1st Quarter Results

RNS Number : 9321E

MTI Wireless Edge Limited

17 May 2013

 



17 May 2013

MTI Wireless Edge Ltd

("MTI" or the "Company")

Financial results for the three months ended 31^st March 2013

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^st March 2013.

Highlights

·     Return to profitability

·     Increase in revenues - revenue for the 3 months US$3.4m (2012: US$3.2m)

·     Major contract awarded in the military sector

·     Net profit of US$26,000 (2012: loss of US$246,000)

·     Cash, cash equivalents and marketable securities remains strong at US$7.2m

Dov Feiner, Chief Executive Officer, commented:

"I am pleased to announce that during this quarter the Company returned to profitability, generating a net profit of US$26,000 compared to a loss ofUS$246,000 for the same period last year.  Revenue, too, increased by 6% to US$3.4m. Cash generation was also good during the period at US$X0.1m (compared to use of US$0.4m in Q1 2012) and the Company's balance sheet remains strong. Gross margins were slightly lower than last year and the Board is addressing this issue.

"Whilst our commercial activities remain the dominant contributor to our business, during the quarter we won a number of important orders in the military segment.  These totaled over US$2m and included a major new contract worth US$1.45m. This gives us confidence in the long term prospects of this segment, which we are well positioned to fulfil.

 "Overall, we have made good, solid progress in the first quarter and the Board believes this trend will continue for the rest of the year.  We remain optimistic that, despite the current economic climate, the outlook for the Group remains positive"

Contacts:

MTI Wireless Edge Dov Feiner, CEO Moni Borovitz, Financial Director	[phone]
Allenby Capital Nick Naylor Alex Price	[phone]
Newgate Threadneedle Graham Herring Robyn McConnachie	[phone]

About MTI Wireless Edge

MTI Wireless Edge is a world leader in the development and production of high quality, low cost, antenna solutions including Smart Antennas, MIMO antennas and Dual Polarity for wireless applications such as WiMAX, WiFi, Broadband Wireless Access and RFID.  MTI is supplying antennas for both military and commercial applications from 100 KHz to 90 GHz. We offer the most dynamic variety of off-the shelf and customised antennas range including sector, directional and Omni Directional antennas for all broad and narrow band wireless applications in both licensed and unlicensed bands. MTI Military products 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.

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three months ended March 31,				Year ended December 31,
	2013		2012		2012
	U.S. $ in thousands
	Unaudited				Audited
Revenues	3,407		3,190		12,711
Cost of sales	2,343		2,141		8,291
Gross profit	1,064		1,049		4,420
Research and development expenses	283		280		1,152
Distribution expenses	479		475		1,721
General and administrative expenses	378		698		1,911
Loss from operations	(76)		(404)		(364)
Finance expense	37		87		186
Finance income	58		140		229
Loss before income tax	(55)		(351)		(321)
Income tax	(81)		32		(75)
Net income (loss)	26		(383)		(246)
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	-		-		53
Total comprehensive income (loss)	26		(383)		(193)
Net income (loss) Attributable to:
Owners of the parent	11		(412)		(365)
Non-controlling interest	15		29		119
	26		(383)		(246)
Total comprehensive income (loss) Attributable to:
Owners of the parent	11		(412)		(312)
Non-controlling interest	15		29		119
	26		(383)		(193)
Net Earnings (loss) per share
Basic and Diluted (dollars per share)	0.0002		(0.0080)		(0.0071)
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 Three months ended March 31, 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 Three months     ended March 31, 2013 (Unaudited):
Comprehensive income for the period	-		-		-		11		11		15		26
Share based payment	-		-		11		-		11		-		11
Balance at March 31, 2013 (Unaudited)	109		14,945		231		2,324		17,609		171		17,780

The ac companying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY

For the Three months ended March 31, 2012:

	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, 2012 (Audited)	109		14,945		176		2,625		17,855		37		17,892
Changes during the Three months     ended March 31, 2012 (Unaudited):
Comprehensive income (loss) for the period	-		-		-		(412)		(412)		29		(383)
Share based payment	-		-		11		-		11		-		11
Balance at March 31, 2012 (Unaudited)	109		14,945		187		2,213		17,454		66		17,520

The ac companying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY

For the year ended December 31, 2012:

	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, 2012	109		14,945		176		2,625		17,855		37		17,892
Changes during 2012:
Loss for the year	-		-		-		(365)		(365)		119		(246)
Other comprehensive income	-		-		-		53		53		-		53
Total comprehensive income (loss) for the year	-		-		-		(312)		(312)		119		(193)
Share based payment	-		-		44		-		44		-		44
Balance at December 31, 2012	109		14,945		220		2,313		17,587		156		17,743

