EX-99 2 exhibit_1.htm

6-K

Exhibit 1

MIND CTI Reports Cash Flow from Operating Activities of $4.1 Million for 2008
* Revenues of $19.5 Million for Full Year 2008

Yoqneam, Israel, February 18, 2009 – MIND CTI Ltd. (NasdaqNM:MNDO), a leading provider of convergent end-to-end billing and customer care product based solutions for service providers as well as telecom expense management (call management) solutions, today announced results for the fourth quarter and year ended December 31, 2008.

Financial Highlights of Q4 2008

— Revenues of $4.6 million, compared with $5.6 million in the fourth quarter of 2007.

— Non-GAAP operating income was $640 thousand, or 13.8% of revenue, excluding amortization of intangible assets of $85 thousand, equity-based compensation expense of $47 thousand and impairment of goodwill of $2.2 million.

— GAAP operating loss was $1.6 million.

— Impairment of Auction Rate Security in the amount of $1.3 million.

— GAAP net loss of $3.2 million or $0.15 per share, compared with GAAP net loss of $14.6 million or $0.67 per share in the fourth quarter of 2007.

Year 2008 Operating Highlights

— Revenues were $19.5 million, compared with $18.4 million in 2007.

— Non-GAAP operating income was $2,118 thousand, or 10.9% of revenue, excluding amortization of intangible assets of $547 thousand, equity-based compensation expense of $181 thousand and impairment of goodwill and intangible asset of $3.7 million..

— GAAP operating loss was $2.3 million, compared with operating income of $1.3 million in 2007.

— Impairment of Auction Rate Security in the amount of $4.2 million.

— GAAP net loss of $6.4 million or $0.30 per share, compared with GAAP net loss of $12 million or $0.55 per share in 2007.

— Cash position as of December 31, 2008 of $9.7 million after a $1.6 million expenditure for the buyback of 2.1 million Company shares.

Monica Eisinger, Chairperson and CEO, commented: “We believe that our results reflect the existing market conditions and we are pleased that we have the skills, experience and understanding to react quickly to any change. We have made practical decisions to reduce cost over the course of the quarter and, as a result, we improved our non-GAAP operating margins and reached our annual cash flow target. We remain confident in our long-term strategy, prospects and future. We serve service providers around the world, supporting their mission-critical activities in long-term relationships including managed services. Service providers continue to invest and enhance their offerings, although in a more cautious way and during the last six months, we experienced delays in deal closing. In the meantime, we are pleased with our backlog, our margins and our cash flow.”

Revenue Distribution for Q4 2008
Sales in the Americas represented 44% and sales in Europe represented 48% of total revenue.
Revenue from our customer care and billing software totaled $3.87 million, while revenue from our enterprise call management software was $766 thousand. The revenue breakdown from our business lines of products was $1.36 million, or 29% from licenses and $3.28 million, or 71% from maintenance and additional services.

Revenue Distribution for Full Year 2008
Sales in the Americas represented 41% and sales in Europe represented 51% of total revenue.
Revenue from our customer care and billing software totaled $16.2 million, while revenue from our enterprise call management software was $3.3 million. The revenue breakdown from our business lines of products was $6.2 million, or 32% from licenses and $13.3 million, or 68% from maintenance and additional services.

Conference Call Information
MIND will host a conference call on February 19, 2009 at 10:30 a.m., Eastern Standard Time, to discuss the Company’s fourth quarter 2008 results and other financial and business information. The call will be carried live on the Internet via www.fulldisclosure.com and the MIND website, www.mindcti.com. For those unable to listen to the live web cast, a replay will be available.

About MIND
MIND CTI Ltd. is a leading provider of convergent end-to-end billing and customer care product based solutions for service providers as well as telecom expense management (call management) solutions. MIND provides a complete range of billing applications for any business model (license, managed service or complete outsourced billing service) for Wireless, Wireline, VoIP and Quad-play carriers in more than 40 countries around the world.

A global company, with over ten years of experience in providing solutions to carriers and enterprises, MIND operates from offices in the United States, UK, Romania and Israel.

For more information, visit MIND at: www.mindcti.com

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 Dray
MIND CTI Ltd.
Tel: +972-4-993-6666
investor@mindcti.com

MIND C.T.I. LTD.

CONSOLIDATED BALANCE SHEETS

			December 31
			2008			2007
			(Unaudited)			(Audited)
			U.S. dollars in thousands
A s s e t s
CURRENT ASSETS:
Cash and cash equivalents			$	9,722		$	12,390
Accounts receivable:
Trade				3,823			4,967
Other				275			156
Prepaid expenses				36			166
Deferred charges				124
Deferred income taxes				44			131
Inventories				36			44
T o t a l current assets				14,060			17,854
INVESTMENTS AND OTHER NON CURRENT ASSETS:
Long-term investment				941			5,113
Deferred charges				467
Other				726			968
PROPERTY AND EQUIPMENT, net of accumulated
depreciation and amortization				1,287			1,616
INTANGIBLE ASSETS, net of accumulated amortization				917			1,951
GOODWILL				5,965			10,224
T o t a l assets			$	24,363		$	37,726
Liabilities and shareholders' equity
CURRENT LIABILITIES:
Accounts payable and accruals:
Trade			$	466		$	741
Other				1,720			2,406
Deferred revenues				1,911			1,053
Advances from customers				295			213
T o t a l current liabilities				4,392			4,413
LONG-TERM LIABILITIES:
Deferred revenues				239
Employee rights upon retirement				1,298			1,504
T o t a l long-term liabilities				1,537			1,504
T o t a l liabilities				5,929			5,917
SHAREHOLDERS' EQUITY:
Share capital - ordinary shares of
NIS 0.01 par value (authorized as of December 31, 2008
and 2007 - 88,000,000 shares; issued as of December 31, 2008
and 2007 - 21,594,010 shares; outstanding:
as of December 31, 2008 - 19,494,010 shares;
as of December 31, 2007 - 21,594,010 shares)				54			54
Additional paid-in capital				53,742			57,880
Differences from translation of foreign currency
financial statements of a subsidiary				(1,324	)		(141	)
Accumulated deficit				(32,407	)		(25,984	)
Treasury shares (as of December 31, 2008- 2,100,000 shares)				(1,631	)
T o t a l shareholders' equity				18,434			31,809
T o t a l liabilities and shareholders' equity			$	24,363		$	37,726

