MIND CTI Reports Fourth Quarter and Full Year 2023 Results
- Revenues increased slightly in Q4 2023 compared to Q4 2022.
- Operating income remained stable, but cash flow from operating activities decreased.
- Net income was slightly higher in Q4 2023 compared to Q4 2022.
- Revenues for full year 2023 were slightly higher than in 2022.
- Cash position as of December 31, 2023, was approximately $16.6 million.
- CEO mentioned challenges in revenue mix and project delays impacting cash flow.
- Company continues to pursue M&A opportunities and invest in new technologies.
- Dividend of $0.24 per share declared, with a record date of March 20, 2024, and payment date of April 4, 2024.
- 2024 Annual General Meeting of Shareholders scheduled for May 6, 2024.
- Cash flow from operating activities decreased in Q4 2023 compared to Q4 2022.
- Revenue decline in the billing segment due to project delays not in the company's control.
- Messaging segment's business results are difficult to predict due to external factors.
- Challenges in revenue mix led to lower operating margins in 2023.
- Extended payment terms in one project contributed to decreased cash flow in 2023.
Insights
The declaration of a cash dividend by MIND CTI indicates a stable cash flow and a commitment to returning value to shareholders. The gross dividend of $0.24 per share is a tangible return on investment for shareholders and can be indicative of the company's financial health. However, the reduced cash flow from operating activities from $1.4 million in Q4 2022 to $0.7 million in Q4 2023 raises concerns about the company's liquidity and operational efficiency. This could potentially impact the company's future dividend-paying ability and warrants close monitoring.
Furthermore, the revenue increase from $21.5 million in 2022 to $21.6 million in 2023 suggests marginal growth. Investors should consider whether this growth aligns with industry benchmarks and the company's historical performance. While net income remained relatively stable, the slight decrease may be a point of interest for stakeholders analyzing the company's profitability trends.
The revenue distribution and segmentation reveal a heavy reliance on the European market, with 54% of full-year revenues derived from this region. This could expose MIND CTI to regional economic fluctuations and exchange rate risks, as evidenced by the CEO's comments on Euro appreciation affecting personnel expenses. Diversification of revenue streams may be a strategic focus for the company moving forward to mitigate these risks.
Additionally, the company's investment in new technologies and support for 5G and digital transformation initiatives could position it favorably within the telecommunications industry. However, the delay in project completion and the unpredictable nature of the messaging segment's business results suggest potential volatility. Stakeholders may wish to evaluate the company's project management capabilities and the impact of external factors on its business segments.
The transition to 5G technologies and cloud solutions is a critical industry trend and MIND CTI's investment in these areas is a strategic move to remain competitive. The adoption of native cloud solutions can lead to increased scalability and reduced costs in the long term. However, the delay in the MINDBill convergent BSS project completion could signal challenges in the company's ability to execute large-scale transformations, which is a crucial capability in the rapidly evolving telecommunications sector.
The emphasis on maintenance and additional services, accounting for 97% of total revenues in 2023, suggests a stable recurring revenue model. However, the low revenue from licenses indicates a possible stagnation in new customer acquisitions or product upgrades, which could limit future growth potential. The company's ability to innovate and attract new customers will likely be a determining factor in its long-term success.
*Board Declares Cash Dividend
* MIND CTI to Host Annual Meeting of Shareholders
YOQNEAM, Israel, March 06, 2024 (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 2023 and its full year ended December 31, 2023.
The following will summarize our business in the fourth quarter of 2023 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 2023
- Revenues of
$5.6 million , compared to$5.4 million in the fourth quarter of 2022. - Operating income of
$ 1.2 million , or21% of total revenue, compared to$1.2 million , or23% of revenue in the fourth quarter of 2022. - Net income of
$1.4 million , or$0.06 per share, compared to$1.3 million , or$0.06 per share in the fourth quarter of 2022. - Cash flow from operating activities of
$0.7 million , compared to$1.4 million in the fourth quarter of 2022.
Financial Highlights of Full Year 2023
- Revenues of
$21.6 million , compared to$21.5 million in 2022. - Operating income of
$4.7 million , or22% of total revenue, compared to$5.5 million , or26% of total revenue in 2022. - Net income of
$5.2 million , or$0.26 per share, compared to$5.3 million , or$0.26 per share in 2022. - Cash flow from operating activities of
$4.1 million , compared to$4.5 million in 2022. - Cash position of approximately
$16.6 million as of December 31, 2023.
Monica Iancu, MIND CTI’s Chief Executive Officer, commented: “The revenue mix between the billing segment and the messaging segment led to lower operating margins in 2023. The Euro appreciation to the U.S. dollar had a positive impact on our total revenues, but it also led to increased personnel expenses. The decrease in cash flow from operating activities in 2023 compared to 2022 is mainly due to extended payment terms, uncommon to us, in one of our projects.
“In our billing segment, we experienced some revenue decline, mainly due to the delay in completion of a project for the implementation of our MINDBill convergent BSS and the migration from incumbent systems to the MINDBill platform, for reasons that are not in our control. The messaging segment’s business results are difficult to predict, as external factors have a strong impact on both revenues and margins. We expect our business results to present volatility in revenues, margins and cash flows.
“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 2023
Revenues in Europe represented
Revenues from our customer care and billing software were
Revenues from maintenance and additional services were
Revenue Distribution for Full Year 2023
Revenues in Europe represented
Revenues from our customer care and billing software were
Revenues from maintenance and additional services were
Follow-on Orders and New Win in 2023
Throughout 2023, we had multiple follow-on orders and one new win.
The win was with a European customer, early in the third quarter of 2023. The project completion is expected during the third quarter of 2024.
The follow-on orders from longtime existing customers mainly included license upgrades, based on number of subscribers, enhancements of scope with additional functionality and implementations of our online store / e-commerce module that we developed.
Dividend Distribution
We first adopted a dividend policy in 2003 and we continue to believe that our annual dividends enhance shareholder value.
Taking into consideration our dividend policy and the remaining cash after the distribution, on March 6, 2024, our Board of Directors declared a gross dividend of
AGM
MIND also announced today that its 2024 Annual General Meeting of Shareholders will be held on May 6, 2024, 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 3, 2024 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 reappoint 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 elect Ms. Orly Sorokin as a Class III director of the Company until the 2027 Annual General Meeting; and
(iii) to discuss the Company’s audited financial statements for the year ended December 31, 2023.
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 Israel, Romania, Germany and the United States.
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 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 the revenues in Q4 2023 for MIND CTI (MNDO)?
What was the cash flow from operating activities in Q4 2023 for MIND CTI (MNDO)?
What was the net income per share in Q4 2023 for MIND CTI (MNDO)?
What was the revenue distribution for full year 2023 for MIND CTI (MNDO)?
What dividend per share was declared by MIND CTI (MNDO) on March 6, 2024?
When is the 2024 Annual General Meeting of Shareholders for MIND CTI (MNDO)?