The ac companying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATEMENT OF

FINANCIAL POSITION

	31.3.2013		31.3.2012		31.12.2012
	U.S. $ in thousands
	Unaudited				Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	4,673		929		4,648
Other current financial assets	2,520		6,433		2,503
Trade receivables	4,779		5,036		4,373
Other receivables	757		827		520
Inventories	2,939		3,105		2,947
	15,668		16,330		14,991
NON-CURRENT ASSETS:
Long term prepaid expenses	36		23		45
Property, plant and equipment	5,442		5,405		5,478
Investment property	1,301		1,336		1,310
Deferred tax assets	220		249		220
Goodwill	406		406		406
	7,405		7,419		7,459
Total assets	23,073		23,749		22,450

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

INTERIM CONSOLIDATED STATEMENT OF

FINANCIAL POSITION

	31.3.2013		31.3.2012			31.12.2012
	U.S. $ In thousands
	Unaudited				Audited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank credit	250		699		250
Trade payables	1,763		2,040		1,404
Other accounts payables	813		1,000		603
Current tax payables	270		147		209
	3,096		3,886		2,466
NON- CURRENT LIABILITIES:
Loans from banks	1,750		2,000		1,813
Employee benefits	275		277		256
Provisions	172		66		172
	2,197		2,343		2,241
Total liabilities	5,293		6,229		4,707
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	231		187		220
Retained earnings	2,324		2,213		2,313
	17,609		17,454		17,587
Non-controlling interest	171		66		156
Total equity	17,780		17,520		17,743
Total equity and liabilities	23,073		23,749		22,450

May 16, 2013
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

			Three months ended March 31,						Year ended December 31,
		2013			2012			2012
		U.S. $ in thousands
		Unaudited						Audited
Cash Flows from Operating Activities:
Profit (loss) for the period		26			(383)		(193)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		107			116		482
Gain from short-term  investments		(17)			(134)		(210)
Equity settled share-based payment expense		11			11		44
Finance expenses		26			29		111
Income tax		(81)			32		(75)
Changes in operating assets and  liabilities:
Decrease (increase) in inventories		8			(109)		49
Decrease (increase) in trade receivables		(406)			238		901
Increase in other accounts receivables and prepaid expenses		(228)			(318)		(33)
Increase (decrease) in trade and other accounts payables		533			122		(894)
Increase (decrease) in provisions		-			(30)		76
Increase (decrease) in employee benefits, net		19			12		(9)
Interest paid		(26)			(29)		(111)
Income tax received		142			46		244
Net cash generated (used) in operating activities		114			(397)		382

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

 INTERIM CONSOLIDATED STATEMENTS OF

CASH FLOWS

			Three months ended March 31,					Year ended December 31,
			2013			2012		2012
			U.S. $ in thousands
				Unaudited				Audited
Cash Flows From Investing Activities:
Sale of short-term investment, net			-			352		4,358
Purchase of property, plant and equipment			(26)			(37)		(467)
Net cash (used in) provided    by investing activities			(26)			315		3,891
Cash Flows From Financing Activities:
Receipt of short-term loan from banks			-			449		-
Repayment of long-term loan from banks			(63)			(63)		(250)
Net cash (used in) provided    by financing activities			(63)			386		(250)
Increase in cash and   cash equivalents			25			304		4,023
Cash and cash equivalents  at the beginning of the period			4,648			625		625
Cash and cash equivalents  at the end of the period			4,673			929		4,648

Appendix A - Non-cash activities:

			Three months ended March 31,				Year ended December 31,
			2013		2012		2012
			U.S. $ in thousands
		Unaudited					Audited
Purchase of property and equipment   against trade payables		45			26		9

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 the AIM 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.

B.    Assets and Liabilities in foreign currencies

Henceforth are the details of the foreign currencies of the main currencies and the changes percentage in the reporting period:

	March 31,			December 31,
	2013		2012	2012
NIS (in Dollar per 1 NIS)	0.274		0.269	0.268

	Three months ended March 31,			Year ended December 31,
	2013		2012	2012
	%		%	%
NIS	2.33		2.85	2.36

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 a 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, 2012 was approved by the board on February 19, 2013. The report of the auditors on those financial statements was unqualified. The interim consolidated financial statements as of March 31, 2013 have not been audited.

The interim consolidated financial information should be read in conjunction with the annual financial statements as of 31 December, 2012 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, 2012 are applied consistently in these interim consolidated financial statements.

Note 2 - Significant Accounting Policies (CONT.): 

Adoption of New Standards, Amendments and Interpretations Effective for the first time from January 1, 2013:

-        IAS 19 (as revised in 2011) Employee Benefits:

The revised IAS 19 includes a number of changes to the recognition and measurement of defined benefit plans and termination benefit and to the disclosures for all employee benefits within IAS 19. Set forth below is a summary of the key changes:

-    "Actuarial gains and losses" are renamed "re-measurements" and recognized immediately in OCI.

