Mti Wireless Regulatory News (MWE)

19 Nov 2007 07:02

MTI Wireless Edge Limited19 November 2007 MTI WIRELESS EDGE LTD FINANCIAL RESULTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2007 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 nine months ended 30 September 2007. In addition, the Company issues its restated figures for six months ended 30 June 2007 to reflect the restated warrants position. As announced in the RNS statement issued by the Company on 7 November 2007, the Company intends to identify the influence of the warrants registration separately on its profit and loss statement in its future financial reports, as the accounting treatment of these warrants does not affect the underlying trading, earnings, prospects and financial position of the Company. Highlights •Revenue increased by 21% year on year to US$14.3m (2006: US$11.8m) •Profit before tax up 44% year on year to US$3.5m (2006: US$2.4m) •Normalised profit before tax (without effect of warrants) up 19% year on year to US$3.0m (2006: US$2.5m) •Net profit improved by 42% year on year to US$3.3m (2006: US$2.3m) •Normalised net profit (without effect of warrants) up 16% year on year to US$2.8m (Q3 2006: US$2.4m) •Gross profit margin of 43% •Cash flow from operating activities of US$1.6m Dov Feiner, Chief Executive Officer, commented: "The Board is pleased to deliver another healthy set of figures for the 9 monthsended September 30 with the group producing a strong financial performance. Wehave seen extremely good demand for our products from our military customerswhilst our other divisions have remained buoyant. In addition, the group's orderbook continues to remain robust which leads us to view the foreseeable futurewith optimism. "Furthermore, the confidence shown in the potential of WiMax has deliveredsignificant benefits to the group as we continue to sell an increasing number ofWiMax compliant antennas. We have received every indication that this marketwill grow at a considerable pace which will have a positive impact on the groupgoing forward. "On 3 September, the Company was informed that Mokirei Aya Ltd., the controllingshareholder of MTI Computers and principal shareholder of the Company, hadsigned a share purchase agreement to sell all of its holdings in MTI Computers,constituting approximately 38.87% of the outstanding shares of MTI Computers,and for Inspire Investment Ltd., an Israeli public company, traded on the TelAviv Stock Exchange, to buy, subject to the completion of due diligence, for aconsideration of US$16,326,547." Contacts:MTI Wireless Edge +972 3 900 8900Dov Feiner, CEOMoni Borovitz, Financial Director Blue Oar Securities Plc +44 20 7448 4400Matthew MarchantShane Gallwey Daniel Stewart & Company +44 20 7776 6550Lindsay Mair Threadneedle Communications +44 207 936 9605Graham HerringJosh Royston About MTI Wireless Edge MTI designs and manufactures flat panel antennas, largely supplied tointernational OEMs of fixed broadband wireless access systems. With over 30years of technical 'know-how', flexible high volume manufacturing capabilitiesand low failure rates, MTI's antennas now comprise approximately 25% of theglobal fixed broadband wireless antenna market. In addition, the Company hassuccessfully developed products for new commercial applications as wirelesssystems become increasingly prevalent in new markets. STATEMENTS OF OPERATIONS For the nine months ended Year ended September 30 December 31 2007 (*)2006 (*)2006 U.S. $ in thousands Revenues 14,283 11,757 16,463 Cost of sales 8,108 6,559 9,159 Gross profit 6,175 5,198 7,304 Research and development expenses 1,076 875 1,121 Selling and marketing expenses 1,402 1,291 1,783 General and administrative expenses 948 798 1,088 Operating profit 2,749 2,234 3,312 Financial (income) expenses, net (757) (202) (644) Profit before taxation 3,506 2,436 3,956 Tax on profit 200 106 161 Net profit 3,306 2,330 3,795 Earnings per share: Basic 0.0615 0.0488 0.0770 Diluted 0.0607 0.0466 0.0741 Weighted average number of shares outstanding: Basic 53,779,998 47,734,124 49,262,202 Diluted 54,493,586 50,029,108 51,182,578 (*) Restated - see note 3. The accompanying notes form an integral part of the financial statements. BALANCE SHEETS 30.9.2007 (*) 31.12.2006 30.9.2006 U.S. $ In thousands ASSETSCURRENT ASSETS:Cash and cash equivalents 1,597 2,266 2,167Short-term investments 12,281 10,902 11,133Trade receivables 5,706 4,455 5,154Other receivables 178 213 206Inventories 2,163 1,598 1,724 Total current assets 21,925 19,434 20,384 LONG TERM PREPAID EXPENSES 49 28 32 PROPERTY AND EQUIPMENT, NET 1,522 1,401 1,435 OTHER ASSETS, NET 503 462 475 23,999 21,325 22,326 (*) Restated - see note 3. The accompanying notes form an integral part of the financial statements. 