Unassociated Document

MIND CTI Reports Cash Flow from Operating Activities of $6.3 Million in 2010

13% Revenue Growth in 2010 over 2009

* Board Declares Cash Dividend

Yoqneam, Israel, February 16, 2011 — MIND C.T.I. LTD. (Nasdaq GM: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 accounting) solutions, today announced results for the fourth quarter and year ended December 31, 2010.

Financial Highlights of Q4 2010

·	Revenues of close to $5 million, similar to the fourth quarter of 2009

·	Operating income was $1.8 million, compared with GAAP operating income of $1.2 million in the fourth quarter of 2009.

·	Net income of $1.9 million or $0.10 per share, compared with GAAP net income of $1.1 million or $0.06 per share in the fourth quarter of 2009

·	One new win and one new upgrade

Year 2010 Financial Highlights

·	Revenues of $19.9 million, a 13% growth over $17.6 million in 2009

·	Operating income was $5.0 million, or 25 % of revenue, including a non-cash impairment of goodwill and intangible assets of $993 thousand and equity-based compensation expense of $139 thousand, compared with operating income of $2.2 million in 2009.

·	Net income of $4.9 million, or $0.26 per share

·	Cash flow from operating activities was $6.3 million.

·	Cash position of $20.5 million as of December 31, 2010

·	Backlog as of December 31, 2010 includes approximately $12.2 million that is expected to be billed by 2011 year-end.

·	Four new wins and multiple upgrades

Monica Iancu, Chairperson and CEO, commented: "We are pleased with our overall execution, the year-to-year growth, our customer satisfaction and our on-time deliveries as well as our new wins. We plan to slightly increase our professional services teams as we support an enhanced customer base with larger projects. We believe that the reputation and experience we have built over more than a decade will help us continue to win new deals, of increased size and scope.”

Revenue Distribution for Q4 2010

Sales in the Americas represented 45.5 % and sales in Europe represented 39.9 % of total revenue.

Revenue from our customer care and billing software totaled $3.5 million, while revenue from our enterprise call accounting software was $1.5 million. Revenue from licenses was $1.8 million, or 35.1 % and $3.2 million, or 64.9 % from maintenance and additional services.

Revenue Distribution for Full Year 2010

Sales in the Americas represented 45.9 % and sales in Europe represented 39.2 % of total revenue.

Revenue from our customer care and billing software totaled $15.7 million, while revenue from our enterprise call accounting software was $4.2 million. Revenue from licenses was $6.6 million, or 33.0 % and $13.3 million, or 67.0 % from maintenance and additional services, in line with our expectations.

Dividend Distribution

As previously announced, following the Board of Directors resolution, the Company sought and received the court approval formally required in order to enable a dividend distribution of up to $6 million, out of its current assets.

Based on the new policy and the amount approved by the court, while taking into consideration the strong cash flow in 2010 and the remaining cash after the distribution, the Board declared a cash dividend of $0.32 per share before withholding tax.

The record date for the dividend will be February 28, 2011 and the payment date will be March 21, 2011. Tax will be withheld at a rate of 20 %.

Appointment of CFO

After serving as Interim CFO since August 2010, MIND appointed Mr. Aviram Cohen as permanent CFO. Aviram joined MIND as Controller in June 2006. Before joining us, he served as an auditor and accountant since 2002 at Ernst & Young, (Haifa, Israel). Aviram is a Certified Public Accountant and holds a B.A. degree in Accounting and Economics from Haifa University.

Conference Call Information

MIND will host a conference call on February 17, 2011 at 10:30 a.m., Eastern Time, to discuss the Company's fourth quarter 2010 results and other financial and business information. The call will be carried live on the Internet via www.earnings.com and the MIND website, www.mindcti.com. For those unable to listen to the live web cast, a replay will be available.

Full financial results can be found in the Investors section www.mindcti.com/investor/PressReleases.asp and in our Form 6-K as well.

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 accounting) 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 twelve years of experience in providing solutions to carriers and enterprises, MIND operates from offices in the United States, UK, 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.

Follow MIND on Twitter @mindcti

For more information please contact:

Andrea Dray

MIND CTI Ltd.

Tel: +972-4-993-6666

investor@mindcti.com

MIND C.T.I. LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three months					Year
	ended					ended
	December 31					December 31
	2 0 1 0		2 0 0 9			2 0 1 0		2 0 0 9
	U.S. $ in thousands
	(except per share data)

Revenues	$	4,991	$	4,969		$	19,886	$	17,574
Cost of revenues		1,333		1,527			6,167		6,413
Gross profit		3,658		3,442			13,719		11,161

Research and development expenses		1,051		1,022			4,057		4,448
Selling and marketing expenses		469		586			2,119		2,220
General and administrative expenses		296		588			1,555		2,324
Impairment of goodwill							586
Impairment of intangible asset							407
Operating income		1,842		1,246			4,995		2,169

