1st Quarter Results

RNS Number : 4547L

MTI Wireless Edge Limited

06 May 2010

 

6 May 2010

MTI Wireless Edge Ltd ('MTI' or the 'Company')

Financial results for the three months ended 31 March 2010

 

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 2010.

Highlights

·; Revenue of US$2.8m (Q1 2009: US$3.4m), a reduction mainly due to a late influx of orders

·; Q1 operating loss of US$542k (Q1 2009: profit of US$76k)

·; Book to Bill ratio of 1.2 in the quarter

·; Cash and cash equivalents of US$12.5m as at 31 March 2010

Dov Feiner, Chief Executive Officer, commented:

"Results for the first quarter of 2010 have been disappointing in terms of both revenue and profit. The major factors in this were timing issues, and in particular that there was an influx of commercial orders late in the quarter and it was difficult to ship these before the end of March. Whilst this has impacted Q1 numbers, we believe that this is revenue that has been delayed rather than revenue lost because the problem has now been resolved and the backlog of orders was cleared in April.

"In addition, we have booked orders in Q1 2010 of 20% more than billing and enter Q2 with stronger forward bookings and with further significant contracts under negotiation.

"MTI continues to have a strong balance sheet and our current forward order book allows the Board to remain confident in the long term growth prospects of the Company."

 

Contacts:

MTI Wireless Edge	+972 3 900 8900
Dov Feiner, CEO
Moni Borovitz, Financial Director
Execution Noble & Company Limited	+44 207 456 9191
Harry Stockdale
Threadneedle Communications	+44 207 653 9850
Graham Herring
Josh Royston

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.

 

 

MTI WIRELESS EDGE LTD.

 (An Israeli Corporation)

 

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

 

	Three months ended March 31,				Year ended December 31,
	2010		2009		2009
	U.S. $ in thousands
	Unaudited				Audited
Revenues	2,801		3,429		13,453
Cost of sales	1,992		2,259		8,756
Gross profit	809		1,170		4,697
Research and development expenses	358		226		1,114
Selling and marketing expenses	549		488		2,050
General and administrative expenses	444		380		1,469
Profit (loss) from operations	(542)		76		64
Finance expense	14		73		128
Finance income	8		107		110
Profit (loss) before tax	(548)		110		46
Tax expense (income)	(13)		209		34
Net and comprehensive Income (loss)	(535)		(99)		12
Attributable to:
Owners of the parent	(523)		(99)		17
Non-controlling interest	(12)		-		(5)
	(535)		(99)		12
Earnings per share
Basic and Diluted (dollars per share)	(0.0101)		(0.0019)		0.0003
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, 2010:

	Attributed to owners of the parent
	Share capital		Additional paid-in capital		Employee equity benefits reserve		Retained earnings		Total		Non-controlling interest		Total equity
	U.S. $ in thousands
	Unaudited
Balance at January 1, 2010 (Audited)	109		14,945		88		4,433		19,575		-		19,575
Changes during the three months ended March 31, 2010:
Total comprehensive loss for the period	-		-		-		(523)		(523)		(12)		(535)
Share based payment	-		-		15		-		15		-		15
Balance at March 31, 2010	109		14,945		103		3,910		19,067		(12)		19,055

 

 

 

 

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, 2009:

	Attributed to owners of the parent
	Share capital		Additional paid-in capital		Employee equity benefits reserve		Retained earnings		Total		Non-controlling interest		Total equity
	U.S. $ in thousands
	Unaudited
Balance at January 1, 2009 (Audited)	109		14,945		29		5,014		20,097		-		20,097
Changes during the three months ended March 31, 2009:
Total comprehensive loss for the period	-		-		-		(99)		(99)		-		(99)
Issue of capital to non-controlling interest in subsidiary	-		-		-		-		-		5		5
Share based payment	-		-		15		-		15		-		15
Balance at March 31, 2009	109		14,945		44		4,915		20,013		5		20,018

 

 

 

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

 

