Dynex Power Announces Third Quarter Results for 2007 - Strong Improvement in Profitability



    Listing: TSX Venture Exchange
    Symbol: DNX

    LINCOLN, England, Nov. 19 /CNW Telbec/ - Dynex Power Inc., a leading
independent power semiconductor company, today announced results for the third
quarter of 2007.
    Summary financial information in Canadian dollars for the three and nine
months ended September 30th, 2007 is as follows:

    
    -------------------------------------------------------------------------
                           Sept 30,      Sept 30,
                              2007          2006      YTD 2007      YTD 2006
                             $'000         $'000         $'000         $'000
    -------------------------------------------------------------------------
    Revenue                  8,706         5,707        22,499        17,042

    Gross Margin             2,220         1,039         4,903         2,957

    Net Earnings/
     (Loss)                    915          (133)        1,066          (696)

    No. of Common
     Shares-average     33,343,908    32,196,183    33,303,006    30,650,637

    Earnings/(Loss)
     per Share in
     Dollars-diluted          0.03         (0.00)         0.03         (0.02)
    -------------------------------------------------------------------------

    The Company's revenue in the third quarter was 53% ahead of that reported
in the corresponding quarter of last year with strong growth reported in all
four product groups. Revenue for the year to date is 32% ahead of the same
period last year. Approximately one quarter of that increase is the result of
the weaker dollar for the year to date, with the rest of the increase coming
from volume growth across all four product groups. A favourable mix of sales
resulted in a gross margin of 25.5% in the quarter compared with 18.2% in the
same quarter last year. As a result, the business was able to report a profit
of $915,000 in the quarter and $1.1 million for the year to date. Last year
the Company recorded losses both for the quarter and the year to date.
    Fourth quarter revenue is expected to be similar to that reported in the
third quarter with some growth in Power Modules and Integrated Circuits offset
by slightly lower volumes in the Bipolar group. Management expects another
strong profit in the fourth quarter.
    Dr Paul Taylor, President and Chief Executive Officer commented that "the
increase in revenue and profitability that we have seen in the third quarter
fulfils the expectations that we expressed at the time we issued the second
quarter results. Given the strength of our order book, we can see another good
result arising in the fourth quarter. Our primary focus now is on funding the
capital expenditure programme needed to increase our capacity and improve our
efficiency and reducing the level of debt in our capital structure."
    Bob Lockwood, Chief Financial Officer, stated that "the results for the
quarter were excellent news for shareholders and employees alike after a long
period of improving but still unsatisfactory performance. Our order book,
which stood at $23.5 million at the end of September, gives us confidence of
another two quarters of good sales and profits to come. It is possible that
overall sales volume may decline slightly thereafter in the later part of 2008
and that an adverse change in product mix might cause profits to fall back
from the level being seen at the moment, but management is working hard to
offset these possibilities."

    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 Company's management
discussion and analysis for the quarter ended September 30th, 2007 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; the worldwide demand for and supply of silicon;
and fluctuations in exchange rates between 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 is one of the world's leading independent suppliers of specialist,
high power semiconductor products. Dynex Semiconductor Ltd is its operating
business and is based in Lincoln, England in a facility housing the fully
integrated silicon wafer fabrication, assembly and test, sales, design and
development operations. Dynex designs and manufactures high power bipolar
discrete semiconductors, power modules, including insulated-gate bipolar
transistors (IGBTs), and high power electronic assemblies. Dynex products are
used world wide in power electronic applications including electric power
generation, transmission and distribution, marine and rail traction drives,
aircraft, electric vehicles, industrial automation and controls. The company
continues to produce and sell certain high reliability integrated circuits
(ICs) for use in specialist applications led by its proven radiation hard
Silicon-on-Sapphire products for space and nuclear applications.

    Press announcements and other information about Dynex are available on the
World Wide Web at http://www.dynexsemi.com.

