Half Yearly Report

RNS Number : 7118N

MTI Wireless Edge Limited

31 July 2014

 



31 July 2014

MTI Wireless Edge Ltd

("MTI" or the "Company")

Financial results for the six months ended 30 June 2014

MTI Wireless Edge Ltd., (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 six months ended 30 June 2014.

Highlights

·     Continued improvement in revenue, gross margin rate, operational and net profit.

·     Revenue increased by 5% to US$7.1m (H1 2013: US$6.8m).

·     Gross profit increased by 14% to US$2.8m (H1 2013: US$2.4m).

·     Operational profit increased 230% to US$202,000 (H1 2013: US$61,000).

·     Net profit of US$249,000 (H1 2013: US$73,000).

·     Shareholder's equity of US$17.7m, similar to December 31, 2013, equivalent to 20.1 pence per share.

Dov Feiner, Chief Executive Officer, commented:

"I am pleased to announce that during the first half of 2014 the Company continued to improve both its margins and profits.  This healthy progress was accompanied by strong cash generation. This resulted with the Company's first half operational profits exceeding those generated during the whole of 2013.

"We continue to see strong demand for our 80GHz products and in the first half of 2014 our revenue from this product line was greater than for the full year 2013.  Current order backlog remains strong and we expect to show a substantial increase in revenues from this product line during this year.

"We have made good progress in the first half of 2014 and the Board is confident that this trend will continue for the rest of the year. The Board is encouraged that the outlook for the Group remains positive."

For further information please contact:

MTI Wireless Edge Dov Feiner, CEO Moni Borovitz, Financial Director	http://www.mtiwe.com/ [phone]
Allenby Capital Limited (Nominated adviser and broker) Nick Naylor Alex Price	[phone]
Newgate Threadneedle (Financial PR) Josh Royston Robyn McConnachie	[phone]

About MTI Wireless Edge

MTI is engaged in the development, production and marketing of High Quality, Low Cost, Flat Panel Antennas for Commercial & for Military applications. Commercial applications such as: WiMAX, Wireless Networking, RFID readers &, Broadband Wireless Access. With over 40 years experience, 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 includes 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.

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Six months ended June 30,				Year ended December 31,
	2014		2013		2013
	U.S. $ in thousands
	Unaudited				Audited
Revenues	7,125		6,809		13,422
Cost of sales	4,360		4,395		8,624
Gross profit	2,765		2,414		4,798
Research and development expenses	650		582		1,127
Distribution expenses	983		950		1,804
General and administrative expenses	930		821		1,677
Profit from operations	202		61		190
Finance expense	87		82		162
Finance income	66		18		58
Profit (loss) before income tax	181		(3)		86
Income tax benefit	(68)		(76)		(340)
Profit or loss	249		73		426
Other comprehensive income (net of tax effect):
Items not to be reclassified to profit or loss in subsequent periods:
Re-measurement of defined benefit plans	-		-		18
Total comprehensive income	249		73		444
Profit or loss Attributable to:
Owners of the parent	242		49		388
Non-controlling interest	7		24		38
	249		73		426
Total comprehensive income Attributable to:
Owners of the parent	242		49		406
Non-controlling interest	7		24		38
	249		73		444
Earnings per share (dollars per share)
Basic and Diluted	0.0047		0.0010		0.0075
Weighted average number of shares outstanding
Basic and Diluted	51,571,990		51,571,990		51,571,990

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

INTERIM CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY

For the Six months period ended June 30, 2014:

	Attributed to owners of the parent
	Share capital		Additional paid-in capital		Capital Reserve for share-based payment transactions		Retained earnings		Total attributable to owners of the  parent		Non-controlling interest		Total equity
	U.S. $ in thousands
Balance at January 1, 2014 (Audited)	109		14,945		259		2,420		17,733		194		17,927
Changes during the Six months     ended June 30, 2014 (Unaudited):
Comprehensive income (loss) for the period	-		-		-		242		242		7		249
Dividend paid	-		-		-		(351)		(351)		-		(351)
Share based payment	-		-		12		-		12		-		12
Balance at June 30, 2014 (Unaudited)	109		14,945		271		2,311		17,636		201		17,837

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

INTERIM CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY

For the Six months period ended June 30, 2013:

