Results in line with guidance
Listing: TSX Venture Exchange
Symbol: DNX
LINCOLN, England, Aug. 29, 2018 /CNW/ - Dynex Power Inc. (TSXV:
DNX), a leading, high power semiconductor company, today announced
its financial results for the second quarter ended June 30, 2018.
Summary financial information for the three months to
June 30, 2018 is as follows:
|
|
|
|
|
Canadian Dollars
(000's)
|
|
|
June
30,
2018
|
June 30,
2017
|
Revenue
|
|
|
10,590
|
11,546
|
Gross
Profit/(Loss)
|
|
|
265
|
998
|
Other Income,
Expenses and Costs
|
|
|
(2,013)
|
(2,133)
|
(Loss) before
Tax
|
|
|
(1,748)
|
(1,135)
|
Income Tax
Recovery
|
|
|
322
|
191
|
Net (Loss)
|
|
|
(1,426)
|
(944)
|
EBITDA
|
|
|
(299)
|
270
|
Operating
cash
|
|
|
(1,501)
|
2,099
|
Common shares
outstanding – diluted
|
|
|
80,509,047
|
80,509,047
|
(Loss) per share in
Canadian Dollars - diluted
|
|
|
(0.02)
|
(0.01)
|
First quarter revenue of $10.6
million was 8% lower than the corresponding quarter of last
year, or, 10% lower before the impact of exchange rates. Gross
margin was 2.5% of revenue, compared with a gross margin of 8.6% in
the corresponding quarter in 2017. The reduction in gross margin in
2018 reflects lower revenues and an unfavourable product mix in a
high fixed cost business.
The combination of other income, expenses and costs represented
19.0% of revenue in the second quarter compared to 18.4% in the
corresponding period in 2017. The absolute level of such
expenditure decreased by $120,000
compared to the corresponding period of last year.
As a consequence of these results, the Company recorded a loss
before tax of $1,748,000 compared to
a loss before tax of $1,135,000 in
the corresponding quarter of last year. The net loss after tax for
the quarter was $1,426,000 or
$0.02 per share, compared with a net
loss of $944,000, or $0.01 per share, in the corresponding period of
last year.
EBITDA for the quarter was negative $299,000 compared with a positive $270,000 in the corresponding period last
year.
Operating cash outflow was $1,501,000 for the quarter compared with an
inflow of $2,099,000 in the
corresponding period of last year.
Clive Vacher, President and Chief
Executive Officer, commented, "In my Q1 report, I stated that the
second quarter performance would be broadly similar to that of the
first, albeit with modest cash usage, and this has indeed been the
case. The losses are attributable to the diminished order book in
the first half of the year. However, the increased focus on
improvements in sales and marketing are starting to show positive
results. Our June order intake was the highest since July 2016 in sterling terms, and the full-quarter
book-to-bill was 1.1.
"More importantly, our focus on new product introduction,
improved product quality and cost reduction is starting to yield
dividends in terms of orders. We are seeing improved customer
interest across our new IGBT module lines, and expect volume orders
for our new 3.3kV and 4.5kV modules during quarters 3 and 4 2018.
This, coupled with new bipolar and power assemblies order
discussions that are at an advanced stage, gives Management
confidence to expect that the quarter 3 book-to-bill will continue
to show improvement.
"In addition, we are now able to demonstrate, to customers,
improved performance of Dynex IGBT modules, versus competitor
products. This is in line with our aim to turn Dynex into a
technological leader in the industry on the latest-generation power
semiconductors. It has also given us the confidence to launch a
project aimed at a substantial increase in manufacturing capacity,
to be on-line in late 2018 and early 2019, in anticipation of the
refreshed and expanded product range yielding significant
incremental orders.
"The timing of the volume orders for our new products continues
to present us with a short-term challenge, due to the timeframes of
qualification by customers. Management expects that quarter 3
results will be similar to quarters 1 and 2. Our expectation for
quarter 4 is to show improvement in financial results, as we start
to execute the improved order book. Thereafter, our performance
will largely depend on successfully turning the current customer
interest into firm orders during the second half of 2018.
"Overall, therefore, we are continuing to position Dynex for a
bright future. However, it will take some more time for this
to translate into our commitment to sustained profitability."
Liu Ke'an, the Chairman of Dynex,
added, "While the financial results are still a considerable
distance from where they need to be, the Dynex team delivered on
their quarter 2 guidance. I am impressed with the improvements in
product development and quality over the first half of 2018. All
indications are that, in releasing new products, Dynex will be able
to capitalise on future market opportunities. I look forward to
progressive improvement to profitability over the coming
quarters."
