SOURCE: MIND CTI Ltd.

November 05, 2009 12:00 ET

MIND CTI Reports Results for the Third Quarter 2009

*Cash Flow From Operating Activities of $1.6 Million

*MIND to Delist From TASE

YOQNEAM, ISRAEL--(Marketwire - November 5, 2009) - MIND C.T.I. LTD. (NASDAQ: MNDO), a leading provider of convergent end-to-end billing and customer care product based solutions for service providers as well as telecom expense management (call management) solutions, today announced results for the third quarter 2009 and that its Board of Directors has resolved to delist the Company's ordinary shares from trading on the Tel Aviv Stock Exchange (TASE).

Financial Highlights of Q3 2009

--  Revenues were $4.1 million, compared with $4.6 million in the second
    quarter of 2008.
--  Operating income was $692 thousand, or 17 % of revenue, excluding
    amortization of intangible assets of $87 thousand and equity-based
    compensation expense of $36 thousand.
--  GAAP operating income was $569 thousand, or 14 % of revenue.
--  GAAP net income was $19.2 million or $1.02 per share, including a one
    time financial income from a cash settlement in the amount of $18.5
    million.
--  Cash flow from operating activities was $1.6 million.
--  Backlog as of September 30, 2009 includes $4.2 million that is
    expected to be billed by year-end.
--  Cash position increased to $31.5 million as of September 30, 2009,
    after a $241 thousand expenditure for the buyback of 238 thousand Company
    shares in the third quarter.
    

New Win & Follow-on Order

In the third quarter MIND secured a new customer, a new operator in Africa, expected to launch a WiMAX network based on network equipment supplied by a major Chinese vendor. MIND will supply a complete billing and customer care solution, fully integrated with the vendor's WiMAX network elements, within the next six months.

The follow-on order is with an existing Sentori/Mind Software Inc. customer, which chose MIND to implement the MINDBill end-to-end Convergent billing solution. MIND's multi year agreement is with a leading Caribbean operator that provides convergent prepaid and postpaid billing, rating, invoicing, roaming, customer care, web Self-care, Point of Sale, inventory management, web services, workflow engine, provisioning, lot management, mediation, interconnect and reports to support wireless, wireline and broadband services.

Monica Eisinger, Chairperson and CEO, commented: "Our backlog for the future increased significantly this quarter, as we won new business that will impact our revenue for the next two years. We continue to execute on our profitability and cash flow strategy and remain confident in our future. We are pleased that the ARS issue is now behind us and we can focus on increasing our business."

Revenue Distribution for Q3 2009

MIND operates globally and continues to focus mainly in the Americas and Europe. Sales in the Americas represented 38.9 % and sales in Europe represented 52.9 % of total revenue.

Revenue from customer care and billing software totaled $3.3 million, while revenue from enterprise call management software was $810 thousand. The revenue from licenses was $1.3 million, or 32.7%, and MIND generated revenue of $2.8 million, or 67.3%, from maintenance and additional services.

Securities Class Action Lawsuit Update

MIND recently reported that a purported class action securities lawsuit has been filed against the Company, certain officers and one director. The complaint seeks unspecified compensatory damages for, among other things, alleged misleading statements relating primarily to the Company's investment in auction rate securities. MIND has reviewed the allegations contained in the complaint and believes that they are without merit. MIND intends to defend itself against the complaint vigorously.

Delisting from Tel Aviv Stock Exchange (TASE)

The Board of Directors resolved yesterday to delist the Company's ordinary shares from the trading on the Tel Aviv Stock Exchange (TASE). Consequently, MIND has applied to the TASE and requested that the TASE initiate the delisting process. Under applicable Israeli law, the delisting of MIND's ordinary shares from trading on the TASE is expected to become effective within three months from the date of application to the TASE. During the interim period, MIND's ordinary shares will continue to be traded on the TASE. MIND will announce the exact date of the delisting when it becomes available. Itay Barzilay, MIND's CFO, said: "Since MIND listed its ordinary shares on the TASE in July 2002, trading volumes have been relatively low. Most of the trading is conducted on NASDAQ. Therefore, our Board of Directors has resolved that we, as a global company which conducts its business mostly outside of Israel, should delist from the TASE and continue trading on NASDAQ."

MIND's shares will continue to be listed on the NASDAQ Global Market, and the Company will continue to file public reports in accordance with the rules and regulations of NASDAQ and of the SEC as they apply to a foreign private issuer such as MIND.

Buyback Update

MIND's Board of Directors authorized yesterday a new plan for the repurchase of the Company's ordinary shares in the open market, in an amount in cash of up to $1.8 million.

Monica Eisinger, Chairperson and CEO, commented: "We continue to believe that in light of current share prices, the history of positive cash flow from operations and the Company's resources, the purchase of the Company's shares is a good investment and is in the best interests of the Company and we can do this without sacrificing expansion, capital investment or growth plans. We believe that at this time the repurchase of our stock at these prices will deliver value to our shareholders and is one of the most appropriate uses of our resources."

Under the repurchase program, share purchases may be made from time to time depending on market conditions, share price, trading volume and other factors. The repurchase may be suspended from time to time or discontinued.

Under the Israeli law, the repurchase program is considered a distribution that requires prior court approval, which the Company will seek soon after completing the dividend distribution mentioned below.

In the meantime, the first buyback program that was authorized in September 2008 and was reinstated on September 16, 2009 is still in place and the remaining amount from this first program is approximately $400 thousand.

Dividend Distribution Update

In July 2003, the Board of Directors adopted the Company's current dividend policy. MIND has since distributed dividends six times and it intends to continue to distribute cash dividends based on factors that include its cash position and activities.

On September 9, 2009, the Board of Directors authorized the necessary steps, including applying for the requisite court approval, to enable the distribution of a cash dividend in the amount of $0.80 per share, or approximately $15 million in the aggregate. Under Israeli law, a company with insufficient retained earnings is required to obtain approval from the court for such a distribution.

We expect to obtain such court approval within two weeks, although there is no guarantee that such approval will not be delayed or denied. Prior to paying the dividend, MIND will issue a press release announcing the record date and distribution date.

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 telecom expense management (call management) solutions. MIND provides a complete range of billing applications for any business model (license, managed service or complete outsourced billing service) for Wireless, Wireline, VoIP and Quad-play carriers in more than 40 countries around the world.

A global company, with over ten years of experience in providing solutions to carriers and enterprises, MIND operates from offices in the United States, UK, Romania and Israel.

For more information, visit MIND at: www.mindcti.com. The financial results can be found in the Investors section and in our Form 6-K as well.

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.

Contact Information

  • For more information please contact:
    Andrea Dray
    MIND CTI Ltd.
    Tel: +972-4-993-6666
    Email Contact