Mti Wireless Regulatory News (MWE)

19 Feb 2007 07:01

MTI Wireless Edge Limited19 February 2007 MTI WIRELESS EDGE LTD FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2006 MTI Wireless Edge Ltd., (ticker: MWE) ('MTI' or 'the Company'), a market leaderin the manufacture of flat panel antennas for fixed wireless broadband, today announces its audited full year results for the year ended 31 December 2006. 2006 Highlights €2006 revenue of $16.5m, increase of 41% over 2005; •Gross Profits of $7.3m, increase of 49% over 2005; •Profit before tax $3.8m, increase of 100% over 2005; •Net Profit of $3.6m, representing EPS of 7.36c, increase of 100% and 33%, respectively over 2005; •Net cash generated from continuing operations in 2006 reached $2.5m; Net cash at the year end of $13.2mequivalent to 12.5 pence per share; •Dividend of 1.67 c per share declared - total of $900k; •Successful admission to AIM in March 2006, raising £7m gross (US $12.2m) at 39p, including £1m of replacement capital; •Strong initial penetration into the radio frequency identification ("RFID") readers market Dov Feiner, Chief Executive of the Company: "2006 has been a landmark year forMTI. As well as our successful IPO and fund raising in March we have continuedto grow the business in terms of revenue and profits for each of the last 16quarters. "Our order pipeline for the coming year is healthy for both military andcommercial antennas and we view our prospects for 2007 with optimism." Contacts: MTI Wireless Edge +972 3 900 8900Dov Feiner, CEOMoni Borovitz, Financial Director Corporate Synergy Plc +44 20 7448 4400Luke AhernDavid Seal 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. Chairman's Statement I'm pleased to report for the first time as the chairman of MTI Wireless EdgeLtd. on its successful results for the financial year ended 31st December 2006,achieving 16 continuous quarters of revenue and profit growth. Since its foundation and subsequent acquisition by MTI Computers in 1994, theCompany has undergone significant development and changes from a purely militaryantenna company to a largely commercial entity that is operating within one ofthe most exciting wireless markets - the fixed broadband wireless access("FBWA"). Over the past few years, and particularly since 2003, the Company'sfocus on flat antenna technology has delivered continuous outstanding growth inboth revenue and profits and has positioned the company as a highly reputableantenna manufacturer among leading vendors. During 2006 a new board of directors of the company was elected as part of thepublic offering and I would like to take this opportunity and thank all boardmembers, previous ones and current for their support and efforts during the pastyears. The business enters 2007 in good health and with excellent opportunities forfurther growth. Winning a large military project early into the first quarter,together with penetration to RFID customers provides us with a wider productoffering for 2007, although the FBWA will continue to be dominant and it is ourbelief that this market should again provide us with material revenue prospectsin due course. The board has decided to distribute a dividend of 1.67 cents per share as westrongly believe it is in the interest of shareholders to receive a yearly yieldon their investment, while the company is managing its growth not only in termsof profits but also in cash generation. The dividend will be payable on 15 March2007 to shareholders on the register as at 2 March 2007. I would like to thank all the employees for their hard work, dedication andcreativity that had enabled the improvement in the business. I further wouldlike to acknowledge with thanks the employees' families for their continuedsupport. Finally, on behalf of MTI Wireless Edge I would like to thank our shareholdersfor their confidence and continued support and we look forward to a long mutualbeneficial association. Zvi BorovitzNon Executive Chairman Chief Executive's Review On behalf of management, I am delighted to report revenue growth of 40% for thefourth consecutive year. 2006 revenues of $16.5m were up 40%, and normalized PBTof $3.8m up 100% on 2005. The final quarter of 2006 was the sixteenthconsecutive period of quarter on quarter growth. MTI's successful IPO in March2006 provided not only a stronger balance sheet with the consequent increasedfinancial flexibility, but also strengthened the Company's standing with itspartners and customers. Finally, we have been delighted by the interest andsupport we have received from the Company's new shareholders ahead of and sincethe IPO. Crucial to MTI's success has been, and will continue to be, the hard work anddedication of its staff and their families' support. It is their commitment tomaintaining and expanding the Company's leadership position that is propellingMTI forward at such a rate. I would like