Q1 Results

RNS Number : 9048R

MTI Wireless Edge Limited

08 May 2009

 



8 May 2009

MTI Wireless Edge Ltd ('MTI' or the 'Company')

Financial results for the three months ended 31 March 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 unaudited results for the three months ended 31 March 2009.

Highlights

• Revenue decreased by 18% year on year to US$3.4m (Q1 2008: US$4.2m)

• Q1 operating profit of US$76,000

• Growth in Military and RFID sectors

• Cash balance and equivalents of US$13.4m as at 31 March 2009, similar to 31 December 2008

Dov Feiner, Chief Executive Officer, commented: 

'Results for the first quarter of 2009 have been disappointing in terms of both revenue and profit, however the Company still achieved an operating profit for the quarter despite difficult market conditions.  With this in mind, the Board has continued to take a rigorous approach to cutting costs on all levels.

'As commented at the full year results, the current economic climate combined with reduced telecommunications infrastructure spend has reduced the visibility of the forward order book. The Company has witnessed a softening in our key market of Fixed Broadband, however, we have seen good growth in our military division as well as growth in our RFID operations. 

'Although the short term visibility continues to be uncertain, we remain confident in the long term growth prospects of the Company. Whilst MTI continues to have a strong balance sheet, the Board considers it prudent to manage its cash position, which remained unchanged in the quarter, efficiently and will be reviewing its buy back policy.'

  Contacts:

MTI Wireless Edge                                                          [phone]

Dov Feiner, CEO

Moni Borovitz, Financial Director

Noble & Company Limited                                            [phone]

John Llewellyn-Lloyd

Brian Stockbridge

Threadneedle Communications                                       [phone]

Graham Herring

Josh Royston

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.

CONSOLIDATED BALANCE SHEETS

	31.3.2009		31.3.2008		31.12.2008
	U.S. $ in thousands
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	3,903		3,031		3,806
Other financial assets	9,490		10,804		9,527
Trade receivables	4,701		6,537		5,898
Other receivables	210		272		217
Inventories	2,431		2,194		2,571
Total current assets	20,735		22,838		22,019
LONG TERM PREPAID EXPENSES	37		55		49
PROPERTY AND EQUIPMENT, NET	1,687		1,506		1,671
GOODWILL	406		406		406
DEFERRED TAX ASSETS	110		228		117
	22,975		25,033		24,262

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

	31.3.2009		31.3.2008			31.12.2008
	U.S. $ in thousands
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables	1,520		2,401		2,565
Other accounts payables	737		728  *		* 964
Tax liability	458		431		374
Liabilities due to warrants	-		164		-
Total current liabilities	2,715		3,724		3,903
NON- CURRENT LIABILITIES:
Employee benefits	215		297		232
Provisions	27		32 *		* 30
Total non-current liabilities	242		329		262
SHAREHOLDERS' EQUITY
Share capital	109		112		109
Additional paid-in capital	14,945		14,945		14,945
Employee equity benefits reserve	44		-		29
Retained earnings	4,915		5,923		5,014
Total shareholders' equity	20,013		20,980		20,097
Minority interests	5		-		-
Total equity	20,018		20,980		20,097
	22,975		25,033		24,262

May 7, 2009
Date of approval of financial statements		Moshe Borovitz Finance Director	Dov Feiner  Chief Executive Officer	Zvi Borovitz  Non-executive Chairman

(*) Reclassified 

CONSOLIDATED STATEMENTS OF OPERATIONS

	For the three months  ended March 31,				Year ended December 31,
	2009		2008		2008
	U.S. $ in thousands
Revenues	3,429		4,200		17,923
Cost of sales	2,259		2,666		11,523
Gross profit	1,170		1,534		6,400
Research and development expenses	226		370		1,329
Distribution costs	488		577		2,374
General and administrative expenses	380		381		1,824
Profit from operations	76		206		873
Finance expense	73		115		266
Finance income	107		266		640
Profit before tax	110		357		1,247
Tax expense (income)	209		(132)		254
Net profit (loss)	(99)		489		993
Earnings per share
Basic and Diluted (dollars per share)	(0.0019)		0.0091		0.0189
Weighted average number    of shares outstanding
Basic and Diluted	51,571,990		53,544,529		52,480,041

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

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

For the three months ended March 31, 2009:

	Attributed to equity holders of the company
	Share capital		Additional paid-in capital		Employee equity benefits reserve		Retained earnings		Total		Minority interest		Total equity
Unaudited	U.S. $ in thousands
Balance at January 1, 2009(Audited)	109		14,945		29		5,014		20,097		-		20,097
Changes during the three months      ended March 31, 2009:
Net loss	-		-		-		(99)		(99)		-		(99)
Total recognized income and    expense for the period	-		-		-		(99)		(99)		-		(99)
Issue of capital to minority in subsidiary	-		-				-		-		5		5
Share based payment	-		-		15		-		15		-		15
Balance at March 31, 2009	109		14,945		44		4,915		20,013		5		20,018

The ac companying notes form an integral part of the financial statements.

