Mti Wireless Regulatory News (MWE)

17 May 2012

MTI Wireless Edge Ltd

("MTI" or the "Company")

Financial results for the three months ended 31 March 2012

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 2012.

Highlights

·; Revenue of US$3.2m (Q1 2011: US$3.7m)

·; Gross profits of US$1.1m (Q1 2011: US$1.3m)

·; Loss before tax of US$351k after US$300k litigation provision (Q1 2011: US$65k profit)

·; Gross cash, cash equivalents and marketable securities remain strong at $7m after $1m dividend distribution in December 2011

Dov Feiner, Chief Executive Officer, commented:

"The three months to the end of March 2012 experienced a US$0.5m decline in revenues against the first quarter of 2011 which resulted in a reduction in gross profits of approximately US$0.2m. Revenue within our commercial operations increased with strong demand for our 80GHz antenna product range. However, after the strong growth for our Military business last year, reflecting major contracts won in 2010, we experienced a quieter start to the current year and Military revenue more than halved to US$405k in the quarter with a resulting sharp drop into losses within that segment, leaving the Group, overall, with a pre-tax loss.

"Yet, despite the low level of Military revenue in the first quarter, we remain optimistic that this division will recover in the remainder of the year. Indeed, we entered the second quarter of the year with a stronger order book, supported by strong bookings early this quarter to a current order book of US$5.1m for the remainder of this year, mostly in Q2 and Q3. This with continued progress from our commercial activities we remain confident in the long term growth prospects of the Company."

"In tandem we have attended several court hearings since the beginning of 2012 relating to a long running litigation that has been ongoing since 2005. The Board believes that the situation is now close to reaching a settlement and therefore it has decided to update the provision in the accounts under contingent liabilities by a further US$300k which is recognised as a G&A expenses of the reported quarter."

Contacts:

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.

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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, 2012:

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, 2011:

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, 2011:

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

INTERIM CONSOLIDATED STATMENTE OF

FINANCIAL POSITION

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

INTERIM CONSOLIDATED STATMENTE OF

FINANCIAL POSITION

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

INTERIM CONSOLIDATED STATEMENTS OF

CASH FLOWS

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

 INTERIM CONSOLIDATED STATEMENTS OF

CASH FLOWS

Appendix A - Non-cash activities:

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 percentage changes in the reporting period:

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 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 31 December 2011 was approved by the board on February 16, 2012. The report of the auditors on those financial statements was unqualified. The interim consolidated financial statements as of 31 March 2012 have not been audited.

The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2011 are applied consistently in these interim consolidated financial statements.

Note 3 - SEGMENTS:

The following table's present revenue and profit information regarding the Group's operating segments for the there months ended March 31, 2012 and 2011, respectively.

 (*) 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 4 -TRANSACTIONS WITH RELATED PARTIES:

The Parent Group and other related party provides certain services to the Group as follows:

Compensation of key management personnel of the Group:

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

Note 4 -TRANSACTIONS WITH RELATED PARTIES (CONT.):

All Transactions are made at market value.

As of March 31, 2012 the parent group and related party owes to the Group US $43,000 while in 31 March 2011 the Group owed to the parent group and related party US $121,000. 

Note 5 - SIGNIFICANT EVENTS:

During the current quarter the Company used US$ 0.5 million out of US$ 4 million credit line from banking corporation. The Company pledged its financial assets as collateral for this line of credit.

NOTE 6 - SUBSEQUENT EVENTS:

Contingent liability

Due to a hearing sessionsheld during 2012 by the District Court in Mars lawsuit (as specified in note 25 to the Annual Report for December 31, 2011), the Company updated the provision recorded by the amount of US $300,000.