30.9.2007 (*) (*) 30.9.2006 31.12.2006 U.S. $ In thousandsLIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIES:Current maturities of long-term loans 43 85 87Trade payables 2,281 2,712 2,470Other accounts payables 1,009 1,013 1,047Liabilities due to warrants 729 1,484 1,240 Total current liabilities 4,062 5,294 4,844 LONG-TERM LIABILITIES:Liabilities to banks - 46 22Accrued severance pay 300 221 231 300 267 253 SHAREHOLDERS' EQUITYShare capital 115 115 115Additional paid-in capital 14,945 14,945 14,945Retained earnings 4,577 704 2,169 Total shareholders' equity 19,637 15,764 17,229 23,999 21,325 22,326 (*) Restated - see note 3. STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY For the nine months ended September 30, 2007: Share Additional Retained capital paid-in earnings capital Total U.S. $ in thousands Balance at January 1, 2007 115 14,945 2,169 17,229 Changes during the nine monthsended September 30, 2007:Dividend distributed - - (898) (898) Net profit - - 3,306 3,306 Balance at September 30, 2007 115 14,945 4,577 19,637 For the nine months ended September 30, 2006(*): Share Additional Retained capital paid-in earnings capital Total U.S. $ in thousands Balance at January 1, 2006 2 7,561 374 7,937 Changes during the nine monthsended September 30, 2006:Dividend distributed - - (2,000) (2,000) Issuance of share capital*** ** 79 - 79 Share capital as a result of split 80 (80) - - Additional capital raised in Aim 33 7,385 - 7,418listing ****Net profit - - 2,330 2,330 Balance at September 30, 2006 115 14,945 704 15,764 (*) Restated - see note 3.** Less than 1 thousands dollar.*** Exercise of options of employees to shares, grant of shares to directors and investors.**** Net of issuance expenses in the amount of $1,631 thousand. The accompanying notes form an integral part of the financial statements. STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY For the year ended December 31, 2006(*): Share Additional Retained capital paid-in earnings capital Total U.S. $ in thousands Balance at January 1, 2006 2 7,561 374 7,937 Changes in the year ended December31, 2006:Dividend distributed - - (2,000) (2,000) Issuance of share capital** * 79 - 79 Share capital as a result of split 80 (80) - - Additional capital raised in Aim 33 7,385 - 7,418listing ***Net profit - - 3,795 3,795 Balance at December 31, 2006 115 14,945 2,169 17,229 (*) Restated - see note 3.* Less than 1 thousands dollar.** Exercise of options of employees to shares, grant of shares to directors andinvestors.*** Net of issuance expenses in the amount of $1,631 thousand. The accompanying notes form an integral part of the financial statements. STATEMENTS OF CASH FLOWS For the nine months Year ended ended September 30 December 31 2007 (*)2006 (*)2006 U.S. $ in thousandsCash Flows from Operating Activities:Net profit 3,306 2,330 3,795Adjustments to reconcile net income to netcash providedby operating activities:Depreciation and amortization 229 207 281Gain from short-term investments (290) (313) (340)Deferred taxes (28) (14) (13)Issuance of share capital - 79 79Decrease in fair value of liabilities due to (512) 72 (172)warrantsChanges in operating assets and liabilities:(Increase) in inventories (439) (590) (716)(Increase) in trade receivables (552) (1,050) (1,749)Decrease in other accounts receivables for 10 52 43short and long termIncrease (decrease) in trade payables (152) 1,051 789Increase in other accounts payables (41) 414 446Severance pay, net 69 47 57 Net cash provided by (used in) operating 1,600 2,285 2,500activities (*) Restated - see note 3. The accompanying notes form an integral part of the financial statements. STATEMENTS OF CASH FLOWS For the nine months Year ended ended September 30 December 31 2007 (*)2006 (*)2006 U.S. $ in thousandsCash Flows From Investing Activities:Sale (purchase) of short-term investment (858) (10,589) (10,793)Purchase of property and equipment (348) (175) (263) Net cash (used in) provided by investing (1,206) (10,764) (11,056)activities Cash Flows From Financing Activities:Dividend distributed (898) (2,000) (2,000)Additional capital raised in Aim Listing, - 8,830 8,830netRepayment of long-term