Dynex Power Announces Second Quarter Results for 2006

29.08.06

Lincoln, England, August 29th, 2006 – Dynex Power Inc., a leading, independent power semiconductor company, today announced results for the second quarter of 2006.

Summary financial information in Canadian dollars for the three and six months ended June 30th, 2006 is as follows:
June 30, 2006
$'000June 30, 2005
$’000YTD 2006
$'000YTD 2005
$’000

Revenue5,2535,55911,3359,725

Gross Margin8033401.918(240)

Net Earnings/(Loss)(629)(671)(563)(2,278)

No. of Common Shares-average30,107,13127,070,65929,454,56027,012,110

Earnings/(Loss) per Share in Dollars-diluted(0.02)(0.02)(0.02)(0.08)


As expected and as indicated in the press release accompanying our first quarter results, the Company’s second quarter revenue was lower than in the first quarter of 2006. However, both revenue and net earnings were in line with the Company’s business plan and budget. Revenue and net earnings for the year to date were both significantly ahead of the figures reported in 2005 and showed the level of recovery achieved by the business over the last twelve months. A further small loss is expected to be reported in the third quarter, but management is still forecasting an overall profit for the year.

Order intake has been strong over recent months and further large orders are currently being finalised for parts for two more Royal Navy destroyers and for an high-voltage direct current station (HVDC) in the Gulf States. As a result, the order book for our high power products is expected to be at its highest level for more than three years.

Dr Paul Taylor, President and Chief Executive Officer commented that “Quarter 2 has remained on plan. Looking forward, our outlook for the coming two quarters is for revenues in the third quarter to be similar to the second quarter whilst revenues in the fourth quarter will be stronger and the financial performance will be sustained in to next year.”

Bob Lockwood, Chief Financial Officer, stated that “we were delighted to have again performed in accordance with our business plan and budget. We expect revenue in the third quarter to remain at similar levels to that reported in the second quarter as we complete the transition to new materials for our Integrated Circuits business and as the major Assemblies projects that are currently being booked do not start until late in the third quarter. Revenue is expected to pick up in the fourth quarter. We expect to report a small loss in the third quarter before returning to profit in the final quarter. The year is unfolding in accordance with our business plans. We continue to expect 2006 to be profitable overall.”

For more information:

Dr. Paul Taylor
President and Chief Executive Officer
or
Bob Lockwood
Finance Director and Chief Financial Officer
Dynex Power Inc.
Tel: UK +44 1522 500 500
Email: paul_taylor@dynexsemi.com