Third Quarter Sees Return to
Profitability
Listing: TSX Venture Exchange
Symbol: DNX
LINCOLN, England, Nov. 23, 2015 /CNW/ - Dynex Power Inc., a
leading, high power semiconductor company, today announced its
financial results for the third quarter and nine months ended
September 30th, 2015.
Summary financial information for the three and nine months
ended September 30th, 2015 is as
follows:
|
|
|
|
|
Canadian Dollars
(000's)
|
Sept 30,
2015
|
Sept 30,
2014
|
YTD
2015
|
YTD 2014
|
Revenue
|
12,254
|
10,410
|
33,794
|
32,038
|
Gross
Profit
|
934
|
1,174
|
166
|
3,625
|
Other Income,
Expenses and Costs
|
(331)
|
(1,435)
|
(3,460)
|
(4,906)
|
Profit/(Loss) before
Tax
|
603
|
(261)
|
(3,294)
|
(1,281)
|
Income Tax (Expense)/
Recovery
|
(120)
|
39
|
577
|
236
|
Net Profit/(Loss
)
|
483
|
(222)
|
(2,717)
|
(1,045)
|
Common shares
outstanding ¹ - diluted
|
80,509,047
|
80,509,047
|
80,509,047
|
80,509,047
|
Earnings per share -
diluted
|
0.01
|
(0.00)
|
(0.03)
|
(0.01)
|
|
|
|
|
|
|
¹ Weighted average
for the period
|
|
|
|
|
Revenue in the third quarter of 2015 was $1.8 million or 17.7% higher than in the
corresponding quarter of last year. Two thirds of this increase was
a result of an 11% weakening of the Canadian Dollar against
Sterling over the last twelve months. The rest of the increase
reflected stronger revenue from sales of IGBT products and
technical services. For the year to date, revenue was $1.8 million or 5% higher than in the first nine
months of 2014. The increase matched the 5% weakening in the
average rate of the Canadian Dollar against Sterling over the
intervening year.
The gross margin of 7.6% in the third quarter of 2015 was lower
than the 11.3% reported in the corresponding quarter of last year.
The gross margin was below the range targeted by management and
reflected the competitive marketplace currently being faced by the
Group. For the year to date, the gross margin was 0.5% compared to
11.3% in the corresponding period last year. This is significantly
below the range being targeted by management and again reflects the
lower level of revenue being reported compared to management's
expectations and additional manufacturing costs due to unexpected
technical issues as well as the cost of redundancies in the first
quarter.
Sales and marketing and administration expenses represented
10.9% of revenue in the third quarter and 11.8% of revenue for the
year to date compared to 12.0% and 11.6% in the corresponding 2014
periods. These costs have been on a steadily reducing percentage
for a number of years. The small increases in the year to date
figure reflected the poor level of revenue reported in the first
half of 2015. Dynex continues to expect these ratios to improve in
the longer term.
There was no net cost to R&D expenditure in the quarter or
the year to date. There had been no net cost in the corresponding
quarter of the preceding year but there had been a cost equivalent
to 1.6% of revenue in the first nine months of 2014. However, gross
expenditure on research and development (which is calculated before
taking account of the contribution received from CSR Times Electric
and the grants from Government bodies) is higher than last year
both in the current quarter and the year to date and the reduction
in net expenditure reflects the Group's success in attracting
grants and funding for this work together with additional tax
relief available to the Group for research and development which,
following changes in the way this relief operates, is now
accounted for as a reduction in R&D costs rather than as part
of the tax charge. Gross expenditure is currently running at 18.0%
of revenue in the year to date.
As a consequence of these changes, Dynex reported a profit
before tax in the quarter of $603,000, compared to a loss before tax of
$261,000 in the corresponding quarter
of last year. For the year to date, a loss before tax of
$3.3 million was recorded compared to
a loss before tax of $1.3 million in
the corresponding period of last year. The decline in year to date
performance reflects the weaker than expected revenue and
additional manufacturing costs due to unexpected technical issues
that had been experienced in the first half of 2015.
At the end of the third quarter, the Company's order book stood
at $17.0 million, approximately 17%
higher than at the end of the second quarter.
