MIND C.T.I. LTD. – (NasdaqGM: MNDO), a leading provider of
convergent end-to-end prepaid/postpaid billing and customer care
product based solutions for service providers, unified
communications analytics and call accounting solutions for
enterprises as well as enterprise messaging solutions, today
announced results for its fourth quarter and full year ended
December 31, 2019.
The following will summarize our business in the
fourth quarter of 2019 and provide a more detailed review of the
financial results for the quarter and for the full year. Full
financial results can be found in the Company News section of our
website at http://www.mindcti.com/company/news/ and in our Form
Financial Highlights of Q4
- Revenues of $6.7 million, compared to $4.5 million in the
fourth quarter of 2018, with the increase attributed to the
acquisition of Message Mobile in March 2019 and GTX in September
2019, which generated revenues of approximately $2.8 million during
- Operating income was $1.2 million, or 18% of revenue, compared
to $1.5 million, or 33% of revenue in the fourth quarter of
- Net income of $1.3 million or $0.07 per share, compared to $1.4
million or $0.07 per share in the fourth quarter of 2018.
- Cash flow from operating activities was $1.2 million, compared
to $0.6 million in the fourth quarter of 2018.
- One new win.
Financial Highlights of Full
- Revenues of $22.7 million, compared to $18.1 million in 2018,
with the increase attributed to the acquisition of Message Mobile
in March 2019 and GTX in September 2019, which generated revenues
of approximately $6.1 million during the year.
- Operating income was $5.0 million, or 22% of revenue, compared
to $5.3 million, or 30.0% of revenue in 2018.
- Net income of $5.1 million, or EPS of $0.26 (diluted EPS of
$0.25), compared to $5.1 million, or $0.27 per share in 2018.
- Cash flow from operating activities was $6.7 million, compared
to $4.5 million in 2018.
- Cash position of approximately $15.3 million as of December 31,
As of December 31, 2019, we had 214 employees,
compared to 221 as of December 31, 2018.
Monica Iancu, MIND CTI’s President and Chief
Executive Officer, commented: “Our lower revenues and income from
our billing platform reflect the expected and previously announced
negative impact of a few customers under maintenance or SaaS
agreements that decided to exit their business. Also, as we
continue to be challenged by the shrinking relevant telecom markets
and strong competition, we lately have encountered fewer new
customers, and our new wins, compared to wins a few years ago, have
lower initial proceeds. At the same time, we are satisfied with the
two acquisitions we completed in 2019. These new subsidiaries have
performed well for us, but their profit margins are lower than that
of our core business. Given our strong cash position and our
experienced organization, we believe that we have the required
resources to respond to market needs, continue to invest in our
core business, bringing permanent value to existing customers and
maintaining up-to-date technology, to be relevant for future market
trends in our core billing, analytics and messaging platforms, as
well as continue with our dividend policy and at the same time
focus on targeting potential acquisitions that could be a source of
Message Mobile GmbH
After reviewing the revenue recognition
methodology for messaging and mobile payment transactions, based on
the key principal-versus-agent considerations under ASC 606,
Revenues from Contract with Customers, we concluded to recognize
revenues from Message Mobile’s mobile payments line of business on
a “net basis” instead of a “gross basis”. Consequently, only our
share in the processed transactions is recognized as revenues.
As a result of the above, our final consolidated
revenues for Q2 2019 were $5.7 million instead of $6.0 million
(Message Mobile being $1.6 million instead of $1.9 million) and the
final consolidated cost of revenues were $2.9 million instead of
$3.2 million (Message Mobile being $1.3 million instead of $1.6
Our final consolidated revenues for Q3 2019 were
$5.8 million instead of $6.1 million (Message Mobile being $1.7
million instead of $2.0 million) and the final consolidated cost of
revenues were $2.7 million instead of $3.0 million (Message Mobile
being $1.3 million instead of $1.6 million).
All the other metrics, including gross profit, operating income
and cash, are unchanged from the preliminary Q2 and Q3 amounts
announced in 2019.
Revenue Distribution for Q4
Revenues in the Americas represented 41%,
revenues in Europe represented 52% (including the Message Mobile
and GTX revenues in Germany that represented 42%) and revenues in
Israel represented 4% of our total revenues.
Revenues from our customer care and billing
software were $3.1 million, or 46% of total revenues, revenues from
enterprise messaging and payment solutions were $2.8 million, or
42% of total revenues, and revenues from our enterprise call
accounting software were $0.8 million, or 12% of total
Revenues from licenses were $0.6 million, or 9%
of total revenues, while revenues from maintenance and additional
services were $6.1 million, or 91% of total revenues.
