders’ equity   22,411    20,989 
Total liabilities and shareholders’ equity  $30,347   $29,624 

 

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MIND C.T.I. LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

   Three months   Year 
   ended   ended 
   December 31   December 31 
   2014   2013   2014   2013 
   U.S. $ in thousands 
Cash flows from operating activities:                    
Net Income  $1,898   $1,017   $5,483   $2,185 
                     
Adjustments to reconcile net income to net cash provided by operating activities:                    
Depreciation and amortization   55    66    233    250 
Deferred taxes, net   (32)   (157)   101    (157)
Accrued severance pay   92    -    68    77 
Unrealized loss (gain)  from marketable securities, net   9    6    (26)   6 
Capital loss (gain) on sale of equipment, net   -    1    -    (5)
Employees share-based compensation expenses   22    13    72    58 
Realized loss (gain) on sale of marketable securities - available for sale, net   1    (1)   (9)   1 
Changes in operating asset and liability items:                    
Decrease (increase) in accounts receivable:                    
Trade   (528)   (79)   (1,354)   (390)
Other   (42)   41    (70)   (15)
Decrease (increase)  in prepaid expenses and work in process   7    137    (77)   351 
Decrease in inventories   -    3    -    3 
Increase (decrease) in accounts payable and accruals:                    
Trade   41    276    (387)   412 
Other   (269)   (424)   1,153    1 
Increase (decrease) in deferred revenues   (918)   574    (1,346)   2,413 
Net cash provided by operating activities   336    1,473    3,841    5,190 
                     
Cash flows from investing activities:                    
Purchase of property and equipment   (36)   (21)   (201)   (240)
Proceeds from sale of marketable securities- available for sale   -    -    522    - 
Severance pay funds   (163)   (104)   (109)   (162)
Investment in short term bank deposits   (314)   (1,715)   -    (2,559)
Realization of short-term bank deposits   -    -    3,746    - 
Investment in marketable securities - available for sale   (301)   -    (1,664)   - 
Investments in marketable securities   (646)   (770)   (2,176)   (2,842)
Proceeds from sale of property and equipment   -    7    -    26 
Net cash provided by (used in) investing activities   (1,460)   (2,603)   118    (5,777)
                     
Cash flows from financing activities:                    
Employee stock options exercised and paid   257    -    424    73 
Dividend paid   -    -    (4,544)   (4,532)
Net cash provided by (used in) financing activities   257    -    (4,120)   (4,459)
                     
Translation adjustments on cash                    
and cash equivalents   1    4    49    (52)
Decrease in cash and cash equivalents   (866)   (1,126)   (112)   (5,098)
                     
Balance of cash and cash equivalents at beginning of period   8,966    9,338    8,212    13,310 
Balance of cash and cash equivalents at end of period  $8,100   $8,212   $8,100   $8,212 

 

 

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