MIND C.T.I.'s CEO Discusses Q4 2011 Results - Earnings Call Transcript

MIND C.T.I. LTD. ( MNDO)

Q4 2011 Earnings Call

March 1, 2012 9:30 a.m. ET

Executives

Andrea Dray - Investor Relations

Monica Iancu - President and Chief Executive Officer

Presentation

Operator

Good day and welcome to the MIND C.T.I Q4 2011 Earnings Conference Call. Today's conference is begin recorded. At this time I would like to turn the conference over to your Andrea Dray. Please go ahead Ms. Dray.

Andrea Dray

Thank you, Rovina. Thank you and good morning everyone and welcome to MIND’s conference call. Before we begin I would like to point out that this call includes information that constitutes forward-looking statements. Although we believe that expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be obtained or that any deviations will not be material. Such statements involve risks and uncertainties that may cause future results to differ from those anticipated.

These risks include, but are not limited to, the effects of general economic conditions and such other risks as discussed in our earnings release and at greater length in the Company's filings with the SEC. MIND may elect to update these forward-looking statements at some point in the future. However, the Company specifically disclaims any obligation to do so.

Yesterday, MIND reported the results of its fourth quarter and full year 2011. The full financials can be found in our Form 6-K and on our website. On the call today from MIND is Ms. Monica Iancu, MIND’s CEO, who will summarize our major achievements in 2011 and discuss our business. I would now like to turn the call over to Monica. Monica, please go ahead.

Monica Iancu

Thank you, Andrea. Good day ladies and gentlemen. Thank you for your interest in MIND and for joining us today. I would like to start the call today with a short reminder of MIND’s history, business strategy and goals. MIND was incorporated in Israel in 1995 and starting providing our call accounting solutions in that year. In 1997, we introduced our billing and customer care software for voice over IP. We have enhanced our billing solutions since then to support all types of service providers. We make three acquisitions through the years. In 2001, 2005 and 2007.

We supply billing and customer care solutions for tier 2 and tier 3 carriers around the world, enabling them to offer all types of wireless, wireline, voice over IP and broadband services. Our convergent billing and customer care solutions supports multiple services, including voice, data and content services, as well as both prepaid and postpaid payment models in a single platform. Prepaid subscribers can enjoy the full range of services offered by the provider with their special bundles, rating plans and limits.

The prepaid solution authorizes its service and controls each session in real-time taking care that the balance is not exceeded. Postpaid subscribers, whether retail or business customers including credit limited and unlimited are fully supported in one single system from the sale of the services and collection. All services used by a postpaid customer appear in a single bill which consists of all charges. Our solution uniqueness is driven by the fact that the rating real time engine is one engine for both postpaid and prepaid. And because it includes not only the expected customer care and billing but also additional modules developed on the same platform.

These modules include our own integrated real-time mediation product that provides interfaces with IP, meaning internet protocol, and IN, meaning mobile intelligent networks, and traditional telecommunication as well as our own point of sales solutions. Our billing and customer care solution includes a powerful workflow engine to support the creation and execution of business processes, such as order management, travel ticket and debt collection. The MIND solution supports real-time distributed processing achieving performance, scalability and high availability. It uses and open architecture thus enabling easy integration with other systems and applications.

We also provide professional services consisting of installation, turnkey projects, implementation services, customer support, training and maintenance services, customization and project management. Our professional services also include enhanced support options known as managed services, which are mainly offered to customers in the United States and are performed from our offices. These managed services include performing day to day billing operational tasks.

In addition to our billing solutions, we offer call management systems used by organizations for call accounting, telecom expense management, traffic analysis and fault detection. Our enterprise software product has been installed on about 20,000 switches around the world. Our high-end product PhonEX ONE, delivers one unified solution for all voice communication expenses including tradition IP and mobile telephony. The flexible and scalable architecture of PhonEX ONE meets the needs of large enterprises supporting and unlimited number of extensions and sites.

We primarily use two business models when we sell our solutions. The license model and the managed services model. In the license model the customer pays a onetime implementation fee, a onetime license fee for a perpetual license limited by the traffic metrics chosen by the customer and additional fees to expand above the limitation. In addition, we are paid maintenance fees to renew periodically the maintenance agreement at the customer’s discretion. In the managed services model, the customer pays a onetime implementation fee, and then a monthly fee that includes a periodic license or right to use, maintenance and service fees, calculated by the metrics chosen by the customer, mainly by number of subscribers.

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