Financial income (expenses):
Auction rate securities settlement				-					18,500
Impairment of auction rate securities				(42	)				(941	)
Other financial income (expenses) - net		57		1			49		256
Income (loss) before taxes on income		1,899		1,205			5,044		19,984

Taxes on income		39		60			188		197

Net Income	$	1,860	$	1,145		$	4,856	$	19,787


Earning per ordinary share:
Basic and Diluted	$	0.10	$	0.06		$	0.26	$	1.04

Weighted average number of ordinary shares used in computation of earnings per ordinary share -
in thousands:

Basic		18,494		18,601			18,467		19,012

Diluted		18,669		18,601			18,613		19,012

MIND C.T.I. LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

	December 31,			December 31,
	2 0 1 0			2 0 0 9
	U.S. $ in thousands
A s s e t s
CURRENT ASSETS:
Cash and cash equivalents	$	17,582		$	15,995
Short term bank deposits		2,905			2,183
Accounts receivable:
Trade		1,585			1,246
Other		154			201
Prepaid expenses		164			91
Deferred cost of revenues		199			141
Other current assets		30			34
Total current assets		22,619			19,891

INVESTMENTS AND OTHER NON CURRENT ASSETS:
Severance pay fund		1,512			1,208
Deferred cost of revenues		66			125
Deferred income tax		-			-
PROPERTY AND EQUIPMENT, net of accumulated depreciation
and amortization		834			1,043
INTANGIBLE ASSETS, net of accumulated amortization					655
GOODWILL		5,430			6,029
Total assets	$	30,461		$	28,951

Liabilities and shareholders’ equity
CURRENT LIABILITIES :
Accounts payable and accruals:
Trade	$	244		$	450
Other		1,236			1,581
Deferred revenues		3,020			2,545
Total current liabilities		4,500			4,576
LONG TERM LIABILITIES :
Deferred revenues		276			216
Employee rights upon retirement		1,702			1,472
Total liabilities		6,478			6,264

SHAREHOLDERS’ EQUITY:
Share capital		54			54
Additional paid-in capital		39,319			39,105
Differences from translation of foreign currency financial statements of a subsidiary		(1,140	)		(1,052	)
Treasury shares		(2,800	)		(2,800	)
Accumulated deficit		(11,450	)		(12,620	)
Total shareholders’ equity		23,983			22,687
Total liabilities and shareholders’ equity	$	30,461		$	28,951

MIND C.T.I. LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three months						Year
	ended						ended
	December 31						December 31
	2 0 1 0			2 0 0 9			2 0 1 0			2 0 0 9
	U.S. $ in thousands
Cash flows from operating activities:
Net Income	$	1,860		$	1,145		$	4,856		$	19,787

Adjustments to reconcile net income to net cash provided by operating activities:
Auction rate securities settlement											(18,500	)
Depreciation and amortization		89			188			582			778
Impairment of auction rate securities					42						941
Impairment of goodwill								586
Impairment of intangible asset								407
Deferred income taxes, net					48						113
Accrued severance pay		(129	)		(5	)		134			39
Capital loss (gain) on sale of equipment - net					2			(15	)		(10	)
Employees share-based compensation expenses		63			36			139			143

Changes in operating asset and liability items:
Decrease (increase) in accounts receivable:
Trade		(630	)		1,365			(352	)		2,265
Other		66			23			44			(51	)

Decrease (increase) in prepaid expenses and work in process		(66	)		(55	)		(74	)		270
Decrease in inventories		4			2			4			2

Increase in accounts payable and accruals:
Trade		(395	)		(96	)		(207	)		(19	)
Other		(180	)		(96	)		(336	)		(169	)

Increase (decrease) in deferred revenues		252			(578	)		536			677
Net cash provided by operating activities		934			2,021			6,304			6,266

Cash flows from investing activities:
Proceeds from cash settlement											18,500
Purchase of property and equipment		(33	)		(128	)		(171	)		(367	)
Severance pay funds		4			(38	)		(208	)		(416	)
Investment in short term bank deposits		(681	)		2,024			(722	)		(2,183	)
Proceeds from sale of property and equipment					71			40			194
Net cash provided by (used in) investing activities		(710	)		1,929			(1,061	)		15,728

Cash flows from financing activities:
Cost of acquisition of treasury shares					(472	)					(1,169	)
Employee stock options exercised and paid		4						75
Dividend paid					(14,780	)		(3,686	)		(14,780	)
Net cash provided by (used in) financing activities		4			(15,252	)		(3,611	)		(15,949	)

Translation adjustments on cash
and cash equivalents		(45	)		28			(45	)		228
Increase (decrease) in cash and cash equivalents		183			(11,274	)		1,587			6,273

Balance of cash and cash equivalents at beginning of period		17,399			27,269			15,995			9,722
Balance of cash and cash equivalents at end of period	$	17,582		$	15,995		$	17,582		$	15,995