Listing: TSX Venture Exchange
Symbol: DNX
Dynex Power Announces Year End Results for 2005
Lincoln, England, May 1st, 2006 – Dynex Power Inc., a leading,
high power semiconductor company, today announced results for the year
ended December 31st, 2005.
Summary financial information for the
twelve months ended December 31st, 2005 is as follows:
| Canadian Dollars (000's) | Dec. 31, 2005 | Dec. 31, 2004 |
| Revenue | 22,761 | 23,886 |
| Gross Margin | 2,928 | 2,383 |
| Net Loss | (1,788) | (5,382) |
| Common shares outstanding 1 - fully diluted | 26,949,650 | 22,336,696 |
| Earnings per share - fully diluted | ($0.07) | ($0.23) |
1 Weighted average for the period
The Company’s performance was significantly better during 2005. The
improvement is masked by an apparent decline in revenue. On the surface,
reported 2005 revenues were down by 5%. This resulted from two factors.
The first and major factor was the negative impact on revenues from the
serious tightness in liquidity the Company suffered from the third
quarter of 2004 through the second quarter of 2005 that the Company has
previously reported. This factor compressed revenue in the third and
fourth quarters of 2004 and half way through the second quarter of 2005.
The second factor affecting revenue was the negative impact of the
foreign exchange translation of the Company’s earnings because of the
strengthening Canadian dollar.
The gross margin of $2.9 million
was an increase of 23% over 2004, continuing the improvement established
in 2004. The Net Loss of $1.8 million was 67% lower than in 2004, again
continuing a trend established in 2004. The Net Loss for the year
disguises a strong and promising result, with the business reporting a
lower loss in each of the first three quarters and a profit in the
fourth quarter.
The key performance factor was tight liquidity,
due to an unexpected revenue collapse in the third quarter of 2004 the
effect of which carried over into 2005. The situation occasioned the
Company’s principal financier to reduce its credit facilities and forced
the Company to restructure the business. The Company’s leadership was
changed, and the operational focus shifted to more responsive customer
service and reducing production cycle time to get orders out quicker.
Following an injection of capital and an accommodation amongst its
creditors in the first and second quarters of 2005, the Company’s
operations significantly improved. The strong management disciplines
resulted in each quarter improving over the previous quarter. This
information has been released before, but the perspective of the
financial performance for the whole year puts the situation in better
context.
For purposes of understanding the trends mentioned, the
key results for the fourth quarter are as follows:
| Canadian dollars (000’s) | Three-months ending Dec. 31, 2005 | Three-months ending Dec. 31, 2004 |
| Revenue | 7,356 | 5,543 |
| Gross Margin | 2,283 | 1,127 |
| Net Profit/(Loss) | 781 | (1,445) |
As regards current news, the recently announced $550,000 private
placement was closed on April 24th, 2006. In addition, the Company is in
the advanced stages of securing the services of a new principal
financier, which should enhance the Company’s commercial operations.
Dr.
Paul Taylor, President and Chief Executive Officer commented, “2005 was
a year of steady recovery. As our supply chain gradually recovered we
were able to report revenue growth, resulting in second half revenues
exceeding those of the first half by more than 30%. The increasing
revenue and continued tight control of costs increased gross margin each
quarter. It was particularly gratifying to be able to record a profit in
the fourth quarter.”
Bob Lockwood, Chief Financial Officer
commented, “we have been able to carry through the recovery plan we
established in the fourth quarter of 2004. The improvement in operating
performance vindicates the tough actions taken at that time. Our backlog
of orders and forecast new orders remains robust and we are forecasting
increased revenue in 2006. We expect to report a net profit for the
year. We intend to use the platform of better performance to replace our
principal lender, and our discussions with new potential lenders are in
an advanced stage.”
Dr. Taylor added, “next year will again
be challenging: because of the timing of major orders in our power
electronic and integrated circuits businesses. Revenue and net results
in the first two quarters will be below those in the second half of
2005, but we expect to see a strong performance across all business
segments in the second half of the year”.
David Banks,
Chairman concluded, “while we expect that 2006 will have the same
profile of a stronger second half as in 2005, we expect the year-on-year
performance to be better. The Company should have improved operating
results. The management team justified the confidence placed in them by
the board, the staff, our customers, suppliers and shareholders. Their
focus and hard work produced an excellent result, not only in better
performance but also better expectations for the future.”
2005
FY Figures (PDF)
About the Company
Dynex is one of the world’s leading suppliers of specialist, high power
semiconductor products. Dynex Semiconductor Ltd is its main operating
business and is based in Lincoln, England in a facility housing the
fully integrated silicon wafer fabrication, assembly and test, sales,
design and development operations. Dynex designs and manufactures high
power bipolar discrete semiconductors, power modules, including
insulated-gate bipolar transistors (IGBTs), and high power electronic
assemblies. Dynex products are used world wide in power electronic
applications including electric power generation, transmission and
distribution, marine and rail traction drives, aircraft, electric
vehicles, industrial automation and controls. The company continues to
produce and sell certain high reliability integrated circuits (ICs) for
use in specialist applications led by its proven radiation hard
Silicon-on-Sapphire products for space and nuclear applications.
Press
announcements and other information about Dynex are available on the
World Wide Web at http://www.dynexsemi.com.
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.
For
more information:
Dr. Paul Taylor
President and Chief Executive Officer
or
Bob
Lockwood
Finance Director and Chief Financial Officer
Dynex
Power Inc.
Tel: +44 1522 500 500
Email: paul_taylor@dynexsemi.com
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