Mti Wireless Regulatory News (MWE)

16 Mar 2006 07:00

MTI WIRELESS EDGE LTD. ADMISSION TO AIM MTI Wireless Edge Ltd. ("MTI" or "the Company"), a market leader in themanufacture of flat panel antennas for fixed wireless broadband, is pleased toannounce that today its shares started to trade on AIM with the ticker "MWE".The Company designs and manufactures flat panel antennas, largely supplied tothe global original equipment manufacturers ("OEMs") of fixed broadbandwireless access systems. These products, originally designed to cope withrequirements of the company's first customers, the military forces, are robustand high performance. With over 35 years of technical `know-how', flexible highvolume manufacturing capabilities and low failure rates, MTI's antennas nowcomprise approximately 25% of the global fixed broadband wireless accessantenna market.The Company's nominated advisor and broker, Corporate Synergy Plc, placedapproximately 15.4 million new Ordinary Shares at 39 pence per share and theissue was well supported by investors in the UK, France and Israel. The newshares represent 28.61% of the share capital of the Company. In addition MTI'sparent company, Tel Aviv listed MTI Computers and Software Services (1982)Ltd., sold approximately 2.6 million ordinary shares.The placement and sale raised a total of ‚£7 million, representing ‚£6 million (‚£5.05 million net) new money to MTI and ‚£1 million to its parent company. At theplacing price MTI had a market capitalisation of approximately ‚£21 million anda free float at admission of 33%.MTI CEO Dov Feiner, commented, "Our IPO today gives us the resources tostrengthen our relationships with our international customer base. The world isgoing wireless and all wireless systems rely on quality antennas to perform. Inthis fast growing environment we need to protect our share of the fixedwireless broadband antenna market as well as apply our technology to newareas."For further information please contact:Moni Borovitz, Finance Director, MTI Wireless Edge Ltd. tel: +972 (0)3 900 8900David Seal / Luke Ahern, Corporate Synergy Plc tel: +44 (0)20 7448 4400Rob Newman, Shared Value tel: +44 (0)20 7321 5029NOTES TO EDITORS:MTI is a developer and manufacturer of sophisticated antennas and antennasystems, including antennas that are sold for use in worldwide interoperabilityfor microwave access ("WiMAX") compliant systems. Antennas transmit and receiveelectromagnetic waves wirelessly. The Company produces antennas ranging infrequency from 100 kilohertz ("KHz") to 40 gigahertz ("GHz"), for both militaryand commercial applications and has an international customer base.MTI's business has grown rapidly in recent years as wireless broadbandtechnology has increasingly become an established global commodity. Over 80 percent of the Company's sales are in the fixed wireless communications market,predominantly for broadband systems. The directors estimate that the Companyhas captured a 25 per cent global market share in the fixed broadband wirelessaccess ("FBWA") antenna market, largely via a number of leading OEMs who areMTI's customers.PRODUCTSThe Company offers more than 200 varieties of antennas for the FBWA market, aswell as antennas for other markets and uses. In 2005 the Company sold more than220,000 antennas, the overwhelming proportion of which were outdoor flat panelantennas for the FBWA market. MTI supplies antennas to a large number ofleading providers of wireless broadband connectivity solutions for integrationin their solution offerings, which in turn are sold across developed anddeveloping countries. The Company's antennas are typically mounted externallyon base stations and end-user premises and act as the enabling technology forwireless communications for those users.Wireless technology, which relies on communication antennas, offers manyadvantages over traditional fixed line/digital subscriber line ("DSL")technology, including: * faster deployment than wired systems (no need to install cable to every user); * higher bandwidth; * satisfying the demand for fundamental data and voice telecom services in un-served areas where wired infrastructure cannot do so; * lower upfront capital and maintenance costs (build out can be scaled both in terms of area coverage and capacity - each installed base station can support many subscribers); * it is ideal for developing countries and last mile access in cities; * true remote working (no need for fixed phone link cabling); * familiarity: wireless fidelity ("WiFi") is available to consumer lap-tops and is already user-friendly; and * multiple services using a single network. CommercialThe Company specialises in flat panel antennas, principally for fixed wirelesscommunication and also seeks to apply its technology for use in other markets.Fixed Wireless CommunicationThe Company's flat panel antennas incorporate proprietary technology, which ispartly protected by several patents registered in the US and Israel. Otherpatents are pending in Europe, Israel, the US and Canada.In the FBWA market, the Company's antennas are used in systems that providewireless broadband data and voice services for subscribers in the last mile.MTI's antennas can operate in licensed and licence-free bands ranging from 700megahertz ("MHz") to 18GHz in conformity