Dynex Power Announces First Quarter Results for 2013

A Difficult Quarter which Management Believes Marks a Turning Point for the 
Listing:TSX Venture Exchange
Symbol: DNX 
LINCOLN, England, May 21, 2013 /CNW/ - Dynex Power Inc. (TSXV: DNX), a 
leading, high power semiconductor company, today announced its financial 
results for the first quarter ended March 31st, 2013. 
Summary financial information for the three months ended March 31st, 2013 is 
as follows: 


Canadian Dollars (000's)              March 31, 2013 March 31, 2012

Revenue                                        6,877         10,522
Gross (Loss)/Profit                            (249)          2,633
Other Income, Expenses and Costs             (1,155)        (1,600)
(Loss)/Profit before Tax                     (1,404)          1,033
Income Tax Recovery/(Expense)                    301          (274)
Net (Loss)/ Profit                           (1,103)            759
Common shares outstanding ¹ - diluted     80,542,859     80,542,859
(Loss)/Earnings per share  - diluted         $(0.01)          $0.01

¹ Weighted average for the period

First quarter revenue of $6.9 million was 35% lower than the corresponding 
quarter of last year. The decrease was the result of reductions in sales of 
power modules and die, as well as bipolar products and power assemblies. The 
Company experienced a significant increase in service revenues and revenues 
from the sale of CSR Times Electric products, partially offset by a reduction 
in integrated circuit revenue, but these are smaller product group sales and 
hence less significant to the overall reduction in revenue. The year-over-year 
decline in first quarter revenue was forecast by management in its news 
release dated April 26, 2013, and reflected delays to high speed rail projects 
in China and a weak economic environment in Europe.

A small gross loss was recorded in the quarter compared to a positive gross 
margin of 25%, or $2.6 million, in the corresponding quarter of last year. The 
reduction was a direct result of the year-over-year decline in revenue, in 
addition to a decision by management to maintain engineering and production 
capacity in anticipation of a near-term recovery in demand.

Other income, expenses and costs were reduced by $445,000 to $1.2 million; 
however, because of the reduced revenue in the period, this represented 16.8% 
of revenue in the 2013 period compared with 15.2% in the corresponding quarter 
of last year. As revenue returns to normalized levels over the balance of the 
year, this ratio is expected to improve.

As a consequence of these changes, the Company recorded a loss before tax of 
$1.4 million, compared to a profit before tax of $1.0 million in the 
corresponding quarter of last year. A $301,000 recovery of UK tax resulted in 
a net loss for the period of $1.1 million or $0.01 per share, compared with a 
net profit of $759,000, or $0.01 per share, in the corresponding period of 
last year.

At the end of the first quarter, Dynex's order book stood at $25.0 million, 
approximately 23% higher than at the end of last year. The increase reflects 
strong order intake during the first quarter, which reinforces management 
confidence that, after a long period of difficult conditions, growth in demand 
is returning to the market. As a consequence of the significant growth in 
orders, management is confident that revenue in the second quarter of 2013 
will show significant growth over the first quarter and should remain strong 
for the rest of the year. For the year as a whole, management expects revenue 
in 2013 to exceed the 2012 level, notwithstanding the weak performance in the 
first quarter.

Dr. Paul Taylor, President and Chief Executive Officer commented, "We 
previously indicated that we expected a significant reduction in revenue in 
the first quarter of 2013. This reduction reflected a temporary slowdown in 
orders from Chinese railways, the impact of overstocking at our parent company 
in China and continuing delays to the start of major projects by our European 
customers. When informing shareholders about the expected decline in revenue 
in the first quarter, we indicated that we expected this to be the turning 
point and that revenue would recover in the second and subsequent quarters. We 
continue to hold that view. In the first quarter of 2013, we took $11.7 
million in new orders from our customers which has strengthened our view that 
revenue will recover in the coming quarters. We believe that despite the very 
disappointing results we are reporting in the first quarter, revenue for 2013 
will exceed that reported in 2012."

Bob Lockwood, Chief Financial Officer commented, "The decline in revenue 
combined with the high fixed cost nature of our business resulted in a small 
loss at the gross profit level. Whilst this was disappointing, it was not 
unexpected given the cost structure of the business. We could, of course, have 
taken action to reduce operating costs, but any such cost cutting would 
negatively impact on our ability to capitalize on demand when the market 
recovers. Given our confidence in the recovery now taking place and our 
commitment to customers in challenging times as well as good times, we opted 
to maintain our existing operating structure. The strong order intake during 
the first quarter vindicates that decision. We have kept tight control on 
overhead costs and been cautious on capital expenditure to conserve cash. 
Ironically, having had our lowest quarterly revenue for several years, the 
next quarter could see one of our highest ever quarterly revenues."

Li Donglin, the Chairman of Dynex said, "The first quarter of 2013 has been 
very difficult for Dynex given the current, global economic difficulties. 
However, we are beginning to see a recovery in our markets, especially the 
Chinese railway and urban mass transit sectors. We, therefore, do see this 
quarter as a turning point and expect to be able to report much better results 
to our shareholders, in the second quarter and thereafter."

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 

Further information on CSR Times Electric can be found at 

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.

