Last checked at 10 Nov 2014 07:00
10 November 2014
MTI Wireless Edge Ltd
("MTI" or the "Company")
Financial results for the nine months ended 30 September 2014
MTI Wireless Edge Ltd., (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 2014.
Highlights
· Revenue increased by 7% to US$10.7m (1-9/2013: US$10.0m).
· Gross profit increased by 5% to US$3.9m (1-9/2013: US$3.7m).
· Operational profit increased 16% to US$217,000 (1-9/2013: US$187,000).
· Profit before tax doubled to US$110,000 (1-9/2013: US$56,000).
· Net cash generated from operation increased 65% to US$313,000 (1-9/2013: US$189,000).
Dov Feiner, Chief Executive Officer, commented:
"I am pleased to announce that during the first nine months of 2014 the Company's revenue increased and we were able to increase our profits. This healthy progress was accompanied by strong cash generation. This resulted with the Company's nine months profits before tax exceeding those generated during the whole of 2013.
"In the third quarter of 2014 we have experienced a 5% depreciation of the US Dollar versus the New Israeli Shekel which is in our favor for the long run but in this quarter created a large finance expense which reduced our profitability. This expense does not involve cash outflow.
"As stated before we continue to see strong demand for our 80GHz products and expect our revenue from this product line to double in 2014 (compared to 2013).
"We have made good progress in 2014 and the Board is confident that this trend will continue. The Board is encouraged that the outlook for the Group remains positive."
For further information please contact:
MTI Wireless Edge Dov Feiner, CEO Moni Borovitz, Financial Director | http://www.mtiwe.com/ +972 3 900 8900 |
Allenby Capital Limited (Nominated adviser and broker) Nick Naylor Alex Price | +44 20 3328 5656
|
Newgate Threadneedle (Financial PR) Josh Royston Robyn McConnachie | +44 207 653 9850 |
About MTI Wireless Edge
MTI is engaged in the development, production and marketing of High Quality, Low Cost, Flat Panel Antennas for Commercial & for Military applications. Commercial applications such as: WiMAX, Wireless Networking, RFID readers &, Broadband Wireless Access. With over 40 years experience, supplying antennas 100KHz to 90GHz including directional antennas and Omni directional for outdoor and indoor deployments including Smart Antennas for WiMAX, Wi-Fi, Public Safety, RFID and for Base Stations and Terminals - Utility Market. Military applications includes 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
Nine months ended September 30, | Year ended December 31, | ||||
2014 | 2013 | 2013 | |||
U.S. $ in thousands | |||||
Unaudited | Audited | ||||
Revenues | 10,659 | 9,987 | 13,422 | ||
Cost of sales | 6,761 | 6,293 | 8,624 | ||
Gross profit | 3,898 | 3,694 | 4,798 | ||
Research and development expenses | 927 | 861 | 1,127 | ||
Distribution expenses | 1,386 | 1,381 | 1,804 | ||
General and administrative expenses | 1,368 | 1,265 | 1,677 | ||
Profit from operations | 217 | 187 | 190 | ||
Finance expense | 182 | 146 | 162 | ||
Finance income | 75 | 15 | 58 | ||
Profit before income tax | 110 | 56 | 86 | ||
Income tax benefit | (72) | (143) | (340) | ||
Profit or loss | 182 | 199 | 426 | ||
Other comprehensive income (net of tax effect): | |||||
Items not to be reclassified to profit or loss in subsequent periods: | |||||
Re-measurement of defined benefit plans | - | - | 18 | ||
Total comprehensive income | 182 | 199 | 444 | ||
Profit or loss Attributable to: | |||||
Owners of the parent | 175 | 162 | 388 | ||
Non-controlling interest | 7 | 37 | 38 | ||
182 | 199 | 426 | |||
Total comprehensive income Attributable to: | |||||
Owners of the parent | 175 | 162 | 406 | ||
Non-controlling interest | 7 | 37 | 38 | ||
182 | 199 | 444 | |||
Earnings per share (dollars per share) | |||||
Basic and Diluted | 0.0034 | 0.0031 | 0.0075 | ||
Weighted average number of shares outstanding | |||||
Basic and Diluted | 51,571,990 | 51,571,990 | 51,571,990 | ||
The accompanying notes form an integral part of the financial statements.