with industry standards.In addition to these core products, the Company sells antenna mounting kits andenclosures which allow OEMs to introduce a low-cost system solution.Radio Frequency Identification ("RFID")In 2005, the Company achieved its first sales of antennas for readers foremerging RFID applications. RFID is a technology used to track assets in avariety of different applications, including those related to supply chainmanagement as an alternative to bar code technology. Very small RFIDtransponders or tags containing a unique identifier are placed on assets, forexample pallets, cases, or individual items and these tags communicate with theRFID readers. The Company has recently entered the market for RFID readers,which use several flat panel antennas. RFID requires very accurate antennas tosupport complex logistics management systems. RFID sales accounted for revenueof $0.15 million in 2005.MilitaryThe Company has over 35 years experience in developing, designing,manufacturing, testing and marketing specialised antennas in high frequency tomillimetre wave bands. These antennas are used for a wide range of systemsincluding communication, communication jamming, signal intelligence, electronicwarfare systems (passive and active) and spectrum monitoring. The Company alsoprovides a range of antenna arrays for direction finding systems, electronicsurveillance measure antennas for submarines and unmanned aerial vehiclesspecial antennas.Military antenna development keeps the Company at the forefront of antennatechnology, strengthening company research and development. The resultingknowledge is applied to commercial as well as military antenna designs. TheCompany's antennas have been installed on various airborne, ground, naval andsubmarine applications.The Company began targeting markets outside Israel several years ago and hassucceeded in penetrating Asia, Europe and North America with several types ofantennas. The Company is also a supplier of military antennas to the Israelidefence industry and foreign defence establishments. Military sales accountedfor revenue of $1.65 million in 2005.TECHNOLOGYThe Company's product development expertise is applied to both off-the-shelfproducts and contractengineering, for commercial and military applications.Materials EngineeringWhilst designing military antennas, MTI's engineering staff developedsignificant expertise in identifying and manipulating materials to optimiseantenna function. This expertise enables the Company to use a wide range ofmaterials in innovative ways to enhance the performance and durability of itscommercial antenna range. It also enables the Company to use less expensivematerials to reduce product costs, while maintaining performance.High GainThese antennas amplify relatively weak radio signals, traditionally throughgeometric focusing of radio waves by means of a horn or parabolic dish to acentral feed point. The Company has developed innovative means of amplifyingsignals that enable it to produce smaller, lower profile antennas with gainequivalent to traditional parabolic antennas.Wideband MatchingThe Company produces antennas for a wide range of frequencies which can be usedin systems transmitting and receiving on multiple, but not necessarilycontiguous, channels. In addition, wideband antennas enable a standardoff-the-shelf product to be used by service providers transmitting on a widerange of assigned frequencies.DevelopmentThe Company has control processes in place to track development time and coststhroughout the product development cycle. These controls provide timely warningof time or cost deviations and allow management to address and correctpotential problems at an early stage.THE MARKETCOMMERCIALBroadbandMaravedis Inc. (WiMAX, NLOS and broadband wireless access (sub 11GHz) worldwidemarket analysis 2004-2008 (February 2004)) have forecast that the sub-11GHzfixed broadband wireless system market, will grow from $430 million in 2003 tomore than $1.6 billion by the end of 2008. MTI believes that on average, theantenna market is 5-7 per cent of this system market.Growth of the wireless broadband market is currently driven by demand forbroadband connectivity. Increasing deregulation should open up thetelecommunications / internet access markets to new suppliers. As morecountries enable carriers and service providers to operate on a variety offrequencies, new broadband access markets are opening. Unlike the built-indelivery systems of wireline infrastructure to transfer voice and data,wireless technology requires the use of frequencies contained within a givenspectrum.Wireless broadband technology offers opportunity and growth potential tocarriers targeting emergingmarket sectors, such as small office and / or home office ("SOHO"), small andmedium enterprise ("SME") and many parts of the residential market because ofits bandwidth, low capital and operating costs and the ability to use thetechnology to deliver sophisticated data and voice services. Roth Capital (RothCapital Partners - WiMAX and the broadband wireless industry (10 February2005)) have forecast that the WiMAX systems are expected to lead the growth ofthe FBWA market from $560 million in 2004 to over $2 billion by 2010, led byresidential and SOHO market segments. The Asia Pacific region