Dynex Power Announces First Quarter Results for 2007
Dynex Power Inc., a leading, independent power semiconductor company, today announced results for the first quarter of 2007.
First quarter revenue was 21% higher than the average quarterly revenue in 2006 with growth reported across all the high power business groups and 18% higher than the corresponding quarter of last year. The gross margin was 18% higher than the average quarterly gross margin in 2006 and 10% higher than the corresponding quarter of last year. The fall in gross profit margin in percentage terms, from 17.7% last year and 18.3% in the corresponding quarter of last year to 17.2% in the first quarter of 2007, was caused by higher costs, particularly for electricity. Overhead expenses of $1.3 million were 13% higher than the quarterly average for last year and 17% higher than the corresponding quarter of last year. The rise reflected the recruitment and training of new sales engineers in advance of revenue growth.
Orders taken during the first quarter totalled $15.4 million, more than twice the level of billings, thus underpinning further growth during 2007. At the end of March, the order book stood at $25.0 million of which $21.4 million is scheduled for delivery in 2007, an increase of 140% on last year.
Dr Paul Taylor, President and Chief Executive Officer commented that “It is pleasing to be able to report that our order book has grown to record levels and as a consequence we have experienced strong growth and are now moving into a period of more robust growth. This is the first such period since Dynex took over the Lincoln business in 2000 and the first period where we have enjoyed such a clear view of the likely revenue over the next few quarters.”
Bob Lockwood, Chief Financial Officer, stated that “we were delighted to exceed our planned revenue in the quarter. Gross margins have fallen slightly, mainly as a result of high-energy costs. These costs should fall later in the year and we expect gross margins to improve. Overhead expenses rose in the quarter as we strengthened our sales team and positioned ourselves for growth in 2007. Revenue is expected to remain at the same level in the second quarter before growing strongly in the second half of the year. The small loss we are reporting was expected and a similar small loss is expected in the second quarter. Nevertheless, we remain confident of reporting a profit for the full year.”
Dynex also announced today that its wholly owned subsidiary, Dynex Semiconductor Limited, has entered into an agreement pursuant to which the subsidiary has borrowed ₤150,000 and may borrow a further ₤350,000, in the aggregate, from David Banks and Daniel Owen, each of whom is a director of Dynex. The loans are intended to smooth expected cashflow over the next few months. The loans are unsecured and repayable on or before October 31, 2007. The Company expects to repay the new loan from internally generated cash flow prior to its due date. The loan accrues interest at the rate of two percent per annum above the Base Rate of Interest charged by the Royal Bank of Scotland compounded monthly and payable on the last business day of each month during the term of the loan. Dynex has guaranteed the obligation of its subsidiary pursuant to this loan. The loan was approved unanimously by the Dynex Board of Directors, including the independent members of the board but excluding Messrs. Banks and Owen. In the event the loan is not repaid on or before October 31, 2007, the full amount of the loan may, at the option of the lenders, be converted into common shares of Dynex Semiconductor Limited based on the market value of such common shares on October 31, 2007.