to thank them for their continuouscontribution and their dedication to the company's success. The Company remains focused on the growth of the business and on furtherdeveloping its position as a leader in the antenna markets for fixed wirelesscommunication. Having captured a significant market share of 25% in the fixedbroadband wireless access, we have learned that in order to achieve solid andstable leadership positioning it is imperative to manage the growth of thecompany in each of its fields of activities. Our strategy aims to deliver not only top-line growth, but comprehensive,cross-company, managed growth in terms of geography, technology, range ofcompetences and customer base within our selected markets. We aim to strengthenthe Company's leadership standing within its markets of operation, and maintainour position as a first choice partner for antennas. We were able to achievethese goals in 2006 by gaining some additional original equipment manufacturer("OEM") customers as well as developing our distribution channels, which grew byapproximately 70% over 2005. Our penetration into Europe, partly through ourpartnerships, continued to increase and our sales to this continent represented22% of our revenues in 2006. In the past year leading companies such as Sprint, Clearwire, Alcatel, SiemensMotorola and Intel have chosen Wimax as their solution for future wirelessservices and solutions for 4G. Although this is only a starting point foradoption of mobile Wimax, which is only in trials and will continue to be so in2007, MTI is developing the base station antennas for such application to assureMTI enjoys this growth when it occurs. Although RFID is only in its initial stages we believe in the potential of thismarket and have made some important steps to position the Company as a keyantenna provider. We were able to penetrate Tier 1 customers, participate in thekey trials and provide a full range of reader's antennas for portals, forkliftand near field antennas. We foresee 2007 as a next step in key trials and planto be involved to ensure that MTI is well positioned to enjoy success once thismarket enters the deployment stage. Our military segment grew 32% in 2006. With the new naval contract win announcedseveral weeks ago we enter 2007 with a significant backlog for military ordersand hope to maintain this momentum and grow this segment by penetrating newmarkets and by utilizing new technologies. Looking ahead, management is optimistic that the current positioning in fixedbroadband wireless access and expansion into new markets such as RFID throughthis year, will deliver significant contribution to revenue and profit over thenext 12 months. We anticipate that establishing an operational set-up outside of Israel willresult in a solid foundation for continual growth for years to come. As always,our pipeline orders reflect several weeks, but the forecast for the year isbuilt from long term relationships with our leading customers and is based ontheir view of the market. The current pipeline comprises both militaryapplications and commercial ones and includes expansion of MTI's activities withboth existing and new customers, as well as of several wider-scale, innovativeopportunities. Dov FeinerChief Executive Officer M.T.I Wireless Edge Ltd.Income statement for the year ended December 31, 2006 Year ended December 31, 2006 2005 $'000 $'000 --------- -------- Revenues 16,463 11,694Cost of sales 9,159 6,780 --------- --------Gross profit 7,304 4,914 Research and development expenses 1,121 855Distribution costs 1,783 1,237General and administrative expenses, net 1,088 779 --------- --------Profit from operations 3,312 2,043Finance cost 102 191Finance income 574 355 --------- --------Profit before tax 3,784 1,879 Tax on profit from ordinary activities 161 130 --------- --------Profit for the year 3,623 1,749 ========= ========Earnings per shareBasic (dollars per share) 0.0736 * 0.0556 ========= ======== Diluted (dollars per share) 0.0708 * 0.0461 ========= ======== * Restated due to split of the Company's ordinary share in a ratio of 3,000 newshares for each 1 ordinary share, prior to the IPO in the AIM. M.T.I Wireless Edge Ltd.Balance sheets As at December 31, As at December 31, 2006 2006 2005 2005 $'000 $'000 $'000 $'000 ------ ----- ------ ------ASSETSNon-current assets:Property, plant and equipment(PPE) 1,435 1,441 Intangible assets 406 406Financial assets 32 26Deferred tax assets 69 51 ------ ------Total non-current assets 1,942 1,924 Current assets:Inventories 1,724 1,008Trade and other receivables 5,360 3,663Other financial assets 11,133 - Cash and cash equivalents 2,167 3,980 ------ ------Total current assets 20,384 8,651 ------ ------Total assets 22,326 10,575 ====== ====== M.T.I Wireless Edge Ltd.Liabilities and shareholders' equity As at December 31, As at December 31, 2006 2006 2005 2005 $'000 $'000 $'000 $'000 ----- ------ ----- ------LIABILITIESCurrent Liabilities:Trade and other payables 3,517 2,268Other financial liabilities 87 87 ----- -----Total current liabilities 3,604 2,335 Non-current liabilities:Financial liabilities 22 109Employee benefits 231 174 ----- -----Total Non-current liabilities 253 283 ------ ------Total liabilities 3,857 2,638 ------ ------TOTAL NET ASSETTS 18,469 7,937 ====== ====== 22,326 10,575 ====== ====== Capital and reservesattributable toequity holders of thecompanyShare capital 115 2Additional paid-in capital 16,357 7,561Retained earnings 1,997 374 ------ ------ 18,469 7,937 ------ ------TOTAL EQUITY 18,649 7,937 ====== ====== M.T.I Wireless Edge Ltd.Cash flow statement for the year ended 31 December 2006 For the year ended For the year ended December 31, December 31, 2006 2006 2005 2005 $'000 $'000 $'000 $'000 ------ ------ ------ ------Operating Activities:Net profit from ordinary activities 3,623 1,749 Adjustments for:Compensation expenses resulting from - 73options granted to employeesDepreciation and amortization 281 272Gain from short-term investments (340) (58)Income tax expense 161 130Issuance of share capital 79 - ------ ------Operating profit before changes 3,804 2,166in working capital and provisions Decrease (increase) in inventories (716) 309Increase in trade receivables (1,749) (1,178)Decrease (increase) in otheraccounts 43 (21)receivables for short and long termIncrease (decrease) in tradepayables 789 (128)Increase (decrease) in other 283 (50)accounts payablesSeverance pay, net 57 12 ------ ------Cash generated from operations 2,511 1,110 Income taxes paid 11 10 ------ ------Cash flows from operating activities carried forward 2,500 1,100 ------ ------ M.T.I Wireless Edge Ltd.Cash flow statement for the year ended 31 December 2006 (Cont.) For the year ended For the year ended December 31, December 31, 2006 2006 2005 2005 $'000 $'000 $'000 $'000 ------ ------ ------ ------Cash flows from operating activities 2,500 1,100brought forward Investing Activities:Sale (purchase) of short-terminvestment (10,793) 2,095Purchase of PPE (263) (112) ------- ------ (11,056) 1,983Financing Activities:Dividend paid to shareholders equity (2,000) -Issue of ordinary shares 8,830 -Repayment of bank borrowing (87) (87) ------- ------ 6,743 (87) Increase (decrease) in cash ------ ------ and cash equivalents (1,813) 2,996 ====== ====== Notes to Editors 1 Accounting policies Basis of preparationThe principal accounting policies adopted in the preparation of the financialstatements are set out below. The policies have been consistently applied to allthe years presented, unless otherwise stated. These financial statements have been prepared in accordance with InternationalFinancial Reporting Standards (IFRSs and IFRIC interpretations) issued by theInternational Accounting Standards Board (IASB) and with those parts of theCompanies Act 1985 applicable to companies preparing their accounts under IFRS.The financial statements have been prepared under the historical costconvention, as modified by the revaluation of financial assets and financialliabilities at fair value through profit or loss. 2 Turnover by geography The Company's secondary reporting format for reporting segment information isgeographic segments. External revenue by location of customers 2006 2005 $'000 $'000 -------- -------- Israel 7,996 5,666North America 3,738 3,422Europe 3,548 1,902Asia 1,029 476Other 152 228 ------ ------ 16,463 11,694 ====== ====== 3. Earnings per share 2006 2005 $'000 $'000 --------- --------- Earnings used in basic EPS 3,623 1,749Earnings used in diluted EPS 3,623 1,749 Weighted average number of shares used in basic EPS 49,262,202 *31,470,000 Effects of:employee share options 1,920,376 6,462,000 1,920,376 6,462,000 Weighted average number of shares ---------- -----------used in diluted EPS 51,182,578 *37,932,000 ========== =========== * Restated due to split of the Company's ordinary share in a ratio of 3,000 newshares for each 1 ordinary share, prior to the IPO in the AIM. 4. DividendFollowing the balance sheet date, the Company declared a dividend of 1.67c pershare which totals approximately 900,000 US$ to its shareholders. Shareholdersthat are listed on the Israeli register will be paid in US Dollars, whilstholders of depository interests will be paid in Pounds Sterling that will beconverted from US Dollars at the prevailing rate on 12 March 2007. The dividendwill be payable on 15 March 2007 to shareholders on the register as at 2 March2007. 5. The Annual Report and AccountsThe annual report and accounts for the year ending 31 December 2006 will beposted to shareholders on or before end of March, 2007 and copies will beavailable from the offices of Corporate Synergy Plc, 30 Old Broad Street, LondonEC2N 1HT. This information is provided by RNS The company news service from the London Stock Exchange