Q3 2023 Financial Results

MTI Wireless Edge Ltd (AIM: MWE), the technology group focused on comprehensive communication and radio frequency solutions across multiple sectors, is pleased to announce its financial results for the nine-month period ended 30 September 2023 (the "Period").

Financial highlights

• Revenue for the Period of $33.7m (nine months to 30 September 2022: $34.8m). On a constant currency basis this represents an increase of 1% over the same period last year
• 6% improvement in profit before tax to $3.4m (nine months to 30 September 2022: $3.2m), helped by positive currency movements and margin improvement
• 9% improvement in earnings per share to 3.25 US cents (nine months to 30 September 2022: 2.99 US cents)
• Company remains virtually ungeared with net cash of $6.4m as at 30 September 2023 (30 September 2022: $5.2m)
• Final dividend anticipated to be declared alongside MTI's full year results which will be announced during the first quarter of 2024

Operational highlights

• A stable performance with the Company remaining well placed for the rest of the year and into 2024
• Antenna division recorded good growth, driven by military and RFID sales

o Demand for military antennas globally is strong and is expected by the Company to continue to grow

o India remains a key market for 5G sales, with recent wins demonstrating the technical strength of the Company's 5G backhaul solution

• Mottech delivered a solid performance during the first nine months of the year

o Good contribution to the Group, helped by improved margins following successful price increases and positive exchange rates from the international businesses

o Israeli market remains firm, growing in NIS terms but, given the NIS/US$ foreign exchange effects, remained flat in the year

o Growth coming through from France and Italy

o Pipeline for Q4 2023 looks promising to support a good end to the year and start to 2024

• MTI Summit affected by a slightly slower order rate, but its pipeline is positive

o The division has seen a slight slowdown in order rate which has impacted sales in the period

o PSK continues to grow and returned to profitability in the third quarter, although the first nine months of the year still showed a minor loss, as it suffered from delays to key projects in Q2

o Overall, MTI Summit remains well placed to deliver a good result for the year and is likely to benefit from increased government spend in Q4

Moni Borovitz, Chief Executive Officer of MTI Wireless Edge, said:

"The business continues to perform well despite the tragic events on 7 October 2023 and the subsequent war. Several of our employees have been called up for military service and a number of others that survived the terrible events have had to leave the attacked area (where they lived) and are still not able to live a normal life. This, together with the overall sadness and turmoil, has had some effect in reducing the Company's labour resources. At the same time, there is high motivation and solidarity in the country as well as in the workplace, resembling to some extent the beginning of the COVID era where people worked long hours and adapted their working practices. As announced in July 2022 we are engaged, in part of our business, in a service contract with the Israeli Government and we are currently working very long hours under this agreement, supporting the needs of the country and compensating for the lost hours elsewhere. As a result, overall demand for our services in Israel is largely unchanged. Our internal infrastructure is unaffected and we continue to import and export goods as normal. 40% of MTI's employees reside outside of Israel where all the Company's international operations are running and performing normally.

"The business is further supported by a strong balance sheet with $6.4m in net cash at the end of September 2023. Q3 results were impacted adversely by currency movements, especially the 9% decrease in NIS against the US$ from the beginning of the year, at the revenue level but those same currency changes had a positive impact on profitability, resulting in an overall positive performance for the first nine months of the year.

"Q4 has begun well with good opportunities visible in all divisions of the Group, part of which is related to the increased spending by the Israeli Government for services from both our Antenna and MTI Summit divisions. I believe that the Company is therefore well placed to weather the current challenges and, in the absence of unforeseen geopolitical developments, to continue to grow."

Antenna division

Water Control & Management division

Distribution & Professional Consulting Services division

MTI WIRELESS EDGE LTD.

(An Israeli Corporation)

INTERIM CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME

Other comprehensive income (loss) net of tax:

Items that will not be reclassified to profit or loss:

The accompanying notes form an integral part of the financial statements.

MTI WIRELESS EDGE LTD.

(An Israeli Corporation)

INTERIM CONSOLIDATED STATEMENTS OF

CHANGES IN EQUITY

For the nine month period ended September 30, 2023 (Unaudited):

Attributable to owners of the parent

Changes during the nine month period ended September 30, 2023:

Comprehensive income

(*) Less than US$ 1 thousand

The accompanying notes form an integral part of the financial statements.

MTI WIRELESS EDGE LTD.