INTERIM CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
For the nine months period ended September 30, 2014:
Attributed to owners of the parent | |||||||||||||
Share capital |
| Additional paid-in capital | Capital Reserve for share-based payment transactions | Retained earnings | Total attributable to owners of the parent | Non-controlling interest | Total equity | ||||||
| U.S. $ in thousands | ||||||||||||
|
|
|
| ||||||||||
Balance at January 1, 2014 (Audited) | 109 | 14,945 | 259 | 2,420 | 17,733 | 194 | 17,927 | ||||||
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|
| ||||||||||
Changes during the nine months ended September 30, 2014 (Unaudited): |
| ||||||||||||
Comprehensive income for the period | - | - | - | 175 | 175 | 7 | 182 | ||||||
Dividend paid | - | - | - | (351) | (351) | - | (351) | ||||||
Share based payment | - |
| - | 20 | - | 20 | - | 20 | |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2014 (Unaudited) | 109 |
| 14,945 | 279 | 2,244 | 17,577 | 201 | 17,778 | |||||
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The accompanying notes form an integral part of the financial statements.
INTERIM CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
For the nine months period ended September 30, 2013:
Attributed to owners of the parent | |||||||||||||
Share capital |
| Additional paid-in capital | Capital Reserve for share-based payment transactions | Retained earnings | Total attributable to owners of the parent | Non-controlling interest | Total equity | ||||||
| U.S. $ in thousands | ||||||||||||
|
|
|
| ||||||||||
Balance at January 1, 2013 (Audited) | 109 | 14,945 | 220 | 2,313 | 17,587 | 156 | 17,743 | ||||||
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|
| ||||||||||
Changes during the nine months period ended September 30, 2013 (Unaudited): |
| ||||||||||||
Comprehensive income for the period | - | - | - | 162 | 162 | 37 | 199 | ||||||
Dividend paid | - | - | - | (299) | (299) | - | (299) | ||||||
Share based payment | - |
| - | 32 | - | 32 | - | 32 | |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
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Balance at September 30, 2013 (Unaudited) | 109 |
| 14,945 | 252 | 2,176 | 17,482 | 193 | 17,675 | |||||
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The accompanying notes form an integral part of the financial statements.
INTERIM CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
For the year ended December 31, 2013:
Attributable to owners of the parent | |||||||||||||
Share capital |
| Additional paid-in capital | Capital Reserve for share-based payment transactions | Retained earnings | Total attributable to owners of the parent | Non-controlling interest | Total equity | ||||||
| U.S. $ in thousands | ||||||||||||
| Audited | ||||||||||||
Balance at January 1, 2013 | 109 |
| 14,945 |
| 220 |
| 2,313 |
| 17,587 |
| 156 |
| 17,743 |
Changes during 2013: |
|
|
|
|
| ||||||||
Income for the year | - |
| - |
| - |
| 388 |
| 388 |
| 38 |
| 426 |
Other comprehensive income | - |
| - |
| - |
| 18 |
| 18 |
| - |
| 18 |
Total comprehensive income for the year | - |
| - |
| - |
| 406 |
| 406 |
| 38 |
| 444 |
Dividend paid | - |
| - |
| - |
| (299) |
| (299) |
| - |
| (299) |
Share based payment | - |
| - | 39 | - | 39 | - | 39 | |||||
Balance at December 31, 2013 | 109 |
| 14,945 |
| 259 |
| 2,420 |
| 17,733 |
| 194 |
| 17,927 |
The accompanying notes form an integral part of the financial statements.
INTERIM CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
30.09.2014 | 30.09.2013 | 31.12.2013 | |||
U.S. $ in thousands | |||||
Unaudited | Audited | ||||
ASSETS | |||||
CURRENT ASSETS: | |||||
Cash and cash equivalents | 2,333 | 944 | 992 | ||
Other current financial assets | 3,717 | 5,704 | 5,753 | ||
Trade receivables | 5,465 | 4,856 | 5,359 | ||
Other receivables | 857 | 636 | 548 | ||
Current tax receivables | 138 | 110 | 165 | ||
Inventories | 2,965 |
| 2,912 | 3,091 | |
15,475 |
| 15,162 | 15,908 | ||
NON-CURRENT ASSETS: | |||||
Long term prepaid expenses | 24 | 39 | 39 | ||
Property, plant and equipment | 5,220 | 5,324 | 5,343 | ||
Investment property | 1,248 | 1,283 | 1,275 | ||
Deferred tax assets | 315 | 225 | 226 | ||
Goodwill | 406 |
| 406 | 406 | |
7,213 |
| 7,277 | 7,289 | ||
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|
|
| ||
Total assets | 22,688 |
| 22,439 | 23,197 | |
The accompanying notes form an integral part of the financial statements.
