1st Quarter Results

RNS Number : 4959U

MTI Wireless Edge Limited

15 May 2008

 



MTI WIRELESS EDGE LTD

 FINANCIAL RESULTS FOR THE THREE MONTHS ENDED 

31 MARCH 2008

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 2008.

Highlights

• Revenue decreased by 11% year on year to US$4.2m (Q1 2007: US$4.7m)
• Negative impact from continued strength of Israeli Shekel versus US Dollar
• Indian facility on course for production in Q3 of current year
• Current order book higher than three months ago
• Share buy back policy to continue

Dov Feiner, Chief Executive Officer, commented: 

'Results for the first quarter of 2008 have been disappointing in terms of both revenue and profit for two main reasons, namely a weaker quarter in terms of revenues booked, and the strength of the Israeli Shekel against the US Dollar. The present order book is higher than three months ago, with a good level of enquiry in our military division, which together provide the Board with confidence on business volumes going forward. Finally, while RFID revenue continues to be a small proportion of the total, it also continues to grow rapidly. 

'Appreciation of the Shekel against the Dollar has a negative effect on the Group's profit margins because the majority of our orders are invoiced in Dollars, while our fixed cost base is mostly in Shekels. Should the current Shekel / Dollar rate continue throughout 2008 this will clearly affect the Group's full year profit outcome. 

'Our production facility in India remains on course to commence production in the third quarter of the current year. Not only will this improve our supply to the increasingly important Asian market, but in future years will also help to mitigate the importance of the Shekel / Dollar exchange rate.

'We continue to be at the forefront of WiMax technology and maintain our market leading position in both fixed broadband wireless access and military. Globally, we have continued to see major investment in WiMax technology over the last few months as the market is expected to grow at pace. A recent report from Juniper Research suggests that there could be 47m WiMax subscribers by 2013, replacing up to 12% of the current Digital Subscriber Line (DSL) installed base.

 'The Board remains confident in the growth prospects of the company. Given our very strong financial position, we will continue our share buy back policy implemented after the 2007 results.'

Contacts:

MTI Wireless Edge Dov Feiner, CEO Moni Borovitz, Financial Director	[phone]
Blue Oar Securities Plc Matthew Marchant Shane Gallwey John Wilkes	[phone]
Daniel Stewart & Company Lindsay Mair	[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.

MTI WIRELESS EDGE LTD.

(An Israeli Corporation)

STATEMENTS OF OPERATIONS

	For the three months  ended March 31,				Year ended December 31,
	2008		2007		2007
	U.S. $ in thousands
Revenues	4,200		4,722		19,035
Cost of sales	2,666		2,750		10,605
Gross profit	1,534		1,972		8,430
Research and development expenses	370		332		1,415
Distribution costs	577		546		1,946
General and administrative expenses	381		275		1,340
Profit from operations	206		819		3,729
Finance cost	115		79		94
Finance income	266		157		1,369
Profit before tax	357		897		5,004
Tax expense (income)	(132)		89		364
Net profit	489		808		4,640
Earnings per share:
Basic (dollars per share)	0.01		0.02		0.09
Diluted (dollars per share)	0.01		0.02		0.09
Weighted average number    of shares outstanding:
Basic	53,544,529		53,779,998		53,779,998
Diluted	53,544,529		54,735,714		54,405,033

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

MTI WIRELESS EDGE LTD.

(An Israeli Corporation)

BALANCE SHEETS

	31.3.2008		31.3.2007		31.12.2007
	U.S. $ in thousands
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	3,031		2,488		3,370
Other financial assets	10,804		10,925		11,203
Trade receivables	6,537		5,100		6,248
Other receivables	272		248		121
Inventories	2,194		2,034		2,253
Total current assets	22,838		20,795		23,195
LONG TERM PREPAID EXPENSES	55		31		55
PROPERTY AND EQUIPMENT, NET	1,506		1,563		1,522
GOODWILL	406		406		406
DEFERRED TAX ASSETS	228		75		95
	25,033		22,870		25,273

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

	31.3.2008		31.3.2007			31.12.2007
	U.S. $ in thousands
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Financial liabilities	-		87		22
Trade payables	2,401		3,003		2,625
Other accounts payables	760		758		597
Tax liability	431		354		494
Liabilities due to warrants	164		1,287		298
Total current liabilities	3,756		5,489		4,036
LONG-TERM LIABILITIES:
Employee benefits	297		242		266
SHAREHOLDERS' EQUITY
Share capital	112		115		115
Additional paid-in capital	14,945		14,945		14,945
Retained earnings	5,923		2,079		5,911
Total shareholders' equity	20,980		17,139		20,971
	25,033		22,870		25,273

_May 14, 2008
Date of approval of financial statements		Moshe Borovitz Finance Director	Dov Feiner Chief Executive Officer	Zvi Borovitz Non-executive Chairman

  STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

For the three months ended March 31, 2008:

