MIND CTI Reports Record Revenue of $20 Million in 2006, a 29% Increase Over 2005

16% GAAP Operating Income in Q4 2006


YOQNEAM, ISRAEL -- (MARKET WIRE) -- February 21, 2007 -- MIND C.T.I. LTD. (NASDAQ: MNDO), a leading provider of convergent end-to-end billing and customer care product based solutions for tier 2 and tier 3 carriers worldwide, today announced results for the fourth quarter and year ended December 31, 2006.

Monica Eisinger, Chairperson and CEO, commented: "I am extremely pleased with reaching record revenue in 2006 and with improved operating income in the last quarter. In 2006 we changed our business model and achieved higher average deal size and better long-term visibility. We successfully completed deployments for some existing customers and had new wins and follow-on orders each quarter. In 2007 we intend to focus on internal growth and to increase our investment in sales and marketing. We estimate that in the long term we will benefit from the increased need for convergent billing solutions that we encounter in today's markets."

Financial Highlights of Q4 2006

--  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