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

For the year ended December 31, 2009:

	Attributed to owners of the parent
	Share capital		Additional paid-in capital		Employee equity benefits reserve		Retained earnings		Total		Non-controlling interest		Total equity
	U.S. $ in thousands
	Audited
Balance at January 1, 2009	109		14,945		29		5,014		20,097		-		20,097
Changes during 2009:
Total comprehensive loss for the year	-		-		-		17		17		(5)		12
Issue of capital to minority in subsidiary	-		-		-		-		-		5		5
Dividends	-		-		-		(598)		(598)		-		(598)
Share based payment	-		-		59		-		59		-		59
Balance at December 31, 2009	109		14,945		88		4,433		19,575		-		19,575

 

 

 

 

 

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

 

 

INTERIM CONSOLIDATED STATMENT OF FINANCIAL POSITION

 

	31.3.2010		31.3.2009		31.12.2009
	U.S. $ in thousands
	Unaudited				Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	12,518		3,903		3,212
Other financial assets	23		9,490		10,346
Trade receivables	4,338		4,701		4,405
Other receivables	597		210		198
Inventories	2,447		2,431		2,318
Total current assets	19,923		20,735		20,479
LONG TERM PREPAID EXPENSES	63		37		51
PROPERTY AND EQUIPMENT, NET	1,580		1,687		1,621
GOODWILL	406		406		406
DEFERRED TAX ASSETS	135		110		121
	22,107		22,975		22,678

 

 

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

 

INTERIM CONSOLIDATED STATMENT OF FINANCIAL POSITION

 

	31.3.2010		31.3.2009			31.12.2009
	U.S. $ In thousands
	Unaudited				Audited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables	1,926		1,520		1,974
Other accounts payables	762		737		633
Tax liability	31		458		173
Total current liabilities	2,719		2,715		2,780
NON- CURRENT LIABILITIES:
Employee benefits	253		215		243
Provisions	80		27		80
Total non-current liabilities	333		242		323
EQUITY
Share capital	109		109		109
Additional paid-in capital	14,945		14,945		14,945
Employee equity benefits reserve	103		44		88
Retained earnings	3,910		4,915		4,433
Equity attributable to owners of the parent	19,067		20,013		19,575
Non-controlling interest	(12)		5		-
Total equity	19,055		20,018		19,575
	22,107		22,975		22,678

 

 

May 6, 2010
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,
		2010		2009		2009
		U.S. $ in thousands
		Unaudited	Unaudited		Audited
Cash Flows from Operating Activities:
Net profit (loss)		(535)		(99)		12
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		94		91		374
Gain from short-term investments		(18)		(109)		(71)
Equity settled share-based payment expense		15		15		59
Tax expense (Income)		(13)		209		34
Changes in operating assets and liabilities:
Decrease (increase) in inventories		(129)		140		253
Decrease in trade receivables		67		1,197		1,493
Decrease (increase) in other accounts receivables for short and long term		(411)		19		17
Decrease in trade payables		(86)		(1,052)		(905)
Increase (decrease) in other accounts payables		129		(227)		-
Increase (decrease) in provisions		-		(3)		11
Increase (decrease) in employee benefits		10		(17)		50
Income tax paid		(143)		(118)		(239)
Net cash (used in) provided by operating activities		(1,020)		46		1,088

 

 

   

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,
		2010		2009			2009
		U.S. $ in thousands
		Unaudited				Audited
Cash Flows From Investing Activities:
Sale (purchase) of short-term investment, net		10,341		146			(748)
Purchase of property and equipment		(15)		(100)			(341)
Net cash (used in) provided by investing activities		10,326		46			(1,089)
Cash Flows From Financing Activities:
Dividend paid to the owners of the parent		-		-			(598)
Issue of capital to minority in subsidiary		-		5			5
Net cash (used in) provided by financing activities		-		5			(593)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		9,306		97			(594)
CASH AND CASH EQUIVALENTS  AT BEGINNING OF PERIOD		3,212		3,806			3,806
CASH AND CASH EQUIVALENTS AT END OF PERIOD		12,518		3,903			3,212

 

 

 

Appendix A - Non-cash activities:

		Three months ended March 31,				Year ended December 31,
		2010		2009			2009
		U.S. $ in thousands
		Unaudited				Audited
Purchase of property and equipment against trade payables		45		31			7

 

 

 

  

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

 

 

 NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

 

Note 1 - General:

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. 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.

