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 May, 2020
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.

 

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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 First Quarter 2020 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: May 14, 2020 President and Chief Executive Officer

 

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EXHIBIT INDEX

 

Exhibit Number   Description of Exhibit
1.   Press Release: MIND CTI Reports First Quarter 2020 Results

 

 

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Exhibit 1

 

MIND CTI Reports First Quarter 2020 Results

  

Yoqneam, Israel, May 14, 2020 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 first quarter ended March 31, 2020.

 

The following will summarize our major achievements in the first quarter of 2020 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, compared with $4.5 million in the first quarter of 2019, with the increase attributed to the acquisition of Message Mobile in March 2019 and GTX in September 2019, which generated revenues of approximately $2.3 million during the quarter.

 

  ● Operating income was $1.3 million, or 21% of total revenues, compared with $1.5 million, or 33% of total revenues in the first quarter of 2019.

 

  ● Net income was $1.2 million, or $0.06 per share, compared with $1.5 million, or $0.08 per share in the first quarter of 2019.

 

  ● Cash flow from operating activities during the quarter was $1.1 million, compared with $2.3 million in the first quarter of 2019.

 

  ● Cash position was $16.2 million as of March 31, 2020 (before the dividend distribution of $4.8 million on April 16, 2020).

 

As of March 31, 2020, we had 204 employees in our Romania, Israel, Germany and U.S. offices, compared with 220 as of March 31, 2019.

 

Monica Iancu, MIND CTI CEO, commented: “In these unprecedented times, our top priority is to ensure that our employees and customers are safe and that we remain resilient and agile. We have successfully transitioned into a new mode of operations to best support our customers under a firm business continuity program wherein most of our employees are working partially or fully from home using secured access. We informed our customers that as always, they can count on us to tirelessly maintain and strengthen their business.

 

“As we continue to face the many challenges mentioned in previous press releases and the additional impact caused by the COVID-19 pandemic, we expect a decline in our revenues and income in 2020. Nevertheless, we are encouraged that even in these times of uncertainty we have the experience, the resilience and the cash to weather the storm.”

 

Impact of COVID-19

 

We experience the effect of the pandemic in all areas of our business, mainly due to the following reasons:

 

  ● Ongoing project delays: Delays in the pace of ongoing implementation rollouts in all our lines of business, due to lockdowns and other COVID-19 related measures.

 

  ● New opportunities freeze: As much of the population remains homebound, service providers are taking action to ramp up their network infrastructure, but we believe that at the same time they are reluctant to promote billing transformation projects. The Messaging segment is also harmed due to a lack of campaigns and a freeze of new enrollments.

 

  ● Existing customers reducing budget: Due to the general economic uncertainty, the majority of our customers, both enterprises and carriers, are restricting their budgets. Especially, due to lack of revenues from supplying communication services to tourists, carriers’ willingness to invest in enhancements in new features is extremely low.

 

 

 

 

Revenue Distribution

 

The Americas represented 45%, Europe represented 49% (including the Message Mobile and GTX revenues in Germany that represented 38%) and the rest of the world represented 6% of total revenues.

 

Customer care and billing software totaled $3.0 million, or 50% of total revenues, enterprise messaging and payment solutions were $2.3 million, or 38% of total revenues and enterprise call accounting software totaled $0.7 million, or 12% of total revenues.

 

Licenses totaled $0.4 million, or 6.5% of total revenues, while maintenance and additional services were $5.6 million, or 93.5% of total revenues.

 

Dividend Distribution

 

As previously announced, the Board declared on March 11, 2020 a cash dividend of $0.24 per share.

 

The dividend of approximately $4.8 million, is presented in our March 31, 2020 balance sheet among other payables and was distributed to our shareholders in April 2020 .

  

AGM Update

 

The Company held its Annual General Meeting of Shareholders on May 12, 2020 and all the proposed resolutions were approved.

 

Board of Directors Update

 

Mr. Meir Nissensohn was appointed as MIND’s new Chairman of the Board of Directors. Mr. Nissensohn has served as an independent director of our company since August 2014. Mr. Nissensohn served as the Chairman of the Board of Directors and Chief Executive Officer of IBM Israel Ltd. from 1996 to 2012. Since his retirement from IBM, he is involved in various business initiatives and serves on the Board of several companies.

 

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 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

 

 

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MIND C.T.I. LTD.