Revenue is expected to be at a similar level in the fourth
quarter to that reported in the third quarter and the Company
expects to record another profit in the fourth quarter.
Dr. Paul Taylor, President and
Chief Executive Officer commented, "We are delighted to be able to
report our first quarterly profit for over two years. Our
manufacturing performance was much improved in the quarter with
greater efficiency and fewer technical issues. These improvements
reflected the on-going continuous improvement activities taking
place in our manufacturing areas. It is also pleasing to report a
further increase in our gross R&D investment, based on the
increasing support we are receiving from our parent company and our
governments."
Bob Lockwood, Chief Financial
Officer commented, "Whilst it is pleasing to be able to report a
return to profitability, we still need to see a significant
improvement in the profitability of the business. However, we are
moving in the right direction".
Li Donglin, the Chairman of Dynex said, "Whilst being pleased to
see the improvement in Dynex's results, we, like all shareholders,
need to see this improvement being repeated in forthcoming
quarters. We remain pleased that through these difficult last few
quarters, the Group has continued to invest heavily in the
development of new products and improved production processes".
About the Company
Dynex designs and manufactures high power bipolar
semiconductors, high power insulated gate bipolar transistor (IGBT)
modules, high power electronic assemblies and radiation hard
silicon-on-sapphire integrated circuits (SOS IC's). The company's
power products are used worldwide in power electronic applications
including electric power transmission and distribution, renewable
and distributed energy, marine and rail traction motor drives,
aerospace, electric vehicles, industrial automation and controls
and power supplies. Our IC products are used in demanding
applications in the aerospace industry. Dynex Semiconductor Ltd is
its only operating business and is based in Lincoln, England in a facility housing the
fully integrated silicon fabrication, assembly and test, sales,
design and development operations. Dynex is majority owned by
Zhuzhou CSR Times Electric Co., Ltd.
Zhuzhou CSR Times Electric Co., Ltd. is based in Hunan Province in the People's Republic of China. It is listed
on the Hong Kong stock exchange.
CSR Times Electric is mainly engaged in the research, development,
manufacture and sales of locomotive train power converters, control
systems and other train-borne electrical systems, as well as the
development, manufacturing and sales of urban railway train
electrical systems. In addition, CSR Times Electric is also engaged
in the design, manufacturing and sales of electric components
including power semiconductor devices for the railway industry,
urban railway industry and non-railway purposes.
Press announcements and other information about Dynex Power Inc
are available at www.dynexpower.com
Information about Dynex Semiconductor Ltd and its products can
be found at www.dynexsemi.com
Further information on CSR Times Electric can be found at
www.timeselectric.cn/en
All monetary values expressed in this release are in Canadian
Dollars unless stated otherwise.
The TSX Venture Exchange has neither approved nor disapproved of