-    Past-service costs recognized immediately in the period of a plan amendment including unvested benefits.

-    Annual expenses for a funded benefit plan include net interest expense or income, calculated by applying the discount rate to the net defined benefit asset or liability.

-    The distinction between short-term and long-term benefits for measurement purposes is be based on when payment is expected in full, not when payment can be demanded.

-    A clarification that any benefit that has a future-service obligation is not a termination benefit. A liability for a termination benefit is recognized when the entity can no longer withdraw the offer of the termination benefit or recognizes any related restructuring costs.

The amendment is effective for periods beginning on or after 1 January 2013. Earlier application is permitted.

The amendment has been applied retrospectively commencing from the financial statements for periods beginning on January 1, 2013 (see note 3).

-        Amendment to IAS 1 Presentation of Financial Statements

The amendments to IAS 1 revised the presentation of other comprehensive income (OCI). Separate subtotals are required for items which may subsequently be recycled through profit or loss and items that will not be recycled through profit or loss. The Group has updated the presentation of OCI on the face of the Statement of Comprehensive Income.

The following new standards and amendments apply for the first time in 2013. However, they do not impact the annual consolidated financial statements of the Group or the interim condensed consolidated financial statements of the Group.

-     IFRS 10 Consolidated Financial Statements

-     IFRS 12 - Disclosure of Interests in Other Entities

-     IFRS 13 Fair Value Measurement

-     IFRS 7 Financial Instruments: Disclosures: Amendments - Offsetting Financial Assets and Financial Liabilities

-     Annual Improvements to IFRSs (2009 - 2011 Cycle)

Note 3 - Adoption of New Amendments:

Following the Adoption of the IAS 19 (as revised in 2011) Employee Benefits as described above (note 2), here is the effects of the change on the financial statements:

Year ended December 31, 2012
Audited
As presented in these financial statements	IAS 19	As previously reported
1,911	53	1,858	General and administrative expenses
(321)	(53)	(268)	Loss before income tax
(246)	(53)	(193)	Net loss
53	53	-	Actuarial gain from defined benefit plans
(193)	-	(193)	Total comprehensive loss
(0.0071)	(0.0011)	(0.0060)	Net loss per share Basic and Diluted (dollars per share)

Note 4 - SEGMENTS:

The following table's present revenue and profit information regarding the Group's operating segments for the Three months ended March 31,2013 and 2012, respectively and for the year ended December 31, 2012.

Three months ended March 31, 2013 (Unaudited)
		Commercial		Military		Total
		$'000
Revenue
External		3,007		400		3,407
Total		3,007		400		3,407
Segment income (loss)		129		(205)		(76)
Unallocated corporate expenses
Finance income, net						21
Loss before income tax						(55)
Other
Depreciation and other non-cash expenses		99		8		107

Note 4 - SEGMENTS (CONT.):

Three months ended March 31, 2012 (Unaudited)
		Commercial		Military		Total
		$'000
Revenue
External		2,785		405		3,190
Total		2,785		405		3,190
Segment loss		(109)		(295)		(404)
Unallocated corporate expenses
Finance income, net						53
Loss before income tax						(351)
Other
Depreciation and other non-cash expenses		106		10		116

Year ended December 31, 2012 (audited)
		Commercial		Military		Total
		$'000
Revenue
External		10,686		2,025		12,711
Total		10,686		2,025		12,711
Segment income (loss)		399		(710)		(311)
Unallocated corporate expenses
Finance income, net						43
loss before income tax						(268)
Other
Depreciation and other non-cash expenses		434		48		482

 (*) The Group cannot distinguish between Commercial and Military assets and liabilities, due to the fact that some of the assets and liabilities are used by both segments.

Note 5 -TRANSACTIONS WITH RELATED PARTIES:

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

		Three months ended      March 31,				Year ended December 31,
		2013		2012			2012
		U.S. $ in thousands
		Unaudited					Audited
Purchased Goods		120		76			268
Management Fee		75		72			282
Services Fee		48		40			160
Lease income		(30)		(52)			(120)
Total		213		136			590

Compensation of key management personnel of the Group:

		Three months ended      March 31,				Year ended December 31,
		2013		2012			2012
		U.S. $ in thousands
		Unaudited					Audited
Short-term employee benefits *)		149		156			605

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

All Transactions are made at market value.

As of March 31, 2013, March 31, 2012 and December 31, 2012 the parent company and related parties owe to the Group US $30,000, US $43,000 and US $30,000 respectively. 

Note 6 - SIGNIFICANT EVENTS:

On April 4, 2013 the company paid a dividend of 0.58 cents per share totaling approximately $299,000.

 

END

 

 

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