is expected to bethe dominant region for WiMAX systems. The Company supplies antennas that areintegrated into WiMAX compliant systems and intends to supply its products foruse in base stations that serve WiMAX compliant mobile devices.RFIDFirms and retailers ship hundreds of billions of units of goods annually.Technology analysts believe that RFID may become the tracking methodology ofchoice for an increasingly large percentage of that volume.Frost & Sullivan (world RFID-based applications markets A696-11 (2004)) haveforecast that there should be considerable upside for RFID despite manycompanies' reluctance to spend on new initiatives (particularly those involvingnew technology). The RFID market has grown at an estimated compound annualgrowth rate of 27 per cent since 2000. Frost & Sullivan have forecast that in2010, the RFID reader market (for all uses) should reach approximately $2billion.The RFID system consists of readers and tags. The reader reads the informationon the tag, which stores basic information about an item. The Company hasdesigned and started to deliver antennas for the reader part of the RFIDsolution as it believes that the technological capabilities of its antennas arewell suited for this application. These readers require flat antenna, similarto the ones developed for the FBWA market and therefore the Company canmanufacture RFID antennas at competitive prices. The market for readers wasestimated by Frost & Sullivan to be 25 per cent of the overall RFID market.MILITARYThe global military spend is projected by Cobham plc, a UK quoted company, toincrease over the next few years. There are two major reasons for thisincrease: first, the expected upgrades of existing command and control systemsand second the introduction of new communications systems.DIRECTORSBrief biographical details of each of the directors are set out below:Zvi Borovitz, Non-executive Chairman (age 67)Mr Borovitz is the founder of the Company and MTI Computers. Prior to this heworked at Elta Electronics Industries Ltd., a subsidiary of Israeli AircraftIndustries, where he gained experience in microwave systems and communicationsand was part of the team to develop the first Israeli airborne radar. Duringhis time at Elta he also managed an airborne electronic warfare programme. MrBorovitz has an MS in Electrical Engineering from the Polytechnic Institute ofBrooklyn.Dov Feiner, Chief Executive Officer (age 49)Mr Feiner has planned and implemented the Company's entry into the commercialantenna market. Prior to joining the Company, Mr Feiner served for 12 years inthe research and development division of the Israeli Defence Force. Mr Feinerholds a B.Sc. in Electrical and Computer Engineering from Ben GurionUniversity. Mr Feiner is responsible for the overall management of the Companyand its international and domestic activities.Moshe Borovitz, Finance Director (age 35)Mr Borovitz, the son of Zvi Borovitz, is also Co-Chief Executive Officer of MTIComputers. He was a consultant with Ernst & Young's Israeli affiliate KostForer & Gabbay, a leading Israeli certified public accountancy firm. MrBorovitz is a certified public accountant with a B.A. in Computer Science fromTel Aviv University, and has an MBA from Ben Gurion University. Mr Borovitz isresponsible for the Company's financial activities as its finance director,assisted by a group of professionals.Hanna Lerman, Non-executive Director (age 33)Hanna Lerman was Chief Financial Officer of SunGard Business Integration Ltd.,a subsidiary of SunGard Data Systems Inc., a global leader in software andprocessing solutions for financial services, and of Insider - Online FinancialServices Ltd., a provider of online trading services in Israel and NorthAmerica. Prior to that Ms. Lerman managed the department of professionalpractice at KPMG Israel. Ms. Lerman is a certified public accountant and holdsa B.A. in Economics and Accounting, and an MBA majoring in Finance from TelAviv University.Frank Lewis, Non-executive Director (age 60)Frank Lewis is a businessman with over 25 years of experience in both quotedand private companies. He has held board positions both in the UK and abroadwith rapidly growing, mid-market companies. Quoted companies of which he waschairman include Lloyds British Testing Plc, an engineering services company,Jetcam International Holdings Limited, a software company and Yoomedia Plc(Executive Chairman), an interactive television company. Mr Lewis is a memberof the Institute of Chartered Accountants of England and Wales and is also amember of The South African Institute of Chartered Accountants.Stewart Millman MA, FSI, Non-executive Director (age 57)Mr Millman has over 30 years' experience in finance and the financial markets.He was an institutional fund manager for 10 years and a corporate financier for20 years, and held managing director roles at Barclays de Zoete Wedd, NatWestMarkets and HSBC Investment Bank. His corporate finance experience includestransactions involving major telecoms operators and various IT companies. Since2002, he has been self-employed, is currently non-executive chairman ofPatsystems plc, a company traded on AIM, and acts as an adviser to, and/ornon-executive director of, various companies in the UK, Israel and elsewhere.ENDMTI WIRELESS EDGE LTD