Results for the nine months to 30 September 2017

RNS Number : 9840V

MTI Wireless Edge Limited

09 November 2017

 

Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR)

9 November 2017

MTI Wireless Edge Ltd

("MTI" or the "Company")

Financial results for the nine months ended 30 September 2017

MTI Wireless Edge Ltd. (AIM: MWE), a market leader in the manufacture of flat panel antennas for fixed wireless broadband and a wireless irrigation solutions provider, today announces its unaudited results for the nine months ended 30 September 2017.

Highlights:

·     Profit before tax increased 54% year-on-year to $1.2m (nine months ended 30 September 2016: $0.76m)

·     Revenues increased by 12% year-on-year to $19.6m (nine months ended 30 September 2016: $11.3m)

·     Earnings per share increased by 47% year-on-year to 1.63 US cents (nine months ended 30 September 2016: 1.11 US cents)

·     Strong cash flow from operations during the period of $1.7m (nine months ended 30 September 2016: $1.5m)

·     Shareholder's equity grew during the period to $19.6m (31 December 2016: $18.9m), equivalent to 27.9 pence per share (converted at 1.31 US dollar/1 British Pound)

·     Cash at 30 September 2017 of $5.35m (30 September 2016: $5.1m, 31 December 2016 $4.4m)

The third quarter has seen strong revenue generation from both the antenna division and the wireless irrigation division.  As announced on 25 October 2017, greater than anticipated costs have been incurred and recognised in the third quarter in relation to a military antenna project which has resulted in the antenna division making an operating loss in the third quarter, although the Board expects that this military antenna project will be profitable once completed.  The wireless irrigation division continued to perform strongly in the third quarter and delivered robust operating profit margins.

Dov Feiner, CEO of MTI Wireless, commented:

"During 2017, we have continued to see growth in both segments of our business. In our wireless controller segment, via Mottech, we continue to see opportunities in various geographical areas as the requirement for water management solutions is increasing world-wide. In 2017, we strengthened our position in key markets by opening new offices, extending distribution agreements and recruiting more value-added resellers. This, together with our continuous development of new solutions, should help us to continue to increase our revenues and profits.

"In the antenna segment, we have a very healthy order book in the military division and a good pipeline of opportunities, which provides us greater visibility of longer-term revenues. Furthermore, the OEM business is proceeding as planned, and RFiD and 80 GHz orders continue to gain attention, and we expect the order book to strengthen.  This provides us greater visibility of longer-term revenues.

Given the current performance of the Company, the growing order book and pipeline of opportunities, the board is increasingly confident in the prospects for the Company."

For further information please contact:

MTI Wireless Edge Ltd Dov Feiner, CEO Moni Borovitz, Financial Director	http://www.mtiwe.com/ [phone]
Nomad and Joint Broker Allenby Capital Limited Nick Naylor Alex Brearley	[phone]
Joint Broker Peterhouse Corporate Finance Limited Lucy Williams Eran Zucker	[phone]

About MTI Wireless Edge

MTI is engaged in the development, production and marketing of high quality low cost, flat panel antennas for commercial and military applications. Commercial applications include: WiMAX, Wireless Networking, RFID readers and Broadband Wireless Access. With over 40 years' experience of supplying 100KHz to 90GHz antennas, 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 include 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.

Via its subsidiary, Mottech Water Solutions Ltd, MTI is also a leading provider of remote control solutions for water and irrigation applications based on Motorola's IRRInet state of the art control, monitoring and communication technologies. Mottech, headquartered in Israel, is the global prime distributor of Motorola for the IRRInet remote control solutions serving its customers worldwide through its subsidiaries and a global network of local distributers and representatives. It utilizes over 25 years of experience in providing its customers with remote control and management systems which ensure constant, reliable and accurate water usage, while reducing operational costs and maintenance costly expenses. Mottech's activities are focused on the market segments of agriculture, water distribution, Municipal and Commercial Landscape and Wastewater and Storm water Reuse.

