Results for the six months ended 30 June 2017

RNS Number : 3294N

MTI Wireless Edge Limited

08 August 2017

 

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

 

8 August 2017

MTI Wireless Edge Ltd

("MTI" or the "Company")

Financial results for the six months ended 30 June 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 six months ended 30 June 2017.

 

Highlights:

·     Revenues increased by 13% year-on-year to $12.8m (H1 2016: $11.3m)

·     Operating profit increased year-on-year by 79% of $0.9m (H1 2016: $0.5m)

·     Profit before tax nearly tripled year-on-year to $1m (H1 2016: $0.35m)

·     Earnings per share of 1.55 US cents (H1 2016: 0.45 US cents)

·      Shareholder's equity grew during the period to $19.5m (31 December 2016: $18.9m), equivalent to 28.2 pence per share (converted at 1.31 US dollar/ British Pound)

·      Cash at 30 June 2017 of $4.8m (30 June 2016: $4.9m)

 

Dov Feiner, CEO of MTI Wireless, commented:

"During the first half of 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, some of which we announced recently including in China, where we see traction from various sectors and territories. In the antenna segment we had a very good first half, in both the broadband access and RFID product lines, whilst in the military division we had good bookings and a good pipeline of opportunities, which provides us greater visibility of longer-term revenues. Given the current performance, order book and pipeline of opportunities in the antenna segment, we strongly believe that our growth will continue in 2017 and beyond."

 

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

	Six month period ended June 30,				Year ended December 31,
	2017		2016		2016
	U.S. $ in thousands
	Unaudited
Revenues	12,758		11,325		23,276
Cost of sales	7,896		7,067		14,728
Gross profit	4,862		4,258		8,548
Research and development expenses	461		574		1,079
Distribution expenses	1,912		1,819		3,346
General and administrative expenses	1,610		1,375		2,640
Profit from operations	879		490		1,483
Finance expense	101		163		334
Finance income	205		22		57
Profit before income tax	983		349		1,206
Income tax expense	111		104		222
Profit	872		245		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	31		177		121
	31		177		121
Total other comprehensive income	31		177		105
Total comprehensive income	903		422		1,089
Profit attributable to:
Owners of the parent	811		232		936
Non-controlling interest	61		13		48
	872		245		984
Total comprehensive income attributable to:
Owners of the parent	842		409		1,041
Non-controlling interest	61		13		48
	903		422		1,089
Earnings per share (dollars)
Basic	0.0155		0.0045		0.0181
Diluted	0.0153		0.0044		0.0178
Weighted average number of shares outstanding
Basic	52,346,974		51,621,990		51,687,853
Diluted	53,167,096		52,616,775		52,575,593

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

INTERIM CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY

For the Six month period ended June 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 six month period     ended June 30, 2017:
Comprehensive income
Profit for the period	-	-	-	-	811	811	61	872
Other comprehensive income
Translation differences	-	-	-	31	-	31	-	31
Total comprehensive income for the period	-	-	-	31	811	842	61	903
Exercise of options to share capital	(*)	14	(*)	-	-	14	-	14
Dividend	3	280	-	-	(518)	(235)	-	(235)
Share based payment	-	-	14	-	-	14	-	14
Balance at June 30, 2017	112	15,258	337	75	3,761	19,543	385	19,928

(*) 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 Six month period ended June 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 six month period     ended June 30, 2016:
Comprehensive income
Profit for the period	-	-	-	-	232	232	13	245
Other comprehensive income
Translation differences	-	-	-	177	-	177	-	177
Total comprehensive income for the period	-	-	-	177	232	409	13	422
Share issuance to non-controlling interest in subsidiary	-	(10)	-	-	-	(10)	10	-
Exercise of options to share capital	(*)	22	(1)	-	-	21	-	21
Dividend paid	-	-	-	-	(568)	(568)	-	(568)
Share based payment	-	-	5	-	-	5	-	5
Balance at June 30, 2016	109	14,957	308	100	2,780	18,254	289	18,543

(*) 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

	30.06.2017		30.06.2016		31.12.2016
	U.S. $ in thousands
	Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	4,786		4,862		4,428
Trade receivables	9,525		8,131		8,159
Other receivables	792		909		706
Current tax receivables	586		331		455
Inventories	4,605		3,893		4,910
	20,294		18,126		18,658
NON-CURRENT ASSETS:
Long term prepaid expenses	39		49		48
Property, plant and equipment	5,328		5,562		5,453
Investment property	619		640		630
Deferred tax assets	617		475		500
Intangible assets	267		375		321
Goodwill	573		573		573
	7,443		7,674		7,525
Total assets	27,737		25,800		26,183

