SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

 

 

F O R M  6-K

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934

 

For the month of August, 2019
Commission File Number: 000-31215

 

MIND C.T.I. LTD.

(Translation of registrant’s name into English)

 

HaCarmel 2, Yoqneam 2069202, Israel

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F:

 

Form 20-F ☒            Form 40-F ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): N/A

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): N/A

 

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

 

Yes ☐            No ☒

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- N/A

 

 

 

 

 

 

INCORPORATION BY REFERENCE

 

The Registrant’s GAAP financial statements attached to the press release in Exhibit 1 to this Report on Form 6-K are hereby incorporated by reference into: (i) the Registrant’s Registration Statement on Form S-8, Registration No. 333-181383; (ii) the Registrant’s Registration Statement on Form S-8, Registration No. 333-117054; (iii) the Registrant’s Registration Statement on Form S-8, Registration No. 333-100804; and (iv) the Registrant’s Registration Statement on Form S-8, Registration No. 333-54632.

 

CONTENTS

 

This report on Form 6-K of the registrant consists of the following Exhibit, which is attached hereto and incorporated by reference herein:

 

Press Release:  MIND CTI Reports Second Quarter 2019 Results

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  By Order of the Board of Directors,
   
  /s/ Monica Iancu
  Title: Monica Iancu
Date: August 12, 2019 President and Chief Executive Officer

 

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EXHIBIT INDEX

 

Exhibit Number   Description of Exhibit
     
1.   Press Release:  MIND CTI Reports Second Quarter 2019 Results

 

 

 

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Exhibit 99.1

 

MIND CTI Reports Second Quarter 2019 Results

 

Yoqneam, Israel, August 12, 2019 MIND C.T.I. LTD. – (NasdaqGM:MNDO), a leading provider of convergent 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 second quarter ended June 30, 2019.

 

The following will summarize our major achievements in the second quarter of 2019 as well as our business. The 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

 

●Revenues were $6.0 million, a 32.7% increase when compared with $4.6 in the second quarter of 2018, with the increase attributed to the acquisition of Message Mobile GmbH in March 2019, which generated revenues of approximately $1.9 million during the quarter.
●Operating income was $1.0 million, or 17.2% of total revenues, compared with $1.3 million, or 28.4% of total revenues in the second quarter of 2018, with the decrease in operating income margin primarily reflecting the lower margins in the acquired business.
●Net income was $1.0 million, or $0.05 per share, compared with $1.2 million, or $0.06 per share in the second quarter of 2018.
●Cash flow from operating activities in the quarter was $1.1 million, compared with $0.9 million in the second quarter of 2018.

 

Six Month Financial Highlights

 

●Revenues were $10.5 million, compared with $9.1 million in the first six months of 2018.
●Operating income was $2.5 million, or 24.0% of total revenues, compared with $2.6 million or 28.1% of total revenues in the first six months of 2018.
●Net income was $2.5 million, or $0.13 per share, compared with $2.3 million or $0.12 per share in the first six months of 2018.
●Cash flow from operating activities in the first six months of 2019 was $3.4 million, compared with $2.3 million in the first six months of 2018.

 

As of June 30, 2019, we had 229 employees in our Romania, Israel, Germany and U.S. offices, compared with 216 as of June 30, 2018.

 

Monica Iancu, MIND CTI CEO, commented: “The financial results reflect the operating activities inclusive of the enterprise messaging solutions acquisition for the full second quarter. We continue to be challenged by the shrinking relevant markets and strong competition in both our billing and our enterprise solutions, as previously announced multiple times. We started to experience the expected continuous negative impact and we continue making the necessary adjustments to our cost structure. Revenue-wise we see the visible impact of the acquisition, while operating margins in the enterprise messaging space are much lower than in our traditional business. As previously mentioned, we expect to focus in the next few quarters on the integration of Message Mobile and on exploring its potential growth, including through additional acquisitions, while striving to find ways to increase margins in this field. At the same time we continue our planned investments aimed at responding to market needs and continue with our dividend policy.”

