1st Quarter Results

RNS Number : 9055G

MTI Wireless Edge Limited

13 May 2014

 



13 May 2014

MTI Wireless Edge Ltd

("MTI" or the "Company")

Financial results for the three months ended 31 March 2014

MTI Wireless Edge Ltd., (MWE) ("MTI" or the "Company"), a market leader in the manufacture of flat panel antennas for fixed wireless broadband, today announces its unaudited results for the three months ended 31 March 2014.

Highlights

·     Continued improvement in revenue, gross margin rate and operational profit.

·     Revenue increased by 3% to US$3.5m (Q1 2013: US$3.4m).

·     Gross profit increased by 27% to US$1.35m (Q1 2013: US$1.06m).

·     Net profit of US$118,000 (Q1 2013: US$26,000).

·     Shareholder's equity of US$17.9m (at December 31, 2013: US$17.7m), equivalent to 20.5 pence per share.

Dov Feiner, Chief Executive Officer, commented:

"I am pleased to announce that during this quarter the Company improved both its margins and profits, and continued its healthy progress. We continue to see strong demand for our 80GHz line of products and current 2014 shipments and order backlog already show a substantial increase of around 40% over the entire 2013 revenue from this product line.

"We have made good progress in the first quarter and the Board is confident that this trend will continue for the rest of the year. The board is encouraged that the outlook for the Group remains positive."

For further information please contact:

MTI Wireless Edge Dov Feiner, CEO Moni Borovitz, Financial Director	http://www.mtiwe.com/ [phone]
Allenby Capital Limited Nick Naylor Alex Price	[phone]
Newgate Threadneedle Graham Herring Robyn McConnachie	[phone]

About MTI Wireless Edge

MTI is engaged in the development, production and marketing of High Quality, Low Cost, Flat Panel Antennas for Commercial & for Military applications. Commercial applications such as: WiMAX, Wireless Networking, RFID readers &, Broadband Wireless Access. With over 40 years experience, supplying antennas 100KHz to 90GHz including directional antennas and Omni directional for outdoor and indoor deployments including Smart Antennas for WiMAX, Wi-Fi, Public Safety, RFID and for Base Stations and Terminals  - Utility Market. Military applications includes a wide range of broadband, tactical and specialized communications antennas, antenna systems and DF arrays installed on numerous airborne, ground and naval, including submarine, platforms worldwide

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three months ended March 31,				Year ended December 31,
	2014		2013		2013
	U.S. $ in thousands
	Unaudited				Audited
Revenues	3,512		3,407		13,422
Cost of sales	2,162		2,343		8,624
Gross profit	1,350		1,064		4,798
Research and development expenses	297		283		1,127
Distribution expenses	505		479		1,804
General and administrative expenses	461		378		1,677
Profit (loss) from operations	87		(76)		190
Finance expense	60		37		162
Finance income	24		58		58
Profit (loss) before income tax	51		(55)		86
Income tax	(67)		(81)		(340)
Net income	118		26		426
Other comprehensive income (net of tax effect):
Items not to be reclassified to profit or loss in subsequent periods:
Re-measurement of defined benefit plans	-		-		18
Total comprehensive income	118		26		444
Net income (loss) Attributable to:
Owners of the parent	124		11		388
Non-controlling interest	(6)		15		38
	118		26		426
Total comprehensive income (loss) Attributable to:
Owners of the parent	124		11		406
Non-controlling interest	(6)		15		38
	118		26		444
Net Earnings per share
Basic and Diluted (dollars per share)	0.0024		0.0002		0.0075
Weighted average number of shares outstanding
Basic and Diluted	51,571,990		51,571,990		51,571,990

The accompanying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY

For the three months ended March 31, 2014:

	Attributed to owners of the parent
	Share capital		Additional paid-in capital		Capital Reserve for share-based payment transactions		Retained earnings		Total attributable to owners of the  parent		Non-controlling interest		Total equity
	U.S. $ in thousands
Balance at January 1, 2014 (Audited)	109		14,945		259		2,420		17,733		194		17,927
Changes during the Three months     ended March 31, 2014 (Unaudited):
Comprehensive income (loss) for the period	-		-		-		124		124		(6)		118
Share based payment	-		-		6		-		6		-		6
Balance at March 31, 2014 (Unaudited)	109		14,945		265		2,544		17,863		188		18,051

The accompanying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY

For the three months ended March 31, 2013:

	Attributed to owners of the parent
	Share capital		Additional paid-in capital		Capital Reserve for share-based payment transactions		Retained earnings		Total attributable to owners of the  parent		Non-controlling interest		Total equity
	U.S. $ in thousands
Balance at January 1, 2013 (Audited)	109		14,945		220		2,313		17,587		156		17,743
Changes during the Three months     ended March 31, 2013 (Unaudited):
Comprehensive income for the period	-		-		-		11		11		15		26
Share based payment	-		-		11		-		11		-		11
Balance at March 31, 2013 (Unaudited)	109		14,945		231		2,324		17,609		171		17,780