loans (66) (65) (87) Net cash used in financing activities (964) 6,765 6,743 INCREASE (DECREASE) IN CASH AND (570) (1,714) (1,813)CASH EQUIVALENTSCASH AND CASH EQUIVALENTS 2,167 3,980 3,980AT BEGINNING OF PERIOD CASH AND CASH EQUIVALENTS AT 1,597 2,266 2,167END OF PERIOD Appendix B - Non-cash activities: For the nine months Year ended ended September 30 December 31 2007 (*)2006 (*)2006 U.S. $ in thousands Purchase of property and equipment against 33 47 66trade payables (*) Restated - see note 3. The accompanying notes form an integral part of the financial statements. NOTES TO THE FINANCIAL STATEMENTS Note 1 - General:MTI wireless Edge Ltd. (hereafter - the Company) is an Israeli corporation. Itwas incorporated on December 30, 1998 as a wholly - owned subsidiary of M.T.I.Computers & Software Services (1982) Ltd. (hereafter - the Parent Company) andcommenced operations on July 1, 2000 and since March 2006, the Company's shareshave been traded on the AIM Stock Exchange The Company is engaged in the development, design, manufacture and marketing ofantennas. Note 2 - Significant Accounting Policies:The significant accounting policies applied in the annual financial statementsof the Company as of December 31, 2006 are applied consistently in these interimconsolidated financial statements.The company prepares its financial statements in accordance with theinternational reporting standards. Note 3 - Restatement:The company has restated the financial data for the periods ending 31.12.2006and 30.9.2006 in order to retroactively reflect the change made in theaccounting treatment of warrants granted to certain investors.The restatement relates to the 3,730,631 warrants (the "Warrants") provided tocertain investors. These Warrants contain an option to be exercised on a"cashless" basis (allowing the investors to get less shares but with no paymentfor the exercise, resulting in a lower dilution to existing shareholders). TheseWarrants should have been recorded at their fair value as a liability instead ofCompany's equity on the IPO date, and thereafter in each financial reportingstatement be marked to market by adjusting the liability against financialincome or expenses as applicable. A. Following are the effects of the restatement on the balance sheet items (inUS$ thousands):As of 30.9.2006: Prior to the Net change Following the restatement restatement Liabilities due to warrants - 1,484 1,484Additional paid-in capital 16,357 (1,412) 14,945Retained earnings 776 (72) 704 Note 3 - Restatement (Cont.):As of 31.12.2006: Prior to the Net change Following the restatement restatement Liabilities due to warrants - 1,240 1,240Additional paid-in capital 16,357 (1,412) 14,945Retained earnings 1,997 172 2,169 B. Following are the effects of the restatement on the statement of operationsitems (in US$ thousands):For the period ended 30.9.2006: Prior to the Net change Following the restatement restatement Financial (income) expenses, net (274) 72 (202)Net profit 2,402 (72) 2,330 For the period ended 31.12.2006: Prior to the Net change Following the restatement restatement Financial (income) expenses, net (472) (172) (644)Net profit 3,623 172 3,795 C. Following are the effects of the restatement on the earnings, per share:For the period ended 30.9.2006: Prior to the Net change Following the restatement restatement Basic 0.0503 (0.0015) 0.0488Diluted 0.0480 (0.0014) 0.0466For the period ended 31.12.2006: Prior to the Net change Following the restatement restatement Basic 0.0736 0.0034 0.0770Diluted 0.0708 0.0033 0.0741 Restated figures for six months ended 30 June 2007 to reflect the restated warrants position STATEMENTS OF OPERATIONS For the six months ended Year ended June 30 Dec 31 (*)2007 (*)2006 (*)2006 U.S. $ in thousands Revenues 9,731 7,290 16,463Cost of sales 5,587 4,061 9,159 Gross profit 4,144 3,229 7,304Research and development expenses 700 506 1,121Selling and marketing expenses 968 893 1,783General and administrative expenses 600 480 1,088 Operating profit 1,876 1,350 3,312Financial (income) expenses, net (591) (407) (644) Profit before taxation 2,467 1,757 3,956Tax on profit 249 58 161 Net profit 2,218 1,699 3,795 Earnings per share:Basic 0.0412 0.0381 0.0770 Diluted 0.0406 0.0355 0.0741 Weighted average number of sharesoutstanding:Basic 53,779,998 44,644,010 49,262,202 Diluted 54,598,079 47,887,383 51,182,578 (*) Restated - see note 3. The accompanying notes form an integral part of the financial