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

For the three months ended March 31, 2008:

	Attributed to equity holders of the company
	Share capital		Additional paid-in capital		Employee equity benefits reserve		Retained earnings		Total		Minority  interest		Total equity
Unaudited	U.S. $ in thousands
Balance at January 1, 2008(Audited)	115		14,945		-		5,911		20,971		-		20,971
Changes during the three months ended March 31, 2008:
Net loss	-		-		-		489		489		-		489
Total recognized income and    expense for the period	-		-		-		489		489		-		489
Buyback purchase of stock	(3)		-		-		(477)		(480)		-		(480)
Balance at March 31, 2008	112		14,945		-		5,923		20,980		-		20,980

The ac companying notes form an integral part of the financial statements.

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

For the year ended December 31, 2008:

	Attributed to equity holders of the company
	Share capital		Additional paid-in capital		Employee equity benefits reserve		Retained earnings		Total		Minority  interest		Total equity
Audited	U.S. $ in thousands
Balance at January 1, 2008	115		14,945		-		5,911		20,971		-		20,971
Changes during 2008:
Profit for the year	-		-		-		993		993		-		993
Total recognized income and    expense for the year	-		-		-		993		993		-		993
Dividends	-		-		-		(979)		(979)		-		(979)
Buy back purchase of stock	(6)		-				(911)		(917)		-		(917)
Share based payment	-		-		29		-		29		-		29
Balance at December 31, 2008	109		14,945		29		5,014		20,097		-		20,097

The ac companying notes form an integral part of the financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

			For the three months ended March 31,								Year ended December 31,
		2009				2008				2008
		U.S. $ in thousands
		Unaudited			Unaudited				Audited
Cash Flows from Operating Activities:
Net profit (loss)		(99)				489				993
Adjustments to reconcile net income to  net cash provided by operating activities:
Depreciation		91				81				332
Gain from short-term investments		(109)				(114)				(6)
Equity settled share-based payment expense		15				-				29
Decrease in fair value of liabilities    due to warrants		-				(134)				(298)
Tax expense (Income)		209				(132)				254
Changes in operating assets and liabilities:
Decrease (increase) in inventories		140				59				(318)
Decrease (Increase) in trade receivables		1,197				(289)				350
Decrease (increase) in other    accounts receivables for short and long term		19				(151)				(90)
Decrease in trade payables		(1,052)				(228)				(43)
Increase (decrease) in other accounts payables		(227)				161				397
Increase (decrease) in provisions		(3)				2				-
Increase (decrease) in employee benefits		(17)				31				(34)
Income tax paid		(118)				(64)				(396)
Net cash (used in) provided by  operating activities		46				(289)				1,170

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

   CONSOLIDATED STATEMENTS OF CASH FLOWS

		For the three months ended March 31,						Year ended December 31,
		2009			2008			2008
		U.S. $ in thousands
		Unaudited		Unaudited			Audited
Cash Flows From Investing Activities:
Sale of short-term investment, net		146			513			1,682
Purchase of property and equipment		(100)			(61)			(498)
Net cash provided    by investing activities		46			452			1,184
Cash Flows From Financing Activities:
Dividend paid to shareholders equity		-			-			(979)
Issue of capital to minority in subsidiary		5			-			-
Buyback purchase of stock		-			(480)			(917)
Repayment of bank borrowing		-			(22)			(22)
Net cash (used in) provided     by financing activities		5			(502)			(1,918)
INCREASE (DECREASE) IN CASH AND  CASH EQUIVALENTS		97			(339)			436
CASH AND CASH EQUIVALENTS   AT BEGINNING OF PERIOD		3,806			3,370			3,370
CASH AND CASH EQUIVALENTS    AT END OF PERIOD		3,903			3,031			3,806

Appendix A - Non-cash activities:

		For the three months ended March 31,				Year ended December 31,
		2009		2008			2008
		U.S. $ in thousands
Purchase of property and equipment    against trade payables		31		45			24

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

   NOTES TO THE FINANCIAL STATEMENTS 

Note 1 - General:

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 & 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.

On March 2008, the company has invested in establishing of a wholly owned subsidiary Switzerland based AdvantCom Sarl, (hereinafter called AdvantCom). AdvantCom is engaged in selling and distributing of antennas and accessories and in manufacturing through an Indian subsidiary. 

During this quarter, pursuant to the founder's agreement, 20 present of the issued and outstanding share capital of GlobalWave Technologies PVT. Ltd (formerly a wholly owned Indian based subsidiary of AdvantCom) were allotted to investors in return to approximately $5,000 

Note 2 - Significant Accounting Policies: 

The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2008 are applied consistently in these interim consolidated financial statements.

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 Financial Reporting Standard IAS 34 ('Interim Financial Reporting').

Basis of consolidation

Where the company has the power, either directly or indirectly, to govern the financial and operating policies of another entity or business so as to obtain benefits from its activities, it is classified as a subsidiary.

The consolidated financial statements present the results of the company and its subsidiaries ('the group') as if they formed a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full. 

NOTE 3 - SIGNIFICANT EVENTS:

In March 16, 2009, Warrants granted prior to the IPO, to certain investors and service provided expired. 

Note 4 -Subsequent EVENTS:

On April 6, 2009 the company paid a dividend of 1.16 cents per share totaling approximately $598,000.

 

END

 

 

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