Dynex Power Announces Results for 2015

Strong Fourth Quarter Sees Dynex Return to Profitability for the Year

Listing: TSX Venture Exchange
Symbol: DNX

LINCOLN, England, May 20, 2016 /CNW/ - Dynex Power Inc. (TSXV: DNX), a leading, high power semiconductor company, today announced its financial results for the year ended December 31st, 2015.

Summary financial information for the twelve months ended December 31st, 2015 is as follows:




Dollars (000's)

Dec. 31, 2015

Dec. 31, 2014

Revenue

46,512

42,166

Gross profit/(loss)

4,683

(441)

Expenses

(4,413)

(6,077)

Profit/(loss) before tax

270

(6,518)

Income tax (expense)/recovery

(104)

970

Net loss

166

(5,548)

Common shares outstanding ¹ - diluted

80,509,047

80,509,047

Earnings per share - diluted

0.00

$(0.07)


¹ Weighted average for the period

 

Revenue for the year of $46.5 million was 10% higher than in the preceding year. The increase was mainly as a result of a weakening of the Canadian Dollar against Sterling. In Sterling terms revenue had risen by approximately 3%. For the year, there was a strong increase in Sterling revenues from bipolar devices and services, but these increases were partially offset by the reduction in power assemblies and integrated circuit revenues.

The Group reported a gross profit of $4.7 million for the year equivalent to 10.1% of revenue compared to a gross loss 0f $441,000 last year following a contract cancellation and product return at the end of last year.

Expenses fell from $6.1 million in 2014 to $4.4 million in 2015. The decrease was mainly accounted for by increased support from CSR Times Electric and continuing strong support from the UK Government for research and development work and a switch from a foreign exchange loss of in 2014 to a foreign exchange gain in 2015. More modest savings were reported in sales and marketing and administrative costs.   

Dynex recorded a profit before tax of $270,000 in 2015 compared to a loss before tax of $6.5 million in 2014 following the contract cancellation and product return at the end of last year.  Without the contract cancellation, the Company would have reported a small profit before tax in 2014.

The Company provided $104,000 for tax, leaving a profit after tax of $166,000 compared to a loss after tax of $5.5 million in the preceding year.

New orders received in 2015 totalled $39.2 million resulting in a book to bill ratio of 0.8 times. The order book fell from $16.2 million at the end of 2014 to $13.4 million at the end of 2015. The order book at the end of 2015 represented approximately 16 weeks of sales.

As disclosed in a press release issued on May 1st, 2016, the Company is late in filing its financial statements, related management's discussion and Certificates of Filing for 2015. The delay occurred as a result of the Company facing increased demands for information and documentation from the auditor at a time when it is preparing to implement a new ERP system. There was also on-going discussion with the auditor on the valuation of certain assets. The Company has now provided the information and documents requested. The discussion on the valuation of certain assets has also been completed without there being a need for any change in asset values.

Dr. Paul Taylor, President and Chief Executive Officer commented, "This year has been a year of improvement for Dynex. The start of the year was affected by the adverse impact of the product cancellation late in the previous year and by certain technical issues with new products. Management took action to adjust Dynex's cost base by a redundancy exercise at the start of 2015 and quickly followed this by an adjustment in management organisation and processes to give greater focus on quality, yield improvement and continuous improvement".

Bob Lockwood, Chief Financial Officer commented, "The cancellation of a major order for delivery in 2015,  the technical issues with new products and the redundancy exercise referred to above by Paul Taylor had a major adverse impact on the first quarter of 2015. The Company was able to report a much reduced loss in the second quarter and a return to a modest profit in the third quarter. With continuing strong support from CSR Times Electric, the Company was able to make a much better profit in the fourth quarter which allowed us to return to profitability for the year. "

Mr Li, Chairman of Dynex and recently appointed General Manager of the CRRC Zhuzhou Institute Co., Ltd, the immediate parent company of CRRC Times Electric, commented "We are pleased to see this return to profitability for Dynex. Although the level of profit reported is very modest, it is clearly a move in the right direction and we look forward to further improvement in the level of profitability going forward."

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 , 2015 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 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 Profit (Loss) and Other Comprehensive Income in Canadian Dollars

Year Ended December 31st, 2015


2015

2014


$

$




Revenue

46,512,345

42,166,004




Cost of Sales

(41,829,244)

(42,607,212)




Gross Profit/(Loss)

4,683,101

(441,208)




Other income

81,043

133,146

Sales and marketing expenses

(1,169,003)

(1,208,148)

Administration expenses

(3,270,465)

(3,778,654)

Research and development surplus/(expenses)

313,235

(97,598)

Finance costs

(776,920)

(726,127)

Other gains and (losses)

408,747

(399,303)




Profit/(Loss) before Tax

269,738

(6,517,892)




Income tax (expense)/ recovery

(103,574)

970,075




Net Profit/(Loss)

166,164

(5,547,817)




Other Comprehensive Income



Items that may be reclassified subsequently to net profit/loss



Exchange differences on translation of foreign



    operations (net of tax of $nil)

4,316,103

882,823







Total Comprehensive Income/(Loss) for the Year

4,482,267

(4,664,994)




Profit/(Loss) per Share



Basic

0.00

(0.07)

Diluted

0.00

(0.07)


 

DYNEX POWER INC.



