Cash Flow From Operating Activities of $1.05 Million
-- Revenues of $4.66 million, a 15% increase over the third quarter of
2005.
-- Operating income, excluding amortization of intangible assets and
equity-based compensation expense of $677 thousand.
-- Net income, excluding amortization of intangible assets and equity-
based compensation expense, of $972 thousand or $0.05 per share.
-- GAAP net income of $710 thousand or $0.03 per share.
-- Cash flow from operating activities in Q3 2006 was $1.05 million.
-- Strong cash position of approximately $37 million on September 30,
2006.
Dividend Policy and Dividend Distribution
In July 2003, the Board of Directors had adopted our dividend policy. We
have since distributed dividends four times and we intend to continue to
distribute cash dividends based on factors that include our cash position
and our activities.
Today, 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 of approximately $4 million, which is similar to previous years'
average. 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.
In view of the strong cash position of approximately $37 million, the
Company expects to obtain such court approval within eight to twelve weeks,
although there is no guarantee that such approval will not be delayed or
denied.
Prior to paying any dividend, which is still subject to specific Board
approval, the Company will issue a press release announcing the exact
dividend amount, record date and distribution date.
"Given our strong cash position and our positive operating cash flow, we
believe that our dividend policy enhances shareholders value," stated
Monica. "We are well positioned and have the required resources to respond
to potentially increasing market needs and at the same time we are focused
on targeting potential acquisitions that could benefit the company growth."
Conference Call Information
MIND will host a conference call on October 31, 2006 at 8:30 a.m., Eastern
Standard Time, to discuss the Company's third quarter 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 staff 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
September 30
------------------------ December 31,
2006 2005 2005
----------- ----------- -----------
(Unaudited) (Audited)
------------------------ -----------
U.S. $ in thousands
-------------------------------------
A s s e t s
CURRENT ASSETS:
Cash and cash equivalents $ 26,647 $ 10,984 $ 10,174
Accounts receivable:
Trade 4,862 3,694 3,389
Other 931 716 739
Inventories 30 18 30
----------- ----------- -----------
T o t a l current assets 32,470 15,412 14,332
LONG-TERM BANK DEPOSITS 10,000 30,000 30,000
OTHER LONG-TERM ASSETS 554 437 480
PROPERTY AND EQUIPMENT, net of
accumulated depreciation and
amortization 1,790 2,057 1,957
INTANGIBLE ASSETS, net of
accumulated amortization 980 * 1,834 1,660
GOODWILL 6,966 * 6,966 6,966
----------- ----------- -----------
T o t a l assets $ 52,760 $ 56,706 $ 55,395
=========== =========== ===========
Liabilities and shareholders' equity
CURRENT LIABILITIES:
Accounts payable and accruals:
Trade $ 594 $ 809 $ 686
Other 1,497 * 2,009 1,741
Deferred revenues 1,580 * 1,899 1,644
Advances from customers, net 171 * 2,715 790
----------- ----------- -----------
T o t a l current
liabilities 3,842 7,432 4,861
EMPLOYEE RIGHTS UPON RETIREMENT 1,215 1,098 1,049
----------- ----------- -----------
T o t a l liabilities 5,057 8,530 5,910
----------- ----------- -----------
SHAREHOLDERS' EQUITY:
Share capital 53 53 53
Additional paid-in capital 59,510 59,399 59,399
Compensation in respect of
options granted to employees 244
Accumulated deficit (12,104) (11,276) (9,967)
----------- ----------- -----------
T o t a l shareholders'
equity 47,703 48,176 49,485
----------- ----------- -----------
T o t a l liabilities and
shareholders' equity $ 52,760 $ 56,706 $ 55,395
=========== =========== ===========
* Reclassified.
