REG - MTI Wireless Edge - Results for the nine months to 30 September 2017 <Origin Href="QuoteRef">MWEE.L</Origin> - Part 1

MTI Wireless EdgeAnnouncement

09/11/2017 07:06

RNS Number : 9840V
MTI Wireless Edge Limited
09 November 2017
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR)
9 November 2017
MTI Wireless Edge Ltd
("MTI" or the "Company")
Financial results for the nine months ended 30 September 2017
MTI Wireless Edge Ltd. (AIM: MWE), a market leader in the manufacture of flat panel antennas for fixed wireless broadband and a wireless irrigation solutions provider, today announces its unaudited results for the nine months ended 30 September 2017.
Highlights: 
 Profit before tax increased 54% year-on-year to $1.2m (nine months ended 30 September 2016: $0.76m) 
 Revenues increased by 12% year-on-year to $19.6m (nine months ended 30 September 2016: $11.3m)
 Earnings per share increased by 47% year-on-year to 1.63 US cents (nine months ended 30 September 2016: 1.11 US cents)
 Strong cash flow from operations during the period of $1.7m (nine months ended 30 September 2016: $1.5m)
 Shareholder's equity grew during the period to $19.6m (31 December 2016: $18.9m), equivalent to 27.9 pence per share (converted at 1.31 US dollar/1 British Pound)
 Cash at 30 September 2017 of $5.35m (30 September 2016: $5.1m, 31 December 2016 $4.4m)
The third quarter has seen strong revenue generation from both the antenna division and the wireless irrigation division. As announced on 25 October 2017, greater than anticipated costs have been incurred and recognised in the third quarter in relation to a military antenna project which has resulted in the antenna division making an operating loss in the third quarter, although the Board expects that this military antenna project will be profitable once completed. The wireless irrigation division continued to perform strongly in the third quarter and delivered robust operating profit margins.
Dov Feiner, CEO of MTI Wireless, commented:
"During 2017, we have continued to see growth in both segments of our business. In our wireless controller segment, via Mottech, we continue to see opportunities in various geographical areas as the requirement for water management solutions is increasing world-wide. In 2017, we strengthened our position in key markets by opening new offices, extending distribution agreements and recruiting more value-added resellers. This, together with our continuous development of new solutions, should help us to continue to increase our revenues and profits. 
"In the antenna segment, we have a very healthy order book in the military division and a good pipeline of opportunities, which provides us greater visibility of longer-term revenues. Furthermore, the OEMbusiness is proceeding as planned, and RFiD and 80 GHz orderscontinue to gain attention, and we expect the order book tostrengthen. Thisprovides us greater visibility of longer-term revenues.
Given the current performance of the Company, the growing order book and pipeline of opportunities, the board is increasingly confident in the prospects for the Company." 
For further information please contact:
MTI Wireless Edge Ltd
Dov Feiner, CEO
Moni Borovitz, Financial Director
http://www.mtiwe.com/
+972 3 900 8900
Nomad and Joint Broker
Allenby Capital Limited
Nick Naylor
Alex Brearley
+44 20 3328 5656
Joint Broker
Peterhouse Corporate Finance Limited
Lucy Williams
Eran Zucker
+44 20 7469 0930
About MTI Wireless Edge
MTI is engaged in the development, production and marketing of high quality low cost, flat panel antennas for commercial and military applications. Commercial applications include: WiMAX, Wireless Networking, RFID readers and Broadband Wireless Access. With over 40 years' experience of supplying 100KHz to 90GHz antennas, 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 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.
Via its subsidiary, Mottech Water Solutions Ltd, MTI is also a leading provider of remote control solutions for water and irrigation applications based on Motorola's IRRInet state of the art control, monitoring and communication technologies. Mottech, headquartered in Israel, is the global prime distributor of Motorola for the IRRInet remote control solutions serving its customers worldwide through its subsidiaries and a global network of local distributers and representatives. It utilizes over 25 years of experience in providing its customers with remote control and management systems which ensure constant, reliable and accurate water usage, while reducing operational costs and maintenance costly expenses. Mottech's activities are focused on the market segments of agriculture, water distribution, Municipal and Commercial Landscape and Wastewater and Storm water Reuse. 
INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 
Nine month period
ended September 30,
Year ended December 31,
2017
2016
2016
U.S. $ in thousands
Unaudited
Revenues
19,610
17,582
23,276
Cost of sales
12,641
11,040
14,728
Gross profit
6,969
6,542
8,548
Research and development expenses
675
828
1,079
Distribution expenses
2,794
2,570
3,346
General and administrative expenses
2,365
2,129
2,640
Other income
7
-
-
Profit from operations
1,142
1,015
1,483
Finance expense
153
307
334
Finance income
194
55
57
Profit before income tax
1,183
763
1,206
Income tax expense 
239
136
222
Profit 
944
627
984
Other comprehensive income (loss)net of tax:
Items that will not be reclassified to profit or loss:
Re-measurement of defined benefit plans
-
-
(16)
-
-
(16)
Items that may be reclassified to profit or loss:
Adjustment arising from translation of financial statements of foreign operations
(10)
202
121
(10)
202
121
Total other comprehensive income
(10)
202
105
Total comprehensive income 
934
829
1,089
Profit attributable to:
Owners of the parent
865
585
936
Non-controlling interest
79
42
48
944
627
984
Total comprehensive income attributable to:
Owners of the parent
855
787
1,041
Non-controlling interest
79
42
48
934
829
1,089
Earningsper share(dollars)
Basic 
0.0164
0.0113
0.0181
Diluted
0.0163
0.0111
0.0178
Weighted average number of shares outstanding
Basic 
52,585,939
51,657,245
51,687,853
Diluted
53,211,172
52,657,327
52,575,593
The accompanying notes form an integral part of the financial statements.
INTERIM CONSOLIDATEDSTATEMENT OF
CHANGES IN EQUITY
For the Nine month period ended September 30, 2017 (Unaudited):
Attributed to owners of the parent
Share capital
Additional paid-in capital
Capital Reserve
for share-based
payment
transactions
Adjustment arising from translation of financial statements of foreign operations
Retained earnings
Total attributable to owners of the parent
Non-controlling interest 
Total equity
U.S. $ in thousands
Balance at January 1, 2017
109
14,964
323
44
3,468
18,908
324
19,232
Changes during the nine month period
 ended September 30, 2017:
Comprehensive income
Profit for the period
-
-
-
-
865
865
79
944
Other comprehensive income
Translation differences
-
-
-
(10)
-
(10)
-
(10)
Total comprehensive income for the period
-
-
-
(10)
865
855
79
934
Exercise of options to share capital
2
99
(*)
-
-
101
-
101
Dividend 
3
280
-
-
(518)
(235)
-
(235)
Share based payment
-
-
22
-
-
22
-
22
Balance at September 30, 2017 
114
15,343
345
34
3,815
19,651
403
20,054
(*) less than one thousand dollars 
The accompanying notes form an integral part of the financial statements.
INTERIM CONSOLIDATEDSTATEMENT OF 
CHANGES IN EQUITY (CONT.)
For the Nine month period ended September 30, 2016 (Unaudited):
Attributed to owners of the parent
Share capital
Additional paid-in capital
Capital Reserve
for share-based
payment
transactions
Adjustment arising from translation of financial statements of foreign operations
Retained earnings
Total attributable to owners of the parent
Non-controlling interest 
Total equity
U.S. $ in thousands
Balance at January 1, 2016 
109
14,945
304 
(77)
3,116
18,397
266
18,663
Changes during the nine month period
 ended September 30, 2016:
Comprehensive income
Profit for the period
-
-
-
-
585
585
42
627
Other comprehensive income
Translation differences
-
-
-
202
-
202
-
202
Total comprehensive income for the period
-
-
-
202
585
787
42
829
Share issuance to non-controlling interest in subsidiary
-
(10)
-
-
-
(10)
10
-
Exercise of options to share capital
*
23
(1)
-
-
22
-
22
Dividend paid
-
-
-
-
(568)
(568)
-
(568)
Share based payment
-
-
14
-
-
14
-
14
Balance at September 30, 2016 
109
14,958
317
125
3,133
18,642
318
18,960
(*) less than one thousand dollars 
The accompanying notes form an integral part of the financial statements.
INTERIM CONSOLIDATEDSTATEMENT OF 
CHANGES IN EQUITY (CONT.)
For the year ended December 31, 2016:
Attributable to owners of the parent
Share capital
Additional paid-in capital
Capital Reserve from share-based payment transactions
Adjustment arising from translation of financial statements of foreign operations
Retained earnings
Total attributable to owners of the parent
Non-controlling interest
Total equity
U.S. $ in thousands
Balance as at January 1, 2016
109
14,945
304
(77)
3,116
18,397
266
18,663
Changes during 2016:
Comprehensive income
Profit for the year
-
-
-
-
936
936
48
984
Other comprehensive income
Re measurements on defined benefit plans
-
-
-
-
(16)
(16)
-
(16)
Translation differences
-
-
-
121
-
121
-
121
Total comprehensive income for the year
-
-
-
121
920
1,041
48
1,089
Share issuance to non-controlling interest in subsidiary
-
(10)
-
-
-
(10)
10
-
Exercise of options to share capital
(*)
29
(1)
-
-
28
-
28
Dividend paid
-
-
-
-
(568)
(568)
-
(568)
Share based payment 
-
-
20
-
-
20
-
20
Balance as at December 31, 2016
109
14,964
323
44
3,468
18,908
324
19,232
(*) less than one thousand dollars 
The accompanying notes form an integral part of these financial statements.
