Listing: TSX Venture Exchange
Symbol: DNX
Significant revenue growth; improved cash
flow; losses reduced by 83%
LINCOLN, England, March 29, 2018 /CNW/ - Dynex Power Inc. (TSXV:
DNX), a leading, high power, semiconductor company, today announced
its financial results for the year ended December 31st, 2017.
Summary financial information for the twelve months ended
December 31st, 2017 is as
follows:
Dollars
(000's)
|
Dec. 31,
2017
|
Dec. 31,
2016
|
Revenue
Gross
profit
Expenses
(Loss) before
tax
Income tax
recovery
Net (loss)
EBITDA
Operating
cash
Weighted average
common shares outstanding - fully diluted
Earnings per
share - diluted
|
47,466
6,097
(6,941)
(844)
7
(837)
4,418
3,313
80,509,047
(0.01)
|
40,519
2,090
(8,041)
(5,951)
1,031
(4,919)
(523)
(501)
80,509,047
(0.06)
|
Revenue for the year of $47.5
million was 17% higher than in the preceding year. In
sterling terms (sterling weakened approximately 6% versus the
Canadian dollar), revenue grew by approximately 25%, and was the
highest in the history of the company. The growth in revenues was
driven by a strong performance across all lines of business.
The Group reported a gross profit of $6.1
million for the year, equivalent to 12.9% of revenue,
compared to a gross profit of $2.1
million, or 5.2% of revenue, last year. The growth in gross
profit was achieved through a higher volume of business, improved
execution, and lower inventory provisions.
Expenses decreased from $8.0
million in 2016 to $6.9
million in 2017. This headline decrease was driven by other
income of $1.5m, with underlying
expenses (excluding other income) of $8.4
million, an increase on 2016 of $0.4
million. Accounting for this increase were research and
development costs which rose by $ 0.2
million, and foreign exchange losses of $0.2 million.
Dynex recorded a loss before tax of $0.8
million in 2017, compared to a loss before tax of
$5.9 million in 2016.
Dynex reported positive operating cash flow of $3.3 million in 2017 compared with negative
operating cash of $0.5 million in
2016. This was helped by a reduction in inventory of $0.9 million. Free cash flow was a positive
$2.7 million, compared to a negative
$0.5 million in 2016. EBITDA
strengthened to $4.4 million,
compared to a negative EBITDA of $0.5
million in 2016.
New orders received in 2017 totalled $42.5 million, resulting in a book-to-bill ratio
of 0.9. The closing order book at the end of 2017 was $9.1 million, compared with $13.4 million at the end of 2016. The market is
moving towards shorter lead times; the Company is responding to
this through improvements in operational efficiency, strategic
stocking on high volume parts, and more efficient marketing.
Clive Vacher, President and Chief
Executive Officer commented, "Dynex made substantial progress in
2017, following the robust five-workstream turnaround plan tabled
at the AGM in June. The key performance metrics show strong
improvement, and the financials have followed. Most importantly,
from a product perspective, our progress in 2017 has provided the
confidence that Dynex can be a leader in the industry, with
market-leading levels of technology, quality and performance. Much
work still needs to be done to bring sustained profitability and
growth, and there are some short-term concerns related to the
current backlog. As a result of the diminished backlog, we will not
be able to sustain a revenue level that shows profitability in the
first quarter of 2018. However, we are intensely focused on
increasing order intake. This, coupled with some significant cost
reductions, forms part of the next iteration of the turnaround
plan, which intensively focuses on long-term financial stability
and growth. It will take time, but our confidence is high."
Alan Lyons, Chief Financial
Officer added, "The results for 2017 are a very positive
improvement. As our operational efficiency improvements continue,
the results will translate into improved financial performance.
While we continue to pursue the goal of further revenue growth in
2018, we are also focusing on cost reduction and working capital
initiatives to improve our margin and operating cash flow.
Specifically, our cost reduction activities are progressing well,
and we will build on $1m of
annualised savings that we are expecting to lock in during Quarter
1 2018. The first half of 2018 will be challenging, but we
intend to build on the positive improvements of 2017 and show
success in 2018 and beyond."
