Listing: TSX Venture Exchange
Symbol: DNX
Lincoln, England, November 17th, 2009 – Dynex Power Inc., a
leading specialist high power semiconductor company, today announced
results for the third quarter of 2009.
Summary financial information in Canadian dollars for the three and nine
months ended September 30th, 2009 is as follows:
| Sept 30, 2009 | Sept 30, 2008 | YTD 2009 | YTD 2008 | |
| $’000 | $’000 | $’000 | $’000 | |
| Revenue | 9,347 | 9,349 | 30,072 | 27,206 |
| Gross Margin | 1,894 | 2,146 | 7,208 | 8,628 |
| Earnings before Tax | 823 | 395 | 3,035 | 3957 |
| Net Earnings | 701 | 395 | 2,591 | 3,857 |
| No. of Common Shares-average | 40,195,637 | 39,748,782 | 40,195,105 | 36,147,746 |
| Earnings per Share in Dollars-diluted | 0.02 | 0.01 | 0.06 | 0.10 |
Revenue remained strong in the third quarter matching that reported in
the corresponding quarter of last year. Once again, there were
particularly good sales of Bipolar Discrete and Power Electronic
Assembly products, while revenue from Power Modules and Integrated
Circuit products both declined. Overall, revenue remains in line with
expectations.
Year to date revenue was 11% ahead of the same
nine-month period last year. Here again, the strong performing product
groups were Bipolar Discrete and Power Electronic Assemblies. There was
a small decrease in Power Modules revenue and a significant decrease in
Integrated Circuit revenue. Overall, management remained pleased with
the Company’s revenue performance in the challenging economic
environment.
Dynex’s product mix in the quarter was slightly less
favourable than in 2008, resulting in a gross profit margin for the
third quarter of 20.3% compared to 23.0% in 2008. The year to date gross
profit margin was 24.0% compared to 31.7% last year. The Company
indicated last year that the gross profit margin in the first half of
2008 was exceptionally high and could not be maintained.
Dynex
reported earnings before income tax of $823,000 in the quarter,
significantly ahead of the $395,000 reported in the corresponding period
of 2008. For the year to date, earnings before income tax was $3.0
million compared to $3.9 million in the corresponding period of last
year. Earnings in the first half of last year had been exceptionally
high. Brought forward tax losses in the UK will be exhausted during 2009
and the Company is now providing for tax on its earnings. The average
tax rate is estimated to be 14% of UK earnings (15% of consolidated
earnings) for this year. The Company expects the rate to rise to nearer
to the statutory UK rate of 28% in future years.
The book to bill
ratio (a measure of whether new orders are being received as fast as
existing orders are being completed) fell to 0.9 to 1 during the quarter
indicating a weaker marketplace and a more competitive environment.
However, to date Dynex has not experienced the revenue contraction
described by some semiconductor analysts. In fact, Dynex’s order book
remains strong with backlog equivalent to approximately eleven
months’ billings. The strength of the order book gives management some
confidence that revenue can be maintained at the current level for at
least the next two quarters.
Dr Paul Taylor, President and Chief
Executive Officer commented that “The order book remains strong and we
still expect revenue overall in 2009 to be well ahead of last year and
to continue at this level at least into the early part of next year. The
Bipolar Discrete business is performing particularly strongly. Our
outlook is for continuing growth in the Bipolar Discrete and Power
Electronic Assemblies businesses, but sales in Power Modules and
Integrated Circuits will remain depressed for the time being. However,
we are working together with CSR Times Electric to qualify our IGBT
parts for use in their power converter systems and it is our objective
that this will lead to significant sales of IGBT die to them in future.
We have announced a major expansion of our IGBT capacity to meet this
expected demand and completion of this expansion and qualification of
the parts with CSR Times Electric is our major priority at the moment”.
Bob
Lockwood, Chief Financial Officer, stated that “the third quarter
earnings remained strong. Looking forward, revenue is expected to
continue at levels similar to those seen in the last two quarters. This
should enable the business to continue reporting quarterly profits
albeit that the net earnings for the year will be lower than in 2008 as
a result of a less favourable product mix and the Company having to
provide for tax on its earnings. The expansion of our IGBT facility is a
major project and it will limit the growth we can achieve next year, but
should lead to exciting new opportunities for the Company thereafter”.
Mr
Lu, Chairman of Dynex and President and Executive Director of CSR Times
Electric, commented again on how well he thought Dynex was performing in
the current economic conditions. In addition, he said “I am pleased with
the progress that has taken place on the expansion of Dynex’s facilities
and the qualification of die for use by CSR Times Electric. Mr Lu
confirmed that CSR Times Electric was providing every assistance it
could to Dynex with these two vital projects”.
The Company
announced that it had filed a preliminary prospectus for a rights issue
on 26th October 2009 to raise the finance required for the expansion of
its IGBT fabrication facility. The Company expects to file a final
prospectus in the next few days setting out full details of the issue.
In the meantime, the Company has borrowed money to finance the initial
work on the project. The loan was guaranteed by CSR Times Electric.
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, 2009 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; the worldwide demand for and supply of
silicon; 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.
2009
Q3 Figures (PDF)
About the Company
Dynex
designs and manufactures high power bipolar semiconductors, high power
insulated gate bipolar transistor (IGBT) modules, 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. Its 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. Dynex is majority owned by
Zhuzhou CSR Times Electric Co., Ltd.
Zhuzhou CSR 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. CSR 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, CSR 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
www.dynexsemi.com.
Further information on CSR Times Electric
can be found at www.timeselectric.cn/en
All monetary values
expressed in this release are in Canadian dollars unless stated
otherwise.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or accuracy of
this 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: UK +44 1522 500
500
Email: investorrelations@dynexsemi.com
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