Delays to Customer Deliveries and Inventory
and Asset Write-Offs Impact on 2016 Results
Listing: TSX Venture Exchange
Symbol: DNX
LINCOLN, England, Feb. 2, 2017 /CNW/ - Dynex Power Inc., a leading,
high power semiconductor company, today provides commentary on
delays to customer deliveries and inventory and asset write-offs
and provides guidance on the adverse impact these items will have
on financial performance in the fourth quarter of 2016.
Nearly $3 million of sales that
the Company expected to be shipped during December were unable to
be shipped to customers before the year end. As a result, these
sales will be reported as part of 2017 revenue rather than 2016.
Approximately $2.1 million of this
total relates to projects that overran their forecast completion
date. A further $850,000 was booked
on flights out of the UK on 29th and 30th
December but the freight company rebooked them on to flights in
early January without the Company's knowledge.
The Company has also taken an inventory and asset write-off of
approximately $2.2 million. These
write offs relate mainly to the last of the integrated circuit
inventory, where the Company does not see any prospect of making
future sales, and to IGBT die types for which the Company no longer
believes there is any demand.
Clive Vacher, the new President
and Chief Executive Officer commented, "The failure of the Company
to complete $3 million of sales that
were forecasted to be completed in 2016 is disappointing and
underscores the need for improvements in the Company's processes
and management control. I see my role as the new CEO to address
these issues so as to return the Company to profitability and
growth in 2017. The inventory and asset write-off reflect the end
of some product lines and the need to concentrate our efforts in
future on the products that will give us growth and better
profitability."
Bob Lockwood, Chief Financial
Officer commented, "The loss of $3
million of revenue out of 2016 has a huge impact on our
results for the year. Together with the inventory and asset
write-off and the Company bearing a higher R&D cost in the
year, we are looking at a net loss for the year of around
$4.7 million."
Liu Ke'an, the Chairman of Dynex
said, "These results are clearly unacceptable and the business
cannot be allowed to continue performing in this way. Clive Vacher has joined the Company with a
mandate to change the processes and management control and to
return the Company to profitability and growth. It is a big task
and CRRC Times Electric will be giving him every support it can to
make the necessary changes."
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 September 30th , 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 sale 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.
SOURCE Dynex Power Inc.