 

 

 

 

Financial Income and Cash Position

 

Our cash position, including short and long-term deposits and marketable securities, was $12.2 million as of June 30, 2019, compared with $14.1 million as of June 30, 2018. The decrease is primarily attributed to the $2.25 million used in the Message Mobile acquisition.

 

As previously announced, the Board declared on March 4, 2019 a cash dividend of $0.26 per share before withholding tax. The record date was March 18, 2019 and the payment date was March 28, 2019. Tax was withheld at a rate of 20%.

 

The dividend declared and distributed was approximately $5 million – approximately $4 million was paid to the shareholders in March 2019 and approximately $1 million was paid for the withholding tax to the Israel Tax Authority in April 2019, similar to the process in 2018.

 

Revenue Distribution for Q2 2019

 

Revenues in the Americas represented 50%, revenues in Europe represented 43% (including the Message Mobile revenues in Germany that represented 32%) and revenues in the rest of the world represented 7% of our total revenues.

 

Revenues from customer care and billing software totaled $3.3 million, or 55% of total revenues, revenues from enterprise messaging and payment solutions were $1.9 million, or 32% of total revenues, and revenues from enterprise call accounting software totaled $0.8 million, or 13% of total revenues.

 

Revenues from licenses were $0.4 million, or 7% of total revenues, while revenues from maintenance and additional services were $5.6 million, or 93% of total revenues.

 

Acquisition Update

 

As previously announced, MIND acquired Message Mobile GmbH, a leading provider of enterprise messaging, communication and payment solutions, based in Lüneburg, Germany with more than 15 years’ experience in the mobile industry. Its messaging platform enables enterprises to easily communicate with clients and partners via text / SMS, voice and instant messaging services like WhatsApp, Facebook Messenger and Telegram. Message Mobile also offers mobile payment solutions that use phone bill charging for a wide range of applications such as mobile parking payment.

 

The financial results reflect the operating activities inclusive of the acquisition as from April 1, 2019.

 

AGM Update

 

The company held its Annual General Meeting of Shareholders on May 26, 2019 and all the proposed resolutions were approved.

 

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 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.” 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 risk that the acquisition will not succeed in achieving its intended goals due to competitive, personnel, technological or other integration issues and 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

 

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MIND C.T.I. LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

   Three Months   Six Months 
   Ended June 30,   Ended June 30, 
   2019   2018   2019     2018 
   Unaudited 
   U.S. dollars in thousands (except per share data) 
         
Revenues  $6,044   $4,555   $10,505   $9,097 
Cost of revenues   3,189    1,533    4,400    3,293 
Gross profit   2,855    3,022    6,105    5,804 
Research and development expenses   1,051    873    1,990    1,710 
Selling and marketing expenses   243    420    548    725 
General and administrative expenses   524    434    1,047    817 
Operating income   1,037    1,295    2,520    2,552 
Financial income (expenses), net   136    (24)   274    (16)
Income before taxes on income   1,173    1,271    2,794    2,536 
Taxes on income   126    111    253    214 
Net income  $1,047   $1,160   $2,541   $2,322 
                     
Earnings per ordinary share - basic and diluted  $0.05   $0.06   $0.13   $0.12 
                     
Weighted average number of shares used  in computation of earnings per share - in thousands:                    
Basic   19,818    19,317    19,649    19,326 
Diluted   19,999    19,557    19,870    19,573 

 

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MIND C.T.I. LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   June 30,   December 31, 
   2019   2018 
   Unaudited   Audited 
   U.S. dollars in thousands 
Assets        
CURRENT ASSETS:        
Cash and cash equivalents  $3,471   $2,739 
Short-term bank deposits   6,279    8,714 
Marketable securities   2,315    4,352 
Accounts receivable, net:          
Trade   3,464    2,130 
Other   558    560 
Prepaid expenses   330    209 
Inventory   4    4 
Total current assets   16,421    18,708 
           
