Dynex Power Announces Weaker than Expected Second Quarter Results for 2012
Lincoln, England, August 14th, 2012 - Dynex Power Inc., a leading, high power semiconductor company, today announced its financial results for the second quarter and six months ended June 30th, 2012.
In the Company’s May 16, 2012 announcement of its first-quarter results, management indicated its expectation of a strong second quarter followed by a challenging second half. However, the expected Q2 results did not materialize, primarily because of the delay in one expected shipment, which was pushed into the third quarter. Looking now at the remainder of 2012, management still expects markets to remain challenging. However, Dynex also commented on its enhanced medium to long-term outlook, highlighted by its improved order book for 2013.
Second quarter revenue of $9.9 million was, nonetheless, 9% higher than the corresponding quarter of last year. The increase was the result of significantly higher sales of power modules and die from the new fabrication lines and smaller increases in revenue from the sale of bipolar devices and services, partially offset by reductions in revenues from integrated circuits and power electronic assemblies.
Year to date revenue of $20.4 million was 23% higher than in the same six-month period last year. Here again, there was growth in revenue of power modules, die, bipolar devices and services with reductions in revenue from integrated circuits and power electronic assemblies.
The gross margin of 15.9%was lower than the 21.5% reported in the corresponding quarter of last year. The reduction in margin reflected a change in product mix. For the year to date, the gross margin was 20.6% compared to 20.7% in the corresponding period last year.
Other income, expenses and costs represented 13.6% of revenue in the second quarter of 2012 and14.4% for the year to date compared with 13.2% and 14.3% in the corresponding periods of last year.
As a consequence of these changes, the Company generated profit before tax in the quarter of $226,000, compared to $755,000 in the corresponding quarter of last year and net profit in the quarter of $142,000 compared with $540,000 in the corresponding quarter of last year. For the year to date, gross profit increased by 18% to $1.3 million with net profit rising by 19% to $901,000. Earnings per share for the year to date of $0.01 were the same as in the first six months of last year.
At the end of the second quarter, the Company’s order book stood at $20.1 million, approximately 25% higher than at the end of the first quarter. The increase reverses a decline seen during the first quarter and leaves the order book approximately 2% higher than it was at the end of 2011. Management remains confident of strong growth in 2013 but remains cautious about the outlook for the second half of 2012.
Dr. Paul Taylor, President and Chief Executive Officer commented, “Our second quarter results reflect three significant, negative factors. First, because of a discrepant letter of credit, we were unable to ship to an Indian customer, the results of which would have made our second quarter results nearly comparable to the first. Second, we are operating in a very troubled and uncertain economic environment. While we expect our 2013 order book to be strong, the current quarter was difficult and the third and fourth quarters of 2012 remain uncertain. Third, expenses were elevated by increased staff levels in contemplation of our 2013 order book and the return of the China rail market opportunities. While this is negatively impacting the current year, our medium-term outlook is stronger than the market in general and we are very pleased with our competitive positioning.”
Dr. Taylor continued, “We recently celebrated the formal opening of our impressive Research and Development Centre in Lincoln. For many reasons, it is a symbol of the turn-around and aspirations of the fortunes of Dynex. It helps position us for the realization of our joint goal with the Power Electronic Business Unit of CSR Times Electric to become one of the top three high power semiconductor firms. It is also the capstone of the strong synergies between Dynex and its controlling shareholder.”
Bob Lockwood, Chief Financial Officer commented, “The current marketplace remains challenging for Dynex and this is reflected in the results for the second quarter. We remain cautious about the rest of this year. We are unlikely to see revenue growth in the next two quarters and our efforts will be directed towards controlling our costs whilst ensuring we are ready for future growth which we now expect to see in 2013. We remain positive on the medium and longer-term prospects for the Company.”
Li Donglin, the Chairman of Dynex said, “These results reflect the difficult marketplace in which Dynex is operating and our expectations for the second half of 2012 have to be seen in the context of the current world economic environment. Nevertheless, we believe Dynex is well positioned for future growth and, once the current difficulties in world markets are overcome, the future of Dynex remains very attractive.”
For more information:
Dr. Paul Taylor
President and Chief Executive Officer
Finance Director and Chief Financial Officer
Dynex Power Inc.
Tel: UK +44 1522 500 500