Mr Liu Ke'an, the Chairman of
Dynex, commented "Dynex's results in 2017 demonstrate a material
improvement in performance. This represents a very encouraging
basis for further improvements in 2018. The leadership team has my
full support. I am growing in my confidence that the business now
has the momentum it needs to succeed well into the future."
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
year ended December 31st , 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 and high power electronic
assemblies. 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. 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 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 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.
|
Consolidated
Statement of Loss and Other Comprehensive Loss in Canadian
Dollars
|
Year Ended
December 31, 2017
|
|
|
|
|
|
|
|
|
2017
|
2016
|
|
|
|
$
|
$
|
|
|
|
|
|
Revenue
|
|
|
47,466,279
|
40,519,413
|
|
|
|
|
|
Cost of
sales
|
|
|
(41,369,391)
|
(38,429,715)
|
|
|
|
|
|
Gross
profit
|
|
|
6,096,888
|
2,089,698
|
|
|
|
|
|
Other
income
|
|
|
1,481,875
|
47,288
|
Sales and marketing
expenses
|
|
|
(1,441,821)
|
(1,429,127)
|
Administration
expenses
|
|
|
(4,228,447)
|
(4,409,051)
|
Research and
development expenses
|
|
|
(1,942,828)
|
(1,733,689)
|
Finance
costs
|
|
|
(614,784)
|
(730,669)
|
Other
(losses)/gains
|
|
|
(195,171)
|
214,933
|
|
|
|
|
|
Loss before
tax
|
|
|
(844,288)
|
(5,950,617)
|
|
|
|
|
|
Income tax
recovery
|
|
|
7,371
|
1,031,493
|
|
|
|
|
|
Net
loss
|
|
|
(836,917)
|
(4,919,124)
|
|
|
|
|
|
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)
|
|
|
799,802
|
(7,278,651)
|
|
|
|
|
|
Total
comprehensive loss for the period
|
|
|
(37,115)
|
(12,197,775)
|
|
|
|
|
|
Loss per
share
|
|
|
|
|
Basic
|
|
|
(0.01)
|
(0.06)
|
Diluted
|
|
|
(0.01)
|
(0.06)
|
DYNEX POWER
INC.
|
Consolidated
Statement of Financial Position in Canadian Dollars
|
As at December 31,
2017
|
|
|
|
|
|
|
|
|
2017
|
2016
|
|
|
|
$
|
$
|
|
|
|
|
|
NON-CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
|
Intangible
assets
|
|
|
1,475,016
|
1,524,346
|
Property, plant &
equipment
|
|
|
29,338,663
|
31,565,940
|
Deferred tax
asset
|
|
|
1,292,441
|
1,127,322
|
|
|
|
|
|
Total non-current
assets
|
|
|
32,106,120
|
34,217,608
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
|
Inventories
|
|
|
10,961,596
|
11,854,067
|
Trade
receivables
|
|
|
4,637,011
|
4,035,481
|
Amounts owing from
group undertakings
|
|
|
8,704,381
|
3,573,709
|
Prepayments, deposits
& other receivables
|
|
|
2,138,954
|
2,297,786
|
Tax
recoverable
|
|
|
-
|
682
|
Cash
|
|
|
3,564,624
|
898,855
|
|
|
|
|
|
Total current
assets
|
|
|
30,006,566
|
22,660,580
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Trade
payables
|
|
|
1,271,903
|
3,010,756
|
Amounts owing to
group undertakings
|
|
|
3,701,225
|
2,103,917
|
Other payables and
accruals
|
|
|
7,204,708
|
3,290,095
|
Borrowings
|
|
|
20,292,764
|
16,380,290
|
Provisions
|
|
|
173,339
|
456,773
|
|
|
|
|
|
Total current
liabilities
|
|
|
32,643,939
|
25,241,831
|
|
|
|
|
|
NON-CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
3,146,100
|
5,141,190
|
Provisions
|
|
|
50,932
|
186,337
|
|
|
|
|
|
Total non-current
liabilities
|
|
|
3,197,032
|
5,327,527
|
|
|
|
|
|
NET
ASSETS
|
|
|
26,271,715
|
26,308,830
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
|
|
Share
capital
|
|
|
37,096,192
|
37,096,192
|
Accumulated
deficit
|
|
|
(11,365,142)
|
(10,528,225)
|
Foreign currency
translation reserve
|
|
|
540,665
|
(259,137)
|
|
|
|
|
|
TOTAL
EQUITY
|
|
|
26,271,715
|
26,308,830
|
DYNEX POWER
INC.