	Attributed to owners of the parent
	Share capital		Additional paid-in capital		Capital Reserve for share-based payment transactions		Retained earnings		Total attributable to owners of the  parent		Non-controlling interest		Total equity
	U.S. $ in thousands
Balance at January 1, 2013 (Audited)	109		14,945		220		2,313		17,587		156		17,743
Changes during the Six months period     ended June 30, 2013 (Unaudited):
Comprehensive income for the period	-		-		-		49		49		24		73
Dividend paid	-		-		-		(299)		(299)		-		(299)
Share based payment	-		-		22		-		22		-		22
Balance at June 30, 2013 (Unaudited)	109		14,945		242		2,063		17,359		180		17,539

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

INTERIM CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY

For the year ended December 31, 2013:

	Attributable to owners of the parent
	Share capital		Additional paid-in capital		Capital Reserve for share-based payment transactions		Retained earnings		Total attributable to owners of the  parent		Non-controlling interest		Total equity
	U.S. $ in thousands
	Audited
Balance at January 1, 2013	109		14,945		220		2,313		17,587		156		17,743
Changes during 2013:
Income for the year	-		-		-		388		388		38		426
Other comprehensive income	-		-		-		18		18		-		18
Total comprehensive income for the year	-		-		-		406		406		38		444
Dividend paid	-		-		-		(299)		(299)		-		(299)
Share based payment	-		-		39		-		39		-		39
Balance at December 31, 2013	109		14,945		259		2,420		17,733		194		17,927

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

INTERIM CONSOLIDATED STATEMENT OF

FINANCIAL POSITION

	30.6.2014		30.6.2013		31.12.2013
	U.S. $ in thousands
	Unaudited				Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	2,502		1,793		992
Other current financial assets	3,736		5,251		5,753
Trade receivables	5,051		4,203		5,359
Other receivables	844		832		548
Current tax receivables	152		-		165
Inventories	3,133		2,949		3,091
	15,418		15,028		15,908
NON-CURRENT ASSETS:
Long term prepaid expenses	24		34		39
Property, plant and equipment	5,312		5,403		5,343
Investment property	1,257		1,292		1,275
Deferred tax assets	308		225		226
Goodwill	406		406		406
	7,307		7,360		7,289
Total assets	22,725		22,388		23,197

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

INTERIM CONSOLIDATED STATEMENT OF

FINANCIAL POSITION

	30.6.2014		30.6.2013			31.12.2013
	U.S. $ In thousands
	Unaudited				Audited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities and short term  Loans	261		250		562
Trade payables	2,001		1,500		1,936
Other accounts payables	811		672		749
Current tax payables	-		277		-
	3,073		2,699		3,247
NON- CURRENT LIABILITIES:
Loans from banks	1,465		1,688		1,595
Employee benefits	350		290		316
Provisions	-		172		112
	1,815		2,150		2,023
Total liabilities	4,888		4,849		5,270
EQUITY
Equity attributable to owners of the parent
Share capital	109		109		109
Additional paid-in capital	14,945		14,945		14,945
Capital reserve from share-based payment transactions	271		242		259
Retained earnings	2,311		2,063		2,420
	17,636		17,359		17,733
Non-controlling interest	201		180		194
Total equity	17,837		17,539		17,927
Total equity and liabilities	22,725		22,388		23,197

July 30, 2014
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 ended June 30,						Year ended December 31,
		2014			2013			2013
		U.S. $ in thousands
		Unaudited						Audited
Cash Flows from Operating Activities:
Profit for the period		249			73		426
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		223			215		436
Loss (Gain) from short-term  investments		(5)			19		(29)
Equity settled share-based payment expense		12			22		39
Finance expenses, net		45			51		98
Income tax		(68)			(76)		(340)
Changes in operating assets and  liabilities:
Decrease in inventories		(42)			(2)		(144)
Decrease (increase) in trade receivables		308			170		(986)
Increase in other accounts receivables and prepaid expenses		(281)			(301)		(22)
Decrease in trade and other accounts payables		61			167		682
Increase in employee benefits, net		34			34		78
Decrease in provisions		(112)			-		(60)
Interest paid		(45)			(51)		(98)
Income tax received (paid)		(1)			139		(40)
Net cash generated (used) in operating activities		378			460		40

