MIND CTI Reports Third Quarter 2018 Results
November 08 2018 - 7:07AM
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 as well as unified
communications analytics and call accounting solutions for
enterprises, today announced results for its third quarter ended
September 30, 2018.
The following will summarize our major
achievements in the third quarter of 2018, as well as our business.
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
6-K.
Q3 2018 Financial
Highlights
- Revenues were $4.6 million, similar to the revenues in both the
third quarter of 2017 and the second quarter of 2018.
- Operating income was $1.3 million, compared to $1.4 million in
the third quarter of 2017 and similar to the operating income in
the second quarter of 2018.
- Net income was $1.4 million, or $0.07 per share, compared to
$1.2 million, or $0.06 per share in the third quarter of 2017.
- Cash flow from operating activities was $1.6 million (including
a tax refund of $0.2 million related to the 2016 financial
year).
- Cash position was $15.6 million as of September 30, 2018.
Nine Months Financial
Highlights
- Revenues were $13.7 million, compared to $13.6 million in the
first nine months of 2017.
- Operating income was $3.9 million, or 28% of total revenues,
compared to $3.6 million, or 26% of total revenues in the first
nine months of 2017.
- Net income was $3.7 million, or $0.19 per share, compared to
$4.0 million, or $0.21 per share in the first nine months of 2017
(net income in the first nine months of 2017 includes a one-time
net capital gain of $0.9 million).
- Cash flow from operating activities in the first nine months of
2018 was $3.9 million.
As of September 30, 2018, we had 220 employees,
compared with 248 as of September 30, 2017 and 216 as of June 30,
2018.
Monica Iancu, MIND CTI CEO, commented: “The
environment remains the same as described in previous press
releases. Communications service providers encounter major
challenges, as running a network requires continuous investment
while price pressure increases, and increased data traffic does not
necessarily translate into increased profits. Communications
service providers are expected to develop new services and offer
multi-play discounted bundles and at the same time they attempt to
reduce their costs as the revenue per subscriber declines. This has
an effect on the markets that appear to be very active,
necessitating extensive pre-sales effort. While we are encouraged
by the momentary increased demand for our products and services, we
encounter lower budget amounts and many processes are constantly
delayed. We expect that future deals will be structured as SaaS,
with low down payments for deployment services.”
Revenue Distribution for Q3
2018Revenues in the Americas represented 75%,
revenues in Europe represented 15% and revenues in the rest of the
world represented 10% of our total revenues.
Revenues from customer care and billing software
totaled $3.6 million, or 79% of total revenues, while revenues from
enterprise call accounting software totaled $1.0 million, or 21% of
our total revenues.
Revenues from licenses were $0.9 million, or 19%
of total revenues, while revenues from maintenance and additional
services were $3.7 million, or 81% of our total revenues.
Follow-on
OrdersSimilar to all previous quarters, our
valued customers showed their appreciation for our technology and
support. These valued customers continue to invest in order to grow
their businesses and improve efficiencies, resulting in follow-on
orders.
This quarter’s follow-on orders include
customizations for new functionalities and additional professional
services.
Fluctuation in
TaxesAs previously mentioned, on a quarterly
basis we incur fluctuation in taxes. Taxes include provisions
for income taxes paid in our different locations at very different
tax rates.
Also as previously mentioned, on February 18,
2018 the Company received a status of "Technologic Preferred
Enterprise" starting 2017 and until 2021, the impact being
that income taxable in Israel will be subject to a tax rate
of 7.5% as long as this status is maintained.
One of the reasons for the fluctuation in taxes
between quarters is that in the 2017 quarterly financial reports,
the lower tax rate was not reflected, since the approval was
received only in February 2018.
Update on Pursuit of
AcquisitionsAs we previously announced, given our
strong cash position and our experienced organization, we believe
that we have the required resources to respond to market needs and
at the same time focus on targeting potential acquisitions that
could benefit the company's growth. Our active pursuit is focused
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.
We made some progress with a small company that
meets our criteria. We are still in the negotiations phase and we
cannot estimate if this effort will bear fruit. We will update on
the outcome together with the release of the full year 2018
financial results.
About MINDMIND
C.T.I. Ltd. is a leading provider of convergent end-to-end billing
and customer care product-based solutions for service providers as
well as unified communications analytics and call accounting
solutions for enterprises. MIND provides a complete range of
billing applications for any business model (license, 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 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 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:
+972-4-993-6666investor@mindcti.com
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