|
Consolidated
Statement of Changes in Equity in Canadian Dollars
|
Year Ended
December 31, 2017
|
|
|
|
|
|
|
|
|
Foreign
|
|
|
|
|
Currency
|
|
|
Share
|
Retained
|
Translation
|
Total
|
|
Capital
|
(Deficit)
|
Reserve
|
Equity
|
|
$
|
$
|
$
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At January 1st,
2016
|
37,096,192
|
(5,609,101)
|
7,019,514
|
38,506,605
|
|
|
|
|
|
Total comprehensive
loss for the period
|
-
|
(4,919,124)
|
(7,278,651)
|
(12,197,775)
|
|
|
|
|
|
|
|
|
|
|
At December 31st,
2016
|
37,096,192
|
(10,528,225)
|
(259,137)
|
26,308,830
|
|
|
|
|
|
Total comprehensive
(loss)/income for the period
|
-
|
(836,917)
|
799,802
|
(37,115)
|
|
|
|
|
|
|
|
|
|
|
At December 31st,
2017
|
37,096,192
|
(11,365,142)
|
540,665
|
26,271,715
|
DYNEX POWER
INC.
|
Consolidated
Statement of Cash Flows in Canadian Dollars
|
Year Ended
December 31, 2017
|
|
|
|
|
|
|
|
|
2017
|
2016
|
|
|
|
$
|
$
|
CASH FLOW FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Loss before
tax
|
|
|
(844,288)
|
(5,950,617)
|
Finance costs
recognised in loss before tax
|
|
|
614,784
|
730,669
|
Investment income
recognised in loss before tax
|
|
|
518
|
(844)
|
Amortization of
intangible assets
|
|
|
303,469
|
206,087
|
Depreciation of
property, plant & equipment
|
|
|
4,642,742
|
4,897,300
|
Loss/(gain) on
disposal of property, plant & equipment
|
|
|
(45,873)
|
(5,348)
|
Provision for slow
moving and obsolete inventory
|
|
|
(6,345,671)
|
1,841,951
|
Non cash movement in
provisions
|
|
|
(35,540)
|
-
|
Movements in working
capital
|
|
|
5,151,166
|
(2,109,223)
|
Income taxes
paid
|
|
|
(128,318)
|
(110,675)
|
|
|
|
|
|
Net cash generated
by/(used in) operating activities
|
|
|
3,312,989
|
(500,700)
|
|
|
|
|
|
CASH FLOW FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Payments for
intangible assets
|
|
|
(205,740)
|
(437,513)
|
Payments for
property, plant & equipment
|
|
|
(1,508,275)
|
(1,385,381)
|
Proceeds on disposal
of property, plant & equipment
|
|
|
81,568
|
6,656
|
Interest
received
|
|
|
(518)
|
844
|
|
|
|
|
|
Net cash used in
investing activities
|
|
|
(1,632,965)
|
(1,815,394)
|
|
|
|
|
|
CASH FLOW FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Proceeds from
borrowings
|
|
|
18,417,509
|
2,821,288
|
Repayments of
borrowings
|
|
|
(17,136,898)
|
(603,728)
|
Interest
paid
|
|
|
(301,343)
|
(324,668)
|
Payments for other
finance costs
|
|
|
(14,465)
|
-
|
|
|
|
|
|
Net cash generated
by financing activities
|
|
|
964,803
|
1,892,892
|
|
|
|
|
|
NET
INCREASE/(DECREASE) IN CASH
|
|
|
2,644,827
|
(423,202)
|
|
|
|
|
|
Cash at beginning of
period
|
|
|
898,855
|
1,410,547
|
|
|
|
|
|
Effect of foreign
currency translation on cash
|
|
|
20,942
|
(88,490)
|
|
|
|
|
|
CASH AT END OF
PERIOD
|
|
|
3,564,624
|
898,855
|
SOURCE Dynex Power Inc.