Profitable First Quarter
Listing: TSX Venture Exchange
Symbol: DNX
LINCOLN, England, May 23, 2017 /CNW/ - Dynex Power Inc. (TSXV:
DNX), a leading, high power semiconductor company, today announced
its financial results for the first quarter ended March 31st, 2017.
Summary financial information for the three months ended
March 31st, 2017 is as follows:
|
|
|
Canadian Dollars
(000's)
|
March 31,
2017
|
March 31,
2016
|
Revenue
Gross
Profit
Other Income,
Expenses and Costs
Profit/(Loss) before
Tax
Income Tax
(Expense)/Recovery
Net
Profit/(Loss)
Number of Common
shares outstanding ¹ - diluted
Profit/(Loss) per
share in Canadian Dollars - diluted
|
11,553
2,732
(2,187)
545
(139)
406
80,509,047
$0.01
|
10,273
1,188
(1,714)
(526)
65
(461)
80,509,047
$(0.01)
|
¹ Weighted
average for the period
|
|
|
First quarter revenue of $11.6million was 12% higher than the
corresponding quarter of last year. This increase was despite a 16%
strengthening of the Canadian Dollar exchange rate against
Sterling. In Sterling terms, revenue had increased by 34%.
The gross margin of $2.7 million
was equivalent to 23.7% of revenue. In the corresponding quarter of
last year a gross profit of $1.2
million had been reported equivalent to 11.6% of revenue.
The improvement in gross margin is primarily the result of
increased revenues in a high fixed cost business. The gross margin
reported is within the range targeted by management for the first
time since the fourth quarter of 2015.
The combination of other income, expenses and costs increased by
$473,000 to $2.2 million despite the 16% strengthening of the
Canadian Dollar against Sterling. The increase was mainly as a
result of a provision to cover the costs of a small redundancy
exercise that has been carried out. The redundancy exercise was
designed to rebalance resources in the business.
As a consequence of these results, the Company recorded a profit
before tax of $545,000, compared to a
loss before tax of $526,000 in the
corresponding quarter of last year. A $139,000 tax expense reduced the net profit for
the period to $406,000 or
$0.01 per share, compared with a net
loss of $461,000, or $0.01 per share, in the corresponding period of
last year.
Management is also forecasting a profitable second quarter for
Dynex, with revenue guidance in the C$ 10.5
-12.5 million range at current exchange rates. The
outlook for the second half of the year remains somewhat less
certain. The industry increasingly works on shorter lead times than
in the past, so the majority of revenue for the second half of the
year has yet to be backed by firm orders. Management, however,
expects that the Group will be able to report a profit for the full
year.
Clive Vacher, President and Chief
Executive Officer commented, "I am pleased to report a strong
increase in revenue for the first quarter. Indeed, this was the
highest quarterly revenue reported for four years. This positive
performance is partly a result of business backlog built-up from
2016 that was scheduled for delivery in 2016 and partly a result of
a first quarter emphasis on marketing. I am also pleased to see the
Group return to profitability and the Dynex team is determined to
maintain this improvement as going forward."
Bob Lockwood, Chief Financial
Officer commented, "Given the high fixed cost nature of the
business, a strong increase in revenue always has a big impact on
the net profit and we have seen that influence once again. We have
the order cover for the second quarter to show another profit and
we believe the year as a whole will also be profitable."
Liu Ke'an, the Chairman of Dynex
said, "We are delighted that Clive agreed to join the business as
our new chief executive at the start of the year. I have reviewed
the improvement plans that he is implementing with the Dynex
leadership team. I believe that these will drive exciting
developments for the Group over the coming periods. I am pleased we
are off to a good start and Clive has our full support for this
change programme."
