SOURCE: MIND CTI Ltd.

June 07, 2005 09:34 ET

MIND CTI Maintains Revenue Estimates for Q2 2005 but Lowers Estimates on Interest Income

YOQNEAM, ISRAEL -- (MARKET WIRE) -- June 7, 2005 -- MIND C.T.I. LTD. (NASDAQ: MNDO), a leading global provider of real-time mediation, rating, billing and customer care solutions for pre-paid and post-paid voice, data and content, today provided an update on the estimated financial (interest) income for year 2005.

Since March 2002, we have deposited most of our cash in structured, callable time deposits. Under the arrangements with the banks, whether or not the deposits bear interest depends upon the prevailing US dollar LIBOR rates. Interest is payable in respect of days during which the US dollar LIBOR is within a certain range and no interest is payable in respect of days during which it exceeds the range. Until May 2005, we achieved relatively high interest rates of over 7% per annum. The banks with which we deposited these amounts had the option to call the deposits periodically and we came to new arrangements every few months.

In November 2004, we deposited an amount of $30 million with several banks for periods of between seven and ten years with similar terms. On all days of the first year that the six-month LIBOR exceeds 3.5%, the deposits do not bear any interest at all. The bank has a right to refund the deposits and terminate these arrangements every six months. Due to the increase in the six-month LIBOR, which passed the 3.5% mark on May 20, 2005, these deposits will not earn any interest during the six-month period ending in November 2005. Accordingly, we expect the financial income derived from interest to be around $400,000 in Q2 2005, which is lower than our previous estimations.

Monica Eisinger, Chairperson and CEO, commented: "We believe that our investment strategy was for the long term the right one and that we gained from it for three years in a row. The average yield achieved for the last four years is still relatively high, even when averaged with the six months that we will earn no interest for $30 million of our cash.

Regarding our business, as previously stated, the sales cycles we are encountering are very long and customers are still very hesitant with commitments. We currently believe that the delayed deals that we discussed during the first quarter will not materialize. Regarding the second quarter results, we maintain our estimate of 10% revenue growth over Q1 2005.

At this time we are focusing on building a stronger company by adding experienced personnel, on forming more partnerships and on winning more significant deals. "

About MIND

MIND CTI Ltd. (http://www.mindcti.com) is a leading global provider of real-time billing and customer care solutions for pre-paid and post-paid voice, data and video. Since 1997 MIND has been a pioneer in enabling the VoIP technology for emerging and incumbent service providers. MIND solutions include "best-in-class" solutions for Service Enabling of IP services in the wireless arena, end-to-end convergent billing solutions and internal billing for large enterprises. MIND operates from offices in Europe, Israel, the United States and China.

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.

Contact Information

  • For more information please contact:
    Andrea Dray
    MIND CTI Ltd.
    Tel: +972-4-993-6666
    investor@mindcti.com