Return To Profitability
Listing: TSX Venture Exchange
Symbol: DNX
LINCOLN, England, Nov. 28, 2016 /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, 2016.
Summary financial information for the three and nine months
ended September 30th, 2016 is as
follows:
|
|
|
|
|
Canadian Dollars
(000's)
|
Sept 30,
2016
|
Sept 30,
2015
|
YTD
2016
|
YTD 2015
|
Revenue
|
11,079
|
12,254
|
30,474
|
33,794
|
Gross
Profit
|
2,071
|
1,081
|
3,141
|
314
|
Other Income,
Expenses and Costs
|
(1,719)
|
(478)
|
(5,413)
|
(3,608)
|
Profit/(Loss) before
Tax
|
352
|
603
|
(2,272)
|
(3,294)
|
Income Tax
(Expense)/Recovery
|
(116)
|
(120)
|
318
|
577
|
Net
Profit/(Loss)
|
236
|
483
|
(1,954)
|
(2,717)
|
Common shares
outstanding¹-diluted
|
80,509,047
|
80,509,047
|
80,509,047
|
80,509,047
|
Earnings per share -
diluted
|
0.00
|
0.01
|
(0.02)
|
(0.03)
|
|
|
|
|
|
¹ Weighted
average for the period
|
Revenue in the third quarter of 2016 was $1.2 million or 10% lower than in the
corresponding quarter of last year. The whole of this reduction was
as a result of the strengthening of the Canadian Dollar against
Sterling. In the UK operating company, revenue in Sterling had
risen by approximately 5% with a significant increase in service
revenue being partially offset by a reduction in bipolar revenue.
For the year to date, revenue was $3.3
million or 10% lower than in the corresponding period of
last year. Approximately 60% of the reduction was as a result
of the strengthening of the Canadian Dollar against Sterling. The
rest of the reduction was as a result of a significant fall in
bipolar revenue partially offset by stronger service revenue.
The gross margin was 18.7% of revenue in the third quarter of
2016 compared to a gross margin of 8.8% of revenue in the third
quarter of 2015. For the year to date, the gross margin was 10.3%
compared to 0.1% in the corresponding period of last year. Despite
the strong improvement, gross margin for the year to date is still
below the level targeted by management.
Sales and marketing and administration expenses represented
12.0% of revenue in the third quarter and 13.2% of revenue for the
year to date compared to 7.4% and 10.5% in the corresponding
periods in 2015. The increase reflected a conscious decision by
management to strengthen the sales team and a lower cross charge to
R&D in the quarter.
The net expenditure on research and development for the third
quarter of 2016 was $266,000. In the
corresponding quarter of last year, there had been a surplus from
research and development of $198,000.
For the year to date, net expenditure was $1.0 million compared to a credit of $100,000 in the corresponding period of last
year. The increase in the cost to the Group reflected the increase
in R&D work being undertaken whilst third party support had not
risen as quickly.
As a consequence of these changes, Dynex reported a profit
before tax in the quarter of $352,000
compared to a profit before tax of $603,000 in the corresponding quarter of last
year. For the year to date, a loss before tax of $2.3 million was recorded compared to a loss
before tax of $3.3 million in the
corresponding period of last year.
At the end of the third quarter, the Company's order book stood
at $17.2 million, approximately 22%
higher than at the end of the second quarter. At the end of 2015,
the order book had stood at $15.2
million.
Revenue is expected to be rise in the fourth quarter and
management expects to remain profitable.
Dr. Paul Taylor, President and
Chief Executive Officer commented, "Market conditions remain tough.
Our customers remain cautious but we have managed to increase
revenue in the third quarter and to return to profitability and we
expect to increase revenue further and remain profitable in the
fourth quarter."
Bob Lockwood, Chief Financial
Officer commented, "Third quarter results show an improvement and
we are pleased to be back in profit. But management is clear that
we need to make further improvements in order to reach the levels
of profitability that we are targeting."
Liu Ke'an, the Chairman of Dynex
said, "I am pleased to be able to report a net profit for the
quarter. We are determined that we should remain profitable going
forward and management is clear about the improvements that need to
be made.."
Forward-looking Statements
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 Management's Discussion and Analysis for the
quarter ended September 30th , 2016
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; 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.
