Expecting improved results from strong order
book
Listing: TSX Venture Exchange
Symbol: DNX
LINCOLN, England, Nov. 27, 2018 /CNW/ - Dynex Power Inc.
(TSXV: DNX), a leading, high power semiconductor company, today
announced its financial results for the third quarter ended
September 30, 2018.
Summary financial information for the three months to
September 30, 2018 is as follows:
|
|
|
|
|
Canadian Dollars
(000's)
|
|
|
Sept
30,
2018
|
Sept 30,
2017
|
Revenue
|
|
|
9,885
|
13,119
|
Gross
Profit/(Loss)
|
|
|
328
|
1,534
|
Other Income,
Expenses and Costs
|
|
|
(2,184)
|
(1,503)
|
(Loss) / Profit
before Tax
|
|
|
(1,856)
|
31
|
Income Tax Recovery /
(Charge)
|
|
|
329
|
(21)
|
Net (Loss) /
Profit
|
|
|
(1,517)
|
11
|
EBITDA
|
|
|
(535)
|
1,300
|
Operating
cash
|
|
|
(731)
|
1,158
|
Common shares
outstanding – diluted
|
|
|
80,509,047
|
80,509,047
|
(Loss) per
share in Canadian Dollars - diluted
|
|
|
(0.02)
|
0.00
|
Third quarter revenues of $9.9
million were 25% lower than the corresponding quarter of
last year, or, 27% lower before the impact of exchange rates. Gross
margin was 3.4% of revenue, compared with a gross margin of 11.7%
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
22.0% of revenue in the third quarter compared to 11.5% in the
corresponding period in 2017.
As a consequence of these results, the Company recorded a loss
before tax of $1,856,000 compared to
a profit before tax of $31,000 in the
corresponding quarter of last year. The net loss after tax for the
quarter was $1,517,000 or
$0.02 per share, compared with a net
profit of $11,000, or $0.00 per share, in the corresponding period of
last year.
EBITDA for the quarter was negative $535,000 compared with a positive $1,300,000 in the corresponding period last
year.
Operating cash outflow was $731,000 for the quarter compared with an inflow
of $1,158,000 in the corresponding
period of last year.
Clive Vacher, President and Chief
Executive Officer, commented, "While the Quarter 3 results were
broadly in line with the guidance provided in Q1, we wish the
results were very much better. We do believe we have broken out of
the poor first-half order intake. As well, the key to sustainable
profitability lies in greater volume. This is due to the high fixed
cost nature of our business. There were encouraging signs with the
order backlog towards the end of Q2, which has continued. We
secured a record order intake month in August, and our
whole-quarter book-to-bill ratio was 1.5. As a consequence, during
the quarter, our order backlog, excluding services, rose from
$10.4 million to $15.4 million.
"We continue to believe in and pursue our turnaround plan, and
the elements that will drive future financial performance. Our
major focus remains on product quality, and on refreshing and
expanding our product portfolio with industry-leading, next
generation products. In addition, we are progressing a project to
increase manufacturing capacity for greater volumes, and
simultaneously continuing our improvement to the sales
function.
"During the quarter, we expanded and updated our product range,
by completing qualification on our new 3.3kV IGBT module, which
demonstrates considerable differentiation versus competitor
products. We successfully won significant new-product IGBT
commitments from a rail equipment company and a motorsport company.
Additionally, we won a competition to supply semiconductor test
equipment in Taiwan for the first
time.
"In quarter 4, we will start to execute on our expanded order
backlog. Furthermore, we are on track to qualify further new
products before year-end, while customer discussions on orders for
these new products continue very encouragingly.
"In summary, we continue to execute the plans that will make
Dynex a solidly profitable company. The financial challenge remains
on how to cover the period from new product release to customer
acceptance and the receipt of volume orders. Our recent uptick in
order intake will help in this regard, as will our upcoming
releases of high-technology new products. While we continue to be
extremely unhappy about the current financial performance, we have
a strong belief that we are executing the right plan for the
future."
Liu Ke'an, the Chairman of Dynex,
added, "Dynex continues its highly-focused improvement on product
quality and the release of industry-leading new IGBT and Bipolar
semiconductors. This will provide the key elements to better
financial performance going forward. I continue to support these
efforts to the full, and believe that progressive financial
improvement will follow."