the information in this press release.
DYNEX POWER
INC.
Interim Condensed
Consolidated Statements of Comprehensive Income (unaudited) in
Canadian Dollars
Quarter Ended
September 30th, 2015
|
|
|
|
3
months
|
3 months
|
YTD
|
YTD
|
|
|
Sept
30th
|
Sept 30th
|
Sept
30th
|
Sept
30th
|
|
|
2015
|
2014
|
2015
|
2014
|
|
|
$
|
$
|
$
|
$
|
|
|
|
|
|
|
Revenue
|
|
12,254,372
|
10,410,336
|
33,794,045
|
32,037,895
|
|
|
|
|
|
|
Cost of
sales
|
|
(11,320,599)
|
(9,236,578)
|
(33,627,584)
|
(28,412,871)
|
|
|
|
|
|
|
Gross
profit/(loss)
|
|
933,773
|
1,173,758
|
166,461
|
3,625,024
|
|
|
|
|
|
|
Other
income
|
|
29,873
|
12,212
|
73,393
|
100,561
|
Sales and marketing
expenses
|
|
(267,635)
|
(319,061)
|
(853,485)
|
(868,032)
|
Administration
expenses
|
|
(975,607)
|
(926,825)
|
(3,050,017)
|
(2,842,585)
|
Research and
development expenses
|
|
686,791
|
265,117
|
588,454
|
(501,343)
|
Finance
costs
|
|
(187,137)
|
(193,227)
|
(532,426)
|
(531,158)
|
Other gains and
(losses)
|
|
383,231
|
(272,554)
|
313,405
|
(263,632)
|
|
|
|
|
|
|
Profit/(loss)
before tax
|
|
603,289
|
(260,580)
|
(3,294,215)
|
(1,281,165)
|
|
|
|
|
|
|
Income tax
income
|
|
(120,185)
|
38,507
|
576,835
|
235,797
|
|
|
|
|
|
|
Net profit/(
loss)
|
|
483,104
|
(222,073)
|
(2,717,380)
|
(1,045,368)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income/(loss)
|
|
|
|
|
|
|
|
|
|
|
Items that may be
reclassified subsequently to net profit/(loss):
|
|
|
|
|
|
|
|
|
|
Exchange differences
on translation of foreign operations (net of tax of
$nil)
|
|
1,420,660
|
(239,405)
|
3,667,858
|
988,824
|
|
|
|
|
|
|
Total comprehensive
income/(loss) for the year
|
1,903,764
|
(461,478)
|
950,478
|
(56,544)
|
|
|
|
|
|
|
Loss per
share
|
|
|
|
|
|
Basic
|
|
0.01
|
0.00
|
(0.03)
|
(0.01)
|
Diluted
|
|
0.01
|
0.00
|
(0.03)
|
(0.01)
|
DYNEX POWER
INC.
Interim Condensed
Consolidated Statement of Financial Position (unaudited) in
Canadian Dollars
As at September
30th, 2015
|
|
|
|
|
Sep
30th
|
Dec
31st
|
|
|
|
2015
|
2014
|
|
|
|
$
|
$
|
|
|
|
|
|
NON-CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
|
Intangible
assets
|
|
|
1,301,629
|
1,150,380
|
Property, plant &
equipment
|
|
|
43,473,110
|
39,883,946
|
Deferred Tax
Asset
|
|
|
635,302
|
-
|
|
|
|
|
|
Total non-current
assets
|
|
|
45,410,041
|
41,034,326
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
|
Inventories
|
|
|
13,380,350
|
14,428,876
|
Trade
receivables
|
|
|
6,686,606
|
9,048,235
|
Amounts owing from
parent company
|
|
|
3,010,823
|
2,764,112
|
Prepayments, deposits
& other receivables
|
|
|
1,541,342
|
1,096,467
|
Tax
recoverable
|
|
|
3,336
|
2,965
|
Derivative financial
instruments
|
|
|
-
|
43,624
|
Cash
|
|
|
680,547
|
894,609
|
|
|
|
|
|
Total current
assets
|
|
|
25,303,004
|
28,278,888
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Trade
payables
|
|
|
1,514,017
|
7,073,579
|
Amounts owing to
parent company
|
|
|
1,014,564
|
667,817
|
Other payables and
accruals
|
|
|
8,359,435
|
10,156,372
|
Borrowings
|
|
|
13,234,599
|
4,171,108
|
Provisions
|
|
|
685,441
|
1,824,060
|
|
|
|
|
|
Total current
liabilities
|
|
|
24,808,056
|
23,892,936
|
|
|
|
|
|
NON-CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
12,510,595
|
12,983,135
|
Provisions
|
|
|
60,951
|
54,180
|
Derivative financial
instruments
|
|
|
-
|
-
|
Deferred tax
liabilities
|
|
|
-
|
-
|
|
|
|
