Dynex Power Announces Stronger Second Quarter Results
Second Half of 2013 Expected to Remain Challenging with Growth Expectation Delayed
Listing: TSX Venture Exchange
LINCOLN, England, Aug. 21, 2013 /CNW/ - Dynex Power Inc., a leading, high power semiconductor company, today announced its financial results for the second quarter and six months ended June 30th, 2013.
Summary financial information for the three and six months ended June 30th, 2013 is as follows:
|Canadian Dollars (000's)||June 30, 2013||June 30, 2012||YTD 2013||YTD 2012|
|Other Income, Expenses and Costs||(1,328)||(1,343)||(2,365)||(2,944)|
|Profit before Tax||608||226||(796)||1,258|
|Income Tax Expense||(81)||(84)||219||(357)|
|Common shares outstanding ¹ - diluted||80,509,047||80,533,826||80,509,047||80,539,148|
|Earnings per share - diluted||$0.01||$0.00||$(0.01)||$0.01|
|¹||Weighted average for the period|
In the press release accompanying the first quarter results in 2013, management forecast a significant increase in revenue in the second quarter and a return to profitability, which has proven to be the case. Revenue increased by 45% over that reported in the first quarter of 2013, with net profit reaching $0.5 million.
Second quarter revenue of $10.0 million was 1% higher than the corresponding quarter of last year. The increase was the result of significantly higher sales of power assemblies and integrated circuits, offset by a reduction in sales of power modules and die.
As a consequence of the weak sales in the first quarter, year to date revenue of $16.8 million was 17% lower than in the same six-month period last year. The reduction reflected a major decline in sales of power modules and die and a smaller decrease in bipolar sales, partially offset by increased sales of integrated circuits, power assemblies and services.
The gross margin of 19.4% in the second quarter of 2013 was higher than the 15.9% reported in the corresponding quarter of last year. This increase in margin reflected a good product mix in the quarter. For the year to date, the gross margin was 10.0% compared to 20.6% in the corresponding period last year. The year-over-year reduction reflects the gross margin loss reported in the first quarter.
Other income, expenses and costs represented 13.3% of revenue in the second quarter of 2013 and 14.7% for the year to date compared with 13.6% and 14.4% in the corresponding periods of last year.
As a consequence of these changes, Dynex generated profit before tax in the quarter of $608,000, compared to $226,000 in the corresponding quarter of last year and net profit in the quarter of $527,000 compared with $142,000 in the corresponding quarter of last year. For the year to date, a loss before tax of $796,000 was recorded, with a net loss of $527,000. This compares with a profit before tax of $1.3 million and a net profit of $901,000 in the corresponding period of last year. The decline in year to date performance reflects the weak results in the first quarter. The Company had earnings per share in the second quarter of 2013 of $0.01 but for the year to date a loss per share of $0.01, compared with earnings per share of $0.01 in the first six months of last year.
At the end of the second quarter, the Company's order book stood at $22.4 million, approximately 10% lower than at the end of the first quarter, although still well ahead of where it stood at the end of last year. The slowdown in orders received in the second quarter has led management to be more cautious about prospects for the rest of the year. Revenue is expected to remain at about the level seen in the second quarter although the product mix may be less favourable. Whilst the business is expected to remain profitable in the coming quarters, management can no longer be confident that revenue and profits for the year will exceed those achieved in 2012.
Dr. Paul Taylor, President and Chief Executive Officer commented, "Dynex's second quarter results show a dramatic improvement over the first quarter. Whilst we are pleased with the improvement, we are not yet seeing the magnitude of growth that we expected in 2013. We continue to believe that this strong growth will be achieved but are cautious about the timing. One large order was deferred into 2014 and the effect was material enough to elevate the caution we already felt."
Bob Lockwood, Chief Financial Officer commented, "The markets in which we operate remain challenging. We continue to see customers delaying placing orders and, indeed, pushing back existing orders by three or six months. Such delays severely disrupt our planning and require us to revise our revenue forecasts. They are a clear indication of the difficult markets in which are customers are operating. We continue to believe that these problems and delays will abate as our customers' experience an improved operating environment."
Li Donglin, the Chairman of Dynex said, "Like, I am sure, other
shareholders in Dynex, the Board of Directors is disappointed with the
current financial performance of the Company. We understand the
difficulties currently being faced and we remain confident in
management's ability to overcome these problems and demonstrate a
period of sustained growth."
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.
