Dynex Power Announces Second Quarter Results for 2008
Lincoln, England, August 7th, 2008 – Dynex Power Inc., a leading, independent power semiconductor company, today announced results for the second quarter of 2008.
The Company’s revenue in the second quarter was 47% ahead of that reported in the corresponding quarter of last year with strong growth reported in the Bipolar Discrete Units, Power Modules and Integrated Circuits product groups whilst revenue for Power Electronic Assemblies declined slightly. Revenue for the year to date is 29% ahead of the same period last year, with growth once again in Bipolar Discrete Units, Power Modules and Integrated Circuits and a small decrease in revenue in Power Electronic Assemblies. A favourable mix of sales resulted in a gross margin of 40.2% in the quarter compared with 21.9% in the same quarter last year. As a result, the business was able to report earnings of $2.3 million in the quarter and $3.5 million for the year to date. Last year the Company recorded earnings of $189,000 for the quarter and $151,000 for the year to date.
Dr Paul Taylor, President and Chief Executive Officer commented that “This has been our best quarter to date and completes twelve months of solid achievement. Moreover, order in-take in excess of $15 million in the quarter and a record order book should ensure that revenues remain strong in the second half of 2008 and well into 2009. Our outlook is for continuing growth in the power business units, but we expect sales in Integrated Circuits to be lower until at least the middle of 2009.”
Bob Lockwood, Chief Financial Officer, stated that “the second quarter earnings were very strong as they were enhanced by extraordinarily high sales of Integrated Circuits. Looking forward, the expected reduction in Integrated Circuit revenues will lessen our gross profit margins in the second half of 2008 and the first half of 2009. In addition, the recent rise in UK energy prices will add between $1 million and $1.5 million to our annual costs. Nevertheless, for 2008 as a whole, revenue and earnings are expected to be significantly better than those reported in 2007.
David Banks, Chairman, expressed his satisfaction with the second quarter result. He also took the opportunity to comment on progress on the discussion with CSR Times Electric Company about their proposed acquisition of a majority of the Company. Mr Banks said “although progress has been a little slower than both Dynex and TEG would have liked, the discussions have developed satisfactorily so far. The due diligence has been largely completed, the negotiation of the documentation is nearly complete and shortly we expect to be able to put a Plan of Arrangement along with a Circular for a Special Meeting of Shareholders to shareholders. We continue to believe strongly that the proposed tie-up with CSR Times Electric Company will see the start of an exciting new period in the history of Dynex”.
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 Company’s management discussion and analysis for the quarter ended June 30th, 2008 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; the worldwide demand for and supply of silicon; 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.