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
quarter ended March 31st , 2016 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.
|
Interim Condensed
Consolidated Statements of Comprehensive Income (unaudited) in
Canadian Dollars
|
Quarter Ended
March 31st, 2017
|
|
|
|
3
months
|
3
months
|
|
|
Mar
31st
|
Mar
31st
|
|
|
2017
|
2016
|
|
|
$
|
$
|
|
|
|
|
Revenue
|
|
11,552,648
|
10,272,554
|
|
|
|
|
Cost of
sales
|
|
(8,820,330)
|
(9,084,760)
|
|
|
|
|
Gross
profit
|
|
2,732,318
|
1,187,794
|
|
|
|
|
Other
income
|
|
38,363
|
22,395
|
Sales and marketing
expenses
|
|
(305,937)
|
(327,242)
|
Administration
expenses
|
|
(1,531,650)
|
(1,060,550)
|
Research and
development expenses
|
|
(194,380)
|
(299,961)
|
Finance
costs
|
|
(140,594)
|
(178,616)
|
Other
(losses)/gains
|
|
(52,795)
|
129,811
|
|
|
|
|
Profit/(loss)
before tax
|
|
545,325
|
(526,369)
|
|
|
|
|
Income tax
(expense)/recovery
|
|
(139,526)
|
65,199
|
|
|
|
|
Net
profit/(loss)
|
|
405,799
|
(461,170)
|
|
|
|
|
|
|
|
|
Other
comprehensive income/(loss)
|
|
|
|
|
|
|
|
Exchange differences
on translation of foreign operations (net of tax of
$nil)
|
|
186,410
|
(3,589,061)
|
|
|
|
|
Total
comprehensive income/(loss) for the period
|
|
592,209
|
(4,050,231)
|
|
|
|
|
Earnings/(loss)
per share
|
|
|
|
Basic
|
|
0.01
|
(0.01)
|
Diluted
|
|
0.01
|
(0.01)
|
DYNEX POWER
INC.
|
Interim Condensed
Consolidated Statement of Financial Position (unaudited) in
Canadian Dollars
|
As at March 31st,
2017
|
|
|
|
|
Mar
31st
|
Dec
31st
|
|
|
|
2017
|
2016
|
|
|
|
$
|
$
|
|
|
|
|
|
NON-CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
|
Intangible
assets
|
|
|
1,482,784
|
1,524,346
|
Property, plant &
equipment
|
|
|
31,154,449
|
31,565,940
|
Deferred tax
asset
|
|
|
1,028,031
|
1,127,322
|
|
|
|
|
|
Total non-current
assets
|
|
|
33,665,264
|
34,217,608
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
|
Inventories
|
|
|
11,898,099
|
11,854,067
|
Trade
receivables
|
|
|
5,909,141
|
4,035,481
|
Amounts owing from
group undertakings
|
|
|
3,945,018
|
3,573,709
|
Prepayments, deposits
& other receivables
|
|
|
2,537,504
|
2,297,786
|
Tax
recoverable
|
|
|
-
|
682
|
Cash
|
|
|
590,585
|
898,855
|
|
|
|
|
|
Total current
assets
|
|
|
24,880,347
|
22,660,580
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Trade
payables
|
|
|
3,928,673
|
3,010,756
|
Amounts owing to
group undertakings
|
|
|
2,167,640
|
2,103,917
|
Other payables and
accruals
|
|
|
2,679,549
|
3,290,095
|
Borrowings
|
|
|
16,770,545
|
16,380,290
|
Provisions
|
|
|
929,880
|
456,773
|
|
|
|
|
|
Total current
liabilities
|
|
|
26,476,287
|
25,241,831
|
|
|
|
|
|
NON-CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
5,118,470
|
5,141,190
|
Provisions
|
|
|
49,815
|
186,337
|
|
|
|
|
|
Total non-current
liabilities
|
|
|
5,168,285
|
5,327,527
|
|
|
|
|
|
NET
ASSETS
|
|
|
26,901,039
|
26,308,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
|
|
Share
capital
|
|
|
37,096,192
|
37,096,192
|
Accumulated
deficit
|
|
|
(10,122,426)
|
(10,528,225)
|
Exchange fluctuation
reserve
|
|
|
(72,727)
|
(259,137)
|
|
|
|
|
|
TOTAL
EQUITY
|
|
|
26,901,039
|
26,308,830
|
DYNEX POWER
INC.