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Nine month period ended September 30,				Year ended December 31,
	2017		2016		2016
	U.S. $ in thousands
	Unaudited
Revenues	19,610		17,582		23,276
Cost of sales	12,641		11,040		14,728
Gross profit	6,969		6,542		8,548
Research and development expenses	675		828		1,079
Distribution expenses	2,794		2,570		3,346
General and administrative expenses	2,365		2,129		2,640
Other income	7		-		-
Profit from operations	1,142		1,015		1,483
Finance expense	153		307		334
Finance income	194		55		57
Profit before income tax	1,183		763		1,206
Income tax expense	239		136		222
Profit	944		627		984
Other comprehensive income (loss) net of tax:
Items that will not be reclassified to profit or loss:
Re-measurement of defined benefit plans	-		-		(16)
	-		-		(16)
Items that may be reclassified to profit or loss:
Adjustment arising from translation of financial statements of foreign operations	(10)		202		121
	(10)		202		121
Total other comprehensive income	(10)		202		105
Total comprehensive income	934		829		1,089
Profit attributable to:
Owners of the parent	865		585		936
Non-controlling interest	79		42		48
	944		627		984
Total comprehensive income attributable to:
Owners of the parent	855		787		1,041
Non-controlling interest	79		42		48
	934		829		1,089
Earnings per share (dollars)
Basic	0.0164		0.0113		0.0181
Diluted	0.0163		0.0111		0.0178
Weighted average number of shares outstanding
Basic	52,585,939		51,657,245		51,687,853
Diluted	53,211,172		52,657,327		52,575,593

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

INTERIM CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY

For the Nine month period ended September 30, 2017 (Unaudited):

	Attributed to owners of the parent
	Share capital	Additional paid-in capital	Capital Reserve for share-based payment transactions	Adjustment arising from translation of financial statements of foreign operations	Retained earnings	Total attributable to owners of the  parent	Non-controlling interest	Total equity
	U.S. $ in thousands
Balance at January 1, 2017	109	14,964	323	44	3,468	18,908	324	19,232
Changes during the nine month period     ended September 30, 2017:
Comprehensive income
Profit for the period	-	-	-	-	865	865	79	944
Other comprehensive income
Translation differences	-	-	-	(10)	-	(10)	-	(10)
Total comprehensive income for the period	-	-	-	(10)	865	855	79	934
Exercise of options to share capital	2	99	(*)	-	-	101	-	101
Dividend	3	280	-	-	(518)	(235)	-	(235)
Share based payment	-	-	22	-	-	22	-	22
Balance at September 30, 2017	114	15,343	345	34	3,815	19,651	403	20,054

(*) less than one thousand dollars

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

INTERIM CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY (CONT.)

For the Nine month period ended September 30, 2016 (Unaudited):

	Attributed to owners of the parent
	Share capital	Additional paid-in capital	Capital Reserve for share-based payment transactions	Adjustment arising from translation of financial statements of foreign operations	Retained earnings	Total attributable to owners of the  parent	Non-controlling interest	Total equity
	U.S. $ in thousands
Balance at January 1, 2016	109	14,945	304	(77)	3,116	18,397	266	18,663
Changes during the nine month period     ended September 30, 2016:
Comprehensive income
Profit for the period	-	-	-	-	585	585	42	627
Other comprehensive income
Translation differences	-	-	-	202	-	202	-	202
Total comprehensive income for the period	-	-	-	202	585	787	42	829
Share issuance to non-controlling interest in subsidiary	-	(10)	-	-	-	(10)	10	-
Exercise of options to share capital	*	23	(1)	-	-	22	-	22
Dividend paid	-	-	-	-	(568)	(568)	-	(568)
Share based payment	-	-	14	-	-	14	-	14
Balance at September 30, 2016	109	14,958	317	125	3,133	18,642	318	18,960

 (*) less than one thousand dollars

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

INTERIM CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY (CONT.)

For the year ended December 31, 2016:

	Attributable to owners of the parent
	Share capital	Additional paid-in capital	Capital Reserve from share-based payment transactions	Adjustment arising from translation of financial statements of foreign operations	Retained earnings	Total attributable to owners of the  parent	Non-controlling interest	Total equity
	U.S. $ in thousands
Balance as at January 1, 2016	109	14,945	304	(77)	3,116	18,397	266	18,663
Changes during 2016:
Comprehensive income
Profit for the year	-	-	-	-	936	936	48	984
Other comprehensive income
Re measurements on defined benefit plans	-	-	-	-	(16)	(16)	-	(16)
Translation differences	-	-	-	121	-	121	-	121
Total comprehensive income for the year	-	-	-	121	920	1,041	48	1,089
Share issuance to non-controlling interest in subsidiary	-	(10)	-	-	-	(10)	10	-
Exercise of options to share capital	(*)	29	(1)	-	-	28	-	28
Dividend paid	-	-	-	-	(568)	(568)	-	(568)
Share based payment	-	-	20	-	-	20	-	20
Balance as at December 31, 2016	109	14,964	323	44	3,468	18,908	324	19,232