Revenue Distribution for Full
Revenues in the Americas represented 53%,
revenues in Europe represented 39% (including the Message Mobile
and GTX revenues in Germany that represented 27%) and revenues in
Israel represented 6% of our total revenues.
Revenues from our customer care and billing
software were $13.6 million, or 60% of total revenues, revenues
from enterprise messaging and payment solutions were $6.1 million,
or 27% of total revenues, and revenues from enterprise call
accounting software were $3.0 million, or 13% of our total
Revenues from licenses were $2.3 million, or 10%
of total revenues, compared to $2.1 million, or 12% of total
revenues in 2018, while revenues from maintenance and additional
services were $20.4 million, or 90%, compared to $16.0 million or
88% of total revenues in 2018.
Q4 2019 New
Our new win is a seven-year contract with one of
the largest wireless internet service providers (WISP) in the
United States, which uses fixed wireless and fiber-optic technology
to deliver high-speed internet and voice services to the
under-served enterprise, commercial, governmental agencies and
residential markets of rural and suburban North Central Texas and
Southern Oklahoma. MIND will deploy its unique full suite
that includes order management, inventory management, scheduling,
workforce management, provisioning, mediation, billing, customer
care, self-care and reporting.
Dividend DistributionSince July
2003, when we first adopted a dividend policy, according to which
we declare, subject to specific Board approval and applicable law,
a dividend distribution once per year, we have distributed 17
annual dividends and one special dividend. We continue to believe
that our annual dividends enhance shareholder value.
Taking into consideration our dividend policy
and the remaining cash after the distribution, our Board of
Directors declared on March 11, 2020, a gross dividend of $0.24 per
share. The record date for the dividend will be March 25, 2020 and
the payment date will be April 16, 2020. Tax will be withheld at a
rate of 20%.
As previously announced, we believe that
messaging needs are expanding worldwide, be it in traditional text
(SMS) or in instant messaging and we continue targeting potential
acquisitions that could be a source of growth.
Following our two acquisitions in messaging in
March 2019 and September 2019 in Germany, we are focused on the
integration of Message Mobile and GTX.
We continue to explore growth through
consolidation by focusing on acquisition targets at reasonable
valuations that satisfy the criteria we defined: proven revenues,
complementary technology or geography and expected accretion to
earnings within two to three quarters.
MIND also announced today that its 2020 Annual
General Meeting of Shareholders will be held on Tuesday, May 12,
2020 at 10:00 A.M. (Israel time), at the offices of the Company,
HaCarmel 2, Yoqneam 20692, Israel.
Shareholders of record at the close of business
on April 9, 2020 are entitled to vote at the Meeting. All
shareholders are cordially invited to attend the Meeting in person.
Proxy statements and proxy cards for use by shareholders that
cannot attend the meeting in person will be sent to shareholders
that hold shares registered with the American Stock Transfer &
Trust Company, including shares held via DTC members. The right
under Israeli law of 1% shareholders to request the addition of
appropriate matters to the agenda shall expire 14 days after the
date of this notice.
The agenda of the meeting is as follows:
(i) to re-appoint Brightman
Almagor Zohar (a firm in the Deloitte Global Network) as the
Company’s independent auditor until the close of the following
Annual General Meeting and to authorize the Board of Directors of
the Company to determine its remuneration or to delegate the Audit
Committee thereof to do so;
(ii) to re-elect Mr.
Joseph Tenne as a Class II director of the Company until the 2023
Annual General Meeting;
(iii) to elect Mr. Itay
Barzilay as a Class II Director of the Company until the 2023
Annual General Meeting; and
(iv) to discuss the Company’s
audited financial statements for the year ended December 31,
MIND CTI Ltd. is a leading provider of
convergent end-to-end billing and customer care product-based
solutions for service providers, unified communications analytics
and call accounting solutions for enterprises as well as enterprise
messaging solutions. MIND provides a complete range of billing
applications for any business model (license, SaaS, managed service
or complete outsourced billing service) for Wireless, Wireline,
Cable, IP Services and Quad-play carriers. A global company, with
over twenty years of experience in providing solutions to carriers
and enterprises, MIND operates from offices in the United States,
Romania, Germany and Israel.
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 annual report and other filings with the United
States Securities Exchange Commission. The Company does not
undertake to update any forward-looking information.
For more information please
contact:Andrea DrayMIND C.T.I. Ltd.Tel:
MIND C T I (NASDAQ:MNDO)
Historical Stock Chart
From Jul 2020 to Aug 2020
MIND C T I (NASDAQ:MNDO)
Historical Stock Chart
From Aug 2019 to Aug 2020