Deswell Industries, Inc. Announces 47% Increase in First Quarter Revenues.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, 2000 Deswell Industries, Inc. (Nasdaq NM Symbol:DSWL) today announced its results for the first quarter ended June June: see month. 30, 2000. 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, 2000 were $17.8 million, an increase of 47% compared to net sales of $12.1 million for the quarter ended June 30, 1999. 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 47% to $2.8 million for the most recent quarter, compared to $1.9 million for the same quarter in 1999. Net income for the quarter increased 31% to $2.8 million compared to $2.1 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 $0.52 and $0.51 respectively (based on 5,348,000 and 5,407,000 weighted average shares outstanding, respectively), compared to $0.39 and $0.39 respectively (based on 5,476,000 and 5,476,000 weighted average shares outstanding, respectively), in the first quarter ended June 30, 1999. The Company's balance sheet remains strong. Working capital was $47.2 million as of June 30, 2000, compared to $44.7 million at March 31, 2000. The Company has no short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. or long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. . The Company also announced that the Company's 2000 Annual General Meeting will be held at 11:00 a.m. E.D.T. on September September: see month. 27, 2000 at La Suite Fragonard of The Plaza Hotel The Plaza Hotel in New York City is a landmark 19-story luxury hotel with a height of 250 feet (76 m) and length of 400 feet that (122 m) occupies the west side of Grand Army Plaza, from which it derives its name, and extends along Central Park South in Manhattan. , Fifth Avenue at Central Park South, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , New York. Mr. Lau, Chairman and Chief Executive Officer, commented, "We are very pleased to announce that the Company reported a 47% increase in net sales together with a 31% increase in net income in the first quarter compared to last year. Though the fluctuation Fluctuation A price or interest rate change. in global oil prices in the past six months affected resin resin, any of a class of amorphous solids or semisolids. Resins are found in nature and are chiefly of vegetable origin. They are typically light yellow to dark brown in color; tasteless; odorless or faintly aromatic; translucent or transparent; brittle, fracturing prices and tightened the supply, the Company had effectively hedged against it, and was not significantly affected. For the plastics operation, Jetcrown will commence another stage of investment starting next quarter. The investment plan will comprise of the upgrade of our tooling section and the purchase of plant and machinery. Moreover, our Dongguan Plastic Plant II is expected to commence operation in October of this year. Business with existing customers remains robust; we expect business with Epson, a relatively new customer, to increase approximately 250% for fiscal 2001. We are also increasingly optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about our new business development efforts. We expect that all these developments shall drive substantial revenue growth in the coming year." Mr. Lau continued, "Our electronics operation reported 80% growth in revenue in the first quarter compared to a weak quarter last year. This increase was driven by the commencement of business with a few new customers. We expect results will continue their turn-around in the coming months. The addition of Mr. Dickson Lam should also strengthen the management and marketing performance of our electronics business." DESWELL INDUSTRIES, INC. 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 Mita Industrial (H.K.) Limited, Epson Precision (H.K.) Ltd., Namtai Electronics (Shenzhen) Co. Ltd., Inter-Tel Incorporated, Vtech Communications Ltd., and Shakespeare (H.K.) Limited. 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,
2000 1999
Net sales $ 17,786 $ 12,081
Cost of sales 11,531 7,489
Gross profit 6,255 4,592
Selling, general and
administrative expenses 3,435 2,667
Operating income 2,820 1,925
Interest expense 0 0
Other income, net 229 335
Income before income taxes 3,049 2,260
Income taxes 204 187
Income before minority
interests 2,845 2,073
Minority interests 88 (40)
Net income $ 2,757 $ 2,113
Basic:
Net income per share
(note 3) $ 0.52 $ 0.39
Weighted average common
shares outstanding
(in thousands) 5,348 5,476
Diluted:
Net income per share
(note 3) $ 0.51 $ 0.39
Weighted average
common and potential
Common shares (in thousands) 5,407 5,476
DESWELL INDUSTRIES, INC.
Consolidated Balance Sheet
(U.S. dollars in thousands)
June 30, March 31,
2000 2000
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 27,783 $ 27,156
Restricted cash 2,145 2,129
Marketable securities 724 1,308
Accounts receivable, net 12,123 10,607
Inventories 12,213 10,932
Prepaid expenses and other
current assets 1,932 2,295
Income taxes receivable 164 164
Total current assets 57,084 54,591
Property, plant and
equipment - net 16,982 16,701
Goodwill 539 549
Total assets $ 74,605 $ 71,841
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,028 $ 5,401
Customer deposits and
accrued expenses 3,682 4,362
Income taxes payable 153 101
Total current liabilities 9,863 9,864
Deferred income tax 15 15
Minority interests 9,007 8,931
Shareholders' equity
Common stock - authorized
20,000,000 shares; issued
and outstanding 5,347,131
shares at June 30, 2000
and at March 31, 2000 53 53
Additional paid-in capital 24,069 24,100
Retained earnings 31,598 28,878
Total shareholders' equity 55,720 53,031
Total liabilities and
shareholders' equity $ 74,605 $ 71,841
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