statements. BALANCE SHEETS (*) (*) (*) 30.6.2007 30.6.2006 31.12.2006 U.S. $ In thousands ASSETSCURRENT ASSETS:Cash and cash equivalents 1,241 1,495 2,167Short-term investments 12,076 10,678 11,133Trade receivables 5,680 4,168 5,154Other receivables 169 181 206Inventories 2,034 1,287 1,724 Total current assets 21,200 17,809 20,384 LONG TERM PREPAID EXPENSES 60 28 32 PROPERTY AND EQUIPMENT, NET 1,541 1,415 1,435 OTHER ASSETS, NET 507 458 475 23,308 19,710 22,326 (*) Restated - see note 3. The accompanying notes form an integral part of the financial statements. (*) (*) (*) 30.6.2007 30.6.2006 31.12.2006 U.S. $ In thousandsLIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIES:Current maturities of long-term loans 65 87 87Trade payables 2,298 2,229 2,470Other accounts payables 1,212 883 1,047Liabilities due to warrants 907 1,105 1,240 Total current liabilities 4,482 4,304 4,844 LONG-TERM LIABILITIES:Liabilities to banks - 65 22Accrued severance pay 277 208 231 277 273 253 SHAREHOLDERS' EQUITYShare capital 115 115 115Additional paid-in capital 14,945 14,945 14,945Retained earnings 3,489 73 2,169 Total shareholders' equity 18,549 15,133 17,229 23,308 19,710 22,326 (*) Restated - see note 3. STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY For the six months ended June 30, 2007(*): Share Additional Retained capital paid-in earnings capital Total U.S. $ in thousands Balance at January 1, 2007 115 14,945 2,169 17,229 Changes during the six monthsended June 30, 2007:Dividend distributed - - (898) (898) Net profit - - 2,218 2,218 Balance at June 30, 2007 115 14,945 3,489 18,549 (*) Restated - see note 3.For the six months ended June 30, 2006(*): Share Additional Retained capital paid-in earnings capital Total U.S. $ in thousands Balance at January 1, 2006 2 7,561 374 7,937 Changes during the six monthsended June 30, 2006:Dividend distributed - - (2,000) (2,000) Issuance of share capital*** ** 79 - 79 Share capital as a result of split 80 (80) - - Additional capital raised in Aim 33 7,385 - 7,418listing ****Net profit - - 1,699 1,699 Balance at June 30, 2006 115 14,945 73 15,133 (*) Restated - see note 3.** Less than 1 thousands dollar.*** Exercise of options of employees to shares, grant of shares to directors andinvestors.**** Net of issuance expenses in the amount of $1,631 thousand. The accompanying notes form an integral part of the financial statements. STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY For the year ended December 31, 2006(*): Share Additional Retained capital paid-in earnings capital Total U.S. $ in thousands Balance at January 1, 2006 2 7,561 374 7,937 Changes in the year ended December31, 2006:Dividend distributed - - (2,000) (2,000) Issuance of share capital** * 79 - 79 Share capital as a result of split 80 (80) - - Additional capital raised in Aim 33 7,385 - 7,418listing ***Net profit - - 3,795 3,795 Balance at December 31, 2006 115 14,945 2,169 17,229 * Less than 1 thousands dollar.** Exercise of options of employees to shares, grant of shares to directors andinvestors.*** Net of issuance expenses in the amount of $1,631 thousand. (*) Restated - see note 3. The accompanying notes form an integral part of the financial statements. STATEMENTS OF CASH FLOWS For the six months Year ended ended June 30 December 31 (*)2007 (*)2006 (*)2006 U.S. $ in thousandsCash Flows from Operating Activities:Net profit 2,218 1,699 3,795Adjustments to reconcile net income to netcash providedby operating activities:Depreciation and amortization 151 138 281Gain from short-term investments (173) (149) (340)Deferred taxes (32) (8) (13)Issuance of share capital - 79 79Decrease in fair value of liabilities due to (333) (307) (172)warrantsChanges in operating assets and liabilities:(Increase) in inventories (310) (279) (716)(Increase) in trade receivables (526) (763) (1,749)Decrease in other accounts receivables for 9 82 43short and long termIncrease (decrease) in trade payables (130) 563 789Increase in other accounts payables 165 284 446Severance pay, net 46 34 57 Net cash provided by (used in) operating 1,085 1,373 2,500activities (*) Restated - see note 3. The accompanying notes form an integral part of the financial statements. STATEMENTS OF CASH FLOWS For the six months Year ended ended June 30 December 31 (*)2007 (*)2006 (*)2006 U.S. $ in thousandsCash Flows From Investing Activities:Sale (purchase) of short-term investment (770) (10,529) (10,793)Purchase of property and equipment (299) (115) (263) Net cash (used in) provided by investing (1,069) (10,644) (11,056)activities Cash Flows From Financing Activities:Dividend distributed (898) (2,000) (2,000)Additional capital raised in Aim Listing, - 8,830 8,830netRepayment of long-term loans (44) (44) (87) Net cash used in financing activities (942) 6,786 6,743 INCREASE (DECREASE) IN CASH AND (926) (2,485) (1,813)CASH EQUIVALENTSCASH AND CASH EQUIVALENTS 2,167 3,980 3,980AT BEGINNING OF PERIOD CASH AND CASH EQUIVALENTS AT 1,241 1,495 2,167END OF PERIOD Appendix A - Non-cash activities: For the six months Year ended ended June 30 December 31 (*)2007 (*)2006 (*)2006 U.S. $ in thousands Purchase of property and equipment against 24 52 66trade payables (*) Restated - see note 3. The accompanying notes form an integral part of the financial statements. NOTES TO THE FINANCIAL STATEMENTS Note 1 - General:MTI Wireless Edge Ltd. (hereafter - the Company) is an Israeli corporation. Itwas incorporated on December 30, 1998 as a wholly - owned subsidiary of M.T.I.Computers & Software Services (1982) Ltd. (hereafter - the Parent Company) andcommenced operations on July 1, 2000 and since March 2006, the Company's shareshave been traded on the AIM Stock Exchange The Company is engaged in the development, design, manufacture and marketing ofantennas. Note 2 - Significant Accounting Policies:The significant accounting policies applied in the annual financial statementsof the Company as of December 31, 2006 are applied consistently in these interimconsolidated financial statements.The company prepares its financial statements in accordance with theinternational reporting standards. Note 3 - Restatement:The company has restated the financial data for the periods ending 30.6.2007,30.12.2006 and 30.6.2006 in order to retroactively reflect the change made inthe accounting treatment of warrants granted to certain investors.The restatement relates to the 3,730,631 warrants (the "Warrants") provided tocertain investors. These Warrants contain an option to be exercised on a"cashless" basis (allowing the investors to get less shares but with no paymentfor the exercise, resulting in a lower dilution to existing shareholders). TheseWarrants should have been recorded at their fair value as a liability instead ofCompany's equity on the IPO date, and thereafter in each financial reportingstatement be marked to market by adjusting the liability against financialincome or expenses as applicable. A. Following are the effects of the restatement on the balance sheet items (inUS$ thousands): As of 30.6.2007: Prior to the Net change Following the restatement restatement Liabilities due to warrants - 907 907Additional paid-in capital 16,357 (1,412) 14,945Retained earnings 2,984 505 3,489 Note 3 - Restatement (Cont.):A. (cont.):As of 30.6.2006: Prior to the Net change Following the restatement restatement Liabilities due to warrants - 1,105 1,105Additional paid-in capital 16,357 (1,412) 14,945Retained earnings (234) 307 73 As of 31.12.2006: Prior to the Net change Following the restatement restatement Liabilities due to warrants - 1,240 1,240Additional paid-in capital 16,357 (1,412) 14,945Retained earnings 1,997 172 2,169 B. Following are the effects of the restatement on the statement of operationsitems (in US$ thousands): For the period ended 30.6.2007: Prior to the Net change Following the restatement restatement Financial (income) expenses, net (258) (333) (591)Net profit 1,885 333 2,218 For the period ended 30.6.2006: Prior to the Net change Following the restatement restatement Financial (income) expenses, net (100) (307) (407)Net profit 1,392 307 1,699 Note 3 - Restatement (Cont.):B. (cont.): For the period ended 31.12.2006: Prior to the Net change Following the restatement restatement Financial (income) expenses, net (472) (172) (644)Net profit 3,623 172 3,795 C. Following are the effects of the restatement on the earnings, per share: For the period ended 30.6.2007: Prior to the Net change Following the restatement restatement Basic 0.0351 0.0061 0.0412Diluted 0.0345 0.0061 0.0406 For the period ended 30.6.2006: Prior to the Net change Following the restatement restatement Basic 0.0312 0.0069 0.0381Diluted 0.0295 0.0060 0.0355 For the period ended 31.12.2006: Prior to the Net change Following the restatement restatement Basic 0.0736 0.0034 0.0770Diluted 0.0708 0.0033 0.0741 This information is provided by RNS The company news service from the London Stock Exchange