- Company Announces First Quarter
Cash Dividend of $0.035 Per Share -
Deswell Industries, Inc. (Nasdaq: DSWL) today announced its
financial results for the fiscal first quarter ended June 30,
2015.
Net sales for the first quarter ended June 30, 2015 were $11.3
million, an increase of 26.3% compared to net sales of $8.9 million
for the same quarter ended June 30, 2014. Net sales increased by
0.8% to $4.5 million in the Company’s plastic segment and increased
by 52.0% to $6.8 million in the electronic segment. The operating
loss in the first quarter was $1.7 million, compared to an
operating loss of $0.8 million for the same quarter of fiscal
2015.
Total gross margin decreased to 6.8% in the first quarter ended
June 30, 2015 compared to 9.7% in the same quarter last year. Gross
profit margin in the plastic segment decreased to 8.2% of net sales
for the first quarter of fiscal 2016 compared to 14.7% of net sales
for the same quarter of last fiscal year. The decrease in gross
profit and margin in the plastic segment was mainly due to
increases in raw materials and labor costs and subcontracting
charges, offsetting a decrease in depreciation expense as a
percentage of sales. The gross profit margin in the electronic
segment increased slightly to 5.8% of net sales for the first
quarter ended June 30, 2015 compared to 4.7% of net sales for the
year-ago quarter. The improvement in gross loss and margin in the
electronic segment was mainly attributed to the slight improvement
of gross margin on certain products and decreases in factory
overheads, offsetting an increase in raw materials cost as a
percentage of sales.
The Company reported a net loss of $1.1 million for the first
quarter ended June 30, 2015 compared to net income of $0.01 million
for the quarter ended June 30, 2014. Deswell reported basic and
diluted loss per share of ($0.07) for the first quarter of fiscal
2016 (based on 16,056, weighted average shares outstanding),
compared to basic and diluted income per share of $0.00 (based on
16,257,000 weighted average shares outstanding), for the quarter
ended June 30, 2014.
The Company's balance sheet remained strong at the end of the
first quarter of fiscal 2016, with $9.3 million in cash and cash
equivalents and working capital of $44.9 million at June 30, 2015.
Furthermore, the Company has no long-term or short-term borrowings
as of June 30, 2015.
Mr. Edward So, Chief Executive Officer, commented, “We’re very
pleased to have achieved a solid increase in sales during the
quarter, driven by significant growth in revenues from our
electronics segment. Our sales team has focused its efforts on
developing new customer relationships and on finding opportunities
for us to work with existing customers on new projects.
Additionally, we are intent on controlling costs and are pleased to
have delivered a reduction in SG&A as a percentage of sales
during the first quarter.”
First Quarter Dividends
The Company also announced that on September 4, 2015 its board
of directors declared a cash dividend of $0.035 per share for the
fiscal first quarter ended June 30, 2015. The dividend will be
payable on October 7, 2015 to shareholders of record as of
September 17, 2015.
About Deswell
Deswell manufactures injection-molded plastic parts and
components, electronic products and subassemblies, and metallic
molds and accessory parts for original equipment manufacturers
(“OEMs”) and contract manufacturers at its factories in the
People’s Republic of China. The Company produces a wide variety of
plastic parts and components used in the manufacture of consumer
and industrial products; printed circuit board assemblies using
surface mount (“SMT”) and finished products such as telephones,
telephone answering machines, sophisticated studio-quality audio
equipment and computer peripherals. The Company’s customers include
Vtech Telecommunications Ltd. and Lenbrook Industries, Ltd.
To learn more about Deswell Industries, Inc., please visit the
Company’s website at www.deswell.com.