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 , 2017
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 June
30th, 2018
|
|
|
|
|
|
|
|
|
3
months
|
3
months
|
YTD
|
YTD
|
|
|
Jun
30th
|
Jun
30th
|
Jun
30th
|
Jun
30th
|
|
|
2018
|
2017
|
2018
|
2017
|
|
Note
|
|
Note
|
$
|
$
|
|
|
|
|
|
|
Revenue
|
5, 6
|
10,590,361
|
11,546,462
|
21,167,219
|
23,099,110
|
|
|
|
|
|
|
Cost of
sales
|
|
(10,325,532)
|
(10,548,470)
|
(20,011,147)
|
(19,368,800)
|
|
|
|
|
|
|
Gross
profit
|
|
264,829
|
997,992
|
1,156,072
|
3,730,310
|
|
|
|
|
|
|
Other
income
|
6
|
58,272
|
48,038
|
130,882
|
86,401
|
Sales and marketing
expenses
|
|
(470,972)
|
(391,691)
|
(950,250)
|
(697,628)
|
Administration
expenses
|
|
(1,125,475)
|
(839,787)
|
(2,445,683)
|
(2,371,437)
|
Research and
development expenses
|
7
|
(377,457)
|
(725,618)
|
(948,741)
|
(919,998)
|
Finance
costs
|
|
(175,100)
|
(182,738)
|
(386,957)
|
(323,332)
|
Other
(losses)/gains
|
|
77,666
|
(41,600)
|
14,324
|
(94,395)
|
|
|
|
|
|
|
Loss before
tax
|
7
|
(1,748,237)
|
(1,135,404)
|
(3,430,353)
|
(590,079)
|
|
|
|
|
|
|
Income tax
recovery
|
|
322,678
|
191,795
|
625,657
|
52,269
|
|
|
|
|
|
|
Net
loss
|
|
(1,425,559)
|
(943,609)
|
(2,804,696)
|
(537,810)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive (loss)/ income
|
|
|
|
|
|
Items that may be
reclassified subsequently to net profit/loss:
|
|
|
|
Exchange differences
on translation of foreign operations (net of tax of
$nil)
|
|
(1,075,715)
|
461,726
|
629,595
|
648,136
|
|
|
|
|
|
|
Total
comprehensive (loss)/income for the period
|
(2,501,274)
|
(481,883)
|
(2,175,101)
|
110,326
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per
share
|
|
|
|
|
|
Basic
|
8
|
(0.02)
|
(0.01)
|
(0.03)
|
(0.01)
|
Diluted
|
8
|
(0.02)
|
(0.01)
|
(0.03)
|
(0.01)
|
DYNEX POWER
INC.
|
Interim Condensed
Consolidated Statement of Financial Position (unaudited) in
Canadian Dollars
|
As at June 30th,
2018
|
|
|
|
|
|
|
|
|
Jun
30th
|
Dec
31st
|
|
|
|
2018
|
2017
|
|
|
Note
|
$
|
$
|
|
|
|
|
|
NON-CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
|
Intangible
assets
|
|
9
|
1,307,871
|
1,475,016
|
Property, plant &
equipment
|
|
9
|
28,277,746
|
29,338,663
|
Deferred tax
asset
|
|
|
2,003,012
|
1,292,441
|
|
|
|
|
|
Total non-current
assets
|
|
|
31,588,629
|
32,106,120
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
|
Inventories
|
|
|
11,742,820
|
10,961,596
|
Trade
receivables
|
|
|
5,002,936
|
4,637,011
|
Amounts owing from
group undertakings
|
|
13
|
8,649,853
|
8,704,381
|
Prepayments, deposits
& other receivables
|
|
|
2,621,607
|
2,138,954
|
Cash
|
|
|
4,410,480
|
3,564,624
|
|
|
|
|
|
Total current
assets
|
|
|
32,427,696
|
30,006,566
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Trade
payables
|
|
|
3,273,246
|
1,271,903
|
Amounts owing to
group undertakings
|
|
13
|
6,872,102
|
3,701,225
|
Other payables and
accruals
|
|
|
4,837,061
|
7,204,708
|
Borrowings
|
|
10
|
22,702,710
|
20,292,764
|
Provisions
|
|
|
58,306
|
173,339
|
|
|
|
|
|
Total current
liabilities
|
|
|
37,743,425
|
32,643,939
|
|
|
|
|
|
|
|
|
|
Jun
30th
|
Dec
31st
|
|
|
|
2018
|
2017
|
|
|
Note
|
$
|
$
|
|
|
|
|
|
NON-CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Borrowings
|
|
10
|
2,124,228
|
3,146,100
|
Provisions
|
|
|
52,058
|
50,932
|
|
|
|
|
|
Total non-current
liabilities
|
|
|
2,176,286
|
3,197,032
|
|
|
|
|
|
NET
ASSETS
|
|
|
24,096,614
|
26,271,715
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
|
|
Share
capital
|
|
11
|
37,096,192
|
37,096,192
|
Accumulated
deficit
|
|
|
(14,169,838)
|
(11,365,142)
|
Foreign currency
translation reserve
|
|
|
1,170,260
|
540,665
|
|
|
|
|
|
TOTAL
EQUITY
|
|
|
24,096,614
|
26,271,715
|
DYNEX POWER
INC.
