MIND CTI Reports Fourth Quarter and Full Year 2022 Results

Rhea-AI Summary

MIND C.T.I. LTD. (MNDO) reported its Q4 and full year 2022 financial results, showing a decline in both revenues and net income. Q4 revenues decreased to $5.4 million from $6.0 million in Q4 2021. Operating income was $1.2 million (23% of revenue), down from $1.6 million (27%). The full year revenues were $21.5 million, down from $26.3 million in 2021. Net income for the year was $5.3 million, or $0.26 per share, compared to $5.9 million or $0.30 per share in 2021. A cash dividend of $0.24 per share was declared, record date March 22, 2023, and payment date April 6, 2023.

Positive

• Declared a cash dividend of $0.24 per share, enhancing shareholder value.

Negative

• Q4 revenue decline of $0.6 million attributed to messaging segment.
• Full year revenue decreased by $4.8 million compared to 2021.
• Net income dropped from $5.9 million to $5.3 million year-over-year.
• Cash flow from operating activities fell from $6.9 million in 2021 to $4.5 million.

*Board Declares Cash Dividend
* MIND CTI to Host Annual Meeting of Shareholders

YOQNEAM, Israel, March 08, 2023 (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, unified communications analytics and call accounting solutions for enterprises as well as enterprise messaging solutions, today announced results for its fourth quarter of 2022 and its full year ended December 31, 2022.

The following will summarize our business in the fourth quarter of 2022 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 6-K.

Financial Highlights of Q4 2022

• Revenues of $5.4 million, compared to $6.0 million in the fourth quarter of 2021, with the decrease mainly attributed to the messaging segment.
• Operating income of $1.2 million, or 23% of total revenue, compared to $1.6 million, or 27% of revenue in the fourth quarter of 2021.
• Net income of $1.3 million, or $0.06 per share, compared to $1.5 million, or $0.08 per share in the fourth quarter of 2021.
• Cash flow from operating activities of $1.4 million, compared to $2.5 million in the fourth quarter of 2021.

Financial Highlights of Full Year 2022

• Revenues of $21.5 million, compared to $26.3 million in 2021, with the decrease mainly attributed to the messaging segment.
• Operating income of $5.5 million, or 25.6% of total revenue, compared to $6.8 million, or 25.9% of total revenue in 2021.
• Net income of $5.3 million, or $0.26 per share, compared to $5.9 million, or $0.30 per share in 2021.
• Cash flow from operating activities of $4.5 million, compared to $6.9 million in 2021.
• Cash position of approximately $17.5 million as of December 31, 2022.
  

Monica Iancu, MIND CTI’s Chief Executive Officer, commented: “The decline in 2022 results, compared to 2021, was expected. As previously announced, the record revenues in 2021 were driven by temporary activities related to COVID-19 in our messaging segment. In our telecom markets, we experienced a decline mainly due to the continuous market trend of lower prices, low demand and strong competition. We expect a continuation of these unfavorable trends in the foreseeable future. The messaging segment’s business results are difficult to predict, as external factors have a strong impact on both revenues and margins and we expect our business results to present volatility in revenues, margins and cash flows. We currently expect that these trends will result in additional decline in our revenues, having a significant negative impact on our net income.

“We continue to pursue M&A opportunities that could be a source of growth and at the same time we continue to invest in new technologies to enhance our offering, to support 5G technologies, to migrate to native cloud solutions and to support carriers’ digital transformation.”

Revenue Distribution for Q4 2022
Revenues in Europe represented 54% (including the Message Mobile and GTX revenues in Germany that represented 37%), revenues in the Americas represented 34%, and revenues in the rest of the world represented 12% of our total revenues.

Revenues from our customer care and billing software were $2.9 million, or 54% of total revenues, revenues from enterprise messaging and payment solutions were $2.0 million, or 37% of our total revenues, and revenues from our enterprise call accounting software were $0.5 million, or 9% of total revenues.

