-- Revenues were $5.08 million, similar to the fourth quarter of 2005,
representing a 9% increase over the third quarter of 2006.
-- Operating income, excluding amortization of intangible assets of $93
thousand and equity-based compensation expense of $81 thousand, was $978
thousand, or 19% of revenue.
-- GAAP operating income was $804 thousand, or 16% of revenue.
-- Net income, excluding amortization of intangible assets of $93
thousand, equity-based compensation expense of $81 thousand and a one-time
tax expense of $1.24 million, was $1.45 million or $0.07 per share.
-- GAAP net income was $37 thousand, or $0.00 per share, mainly due to
the one-time tax expense of $1.24 million.
-- Cash flow from operating activities in Q4 2006 was $832 thousand.
-- Strong cash position of approximately $38 million on December 31,
2006.
Year 2006 Financial Highlights
-- Revenues were $20.06 million, a 29% increase over 2005.
-- Operating income, excluding amortization of intangible assets of $773
thousand and equity-based compensation expense of $323 thousand, was $3.6
million, representing a 9% increase over 2005.
-- GAAP operating income was $2.5 million, compared with $2.85 million in
2005.
-- Net income, excluding amortization of intangible assets of $773
thousand, equity-based compensation expense of $323 thousand, a one-time
loss from withdrawal of long-term bank deposits of $1.33 million and a one-
time tax expense of $1.24 million, was $4.57 million, or $0.21 per share,
similar to 2005.
-- GAAP net income was $909 thousand or $0.04 per diluted share, compared
with $4.06 million, or $0.19 per diluted share in 2005.
Taxes on Income
Recently we went through a tax assessment process, which included disputes
with the Israeli Tax Authorities on issues related to the approved
enterprise regime. On February 20, 2007, the Company finalized its tax
assessment for tax years 2003 to 2005, which resulted in an additional tax
expense in the amount of $1.24 million. Of this amount, approximately $800
thousand will affect the Company's cash flow (in 2007).
Revenue Distribution for Q4 2006
Sales in the Americas represented 48% and sales in Europe represented 42%
of total revenue.
Revenue from our customer care and billing software totaled $4.17 million,
while revenue from our enterprise call management software was $910
thousand. The revenue breakdown from our business lines of products was
$2.09 million, or 41% from licenses, $1.60 million, or 32% from maintenance
and $1.39 million, or 27% from services.
Revenue Distribution for Full Year 2006
Sales in the Americas represented 48% and sales in Europe represented 38%
of total revenue.
Revenue from our customer care and billing software totaled $17.18 million,
while revenue from our enterprise call management software was $2.88
million. The revenue breakdown from our business lines of products was
$8.47 million, or 42% from licenses, $6.04 million, or 30% from maintenance
and $5.55 million, or 28% from services.
Dividend Distribution
On October 30, 2006 the Board of Directors resolved that the Company should
seek the court approval formally required in order to enable a distribution
for the year 2006, in an amount similar to previous years. Under Israeli
law, a company with insufficient retained earnings is required to obtain
approval from the court for such a distribution in order to ensure that the
Company's creditors are not harmed by the action. Following the receipt of
approval from the District Court of Haifa, on February 20, 2007 the Board
declared a cash dividend of $0.20 per share before withholding tax. The
Company expects to receive shortly a pre-ruling from the Israeli Income Tax
Authorities regarding the applicable rate of withholding tax. The
withholding rate, as well as the record date for the distribution of the
dividend and the payment date will be announced promptly after we receive
the formal ruling.
Conference Call Information
MIND will host a conference call on February 21, at 10:00 a.m., Eastern
Standard Time, to discuss the Company's fourth quarter and 2006 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.
About MIND
MIND CTI Ltd. is a leading provider of convergent prepaid and postpaid
end-to-end billing and customer care solutions for VoIP, Mobile, Wireline
and Quad-play carriers worldwide. Since 1997 MIND has been a pioneer in
enabling the VoIP technology for emerging and incumbent service providers.
In August 2005 MIND acquired Sentori, Inc., a US based provider of customer
care and billing solutions to wireless carriers and mobile virtual network
operators (MVNOs). Sentori, Inc. brings over ten years of wireless
experience and seven years of a wireless operational solution to carriers.
A global company, MIND operates from offices in Europe, Israel and the
United States. MIND employs over 300 IT professionals and serves customers
in more than 40 countries around the world. 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.