(An Israeli Corporation)

INTERIM CONSOLIDATED STATEMENTS OF

CHANGES IN EQUITY (CONT.)

For the nine month period ended September 30, 2022 (Unaudited):

Attributable to owners of the parent

The accompanying notes form an integral part of the financial statements.

MTI WIRELESS EDGE LTD.

(An Israeli Corporation)

INTERIM CONSOLIDATED STATEMENTS OF

CHANGES IN EQUITY (CONT.)

For the year ended December 31, 2022 :

Attributable to owners of the parent

The accompanying notes form an integral part of the financial statements.

MTI WIRELESS EDGE LTD.

(An Israeli Corporation)

INTERIM CONSOLIDATED STATEMENTS OF

FINANCIAL POSITION

The accompanying notes form an integral part of the financial statements.

MTI WIRELESS EDGE LTD.

(An Israeli Corporation)

INTERIM CONSOLIDATED STATEMENTS OF

FINANCIAL POSITION

The accompanying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATEMENTS OF

CASH FLOWS

The accompanying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATEMENTS OF

CASH FLOWS (cont.)

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:

The Company and its subsidiaries are engaged in the following areas:

• Development, design, manufacture and marketing of antennas for the military and civilian sectors.

Note 2 - Significant Accounting Policies:

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). The financial information for the financial year ended December 31, 2022 was approved by the board on March 12, 2023. The report of the auditors on those financial statements was unqualified.

The interim consolidated financial statements as of September 30, 2023 have not been audited.

Note 3 - REVENUES:

(*) at the point in time

(**) over time

Note 4 - operating SEGMENTS:

The following tables present revenue and profit information regarding the Group's operating segments for the nine month period ended September 30, 2023 and 2022 respectively and for the year ended December 31, 2022.

Nine month period ended September 30, 2023 (Unaudited):

Note 5 - SIGNIFICANT EVENTS:

• On March 12, 2023, the Board of directors declared a cash dividend of 3.0 US cents per share, representing approximately $2,656,000, in total. This dividend was paid on April 6, 2023 to shareholders on the register at the close of trading on March 24, 2023 (ex-dividend on March 23, 2023).
• On 24 January, 2019, the Company announced a share repurchase program to conduct market purchases of ordinary shares of par value 0.01 Israeli Shekels each ("Ordinary Shares") in the Company up to a maximum value of £150,000 (the "Programme"). Thereafter, the board of directors of the Company and the board of directors of MTI Engineering decided to continue with the Programme for several further periods. On 14 March, 2023, the Company announced that it would extend the Programme until 31 March, 2024, with the Programme having an increased maximum value of up to £200,000 and with the Programme being managed by Shore Capital Stockbrokers Limited pursuant to the terms as announced. As at 30 September 2023 and as at 19 November 2023, 200,000 and 350,000 Ordinary Shares, respectively, were held in treasury under the Programme.
• On 14 March, 2023 at the Company's annual general meeting, Mr. Michael Yehezkel Karo was elected as an independent non-executive director.
• On 11 July, 2023 the Company acquired minority holdings in Ginat for an insignificant amount and now holds 100% of the company.

Note 6 - SUBSEQUENT EVENTS:

A. On 7 October, 2023 Israel was attacked by the Hamas terror organization leading to war. The war has led to a slowdown in the Israeli economy and if war continues for a prolonged period then it may begin to impact the Company. The wide usage of military reserve personnel, adverse foreign currency exchange rates and restrictions on access to certain areas in Israel are risks which may affect the Company from a prolonged period of war. As of the date of this report, and to the best of the Company's knowledge, the war has not had a significant effect on it. The Company continues to review the effects of the war on its trading as it believes that if the war continues for a long period of time then the overall Israeli economy will be effected, and factors including the lack of available manpower, interest rates and foreign currency exchange rates may have an impact on its trading.

• On 19 November, 2023 the remuneration committee and the board of directors approved an option plan for the Company's shares ("Option Plan").

The Option Plan includes the authority to issue 2,000,000 options (2.2% of the Company's issued share capital on fully diluted basis) with the following terms:

• Each option can be exercised into one ordinary share of the Company at a price of 40p being 25% above the share price at the date preceding this announcement and 17% above the average share price in the last 30 days.
• The vesting of the options will be 50% after two years, 25% after three years and 25% after four years with expiration after six years from issuance.
• The economic value of the options based on a Black-Scholes calculation is US$259,000 for the total 2 million options approved by the board of directors.