|
|
Total non-current
liabilities
|
|
|
12,571,546
|
13,037,315
|
|
|
|
|
|
NET
ASSETS
|
|
|
33,333,441
|
32,382,963
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
|
|
Share
capital
|
|
|
37,096,192
|
37,096,192
|
(Accumulated
deficit)/retained profit
|
|
|
(10,134,020)
|
(7,416,640)
|
Exchange fluctuation
reserve
|
|
|
6,371,269
|
2,703,411
|
|
|
|
|
|
|
|
|
33,333,441
|
32,382,963
|
DYNEX POWER
INC. Interim Condensed Consolidated Statement of Changes
in Equity (unaudited) in Canadian Dollars Quarter Ended
September 30th, 2015
|
|
|
|
|
Foreign
|
|
|
|
Retained
|
Currency
|
|
|
Share
|
Profit/
|
Translation
|
Total
|
|
Capital
|
(Deficit)
|
Reserve
|
Equity
|
|
$
|
$
|
$
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At January 1st,
2014
|
37,096,192
|
(1,868,823)
|
1,820,588
|
37,047,957
|
|
|
|
|
|
Total comprehensive
income for the period
|
-
|
(1,045,368)
|
988,824
|
(56,544)
|
|
|
|
|
|
|
|
|
|
|
At September 30th,
2014
|
37,096,192
|
(2,914,191)
|
2,809,412
|
36,991,413
|
|
|
|
|
|
Total comprehensive
income for the period
|
-
|
(4,502,449)
|
(106,001)
|
(4,608,450)
|
|
|
|
|
|
|
|
|
|
|
At December 31st,
2014
|
37,096,192
|
(7,416,640)
|
2,703,411
|
32,382,963
|
|
|
|
|
|
Total
comprehensive income for the period
|
-
|
(2,717,380)
|
3,667,858
|
950,478
|
|
|
|
|
|
|
|
|
|
|
At September 30th,
2015
|
37,096,192
|
(10,134,020)
|
6,371,269
|
33,333,441
|
DYNEX POWER
INC.
Interim Condensed
Consolidated Statement of Cash Flows (unaudited) in Canadian
Dollars
Quarter Ended
September 30th, 2015
|
|
|
|
|
YTD
|
YTD
|
|
|
|
Sept
30th
|
Sept
30th
|
|
|
|
2015
|
2014
|
CASH FLOW FROM
OPERATING ACTIVITIES
|
|
$
|
$
|
|
|
|
|
|
Loss before
tax
|
|
|
(3,294,215)
|
(1,281,165)
|
Finance costs
recognised in loss before tax
|
|
|
442,303
|
531,158
|
Investment income
recognised in loss before tax
|
|
|
-
|
(2,443)
|
Amortization of
intangible assets
|
|
|
121,162
|
83,229
|
Depreciation of
property, plant & equipment
|
|
|
3,919,520
|
3,222,741
|
Loss on disposal of
property, plant & equipment
|
|
|
-
|
3,964
|
Provision for slow
moving and obsolete inventory
|
|
|
58,308
|
700,872
|
Non cash movement in
provisions
|
|
|
-
|
35,705
|
Movements in working
capital
|
|
|
(4,231,389)
|
2,211,825
|
Income taxes
received/(paid)
|
|
|
201
|
107,941
|
Net cash generated
by/(used in) operating activities
|
|
(2,984,110)
|
5,613,827
|
|
|
|
|
|
CASH FLOW FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
Payments for
intangible assets
|
|
|
(127,878)
|
(383,699)
|
Payments for
property, plant & equipment
|
|
|
(2,795,671)
|
(7,223,624)
|
Interest
received
|
|
|
-
|
2,443
|
Net cash used in
investing activities
|
|
|
(2,923,549)
|
(7,604,880)
|
|
|
|
|
|
CASH FLOW FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Proceeds from
borrowings
|
|
|
38,687,049
|
10,950,723
|
Repayments of
borrowings
|
|
|
(31,807,568)
|
(7,339,987)
|
Interest
paid
|
|
|
(560,075)
|
(524,230)
|
Payments for other
finance costs
|
|
|
-
|
(40,824)
|
Net cash generated
by financing activities
|
|
|
6,319,406
|
3,045,682
|
|
|
|
|
|
NET
INCREASE/(DECREASE) IN CASH
|
|
|
411,747
|
1,054,629
|
|
|
|
|
|
Cash at beginning of
period
|
|
|
894,609
|
775,071
|
|
|
|
|
|
Effect of foreign
currency translation on cash
|
|
|
(626,174)
|
568
|
|
|
|
|
|
CASH AT END OF
PERIOD
|
|
|
680,182
|
1,830,268
|
SOURCE Dynex Power Inc.