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.