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

INTERIM CONSOLIDATED STATEMENT OF

FINANCIAL POSITION

	30.06.2017		30.06.2016			31.12.2016
	U.S. $ In thousands
	Unaudited
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities and short term bank credit and loans	1,018		799		802
Trade payables	2,621		2,155		2,285
Other accounts payables	2,247		1,786		1,792
Current tax payables	143		20		3
	6,029		4,760		4,882
NON- CURRENT LIABILITIES:
Loans from banks, net of current maturities	1,321		2,017		1,664
Employee benefits, net	459		388		405
Other liabilities	-		92		-
	1,780		2,497		2,069
Total liabilities	7,809		7,257		6,951
EQUITY
Equity attributable to owners of the parent
Share capital	112		109		109
Additional paid-in capital	15,258		14,957		14,964
Capital reserve from share-based payment transactions	337		308		323
Translation differences	75		100		44
Retained earnings	3,761		2,780		3,468
	19,543		18,254		18,908
Non-controlling interest	385		289		324
Total equity	19,928		18,543		19,232
Total equity and liabilities	27,737		25,800		26,183

August 7, 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

		Six months period ended June 30,						Year ended December 31,
		2017		2016			2016
		U.S. $ in thousands
		Unaudited
Cash Flows from Operating Activities:
Profit for the period		872		245		984
Adjustments for:
Depreciation and amortization		326		312		635
Loss (gain) from investments in financial assets		133		(10)		(57)
Equity settled share-based payment expense		14		5		20
Finance expenses, net		56		64		122
Income tax expense		111		104		222
Changes in operating assets and  liabilities:
Decrease (increase) in inventories		372		551		(466)
Decrease (increase) in trade receivables		(1,409)		102		19
Decrease (increase) in other accounts receivables and prepaid expenses		(34)		368		572
Increase in trade and other accounts payables	4	700		44		105
Increase in employee benefits, net		54		1		2
Interest paid		(56)		(64)		(122)
Income tax paid		(215)		(553)		(837)
Net cash provided by operating activities		924		1,169		1,199

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

 INTERIM CONSOLIDATED STATEMENTS OF

CASH FLOWS (cont.)

		Six months period ended June 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
Purchase of property, plant and equipment		(119)		(146)				(314)
Net cash provided by (used in) investing activities		(119)		1,996				1,828
Cash Flows From Financing Activities:
Exercise of share options		14		21				28
Dividend paid to the owners of the parent		(235)		(568)				(568)
Short term loan received from banks		166		-				-
Long term loan received from banks		-		-				87
Repayment of long-term loan from banks		(426)		(403)				(793)
Net cash used in financing activities		(481)		(950)				(1,246)
Increase in cash and cash equivalents during the period		324		2,215				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		34		13				13
Cash and cash equivalents at the end of the period		4,786		4,862				4,428

Appendix A - Non-cash transactions:

			Six months period ended June 30,				Year ended December 31,
			2017		2016		2016
			U.S. $ in thousands
		Unaudited
Purchase of property, plant and equipment   against trade payables		6			23		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 June 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 six months period ended June 30, 2017 and 2016 respectively, and for the year ended December 31, 2016.

Six months period ended June 30, 2017 (Unaudited)
		Antennas		Water Solutions		Total
		U.S. $ in thousands
Revenue
External		6,579		6,179		12,758
Total		6,579		6,179		12,758
Segment profit		175		704		879
Finance income, net						104
Profit before income tax						983
Other
Depreciation and amortization		298		28		326

Six months period ended June 30, 2016 (Unaudited)
		Antennas		Water Solutions		Total
		U.S. $ in thousands
Revenue
External		5,304		6,021		11,325
Total		5,304		6,021		11,325
Segment profit (loss)		(345)		835		490
Finance expense, net						(141)
Profit before income tax						349
Other
Depreciation and amortization		288		24		312

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:

		Six months period ended      June 30,				Year ended December 31,
		2017		2016			2016
		U.S. $ in thousands
		Unaudited
Purchased Goods		103		105			369
Management Fee		221		185			428
Services Fee		130		124			249
Lease income		(36)		(36)			(72)

Compensation of key management personnel of the Group:

		Six months period ended      June 30,				Year ended December 31,
		2017		2016			2016
		U.S. $ in thousands
		Unaudited
Short-term employee benefits *)		417		353			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
	30.06.2017		30.06.2016		31.12.2016
	U.S. $ in thousands
	Unaudited
Other accounts payables	293		90		207

Note 5 - SIGNIFICANT EVENTS:

A.  During January and June 2017, employees exercised options over 120,000 shares in exchange for a total consideration of approximately $14,000.

B.   On April 4, 2017, the Company paid a dividend of 1 US cent per 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

 

 

IR OKODPPBKDOFK