<PAGE>
EXHIBIT 99.1
APPROVED BY: Monica Eisinger
President and CEO
FOR IMMEDIATE RELEASE
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CONTACT: MIND C.T.I. Ltd.
Michelle Melamed
Tel: 201-288-3900
Morgen-Walke Associates, Inc.
Michele Katz /Michael Polyviou/
Cathy Dawson
Press: Brian Maddox
Tel: 212-850-5600
MIND CTI REPORTS 230% RISE IN NET INCOME FOR THIRD QUARTER
* Total Revenue Increases 107%
Yoqneam, Israel, October 25, 2000--MIND C.T.I. Ltd. (Nasdaq: MNDO) a leading IP
telephony billing and customer care provider, today announced results for the
third quarter ended September 30, 2000.
Revenue for the third quarter of 2000 increased 107% to $4.2 million from $2.0
million in the third quarter of 1999. The significant revenue growth reflects
penetration into new countries and an increase in the amount of the average
sale. Sales in Europe represented 54% of total revenue, while sales in the
United States and Asia Pacific represented 18% and 19%, respectively. Sales in
Israel represented 9% of total revenue.
Net income for the quarter ended September 30, 2000 rose 230% to $1.0 million,
or $0.06 pro forma earnings per share from $316,000, or $0.02 earnings per
share, for the quarter ended September 30, 1999.
"The strength of our third quarter was fueled by the success of our pay-as-you-
grow business model, as well as our increased activity in Europe," stated Monica
Eisinger, President and CEO. "Early on, we anticipated the boom the European
market would ultimately experience for VoIP solutions. During the quarter, we
entered several new European countries, including Switzerland, Austria, Spain
and Italy, with European sales totaling 54% of revenue."
-more-
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MIND CTI PAGE 2
"We are also excited by the opportunities presented to us through our key
strategic partnerships. In particular, we are already benefiting from our
recently announced alliance with Clarent by MIND's sales force participating in
Clarent's marketing events. Looking ahead, we are confident that we will
maintain our leadership position and further our growth."
For the nine months ended September 30, 2000, revenue increased 102% to $11.0
million from $5.4 million in the prior year period. Net income increased 163% to
$2.4 million, or $0.14 pro forma earnings per share, from $913,000, or $0.06
earnings per share, for the nine months ended September 30, 1999.
Pro forma earnings per share exclude the effect of non-cash charges in the
amount of $4.0 million and $16.1 million, respectively, for the three and nine
month periods ended September 30, 2000 for accretion and amortization of the
beneficial conversion feature of MIND's convertible preferred shares. These
preferred shares were converted into ordinary shares upon consummation of MIND's
initial public offering in August 2000. Net losses applicable to ordinary shares
for the three and nine month periods ended September 30, 2000 were $3.0 million,
or $0.17 per share, and $13.7 million, or $0.87 per share, respectively.
In August 2000, the Company sold 3,000,000 ordinary shares at an initial public
offering price of $10.00 per share. On September 8, 2000, the underwriters
exercised their over-allotment option to purchase from MIND an additional
450,000 shares.
Third Quarter Highlights
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MIND Billing Solution Selected by NorthVoice for State-Of-The-Art IP Telephony
Network.
MIND-iPhonEX(R) billing and customer care solution gives NorthVoice the
flexibility to support a diverse number of IP telephony business models,
allowing customers to register to the service via the web, pay on line and offer
advanced voice and data services. NorthVoice is currently deploying a VoIP
telephony network that covers 81 cities on three continents in its first phase,
and an additional 240 cities covering five continents in its second phase.
MIND-iPhonEX Selected by NewWave Communications for VoIP Billing Solution.
MIND's billing and customer care system was selected for the billing of post-
paid, credit and debit customers. MIND-iPhonEX enables Web-based customer care
and Web-based customer registration. In addition, the system has the real time
capability necessary for providing prepaid services, making it possible for
NewWave to offer a prepaid calling card option to its customers.
-more-
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MIND CTI PAGE 3
MIND Chosen by Teltran International to Deliver Interoperable, Advanced VoIP
Billing and Customer Care Solution. The solution incorporates MIND and Cisco
products and is based on an open-architecture platform that allows the Company
to add future services as they become available. The carrier-grade, real-time
billing and customer care system for the emerging VoIP market handles prepaid
and post-paid billing, creation and management of prepaid calling cards, real-
time cut-off of calls, individual customer rate tables, and flexible fax-charge
options. The system also generates call management reports and traffic analyses
for customers and provides them with access to up-to-the-minute account
information.