Forward-Looking Statements
Statements in this press release that are "forward-looking
statements" are based on current expectations and assumptions that
are subject to risks and uncertainties. For example, our statements
regarding our expected growth in sales from the electronic and
metallic division in the coming year and our efforts to reduce
overhead costs in our plastic division are forward-looking
statements. Actual results could differ materially because of the
following factors, among others, which may cause revenues and
income to fall short of anticipated levels or our overhead expenses
to increase: our dependence on a few major customers; vigorous
competition forcing product price reductions or discounts; the
timing and amount of significant orders from our relatively few
significant customers; continuing increases in resin prices that
cannot be passed on to customers; unexpected production delays;
obsolete inventory or product returns; losses resulting from
fraudulent activity of our customers or employees; labor shortages
that increase labor and costs; changes in the mix of product
products we manufacture and sell; adverse currency fluctuations in
the renminbi and Hong Kong dollar when translated to US dollars;
potential new accounting pronouncements; and the effects of travel
restrictions and quarantines associated with major health problems,
such as the Severe Acute Respiratory Syndrome, on general economic
activity.
For further information regarding risks and uncertainties
associated with the Company’s business, please refer to the “Risk
Factors” section of Company’s Annual Report on Form 20-F, copies of
which may be obtained from the Website maintained by the Securities
and Exchange Commission at http://www.sec.gov.
All information in this release is made as of the date of this
press release. Deswell undertakes no duty to update any
forward-looking statement to conform the statement to actual
results or changes in Deswell’s expectations.
DESWELL INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEET ( U.S. dollars in
thousands) June 30, March 31,
2015
2015
ASSETS (Unaudited) (Audited) Current assets : Cash and cash
equivalents $ 9,347 $ 14,325 Fixed deposits maturing over three
months 11,769 9,911 Marketable securities (note 2) 11,106 9,803
Available-for-sale securities (note 2) 1,656 1,676 Accounts
receivable, net 12,204 9,577 Inventories (note 4) 10,987 10,828
Prepaid expenses and other current assets 2,266 2,120
Total current assets 59,335 8,240 Property, plant and equipment -
net 35,845 6,598
Time deposits maturing over twelve
months
1,601 1,601 Total assets $ 96,781 $ 96,439
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities
Accounts payable $ 4,852 $ 3,348 Accrued payroll and employee
benefits 4,449 4,228 Customer deposits 2,123 2,450 Other accrued
liabilities 1,201 1,201 Income taxes payable 365 345 Deferred
income tax liabilities 845 804 Dividend payable 562 -
Total current liabilities 14,397 12,376
Shareholders' equity Common shares nil par value - authorized
30,000,000 shares, shares issued and outstanding as of June 30,
2015 and March 31, 2015 - 16,056,239; 53,063 53,063 Additional
paid-in capital 5,492 5,492 Accumulated other comprehensive income
5,358 5,378 Retained earnings 18,471 20,130 Total
shareholders' equity 82,384 84,063 Total liabilities
and shareholders' equity $ 96,781 $ 96,439
DESWELL INDUSTRIES, INC. CONSOLIDATED STATEMENT OF
OPERATIONS & COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
( U.S. dollars in thousands, except per share data )
Quarter ended Quarter ended June 30, June 30,
2015
2014
Net sales $ 11,273 $ 8,924 Cost of sales 10,508
8,059 Gross profit 765 865 Selling, general
and administrative expenses 2,234 1,953 Other income (expense), net
(184 ) 275 Operating loss (1,653 ) (813 )
Non-operating income , net 624 888
Income (Loss) before income taxes (1,029 ) 75 Income taxes
68 61 Net income (loss) attributable to
Deswell Industries, Inc. $ (1,097 ) $ 14 Other comprehensive
income (loss) Unrealized gain (loss) on available-for-sale
securities $ (20 ) $ 53 Comprehensive income (loss) attributable to
Deswell Industries, Inc. $ (1,117 ) $ 67 Net
income (loss) per share attributable to Deswell Industries, Inc.
(note 5) Basic: Net income (loss) per share $ (0.068 ) $ 0.001
Weighted average common shares outstanding
shares (in thousands)
16,056 16,257 Diluted: Net
income (loss) per share $ (0.068 ) $ 0.001
Weighted average number of shares
outstanding (in thousands)
16,056 16,257
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Investor Relations:Institutional Marketing Services
(IMS)John Nesbett/Jennifer Belodeau203-972-9200
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