-- 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