INVESTMENTS AND OTHER NON-CURRENT ASSETS:          
Marketable securities - available-for-sale   124    105 
Severance pay fund   1,574    1,439 
Deferred income taxes   34    34 
Long-term bank deposits   -    98 
RIGHT-OF-USE ASSETS, net of accumulated depreciation   842    - 
PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization   157    164 
GOODWILL AND INTANGIBLE ASSETS, net of accumulated amortization   8,546    5,430 
Total assets  $27,698   $25,978 
           
Liabilities and shareholders’ equity          
CURRENT LIABILITIES :          
Accounts payable and accruals:          
Trade   1,835   $147 
Other   1,541    1,501 
Current maturities of lease Liabilities   320    - 
Deferred revenues   2,426    1,788 
Total current liabilities   6,122    3,436 
LONG-TERM LIABILITIES :          
Deferred revenues   53    43 
Lease liabilities, net of current maturities   526    - 
Employee rights upon retirement   1,682    1,517 
Total liabilities   8,383    4,996 
           
SHAREHOLDERS’ EQUITY:          
Share capital   54    54 
Additional paid-in capital   26,498    26,404 
Accumulated other comprehensive loss   (875)   (877)
Treasury shares   (758)   (1,515)
Accumulated deficit   (5,604)   (3,084)
Total shareholders’ equity   19,315    20,982 
Total liabilities and shareholders’ equity  $27,698   $25,978 

 

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MIND C.T.I. LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

   Three Months   Six Months 
   Ended June 30,   Ended June 30, 
   2019   2018   2019   2018 
   Unaudited 
   U.S. dollars in thousands 
Cash flows from operating activities:        
Net income  $1,047   $1,160   $2,541   $2,322 
Adjustments to reconcile net income to net cash provided by operating activities:                    
Depreciation and amortization   35    20    48    44 
Accrued severance pay   71    27    143    (7)
Deferred income taxes, net   -    -    -    (1)
Financial income from available-for-sale securities   (5)   (1)   (19)   - 
Unrealized (loss) gain on marketable securities, net   (39)   11    (78)   35 
Employees share-based compensation expenses   47    50    94    101 
Financial expenses in respect of lease liabilities   (30)   -    (15)   - 
Changes in operating asset and liability items:                    
Decrease (increase) in accounts receivable:                    
Trade   (426)   333    (51)   356 
Other   161    37    167    129 
Decrease (increase)  in prepaid expenses    294    (97)   (121)   (185)
Increase (decrease) in accounts payable and accruals:                    
Trade   (104)   (196)   396    37 
Other   (156)   (48)   (325)   519 
Change in operating lease liability   7    -    4    - 
Decrease (increase) in deferred revenues   245    (354)   637    (1,072)
Net cash provided by operating activities   1,147    942    3,421    2,278 
                     
Cash flows from investing activities:                    
Purchase of property and equipment   (11)   (3)   (12)   (34)
Severance pay funds   (58)   (25)   (113)   21 
Proceeds from  marketable securities   536    410    2,213    688 
Acquisition of a subsidiary   -         (2,215)     
Proceeds from (investment in) short-term bank deposits   (285)   -    2,435    2,025 
Net cash provided by investing activities   182    382    2,308    2,700 
Cash flows from financing activities:                    
Employee stock options exercised and paid   -    1    -    39 
Dividend paid   (1,012)   (1,184)   (5,061)   (5,799)
Net cash used in financing activities   (1,012)   (1,183)   (5,061)   (5,760)
Increase (decrease) in cash and cash equivalents   317    142    668    (781)
Balance of cash and cash equivalents at beginning of period   3,154    4,091    *2,803    5,014 
Balance of cash and cash equivalents at end of period  $3,471   $4,233   $3,471   $4,233 

 

* Includes $2,739 cash and cash equivalents and $64 restricted cash that was presented in other receivables.

 

 

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