Dynex Power Announces First Quarter Results for 2009 - Net Earnings Maintained Despite a Full Tax Charge



    
    Listing:   TSX Venture Exchange
    Symbol:    DNX
    

    LINCOLN, England, May 28 /CNW Telbec/ - Dynex Power Inc., a leading
specialist high power semiconductor company, today announced results for the
first quarter of 2009.

    
    Summary financial information for the three months ended March 31st, 2009
    is as follows:

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                      March 31,     March 31,
    Dollars (000's)                                       2009          2008
    -------------------------------------------------------------------------
    Revenue                                             11,003         8,084
    Gross Margin                                         3,280         2,549
    Net Earnings                                         1,165         1,171
    Common shares outstanding (1) - diluted         40,297,238    41,678,582
    Earnings per share - diluted                         $0.03         $0.03
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Weighted average for the period
    

    First quarter revenue of $11.0 million was 36% higher than the
corresponding quarter of 2008 and 19% higher than the average quarterly
revenue in 2008. There was a particularly strong performance from the bipolar
discrete business group, which recorded its highest quarterly revenue ever.
The power module business group reported modest growth against the
corresponding quarter of last year, with small reductions in turnover from the
power electronic assemblies and integrated circuit business groups.
    The gross margin of 29.8% was slightly lower than the 31.5% reported in
the corresponding quarter of 2008 but was still above the average gross margin
in 2008 of 28.2%.
    Expenses of $1.6 million were 7% higher than in the corresponding quarter
of last year but 3% lower than the average expenses during 2008.
    The Company incurred a $480,000 tax charge in the quarter. No tax charge
had been incurred in 2008. Despite having to provide for tax, net earnings
were only 1% lower than in the corresponding quarter of last year and were 2%
higher than average quarterly earnings in 2008.
    The growth in the order book continued during the quarter. Orders taken
in the quarter of $12.7 million were 24% higher than the corresponding quarter
of last year and gave a book to bill ratio of 1.1 to 1. Management has seen
little sign so far of the global recession affecting other businesses and a
record order book gives confidence that revenue will remain strong throughout
the rest of 2009. However, a downturn in business may develop in the coming
months and management expects gross margins to reduce as a result of
competitive pressures and a less favourable product mix.
    Dr. Paul Taylor, President and Chief Executive Officer commented, "at a
time when so many other businesses are encountering worsening conditions, we
are delighted to be able to report that Dynex is continuing to grow revenues
and has a record order book. But we must not be complacent. Conditions
world-wide are difficult and we may feel the affects on our business at some
stage in the future. However, the expansion of our bipolar fabrication
facilities will soon be complete and with the help of CSR Times Electric we
are planning an expansion of our power module fabrication facilities. We are
therefore well positioned to maintain our growth for as long as our markets
remain strong."
    Bob Lockwood, Chief Financial Officer commented, "we are delighted to
have been able to produce another outstanding set of results, particularly
given the current economic climate. To be able to maintain the level of
earnings after providing in full for tax is a tremendous achievement. But we
will face a number of challenges in the coming months. A less favourable
product mix means that net earnings are expected to fall in the next few
quarters. We may yet feel the current recession that is affecting most of the
world's major economies a little more."
    Mr Lu, Chairman of Dynex and President and Executive Director of CSR
Times Electric, concluded, "CSR Times Electric is delighted to see Dynex
continuing to perform strongly. The management of Dynex has delivered another
excellent set of results and we look forward to working closely with them on
the expansion of their power module facility. CSR Times Electric will continue
to give strong support to the development of Dynex during these challenging
economic times."

    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 the leading train-borne electrical system provider and
integrator for the railway industry in China. It is also engaged in
developing, manufacturing and selling train power converters, auxiliary power
supply equipment and control systems for trains for urban rail systems. In
addition, CSR Times Electric designs, manufactures and sells electrical
components including power semiconductor devices.
    Press announcements and other information about Dynex are available 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.
    Consolidated Statements of Earnings and Deficit (Unaudited)
    Quarters Ended March 31st, 2009 and 2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                      3 months      3 months
                                                      Mar 31st      Mar 31st
                                                          2009          2008
                                                 ----------------------------

    Revenue                                       $ 11,002,723  $  8,084,138

    Cost of sales                                    7,723,164     5,535,333
    -------------------------------------------------------------------------

    Gross margin                                     3,279,559     2,548,805
    -------------------------------------------------------------------------

    Expenses
    General and administration                         924,176       901,471
    Sales and marketing                                292,752       223,924
    Research and development                           255,919       212,469
    Interest expense                                   136,595       172,220
    -------------------------------------------------------------------------

                                                     1,609,442     1,510,084
    -------------------------------------------------------------------------

    Earnings before other income (expenses)
     and income taxes                                1,670,117     1,038,721
    -------------------------------------------------------------------------

    Other income (expenses)
    Interest and other income                           38,622        46,569
    Foreign exchange (loss) gain                       (64,233)       85,601
    -------------------------------------------------------------------------

                                                       (25,611)      132,170
    -------------------------------------------------------------------------

    Earnings before income taxes                     1,644,506     1,170,891

    Income taxes                                      (479,818)            -

    NET EARNINGS                                     1,164,688     1,170,891

    DEFICIT, BEGINNING OF PERIOD                    (7,169,144)  (11,730,827)
    -------------------------------------------------------------------------

    DEFICIT, END OF PERIOD                        $ (6,004,456) $(10,559,936)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per share
    Basic                                         $       0.03  $       0.04
    Diluted                                       $       0.03  $       0.03
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted average number of shares
    Basic                                           40,194,834    33,348,562
    Diluted                                         40,297,238    41,678,582
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    DYNEX POWER INC.
    Consolidated Statements of Comprehensive Income (Unaudited)
    Quarters Ended March 31st, 2009 and 2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                      3 months      3 months
                                                      Mar 31st      Mar 31st
                                                          2009          2008
                                                 ----------------------------

