YOQNEAM, Israel, Nov. 08, 2018 (GLOBE NEWSWIRE) -- 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 2018
Revenues 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.
Similar 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 Taxes
As 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 Acquisitions
As 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.
MIND 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.