About the Company
Dynex designs and
manufactures high power bipolar semiconductors, high power
insulated gate bipolar transistor (IGBT) modules and die, 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.
The Company's 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. In 2008, a majority of the shares of Dynex were
acquired by Zhuzhou CSR Times Electric Co., Ltd. In April 2016 this company changed its name to
Zhuzhou CRRC Times Electric Co., Ltd.
Zhuzhou CRRC 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. CRRC 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, CRRC Times Electric is also engaged in the design,
manufacturing and sale 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 are
available at www.dynexpower.com.
Further information on CRRC 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, 2016
|
|
3
months
|
3 months
|
YTD
|
YTD
|
|
Sept
30th
|
Sept 30th
|
Sept
30th
|
Sept
30th
|
|
2016
|
2015
|
2016
|
2015
|
|
$
|
$
|
$
|
$
|
|
|
|
|
|
Revenue
|
11,079,036
|
12,254,372
|
30,474,329
|
33,794,045
|
|
|
|
|
|
Cost of
sales
|
(9,008,230)
|
(11,173,043)
|
(27,332,962)
|
(33,480,028)
|
|
|
|
|
|
Gross
profit
|
2,070,806
|
1,081,329
|
3,141,367
|
314,017
|
|
|
|
|
|
Other
income
|
9,759
|
29,873
|
38,954
|
73,393
|
Sales and marketing
expenses
|
(365,794)
|
(267,635)
|
(1,084,349)
|
(853,485)
|
Administration
expenses
|
(967,489)
|
(634,796)
|
(2,946,099)
|
(2,709,206)
|
Research and
development expenses
|
(265,680)
|
198,425
|
(1,048,923)
|
100,087
|
Finance
costs
|
(188,567)
|
(187,137)
|
(555,144)
|
(532,426)
|
Other
gains/(losses)
|
59,358
|
383,231
|
181,642
|
313,405
|
|
|
|
|
|
Profit/(loss)
before tax
|
352,393
|
603,290
|
(2,272,552)
|
(3,294,215)
|
|
|
|
|
|
Income tax
(expense)/recovery
|
(116,559)
|
(120,185)
|
318,085
|
576,835
|
|
|
|
|
|
Net
profit/(loss)
|
235,834
|
483,105
|
(1,954,467)
|
(2,717,380)
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income
|
|
|
|
|
|
|
|
|
|
Exchange differences
on translation of foreign operations (net of tax of
$nil)
|
(629,240)
|
1,420,660
|
(6,410,162)
|
3,667,858
|
|
|
|
|
|
Total comprehensive
(loss)/income
|
(393,406)
|
1,903,765
|
(8,364,629)
|
950,478
|
|
|
|
|
|
Loss per
share
|
|
|
|
|
Basic
|
0.00
|
0.01
|
(0.02)
|
(0.03)
|
Diluted
|
0.00
|
0.01
|
(0.02)
|
(0.03)
|
|
|
|
|
|
DYNEX POWER
INC. Interim Condensed Consolidated Statement of
Financial Position (unaudited) in Canadian Dollars As at
September 30th, 2016
|
|
Sep
30th
|
Dec
31st
|
|
2016
|
2015
|
|
$
|
$
|
|
|
|
NON-CURRENT
ASSETS
|
|
|
|
|
|
Intangible
assets
|
1,229,872
|
1,594,142
|
Property, plant &
equipment
|
33,655,798
|
43,447,376
|
Deferred tax
asset
|
388,819
|
57,838
|
|
|
|
Total non-current
assets
|
35,274,489
|
45,099,356
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
Inventories
|
13,303,943
|
15,215,237
|
Trade
receivables
|
5,013,152
|
6,334,417
|
Amounts owing from
group undertakings
|
3,814,410
|
5,445,377
|
Prepayments, deposits
& other receivables
|
1,541,475
|
1,236,102
|
Tax
recoverable
|
702
|
3,382
|
Cash
|
505,417
|
1,410,547
|
|
|
|
Total
current assets
|
24,179,099
|
29,645,062
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
Trade
payables
|
2,003,131
|
2,371,233
|
Amounts owing to
group undertakings
|
1,247,729
|
760,062
|
Other payables and
accruals
|
4,795,334
|
8,695,638
|
Borrowings
|
11,972,609
|
15,423,684
|
Provisions
|
17,000
|
20,599
|
|
|
|
Total current
liabilities
|
20,035,803
|
27,271,216
|
|
|
|
NON-CURRENT
LIABILITIES
|
|
|
|
|
|
Borrowings
|
9,224,809
|
8,904,800
|
Provisions
|
51,000
|
61,797
|
|
|
|
Total non-current
liabilities
|
9,275,809
|
8,966,597
|
|
|
|
NET
ASSETS
|
30,141,976
|
38,506,605
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
Share
capital
|
37,096,192
|
37,096,192
|
Accumulated
deficit
|
(7,563,568)
|
(5,609,101)
|
Foreign currency
translation reserve
|
609,352
|
7,019,514
|
|
|
|
TOTAL
EQUITY
|
30,141,976
|
38,506,605
|
DYNEX POWER
INC.
