Deswell Industries, Inc. Announces 23% Increase in First Quarter Revenues; Operating Income Increases 40 percent; Company also Announces First Quarter Dividend of $0.24 Per Share.Business Editors HONG n. 1. A mercantile establishment or factory for foreign trade in China, as formerly at Canton; a succession of offices connected by a common passage and used for business or storage. KONG--(BUSINESS WIRE)--Aug. 14, 2001 Deswell Industries, Inc. (Nasdaq: DSWL) today announced its results for the first quarter ended June June: see month. 30, 2001. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the quarter ended June 30, 2001 were $21.9 million, an increase of 23% compared to net sales of $17.8 million for the quarter ended June 30, 2000. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increased 40% to $4.0 million, compared to $2.8 million for the same quarter in 2000. Net income for the quarter increased 22% to $3.4 million compared to $2.8 million for the year-ago quarter. Basic earnings per share and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of increased to $0.60 and $0.60 respectively (based on 5,598,000 and 5,598,000 weighted average shares outstanding, respectively), compared to $0.52 and $0.51 respectively (based on 5,348,000 and 5,407,000 weighted average shares outstanding, respectively), in the first quarter ended June 30, 2000. The Company's balance sheet remains strong. The Company's cash and cash equivalents for the quarter increased to $29.4 million, compared to $25.3 million on March 31, 2001. The Company has no long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. borrowings. Mr. Lau, chairman and chief executive officer, commented, "We are very pleased to announce that the Company reported a 23% increase in net sales and a 22% increase in net income in the first quarter compared to last year. Despite the downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. in global manufacturing driven by declining sales orders The sales order, sometimes abbreviated as SO, is an order received by a business from a customer. A sales order may be for products and/or services. Given the wide variety of businesses, this means that the orders can be fulfilled in several ways. , we are glad to have been able to sustain strong growth in our business and maintain a healthy profit margin due largely to increased orders from new customers in both our electronics and metallics divisions. However, while our business remains strong, we realize that we are not immune to the macro-economic environment, and we are being more cautious concerning capacity expansion to protect our strong balance sheet." Mr. Lau continued, "Strengthening our marketing team has been one of our top priorities over the last couple of years. We are encouraged by these efforts, and look forward to maintaining our solid performance." Annual General Meeting The Company announced that the 2001 Annual General Meeting will be held at 10:00 a.m. on September September: see month. 24, 2001 in the Linden Linden, city, United States Linden, city (1990 pop. 36,701), Union co., NE N.J., in the New York metropolitan area; inc. 1925. During the first half of the 20th cent. Room of the Four Seasons Hotel, 300 S. Doheny Drive Doheny Drive is a major north/south thoroughfare for Beverly Hills and West Hollywood. It starts a few blocks south of Pico Boulevard and travels north past Sunset Boulevard. Doheny encounters few traffic lights, making it a relatively quick trip north/south. , Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. , CA 90048. First Quarter Dividends The Company also announced that on August 10, 2001 its board of directors declared a dividend of $0.24 per share for the first quarter. The dividend will be payable on September 3, 2001 to shareholders of record as of August 20, 2001. Deswell manufactures injection-molded plastic parts and components, electronic products and subassemblies, and metallic products for original equipment manufacturers ("OEMs") and contract manufacturers at its factories in the People's Republic People's Republic n. A political organization founded and controlled by a national Communist party. 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 (1) (Surface Mount Technology) See surface mount. (2) (Station ManagemenT) An FDDI network management protocol that provides direct management. Only one node requires the software. SMT - Station Management "), and pin-through hole ("PHT PHT Phenytoin (antiepileptic, Dilantin) PHT Pulmonary Hypertension PhT Pharmacy Technician PHT Post-Harvest Technology PHT Pattern History Table PHT Pressure Half Time PHT Public Health Trust ") interconnection in·ter·con·nect v. in·ter·con·nect·ed, in·ter·con·nect·ing, in·ter·con·nects v.intr. To be connected with each other: The two buildings interconnect. v.tr. technologies; and finished products such as telephones, telephone answering machines, sophisticated studio-quality audio equipment and computer peripherals. The Company's customers include Kyocera Kyocera Corporation (京セラ株式会社 Mita Industrial Co. (H.K.) Limited, Epson Precision (H.K.) Ltd., Namtai Electronics (Shenzhen) Co. Ltd., Inter-Tel Incorporated, Vtech Communications Ltd., Peavey Electronics Peavey Electronics Corporation is one of the largest audio equipment manufacturers in the world, headquartered in Meridian, Mississippi in the United States. History Hartley Peavey founded Peavey Electronics in 1965 after building his first amplifier in 1957. Corporation and Emerson. To learn more about Deswell Industries, Inc., please visit the Company's web site at www.deswell.com.
DESWELL INDUSTRIES, INC.
Consolidated Statements of Operations (unaudited)
(U.S. dollars in thousands, except per share data)
Quarter ended
June 30,
2001 2000
Net sales $ 21,884 $ 17,786
Cost of sales 14,361 11,531
Gross profit 7,523 6,255
Selling, general and
administrative expenses 3,567 3,435
Operating income 3,956 2,820
Interest expense (11) 0
Other income, net 79 229
Income before income taxes 4,024 3,049
Income taxes 210 204
Income before minority
interests 3,814 2,845
Minority interests 445 88
Net income $ 3,369 $ 2,757
Basic:
Net income per share $ 0.60 $ 0.52
Weighted average common
shares outstanding
(in thousands) 5,598 5,348
Diluted:
Net income per share $ 0.60 $ 0.51
Weighted average common
and potential Common shares
(in thousands) 5,598 5,407
DESWELL INDUSTRIES, INC.
Consolidated Balance Sheet
(U.S. dollars in thousands)
June 30, March 31,
2001 2001
(Unaudited) (Audited)
ASSETS
Current assets:
Cash and cash equivalents $ 29,445 $ 25,330
Restricted cash 2,477 1,988
Marketable securities 493 -
Accounts receivable, net 17,690 15,777
Inventories 12,071 12,034
Prepaid expenses and other
current assets 2,033 1,833
Income taxes receivable 428 428
Total current assets 64,637 57,390
Property, plant and
equipment - net 24,939 25,563
Goodwill 504 513
Total assets $ 90,080 $ 83,466
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable $ 6,710 $ 4,274
Bank loans 482 -
Customer deposits and
accrued expenses 5,380 5,462
Income taxes payable 210 298
Total current liabilities 12,782 10,034
Deferred income tax 15 15
Minority interests 9,985 9,540
Shareholders' equity
Common stock
- authorized 20,000,000
shares; issued and
outstanding 5,601,431 shares
at June 30, 2001 and
5,597,931 at March 31, 2001 56 56
Additional paid-in capital 26,895 26,843
Retained earnings 40,347 36,978
Total shareholders' equity 67,298 63,877
Total liabilities and
shareholders' equity $ 90,080 $ 83,466
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