 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 (Unaudited)

  

   Three Months 
   Ended March 31, 
   2020   2019 
   U.S. dollars in thousands (except per share data) 
         
REVENUES  $6,008   $4,461 
COST OF REVENUES   2,878    1,211 
GROSS PROFIT   3,130    3,250 
OPERATING EXPENSES:          
Research and development   993    939 
Selling and marketing   429    305 
General and administrative   421    523 
Total operating expenses   1,843    1,767 
OPERATING INCOME   1,287    1,483 
FINANCIAL INCOME (EXPENSES), net   (8)   138 
INCOME BEFORE TAXES ON INCOME   1,279    1,621 
TAXES ON INCOME   105    127 
NET INCOME  $1,174   $1,494 
           
EARNINGS PER SHARE - basic and diluted - in U.S. dollars  $0.06   $0.08 
           
WEIGHTED AVERAGE NUMBER OF SHARES USED IN COMPUTATION OF EARNINGS PER SHARE - in thousands:          
Basic   19,898    19,475 
Diluted   20,081    19,549 

 

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MIND C.T.I. LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

 (Unaudited)

 

   March 31,   December 31, 
   2020   2019 
   U.S. dollars in thousands 
ASSETS        
CURRENT ASSETS:        
Cash and cash equivalents  $11,016   $6,479 
Short-term bank deposits   3,060    6,795 
Marketable securities   2,038    1,916 
Accounts receivable, net:          
Trade   2,536    3,082 
Other   635    577 
Prepaid expenses   290    224 
Inventories   4    4 
Total current assets   19,579    19,077 
           
INVESTMENTS AND OTHER NON-CURRENT ASSETS:          
Marketable securities   109    129 
Severance pay fund   1,639    1,725 
Deferred income taxes    36    36 
PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization   161    167 
RIGHT-OF-USE ASSETS, net of accumulated depreciation   1,224    1,290 
INTANGIBLE ASSETS, net of accumulated amortization   716    761 
GOODWILL   7,846    7,910 
Total assets  $31,310   $31,095 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
CURRENT LIABILITIES:          
Accounts payable and accruals:          
Trade  $1,684   $2,066 
Other   6,699    2,048 
Current maturities of lease liabilities   271    292 
Deferred revenues   1,674    1,892 
Total current liabilities   10,328    6,298 
           
LONG-TERM LIABILITIES:          
Deferred revenues   91    103 
Lease liabilities, net of current maturities   905    983 
Employee rights upon retirement   1,686    1,775 
Total liabilities   13,010    9,159 
           
SHAREHOLDERS’ EQUITY:          
Share capital   54    54 
Additional paid-in capital   27,106    27,050 
Accumulated other comprehensive loss   (975)   (884)
Accumulated deficit   (6,681)   (3,080)
Treasury shares   (1,204)   (1,204)
Total shareholders’ equity   18,300    21,936 
Total liabilities and shareholders’ equity  $31,310   $31,095 

 

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MIND C.T.I. LTD.

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 (Unaudited)

 

   Three Months 
   Ended March 31, 
   2020   2019 
   U.S. dollars in thousands 
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net income  $1,174   $1,494 
Adjustments to reconcile net income to net cash provided by operating activities:          
Depreciation and amortization   46    13 
Accrued severance pay   30    72 
Unrealized loss (gain) from marketable securities, net   51    (29)
Realized gain on sale of marketable securities, net   (5)   (24)
Financial expenses   -    15 
Employees share-based compensation expenses   56    47 
Changes in operating asset and liability items:          
Decrease (increase) in accounts receivable:          
Trade   497    385 
Other   (65)   6 
Increase prepaid expenses   (66)   (415)
Increase (decrease) in accounts payable and accruals:          
Trade   (334)   490 
Other   (71)   (169)
Change in operating lease liability   (33)   (3)
Increase (decrease) in deferred revenues   (230)   392 
Net cash provided by operating activities   1,050    2,274 
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Acquisition of a subsidiary   -    (2,215)
Purchase of property and equipment   (12)   (1)
Severance pay funds   (33)   (55)
Proceeds from sale (investment in) of marketable securities   (148)   1,677 
Proceeds from short-term bank deposits   3,735    2,720 
Net cash provided by investing activities   3,542    2,126 
CASH FLOWS FROM FINANCING ACTIVITIES:          
Dividend paid   -    (4,049)
Net cash used in financing activities   -    (4,049)
Translation adjustments on cash and cash equivalents   (55)   - 
           
INCREASE IN CASH AND CASH EQUIVALENTS   4,537    351 
BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD   6,479    2,803*
BALANCE OF CASH AND CASH EQUIVALENTS AT END OF PERIOD  $11,016   $3,154 

  

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

 

  

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