Last checked at 8 May 2009 07:00
8 May 2009
MTI Wireless Edge Ltd ('MTI' or the 'Company')
Financial results for the three months ended 31 March 2009
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 2009.
Highlights
Revenue decreased by 18% year on year to US$3.4m (Q1 2008: US$4.2m)
Q1 operating profit of US$76,000
Growth in Military and RFID sectors
Cash balance and equivalents of US$13.4m as at 31 March 2009, similar to 31 December 2008
Dov Feiner, Chief Executive Officer, commented:
"Results for the first quarter of 2009 have been disappointing in terms of both revenue and profit, however the Company still achieved an operating profit for the quarter despite difficult market conditions. With this in mind, the Board has continued to take a rigorous approach to cutting costs on all levels.
"As commented at the full year results, the current economic climate combined with reduced telecommunications infrastructure spend has reduced the visibility of the forward order book. The Company has witnessed a softening in our key market of Fixed Broadband, however, we have seen good growth in our military division as well as growth in our RFID operations.
"Although the short term visibility continues to be uncertain, we remain confident in the long term growth prospects of the Company. Whilst MTI continues to have a strong balance sheet, the Board considers it prudent to manage its cash position, which remained unchanged in the quarter, efficiently and will be reviewing its buy back policy."
Contacts:
MTI Wireless Edge +972 3 900 8900
Dov Feiner, CEO
Moni Borovitz, Financial Director
Noble & Company Limited +44 207 763 2200
John Llewellyn-Lloyd
Brian Stockbridge
Threadneedle Communications +44 207 653 9850
Graham Herring
Josh Royston
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.
CONSOLIDATED BALANCE SHEETS
| 31.3.2009 | 31.3.2008 | 31.12.2008 | |||
| U.S. $ in thousands | |||||
| ASSETS | |||||
| CURRENT ASSETS: | |||||
| Cash and cash equivalents | 3,903 | 3,031 | 3,806 | ||
| Other financial assets | 9,490 | 10,804 | 9,527 | ||
| Trade receivables | 4,701 | 6,537 | 5,898 | ||
| Other receivables | 210 | 272 | 217 | ||
| Inventories | 2,431 | 2,194 | 2,571 | ||
| Total current assets | 20,735 | 22,838 | 22,019 | ||
| LONG TERM PREPAID EXPENSES | 37 | 55 | 49 | ||
| PROPERTY AND EQUIPMENT, NET | 1,687 | 1,506 | 1,671 | ||
| GOODWILL | 406 | 406 | 406 | ||
| DEFERRED TAX ASSETS | 110 | 228 | 117 | ||
| 22,975 | 25,033 | 24,262 | |||
The accompanying notes form an integral part of the financial statements.
| 31.3.2009 | 31.3.2008 | 31.12.2008 | ||||
| U.S. $ in thousands | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| CURRENT LIABILITIES: | ||||||
| Trade payables | 1,520 | 2,401 | 2,565 | |||
| Other accounts payables | 737 | 728 * | * 964 | |||
| Tax liability | 458 | 431 | 374 | |||
| Liabilities due to warrants | - | 164 | - | |||
| Total current liabilities | 2,715 | 3,724 | 3,903 | |||
| NON- CURRENT LIABILITIES: | ||||||
| Employee benefits | 215 | 297 | 232 | |||
| Provisions | 27 | 32 * | * 30 | |||
| Total non-current liabilities | 242 | 329 | 262 | |||
| SHAREHOLDERS' EQUITY | ||||||
| Share capital | 109 | 112 | 109 | |||
| Additional paid-in capital | 14,945 | 14,945 | 14,945 | |||
| Employee equity benefits reserve | 44 | - | 29 | |||
| Retained earnings | 4,915 | 5,923 | 5,014 | |||
| Total shareholders' equity | 20,013 | 20,980 | 20,097 | |||
| Minority interests | 5 | - | - | |||
| Total equity | 20,018 | 20,980 | 20,097 | |||
| 22,975 | 25,033 | 24,262 | ||||
| May 7, 2009 | ||||
| Date of approval of financial statements | Moshe Borovitz Finance Director | Dov Feiner Chief Executive Officer | Zvi Borovitz Non-executive Chairman |
(*) Reclassified
CONSOLIDATED STATEMENTS OF OPERATIONS
| For the three months ended March 31, | Year ended December 31, | ||||
| 2009 | 2008 | 2008 | |||
| U.S. $ in thousands | |||||
| Revenues | 3,429 | 4,200 | 17,923 | ||
| Cost of sales | 2,259 | 2,666 | 11,523 | ||
| Gross profit | 1,170 | 1,534 | 6,400 | ||
| Research and development expenses | 226 | 370 | 1,329 | ||
| Distribution costs | 488 | 577 | 2,374 | ||
| General and administrative expenses | 380 | 381 | 1,824 | ||
| Profit from operations | 76 | 206 | 873 | ||
| Finance expense | 73 | 115 | 266 | ||
| Finance income | 107 | 266 | 640 | ||
| Profit before tax | 110 | 357 | 1,247 | ||
| Tax expense (income) | 209 | (132) | 254 | ||
| Net profit (loss) | (99) | 489 | 993 | ||
| Earnings per share | |||||
| Basic and Diluted (dollars per share) | (0.0019) | 0.0091 | 0.0189 | ||
| Weighted average number of shares outstanding | |||||
| Basic and Diluted | 51,571,990 | 53,544,529 | 52,480,041 | ||
The accompanying notes form an integral part of the financial statements.