Consolidated Statement of Financial Position in Canadian Dollars



As at December 31st, 2015




2015

2014


$

$




NON-CURRENT ASSETS






Intangible assets

1,594,142

1,150,380

Property, plant and equipment

43,447,376

39,883,946

Deferred tax asset

57,838

-

Derivative financial instruments

-

43,624




Total non-current assets

45,099,356

41,077,950




CURRENT ASSETS






Inventories

15,215,237

14,428,876

Trade receivables

6,334,417

9,048,235

Amounts owing from parent company

5,445,377

2,764,112

Prepayments, deposits and other receivables

1,236,102

1,096,467

Tax recoverable

3,382

2,965

Cash 

1,410,547

894,609




Total  current assets

29,645,062

28,235,264




CURRENT LIABILITIES






Trade payables

2,371,233

7,073,578

Amounts owing to parent company

760,062

667,817

Other payables and accruals

8,695,638

10,156,373

Borrowings

15,423,684

4,171,108

Provisions

20,599

1,824,060




Total current liabilities

27,271,216

23,892,936


 


DYNEX POWER INC.

Consolidated Statement of Financial Position in Canadian Dollars (continued)

As at December 31st, 2015


2015

2014


$

$

NON-CURRENT LIABILITIES






Borrowings

8,904,800

12,983,135

Provisions

61,797

54,180




Total non-current liabilities

8,966,597

13,037,315




NET ASSETS

38,506,605

32,382,963




EQUITY 






Share capital

37,096,192

37,096,192

Accumulated deficit

(5,609,101)

(7,416,640)

Foreign currency translation reserve

7,019,514

2,703,411




TOTAL EQUITY

38,506,605

32,382,963

 



 

DYNEX POWER INC.

Consolidated Statement of Changes in Equity in Canadian Dollars

Year Ended December 31st, 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 loss for the year

-

(5,547,817)

882,823

(4,664,994)











At December 31st, 2014

37,096,192

(7,416,640)

2,703,411

32,382,963






Total comprehensive income for the year

-

166,164

4,316,103

4,482,267






Capital Contribution


1,641,375


1,641,375











At December 31st, 2015

37,096,192

(5,609,101)

7,019,514

38,506,605

 



 

DYNEX POWER INC.

Consolidated Statement of Cash Flows in Canadian Dollars

Year Ended December 31st, 2015


2015

2014


$

$

CASH FLOW FROM OPERATING ACTIVITIES






Profit/(loss) before tax

269,738

(6,517,892)

Finance costs recognised in loss before tax

776,920

726,127

Investment income recognised in loss before tax

-

(2,444)

Amortization of intangible assets

169,288

120,546

Depreciation of property, plant and equipment

5,282,462

4,380,245

(Gain) Loss on disposal of property, plant and equipment

(3,361)

5,710

Provision for slow moving and obsolete inventory

(424,680)

4,903,255

Non cash movement in provisions

-

35,705

Movements in working capital

(6,742,646)

6,787,902

Income taxes (paid)/received

(102,545)

23,402




Net cash generated/(used) by operating activities

(774,824)

10,462,556




CASH FLOW FROM INVESTING ACTIVITIES






Payments for intangible assets and property, plant & equipment

(4,001,881)

(8,635,658)

Interest received

-

2,444

Proceeds from the sale of fixed assets

5,167

-




Net cash used in investing activities

(3,996,714)

(8,633,214)




CASH FLOW FROM FINANCING ACTIVITIES






Capital contribution

1,641,375

-

Proceeds from borrowings

38,484,089

10,950,723

Repayments of borrowings

(33,352,566)

(11,934,564)

Interest paid

(866,577)

(689,889)

Payments for other finance costs

-

(40,824)




Net cash generated/(used) by financing activities

5,906,321

(1,714,554)




NET INCREASE IN CASH

1,134,783

114,788




Cash at beginning of year

894,609

775,071




Effect of foreign currency translation on cash 

(618,845)

4,750




CASH AT END OF YEAR

1,410,547

894,609

 

SOURCE Dynex Power Inc.

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

RELATED LINKS
http://www.dynexsemi.com

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