1st Quarter Results

RNS Number : 6624E

MTI Wireless Edge Limited

10 May 2017

 

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

10 May 2017

MTI Wireless Edge Ltd

("MTI" or the "Company")

Financial results for Q1 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 three months ended 31 March 2017.

Highlights:

·     Revenues increased by 18% year-on-year to $6.2m (Q1 2016: $5.3m)

·     Gross profit increased 38% year-on-year to $2.46m (Q1 2016: $1.78m)

·     Operating profit of $0.45m (Q1 2016: loss of $0.1m)

·     Earnings per share of 0.43 US cents (Q1 2016: loss of 0.29 US cents)

·     Shareholder's equity grew during the period to $19.4m (31 December 2016: $18.9m), equivalent to 28.4 pence per share.

Dov Feiner, CEO of MTI Wireless, commented:

"During the first quarter of 2017 we continued to see growth in both segments of our business. In our wireless controller segment, via Mottech, we see many additional opportunities to grow the business in various geographical areas, some of which we announced recently. In the antenna segment we continue to see good demand in all areas (military, RFID and broadband access) and given the current orderbook and pipeline of opportunities in the antenna segment, we have a strong belief that the growth will continue in 2017 and beyond.

Notwithstanding the decline in value of the US dollar against the New Israeli Shekel in Q1 2017 we were delighted to grow the operating profit, as this decline is reflected in the higher financial costs we incurred during the quarter. We believe that once the exchange rate stabilises our net earnings will grow even further".

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 &, Broadband Wireless Access. With over 40 years' experience of supplying antennas 100KHz to 90GHz, 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 in the market segments of agriculture, water distribution, Municipal and Commercial Landscape and Wastewater and Storm water Reuse.

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three months ended  March 31,				Year ended December 31,
	2017		2016		2016
	U.S. $ in thousands
	Unaudited				Audited
Revenues	6,211		5,253		23,276
Cost of sales	3,754		3,472		14,728
Gross profit	2,457		1,781		8,548
Research and development expenses	249		322		1,079
Distribution expenses	948		918		3,346
General and administrative expenses	814		630		2,640
Profit (loss) from operations	446		(89)		1,483
Finance expense	220		148		334
Finance income	7		21		57
Profit (loss) before income tax	233		(216)		1,206
Income tax expense	13		(60)		222
Profit (loss)	246		(156)		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	242		261		121
	242		261		121
Total other comprehensive income	242		261		105
Total comprehensive income	488		105		1,089
Profit (loss) Attributable to:
Owners of the parent	224		(501)		936
Non-controlling interest	22		(6)		48
	246		(156)		984
Total comprehensive income (loss) Attributable to:
Owners of the parent	466		111		1,041
Non-controlling interest	22		(6)		48
	488		105		1,089
Earnings (losses) per share (dollars)
Basic	0.0043		(0.0029)		0.0181
Diluted	0.0042		(0.0029)		0.0178
Weighted average number of shares outstanding
Basic	51,837,468		51,580,836		51,687,853
Diluted	52,679,854		52,664,393		52,575,593

INTERIM CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY

For the three months period ended March 31, 2017:

	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 (Audited)	109	14,964	323	44	3,468	18,908	324	19,232
Changes during the three months     ended March 31, 2017 (Unaudited):
Comprehensive income
Profit for the period	-	-	-	-	224	224	22	246
Other comprehensive income
Translation differences	-	-	-	242	-	242	-	242
Total comprehensive income for the period	-	-	-	242	224	466	22	488
Exercise of options to share capital	*	7	(*)	-	-	7	-	7
Share based payment	-	-	7	-	-	7	-	7
Balance at March 31, 2017 (Unaudited)	109	14,971	330	286	3,692	19,388	346	19,734

(*) less than 1 thousand dollar

INTERIM CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY

For the three months period ended March 31, 2016:

	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 (Audited)	109	14,945	304	(77)	3,116	18,397	266	18,663
Changes during the three months     ended March 31, 2016 (Unaudited):
Comprehensive income
Loss for the period	-	-	-	-	(150)	(150)	(6)	(156)
Other comprehensive income
Translation differences	-	-	-	261	-	261	-	261
Total comprehensive income for the period	-	-	-	261	(150)	111	(6)	105
Share issuance to non-controlling interests in subsidiary	-	(10)	-	-	-	(10)	10	-
Exercise of options to share capital	-	6	(1)	-	-	5	-	5
Share based payment	-	-	2	-	-	2	-	2
Balance at March 31, 2016 (Unaudited)	109	14,941	305	184	2,966	18,505	270	18,775

INTERIM CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY

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
	Audited
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 1 thousand dollar

INTERIM CONSOLIDATED STATEMENT OF

FINANCIAL POSITION

	31.03.2017		31.03.2016		31.12.2016
	U.S. $ in thousands
	Unaudited				Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	4,926		3,144		4,428
Other current financial assets	-		2,109		-
Trade receivables	9,122		7,751		8,159
Other receivables	630		879		706
Current tax receivables	540		183		455
Inventories	4,151		3,950		4,910
	19,369		18,016		18,658
NON-CURRENT ASSETS:
Long term prepaid expenses	39		36		48
Property, plant and equipment	5,340		5,578		5,453
Investment property	625		646		630
Deferred tax assets	597		502		500
Intangible assets	294		402		321
Goodwill	573		573		573
	7,468		7,737		7,525
Total assets	26,837		25,753		26,183