MIND Partners with ipVerse to Deliver Interoperable IP Telephony Solution for
Nextgen Service Providers. The partnership provides the IP Telephony industry
with a fully integrated softswitch and IP telephony billing and customer care
solution. The ipVerse(TM) ControlSwitch(TM) is a software switch that can
quickly deliver voice-data communication services tailored to each user and
business organization. The MIND-iPhonEX(R) IP telephony billing and customer
care solution and the ipVerse ControlSwitch offer service providers the means to
deploy enhanced and innovative voice and data services, and start billing for
those services immediately, as well as perform customer care.
As a reminder, MIND CTI will be hosting a conference call to discuss earnings on
Wednesday, October 25, 2000, at 10:00 a.m. US EST. To participate in the
conference call, local and international callers can dial 212-676-5248. A replay
is available approximately one hour after the call until 11:59 p.m. on October
29. The replay number is 858-812-6440, passcode: 16661839.
About MIND
MIND is a leading provider of Billing & Customer Care, Accounting and Management
solutions for multiple IP services including Voice, Data, Content and Unified
Messaging. MIND's IP Telephony billing and customer care solutions are installed
at over 100 customers worldwide. MIND's convergent IP services billing system
provides ISPs, ITSPs and telcos with a real time solution for billing diverse IP
services. MIND operates from its Israeli headquarters and provides sales and
support services to its worldwide customer base from offices in the United
States and China. For information about MIND and its products visit the company
Web site: http://www.mindcti.com
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.
They involve risks, uncertainties, and assumptions, including the risks
discussed in the Company's filings with the United States Securities Exchange
Commission.
(tables to follow)
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MIND C.T.I. LTD.
Condensed Consolidated Statement of Income (unaudited)
(in thousands of U.S. $, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- ----------------------
2000 1999 2000 1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenue $ 4,209 $ 2,035 $ 11,010 $ 5,441
Cost of revenue 665 265 1,594 891
-------- -------- -------- --------
Gross Profit 3,544 1,770 9,416 4,550
-------- -------- -------- --------
Research and Development Expenses-net 987 574 2,728 1,361
Selling, General and Administrative Expenses:
Selling 1,225 567 3,197 1,400
General and administrative 463 230 1,119 660
Non-Cash Compensation 95 10 244 10
-------- -------- -------- --------
Expenses 2,770 1,381 7,288 3,431
Operating Income 774 389 2,128 1,119
Financial Income - net 303 36 475 71
-------- -------- -------- --------
Income before income taxes 1,077 425 2,603 1,190
Taxes on income 34 109 200 277
-------- -------- -------- --------
Net Income 1,043 316 2,403 913
-------- -------- -------- --------
Accretion of mandatory redeemable, convertible A (2,222) - (8,894) -
Preferred shares to mandatory redemption value
Amortization of beneficial conversion feature of
Redeemable convertible preferred shares (BCF) (1,806) - (7,223) -
-------- -------- -------- --------
Net income (loss) applicable to ordinary shares $(2,985) $ 316 $(13,714) $ 913
======== ======== ======== ========
Earnings (loss) per ordinary share
Basic and Diluted $ (0.17) $ 0.02 $ (0.87) $ 0.06
Proforma earnings per ordinary share basic and $ 0.06 $ 0.02 $ 0.14 $ 0.06
diluted
Weighted average number of ordinary shares used in
Computation of earnings (loss) per ordinary
share -
In thousands:
Basic 17,797 14,892 15,676 14,592
Diluted 17,797 15,220 15,676 14,901
</TABLE>
(table to follow)
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MIND C.T.I. LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. $)
<TABLE>
<CAPTION>
September 30 December 31,
2000 1999
(Unaudited) (Audited)
<S>
Assets <C> <C>
CURRENT ASSETS:
Cash and cash equivalents 42,611 2,646
Short-term investments 101 754
Accounts receivable:
Trade 5,560 2,577
Related party 25
Other 459 250
Inventory 53 37
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Total current assets 48,809 6,264
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PROPORTY AND EQUIPMENT:
Cost 2,457 1,392
Less accumulated depreciation and
Amortization 690 421
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1,767 971
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OTHER ASSETS 430 258
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Total Assets 51,006 7,493
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Liabilities and shareholders' equity
CURRENT LIABILITIES -
accounts payable and accruals:
Trade 1,099 201
Other 2,453 1,648
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Total current liabilities 3,552 1,849
ACCRUED SEVERANCE PAY 812 424
Total liabilities 4,364 2,273
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SHAREHOLDERS' EQUITY
Share capital 51 36
Capital surplus 61,254 3,680
Deferred stock compensation (714) (274)
Retained earnings (accumulated deficit) (13,949) 1,778
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Total shareholders' equity 46,642 5,220
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Total liabilities and shareholders' equity 51,006 7,493
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