Dynex Power Announces First Quarter Results
Return to Profitability Expected in Second Half
Lincoln, England, May 27th, 2016 - Dynex Power Inc. (TSXV: DNX), a leading, high power semiconductor company, today announced its financial results for the first quarter ended March 31st, 2016.
Summary financial information for the three months ended March 31st, 2016 can be found here.
First quarter revenue of $10.3 million was 8% higher than the corresponding quarter of last year. Approximately two-thirds of the increase was accounted for by the weakness of the Canadian Dollar in 2016 compared to 2015. The rest of the increase came from stronger sales of power assemblies and modules partially offset by weaker bipolar revenue.
The gross margin of $1.2 million was equivalent to 11.6% of revenue. In the corresponding quarter of last year, a gross loss of $1.5 million had been reported arising from weak revenue in the quarter following a contract cancellation and the cost of a redundancy exercise.
The combination of other income, expenses and costs decreased by $141,000 to $1.7 million despite a 5% weakening of the Canadian Dollar against Sterling. The decrease was brought about by a shift from a foreign exchange loss in 2015 to a foreign exchange gain in 2016. Because of the foreign exchange gain and the higher revenue figure in the period, other income, expenses and costs represented 16.7% of revenue in the 2016 period compared with 19.4% in the corresponding quarter of last year.
As a consequence of these results, the Company recorded a loss before tax of $526,000, compared to a loss before tax of $3.4 million in the corresponding quarter of last year. A $65,000 recovery of UK tax reduced the net loss for the period to $461,000 or $0.01 per share, compared with a net loss of $2.8 million, or $0.03 per share, in the corresponding period of last year.
Revenue and net loss for the second quarter are forecast to be similar to that reported in the first. Revenue is expected to increase in the second half of the year and management is still targeting a small profit for the year.
Dr Taylor also said that he would like “to thank our current Chairman, Li Donglin, for his support and encouragement over the last six years. Li Donglin has recently been promoted to become General Manager of CRRC Zhuzhou Institute, the majority shareholder of CRRC Times Electric, and would not be standing for re-election to the Board of Dynex at this year’s annual general meeting”.
Bob Lockwood, Chief Financial Officer commented, “As I have commented before, high power semiconductor manufacturing is a high fixed cost business, so a small weakening in orders always has a big impact on profitability. But we are sensing the start of a recovery in order intake of orders and that gives us a belief that revenues will rise in the second half of this year which will allow us to return to profitability”.
Li Donglin, the Chairman of Dynex said, “Having recently changed roles within the CRRC Group in China, I will not be standing for re-election to the Board of Dynex at this year’s annual general meeting. I have thoroughly enjoyed my time as Chairman of the company and will continue to follow its progress in the years to come. Whilst I am disappointed with the recent financial results of the company, I believe the company is well placed to move forward in the coming years and I believe and hope it will achieve great success in the coming years. ”
In commenting on its expectations, the Company cautioned existing and potential shareholders about relying on the Company’s expectations in that the Company’s expectations contain forward-looking statements and assumptions which are subject to the risks and uncertainties of the markets and the future, which could cause actual results to differ materially from expectations, and which are each difficult and subjective to forecast. Certain of those risks and uncertainties are discussed in the Management’s Discussion and Analysis for the quarter ended March 31st , 2016 and include, among other things, risks and uncertainties relating to: the level of worldwide demand for power semiconductors and power semiconductor assemblies; the level of investment in power electronic equipment, electrification of transport systems, alternative power generation and high quality power transmission and distribution; and fluctuations in exchange rates between Canadian Dollars, Sterling, US dollars and Euros. As a consequence of these and other risks and uncertainties, shareholders and potential investors must make their own independent judgments about the accuracy and reliability of the Company’s expectations. Dynex disclaims any intention or obligation to update or revise any forward-looking statement whether as a result of new information, future events or otherwise.
About the Company
Dynex designs and manufactures high power bipolar semiconductors, high power insulated gate bipolar transistor (IGBT) modules and die, high power electronic assemblies and radiation hard silicon-on-sapphire integrated circuits (SOS IC’s). The company’s power products are used worldwide in power electronic applications including electric power transmission and distribution, renewable and distributed energy, marine and rail traction motor drives, aerospace, electric vehicles, industrial automation and controls and power supplies. The Company’s IC products are used in demanding applications in the aerospace industry. Dynex Semiconductor Ltd is its only operating business and is based in Lincoln, England in a facility housing the fully integrated silicon fabrication, assembly and test, sales, design and development operations. In 2008, a majority of the shares of Dynex were acquired by Zhuzhou CSR Times Electric Co., Ltd. In April 2016 this company changed its name to Zhuzhou CRRC Times Electric Co., Ltd.
Zhuzhou CRRC Times Electric Co., Ltd. is based in Hunan Province in the People's Republic of China. It is listed on the Hong Kong Stock Exchange. CRRC Times Electric is mainly engaged in the research, development, manufacture and sales of locomotive train power converters, control systems and other train-borne electrical systems, as well as the development, manufacturing and sales of urban railway train electrical systems. In addition, CRRC Times Electric is also engaged in the design, manufacturing and sales of electric components including power semiconductor devices for the railway industry, urban railway industry and non-railway purposes.
Further information on CRRC Times Electric can be found at www.timeselectric.cn/en
All monetary values expressed in this release are in Canadian Dollars unless stated otherwise.
The TSX Venture Exchange has neither approved nor disapproved of the information in this press release.