Deswell Industries, Inc. Announces EPS of $0.61 Per Share for the Third Quarter; Operating Income Up 3%; Third 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)--Feb. 4, 2002 Deswell Industries, Inc. (Nasdaq: DSWL) today announced its results for the third quarter and nine months ended December December: see month. 31, 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 were $20.2 million, a decrease of 5% compared to sales of $21.4 million in the third quarter ended December 31, 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 3% to $3.4 million, compared to $3.3 million in the previous year. Net income for the quarter decreased 4% to $3.4 million, compared to $3.6 million in the previous year. The decrease is mainly attributed to less interest income as a result of the decline in interest rates this year. 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 decreased 7% to $0.61 based on 5,622,000 weighted average shares outstanding, compared to $0.66 based on 5,454,000 weighted average shares outstanding in the third quarter ended December 31, 2000. Net sales for the nine months ended December 31, 2001 were $64.3 million, an increase of 1% compared to sales of $64.0 million for the corresponding period in 2000. Operating income remained the same at $11.2 million for both periods. Net income was $10.4 million, compared to $10.4 million in the previous year. Diluted earnings per share decreased 3% to $1.86 based on 5,612,000 weighted average shares outstanding, compared to $1.92 based on 5,407,000 weighted average shares outstanding for the nine months ended December 31, 2000. The Company's balance sheet remains strong. The Company's cash and cash equivalents for the nine months increased to $32.3 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. Richard Ri·chard , Joseph Henri Maurice Known as "Rocket." 1921-2000. Canadian hockey player. A right wing for the Montreal Canadiens (1942-1960), he led his team to eight Stanley Cup championships and was the first player to score 50 goals in a Lau, Chairman and Chief Executive Officer, commented, "Like many OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and manufacturers, our business continues to be impacted by the economic slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. , which has resulted in delayed orders from some customers. We are proud of the fact that despite a very slight decline in revenue during the quarter, operating income increased due to a reduction in selling, general & administrative expenses. Mr. Lau continued, "We will commence construction in March of a new plastic manufacturing plant in Dongguan. Construction is expected to be complete by August 2002. The new facility will expand the capacity of our plastics division by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 40 percent and enable us to accept additional business we anticipate from existing customers. Additionally, we have strengthened our marketing team and added some seasoned professionals from the industry. We believe that our performance will gradually grad·u·al adj. Advancing or progressing by regular or continuous degrees: gradual erosion; a gradual slope. n. Roman Catholic Church 1. improve in the coming year." Third Quarter Dividends The Company also announced that on February February: see month. 2, 2002 its board of directors declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. a dividend of $0.24 per share for the third quarter. The dividend will be payable on February 25, 2002 to shareholders of record as of February 11, 2002. 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 Shenzhen (shĕn`jŭn`), city (1994 est. pop. 695,600), S Guangdong prov., China, on the South China Sea, N of Hong Kong. Designated a special economic zone in 1979, the city's spectacular economic growth led China to create over a dozen more ) 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 STATEMENT OF INCOME (UNAUDITED)
( U.S. dollars in thousands, except per share data )
Quarter ended Nine months ended
December 31, December 31,
------------------- -------------------
2001 2000 2001 2000
------- ------- ------- -------
(Unaudited) (Unaudited)
Net sales $20,217 $21,376 $64,290 $63,971
Cost of sales 12,992 13,757 41,978 40,942
------- ------- ------- -------
Gross profit 7,225 7,619 22,312 23,029
Selling, general and
administrative expenses 3,778 4,282 11,103 11,801
------- ------- ------- -------
Operating income 3,447 3,337 11,209 11,228
Interest expense (8) - (19) (5)
Other income, net 156 436 480 610
------- ------- ------- -------
Income before income taxes 3,595 3,773 11,670 11,833
Income taxes 87 97 492 560
------- ------- ------- -------
Income before minority
interests 3,508 3,676 11,178 11,273
Minority interests 78 87 744 916
------- ------- ------- -------
Net income $ 3,430 $ 3,589 $10,434 $10,357
======= ======= ======= =======
Basic earnings per share $ 0.61 $ 0.67 $ 1.86 $ 1.94
======= ======= ======= =======
Weighted average number
of shares outstanding
(in thousands) 5,601 5,358 5,600 5,352
======= ======= ======= =======
Diluted earnings
per share $ 0.61 $ 0.66 $ 1.86 $ 1.92
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Diluted weighted average
number of shares
outstanding
(in thousands) 5,622 5,454 5,612 5,407
======= ======= ======= =======
DESWELL INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEET
( U.S. dollars in thousands)
December 31, March 31,
2001 2001
------- -------
ASSETS (Unaudited) (Audited)
Current assets:
Cash and cash equivalents $32,347 $25,330
Restricted cash 2,827 1,988
Marketable securities 564 -
Accounts receivable, net 17,119 15,777
Inventories 12,949 12,034
Prepaid expenses and other current assets 3,167 1,833
Income taxes receivable 428 428
------- -------
Total current assets 69,401 57,390
Property, plant and equipment - net 24,087 25,563
Goodwill 486 513
------- -------
Total assets $93,974 $83,466
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 7,075 $ 4,274
Bank loans 482 -
Customer deposits and accrued expenses 7,280 5,462
Income taxes payable 293 298
------- -------
Total current liabilities 15,130 10,034
------- -------
Deferred income tax 15 15
------- -------
Minority interests 10,347 9,540
------- -------
Shareholders' equity
Common stock
- authorized 20,000,000 shares; issued and
outstanding 5,601,431 shares at December 31,
2001 and 5,597,931 shares at March 31, 2001 56 56
Additional paid-in capital 26,894 26,843
Retained earnings 41,532 36,978
------- -------
Total shareholders' equity 68,482 63,877
------- -------
Total liabilities and shareholders' equity $93,974 $83,466
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