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
For the three months ended March 31, 2009:
| Attributed to equity holders of the company | |||||||||||||
| Share capital | Additional paid-in capital | Employee equity benefits reserve | Retained earnings | Total | Minority interest | Total equity | |||||||
| Unaudited | U.S. $ in thousands | ||||||||||||
| Balance at January 1, 2009(Audited) | 109 | 14,945 | 29 | 5,014 | 20,097 | - | 20,097 | ||||||
| Changes during the three months ended March 31, 2009: | |||||||||||||
| Net loss | - | - | - | (99) | (99) | - | (99) | ||||||
| Total recognized income and expense for the period | - | - | - | (99) | (99) | - | (99) | ||||||
| Issue of capital to minority in subsidiary | - | - | - | - | 5 | 5 | |||||||
| Share based payment | - | - | 15 | - | 15 | - | 15 | ||||||
| Balance at March 31, 2009 | 109 | 14,945 | 44 | 4,915 | 20,013 | 5 | 20,018 | ||||||
The ac companying notes form an integral part of the financial statements.
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
For the three months ended March 31, 2008:
| Attributed to equity holders of the company | |||||||||||||
| Share capital | Additional paid-in capital | Employee equity benefits reserve | Retained earnings | Total | Minority interest | Total equity | |||||||
| Unaudited | U.S. $ in thousands | ||||||||||||
| Balance at January 1, 2008(Audited) | 115 | 14,945 | - | 5,911 | 20,971 | - | 20,971 | ||||||
| Changes during the three months ended March 31, 2008: | |||||||||||||
| Net loss | - | - | - | 489 | 489 | - | 489 | ||||||
| Total recognized income and expense for the period | - | - | - | 489 | 489 | - | 489 | ||||||
| Buyback purchase of stock | (3) | - | - | (477) | (480) | - | (480) | ||||||
| Balance at March 31, 2008 | 112 | 14,945 | - | 5,923 | 20,980 | - | 20,980 | ||||||
The ac companying notes form an integral part of the financial statements.