MIND C.T.I. LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31 September 30
------------------------------
2006 2005 2006
-------- -------- --------
U.S. $ in thousands
-----------------------------
Assets
CURRENT ASSETS:
Cash and cash equivalents $ 27,571 $ 10,174 $ 26,647
Accounts receivable:
Trade 5,385 3,389 4,862
Other 231 731 923
Deferred income taxes 154 8 8
Inventories 35 30 30
-------- -------- --------
Total current assets 33,376 14,332 32,470
-------- -------- --------
INVESTMENTS AND OTHER NON CURRENT ASSETS:
Marketable debentures 10,000
Long term bank deposits 30,000 10,000
Other 1,003 737 834
PROPERTY AND EQUIPMENT, net of accumulated
depreciation 1,558 1,957 1,790
INTANGIBLE ASSETS, net of accumulated
amortization 888 1,660 980
GOODWILL 6,966 6,966 6,966
-------- -------- --------
Total assets $ 53,791 $ 55,652 $ 53,040
======== ======== ========
Liabilities and shareholders’ equity
CURRENT LIABILITIES:
Accounts payable and accruals:
Trade $ 464 $ 686 $ 594
Other 2,509 1,741 1,497
Deferred revenues 1,236 1,644 1,580
Advances from customers 241 790 171
-------- -------- --------
Total current liabilities 4,450 4,861 3,842
-------- -------- --------
EMPLOYEE RIGHTS UPON RETIREMENT 1,482 1,306 1,495
-------- -------- --------
Total liabilities 5,932 6,167 5,337
SHAREHOLDERS’ EQUITY:
Share capital 54 53 53
Additional paid-in capital 59,547 59,399 59,510
Capital surplus 325 244
Accumulated deficit (12,067) (9,967) (12,104)
-------- -------- --------
Total shareholders' equity 47,859 49,485 47,703
-------- -------- --------
Total liabilities and shareholders’
equity $ 53,791 $ 55,652 $ 53,040
======== ======== ========
MIND C.T.I. LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Years Three months
ended December 31 ended December 31
------------------ -------------------
2006 2005 2006 2005
-------- --------- --------- ---------
U.S. $ in thousands
(except per share data)
--------------------------------------
REVENUES $ 20,060 $ 15,601 $ 5,075 $ 5,039
COST OF REVENUES 5,675 4,015 1,193 1,324
-------- --------- --------- ---------
GROSS PROFIT 14,385 11,586 3,882 3,715
RESEARCH AND DEVELOPMENT
EXPENSES 6,118 5,086 1,403 1,525
SELLING AND MARKETING EXPENSES 3,628 2,148 893 582
GENERAL AND ADMINISTRATIVE
EXPENSES 2,135 1,507 782 402
-------- --------- --------- ---------
OPERATING INCOME 2,504 2,845 804 1,206
FINANCIAL INCOME (EXPENSES) - net * (222) 1,260 527 112
-------- --------- --------- ---------
INCOME BEFORE TAXES ON INCOME 2,282 4,105 1,331 1,318
TAXES ON INCOME 1,373 43 1,294 9
-------- --------- --------- ---------
NET INCOME $ 909 $ 4,062 $ 37 $ 1,309
======== ========= ========= =========
EARNINGS PER ORDINARY SHARE
Basic and diluted $ 0.04 $ 0.19 $ 0.00 $ 0.06
======== ========= ========= =========
WEIGHTED AVERAGE NUMBER OF
ORDINARY SHARES USED IN
COMPUTATION OF EARNINGS PER
ORDINARY SHARE - IN THOUSANDS:
Basic 21,515 21,431 21,532 21,463
======== ========= ========= =========
Diluted 21,546 21,619 21,552 21,513
======== ========= ========= =========
* Financial expenses for the year ended December 31, 2006 include a loss
from a premature withdrawal of long-term deposits in the amount of
$1,330,000.
MIND C.T.I. LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended Three months ended
December 31 December 31
------------------ ------------------
2006 2005 2006 2005
-------- -------- -------- --------
U.S. $ in thousands
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 909 $ 4,062 $ 37 $ 1,309
-------- -------- -------- --------
Adjustments to reconcile net
income to net cash provided by
(used in) operating activities:
Depreciation and amortization 1,391 987 242 319
Deferred income taxes, net (293) (293)
Accrued severance pay 176 (151) (13) (140)
Capital loss (gain) on sale
of property and
equipment - net (3) (38) 6
Employees share based
compensation expenses 325 81
Changes in operating asset
and liability items:
Decrease (increase) in
accounts receivable:
Trade (1,996) 196 (523) 305
Interest accrued on
long-term bank
deposits and
marketable debentures (37) 242 (37)
Other 537 48 729 (23)
Increase in inventories (5) (12) (5) (12)
Increase (decrease) in
accounts payable and
accruals:
Trade (222) (697) (130) (123)
Other 768 (1,510) 1,012 (39)
Decrease in deferred
revenues (408) (799) (344) (255)
Increase (decrease) in
advances from customers (549) (1,467) 70 (1,925)
-------- -------- -------- --------
Net cash provided by (used in)
operating activities * 593 861 832 (584)
-------- -------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (379) (589) (40) (46)
Acquisition of a subsidiary,
net of cash acquired (a)(4,233) (231)
Amounts funds in respect of
accrued severance pay (119) 94 (22) 51
Investment in long-term bank
deposits (10,000)
Acquisition of marketable
debentures held-to-maturity (10,000) (10,000)
Withdrawal of long-term bank
deposits 30,000 10,000 10,000
Proceeds from sale of property
and equipment 162 175 116
-------- -------- -------- --------
Net cash provided by (used in)
investing activities 19,664 (4,553) 54 (226)
-------- -------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Employees stock options
exercised and paid 149 322 38
Dividend paid (3,009) (5,143)
-------- -------- -------- --------
Net cash provided by (used in)
financing activities (2,860) (4,821) 38 -,-
-------- -------- -------- --------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 17,397 (8,513) 924 (810)
BALANCE OF CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD 10,174 18,687 26,647 10,984
-------- -------- -------- --------
BALANCE OF CASH AND CASH
EQUIVALENTS AT END OF PERIOD $ 27,571 $ 10,174 $ 27,571 $ 10,174
======== ======== ======== ========
* Cash flow from operating activities for the year ended December 31, 2006
includes a loss from a premature withdrawal of long-term deposits in
the amount of $1,330,000.
MIND C.T.I. LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS (cont.)
Year ended
December 31, 2005
-------------------
U.S. $ in thousands
-------------------
(a) Acquisition of a subsidiary:
Assets and liabilities of the subsidiary
upon acquisition:
Working capital (excluding cash and
cash equivalents) $ (4,881)
Property and equipment 277
Intangible assets 1,871
Goodwill 6,966
-------------------
Cash paid – net $ 4,233
===================
Contact Information: For more information please contact: Andrea Dray MIND CTI Ltd. Tel: +972-4-993-6666 Email Contact