Dynex Power Announces Third Quarter Results for 2008


Lincoln, England, November 20th, 2008 – Dynex Power Inc., a leading specialist high power semiconductor company, today announced results for the third quarter of 2008.

The Company’s revenue in the third quarter was 7% ahead of that reported in the corresponding quarter of last year with strong growth reported in the Power Modules, Power Electronic Assemblies and Bipolar Discrete Units product groups whilst revenue for Integrated Circuits declined steeply from the high figure reported last year. Revenue for the year to date is 21% ahead of the same period last year, with growth in all four product groups. As expected, the less favourable mix of sales resulted in a gross margin of 23.0% in the quarter compared with 25.5% in the same quarter last year. The business reported earnings of $395,000 in the quarter and $3.9 million for the year to date. Last year the Company recorded earnings of $915,000 for the quarter and $1.1 million for the year to date.

Dr Paul Taylor, President and Chief Executive Officer commented that “As we expected, our gross margins and net profits are lower in the third quarter than they were in the first two quarters of the year. Our order book remains at a record level and the 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”. Commenting on the recent corporate transaction, Dr Taylor added “The acquisition of 75% of the Company’s equity by Zhuzhou CSR Times Electric Co., Ltd., which was completed at the end of October, opens a new chapter in the Company’s history. We look forward to the opportunities this will give us to strengthen our business, particularly in power modules, and to co-operate with CSR Times Electric.”

Bob Lockwood, Chief Financial Officer, stated that “The reduction in sales of Integrated Circuits has led to a lower gross profit margin in the third quarter and this is expected to continue until new Integrated Circuit die stocks become available sometime in the middle of next year. In addition, one-off costs related to the recently completed acquisition of 75% of the Company’s equity by CSR Times Electric have increased our overhead costs substantially in the quarter. Despite these changes, and the steep increase in electricity costs which will impact on the fourth quarter results, we remain on track and confident that revenue and earnings for 2008 will be significantly better than those reported in 2007.”

Mr Lu Penghu, the President of CSR Times Electric and the newly appointed Chairman of Dynex said “It is clear that Dynex has been growing its position in the world market and strengthening its financial performance over recent years. We are delighted to have completed our acquisition of 75% of Dynex’s common shares at such a point in its history and I look forward to working with Dynex’s existing directors and employees to ensure that the Company continues to grow and fulfil its potential.”

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 September 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.