Dynex Power Announces Stronger Second Quarter Results
Management forecast a significant increase in revenue in the second quarter and a return to profitability, which has proven to be the case
Lincoln, England, August 21st, 2013 - Dynex Power Inc., a leading, high power semiconductor company, today announced its financial results for the second quarter and six months ended June 30th, 2013.
Summary financial information for the three and six months ended June 30th, 2013 is as follows:
In the press release accompanying the first quarter results in 2013, management forecast a significant increase in revenue in the second quarter and a return to profitability, which has proven to be the case. Revenue increased by 45% over that reported in the first quarter of 2013, with net profit reaching $0.5 million.
Second quarter revenue of $10.0 million was 1% higher than the corresponding quarter of last year. The increase was the result of significantly higher sales of power assemblies and integrated circuits, offset by a reduction in sales of power modules and die.
As a consequence of the weak sales in the first quarter, year to date revenue of $16.8 million was 17% lower than in the same six-month period last year. The reduction reflected a major decline in sales of power modules and die and a smaller decrease in bipolar sales, partially offset by increased sales of integrated circuits, power assemblies and services.
The gross margin of 19.4% in the second quarter of 2013 was higher than the 15.9% reported in the corresponding quarter of last year. This increase in margin reflected a good product mix in the quarter. For the year to date, the gross margin was 10.0% compared to 20.6% in the corresponding period last year. The year-over-year reduction reflects the gross margin loss reported in the first quarter.
Other income, expenses and costs represented 13.3% of revenue in the second quarter of 2013 and 14.7% for the year to date compared with 13.6% and 14.4% in the corresponding periods of last year.
As a consequence of these changes, Dynex generated profit before tax in the quarter of $608,000, compared to $226,000 in the corresponding quarter of last year and net profit in the quarter of $527,000 compared with $142,000 in the corresponding quarter of last year. For the year to date, a loss before tax of $796,000 was recorded, with a net loss of $527,000. This compares with a profit before tax of $1.3 million and a net profit of $901,000 in the corresponding period of last year. The decline in the year to date performance reflects the weak results in the first quarter. The Company had earnings per share in the second quarter of 2013 of $0.01 but for the year to date a loss per share of $0.01, compared with earnings per share of $0.01 in the first six months of last year.
At the end of the second quarter, the Company’s order book stood at $22.4 million, approximately 10% lower than at the end of the first quarter, although still well ahead of where it stood at the end of last year. The slowdown in orders received in the second quarter has led management to be more cautious about prospects for the rest of the year. Revenue is expected to remain at about the level seen in the second quarter although the product mix may be less favourable. Whilst the business is expected to remain profitable in the coming quarters, management can no longer be confident that revenue and profits for the year will exceed those achieved in 2012.
Dr. Paul Taylor, President and Chief Executive Officer commented, “Dynex’s second-quarter results show a dramatic improvement over the first quarter. Whilst we are pleased with the improvement, we are not yet seeing the magnitude of growth that we expected in 2013. We continue to believe that this strong growth will be achieved but are cautious about the timing. One large order was deferred into 2014 and the effect was material enough to elevate the caution we already felt.”
Bob Lockwood, Chief Financial Officer commented, “The markets in which we operate remain challenging. We continue to see customers delaying placing orders and, indeed, pushing back existing orders by three or six months. Such delays severely disrupt our planning and require us to revise our revenue forecasts. They are a clear indication of the difficult markets in which our customers are operating. We continue to believe that these problems and delays will abate as our customers’ experience an improved operating environment.”
Li Donglin, the Chairman of Dynex said, “Like, I am sure, other shareholders in Dynex, the Board of Directors is disappointed with the current financial performance of the Company. We understand the difficulties currently being faced and we remain confident in management’s ability to overcome these problems and demonstrate a period of sustained growth.”