INTERIM CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
30.09.2014 | 30.09.2013 | 31.12.2013 | ||||
U.S. $ In thousands | ||||||
Unaudited | Audited | |||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
CURRENT LIABILITIES: | ||||||
Current maturities and short term Loans | 261 | 250 | 562 | |||
Trade payables | 1,967 | 1,532 | 1,895 | |||
Other accounts payables | 918 | 730 | 790 | |||
Current tax payables | - | 145 | - | |||
3,146 | 2,657 | 3,247 | ||||
NON- CURRENT LIABILITIES: | ||||||
Loans from banks | 1,424 | 1,625 | 1,595 | |||
Employee benefits | 340 | 310 | 316 | |||
Provisions | - | 172 | 112 | |||
1,764 | 2,107 | 2,023 | ||||
Total liabilities | 4,910 | 4,764 | 5,270 | |||
EQUITY | ||||||
Equity attributable to owners of the parent | ||||||
Share capital | 109 | 109 | 109 | |||
Additional paid-in capital | 14,945 | 14,945 | 14,945 | |||
Capital reserve from share-based payment transactions | 279 | 252 | 259 | |||
Retained earnings | 2,244 | 2,176 | 2,420 | |||
17,577 | 17,482 | 17,733 | ||||
Non-controlling interest | 201 | 193 | 194 | |||
Total equity | 17,778 | 17,675 | 17,927 | |||
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| ||||
Total equity and liabilities | 22,688 | 22,439 | 23,197 | |||
November 9, 2014 |
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| |
Date of approval of financial statements | Moshe Borovitz Finance Director | Dov Feiner Chief Executive Officer | Zvi Borovitz Non-executive Chairman |
The accompanying notes form an integral part of the financial statements.
INTERIM CONSOLIDATED STATEMENTS OF
CASH FLOWS
Nine months ended September 30, | Year ended December 31, |
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2014 | 2013 | 2013 | ||||||||
U.S. $ in thousands |
| |||||||||
Unaudited | Audited | |||||||||
Cash Flows from Operating Activities: |
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Profit for the period | 182 | 199 | 426 |
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Adjustments to reconcile net income to net cash provided by operating activities: |
| |||||||||
Depreciation | 339 | 322 | 436 |
| ||||||
Loss (Gain) from short-term investments | 3 | 59 | (29) |
| ||||||
Equity settled share-based payment expense | 20 | 32 | 39 |
| ||||||
Finance expenses, net | 66 | 74 | 98 |
| ||||||
Income tax | (72) | (143) | (340) |
| ||||||
Changes in operating assets and liabilities: |
| |||||||||
Decrease (increase) in inventories | 126 | 35 | (144) |
| ||||||
Increase in trade receivables | (106) | (483) | (986) |
| ||||||
Increase in other accounts receivables and prepaid expenses
| (294) | (110) | (22) |
| ||||||
Increase in trade and other accounts payables | 193 | 260 | 682 |
| ||||||
Increase in employee benefits, net | 24 | - | 78 |
| ||||||
Decrease in provisions | (112) | 54 | (60) |
| ||||||
Interest paid | (66) | (74) | (98) |
| ||||||
Income tax received (paid) | 10 | (36) | (40) |
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Net cash generated in operating activities | 313 | 189 | 40 |
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The accompanying notes form an integral part of the financial statements.
INTERIM CONSOLIDATED STATEMENTS OF
CASH FLOWS
Nine months ended September 30, | Year ended December 31, | |||||||
2014 | 2013 | 2013 | ||||||
U.S. $ in thousands | ||||||||
Unaudited | Audited | |||||||
Cash Flows From Investing Activities: | ||||||||
Sale (purchase) of short-term investment, net | 2,028 | (3,260) | (3,221) | |||||
Purchase of property, plant and equipment | (182) | (146) | (270) | |||||
Net cash generated (used in) investing activities | 1,846 | (3,406) | (3,491) | |||||
Cash Flows From Financing Activities: | ||||||||
Short term Loan received (paid) | (301) | - | 301 | |||||
Long term Loan received | - | - | 43 | |||||
Dividend paid to the owners of the parent | (351) | (299) | (299) | |||||
Repayment of long-term loan from banks | (166) | (188) | (250) | |||||
Net cash used in financing activities | (818) | (487) | (205) | |||||
Increase (decrease) in cash and cash equivalents during the period | 1,341 | (3,704) | (3,656) | |||||
Cash and cash equivalents at the beginning of the period | 992 | 4,648 | 4,648 | |||||
Cash and cash equivalents at the end of the period | 2,333 | 944 | 992 | |||||
Appendix A - Non-cash transactions:
Nine months ended September 30, | Year ended December 31, |
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2014 | 2013 | 2013 |
| ||||||
U.S. $ in thousands |
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Unaudited | Audited | ||||||||
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Purchase of property and equipment against trade payables | 12 | 4 | 5 |
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The accompanying notes form an integral part of the financial statements.
