Annual Financial Report

RNS Number : 7123H

MTI Wireless Edge Limited

26 February 2010

 



MTI WIRELESS EDGE LTD

 AUDTED FINANCIAL RESULTS FOR THE YEAR ENDED

 31 DECEMBER 2009

MTI Wireless Edge Ltd., (ticker: MWE) ('MTI' or 'the Company'), a market leader in the manufacture of flat panel antennas for fixed wireless broadband, today announces its audited full year results for the year ended 31 December 2009.

2009 Highlights

·     Revenues decreased by 25% to $13.5m (2008: $17.9m).

·     Gross profit down 27% to $4.7m (2008: $6.4m).

·     Company ended 2009 with minor operating profit of $0.1m (2007: $0.9m).

·     Breakeven in 2009 compared with net Profit of $1m in 2008, representing EPS of 0.03c compared with 1.89c in previous year.

·     Net cash generated from continuing operations reached $1.1m.

·     Net cash, cash equivalents and marketable securities at the year end of $13.5m, equivalent to 17pence per share.

·     Indian facility became operational profitable during 2009.

Dov Feiner, CEO of MTI Wireless Edge, commented: "In line with the global economy, 2009 proved to be a very challenging year for MTI. I am pleased to report that the management team reacted quickly to the changes in our markets and put in place measures which ensured that we were cash flow positive for the year, from an operational perspective.

"We remain extremely confident in the long term future of our position in our chosen markets. With continued investment in R&D and Marketing, we have maintained our leadership position throughout this downturn, including some imminent new product launches, which put us in an excellent position to benefit when the economy recovers.

"Our Indian facility, in its first full year, provided us with significant cost savings as well as a strong local presence in an increasingly important market. Although visibility remains unclear and conditions difficult, we believe that the Company is well placed for long term growth and, though it is very early days, 2010 so far is in line with budget."  

Contacts:

MTI Wireless Edge Dov Feiner, CEO Moni Borovitz, Financial Director	[phone]
Execution Noble & Company  Limited                              Harry Stockdale James Bromhead	[phone]
Threadneedle Communications Graham Herring Josh Royston	[phone]

About MTI Wireless Edge

MTI designs and manufactures flat panel antennas, largely supplied to international OEMs of fixed broadband wireless access systems. With over 30 years of technical `know-how', flexible high volume manufacturing capabilities and low failure rates, MTI's antennas now comprise approximately 25% of the global fixed broadband wireless antenna market. In addition, the Company has successfully developed products for new commercial applications as wireless systems become increasingly prevalent in new markets.

Chairman's Statement

I am pleased to report on our audited results for the financial year ended 31 December 2009 - a very challenging year in terms of the global macro economy.  We started the year with a great deal of uncertainty as to the effect that the worldwide recession would have on our business. This soon became clear with our key market, antennas for broadband communications, suffering shrinkage of approximately 30%. I am pleased to report that our management team took immediate action and was able to maintain the business at breakeven, with positive cash flow and without harming the potential future growth of the company, through maintaining a very strong balance sheet. 

The market shrinkage in 2009, together with the resulting increase in competition, created a more difficult trading environment but we were able to maintain our leadership based on the quality of our products and our long term relationships with key customers. Our Indian manufacturing facility, which was operating for a first full year, helped to reduce costs and improved our ability to service customers in India and elsewhere. We see the Indian market as a promising one and believe that our local presence will benefit us further as it develops.

As stated last year, the underlying drivers of our business, such as growth in data usage and subscriber growth, are part of long term trends expected to continue for several years. Although we see government stimulus funding continues and broadband becoming a national imperative, we lack short term visibility as customers focus on maintaining flexibility and conserving cash in response to the global recession.

The Board has decided not to distribute a dividend this year as we strongly believe it is in the interest of shareholders to conserve cash at this point of time. We do believe that in the long run investors are entitled to receive an annual yield on their investment, while the company is managing its earnings and cash generation, and will return to a dividend once the company returns to profitability.  

I would like to compliment our employees on their contribution to the company and thank each and every one for their dedication and creativity, which has enabled us to maintain our leadership. I further would like to acknowledge with thanks the employees' families for their continued support.

Zvi Borovitz

Non Executive Chairman

Chief Executive's Review

In 2009, the WiMAX industry has suffered from the global recession and all leading companies in this area reported revenues significantly lower than in 2008. Our business suffered a 25% decline in total revenue, due to the softness in this fixed broadband wireless market. Although we have experienced a difficult year we are certain that the demand for primary broadband connectivity and data usage are both in long term growth trends that require new solutions which improve the total cost of ownership for operators.

Our immediate challenge remains to win further major deals while supporting existing customers, and to take a larger share of the available business in a very competitive environment. In 2009, we managed to maintain our position as a leader in the field of antennas for broadband applications, which the directors believe will win the bulk of the Fixed Broadband Wireless business in years to come. At the start of 2009, we took the necessary operational measures to ensure that the company remains cash flow positive without harming our future potential growth - this will be our guideline for as long as we feel that the market is unstable. Our focus is to emerge stronger from this recession, supplying our customers with a better and wider range of products based on our advanced technology.  Our operating facility in India produced nearly 10% of our revenue in 2009, making our offering even more compelling in this competitive environment.

The Company remains focused on growth and on expanding its position as a leader in the antenna markets for fixed wireless communication. In 2009, we were able to further develop our product offering, including antennas for the short range point to point backhaul market in the 60 -90 GHz. bandwidth, which we expect to generate revenues from 2010 onwards.

As we have previously stated, although RFID is only in its initial stages, we continue to strongly believe in the potential of this market and were able to strengthen our position with revenue growth over the previous year. We foresee 2010 as a next step in the growth of this market and plan to ensure that MTI remains well positioned to enjoy success once this market enters the full deployment stage.

Our military segment returned to growth in 2009 as part of the long term growth we have experienced in the past few years, trend a which we expect to continue in 2009 and beyond.

As always, our non-military pipeline reflects the industry norm of placing orders only several weeks in advance. This, coupled with current global economic recession, forces customers to focus on risk management and reducing inventory levels, which reduces the visibility of our order book. We remain confident in our market position and the long-term growth inherent in our major markets. 

I would like to end my review by thanking the employees and their families for the hard work, dedication and support during the past year. It is their creativity, perfectionism and implementation that led MTI to its position in the market and we see them as the key to our ongoing success. 

Dov Feiner

Chief Executive Officer

Click on, or paste the following link into your web browser, to view the associated PDF document, which forms part of this announcement:

http://www.rns-pdf.londonstockexchange.com/rns/7123H_-2010-2-25.pdf

 

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