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
For the year ended December 31, 2008:
| Attributed to equity holders of the company | |||||||||||||
| Share capital | Additional paid-in capital | Employee equity benefits reserve | Retained earnings | Total | Minority interest | Total equity | |||||||
| Audited | U.S. $ in thousands | ||||||||||||
| Balance at January 1, 2008 | 115 | 14,945 | - | 5,911 | 20,971 | - | 20,971 | ||||||
| Changes during 2008: | |||||||||||||
| Profit for the year | - | - | - | 993 | 993 | - | 993 | ||||||
| Total recognized income and expense for the year | - | - | - | 993 | 993 | - | 993 | ||||||
| Dividends | - | - | - | (979) | (979) | - | (979) | ||||||
| Buy back purchase of stock | (6) | - | (911) | (917) | - | (917) | |||||||
| Share based payment | - | - | 29 | - | 29 | - | 29 | ||||||
| Balance at December 31, 2008 | 109 | 14,945 | 29 | 5,014 | 20,097 | - | 20,097 | ||||||
The ac companying notes form an integral part of the financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the three months ended March 31, | Year ended December 31, | ||||||||||
| 2009 | 2008 | 2008 | |||||||||
| U.S. $ in thousands | |||||||||||
| Unaudited | Unaudited | Audited | |||||||||
| Cash Flows from Operating Activities: | |||||||||||
| Net profit (loss) | (99) | 489 | 993 | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation | 91 | 81 | 332 | ||||||||
| Gain from short-term investments | (109) | (114) | (6) | ||||||||
| Equity settled share-based payment expense | 15 | - | 29 | ||||||||
| Decrease in fair value of liabilities due to warrants | - | (134) | (298) | ||||||||
| Tax expense (Income) | 209 | (132) | 254 | ||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Decrease (increase) in inventories | 140 | 59 | (318) | ||||||||
| Decrease (Increase) in trade receivables | 1,197 | (289) | 350 | ||||||||
| Decrease (increase) in other accounts receivables for short and long term | 19 | (151) | (90) | ||||||||
| Decrease in trade payables | (1,052) | (228) | (43) | ||||||||
| Increase (decrease) in other accounts payables | (227) | 161 | 397 | ||||||||
| Increase (decrease) in provisions | (3) | 2 | - | ||||||||
| Increase (decrease) in employee benefits | (17) | 31 | (34) | ||||||||
| Income tax paid | (118) | (64) | (396) | ||||||||
| Net cash (used in) provided by operating activities | 46 | (289) | 1,170 | ||||||||
The accompanying notes form an integral part of the financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the three months ended March 31, | Year ended December 31, | |||||||
| 2009 | 2008 | 2008 | ||||||
| U.S. $ in thousands | ||||||||
| Unaudited | Unaudited | Audited | ||||||
| Cash Flows From Investing Activities: | ||||||||
| Sale of short-term investment, net | 146 | 513 | 1,682 | |||||
| Purchase of property and equipment | (100) | (61) | (498) | |||||
| Net cash provided by investing activities | 46 | 452 | 1,184 | |||||
| Cash Flows From Financing Activities: | ||||||||
| Dividend paid to shareholders equity | - | - | (979) | |||||
| Issue of capital to minority in subsidiary | 5 | - | - | |||||
| Buyback purchase of stock | - | (480) | (917) | |||||
| Repayment of bank borrowing | - | (22) | (22) | |||||
| Net cash (used in) provided by financing activities | 5 | (502) | (1,918) | |||||
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 97 | (339) | 436 | |||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 3,806 | 3,370 | 3,370 | |||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | 3,903 | 3,031 | 3,806 | |||||
Appendix A - Non-cash activities:
| For the three months ended March 31, | Year ended December 31, | |||||||
| 2009 | 2008 | 2008 | ||||||
| U.S. $ in thousands | ||||||||
| Purchase of property and equipment against trade payables | 31 | 45 | 24 | |||||
The accompanying notes form an integral part of the financial statements.
NOTES TO THE FINANCIAL STATEMENTS
Note 1 - General:
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 & 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.
On March 2008, the company has invested in establishing of a wholly owned subsidiary Switzerland based AdvantCom Sarl, (hereinafter called AdvantCom). AdvantCom is engaged in selling and distributing of antennas and accessories and in manufacturing through an Indian subsidiary.
During this quarter, pursuant to the founder's agreement, 20 present of the issued and outstanding share capital of GlobalWave Technologies PVT. Ltd (formerly a wholly owned Indian based subsidiary of AdvantCom) were allotted to investors in return to approximately $5,000
Note 2 - Significant Accounting Policies:
The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2008 are applied consistently in these interim consolidated financial statements.
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").
Basis of consolidation
Where the company has the power, either directly or indirectly, to govern the financial and operating policies of another entity or business so as to obtain benefits from its activities, it is classified as a subsidiary.
The consolidated financial statements present the results of the company and its subsidiaries ("the group") as if they formed a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
NOTE 3 - SIGNIFICANT EVENTS:
In March 16, 2009, Warrants granted prior to the IPO, to certain investors and service provided expired.
Note 4 -Subsequent EVENTS:
On April 6, 2009 the company paid a dividend of 1.16 cents per share totaling approximately $598,000.