MIND C.T.I. LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Nine months Three months Year ended
ended September 30 ended September 30 December
------------------ ------------------ 31,
2006 2005 2006 2005 2005
-------- -------- -------- -------- --------
(Unaudited) (Unaudited) (Audited)
------------------ ------------------ --------
U.S. $ in thousands
------------------------------------------------
REVENUES $ 14,985 $ 10,562 $ 4,659 $ 4,058 $ 15,601
COST OF REVENUES 4,482 2,691 1,392 1,084 4,015
-------- --------- --------- --------- -----------
GROSS PROFIT 10,503 7,871 3,267 2,974 11,586
RESEARCH AND
DEVELOPMENT
EXPENSES 4,715 3,561 1,389 1,452 5,086
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES:
Selling 2,735 1,566 868 546 2,148
General and
administrative 1,353 1,143 595 390 1,507
-------- --------- --------- --------- -----------
OPERATING INCOME 1,700 1,601 415 586 2,845
FINANCIAL INCOME
(EXPENSES) - net * (749) 1,186 304 165 1,260
-------- --------- --------- --------- -----------
INCOME BEFORE TAXES ON
INCOME 951 2,787 719 751 4,105
TAXES ON INCOME 79 34 9 9 43
-------- --------- --------- --------- -----------
NET INCOME $ 872 $ 2,753 $ 710 $ 742 $ 4,062
======== ========= ========= ========= ===========
EARNING PER SHARE-
Basic and diluted $ 0.04 $ 0.13 $ 0.03 $ 0.03 $ 0.19
======== ========= ========= ========= ===========
WEIGHTED AVERAGE NUMBER
OF ORDINARY SHARES USED
IN COMPUTATION OF
EARNINGS PER ORDINARY
SHARE - IN THOUSANDS:
Basic 21,510 21,438 21,528 21,477 21,431
======== ========= ========= ========= ===========
Diluted 21,555 21,579 21,551 21,582 21,619
======== ========= ========= ========= ===========
* Financial expenses for the 9 months period ended September 30, 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
Nine months Three months Year ended
ended September 30 ended September 30 December
------------------ ------------------ 31,
2006 2005 2006 2005 2005
-------- -------- -------- -------- --------
(Unaudited) (Unaudited) (Audited)
------------------ ------------------ --------
U.S. $ in thousands
------------------------------------------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Income $ 872 $ 2,753 $ 710 $ 742 $ 4,062
Adjustments to
reconcile net income
to net cash provided
by or used in
operating activities:
Depreciation and
amortization 1,149 668 334 330 987
Accrued severance pay 166 (8) 72 (20) (151)
Capital gain on sale
of property and
equipment - net (9) (39) (1) (9) (38)
Loss from withdrawal
of long term
deposits 1,330
Compensation in
respect of options
granted to employees 244 83
Changes in operating
asset and liability
items:
Decrease (increase)
in accounts
receivable:
Trade (1,473) (109) 20 (1,009) 196
Interest accrued
on long-term
bank deposits 242 29 242
Other (192) 71 25 24 48
Decrease in
accounts payable
and accruals:
Trade (92) (574) (105) (446) (697)
Other (244) (1,240) (87) (837) (1,510)
Decrease (increase)
in inventories 1 (12)
Increase (decrease)
in deferred
revenues (64) (86) 168 79 (799)
Decrease in
advances from
customers, net (619) (171) (1,467)
-------- -------- -------- -------- --------
Net cash provided by
(used in) operating
activities 1,068 1,678 1,048 (1,116) 861
-------- -------- -------- -------- --------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of property
and equipment (339) (543) (43) (122) (589)
Acquisition of
subsidiary (a) (4,233) (4,233) (4,233)
Amounts withdrawal
(funded) in respect of
accrued severance pay (74) 43 (62) 2 94
Investments in
long-term bank
deposits (10,000) (10,000)
Withdrawal of long-term
bank deposits 18,670 10,000 10,000 10,000
Proceeds from sale of
property and equipment 46 175 10 57 175
-------- -------- -------- -------- --------
Net cash provided by
(used in) investing
activities 18,303 (4,558) (95) 5,704 (4,553)
-------- -------- -------- -------- --------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Employee stock options
exercised and paid 111 320 42 322
Dividend paid (3,009) (5,143) (5,143)
-------- -------- -------- -------- --------
Net cash provided by
(used in) financing
activities (2,898) (4,823) 42 (4,821)
-------- -------- -------- -------- --------
INCREASE (DECREASE) IN
CASH AND CASH
EQUIVALENTS 16,473 (7,703) 953 4,630 (8,513)
BALANCE OF CASH AND CASH
EQUIVALENTS AT BEGINNING
OF PERIOD 10,174 18,687 25,694 6,354 18,687
-------- -------- -------- -------- --------
BALANCE OF CASH AND CASH
EQUIVALENTS AT END OF
PERIOD $ 26,647 $ 10,984 $ 26,647 $ 10,984 $ 10,174
======== ======== ======== ======== ========
MIND C.T.I. LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. $ in
thousands
-------------
(a) Acquisition of 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 Tel: 18882704056 Email Contact