Dynex Power Announces Results for 2015
Strong Fourth Quarter Sees Dynex Return to Profitability for the Year
Lincoln, England, May 20th, 2016 - Dynex Power Inc. (TSXV: DNX), a leading, high power semiconductor company, today announced its financial results for the year ended December 31st, 2015.
Summary financial information for the twelve months ended December 31st, 2015 can be viewed here.
Revenue for the year of $46.5 million was 10% higher than in the preceding year. The increase was mainly as a result of a weakening of the Canadian Dollar against Sterling. In Sterling terms revenue had risen by approximately 3%. For the year, there was a strong increase in Sterling revenues from bipolar devices and services, but these increases were partially offset by the reduction in power assemblies and integrated circuit revenues.
The Group reported a gross profit of $4.7 million for the year equivalent to 10.1% of revenue compared to a gross loss 0f $441,000 last year following a contract cancellation and product return at the end of last year.
Expenses fell from $6.1 million in 2014 to $4.4 million in 2015. The decrease was mainly accounted for by increased support from CSR Times Electric and continuing strong support from the UK Government for research and development work and a switch from a foreign exchange loss of in 2014 to a foreign exchange gain in 2015. More modest savings were reported in sales and marketing and administrative costs.
Dynex recorded a profit before tax of $270,000 in 2015 compared to a loss before tax of $6.5 million in 2014 following the contract cancellation and product return at the end of last year. Without the contract cancellation, the Company would have reported a small profit before tax in 2014.
The Company provided $104,000 for tax, leaving a profit after tax of $166,000 compared to a loss after tax of $5.5 million in the preceding year.
New orders received in 2015 totalled $39.2 million resulting in a book to bill ratio of 0.8 times. The order book fell from $16.2 million at the end of 2014 to $13.4 million at the end of 2015. The order book at the end of 2015 represented approximately 16 weeks of sales.
As disclosed in a press release issued on May 1st, 2016, the Company is late in filing its financial statements, related management’s discussion and Certificates of Filing for 2015. The delay occurred as a result of the Company facing increased demands for information and documentation from the auditor at a time when it is preparing to implement a new ERP system. There was also on-going discussion with the auditor on the valuation of certain assets. The Company has now provided the information and documents requested. The discussion on the valuation of certain assets has also been completed without there being a need for any change in asset values.
Bob Lockwood, Chief Financial Officer commented, “The cancellation of a major order for delivery in 2015, the technical issues with new products and the redundancy exercise referred to above by Paul Taylor had a major adverse impact on the first quarter of 2015. The Company was able to report a much reduced loss in the second quarter and a return to a modest profit in the third quarter. With continuing strong support from CSR Times Electric, the Company was able to make a much better profit in the fourth quarter which allowed us to return to profitability for the year. ”
Mr Li, Chairman of Dynex and recently appointed General Manager of the CRRC Zhuzhou Institute Co., Ltd, the immediate parent company of CRRC Times Electric, commented “We are pleased to see this return to profitability for Dynex. Although the level of profit reported is very modest, it is clearly a move in the right direction and we look forward to further improvement in the level of profitability going forward."
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 year ended December 31st , 2015 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 componentsincluding 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.