YOQNEAM, Israel, Aug. 11, 2020 (GLOBE NEWSWIRE) -- MIND C.T.I. LTD. – 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 second quarter ended June 30, 2020.
The following will summarize our major achievements in the second quarter of 2020 as well as our business. The financial results can be found in the Company News section of our website at http://www.mindcti.com/company/news/ and in our Form 6-K.
Financial Highlights
- Revenues of $5.6 million, compared with $5.7 in the second quarter of 2019.
- Operating income of $1.4 million, or 25% of total revenues, compared with $1.0 million, or 18% of total revenues in the second quarter of 2019.
- Net income was $1.4 million, or $0.07 per share, compared with $1.0 million, or $0.05 per share in the second quarter of 2019.
- Multiple follow-on orders, including two significant ones.
- Cash flow from operating activities in the quarter of $1.3 million, compared with $1.1 million in the second quarter of 2019.
Six Month Financial Highlights
- Revenues of $11.6 million, compared with $10.2 million in the first six months of 2019, with the increase attributed to the acquisition of Message Mobile in March 2019 and of GTX in September 2019, which generated revenues of approximately $4.3 million during the first half of 2020, while in 2019 only Message Mobile contributed to the six months revenues with only Q2 revenues of $1.6 million.
- Operating income of $2.7 million, or 23% of total revenues, compared with $2.5 million or 25 % of total revenues in the first six months of 2019.
- Net income of $2.6 million, or $0.13 per share, compared with $2.5 million, or $0.13 per share in the first six months of 2019.
- Cash flow from operating activities in the first six months of 2020 was $2.3 million, compared with $3.4 million in the first six months of 2019.
Monica Iancu, MIND CTI CEO, commented: "The decline in revenues in Q2 2020 was in line with our expectations as previously conveyed. The increase in net income reflects the measures applied in Q2 to reduce cost, such as the temporary part-time work that we enforced for two months in Q2, the low travel expenses as a result of travel limitations as well as the increase in financial income that fluctuates among quarters. We are excited with the latest upgrade of an existing significant customer. We continue to invest in new technologies and expanding our platform to better support digital transformations. While we cannot estimate the impact of COVID-19 for the long term, we expect this year's dividend to be similar to the previous year's one, subject to Board approval."
Financial Income and Cash Position
Financial income fluctuates from quarter to quarter. Our financial income (expenses), net consists mainly of interest earned on bank deposits and short-term investments, gains and losses from the change in value and realization of marketable securities, gains and losses from the conversion of monetary balance sheet items denominated in non-dollar currencies into dollars, net of financing costs, and bank charges.
Our cash position, including short and long-term deposits and marketable securities, was $12.8 million as of June 30, 2020, compared with $12.2 million as of June 30, 2019.
As previously announced, the Board declared, on March 11, 2020, a cash dividend of $0.24 per share before withholding tax. The dividend declared and distributed in April 2020 was approximately $4.8 million.
Message Mobile GmbH 2019 Results
As previously announced, 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 in the preliminary Q2 amounts announced in 2019 (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 million).
All the other metrics, including gross profit, operating income and cash, are unchanged from the preliminary amounts announced in 2019.
Revenue Distribution for Q2 2020
The Americas represented 47%, Europe represented 49% (including the Message Mobile and GTX revenues in Germany that represented 35%) and the rest of the world represented 4% of total revenues.
Customer care and billing software totaled $3.0 million, or 53% of total revenues, enterprise messaging and payment solutions were $2.0 million, or 35% of total revenues and enterprise call accounting software totaled $0.6 million, or 12% of total revenues.
Licenses totaled $0.3 million, or 9% of total revenues, while maintenance and additional services were $5.3 million, or 91% of total revenues.
Follow-on Orders
This quarter's follow-on orders include a major upgrade of our billing platform at a very important long-term customer. This significant upgrade will be completed around year end. The upgrade substantiates our value proposition for the customer and we believe it indicates continuation of recurring maintenance and professional services revenues for future years. A second significant follow-on order is for specific customizations to be delivered with Agile methodology throughout the year to another important customer.
About MIND
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 Dray
MIND CTI Ltd.
Tel: +972-4-993-6666
investor@mindcti.com
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