    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 Balance Sheets (Unaudited)
    ---------------------------------------
    Quarter Ended September 30th, 2007
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                     Sept 30th      Dec 31st
                                                          2007          2006
                                               ------------------------------
    CURRENT ASSETS

    Cash                                          $    304,872  $    357,042
    Accounts receivable                              5,844,310     4,936,028
    Inventories                                      7,510,676     7,198,306
    Prepaid expenses and deposits                      414,927       715,935
    -------------------------------------------------------------------------
                                                    14,074,785    13,207,311

    CAPITAL ASSETS                                     688,435       444,715
    -------------------------------------------------------------------------

                                                  $ 14,763,220  $ 13,652,026
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    CURRENT LIABILITIES

    Accounts payable and accrued liabilities      $  4,484,231  $  4,592,004
    Short-term loan                                  4,017,600     3,013,654
    Due to directors                                         -             -
    Current portion of long-term debt                1,800,728     1,269,994
    Current portion of deferred revenue                156,815       175,832
    -------------------------------------------------------------------------
                                                    10,459,374     9,051,484

    LONG-TERM DEBT                                   2,106,954     3,570,847

    LONG-TERM DEFERRED REVENUE                       1,489,739     1,802,283
    -------------------------------------------------------------------------
                                                    14,056,067    14,424,614

    CONTINGENCIES                                            -             -

    SHAREHOLDERS' SURPLUS/(DEFICIENCY)

    Share capital                                   14,130,108    13,888,690
    Deficit                                        (12,836,490)  (14,098,044)
    Accumulated other comprehensive loss              (586,465)     (563,234)
    -------------------------------------------------------------------------
                                                       707,153      (772,588)
    -------------------------------------------------------------------------

                                                  $ 14,763,220  $ 13,652,026
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    DYNEX POWER INC.
    Consolidated Statement of Earnings (Losses) and Deficits (Unaudited)
    --------------------------------------------------------------------
    Quarter Ended September 30th, 2007
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                          3 months      3 months           YTD           YTD
                         Sept 30th     Sept 30th     Sept 30th     Sept 30th
                              2007          2006          2007          2006
                      -------------------------------------------------------

    Revenue           $  8,706,374  $  5,706,698  $ 22,499,302  $ 17,041,865

    Cost of sales        6,486,247     4,668,074    17,596,426    14,085,348
    -------------------------------------------------------------------------
    Gross margin         2,220,127     1,038,624     4,902,876     2,956,517
    -------------------------------------------------------------------------
    Expenses

    General and
     administration        797,642       604,284     2,099,998     1,954,366
    Sales and
     marketing             211,082       242,822       790,568       722,541
    Research and
     development           175,062       181,839       477,095       541,146
    Interest expense       218,611       204,825       647,766       589,780
    -------------------------------------------------------------------------
                         1,402,397     1,233,770     4,015,427     3,807,833
    -------------------------------------------------------------------------
    Earnings (loss)
     before other
     income and
     income taxes          817,730      (195,146)      887,449      (851,316)
    -------------------------------------------------------------------------
    Other income

    Interest and
     other income           94,041        60,551       231,221       185,051
    Foreign exchange
     gain (loss)             3,478         1,962       (52,830)      (29,849)
    -------------------------------------------------------------------------
                            97,519        62,513       178,391       155,202
    -------------------------------------------------------------------------
    Income taxes                 -             -             -             -

    NET EARNINGS
     (LOSS)                915,249      (132,633)    1,065,840      (696,114)

    DEFICIT,
     BEGINNING OF
     PERIOD            (13,751,739)  (14,388,076)  (14,098,044)  (13,824,595)

    Adjustment to
     deficit,
     beginning of
     period                      -             -       195,714             -
    -------------------------------------------------------------------------

    DEFICIT, END OF
     PERIOD           $(12,836,490) $(14,520,709) $(12,836,490) $(14,520,709)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings (Loss)
     per share

    Basic             $       0.03  $      (0.00) $       0.03  $      (0.02)
    Diluted           $       0.03  $      (0.00) $       0.03  $      (0.02)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted average
     number of shares

    Basic               33,343,908    32,196,183    33,303,066    30,650,637
    Diluted             33,778,444    32,196,183    33,717,520    30,650,637
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    DYNEX POWER INC.
    Consolidated Statement of Comprehensive Income (Loss) (Unaudited)
    -----------------------------------------------------------------
    Quarter Ended September 30th, 2007
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                          3 months      3 months           YTD           YTD
                         Sept 30th     Sept 30th     Sept 30th     Sept 30th
                              2007          2006          2007          2006
                      -------------------------------------------------------
    Net earnings
     (loss)           $    915,249  $   (132,633) $  1,065,840  $   (696,114)
    -------------------------------------------------------------------------
    Other
     Comprehensive
     loss, net of
     tax:

    Unrealized loss
     on translating
     financial
     statements of
     self-sustaining
     foreign
     operations            (45,271)      (46,358)      (23,231)      (63,772)
    -------------------------------------------------------------------------

    OTHER
     COMPREHENSIVE
     LOSS                  (45,271)      (46,358)      (23,231)      (63,772)
    -------------------------------------------------------------------------

    COMPREHENSIVE
     INCOME (LOSS)    $    869,978  $   (178,991) $  1,042,609  $   (759,886)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    DYNEX POWER INC.
    Consolidated Statement of Accumulated Other Comprehensive Loss
    --------------------------------------------------------------
    (Unaudited)
    -----------
    Quarter Ended September 30th, 2007
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                     Sept 30th      Dec 31st
                                                          2007          2006
                                               ------------------------------
    Accumulated other comprehensive loss,
     beginning of period                          $   (563,234) $          -

    Adjustment to accumulated other
     comprehensive loss, beginning of period

    Cumulative adjustment on translation of
     financial statements of self-sustaining
     foreign operations                                      -      (415,092)
    -------------------------------------------------------------------------

    Accumulated other comprehensive loss,
     beginning of period                              (563,234)     (415,092)

    Other comprehensive income (loss)                  (23,231)     (148,142)
    -------------------------------------------------------------------------

    ACCUMULATED OTHER COMPREHENSIVE LOSS          $   (586,465) $   (563,234)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    DYNEX POWER INC.
    Consolidated Statement of Cash Flows (Unaudited)
    ------------------------------------------------
    Quarter Ended September 30th, 2007
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                          3 months      3 months           YTD           YTD
                         Sept 30th     Sept 30th     Sept 30th     Sept 30th
                              2007          2006          2007          2006
                      -------------------------------------------------------
    OPERATING

    Net earnings
     (loss)           $    915,249  $   (132,633) $  1,065,840  $   (696,114)

    Items not
     affecting cash
    ---------------

      Amortization          30,583        59,930       154,617       169,622
      Gain on
       disposal of
       capital
       assets              (40,778)      (40,032)     (139,922)     (118,575)
      Shares and
       options
       issued for
       services              2,453       109,569        47,771       284,287
      Non cash
       interest             44,143             -       145,848             -
      Non cash
       grant income              -             -       (28,660)            -
    Changes in non-
     cash operating
     working capital    (1,576,226)   (1,211,482)   (2,054,508)     (171,438)
    -------------------------------------------------------------------------
                          (624,576)   (1,214,648)     (809,014)     (532,218)
    -------------------------------------------------------------------------

    FINANCING

    Shares issued
     for cash                  762             -           762       550,000
    Increase in
     short-term debt     1,844,404     1,180,308     1,361,387        69,384
    Decrease in
     loans from a
     director           (1,098,138)            -             -             -
    Decrease in long-
     term debt            (108,900)      (42,493)     (183,887)     (105,987)
    -------------------------------------------------------------------------
                           638,128     1,137,815     1,178,262       513,397
    -------------------------------------------------------------------------

    INVESTING

    Proceeds of
     disposal of
     capital assets              -             -        12,518             -
    Purchase of
     capital assets       (128,633)      (14,955)     (474,519)      (99,861)
    -------------------------------------------------------------------------
                          (128,633)      (14,955)     (462,001)      (99,861)
    -------------------------------------------------------------------------

    NET DECREASE IN
     CASH                 (115,081)      (91,788)      (92,753)     (118,682)

    Effect of
     foreign
     currency
     translation on
     cash flow              39,937        (6,336)       40,583        (1,919)
    Cash, beginning
     of period             380,016       309,420       357,042       331,897
    -------------------------------------------------------------------------

    CASH, END OF
     PERIOD           $    304,872  $    211,296  $    304,872  $    211,296
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Supplementary
     Information:

    Interest paid
     during period    $    215,751  $    134,609  $    531,757  $    489,559
    Income taxes
     paid during
     period                      -             -             -             -
    
    %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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