Revenues from maintenance and additional services were $5.3 million, or 98% of our total revenues, while revenues from licenses were $0.1 million, or 2% of our total revenues.

Revenue Distribution for Full Year 2022
Revenues in Europe represented 53% (including the Message Mobile and GTX revenues in Germany that represented 36%), revenues in the Americas represented 40%, and revenues in the rest of the world represented 7% of our total revenues.

Revenues from our customer care and billing software were $11.5 million, or 54% of total revenues, revenues from enterprise messaging and payment solutions were $7.6 million, or 35% of our total revenues, and revenues from enterprise call accounting software were $2.4 million, or 11% of our total revenues.

Revenues from maintenance and additional services were $20.9 million, or 97% of our total revenues, compared to $24.8 million or 94% of our total revenues in 2021, while revenues from licenses were $0.6 million, or 3% of our total revenues, compared to $1.5 million, or 6% of total revenues in 2021.

Follow-on Orders and New Wins in 2022
Throughout 2022, we had multiple follow-on orders and two new wins.

The first win was in Q2 and the second was in Q4, and both include the implementation of our MINDBill convergent BSS and the migration from incumbent systems to the MINDBill platform. They are expected to be completed by the end of 2023 and during 2024, respectively.  

The follow-on orders included two significant upgrades of longtime existing customers to our MINDBill version 10 and the first order for our online store / e-commerce module that we developed over the last two years.

Dividend Distribution
Since July 2003, when we first adopted a dividend policy, we performed 20 distributions, including 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 8, 2023, a gross dividend of $0.24 per share. The record date for the dividend will be March 22, 2023 and the payment date will be April 6, 2023. Tax will be withheld at a rate of 22%.

Changes in Management Team
In December 2022, Arie Abramovich, (36), re-joined us as Chief Financial Officer. Arie served as MIND’s Assistant Controller from 2020 until 2021. Prior to that, he served as Senior Accountant at KPMG from 2017 until 2020. Mr. Abramovich holds a B.A. degree in Accounting from The Jerusalem School for Business Administration of the Hebrew University and he is a Certified Public Accountant in Israel.

AGM
MIND also announced today that its 2023 Annual General Meeting of Shareholders will be held on May 9, 2023, at 10:00 A.M. (Israel time), at the offices of the Company, 2 HaCarmel Street, Yoqneam 2066724, Israel.

Shareholders of record at the close of business on April 6, 2023 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 by mail.

The agenda of the meeting is as follows:

(i) to re-appoint Fahn Kanne & Co. Grant Thornton Israel 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 2026 Annual General Meeting;

(iii) to re-elect Mr. Itay Barzilay as a Class II director of the Company until the 2026 Annual General Meeting; and

(iv) to discuss the Company’s audited financial statements for the year ended December 31, 2022.

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-five 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", including estimations relating to the impact of the recent political situation in Ukraine, expectations of the results of the Company’s business optimization initiative, integration of the company’s acquisitions and its projected outlook and results of operations. 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, but not limited to, economic conditions in our key markets, as well as 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 C.T.I. Ltd.
Tel: +972-4-993-6666
investor@mindcti.com

FAQ

What were MIND CTI's Q4 2022 revenue results?

MIND CTI reported Q4 2022 revenues of $5.4 million, down from $6.0 million in the previous year.

What is the cash dividend declared by MIND CTI for 2023?

MIND CTI declared a cash dividend of $0.24 per share, payable on April 6, 2023.

How did MIND CTI's net income change in 2022?

MIND CTI's net income decreased from $5.9 million in 2021 to $5.3 million in 2022.

When is the annual meeting of MIND CTI shareholders scheduled?

The annual meeting of MIND CTI shareholders is set for May 9, 2023.

What were MIND CTI's financial results for the full year 2022?

The full year 2022 revenues for MIND CTI were $21.5 million, down from $26.3 million in 2021.