Condensed Consolidated Statement of Comprehensive Income (unaudited) in Canadian Dollars
Quarter Ended June 30th, 2013
|3 months||3 months||YTD||YTD|
|Jun 30th||Jun 30th||Jun 30th||Jun 30th|
|Cost of sales||(8,025,326)||(8,286,754)||(15,151,238)||(16,175,601)|
|Sales and marketing expenses||(244,129)||(205,628)||(452,458)||(435,669)|
|Research and development expenses||(293,645)||(321,269)||(550,977)||(608,328)|
|Other gains and (losses)||30,231||(18,942)||126,748||(70,084)|
|Profit/(Loss) before Tax||607,941||225,582||(796,379)||1,258,095|
|Income tax (expense)/recovery||(80,991)||(83,799)||219,877||(357,214)|
|Other Comprehensive Income/(Loss)|
|Exchange differences on translation of foreign operations (net of tax of $nil)||1,236,593||284,675||(294,118)||439,304|
|Total Comprehensive Income/(Loss) for the year||1,763,543||426,458||(870,620)||1,340,185|
|Earnings/(Loss) per share|
DYNEX POWER INC.
Condensed Consolidated Statement of Financial Position (unaudited) in Canadian Dollars
As at June 30th, 2013
|Jun 30th||Dec 31st|
|Property, plant & equipment||33,072,034||33,706,294|
|Derivative financial instruments||65,044||2,228|
|Total non-current assets||33,137,078||33,708,522|
|Amounts owing from parent company||2,703,435||2,776,110|
|Prepayments, deposits & other receivables||789,558||255,847|
|Total current assets||23,852,232||21,614,419|
|Amounts owing to parent company||607,183||267,349|
|Other payables and accruals||2,308,298||3,171,809|
|Total current liabilities||10,169,181||11,375,391|
|NET CURRENT ASSETS||13,683,051||10,239,028|
|TOTAL ASSETS LESS CURRENT LIABILITIES||46,820,129||43,947,550|
|Deferred tax liabilities||1,699,641||1,939,851|
|Total non-current liabilities||11,408,245||7,665,046|
|(Accumulated deficit)/retained profit||(35,581)||540,921|
|Exchange fluctuation reserve||(1,648,727)||(1,354,609)|
DYNEX POWER INC.
Condensed Consolidated Statement of Changes in Equity (unaudited) in Canadian Dollars
Quarter Ended June 30th, 2013
|At January 1st, 2012||37,096,192||(524,615)||(1,917,379)||34,654,198|
|Total comprehensive income for the period||-||900,881||439,304||1,340,185|
|At June 30th, 2012||37,096,192||376,266||(1,478,075)||35,994,383|
|Total comprehensive income for the period||-||164,655||123,466||288,121|
|At December 31st, 2012||37,096,192||540,921||(1,354,609)||36,282,504|
|Total comprehensive income for the period||-||(576,502)||(294,118)||(870,620)|
|At June 30th, 2013||37,096,192||(35,581)||(1,648,727)||35,411,884|
DYNEX POWER INC.
Condensed Consolidated Statement of Cash Flows (unaudited) in Canadian Dollars
Quarter Ended June 30th, 2013
|Jun 30th||Jun 30th|
|CASH FLOW FROM OPERATING ACTIVITIES|
|(Loss)/profit before tax||(796,379)||1,258,095|
|Finance costs recognised in (loss)/profit before tax||279,865||173,438|
|Investment income recognised in (loss)/profit before tax||(174)||(341)|
|Depreciation of property, plant & equipment||1,678,619||1,412,365|
|Loss on disposal of property, plant & equipment||1,506||-|
|Provision for slow moving and obsolete inventory||265,564||(357,958)|
|Movements in working capital||(3,041,807)||(2,061,141)|
|Cash used in operating activities before income taxes||(1,612,806)||424,458|
|Income taxes (paid)/received||(1,929)||300,512|
|Net cash (used in)/generated by operating activities||(1,614,735)||724,970|
|CASH FLOW FROM INVESTING ACTIVITIES|
|Payments for property, plant & equipment||(800,897)||(2,693,358)|
|Net cash used in investing activities||(800,723)||(2,693,017)|
|CASH FLOW FROM FINANCING ACTIVITIES|
|Proceeds from borrowings||7,501,074||614,189|
|Repayments of borrowings||(5,703,538)||(61,917)|
|Payments for other finance costs||(94,167)||(27,754)|
|Net cash generated by financing activities||1,539,481||378,396|
|NET DECREASE IN CASH||(875,977)||(1,589,651)|
|Cash at beginning of period||2,206,430||3,028,599|
|Effect of foreign currency translation on cash||(16,299)||(11,014)|
|CASH AT END OF PERIOD||1,314,154||1,427,934|
SOURCE DYNEX POWER INC.For further information:
Dr. Paul Taylor
President and Chief Executive Officer
Finance Director and Chief Financial Officer
Dynex Power Inc.
Tel: +44 1522 500 500