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

INTERIM CONSOLIDATED STATEMENTS OF

CASH FLOWS

			Six months ended June 30,					Year ended December 31,
			2014			2013		2013
			U.S. $ in thousands
				Unaudited				Audited
Cash Flows From Investing Activities:
Sale (purchase) of short-term investment, net			2,022			(2,767)		(3,221)
Purchase of property, plant and equipment			(108)			(124)		(270)
Net cash used in investing activities			1,914			(2,891)		(3,491)
Cash Flows From Financing Activities:
Short term Loan received (paid)			(301)			-		301
Long term Loan received			-			-		43
Dividend paid to the owners of the parent			(351)			(299)		(299)
Repayment of long-term loan from banks			(130)			(125)		(250)
Net cash used in financing activities			(782)			(424)		(205)
Increase (decrease) in cash and  cash equivalents during the period			1,510			(2,855)		(3,656)
Cash and cash equivalents  at the beginning of the period			992			4,648		4,648
Cash and cash equivalents  at the end of the period			2,502			1,793		992

Appendix A - Non-cash transactions:

			Six months ended June 30,				Year ended December 31,
			2014		2013		2013
			U.S. $ in thousands
		Unaudited					Audited
Purchase of property and equipment   against trade payables		71			7		5

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

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - General:

A.    Corporate information:

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 and 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 London's AIM Market.

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.

B.    Foreign currencies:

Henceforth are the details of the main foreign currency information and the changes in the exchange rate percentage in the reporting period:

	June 30,			December 31,
	2014		2013	2013
NIS (in Dollar per 1 NIS)	0.291		0.276	0.288

	Six months ended June 30,			Year ended December 31,
	2014		2013	2013
	%		%	%
NIS	(0.95)		3.18	7.55

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, 2013 was approved by the board on February 19, 2014. The report of the auditors on those financial statements was unqualified. The interim consolidated financial statements as of June 30, 2014 have not been audited.

The interim consolidated financial information should be read in conjunction with the annual financial statements as of 31 December, 2013 and for the year ended on that date and with the notes thereto, The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2013 are applied consistently in these interim consolidated financial statements.

Note 3 - operating SEGMENTS:

The following table's present revenue and profit information regarding the Company's operating segments for the six months ended June 30,2014 and 2013, respectively and for the year ended December 31, 2013.

Six months ended June 30, 2014 (Unaudited)
		Commercial		Military		Total
		$'000
Revenue
External		5,754		1,370		7,125
Total		5,754		1,370		7,125
Segment income		156		46		202
Finance expense, net						(21)
Profit before income tax						181
Other
Depreciation and other non-cash expenses		197		26		223

Six months ended June 30, 2013 (Unaudited)
		Commercial		Military		Total
		$'000
Revenue
External		5,466		1,343		6,809
Total		5,466		1,343		6,809
Segment income		17		44		61
Finance expenses, net						64
Loss before income tax						(3)
Other
Depreciation and other non-cash expenses		188		27		215

Note 3- operating SEGMENTS (CONT.):

Year ended December 31, 2013 (audited)
		Commercial		Military		Total
		$'000
Revenue
External		10,069		3,353		13,422
Total		10,069		3,353		13,422
Segment income (loss)		(32)		240		208
Unallocated corporate expenses
Unallocated expenses						(18)
Finance expense, net						(104)
Profit before income tax						86
Other
Depreciation and other non-cash expenses		368		68		436

Note 4 -TRANSACTIONS WITH RELATED PARTIES:

The Parent Company and other related parties provide certain services to the Group as follows:

		Six months ended      June 30,				Year ended December 31,
		2014		2013			2013
		U.S. $ in thousands
		Unaudited					Audited
Purchased Goods		152		170			322
Management Fee		201		154			334
Services Fee		104		95			190
Lease income		(60)		(60)			(120)

Compensation of key management personnel of the Group:

		Six months ended      June 30,				Year ended December 31,
		2014		2013			2013
		U.S. $ in thousands
		Unaudited					Audited
Short-term employee benefits *)		366		305			673

*) Including Management fees for the CEO, Director executive management and other related parties.

All Transactions are made at market value.

	30.6.2014		30.6.2013			31.12.2013
	U.S. $ In thousands
	Unaudited				Audited
Related parties	44		103		37

Note 5 - SIGNIFICANT EVENTS:

On April 4, 2014 the company paid a dividend of 0.68 cents per share totaling approximately $351,000.

 

END

 

 

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