MIND C.T.I. LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

			Years ended December 31,
			2008			2007			2006
			(Unaudited)			(Audited)			(Audited)
			U.S. dollars in thousands, except per share data
REVENUES:
Sales of licenses			$	6,191		$	5,903		$	8,467
Services				13,282			12,544			11,593
				19,473			18,447			20,060
COST OF REVENUES				5,783			5,784			5,675
GROSS PROFIT				13,690			12,663			14,385
RESEARCH AND DEVELOPMENT EXPENSES				6,185			5,714			6,118
SELLING AND MARKETING EXPENSES				3,805			3,846			3,628
GENERAL AND ADMINISTRATIVE EXPENSES				2,311			1,845			2,135
IMPAIRMENT OF GOODWILL				3,498
IMPAIRMENT OF INTANGIBLE ASSET				185
OPERATING INCOME (LOSS)				(2,294	)		1,258			2,504
FINANCIAL INCOME (EXPENSES):
IMPAIRMENT OF AUCTION RATE SECURITIES				(4,172	)		(15,187	)
OTHER FINANCIAL INCOME (EXPENSES) - net				568			2,082			(222	)
INCOME (LOSS) BEFORE TAXES ON INCOME				(5,898	)		(11,847	)		2,282
TAXES ON INCOME				525			108			1,373
NET INCOME (LOSS) FOR THE YEAR			$	(6,423	)	$	(11,955	)	$	909
EARNINGS (LOSS) PER ORDINARY SHARE -
Basic and diluted			$	(0.30	)	$	(0.55	)	$	0.04
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES
USED IN COMPUTATION OF EARNINGS (LOSS)
PER ORDINARY SHARE - IN THOUSANDS:
Basic				21,473			21,586			21,515
Diluted				21,473			21,586			21,546

MIND C.T.I. LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

			Years ended December 31,
			2008			2007			2006
			(Unaudited)			(Audited)			(Audited)
			U.S. dollars in thousands
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)			$	(6,423	)	$	(11,955	)	$	909
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization				1,088			950			1,391
Impairment of auction rate securities				4,172			15,187
Impairment of goodwill				3,498
Impairment of intangible asset				185
Deferred income taxes, net				248			78			(293	)
Accrued severance pay				162			22			176
Losses on amounts funded in respect of severance pay				28
Capital loss (gain) on sale of property and equipment, net				(40	)		8			(3	)
Employees share based compensation				181			269			325
Realized loss on sale of marketable debentures held-to-maturity							4
Changes in operating asset and liability items:
Decrease (increase) in accounts receivable:
Trade				960			1,330			(1,996	)
Other				128			8			521
Decrease (increase) in prepaid expenses				128			(17	)		(21	)
Increase in deferred charges				(591	)
Decrease (increase) in inventories				8			(9	)		(5	)
Increase (decrease) in accounts payable and accruals:
Trade				(262	)		156			(222	)
Other				(553	)		(1,127	)		768
Increase (decrease) in deferred revenues				1,113			(205	)		(408	)
Increase (decrease) in advances from customers				82			(28	)		(549	)
Net cash provided by operating activities				4,112			4,671			593
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities							(166,300	)		(200,550	)
Sale of marketable securities							168,800			177,750
Purchase of property and equipment				(436	)		(445	)		(379	)
Acquisition of subsidiaries, net of cash acquired							(4,979	)
Severance pay funds				(213	)		(20	)		(119	)
Sale (acquisition) of marketable debentures held-to-maturity							9,996			(10,000	)
Withdrawal of long-term deposits										30,000
Proceeds from sale of property and equipment				207			139			162
Net cash provided by (used in) investing activities				(442	)		7,191			(3,136	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cost of acquisition of treasury shares				(1,631	)
Employee stock options exercised							95			149
Dividend paid				(4,319	)		(4,318	)		(3,009	)
Net cash used in financing activities				(5,950	)		(4,223	)		(2,860	)
TRANSLATION ADJUSTMENTS ON CASH AND CASH EQUIVALENTS				(388	)		(20	)		-,-
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS				(2,668	)		7,619			(5,403	)
BALANCE OF CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR				12,390			4,771			10,174
BALANCE OF CASH AND CASH EQUIVALENTS
AT END OF YEAR			$	9,722		$	12,390		$	4,771
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW AND NON-CASH ACTIVITIES -
Cash paid during the year for income tax			$	776		$	902		$	39
Supplier's credit received during the year for the purchase of property, plant
and equipment			$	8