Dynex Power Announces Year End Results for 2008 - Improved Earnings and a Growing Order Book Justify Expanding Production Facilities



    
    Listing: TSX Venture Exchange
    Symbol:  DNX
    

    LINCOLN, ENGLAND, April 17 /CNW Telbec/ - Dynex Power Inc., a leading,
high power semiconductor company, today announced results for the year ended
December 31st, 2008.
    Summary financial information for the twelve months ended December 31st,
2008 is as follows:

    
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Dollars (000's)                            Dec. 31, 2008   Dec. 31, 2007
    -------------------------------------------------------------------------
    Revenue                                           37,017          30,155
    Gross Margin                                      10,457           6,864
    Net Earnings                                       4,562           2,172
    Common shares outstanding (1) - diluted       37,666,916      33,680,516
    Earnings per share - diluted                       $0.12           $0.06
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Weighted average for the period
    

    Revenue growth of 23% in 2008 reflected the continued strong demand in
the market place for Dynex products. The increase in volume together with a
particularly favourable product mix in the first half of the year resulted in
the gross margin rising from 22.7% to 28.3%. The gross margin in 2008 of $10.5
million represented an increase of 52% over 2007. A 34% increase in expenses
reflected significant one-off costs associated with the acquisition of a
majority stake in the Company by Zhuzhou CSR Times Electric Co., Ltd of Hunan
Province in the People's Republic of China and costs associated with preparing
the Company for further growth in 2009.
    The growth in the order book continued during 2008. Orders taken of $49.0
million were 15% higher than the previous year and gave a book to bill ratio
of 1.3. Such a level of order in-take, combined with a record year-end order
book of $37.7 million, gives management confidence that further growth in
revenue can be achieved in 2008. However, the exceptionally favourable product
mix seen in the early part of 2008 is not expected to be repeated and net
earnings are expected to fall in 2009. In addition, due to the exhaustion of
brought forward tax losses in the UK, the Company expects to incur a tax
charge in 2009.
    Dr. Paul Taylor, President and Chief Executive Officer commented, "this
has been an historic year for Dynex. The acquisition of 75% of our common
shares by CSR Times Electric brings us the support of a strong parent company
and the opportunity to play an even more active role in what is probably the
strongest growing economy in the world. Our co-operation with CSR Times
Electric is still at an early stage, but already we can see that there are
many new opportunities from which we can benefit. We have pushed ahead in 2008
with the installation of a 6 inch bipolar fabrication facility, we have begun
to build a new, special test facility for high power thyristors and we expect
to start soon on an expansion of our IGBT facility to service the massive and
rapid expansion of the China rail networks. At the same time, we have been
able to report an excellent set of results, with strong growth in revenue,
another excellent improvement in gross and net earnings and a record order
book."
    Bob Lockwood, Chief Financial Officer commented, "we are delighted to be
able to produce an outstanding set of results in the current climate. Strong
growth in revenue and another significant improvement in gross margin has
enabled us to more than double our net earnings compared to last year. The
strength of our order book and the expansion plans that Paul Taylor has
referred to and our relationship with CSR Times Electric all point to an
exciting future. But 2009 will also be a difficult year in many ways. A less
favourable product mix and the need to provide for tax in future means that
net earnings are expected to fall next year. We also need to be conscious of
the current recession affecting most of the world's major economies. We have
not seen too much affect of the current economic troubles on our business to
date, but we cannot ignore the possibility that we will be affected at some
point in the future."
    Mr Lu, Chairman and President of CSR Times Electric, concluded, "CSR
Times Electric is delighted to have completed its first overseas acquisition
and we are excited by the opportunities that arise from CSR Times Electric and
Dynex working together in the future. The management of Dynex has delivered an
excellent set of results for 2008 and we look forward to working with them to
produce even better results for all Dynex shareholders in the future."

    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
    -----------------------------------------------
    Years Ended December 31st, 2008 and 2007
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                        2008            2007
                                               ------------------------------
    Revenue                                    $  37,016,731   $  30,155,294

    Cost of sales                                 26,559,302      23,291,137
    -------------------------------------------------------------------------

    Gross margin                                  10,457,429       6,864,157
    -------------------------------------------------------------------------

    Expenses
    General and administration                     4,077,965       2,466,857
    Sales and marketing                            1,010,798         947,932
    Research and development                         796,414         673,503
    Interest expense                                 759,128         847,324
    -------------------------------------------------------------------------

                                                   6,644,305       4,935,616
    -------------------------------------------------------------------------

    Earnings before other income                   3,813,124       1,928,541
    -------------------------------------------------------------------------

    Other income
    Interest and other income                        297,254         279,406
    Foreign exchange gain (loss)                     453,603         (36,444)
    -------------------------------------------------------------------------

                                                     750,857         242,962
    -------------------------------------------------------------------------

    Income taxes                                      (2,298)              -

    NET EARNINGS                                   4,561,683       2,171,503

    DEFICIT, BEGINNING OF PERIOD, as originally
     stated                                      (11,730,827)    (14,098,044)