|
Interim
Condensed Consolidated Statement of Changes in Equity (unaudited)
in Canadian Dollars
|
Six Months Ended
June 30th, 2018
|
|
|
|
|
|
|
Share
Capital
|
Deficit
|
Foreign Currency
Translation
Reserve
|
Total
Equity
|
|
$
|
$
|
$
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At January 1st,
2017
|
37,096,192
|
(10,528,225)
|
(259,137)
|
26,308,830
|
|
|
|
|
|
Total comprehensive
income for the period
|
-
|
(537,810)
|
648,136
|
110,326
|
|
|
|
|
|
|
|
|
|
|
At June 30th,
2017
|
37,096,192
|
(11,066,035)
|
388,999
|
26,419,156
|
|
|
|
|
|
Total comprehensive
(loss)/income for the period
|
-
|
(299,107)
|
151,666
|
(147,441)
|
|
|
|
|
|
|
|
|
|
|
At December 31st,
2017
|
37,096,192
|
(11,365,142)
|
540,665
|
26,271,715
|
|
|
|
|
|
Total comprehensive
(loss)/income for the period
|
-
|
(2,804,696)
|
629,595
|
(2,175,101)
|
|
|
|
|
|
|
|
|
|
|
At June 30th,
2018
|
37,096,192
|
(14,169,838)
|
1,170,260
|
24,096,614
|
DYNEX POWER
INC.
|
Interim Condensed
Consolidated Statement of Cash Flows (unaudited) in Canadian
Dollars
|
Six Months Ended
June 30th, 2018
|
|
|
|
|
|
|
|
|
YTD
|
YTD
|
|
|
|
Jun
30th
|
Jun
30th
|
|
|
|
2018
|
2017
|
|
|
Note
|
$
|
$
|
CASH FLOW FROM
OPERATING ACTIVITIES
|
|
|
|
|
Loss before
tax
|
|
|
(3,430,353)
|
(590,079)
|
Finance costs
recognised in loss before tax
|
|
|
386,957
|
323,332
|
Investment income
recognised in loss before tax
|
|
|
-
|
542
|
Amortization of
intangible assets
|
|
|
202,865
|
103,079
|
Depreciation of
property, plant & equipment
|
|
|
2,353,860
|
2,309,759
|
Loss on disposal of
property, plant & equipment and intangibles
|
|
186
|
-
|
Provision for slow
moving and obsolete inventory
|
|
302,653
|
(3,179,780)
|
Non cash movement in
provisions
|
|
|
-
|
42,294
|
Movements in working
capital
|
|
12
|
968,754
|
3,211,927
|
Income taxes
paid
|
|
|
(66,964)
|
(64,859)
|
|
|
|
|
|
Net cash generated
by operating activities
|
|
|
717,958
|
2,156,215
|
|
|
|
|
|
CASH FLOW FROM
INVESTING ACTIVITIES
|
|
|
|
|
Payments for
intangible assets
|
|
|
-
|
(9,522)
|
Payments for
property, plant & equipment
|
|
|
(617,585)
|
(1,012,384)
|
Interest
received
|
|
|
-
|
(542)
|
|
|
|
|
|
Net cash used in
investing activities
|
|
|
(617,585)
|
(1,022,448)
|
|
|
|
|
|
CASH FLOW FROM
FINANCING ACTIVITIES
|
|
|
|
|
Proceeds from
borrowings
|
|
|
2,313,327
|
1,382,927
|
Repayments of
borrowings
|
|
|
(1,432,839)
|
(1,202,716)
|
Interest
paid
|
|
|
(216,511)
|
(148,176)
|
Payments for other
finance costs
|
|
|
-
|
(14,465)
|
|
|
|
|
|
Net cash generated
by financing activities
|
|
|
663,977
|
17,570
|
|
|
|
|
|
NET INCREASE IN
CASH
|
|
|
764,350
|
1,151,337
|
|
|
|
|
|
Cash at beginning of
period
|
|
|
3,564,626
|
898,855
|
|
|
|
|
|
Effect of foreign
currency translation on cash
|
|
|
81,504
|
(9,739)
|
|
|
|
|
|
CASH AT END OF
PERIOD
|
|
|
4,410,480
|
2,040,453
|
SOURCE Dynex Power Inc.