The accompanying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY

For the year ended December 31, 2013:

	Attributable to owners of the parent
	Share capital		Additional paid-in capital		Capital Reserve for share-based payment transactions		Retained earnings		Total attributable to owners of the  parent		Non-controlling interest		Total equity
	U.S. $ in thousands
	Audited
Balance at January 1, 2013	109		14,945		220		2,313		17,587		156		17,743
Changes during 2013:
Income for the year	-		-		-		388		388		38		426
Other comprehensive income	-		-		-		18		18		-		18
Total comprehensive income for the year	-		-		-		406		406		38		444
Dividend paid	-		-		-		(299)		(299)		-		(299)
Share based payment	-		-		39		-		39		-		39
Balance at December 31, 2013	109		14,945		259		2,420		17,733		194		17,927

The accompanying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATEMENT OF

FINANCIAL POSITION

	31.3.2014		31.3.2013		31.12.2013
	U.S. $ in thousands
	Unaudited				Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	687		4,673		992
Other current financial assets	5,753		2,520		5,753
Trade receivables	5,382		4,779		5,359
Other receivables	562		757		548
Current tax receivables	164		-		165
Inventories	3,139		2,939		3,091
	15,687		15,668		15,908
NON-CURRENT ASSETS:
Long term prepaid expenses	32		36		39
Property, plant and equipment	5,330		5,442		5,343
Investment property	1,265		1,301		1,275
Deferred tax assets	293		220		226
Goodwill	406		406		406
	7,326		7,405		7,289
Total assets	23,013		23,073		23,197

The accompanying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATEMENT OF

FINANCIAL POSITION

	31.3.2014		31.3.2013			31.12.2013
	U.S. $ In thousands
	Unaudited				Audited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities and short term  Loans	562		250		562
Trade payables	1,682		1,763		1,936
Other accounts payables	777		813		749
Current tax payables	-		270		-
	3,021		3,096		3,247
NON- CURRENT LIABILITIES:
Loans from banks	1,529		1,750		1,595
Employee benefits	330		275		316
Provisions	82		172		112
	1,941		2,197		2,023
Total liabilities	4,962		5,293		5,270
EQUITY
Equity attributable to owners of the parent
Share capital	109		109		109
Additional paid-in capital	14,945		14,945		14,945
Capital reserve from share-based payment transactions	265		231		259
Retained earnings	2,544		2,324		2,420
	17,863		17,609		17,733
Non-controlling interest	188		171		194
Total equity	18,051		17,780		17,927
Total equity and liabilities	23,013		23,073		23,197

May 12, 2014
Date of approval of financial statements		Moshe Borovitz Finance Director	Dov Feiner Chief Executive Officer	Zvi Borovitz Non-executive Chairman

The accompanying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATEMENTS OF

CASH FLOWS

			Three months ended March 31,						Year ended December 31,
		2014			2013			2013
		U.S. $ in thousands
		Unaudited						Audited
Cash Flows from Operating Activities:
Profit for the period		118			26		426
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		112			107		436
Gain from short-term  investments		(22)			(17)		(29)
Equity settled share-based payment expense		6			11		39
Finance expenses		23			26		98
Income tax		(67)			(81)		(340)
Changes in operating assets and  liabilities:
Decrease (increase) in inventories		(48)			8		(144)
Increase in trade receivables		(23)			(406)		(986)
Increase in other accounts receivables and prepaid expenses		(7)			(228)		(22)
Increase (decrease) in trade and other accounts payables		(261)			533		682
Increase in employee benefits, net		14			19		78
Decrease in provisions		(30)			-		(60)
Interest paid		(23)			(26)		(98)
Income tax received		1			142		(40)
Net cash generated (used) in operating activities		(207)			114		40

The accompanying notes form an integral part of the financial statements.

 INTERIM CONSOLIDATED STATEMENTS OF

CASH FLOWS

			Three months ended March 31,					Year ended December 31,
			2014			2013		2013
			U.S. $ in thousands
				Unaudited				Audited
Cash Flows From Investing Activities:
Sale of short-term investment, net			22			-		(3,221)
Purchase of property, plant and equipment			(54)			(26)		(270)
Net cash used in investing activities			(32)			(26)		(3,491)
Cash Flows From Financing Activities:
Sort term Loan received			-			-		301
Long term Loan received			-			-		43
Dividend paid to the owners of the parent			-			-		(299)
Repayment of long-term loan from banks			(66)			(63)		(250)
Net cash used in financing activities			(66)			(63)		(205)
Increase in cash and  cash equivalents			(305)			25		(3,656)
Cash and cash equivalents  at the beginning of the period			992			4,648		4,648
Cash and cash equivalents  at the end of the period			687			4,673		992