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

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

    Earnings per share
      Basic                                    $        0.12   $        0.07
      Diluted                                  $        0.12   $        0.06
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted average number of shares
      Basic                                       37,120,084      33,314,485
      Diluted                                     37,666,916      33,680,516
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    DYNEX POWER INC.
    Consolidated Statements of Comprehensive Income
    -----------------------------------------------
    Years Ended December 31st, 2008 and 2007
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                        2008            2007
                                                -----------------------------

    Net earnings                                $  4,561,683    $  2,171,503
    -------------------------------------------------------------------------

    Other Comprehensive loss, net of tax:

    Unrealized loss on translating financial
     statements of self-sustaining foreign
     operations                                     (619,314)       (197,553)
    -------------------------------------------------------------------------

    OTHER COMPREHENSIVE LOSS                        (619,314)       (197,553)
    -------------------------------------------------------------------------

    COMPREHENSIVE INCOME                        $  3,942,369    $  1,973,950
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    DYNEX POWER INC.
    Consolidated Statements of Accumulated Other Comprehensive
    ----------------------------------------------------------
    Loss and Deficit
    ------------------
    As at December 31st, 2008 and 2007
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                        2008            2007
                                                 ----------------------------

    Accumulated other comprehensive loss,
     beginning of period                        $   (760,787)   $   (563,234)

    Other comprehensive loss                        (619,314)       (197,553)
    -------------------------------------------------------------------------

    Accumulated other comprehensive loss          (1,380,101)       (760,787)

    Deficit                                       (7,169,144)    (11,730,827)
    -------------------------------------------------------------------------

    TOTAL ACCUMULATED OTHER COMPREHENSIVE LOSS
     AND RETAINED DEFICIT                       $ (8,549,245)   $(12,491,614)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    DYNEX POWER INC.
    Consolidated Balance Sheets
    ---------------------------
    As At December 31st, 2008 and 2007
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                        2008            2007
                                                -----------------------------
    CURRENT ASSETS
    Cash                                        $    404,638    $    140,867
    Accounts receivable                            6,081,965       5,743,050
    Inventories                                    8,041,747       7,521,573
    Income tax recoverable                             2,838               -
    Prepaid expenses and deposits                    696,625         597,805
    -------------------------------------------------------------------------
                                                  15,227,813      14,003,295

    PROPERTY, PLANT & EQUIPMENT                    5,433,347       1,083,540
    -------------------------------------------------------------------------

                                                $ 20,661,160    $ 15,086,835
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    CURRENT LIABILITIES
    Accounts payable and accrued liabilities    $  5,688,807    $  4,346,095
    Short-term loan                                3,551,495       3,814,585
    Current portion of long-term debt                 45,610         279,768
    Obligation under capital leases                  114,146               -
    Current portion of deferred revenue              137,271         151,942
    -------------------------------------------------------------------------
                                                   9,537,329       8,592,390

    LONG-TERM DEBT                                 2,846,811       3,446,595
    LONG-TERM OBLIGATION UNDER CAPITAL LEASES        642,659               -
    LONG-TERM DEFERRED REVENUE                     1,132,483       1,405,465
    -------------------------------------------------------------------------
                                                  14,159,282      13,444,450


    SHAREHOLDERS' EQUITY
    Share capital                                 15,051,123      14,133,999
    Deficit                                       (7,169,144)    (11,730,827)
    Accumulated other comprehensive loss          (1,380,101)       (760,787)
    -------------------------------------------------------------------------

                                                   6,501,878       1,642,385
    -------------------------------------------------------------------------

                                                $ 20,661,160    $ 15,086,835
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    DYNEX POWER INC.
    Consolidated Statements of Cash Flows
    -------------------------------------
    Years Ended December 31st, 2008 and 2007
    -------------------------------------------------------------------------
                                                        2008            2007
                                                -----------------------------
    OPERATING
    Net earnings                                $  4,561,683    $  2,171,503
    Items not affecting cash
    ------------------------
      Amortization                                   310,446         186,890
      Gain on disposal of capital assets            (101,245)       (177,994)
      Shares and options issued for services          37,000          51,662
      Non-cash interest                              183,226         183,633
      Non-cash grant income                           (2,355)        (28,660)
      Provision for inventory obsolescence         1,149,172         154,328
    Changes in non-cash operating working
     capital                                      (1,799,184)     (2,760,164)
    -------------------------------------------------------------------------
                                                   4,338,743        (218,802)
    -------------------------------------------------------------------------

    FINANCING
    Shares issued for cash                            34,500             762
    Increase in short-term loan                       62,836       1,281,565
    Payments on  capital leases                      (79,743)              -
    Increase (decrease) in long-term debt            126,489        (282,831)
    -------------------------------------------------------------------------
                                                     144,082         999,496
    -------------------------------------------------------------------------

    INVESTING
    Proceeds of disposal of capital assets             4,374          12,518
    Purchase of capital assets                    (4,333,637)       (932,734)
    -------------------------------------------------------------------------
                                                  (4,329,264)       (920,216)
    -------------------------------------------------------------------------

    NET INCREASE (DECREASE) IN CASH                  153,562        (139,522)

    Effect of foreign currency translation
     on cash                                         110,209         (76,653)

    Cash, beginning of period                        140,867         357,042
    -------------------------------------------------------------------------

    CASH, END OF PERIOD                           $  404,638      $  140,867
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    
    %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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