TTI Telecom International Ltd. Reports Record Revenues and Net Income for First Quarter 1999
-- Revenues up 59%; EPS up 86% --
PETACH TIKVA, Israel--(BUSINESS WIRE)--May 12, 1999-- TTI Telecom International Ltd. (NASDAQ/NM symbol: TTIL - news), a leading provider of integrated, turnkey software solutions for telecom service providers, today announced record unaudited results for the first quarter ended March 31, 1999.
Revenues for the first quarter of 1999 reached a record $6.4 million, an increase of 59% versus $4.0 million for the first quarter of last year. Product sales increased 60% to $4.8 million compared to $3.0 million for the same period last. Operating income rose 97% to $1.2 million compared to $606 thousand for the same quarter of 1998. Net income for the quarter reached a record $1.2 million or $0.13 per diluted share, versus $644 thousand or $0.07 per diluted share last year.
Commenting on the results, Mr. Meir Lipshes, Chief Executive Officer said, ''Our record revenues this quarter reflect primarily new contract wins and recurring revenues from existing contract awards. With our turnkey solutions in network management, we are gaining a greater edge in effectively competing for and closing significant new contracts.
''In addition, this quarter we received follow-on orders for product enhancements from existing customers. We expect to increase revenues from follow-on orders as we continue to mine our growing customer base. These follow-on orders serve to further validate our technology and exemplify our ability to grow with our customers as they expand their networks.
''This quarter, more than any other, has illustrated our ability to provide network management solutions to a variety of customers, from traditional telecommunications providers, such as Belgacom and Telkom South Africa, to next-generation, multi-media communications companies, such as Startec Global Communications. With our technology, we have the capability and flexibility to support such leading-edge telecom standards as GSM and many communications services including voice, data & Internet access. With this strong start to the year, along with our growing pipeline of orders, strategic partnership agreements, we feel positive of our continued growth through 1999.''
About TTI Telecom
TTI Telecom International Ltd. develops, markets and supports advanced, modular, integrated software products and services for operations support systems (''OSS'') and network management systems (''NMS'') in the telecommunications industry. The Company's solutions, based on its Netrac family of products, enable telecommunications service providers to improve the quality of existing services, streamline their operations in order to compete cost-effectively, maximize the return on their investment in network infrastructure and offer new services over complex networks. The Company's products manage mission-critical functions, such as fault management, performance management, configuration management and security management. Its growing family of Netrac NMS/OSS application tools are used by telecommunications companies worldwide and include leading service providers such as Sweden's Tele2 AB, RSL-Com in the UK, Germany's VIAG Interkom, SaskTel in Canada, Embratel in Brazil and HK Telecom in Hong Kong.
Forward looking statements in this release involve a number of risks and uncertainties including, but not limited to, product demand, pricing, market acceptance, changing economic conditions, risks in product and technology development, the effect of the Company's accounting policies as well as certain other risk factors which are detailed in the Company's SEC filings.
TTI TELECOM INTERNATIONAL LTD.
STATEMENT OF INCOME
(in thousands of U.S. dollars except per share data)
Three months ended
3/31/99 3/31/98
--------------- ---------------
(Unaudited) Unaudited
Revenues
Product $4,819 $3,020
Services 1,542 991
--------------- ---------------
Total revenues 6,361 4,011
Cost of revenues:
Product 2,058 1,342
Service 825 470
--------------- ---------------
Total cost of revenues 2,883 1,812
--------------- ---------------
Gross profit 3,478 2,199
--------------- ---------------
Operating expenses:
Research and development, net 540 463
Selling and marketing expenses 1,169 694
General and administrative 577 436
--------------- ---------------
Total operating expenses 2,286 1,593
--------------- ---------------
Operating income 1,192 606
Financial income (expenses),
net 110 78
--------------- ---------------
Income before taxes on income 1,302 684
Tax on income 94 40
=============== ===============
Net income $1,208 $644
=============== ===============
Basic earnings per share $0.14 $0.08
=============== ===============
Diluted earnings per share $0.13 0.07
=============== ===============
Number of shares used in
computing basic income per
share 8,627,445 8,148,413
=============== ===============
Number of shares used in
computing diluted income per
share 9,363,271 8,760,456
=============== ===============
TTI TELECOM INTERNATIONAL LTD.
CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars)
March 31, December 31,
1999 1998
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $12,931 $5,375
Short-term bank deposits 0 -
Trade receivables 8,330 6,995
Unbilled receivables 6,118 5,291
Other account receivable and
prepaid expenses 1,473 728
--------------- ---------------
Total current Assets 28,852 18,389
--------------- ---------------
SEVERANCE PAY FUND 1,150 1,010
--------------- ---------------
FIXED ASSETS:
Cost 6,425 5,810
Less - accumulated depreciation 2,025 1,765
--------------- ---------------
4,400 4,045
--------------- ---------------
--------------- ---------------
Total assets $34,402 $23,444
=============== ===============
March 31, December 31,
1999 1998
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank debt $189 $201
Trade payables 2,215 1,419
Related parties 863 433
Other accounts payable and
accrued expense 2,397 1,812
--------------- ---------------
Total current Liabilities 5,664 3,865
--------------- ---------------
ACCRUED SEVERANCE PAY 1,693 1,469
--------------- ---------------
SHAREHOLDERS' EQUITY:
Share Capital 1,491 1,348
Additional paid-in capital 17,490 9,906
Retained earnings 8,064 6,856
--------------- ---------------
Total shareholders' equity 27,045 18,110
=============== ===============
$34,402 $23,444
=============== ===============
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Contact:
TTI Telecom Ltd., Petach Tikva
Meir Lipshes
Chief Executive Officer
Tel: (972-3) 922-1262
Fax: (972-3) 922-1249
meirl@tti.co.il
or
Lippert/Heilshorn & Associates, Inc., New York
Jody Burfening
212/838-3777 (ext. 304)
jody@lhai.com
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