 

In March 2008, the Company established a wholly owned subsidiary, Switzerland based AdvantCom Sarl (hereafter AdvantCom). AdvantCom is engaged in selling and distributing of antennas and accessories and in manufacturing through an Indian subsidiary.

 

In February 2009, pursuant to the founder's agreement, 20 percent of the issued and outstanding share capital of GlobalWave Technologies PVT Ltd (formerly a wholly owned Indian based subsidiary of AdvantCom), was allotted to investors in return for approximately $5,000.

Certain rental, operational and administrate services are provided by the Parent Company to the Company.

 

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 Financial Reporting Standard IAS 34 ("Interim Financial Reporting").

 

The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2009 are applied consistently in these interim consolidated financial statements, except for the impact of the adoption of the Standards and Interpretations described below.

 

- IFRS 3 (Revised) - Business Combinations and IAS 27 (Revised) - Consolidated and Separate Financial Statements:

These standards have been applied prospectively from 1 January 2010. The implementation of these standards will affect future acquisitions and transactions with non-controlling interests.

The principal changes following the adoption of these Standards are:

 

(a) IFRS 3 previously prescribes that goodwill, as opposed to the acquiree's other identifiable assets and liabilities, should be measured as the excess of the cost of the acquisition over the acquirer's share in the fair value of the identifiable assets, net on the acquisition date. According to the Revised Standards, goodwill can be measured at its full fair value and not only based on the acquired part, with each business combination transaction measured separately.

 NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

 

Note 2 - Significant Accounting POLICIES (Cont.):

- IFRS 3 (Revised) - Business Combinations and IAS 27 (Revised) - Consolidated and Separate Financial Statements (Cont.):

(b) A contingent consideration in a business combination is measured at fair value and changes in the fair value of the contingent consideration, which do not represent adjustments to the acquisition cost in the measurement period, should not be simultaneously recognized as goodwill adjustment. Normally, the contingent consideration is considered a financial derivative within the scope of IAS 39 and presented at fair value through profit or loss.

 

(c) Direct acquisition costs attributed to a business combination transaction are recognized in the comprehensive income statement as incurred as opposed to the previous requirement of carrying them as part of the consideration of the cost of the business combination, which has been removed.

 

(d) A minority transaction, whether a sale or an acquisition, will be accounted for as an equity transaction and will therefore not be recognized in the statement of income or have any effect on the amount of goodwill, respectively.

 

(e) A subsidiary's losses, although resulting in the subsidiary's deficiency, are allocated between the parent company and non-controlling interests, even if the non-controlling interests have not guaranteed or have no contractual obligation of sustaining the subsidiary or carrying out another investment.

 

 (f) On the loss of control of a subsidiary, the remaining investment in the subsidiary, if any, is revalued to fair value against gain and loss from the sale and this fair value will represent the cost basis for the purpose of subsequent treatment.

 

 

- Amendments to IFRS 2 - Group Cash-settled Share-based Payment Transactions

In June 2009, the International Accounting Standards Board amended IFRS 2 to clarify its scope and the accounting for group cash-settled share-based payment transactions in the separate or individual financial statements of the entity receiving the goods or services when that entity has no obligation to settle the share-based payment transaction. The amendments also incorporate the guidance contained in the following Interpretations:

• IFRIC 8 Scope of IFRS 2

• IFRIC 11 IFRS 2-Group and Treasury Share Transactions.

 

The implementation of Amendments to IFRS 2 has had no impact on the reported results or financial position of the Company.

 

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