Consolidated Statement of Comprehensive Income in Canadian Dollars
Quarter Ended March 31st, 2013
                                                 3 months    3 months
                                                 Mar 31st    Mar 31st
                                                     2013        2012
                                                        $           $

Revenue                                         6,877,099  10,522,090

Cost of sales                                 (7,125,912) (7,888,847)

Gross (loss)/profit                             (248,813)   2,633,243

Other income                                       25,618      22,412

Sales and marketing expenses                    (208,329)   (230,041)

Administration expenses                         (709,449)   (950,306)

Research and development expenses               (257,332)   (287,059)

Finance costs                                   (102,532)   (104,594)

Other gains and (losses)                           96,517    (51,142)

(Loss)/Profit before Tax                      (1,404,320)   1,032,513

Income tax expense                                300,868   (273,415)

Net (Loss)/Profit                             (1,103,452)     759,098

Other Comprehensive (Loss)/Income                                    

Exchange differences on translation of
foreign operations (net of tax of $nil)       (1,530,711)     154,629

Total Comprehensive (Loss)/Income for the
year                                          (2,634,163)     913,727

Loss per share                                                       

Basic                                              (0.01)           -

Diluted                                            (0.01)           -

Consolidated Statement of Financial Position in Canadian Dollars 
Quarter Ended March 31st, 2013 

                                                 Mar 31st    Dec 31st
                                                     2013        2012
                                                        $           $

NON-CURRENT ASSETS                                                   

Property, plant & equipment                    31,685,848  33,706,294

Derivative financial instruments                   68,223       2,228

Total non-current assets                       31,754,071  33,708,522

CURRENT ASSETS                                                       

Inventories                                    11,112,556  10,954,012

Trade receivables                               5,063,218   5,297,728

Amounts owing from parent company               3,401,209   2,776,110

Prepayments, deposits & other receivables         903,996     255,847

Tax recoverable                                   120,654     124,292

Cash                                              597,752   2,206,430

Total  current assets                          21,199,385  21,614,419

CURRENT LIABILITIES                                                  

Trade payables                                  1,659,605   1,151,054

Amounts owing to parent company                   553,211     267,349

Other payables and accruals                     2,267,541   3,171,809

Borrowings                                      8,040,523   6,547,631

Provisions                                         80,222     237,548

Total current liabilities                      12,601,102  11,375,391

NET CURRENT ASSETS                              8,598,283  10,239,028

TOTAL ASSETS LESS CURRENT LIABILITIES          40,352,354  43,947,550

NON-CURRENT LIABILITIES                                              

Borrowings                                      4,936,202   5,512,391

Provisions                                        208,583     212,804

Deferred tax liabilities                        1,559,228   1,939,851

Total non-current liabilities                   6,704,013   7,665,046

NET ASSETS                                     33,648,341  36,282,504


Share capital                                  37,096,192  37,096,192

(Accumulated deficit)/retained profit           (562,531)     540,921

Exchange fluctuation reserve                  (2,885,320) (1,354,609)
                                               33,648,341  36,282,504

Consolidated Statement of Changes in Equity in Canadian Dollars 
Quarter Ended March 31st, 2013 

                            Share    Retained    Currency       Total
                          Capital     Profit/ Translation      Equity
                                    (Deficit)     Reserve            
                                $           $           $           $

At January 1st, 2012   37,096,192   (524,615) (1,917,379)  34,654,198

Total comprehensive
income for the period           -     759,098     154,629     913,727

At March 31st, 2012    37,096,192     234,483 (1,762,750)  35,567,925

Total comprehensive
income for the period           -     306,438     408,141     714,579

At December 31st, 2012 37,096,192     540,921 (1,354,609)  36,282,504

Total comprehensive
income for the period           - (1,103,452) (1,530,711) (2,634,163)

At March 31st, 2013    37,096,192   (562,531) (2,885,320)  33,648,341

Consolidated Statement of Cash Flows in Canadian Dollars 
Quarter Ended March 31st, 2013 

                                                   3 months    3 months
                                                   Mar 31st    Mar 31st
                                                       2013        2012
                                                          $           $

CASH FLOW FROM OPERATING ACTIVITIES                                    

(Loss)/profit before tax                        (1,404,320)   1,032,513

Finance costs recognised in (loss)/profit
before tax                                          102,532     104,594

Investment income recognised in
(loss)/profit before tax                               (91)       (215)

Depreciation of property, plant & equipment         834,279     691,083

Provision for slow moving and obsolete
inventory                                            68,137   (179,525)

Movements in working capital                    (2,049,198) (2,686,366)

Cash used in operating activities before
income taxes                                    (2,448,661) (1,037,916)

Income taxes (paid)/received                        (1,929)     300,512

Net cash used in operating activities           (2,450,590)   (737,404)

CASH FLOW FROM INVESTING ACTIVITIES                                    

Payments for property, plant & equipment          (477,418)   (939,219)

Interest received                                        91         215

Net cash used in investing activities             (477,327)   (939,004)

CASH FLOW FROM FINANCING ACTIVITIES                                    

Proceeds from borrowings                          1,837,077           -

Repayments of borrowings                          (419,889)    (30,306)

Interest paid                                      (79,467)    (81,722)

Payments for other finance costs                   (15,747)    (23,053)

Net cash generated by/(used in) financing
activities                                        1,321,974   (135,081)

NET DECREASE IN CASH                            (1,605,943) (1,811,489)

Cash at beginning of period                       2,206,430   3,028,599

Effect of foreign currency translation on
cash                                                (2,735)     (8,085)

CASH AT END OF PERIOD                               597,752   1,209,025

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:investorrelations@dynexsemi.com


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