(*) less than one thousand dollars

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

INTERIM CONSOLIDATED STATEMENT OF

FINANCIAL POSITION

	30.09.2017		30.09.2016		31.12.2016
	U.S. $ in thousands
	Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	5,349		5,100		4,428
Trade receivables	9,244		7,886		8,159
Other receivables	791		1,169		706
Current tax receivables	416		393		455
Inventories	4,689		3,943		4,910
	20,489		18,491		18,658
NON-CURRENT ASSETS:
Long term prepaid expenses	45		52		48
Property, plant and equipment	5,237		5,545		5,453
Investment property	614		635		630
Deferred tax assets	618		564		500
Intangible assets	239		348		321
Goodwill	573		573		573
	7,326		7,717		7,525
Total assets	27,815		26,208		26,183

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

INTERIM CONSOLIDATED STATEMENT OF

FINANCIAL POSITION

	30.09.2017		30.09.2016			31.12.2016
	U.S. $ In thousands
	Unaudited
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities and short term bank credit and loans	919		811		802
Trade payables	2,513		2,239		2,285
Other accounts payables	2,503		1,702		1,792
Current tax payables	223		100		3
	6,158		4,852		4,882
NON- CURRENT LIABILITIES:
Loans from banks, net of current maturities	1,139		1,870		1,664
Employee benefits, net	464		434		405
Other liabilities	-		92		-
	1,603		2,396		2,069
Total liabilities	7,761		7,248		6,951
EQUITY
Equity attributable to owners of the parent
Share capital	114		109		109
Additional paid-in capital	15,343		14,958		14,964
Capital reserve from share-based payment transactions	345		317		323
Translation differences	34		125		44
Retained earnings	3,815		3,133		3,468
	19,651		18,642		18,908
Non-controlling interest	403		318		324
Total equity	20,054		18,960		19,232
Total equity and liabilities	27,815		26,208		26,183

November 8, 2017
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

		Nine months period ended September 30,						Year ended December 31,
		2017		2016			2016
		U.S. $ in thousands
		Unaudited
Cash Flows from Operating Activities:
Profit for the period		944		627		984
Adjustments for:
Depreciation and amortization		478		385		635
Loss (gain) from investments in financial assets		126		7		(57)
Loss (gain) from sale of property, plant and equipment		(7)		-		-
Equity settled share-based payment expense		22		14		20
Finance expenses, net		81		79		122
Income tax expense		239		136		222
Changes in operating assets and liabilities:
Decrease (increase) in inventories		264		534		(466)
Decrease (increase) in trade receivables		(1,141)		315		19
Decrease (increase) in other accounts receivables and prepaid expenses		(48)		126		572
Increase in trade and other accounts payables	4	862		9		105
Increase in employee benefits, net		59		47		2
Interest paid		(81)		(79)		(122)
Income tax paid		(94)		(658)		(837)
Net cash provided by operating activities		1,704		1,542		1,199

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

INTERIM CONSOLIDATED STATEMENTS OF

CASH FLOWS (cont.)

		Nine months period ended September 30,						Year ended December 31,
		2017		2016				2016
		U.S. $ in thousands
		Unaudited
Cash Flows From Investing Activities:
Sale of investments in financial assets, net		-		2,142				2,142
Proceeds from sale of property, plant and equipment		31
Purchase of property, plant and equipment		(170)		(171)				(314)
Net cash provided by (used in) investing activities		(139)		1,971				1,828
Cash Flows From Financing Activities:
Exercise of share options		101		22				28
Dividend paid to the owners of the parent		(235)		(568)				(568)
Short term loan received from banks		78		-				-
Long term loan received from banks		19		27				87
Repayment of long-term loan from banks		(631)		(582)				(793)
Net cash used in financing activities		(668)		(1,101)				(1,246)
Increase in cash and cash equivalents during the period		921		2,412				1,781
Cash and cash equivalents  at the beginning of the period		4,428		2,634				2,634
Exchange differences on balances of cash and        cash equivalents		24		54				13
Cash and cash equivalents  at the end of the period		5,349		5,100				4,428

Appendix A - Non-cash transactions:

			Nine months period ended September 30,				Year ended December 31,
			2017		2016		2016
			U.S. $ in thousands
		Unaudited
Purchase of property, plant and equipment   against trade payables		18			27		5
Scrip dividend (Note 5 B)		283			-		-

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

MTI WIRELESS EDGE LTD.