INTERIM CONSOLIDATED STATEMENT OF

FINANCIAL POSITION

	31.03.2017		31.03.2016			31.12.2016
	U.S. $ In thousands
	Unaudited				Audited
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities and short term bank credit and loans	994		812		802
Trade payables	2,036		1,648		2,285
Other accounts payables	2,071		1,620		1,792
Current tax payables	56		194		3
	5,157		4,274		4,882
NON- CURRENT LIABILITIES:
Loans from banks, net of current maturities	1,505		2,209		1,664
Employee benefits	441		403		405
Other liabilities	-		92		-
	1,946		2,704		2,069
Total liabilities	7,103		6,978		6,951
EQUITY
Equity attributable to owners of the parent
Share capital	109		109		109
Additional paid-in capital	14,971		14,941		14,964
Capital reserve from share-based payment transactions	330		305		323
Translation differences	286		184		44
Retained earnings	3,692		2,966		3,468
	19,388		18,505		18,908
Non-controlling interest	346		270		324
Total equity	19,734		18,775		19,232
Total equity and liabilities	26,837		25,753		26,183

May 9, 2017
Date of approval of financial statements	Moshe Borovitz Finance Director	Dov Feiner Chief Executive Officer	Zvi Borovitz Non-executive Chairman

INTERIM CONSOLIDATED STATEMENTS OF

CASH FLOWS

			Three months ended  March 31,						Year ended December 31,
		2017			2016			2016
		U.S. $ in thousands
		Unaudited						Audited
Cash Flows from Operating Activities:
Profit (loss) for the period		246			(156)		984
Adjustments for:
Depreciation and amortization		164			162		635
Loss (gain) from investments in financial assets		77			39		(57)
Equity settled share-based payment expense		7			2		20
Finance expenses, net		28			32		122
Income tax expense (benefit)		(13)			(60)		222
Changes in operating assets and  liabilities:
Decrease (increase) in inventories		870			481		(466)
Decrease (increase) in trade receivables		(839)			579		19
Decrease in other accounts receivables and prepaid expenses		121			410		572
Increase (decrease) in trade and other accounts payables		(51)			(620)		105
Increase in employee benefits, net		35			16		2
Interest paid		(28)			(32)		(122)
Income tax paid		(114)			(92)		(837)
Net cash provided by operating activities		503			761		1,199

 INTERIM CONSOLIDATED STATEMENTS OF

CASH FLOWS

		Three months ended  March 31,						Year ended December 31,
		2017		2016				2016
		U.S. $ in thousands
		Unaudited					Audited
Cash Flows From Investing Activities:
Sale of investments in financial assets, net		-		-				2,142
Purchase of property, plant and equipment		(8)		(46)				(314)
Net cash provided by (used in) investing activities		(8)		(46)				1,828
Cash Flows From Financing Activities:
Exercise of share options		7		5				28
Dividend paid to the owners of the parent		-		-				(568)
Short term loan received from banks		166		-				-
Long term loan received from banks		-		-				87
Repayment of long-term loan from banks		(210)		(214)				(793)
Net cash used in financing activities		(37)		(209)				(1,246)
Increase in cash and cash equivalents during the period		458		506				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		40		4				13
Cash and cash equivalents  at the end of the period		4,926		3,144				4,428

Appendix A - Non-cash transactions:

			Three months ended  March 31,				Year ended December 31,
			2017		2016		2016
			U.S. $ in thousands
		Unaudited					Audited
Purchase of property, plant and equipment   against trade payables		6			22		5

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - General:

Corporate information:

M.T.I Wireless Edge Ltd. (hereafter - the "Company") 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"), commenced operations on July 1, 2000 and 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., the Company is also a leading provider of remote control solutions for water and irrigation applications based on Motorola 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 March 31, 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 three months ended March 31, 2017 and 2016, respectively and for the year ended December 31, 2016.

Three months ended March 31, 2017 (Unaudited)
		Antennas		Water Solutions		Total
		U.S. $ in thousands
Revenue
External		3,129		3,082		6,211
Total		3,129		3,082		6,211
Segment income		166		280		446
Finance expense, net						(213)
Profit before income tax						233
Other
Depreciation and amortization		147		17		164

Three months ended March 31, 2016 (Unaudited)
		Antennas		Water Solutions		Total
		U.S. $ in thousands
Revenue
External		2,321		2,932		5,253
Total		2,321		2,932		5,253
Segment income (loss)		(400)		311		(89)
Finance expense, net						(127)
Loss before income tax						(216)
Other
Depreciation and other non-cash expenses		150		12		162

Year ended December 31, 2016 (audited)
		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:

		Three months ended  March 31,				Year ended December 31,
		2017		2016			2016
		U.S. $ in thousands
		Unaudited					Audited
Purchased Goods		60		34			369
Management Fee		116		94			428
Services Fee		65		62			249
Lease income		(18)		(18)			(72)

Compensation of key management personnel of the Group:

		Three months ended  March 31,				Year ended December 31,
		2017		2016			2016
		U.S. $ in thousands
		Unaudited					Audited
Short-term employee benefits *)		201		178			810

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

All Transactions are made at market value.

Balances with related parties:

	As at
	31.03.2017		31.03.2016		31.12.2016
	U.S. $ in thousands
	Unaudited				Audited
Other receivables (Other accounts payables)	(243)		108		(207)

Note 5 - SIGNIFICANT EVENTS:

During January 2017, an employee exercised options over 60,000 shares in exchange for a consideration of approximately of $7,000.

Note 6 - SUBSEQUENT EVENTS:

On April 4, 2017 the company paid a dividend of 1 cent per share totaling approximately $236,000 and in addition 1,022,328 new ordinary shares were issued to qualifying shareholders that chose the scrip dividend alternative. 

 

END

 

 

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