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
September 30th, 2018
|
|
|
|
|
|
|
|
|
3
months
|
3
months
|
YTD
|
YTD
|
|
|
Sept
30th
|
Sept
30th
|
Sept
30th
|
Sept
30th
|
|
|
2018
|
2017
|
2018
|
2017
|
|
Note
|
|
Note
|
$
|
$
|
|
|
|
|
|
|
Revenue
|
5, 6
|
9,885,111
|
13,119,281
|
31,052,330
|
36,218,391
|
|
|
|
|
|
|
Cost of
sales
|
|
(9,557,070)
|
(11,585,733)
|
(29,568,217)
|
(30,954,533)
|
|
|
|
|
|
|
Gross
profit
|
|
328,041
|
1,533,548
|
1,484,113
|
5,263,858
|
|
|
|
|
|
|
Other
income
|
6
|
13,978
|
526,425
|
144,860
|
612,826
|
Sales and marketing
expenses
|
|
(327,420)
|
(370,911)
|
(1,277,670)
|
(1,068,539)
|
Administration
expenses
|
|
(970,457)
|
(885,946)
|
(3,416,140)
|
(3,257,383)
|
Research and
development expenses
|
7
|
(696,800)
|
(496,741)
|
(1,645,541)
|
(1,416,739)
|
Finance
costs
|
|
(171,996)
|
(150,189)
|
(558,953)
|
(473,521)
|
Other
(losses)/gains
|
|
(31,501)
|
(125,161)
|
(17,177)
|
(219,556)
|
|
|
|
|
|
|
Loss before
tax
|
7
|
(1,856,155)
|
31,025
|
(5,286,508)
|
(559,054)
|
|
|
|
|
|
|
Income tax
recovery
|
|
338,727
|
(20,394)
|
964,384
|
31,875
|
|
|
|
|
|
|
Net
loss
|
|
(1,517,428)
|
10,631
|
(4,322,124)
|
(527,179)
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
(385,024)
|
(191,189)
|
244,571
|
456,947
|
|
|
|
|
|
|
Total
comprehensive (loss)/income for the period
|
|
(1,902,452)
|
(180,558)
|
(4,077,553)
|
(70,232)
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per
share
|
|
|
|
|
|
Basic
|
8
|
(0.02)
|
0.00
|
(0.05)
|
(0.01)
|
Diluted
|
8
|
(0.02)
|
0.00
|
(0.05)
|
(0.01)
|
DYNEX POWER
INC.
|
Interim Condensed
Consolidated Statement of Financial Position (unaudited) in
Canadian Dollars
|
As at September
30th, 2018
|
|
|
|
|
Sept
30th
|
Dec
31st
|
|
|
|
2018
|
2017
|
|
|
Note
|
$
|
$
|
|
|
|
|
|
NON-CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
|
Intangible
assets
|
|
9
|
1,439,924
|
1,475,016
|
Property, plant &
equipment
|
|
9
|
27,228,363
|
29,338,663
|
Derivative financial
instruments
|
|
|
-
|
-
|
Deferred tax
asset
|
|
|
2,342,091
|
1,292,441
|
|
|
|
|
|
Total non-current
assets
|
|
|
31,010,378
|
32,106,120
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
|
Inventories
|
|
|
12,640,749
|
10,961,596
|
Trade
receivables
|
|
|
5,181,769
|
4,637,011
|
Amounts owing from
group undertakings
|
|
13
|
8,683,350
|
8,704,381
|
Prepayments, deposits
& other receivables
|
|
|
2,794,583
|
2,138,954
|
Tax
recoverable
|
|
|
-
|
-
|
Cash
|
|
|
2,713,256
|
3,564,624
|
|
|
|
|
|
Total current
assets
|
|
|
32,013,707
|
30,006,566
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Trade
payables
|
|
|
3,077,274
|
1,271,903
|
Amounts owing to
group undertakings
|
|
13
|
8,536,504
|
3,701,225
|
Other payables and
accruals
|
|
|
4,700,586
|
7,204,708
|
Borrowings
|
|
10
|
22,214,009
|
20,292,764
|
Tax
payable
|
|
|
-
|
-
|
Provisions
|
|
|
57,387
|
173,339
|
|
|
|
|
|
Total current
liabilities
|
|
|
38,585,760
|
32,643,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Borrowings
|
|
10
|
2,192,925
|
3,146,100
|
Provisions
|
|
|
51,238
|
50,932
|
|
|
|
|
|
Total non-current
liabilities
|
|
|
2,244,163
|
3,197,032
|
|
|
|
|
|
NET
ASSETS
|
|
|
22,194,162
|
26,271,715
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
|
|
Share
capital
|
|
11
|
37,096,192
|
37,096,192
|
Accumulated
deficit
|
|
|
(15,687,266)
|
(11,365,142)
|
Foreign currency
translation reserve
|
|
|
785,236
|
540,665
|
|
|
|
|
|
TOTAL
EQUITY
|
|
|
22,194,162
|
26,271,715
|
DYNEX POWER
INC.
