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.
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: [email protected]
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