Mti Wireless Regulatory News (MWE)

12 November 2012

MTI Wireless Edge Ltd

("MTI" or the "Company")

Financial results for the nine months ended 30 September 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 nine months ended 30 September 2012.

Highlights

·; Continued progress in third quarter

·; Gross profit margins increase to 37.6% in Q3 (Q2 2012: 34.9%)

·; Profit from operations in Q3 was at US$56k, a margin of 2%, (Q2 2012: US$19k)

·; Strong cash flow from operations in Q3 generating US$0.56m (Q2 2012: $3k)

·; Net profit of US$102k in Q3 (Q2 2012: US$74k loss)

·; Revenue for the 9 months was US$9.5m (9 months to Q3 2011: US$11.1m)

·; Net loss for the 9 months was US$355k (9 months to Q3 2011: profit of US$133k)

·; Cash, cash equivalents and marketable securities remain strong at US$7m

Dov Feiner, Chief Executive Officer, commented:

"I am pleased to announce that the upturn which commenced in the second quarter has gained momentum, with a net profit of US$102k in the latest three months. The cost saving measures implemented after the testing first quarter continued to flow through with gross margins in the latest quarter improving to 37.6%, a gain of more than two and a half points over the previous three months. Cash generation was also strong in the period at US$0.56m and the balance sheet remains very robust.

"Our commercial activities have been the dominant contributor so far this year. To date the division's revenue is off 4% at US$8.1m for the nine months compared with the previous year, but with improved margins as a result of tight cost controls and a better mix of products, the division contributed a profit of US$285k to the Group during the first nine months of 2012. In particular our 80GHz product line has been a major part of this growth and we believe this will continue to be a major factor for the rest of the year. Our military business is a project based operation and therefore inevitably experiences an uneven revenue flow. This year, to date, delays to some orders have held the business in check but we are very optimistic that we will achieve a positive outcome for a number of tenders we are progressing.

"Overall, we have made solid progress after a difficult first quarter thanks to a combination of cost savings and improving revenues and the Board believes this trend will continue for the rest of the year. Beyond that, the Board remains optimistic that the outlook for the Group remains positive even though, in the current worldwide economic environment, optimism must be balanced by a degree caution."

Contacts:

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

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

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the Nine months ended September 30, 2012:

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

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the Nine months ended September 30, 2011:

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

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended December 31, 2011:

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

INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION

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

INTERIM CONSOLIDATED STATEMENT 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.

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:

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, 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 September 30, 2012 have not been audited.

The interim consolidated financial information should be read in conjunction with the annual financial statements as of 31 December, 2011 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, 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 Nine months ended September 30, 2012 and 2011, respectively and for the year ended December 31 ,2011.

(*) 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 Company and other related parties provide 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 September 30, 2012 the parent company and related parties owe to the Group US $72,000 while in December 31, 2012 and in September 30, 2011 the Group owed to the parent group and related party US $5,000 and US $19,000 respectively. 

Note 5 - SIGNIFICANT EVENTS:

Contingent liability:

Due to a hearing sessionsheld during May 2012 by the District Court in Mars lawsuit (as specified in note 24 to the Annual Report for December 31, 2011), the Company updated the provision recorded by the amount of US $280,000 as at June 30, 2012.