INTERIM CONSOLIDATED STATEMENT OF 
FINANCIAL POSITION 
30.09.2017
30.09.2016
31.12.2016
U.S. $ in thousands
Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 
5,349
5,100
4,428
Trade receivables
9,244
7,886
8,159
Other receivables
791
1,169
706
Currenttax receivables
416
393
455
Inventories
4,689
3,943
4,910
20,489
18,491
18,658
NON-CURRENT ASSETS:
Long term prepaid expenses
45
52
48
Property, plant and equipment
5,237
5,545
5,453
Investment property
614
635
630
Deferred tax assets
618
564
500
Intangible assets
239
348
321
Goodwill 
573
573
573
7,326
7,717
7,525
Total assets
27,815
26,208
26,183
The accompanying notes form an integral part of the financial statements.
INTERIM CONSOLIDATED STATEMENT OF
FINANCIAL POSITION 
30.09.2017
30.09.2016
31.12.2016
U.S. $ In thousands
Unaudited
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities and short term bank credit and loans
919
811
802
Trade payables
2,513
2,239
2,285
Other accounts payables
2,503
1,702
1,792
Currenttax payables
223
100
3
6,158
4,852
4,882
NON- CURRENTLIABILITIES:
Loans from banks, net of current maturities
1,139
1,870
1,664
Employee benefits, net
464
434
405
Other liabilities
-
92
-
1,603
2,396
2,069
Total liabilities
7,761
7,248
6,951
EQUITY 
Equity attributable to owners of the parent
Share capital 
114
109
109
Additional paid-in capital
15,343
14,958
14,964
Capital reserve from share-based payment transactions
345
317
323
Translation differences
34
125
44
Retained earnings
3,815
3,133
3,468
19,651
18,642
18,908
Non-controlling interest
403
318
324
Total equity 
20,054
18,960
19,232
Total equity and liabilities
27,815
26,208
26,183
November 8, 2017
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 period
ended September 30,
Year ended December 31,
2017
2016
2016
U.S. $ in thousands
Unaudited
Cash Flows from Operating Activities:
Profitfor the period
944
627
984
Adjustments for:
Depreciation and amortization
478
385
635
Loss (gain) from investments in financial assets
126
7
(57)
Loss (gain) from sale of property, plant and equipment
(7)
-
-
Equity settled share-based payment expense
22
14
20
Finance expenses, net
81
79
122
Income tax expense 
239
136
222
Changes in operating assets and liabilities:
Decrease (increase) in inventories 
264
534
(466)
Decrease (increase) in trade receivables
(1,141)
315
19
Decrease (increase) in other accounts receivables and prepaid expenses
(48)
126
572
Increase in trade and other accounts payables
4
862
9
105
Increase in employee benefits, net
59
47
2
Interest paid
(81)
(79)
(122)
Income taxpaid
(94)
(658)
(837)
Net cash provided by operating activities
1,704
1,542
1,199
The accompanying notes form an integral part of the financial statements.
INTERIM CONSOLIDATED STATEMENTS OF 
CASH FLOWS (cont.)
Nine months period
ended September 30,
Year ended December 31,
2017
2016
2016
U.S. $ in thousands
Unaudited
Cash Flows From Investing Activities:
Sale of investments in financial assets, net
-
2,142
2,142
Proceeds from sale of property, plant and equipment
31
Purchase of property, plant and equipment
(170)
(171)
(314)
Net cash provided by (used in) investing activities
(139)
1,971
1,828
Cash Flows From Financing Activities:
Exercise of share options
101
22
28
Dividend paid to the owners of the parent
(235)
(568)
(568)
Short term loan received from banks
78
-
-
Long term loan received from banks
19
27
87
Repayment of long-term loan from banks
(631)
(582)
(793)
Net cash used in financing activities
(668)
(1,101)
(1,246)
Increase in cash and 
cash equivalents during the period 
921
2,412
1,781
Cash and cash equivalents
at the beginning of the period 
4,428
2,634
2,634
Exchange differences on balances of cash and 
 cash equivalents
24
54
13
Cash and cash equivalents
at the end of the period 
5,349
5,100
4,428
Appendix A - Non-cash transactions:
Nine months period
ended September 30,
Year ended December 31,
2017
2016
2016
U.S. $ in thousands
Unaudited
Purchase of property, plant and equipment 
 against trade payables
18
27
5
Scrip dividend (Note 5 B)
283
-
-
The accompanying notes form an integral part of the financial statements.