    Net earnings                                  $  1,164,688  $  1,170,891
    -------------------------------------------------------------------------

    Other Comprehensive income, net of tax:

    Unrealized foreign exchange on translating
     financial statements of self-sustaining
     foreign operations                                129,434       112,129
    -------------------------------------------------------------------------

    OTHER COMPREHENSIVE INCOME                         129,434       112,129
    -------------------------------------------------------------------------

    COMPREHENSIVE INCOME                          $  1,294,122  $  1,283,020
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    DYNEX POWER INC.
    Consolidated Statements of Accumulated Other Comprehensive Loss and
    Deficit (Unaudited)
    As at March 31st, 2009 and December 31st, 2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                      Mar 31st      Dec 31st
                                                          2009          2008
                                                 ----------------------------

    Accumulated other comprehensive loss,
     beginning of period                          $ (1,380,101) $   (760,787)

    Other comprehensive income (loss)                  129,434      (619,314)

    -------------------------------------------------------------------------

    Accumulated other comprehensive loss            (1,250,667)   (1,380,101)

    Deficit                                         (6,004,456)   (7,169,144)

    -------------------------------------------------------------------------

    TOTAL ACCUMULATED OTHER COMPREHENSIVE LOSS
    AND DEFICIT                                   $ (7,255,123) $ (8,549,245)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    DYNEX POWER INC.
    Consolidated Balance Sheets (Unaudited)
    As At March 31st, 2009 and December 31st, 2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                      Mar 31st      Dec 31st
                                                          2009          2008
                                                 ----------------------------

    CURRENT ASSETS
    Cash                                          $    884,061  $    404,638
    Accounts receivable                              7,733,021     6,081,965
    Inventories                                      8,092,781     8,041,747
    Income tax recoverable                                   -         2,838
    Prepaid expenses and deposits                      680,656       696,625
    -------------------------------------------------------------------------
                                                    17,390,519    15,227,813

    PROPERTY, PLANT & EQUIPMENT                      5,838,971     5,433,347

    -------------------------------------------------------------------------

                                                  $ 23,229,490  $ 20,661,160
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    CURRENT LIABILITIES
    Accounts payable and accrued liabilities      $  5,234,589  $  5,688,807
    Income tax payable                                 487,111             -
    Amounts owing to parent company                  2,270,529             -
    Short-term loan                                  2,516,639     3,551,495
    Current portion of long-term debt                   47,715        45,610
    Obligation under capital leases                    117,439       114,146
    Current portion of deferred revenue                139,475       137,271
    -------------------------------------------------------------------------
                                                    10,813,497     9,537,329

    LONG-TERM DEBT                                   2,880,058     2,846,811

    LONG-TERM OBLIGATION UNDER CAPITAL LEASES          624,135       642,659

    LONG-TERM DEFERRED REVENUE                       1,115,800     1,132,483

    -------------------------------------------------------------------------
                                                    15,433,490    14,159,282

    SHAREHOLDERS' EQUITY
    Share capital                                   15,051,123    15,051,123
    Deficit                                         (6,004,456)   (7,169,144)
    Accumulated other comprehensive loss            (1,250,667)   (1,380,101)
    -------------------------------------------------------------------------

                                                     7,796,000     6,501,878
    -------------------------------------------------------------------------

                                                  $ 23,229,490  $ 20,661,160
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    DYNEX POWER INC.
    Consolidated Statements of Cash Flows (Unaudited)
    Quarters Ended March 31st, 2009 and 2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                      3 months      3 months
                                                      Mar 31st      Mar 31st
                                                          2009          2008
                                                 ----------------------------

    OPERATING
    Net earnings                                  $  1,164,688   $ 1,170,891
    Items not affecting cash
    ------------------------
      Amortization                                     121,010        44,051
      Gain on disposal of property, plant and
       equipment                                       (34,610)      (38,406)
      Shares and options issued for services                 -         2,558
      Non-cash interest                                  2,054        26,483
      Non-cash grant income                                  -        (2,355)
      Provision for inventory obsolescence              55,981       326,995
    Changes in non-cash operating working
     capital items                                  (1,535,620)      360,593
    -------------------------------------------------------------------------
                                                      (226,497)    1,890,810
    -------------------------------------------------------------------------

    FINANCING
    Increase in amounts owing to parent company      2,521,141             -
    Decrease in amounts owing to parent company       (284,605)            -
    Repayment of short-term loan                    (1,075,536)   (1,448,693)
    Payments on capital leases                         (26,973)            -
    Repayment of long-term debt                        (12,980)      (46,430)
    -------------------------------------------------------------------------
                                                     1,121,047    (1,495,123)
    -------------------------------------------------------------------------

    INVESTING
    Proceeds of disposal of property, plant and
     equipment                                             263             -
    Purchase of property, plant and equipment         (434,623)     (286,541)
    -------------------------------------------------------------------------
                                                      (434,360)     (286,541)
    -------------------------------------------------------------------------

    NET INCREASE IN CASH                               460,190       109,146

    Effect of foreign currency translation on cash      19,233         6,192

    Cash, beginning of period                          404,638       140,867
    -------------------------------------------------------------------------

    CASH, END OF PERIOD                           $    884,061  $    256,205
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    
    %SEDAR: 00010667E




For further information:

For further information: Dr. Paul Taylor, President and Chief Executive
Officer; Bob Lockwood, Finance Director and Chief Financial Officer, Dynex
Power Inc., +44 1522 500 500, investorrelations@dynexsemi.com


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