	Share capital		Additional paid-in capital		Retained earnings		Total
	U.S. $ in thousands
Unaudited
Balance at January 1, 2008(Audited)	115		14,945		5,911		20,971
Changes during the three months      ended March 31, 2008:
Net profit	-		-		489		489
Total recognized income for the period	-		-		489		489
Buyback purchase of stock (*)	(3)		-		(477)		(480)
Balance at March 31, 2008	112		14,945		5,923		20,980

(*) see note 3

For the three months ended March 31, 2007:

	Share capital		Additional paid-in capital		Retained earnings		Total
	U.S. $ in thousands
Unaudited
Balance at January 1, 2007(Audited)	115		14,945		2,169		17,229
Changes during the three months      ended March 31, 2007:
Net profit	-		-		808		808
Total recognized income for the period	-		-		808		808
Dividend distributed	-		-		(898)		(898)
Balance at March 31, 2007	115		14,945		2,079		17,139

For the year ended December 31, 2007:

	Share capital		Additional paid-in capital		Retained earnings (accumulated deficit)		Total
	U.S. $ in thousands
Audited
Balance at January 1, 2007	115		14,945		2,169		17,229
Changes during 2007:
Net profit	-		-		4,640		4,640
Total recognized income for the year	-		-		4,640		4,640
Dividend distributed	-		-		(898)		(898)
Balance at December 31, 2007	115		14,945		5,911		20,971

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

  STATEMENTS OF CASH FLOWS

			For the three months ended March 31,								Year ended December 31,
		2008				2007				2007
		U.S. $ in thousands
		Unaudited			Unaudited				Audited
Cash Flows from Operating Activities:
Net profit		489				808				4,640
Adjustments to reconcile net income to  net cash provided by operating activities:
Depreciation		81				73				309
Gain from short-term investments		(114)				(152)				(104)
Deferred tax assets		(133)				(6)				(26)
Increase(decrease) in fair value of liabilities    due to warrants		(134)				47				(942)
Changes in operating assets and liabilities:
Decrease (increase) in inventories		59				(310)				(529)
Decrease (Increase) in trade receivables		(289)				54				(1,094)
Decrease (increase) in other    accounts receivables for short and long term		(151)				(41)				62
Increase (decrease) in trade payables		(228)				477				180
Increase(decrease) in other accounts payables		163				(42)				(200)
Increase (decrease) in tax liability		(63)				104				244
Increase in employee benefits		31				11				35
Net cash (used in) provided by  operating activities		(289)				1,023				2,575

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

   STATEMENTS OF CASH FLOWS

		For the three months ended March 31,						Year ended December 31,
		2008			2007			2007
		U.S. $ in thousands
		Unaudited		Unaudited			Audited
Cash Flows From Investing Activities:
Sale of short-term investment, net		513			360			34
Purchase of property and equipment		(61)			(142)			(421)
Net cash (used in) provided    by investing activities		452			218			(387)
Cash Flows From Financing Activities:
Dividend distributed		-			(898)			(898)
Buyback purchase of stock		(480)			-			-
Repayment of bank borrowing		(22)			(22)			(87)
Net cash used in by    financing activities		(502)			(920)			(985)
INCREASE (DECREASE) IN CASH AND  CASH EQUIVALENTS		(339)			321			1,203
CASH AND CASH EQUIVALENTS   AT BEGINNING OF PERIOD		3,370			2,167			2,167
CASH AND CASH EQUIVALENTS    AT END OF PERIOD		3,031			2,488			3,370

Appendix A - Non-cash activities:

			For the three months ended March 31,						Year ended December 31,
		2008			2007			2007
		U.S. $ in thousands
Purchase of property and equipment    against trade payables		45			125			41

Appendix B - Additional Information

			For the three months ended March 31,						Year ended December 31,
		2008			2007			2007
		U.S. $ in thousands
Income tax		65			39			181

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

   NOTES TO THE FINANCIAL STATEMENTS 

Note 1 - General:

MTI wireless Edge Ltd. (hereafter - the Company) is an Israeli corporation. It was incorporated 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 Company is engaged in the development, design, manufacture and marketing of antennas.

Note 2 - Significant Accounting Policies:

The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2007 are applied consistently in these interim consolidated financial statements.

The company prepares its financial statements in accordance with the international reporting standards. 

Note 3 - share CAPITAL:

Further to the US$1.5 million share buyback program announced with the full year results, on 6 March 2008 the Company purchased for cancellation 883,008 ordinary shares for total of $480 thousand.

Following the above transaction the Company has 52,896,990 ordinary shares in issue.

Note 4 - Subsequent EVENTS:

• The company intended to approve a new option scheme for key Directors and Employees under which options will be granted on 1.5 million shares (approximately 2.84% of the Company's current issued and voting share capital of 52,896,990 ordinary shares), including 275,000 options (0.52%) to each of Dov Feiner and Moni Borovitz, with a vesting date of 1st April 2011 and an exercise price of 30p per share, which exercise price represents a premium to today's share price. Any further amounts of options to be granted under the new scheme will be presented to shareholders for their approval.

• On April 4, 2008 the company paid a dividend of 1.85 cents per share totaling US$ 978,594.

 

END

 

 

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