MIND C.T.I., Ltd. (MNDO)
Q2 2010 Earnings Call
August 04, 2010 10:30 am ET
Monica Iancu - President and CEO
Dan Weston - WestCap Management
Good day ladies and gentlemen and welcome to the Mind's Q2 2010 Earnings Conference Call. Today's conference is being recorded at this time I would like to turn the conference over to Andrea Dray. Please go ahead.
Good morning everyone and welcome to Mind's Conference Call. Before we begin I would like to point out that during this call we will discuss certain financial information that is not prepared in accordance with GAAP. The company's management uses its financial information and internal analysis in order to exclude the effects of acquisitions and other significant items that may have a disproportionate effect in a particular period.
Accordingly management believes that isolating the effects of such events enables management and investors to consistently analyze the critical components and the results of operations of the company's business and to have a meaningful comparison to prior periods.
Also this call includes information that constitutes forward-looking statements. Although we believe that expectations reflecting such forward-looking statements are based upon reasonable assumption we can give no assurance that our expectations will be obtained or that any deviation will not be material.
Such statements involve risks and uncertainties that make those future results to differ from those anticipated. These risks include but are not limited to the effect of general economic conditions and such other risks as discussed in our earnings release and at greater lengths in the company's filings with the SEC.
MIND may arrest to update these forward-looking statements at some points in the future, however the company specifically disclaims any obligation to do so. Yesterday MIND reported the result of the second quarter 2010. The financials can be found in our form 10K on the call today for MIND is Mrs. Monica Iancu, MIND's, CEO I would now like to turn the call over to Monica. Monica please go ahead.
Thank you Andrea and good day ladies and gentlemen. Thank you for your interest in MIND and for joining us today. In our call today I will summarize and discuss some aspects of our business.
I would like to start with the Finance Department update. In light of the departure of the last CFO after only three years with the company we decided to review the structure of our Finance Department and in the mean time for the quarter.
Until a firm conclusion is reached our controller for the last 4 years Mr. Aviram Cohen aged 34 will lead our Finance Department and serve as Interim, CFO. Aviram joined MIND as Controller in 2006. Before this he served as an auditor at the Israeli affiliate of Ernst & Young. We wish Aviram great success for many years to come.
Yesterday we reported our business results for the second quarter of 2010. Revenue for the second quarter was $4.9 million. Revenue from our customer care and billing solutions was $4.05 million and revenue from our enterprise Call Accounting Solutions was approximately $853,000.
The geographic revenue breakdown was roughly 47% from the Americas and 37% from Europe. The license revenue was $1.75 million or 36% of total revenue. Maintenance represented $1.67 million or 34%, and services were $1.48 million or 30% of the total revenue.
All this in line with out business model. Operating income for the second quarter was 28% of revenue similar to last quarter well above our 20% value. Net income for the second quarter was $1.3 million, an EPS of $0.07 per share.
Our balance sheet continues to be strong with total cash possession of $80 million at the end of the quarter after a dividend distribution of $3.7 million. Our backlog as of June 30, 2010 include approximately $7.9 million which is expected to be billed by year end and then the 7.2 million on the same date last year.
We are pleased that in these economic conditions we continue with our execution of positive cash flow and that during the quarter we succeeded to close additional business but unfortunately at the same time we lost one Europe customer which was under a managed service agreement with our UK acquired entity. The entity was acquired in 2007 and the UK based company provides billing and customer care software solutions in a service bill amount mainly to European carriers.
In the second quarter of 2010 we secured one new European customer as well as a solution upgrade with an existing up tick on customers.
The new win is with a telecom vendor that had been awarded the prime contractor role in a project that is financed by the European Union. We are proud for them being chosen following a lengthy selection process that had started almost two years ago. MIND will provide an end-to-end billing and customer care solution for handling both prepaid and postpaid models.
MIND enables the carrier to implement advanced rating schemes for the latest technology infrastructure being installed. The upgrade is with a philosophical career providing the full force of ISP services in voice over IP solutions primarily to corporate customers. The rating and billing of VOIP services has been handled by the MIND Systems since the launch in 2005 while other solutions were used for data services.
Following the decision by the carriers we expand the service offering as well as consolidate all systems into a single platform MIND was chosen as the converged platform. This move will save on the carriers overall operating expenses.