|
Interim Condensed
Consolidated Statement of Changes in Equity (unaudited) in Canadian
Dollars
|
Quarter Ended
March 31st 2017
|
|
|
|
|
Foreign
|
|
|
|
|
Currency
|
|
|
Share
|
|
Translation
|
Total
|
|
Capital
|
Deficit
|
Reserve
|
Equity
|
|
$
|
$
|
$
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At January 1st,
2016
|
37,096,192
|
(5,609,101)
|
7,019,514
|
38,506,605
|
|
|
|
|
|
Total comprehensive
income for the period
|
-
|
(2,717,380)
|
3,667,858
|
950,478
|
|
|
|
|
|
|
|
|
|
|
At March 31st,
2016
|
37,096,192
|
(8,326,481)
|
10,687,372
|
39,457,083
|
|
|
|
|
|
Total comprehensive
income for the period
|
-
|
(2,201,744)
|
(10,946,509)
|
(13,148,253)
|
|
|
|
|
|
|
|
|
|
|
At December 31st,
2016
|
37,096,192
|
(10,528,225)
|
(259,137)
|
26,308,830
|
|
|
|
|
|
Total comprehensive
income for the period
|
-
|
405,799
|
186,410
|
592,209
|
|
|
|
|
|
|
|
|
|
|
At March 31st,
2017
|
37,096,192
|
(10,122,426)
|
(72,727)
|
26,901,039
|
DYNEX POWER
INC.
|
Interim Condensed
Consolidated Statement of Cash Flows (unaudited) in Canadian
Dollars
|
Quarter Ended
March 31st, 2017
|
|
|
|
|
3
months
|
3
months
|
|
|
|
Mar
31st
|
Mar
31st
|
|
|
|
2017
|
2016
|
|
|
|
$
|
$
|
CASH FLOW FROM
OPERATING ACTIVITIES
|
|
|
|
|
Profit before
tax
|
|
|
545,325
|
(526,369)
|
Finance costs
recognised in profit before tax
|
|
|
140,594
|
178,616
|
Investment income
recognised in profit before tax
|
|
|
658
|
-
|
Amortization of
intangible assets
|
|
|
51,881
|
57,063
|
Depreciation of
property, plant & equipment
|
|
|
1,139,318
|
1,343,479
|
Provision for slow
moving and obsolete inventory
|
|
|
(1,464,406)
|
-
|
Non cash movement in
provisions
|
|
|
330,120
|
-
|
Movements in working
capital
|
|
|
(654,479)
|
(1,236,870)
|
Income taxes
(paid)/received
|
|
|
(32,329)
|
-
|
|
|
|
|
|
Net cash generated
by/(used in) operating activities
|
|
|
56,682
|
(184,081)
|
|
|
|
|
|
CASH FLOW FROM
INVESTING ACTIVITIES
|
|
|
|
|
Payments for
intangible assets
|
|
|
-
|
(2,188)
|
Payments for
property, plant & equipment
|
|
|
(511,455)
|
(406,934)
|
Interest
received
|
|
|
(658)
|
-
|
|
|
|
|
|
Net cash used in
investing activities
|
|
|
(512,113)
|
(409,122)
|
|
|
|
|
|
CASH FLOW FROM
FINANCING ACTIVITIES
|
|
|
|
|
Proceeds from
borrowings
|
|
|
1,185,202
|
949,988
|
Repayments of
borrowings
|
|
|
(969,053)
|
(113,142)
|
Interest
paid
|
|
|
(71,478)
|
(77,209)
|
Payments for other
finance costs
|
|
|
(1,236)
|
-
|
|
|
|
|
|
Net cash generated
by financing activities
|
|
|
143,435
|
759,637
|
|
|
|
|
|
NET
(DECREASE)/INCREASE IN CASH
|
|
|
(311,996)
|
166,434
|
|
|
|
|
|
Cash at beginning of
period
|
|
|
898,855
|
1,410,547
|
|
|
|
|
|
Effect of foreign
currency translation on cash
|
|
|
3,726
|
(57,278)
|
|
|
|
|
|
CASH AT END OF
PERIOD
|
|
|
590,585
|
1,519,703
|
SOURCE Dynex Power Inc.