(An Israeli Corporation)

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - General:

Corporate information:

M.T.I Wireless Edge Ltd. (hereafter - the "Company", or collectively with its subsidiaries, the "Group") is an Israeli corporation. The Company 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. Since March 2006, the Company's shares have been traded on the AIM market of the London 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.

Via its subsidiary, Mottech Water solutions Ltd. (hereafter "Mottech"), the Company is also a leading provider of remote control solutions for water and irrigation applications based on Motorola's IRRInet state of the art control, monitoring and communication technologies.

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 the 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, 2016 was approved by the board on February 15, 2017. The report of the auditors on those financial statements was unqualified.

The interim consolidated financial statements as of September 30, 2017 have not been audited.

The interim consolidated financial information should be read in conjunction with the annual financial statements as of December 31, 2016 and for the year then ended and with the notes thereto. The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2016 are applied consistently in these interim consolidated financial statements.

Note 3 - operating SEGMENTS:

The following tables present revenue and profit information regarding the Group's operating segments for the nine months period ended September 30, 2017 and 2016 respectively and for the year ended December 31, 2016.

Nine months period ended September 30, 2017 (Unaudited)
		Antennas		Water Solutions		Total
		U.S. $ in thousands
Revenue
External		9,984		9,626		19,610
Total		9,984		9,626		19,610
Segment profit (loss)		(43)		1,185		1,142
Finance income, net						41
Profit before income tax						1,183
Other
Depreciation and amortization		445		33		478

Nine months period ended September 30, 2016 (Unaudited)
		Antennas		Water Solutions		Total
		U.S. $ in thousands
Revenue
External		8,324		9,258		17,582
Total		8,324		9,258		17,582
Segment profit (loss)		(305)		1,320		1,015
Finance expense, net						(252)
Profit before income tax						763
Other
Depreciation and amortization		347		38		385

Note 3- operating SEGMENTS (CONT.):

Year ended December 31, 2016
		Antennas		Water Solutions		Total
		U.S. $ in thousands
Revenue
External		11,427		11,849		23,276
Total		11,427		11,849		23,276
Segment profit (loss)		(108)		1,591		1,483
Unallocated corporate expenses
Finance expense, net						(277)
Profit before income tax						1,206
Other
Depreciation and amortization		591		44		635

Note 4-TRANSACTIONS AND BALANCES WITH RELATED PARTIES:

The following transactions occurred with the Parent Company and other related parties:

		Nine months period ended      September 30,				Year ended December 31,
		2017		2016			2016
		U.S. $ in thousands
		Unaudited
Purchased Goods		151		221			369
Management Fee		345		320			428
Services Fee		194		187			249
Lease income		(54)		(54)			(72)

Compensation of key management personnel of the Group:

		Nine months period ended      September 30,				Year ended December 31,
		2017		2016			2016
		U.S. $ in thousands
		Unaudited
Short-term employee benefits *)		636		584			810

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

All Transactions were made at market value.

Note 4 -TRANSACTIONS AND BALANCES WITH RELATED PARTIES (CONT.):

Balances with related parties:

	As at
	30.09.2017		30.09.2016		31.12.2016
	U.S. $ in thousands
	Unaudited
Other accounts payables	335		113		207

Note 5 - SIGNIFICANT EVENTS:

A.  During January, June and September 2017, employees exercised options over 822,500 ordinary shares in exchange for a total consideration of approximately $101,000.

B.   On April 4, 2017, the Company paid a dividend of 1 US cent per ordinary share totaling approximately $235,000 and in addition 1,022,328 new ordinary shares were issued to qualifying shareholders that chose the scrip dividend alternative.

C.   During June 2017 Mottech agreed to establish a joint venture company in China ("Mottech China") with Omega Technologies LTD ("OTL"), which is an existing third-party sales representative for Mottech's water irrigation solutions in China. Mottech China will be 60% owned by Mottech. In addition to supporting Mottech's activities, it is intended that Mottech China will also sell additional third party products that are complementary to Mottech's equipment which are currently being sold by OTL in China.

 

END

 

 

QRTVVLFBDFFZFBZ