NOTES TO INTERIM CONSOLIDATED 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 London's AIM Market.
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. Foreign currencies:
Henceforth are the details of the main foreign currency information and the changes in the exchange rate percentage in the reporting period:
September 30, | December 31, | |||
2014 | 2013 | 2013 | ||
NIS (in Dollar per 1 NIS) | 0.271 | 0.283 | 0.288 | |
| Nine months ended September 30, | Year ended December 31, | ||
2014 | 2013 | 2013 | ||
% | % | % | ||
NIS | (6.06) | 5.54 | 7.55 | |
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 the 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, 2013 was approved by the board on February 19, 2014. The report of the auditors on those financial statements was unqualified. The interim consolidated financial statements as of September 30, 2014 have not been audited.
The interim consolidated financial information should be read in conjunction with the annual financial statements as of 31 December, 2013 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, 2013 are applied consistently in these interim consolidated financial statements.
Note 3 - operating SEGMENTS:
The following table's present revenue and profit information regarding the Company's operating segments for the nine months ended September 30, 2014 and 2013, respectively and for the year ended December 31, 2013.
Nine months ended September 30, 2014 (Unaudited) | ||||||
Commercial | Military | Total | ||||
$'000 | ||||||
Revenue | ||||||
External | 8,573 | 2,086 | 10,659 | |||
Total | 8,573 | 2,086 | 10,659 | |||
Segment income | 173 | 44 | 217 | |||
Finance expense, net | (107) | |||||
Profit before income tax | 110 | |||||
Other | ||||||
Depreciation and other non-cash expenses | 300 | 39 | 339 | |||
Nine months ended September 30, 2013 (Unaudited) | ||||||
Commercial | Military | Total | ||||
$'000 | ||||||
Revenue | ||||||
External | 7,552 | 2,435 | 9,987 | |||
Total | 7,552 | 2,435 | 9,987 | |||
Segment income (loss) | (56) | 243 | 187 | |||
Unallocated corporate expenses | ||||||
Finance expenses, net | (131) | |||||
Profit before income tax | 56 | |||||
Other | ||||||
Depreciation and other non-cash expenses | 272 | 49 | 322 | |||
Note 3- operating SEGMENTS (CONT.):
Year ended December 31, 2013 (audited) | ||||||
Commercial | Military | Total | ||||
$'000 | ||||||
Revenue | ||||||
External | 10,069 | 3,353 | 13,422 | |||
Total | 10,069 |
| 3,353 |
| 13,422 | |
Segment income (loss) | (32) | 240 | 208 | |||
Unallocated corporate expenses | ||||||
Unallocated expenses | (18) | |||||
Finance expense, net | (104) | |||||
Profit before income tax | 86 | |||||
Other | ||||||
Depreciation and other non-cash expenses | 368 | 68 | 436 | |||
Note 4 -TRANSACTIONS WITH RELATED PARTIES:
The Parent Company and other related parties provide certain services to the Group as follows:
Nine months ended September 30, | Year ended December 31, |
| ||||||
2014 | 2013 | 2013 | ||||||
U.S. $ in thousands | ||||||||
Unaudited | Audited | |||||||
Purchased Goods | 194 | 218 | 322 | |||||
Management Fee | 294 | 240 | 334 | |||||
Services Fee | 156 | 120 | 190 | |||||
Lease income | (90) | (90) | (120) | |||||
Compensation of key management personnel of the Group:
Nine months ended September 30, | Year ended December 31, |
| ||||||
2014 | 2013 | 2013 | ||||||
U.S. $ in thousands | ||||||||
Unaudited | Audited | |||||||
Short-term employee benefits *) | 523 | 483 | 673 | |||||
*) Including Management fees for the CEO, Director executive management and other related parties.
All Transactions are made at market value.
30.09.2014 | 30.09.2013 | 31.12.2013 | ||||
U.S. $ In thousands | ||||||
Unaudited | Audited | |||||
Related parties | 55 | 83 | 37 | |||
Note 5 - SIGNIFICANT EVENTS:
On April 4, 2014 the company paid a dividend of 0.68 cents per share totaling approximately $351,000.