MTI WIRELESS EDGE LTD. 
(An Israeli Corporation)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - General:
Corporate information:
M.T.I Wireless Edge Ltd. (hereafter - the "Company", or collectively with its subsidiaries, the "Group") is an Israeli corporation. The Company 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.Since March 2006, the Company's shares have been traded on the AIM market of the London 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.
Via its subsidiary, Mottech Water solutions Ltd. (hereafter "Mottech"), the Company is also a leading provider of remote control solutions for water and irrigation applications based on Motorola's IRRInet state of the art control, monitoring and communication technologies.
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, 2016 was approved by the board on February 15, 2017. The report of the auditors on those financial statements was unqualified. 
The interim consolidated financial statements as of September 30, 2017 have not been audited.
The interim consolidated financial information should be read in conjunction with the annual financial statements as of December 31, 2016 and for the year then ended and with the notes thereto. The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2016 are applied consistently in these interim consolidated financial statements.
Note 3 - operating SEGMENTS:
The following tables present revenue and profit information regarding the Group's operating segments for the nine months period ended September 30, 2017 and 2016 respectively and for the year ended December 31, 2016.
Nine months periodended September 30, 2017(Unaudited)
Antennas
Water Solutions
Total
U.S. $ in thousands
Revenue
External
9,984
9,626
19,610
Total
9,984
9,626
19,610
Segment profit (loss)
(43)
1,185
1,142
Finance income, net
41
Profit before income tax
1,183
Other
Depreciation and amortization
445
33
478
Nine months periodended September 30, 2016 (Unaudited)
Antennas
Water Solutions
Total
U.S. $ in thousands
Revenue
External
8,324
9,258
17,582
Total
8,324
9,258
17,582
Segment profit (loss)
(305)
1,320
1,015
Finance expense, net
(252)
Profit before income tax
763
Other
Depreciation and amortization
347
38
385
Note 3- operating SEGMENTS (CONT.):
Year ended December 31, 2016 
Antennas
Water Solutions
Total
U.S. $ in thousands
Revenue
External
11,427
11,849
23,276
Total
11,427
11,849
23,276
Segment profit (loss) 
(108)
1,591
1,483
Unallocated corporate expenses
Finance expense, net
(277)
Profit before income tax
1,206
Other
Depreciation and amortization
591
44
635
Note 4-TRANSACTIONS AND BALANCES WITH RELATED PARTIES: 
The following transactions occurred with the Parent Company and other related parties: 
Nine months periodended 
 September 30,
Year ended December 31,
2017
2016
2016
U.S. $ in thousands
Unaudited
Purchased Goods
151
221
369
Management Fee
345
320
428
Services Fee
194
187
249
Leaseincome
(54)
(54)
(72)
Compensation of key management personnel of the Group:
Nine months periodended 
 September 30,
Year ended December 31,
2017
2016
2016
U.S. $ in thousands
Unaudited
Short-term employee benefits *)
636
584
810
*) Including Management fees for the CEO, Directors, Executive Management and other related parties.
All Transactions were made at market value. 
Note 4-TRANSACTIONS AND BALANCES WITH RELATED PARTIES (CONT.):
Balances with related parties:
As at
30.09.2017
30.09.2016
31.12.2016
U.S. $ in thousands
Unaudited
Other accounts payables
335
113
207
Note 5 - SIGNIFICANT EVENTS:
A. During January, June and September 2017, employees exercised options over 822,500 ordinary shares in exchange for a total consideration of approximately $101,000.
B. On April 4, 2017, the Company paid a dividend of 1 US cent per ordinary share totaling approximately $235,000 and in addition 1,022,328 new ordinary shares were issued to qualifying shareholders that chose the scrip dividend alternative.
C. During June 2017 Mottech agreed to establish a joint venture company in China ("Mottech China") with Omega Technologies LTD ("OTL"), which is an existing third-party sales representative for Mottech's water irrigation solutions in China. Mottech China will be 60% owned by Mottech. In addition to supporting Mottech's activities, it is intended that Mottech China will also sell additional third party products that are complementary to Mottech's equipment which are currently being sold by OTL in China.

This information is provided by RNS
The company news service from the London Stock Exchange
  END
QRTVVLFBDFFZFBZ