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.
We continue to invest in enhancing our solutions with new functionality releasing new modules every year. In 2009 we added to our IP, voice and data prepaid capabilities the Intelligent Network or IN prepaid solutions for mobile carriers.
The solution of our first prepaid mobile module is integrated now and fully operational and the mobile carrier using this is a good reference side for new potential customers. MIND will allow through convergence of prepaid and postpaid services under the same account.
The same rate plan may be used for both prepaid and postpaid as rating and charging are done by the same engine. The full richness of postpaid features and capabilities is available in real time for prepaid services. MIND will support a signal from them, customer care interface will incorporate the benefit of an integral comprehensive point of sale solution with module focus here and inventory management and introduces a wide set of business intelligence and capabilities.
It is highly available and scalable from a few thousand to millions of prepaid subscribers. Lately we received many requests for information regarding our dividends and I would like to explain our existing dividend policies and update on it.
In July 2003 we adopted a dividend policy according to which we declared subject to specific board approval in applicable law and a dividend distribution once a year. In the amount of our net income from our previous year. Additionally the board approved dividend distributions that did not meet this exact criteria. Since 2003 we distributed cash dividend with a total of $2.05 per share to our shareholders.
We declared and paid 7 yearly dividends of close to $0.80 of share regain average every year and a special dividend of $0.80 per share in 2009. But our existing policy the board decisions to approve the annual distribution is based among other factors on our cash position and debt buying potential acquisition and future cash meets.
The board may decide to discontinue the dividend distribution in whole or in part at any time. The MIND Board of Directors is reviewing now the dividend policy as we plan to further enforce the expected annual distributions and leave less room for board discretion.
If approved by the board the new policy will commence in 2011 and will imply an annual dividend declared with the release of applicable year-end financial statements. The details of the new policy will be revealed in our next quarter's press release.
Now a quick update on the discreet supply section. The previously disclosed alleged security supply section against the company and individuals have been dismissed. On July 2, 2010 the US district court for the thousand districts of New York issued the decision dismissing the complaints against all defendants. Without leads to amend and directing the court to close the case. The quality based was seen the ruling has passed and we are not aware of any appeal.
And the quick update on the annual general meeting results. The company held its annual general meetings of shareholders on June 28, 2010 and those proposed solutions were approved. Monica and Doron were reelected for an additional period of three years. Mr. Rimon Ben-Shaoul, who served on the Company's Board of Directors from 2002 to 2008, was reelected to serve as a director and member of all committees. We welcome him back and look forward to his contribution to the company.
To summarize we believe that we are active in all areas. The sales teams are very [busy and the teams have left for busy mail]. In the markets are deceivably active with lots of spenders around the globe. Many carriers are looking to add or replace solutions but most decisions are delayed due to lack of financing or [visitors to make move].
Why do you believe that at this point in time the market is not strong enough to enable growth? We continue to focus on our target. Satisfied customers, successful project implementations, winning new business and positive cash flow.
We continue to believe this adds on well. This target grouped our great company cultures in the unprecedented spirit and team effort to drive us forward for successful future. Operator?
MIND C.T.I., Ltd. (MNDO) Q2 2010 Earnings Call August 4, 2010 10:30 AM ET
Thank you, (Operator Instructions) Our first questions comes from Dan Western from West Cap Management, please go ahead.
Dan Weston - WestCap Management
Congrats on a good quarter couple of questions first on the win that you announced with the telecom vendor, were any revenue recognized from that contract in the second quarter?
Hi Dan, no revenue was recognized as of now. Our projects are projects that normally are recognized between six to nine months after the receipt of the purchase order. There is a time to complete the statement of work and to start the implementation. So no revenue was recognized from this sale order.
Dan Weston - WestCap Management
Okay and is there any color you can give us in terms of what the size of the order was or would this be a combination of license maintenance and service or how do you see it playing out over the next year?
In terms of medium size order we believe this is mainly important because it was not with an end user but with an integrator that an equipment vendor but this was the first time that we start productive relationship with and hopefully more orders will come after the successful implementation of this fund.
Dan Weston - WestCap Management
And could you update us please on your buyback activity do you still have an authorization and did you buy any shares in the second quarter?
We did not buy any shares, we do have an authorization but the criteria for the banker is (inaudible).
(Operator Instructions) there are no further questions remaining in the queue that will conclude today's Q&A session I would now like to hand the call back to Monica Iancu. Please go ahead.
Thank you all for your interest in MIND.
That concludes today's conference call thank you for attending today's conference you may now disconnect.