Appendix A - Non-cash activities:

			Three months ended March 31,				Year ended December 31,
			2014		2013		2013
			U.S. $ in thousands
		Unaudited					Audited
Purchase of property and equipment   against trade payables		40			45		5

 The accompanying notes form an integral part of the financial statements.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - General:

A.    Corporate information:

M.T.I Wireless Edge Ltd. (hereafter - the Company) is an Israeli corporation. It was incorporated under the Companies Act in Israel on December 30, 1998 as a wholly- owned subsidiary of M.T.I Computers and Software Services (1982) Ltd. (hereafter - the Parent Company) and commenced operations on July 1, 2000 and since March 2006, the Company's shares have been traded on the AIM Stock Exchange.

The formal address of the company is 11 Hamelacha Street, Afek industrial Park, Rosh-Ha'Ayin, Israel.

The Company is engaged in the development, design, manufacture and marketing of antennas and accessories.

B.    Assets and Liabilities in foreign currencies

Henceforth are the details of the foreign currencies of the main currencies and the changes percentage in the reporting period:

	March 31,			December 31,
	2014		2013	2013
NIS (in Dollar per 1 NIS)	0.287		0.274	0.288

	Three months ended March 31,			Year ended December 31,
	2014		2013	2013
	%		%	%
NIS	(0.45)		2.33	7.55

Note 2 - Significant Accounting Policies:

The interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for the preparation of financial statements for interim periods, as prescribed in International Accounting Standard No. 34 ("Interim Financial Reporting").

The interim consolidated financial information set out above does not constitute full year end accounts within the meaning of Israeli Companies Law. It has been prepared on a going concern basis in accordance with the recognition and measurement criteria of the International Financial Reporting Standards (IFRS). Statutory financial information for the financial year ended December 31, 2013 was approved by the board on February 19, 2014. The report of the auditors on those financial statements was unqualified. The interim consolidated financial statements as of March 31, 2014 have not been audited.

The interim consolidated financial information should be read in conjunction with the annual financial statements as of 31 December, 2013 and for the year ended on that date and with the notes thereto,

The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2013 are applied consistently in these interim consolidated financial statements.

Note 3 - SEGMENTS:

The following table's present revenue and profit information regarding the Group's operating segments for the Three months ended March 31,2014 and 2013, respectively and for the year ended December 31, 2013.

Three months ended March 31, 2014 (Unaudited)
		Commercial		Military		Total
		$'000
Revenue
External		2,662		850		3,512
Total		2,662		850		3,512
Segment income (loss)		24		63		87
Unallocated corporate expenses
Finance expense, net						(36)
Profit before income tax						51
Other
Depreciation and other non-cash expenses		99		8		112

Three months ended March 31, 2013 (Unaudited)
		Commercial		Military		Total
		$'000
Revenue
External		3,007		400		3,407
Total		3,007		400		3,407
Segment income (loss)		129		(205)		(76)
Unallocated corporate expenses
Finance income, net						21
Loss before income tax						(55)
Other
Depreciation and other non-cash expenses		99		8		107

Year ended December 31, 2013 (audited)
		Commercial		Military		Total
		$'000
Revenue
External		10,069		3,353		13,422
Total		10,069		3,353		13,422
Segment income (loss)		(32)		240		208
Unallocated corporate expenses
Unallocated expenses						(18)
Finance expense, net						(104)
Profit before income tax						86
Other
Depreciation and other non-cash expenses		368		68		436

 (*) The Group cannot distinguish between Commercial and Military assets and liabilities, due to the fact that some of the assets and liabilities are used by both segments.

Note 4 -TRANSACTIONS WITH RELATED PARTIES:

The Parent Company and other related parties provide certain services to the Group as follows:

		Three months ended      March 31,				Year ended December 31,
		2014		2013			2013
		U.S. $ in thousands
		Unaudited					Audited
Purchased Goods		95		120			322
Management Fee		99		75			334
Services Fee		52		48			190
Lease income		(30)		(30)			(120)

Compensation of key management personnel of the Group:

		Three months ended      March 31,				Year ended December 31,
		2014		2013			2013
		U.S. $ in thousands
		Unaudited					Audited
Short-term employee benefits *)		173		149			673

*) Including Management fees for the CEO, Directors Executive Management and other related parties

All Transactions are made at market value.

As of March 31, 2014, March 31, 2013 and December 31, 2013 the parent company and related parties owe to the Group US $32,000, US $30,000 and US $37,000 respectively. 

Note 5 - SIGNIFICANT EVENTS:

On April 4, 2014 the company paid a dividend of 0.68 cents per share totaling approximately $351,000.

 

END

 

 

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