Third Quarter Results Impacted by Continuing Uncertainty in World Markets
Lincoln, England, November 12th, 2012 - Dynex Power Inc., a leading, high power semiconductor company, today announced its financial results for the third quarter and nine months ended September 30th, 2012.
Summary financial information for the three and nine months ended September 30th, 2012 is as follows:
The results were in line with management’s expectations, as outlined in the Company’s August 14th, 2012 announcement of its ssecond-quarterresults. Management expected the second half of the year to be challenging, with revenue growth unlikely and stated that emphasis would be placed on controlling costs whilst preparing for revenue to rebound in 2013. Third quarter results have borne out this caution.
In line with this expectation, third quarter revenue of $9.3 million was 6% lower than the corresponding quarter of last year. The decrease was the result of significantly lower sales of power electronic assemblies and a small decrease in the sales of integrated circuits, partially offset by small increases in sales of bipolar discrete, IGBT modules and die products and service revenue.
On a year to date basis, revenue of $29.7 million was 12% higher than in the same nine-month period last year. The change comprised a significant increase in sales of power modules and die and smaller increases in bipolar discrete and services revenue partially offset by reductions in revenue for integrated circuits and power electronic assemblies.
The third quarter gross margin of 15.7% was lower than the 30.2% reported in the corresponding quarter of last year. The gross margin in the corresponding quarter of last year included a one-off credit without which gross margin would have been around 24.3%. For the year to date, the gross margin was 19.1% compared to 24.2% in the corresponding period last year.
Other income, expenses and costs represented 13.9% of revenue in the third quarter of 2012 and 14.3% for the year to date compared with 13.3% and 13.9% respectively in the corresponding periods of last year.
As a consequence of these changes, the Company generated profit before tax in the third quarter of 2012 of $166,000, compared to $1.7 million in the corresponding quarter of last year and net profit in the quarter of $109,000 compared with $1.2 million in the corresponding quarter of last year. For the year to date, profit before tax was $1.4 million with net profit of $1.0 million compared to $2.7 million and $2.0 million in the corresponding period of last year. Earnings per share for the year to date of $0.01 were below the $0.02 in the first nine months of last year.
At the end of the third quarter, the Company’s order book stood at $19.7 million, approximately 1% lower than at the end of the second quarter. This was the same level as it had been at the end of 2011. Management is cautious about the outlook for the fourth quarter of 2012 and the first quarter of 2013 but remains confident that there will be growth in revenue in 2013 compared with 2012.
Dr. Paul Taylor, President and Chief Executive Officer commented, “Our financial performance continues to be heavily impacted by the ongoing troubled markets around the world, which is causing our customers to exercise extreme caution in their buying programs. European markets particularly have been constrained and the China rail expansion is only slowly regaining its growth. Our long term future remains strong. However, until the global economy becomes more settled, our customers will continue to operate cautiously.”
Dr. Taylor continued, “We are fortunate to have the support from CSR Times Electric that enables us to continue with the investment that will ensure we are well placed to take advantage when these markets do recover.”
Bob Lockwood, Chief Financial Officer commented, “While we expected the third quarter to be constrained, we are not at all pleased with the result. We remain cautious about the fourth quarter of this year and the first quarter of next year. We are unlikely to see revenue growth in the short term. As promised, we have kept our expenditure under control and 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 currently operates. We have no doubt that Dynex is well positioned for future growth in China and other global markets 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