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Dynex Power Announces Strong Year End Results for 2011
(Canada Newswire Via Acquire Media NewsEdge) Order Book Solid for First Half of 2012 but Management Remains Cautious
About Longer-term Economic Outlook
Listing: TSX Venture ExchangeSymbol: DNX
LINCOLN, England, April 12, 2012 /CNW/ - Dynex Power Inc. (TSXV: DNX), a
leading, high power semiconductor company, today announced its
financial results for the year ended December 31st, 2011.
Summary financial information for the twelve months ended December 31st,
2011 is as follows:
Dollars (000's)
Dec. 31, 2011 Dec. 31, 2010
Revenue
36,082
36,161
Gross profit
8,616
6,893
Expenses
(5,158)
(4,898)
Profit before tax
3,458
1,995
Income tax expense
(748)
(650)
Net profit
2,710
1,345
Common shares outstanding ¹ - diluted
80,574,194
80,531,118
Earnings per share - diluted
$0.03
$0.02
¹ Weighted average for the period
The summary financial information presented above has been taken from
financial statements prepared in accordance with International
Financial Reporting Standards ("IFRS"). This is the first time that the
Company has presented summary annual figures using IFRS. Consequently,
the comparative figures for 2010 vary slightly from the summary figures
that were reported last year.
The last year was eventful for Dynex: the two new 6-inch IGBT wafer
fabrication lines were installed and ramped-up, the freehold of the
Doddington Road site was repurchased and the R&D Centre was established
and is now flourishing. In addition, construction work began on the new
building to house the increased R&D team and to provide additional
office accommodation. Each of these developments is important to
Dynex's long term success.
Full-year 2011 revenue remained essentially level in a challenging
market environment, with a decline of less than one-quarter of 1%,
which was fully attributable to a strengthening of the Canadian Dollar.
In Sterling terms, the UK operating business recorded growth of
slightly less than 1%. Management were pleased with this modest level
of growth in a year characterized by weak trading conditions in Europe
and the previously reported reduction in Chinese rail investment.
Revenue for the Power Module Product Group, which now includes sales of
IGBT die to CSR Times Electric, grew by 155% establishing a record for
the group. This group accounted for 25% of all revenue in 2011, and its
contribution is expected to increase further in the coming years.
Revenue from the Bipolar Discrete Group declined by 27%. Historically,
the Bipolar Discrete Group has been Dynex's mainstay, the strongest and
most reliable revenue generator. Last year, its markets were heavily
affected by the tough economic conditions in Europe. Bipolar discrete
products accounted for 49% of revenue in 2011, the first time it has
been less than half of total revenue. The Power Electronic Assemblies
Group saw revenue decline by 4% from the record level reported last
year. Here again, the tough economic conditions in Europe, which is the
Power Electronic Assembly Product Group's main market, was the
principal factor. The Integrated Circuits Product Group enjoyed a
successful year with revenue more than three times the level reported
last year. As has previously been announced, management no longer
regard integrated circuits as a core business.
The 2011 gross margin was 23.9%, ahead of the 19.1% reported last year.
However, the gross margin was affected by two one-off items during the
fourth quarter of 2011: poor yield variances during the ramp-up of the
new IGBT fabrication lines; and a change to the accounting estimate of
inventory obsolescence. Without these two items, gross margin for the
year would have been approximately 21.9%.
Expenses increased by 5% compared to 2010. Expenses represented 14.3% of
revenue, compared to 13.6% last year. The increase reflected the
Company's preparation for growth in revenue. Currently, management is
more cautious managing its expense base.
The Company generated profit before tax of $3.5 million, 73% higher than
the figure reported in 2010. Without the two one-off items referred to
above, profit before tax would have been approximately $2.8 million, or
40% higher than last year's level.
The Company's tax charge rose by 15% to $749,000. However, the rate of
tax paid on profit before tax fell from 32.6% to 21.6%. The fall in
rate reflected a reduction in the rate of corporation tax payable in
the UK and some additional tax allowances that the Company has been
able to claim in the UK.
The Company generated a net profit of $2.7 million, which is twice that
reported in the previous year. Without the two one-off items referred
to above, net profit would have been approximately $2 million, 49%
higher than last year.
New orders received in 2011 totalled $38.9 million, resulting in a book
to bill ratio of 1.1. As a result, the order book has risen from $16.8
million at the end of 2010 to $19.7 million at the end of 2011. This
represented 28 weeks of sales at the current revenue levels. However,
the book to bill ratio was below 1.0 for the second half of 2011 and
has remained below 1.0 for the first three months of 2012. Management
believes that this reflects the challenging economic conditions in many
of the Company's major markets. The lead time for orders has shortened
significantly, with many customers operating in a naturally defensive
way in respect of their capital expenditure plans. The current order
book gives confidence in the outlook for the next two quarters.
However, results for the second half of 2012 and beyond are difficult
to predict at the moment.
Dr. Paul Taylor, President and Chief Executive Officer commented, "The
performance of the business has shown strong improvement in 2011. We
also achieved solid progress across many areas which lay the
foundations for an even more successful future. I have no doubt that
the coming year will again be very challenging. We will be working hard
to improve the yields from the new lines, to complete and move into the
new R&D Centre and to qualify our products for a number of new non-rail
applications in China."
Bob Lockwood, Chief Financial Officer commented, "Given the current
state of world economies and the slow-down in rail investment in China,
we are pleased with our financial results and the improvements reported
over 2010. The strength of our order book at the end of 2011 gives us
confidence for the first half of 2012 and we are already seeing
improvements in the yields from the new lines. But the outlook for the
second half of 2012 and beyond is currently uncertain and we will
continue to be cautious until we see signs of a pick-up in demand from
the market."
Mr Li, Chairman of Dynex and General Manager of CSR Times Electric
concluded, "CSR Times Electric is pleased with Dynex's operating and
financial results in 2011. The Company's management team has delivered
another excellent set of results, particularly in light of the
challenging operating environment. We will be working closely with
Dynex to develop more non-rail opportunities for the Company in China
and hope to see growth in revenue and continuing growth in net profit
in 2012."
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 June 30th, 2011 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.
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. Our 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 at 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.
The TSX Venture Exchange has neither approved nor disapproved of the
information in this press release.
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