|
Interim Condensed
Consolidated Statement of Changes in Equity (unaudited) in Canadian
Dollars
|
Six Months Ended
September 30th, 2018
|
|
|
|
|
|
|
|
|
Foreign
|
|
|
|
|
Currency
|
|
|
Share
|
|
Translation
|
Total
|
|
Capital
|
Deficit
|
Reserve
|
Equity
|
|
$
|
$
|
$
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At January 1st,
2017
|
37,096,192
|
(10,528,225)
|
(259,137)
|
26,308,830
|
|
|
|
|
|
Total comprehensive
income for the period
|
-
|
(527,179)
|
456,947
|
(70,232)
|
|
|
|
|
|
|
|
|
|
|
At September 30th,
2017
|
37,096,192
|
(11,055,404)
|
197,810
|
26,238,598
|
|
|
|
|
|
Total comprehensive
(loss)/income for the period
|
-
|
(309,738)
|
342,855
|
33,117
|
|
|
|
|
|
|
|
|
|
|
At December 31st,
2017
|
37,096,192
|
(11,365,142)
|
540,665
|
26,271,715
|
|
|
|
|
|
Total comprehensive
(loss)/income for the period
|
-
|
(4,322,124)
|
244,571
|
(4,077,553)
|
|
|
|
|
|
|
|
|
|
|
At September 30th,
2018
|
37,096,192
|
(15,687,266)
|
785,236
|
22,194,162
|
DYNEX POWER
INC.
|
Interim Condensed
Consolidated Statement of Cash Flows (unaudited) in Canadian
Dollars
|
Six Months Ended
September 30th, 2018
|
|
|
|
|
|
|
|
|
YTD
|
YTD
|
|
|
|
Sept
30th
|
Sept
30th
|
|
|
|
2018
|
2017
|
|
|
Note
|
$
|
$
|
CASH FLOW FROM
OPERATING ACTIVITIES
|
|
|
|
|
Loss before
tax
|
|
|
(5,286,508)
|
(559,054)
|
Finance costs
recognised in loss before tax
|
|
|
558,953
|
473,521
|
Investment income
recognised in loss before tax
|
|
|
-
|
518
|
Amortization of
intangible assets
|
|
|
320,164
|
144,677
|
Depreciation of
property, plant & equipment
|
|
|
3,503,343
|
3,428,972
|
Loss on disposal of
property, plant & equipment and intangibles
|
|
|
23,320
|
-
|
Provision for slow
moving and obsolete inventory
|
|
|
226,961
|
(3,188,558)
|
Non cash movement in
provisions
|
|
|
-
|
42,294
|
Movements in working
capital
|
|
12
|
740,618
|
3,067,615
|
Income taxes
paid
|
|
|
(99,467)
|
(96,228)
|
|
|
|
|
|
Net cash generated
by operating activities
|
|
|
(12,616)
|
3,313,757
|
|
|
|
|
|
CASH FLOW FROM
INVESTING ACTIVITIES
|
|
|
|
|
Payments for
intangible assets
|
|
|
(270,202)
|
(9,522)
|
Payments for
property, plant & equipment
|
|
|
(1,185,380)
|
(1,352,617)
|
Interest
received
|
|
|
-
|
(518)
|
|
|
|
|
|
Net cash used in
investing activities
|
|
|
(1,455,582)
|
(1,362,657)
|
|
|
|
|
|
CASH FLOW FROM
FINANCING ACTIVITIES
|
|
|
|
|
Proceeds from
borrowings
|
|
|
2,566,368
|
1,382,927
|
Repayments of
borrowings
|
|
|
(1,714,773)
|
(1,702,462)
|
Interest
paid
|
|
|
(244,054)
|
(206,399)
|
Payments for other
finance costs
|
|
|
(86)
|
(14,465)
|
|
|
|
|
|
Net cash generated
by financing activities
|
|
|
607,455
|
(540,399)
|
|
|
|
|
|
NET INCREASE IN
CASH
|
|
|
(860,743)
|
1,410,701
|
|
|
|
|
|
Cash at beginning of
period
|
|
|
3,564,626
|
898,855
|
|
|
|
|
|
Effect of foreign
currency translation on cash
|
|
|
9,373
|
(17,986)
|
|
|
|
|
|
CASH AT END OF
PERIOD
|
|
|
2,713,256
|
2,291,570
|
SOURCE Dynex Power Inc.