Interim Condensed Consolidated Statement of Changes in Equity
(unaudited) in Canadian Dollars
Quarter Ended September 30th, 2016
|
|
|
|
Foreign
|
|
|
|
|
Currency
|
|
|
Share
|
|
Translation
|
Total
|
|
Capital
|
Deficit
|
Reserve
|
Equity
|
|
$
|
$
|
$
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At January 1st,
2015
|
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
|
|
|
|
|
|
Total comprehensive
income for the period
|
-
|
2,883,544
|
648,245
|
3,531,789
|
|
|
|
|
|
Capital
Contribution
|
-
|
1,641,375
|
-
|
1,641,375
|
|
|
|
|
|
|
|
|
|
|
At December 31st,
2015
|
37,096,192
|
(5,609,101)
|
7,019,514
|
38,506,605
|
|
|
|
|
|
Total comprehensive
income for the period
|
-
|
(1,954,467)
|
(6,410,162)
|
(8,364,629)
|
|
|
|
|
|
|
|
|
|
|
At September 30th
2016
|
37,096,192
|
(7,563,568)
|
609,352
|
30,141,976
|
DYNEX POWER
INC. Interim Condensed Consolidated Statement of Cash
Flows (unaudited) in Canadian Dollars Quarter Ended
September 30th, 2016
|
|
YTD
|
YTD
|
|
Sept
30th
|
Sept
30th
|
|
2016
|
2015
|
|
$
|
$
|
CASH FLOW FROM
OPERATING ACTIVITIES
|
|
|
Loss before
tax
|
(2,272,552)
|
(3,294,215)
|
Finance costs
recognised in loss before tax
|
555,143
|
532,426
|
Investment income
recognised in loss before tax
|
(844)
|
-
|
Amortization of
intangible assets
|
157,886
|
121,162
|
Depreciation of
property, plant & equipment
|
3,773,372
|
3,919,523
|
Provision for slow
moving and obsolete inventory
|
440,500
|
(41,191)
|
Movements in working
capital
|
(2,790,706)
|
(4,131,890)
|
Income taxes
paid
|
(66,545)
|
201
|
|
|
|
Net cash
generated(used) by operating activities
|
(203,746)
|
(2,893,984)
|
|
|
|
CASH FLOW FROM
INVESTING ACTIVITIES
|
|
|
Payments for
intangible assets
|
(54,685)
|
(127,878)
|
Payments for
property, plant & equipment
|
(1,350,943)
|
(2,795,671)
|
Interest
received
|
844
|
-
|
|
|
|
Net cash used in
investing activities
|
(1,404,784)
|
(2,923,549)
|
|
|
|
CASH FLOW FROM
FINANCING ACTIVITIES
|
|
|
Proceeds from
borrowings
|
2,821,288
|
38,687,049
|
Repayments of
borrowings
|
(1,573,144)
|
(31,807,568)
|
Interest
paid
|
(465,323)
|
(650,199)
|
|
|
|
Net cash generated by
financing activities
|
782,821
|
6,229,282
|
|
|
|
NET
(DECREASE)/INCREASE IN CASH
|
(825,709)
|
411,749
|
|
|
|
Cash at beginning of
period
|
1,410,547
|
894,609
|
|
|
|
Effect of foreign
currency translation on cash
|
(79,422)
|
(625,811)
|
|
|
|
CASH AT END OF
PERIOD
|
505,416
|
680,547
|
SOURCE Dynex Power Inc.