Deswell Industries, Inc. Announces First Quarter Results.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. 13, 1999-- Deswell Industries, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on NM Symbol:DSWL) today announced its results for the first quarter ended June June: see month. 30, 1999. 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, 1999 were $12.1 million, a decrease of 22% compared to net sales of $15.4 million for the quarter ended June 30, 1998. 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. decreased 47% to $1.9 million for the most recent quarter, compared to $3.6 million for the same quarter in 1998. Net income for the quarter decreased 33% to $2.1 million compared to $3.2 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 decreased to $0.39 (based on 5,476,000 weighted average shares outstanding), compared to $0.58 and $0.56 respectively (based on 5,479,000 and 5,623,000 weighted average shares outstanding, respectively), in the first quarter ended June 30, 1998. The Company reported a continued strong financial position. Working capital was $39.1 million as of June 30, 1999, compared to $41.0 million at March 31, 1999. The Company has no short term or long term debt. The Company also announced that the Company's 1999 Annual General Meeting will be held at 10:00 a.m. (California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). time) on September September: see month. 21, 1999 at the Burgundy Room of the Regent REGENT. 1. A ruler, a governor. The term is usually applied to one who governs a regency, or rules in the place of another. 2. In the canon law, it signifies a master or professor of a college. Dict. du Dr. Call. h.t. 3. Beverly Wilshire Hotel, 9500 Wilshire Boulevard Wilshire Boulevard is one of the principal east-west arterial roads in Los Angeles, California, United States. It was named for H. Gaylord Wilshire (1861-1927), an Ohio native who made and lost fortunes in real estate, farming, and gold mining. , Beverly Hills Beverly Hills, city (1990 pop. 31,971), Los Angeles co., S Calif., completely surrounded by the city of Los Angeles; inc. 1914. The largely residential city is home to many motion-picture and television personalities. , CA 90212. Mr Lau, Chairman and Chief Executive Officer, commented, "Though the Company reported a 22% decrease in net sales in the first quarter compared to the first quarter last year, we are beginning to see some recovery in our business. While the electronic business is still weak in the current market conditions, our core plastic injection molding injection molding n. A manufacturing process for forming objects, as of plastic or metal, by heating the molding material to a fluid state and injecting it into a mold. business should experience growth this year that will outperform Outperform An analyst recommendation meaning a stock is expected to do slightly better than the market return. Notes: Exact definitions vary by brokerage, but in general this rating is better than neutral and worse than buy or strong buy. our prior years. Furthermore, the plastic division was able to maintain its profit margins for the quarter as compared with prior periods. Moreover, the Company continues to invest in new and updated machinery, including an additional $1.5 millions for a total of 21 sets of "Toshiba", "Nissei" and "Jetmaster" double, vertical and traditional injection molding machines Injection molding machine (also known as injection press) - a machine for making plastic parts. Manufacturing products by injection molding process. Consist of two main parts, an injection unit and a clamping unit. . These machines were ordered in partial shipments with the last shipment expected to be completed by the end of October. In addition to the existing factory space, the Company has leased an additional 20,000 square feet and soon will be ready for renovations." Mr. Lau continued, "With the strong performance of our plastic business, there is currently a need for 40,000 square feet of additional factory space and 25 sets of new injection machines. In fact, the Government party, landlord of Wing Village, Shekou, our existing factory location, has agreed verbally to supply the additional space to Jetcrown. After the installation of 31 sets of injection molding machines as previously reported, our manufacturing capacity for the plastic division will increase significantly to meet the requirements of both new and existing customers. Depending on the progress of business development, the Company will acquire the 25 sets of new injection machines gradually to compliment Not to be confused with Complement. Compliment may be
Mr. Lau concluded, "Kwanasia, the electronic assembly operation, continued to experience soft sales due to the stagnant stagnant /stag·nant/ (stag´nant) 1. motionless; not flowing or moving. 2. inactive; not developing or progressing. audio business. The division needs at least two to three quarters to recover." DESWELL INDUSTRIES, INC. Deswell manufactures injection-molded plastic parts and components and 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 Mita Industries (H.K.) Limited, Namtai Electronic (Shenzhen) Co. Ltd., Inter-Tel Incorporated, Behringer Holdings (Pte) Ltd., Vtech Communications Ltd., Prod-Art Company Limited and Shakespeare (H.K.) Limited. -0-
DESWELL INDUSTRIES, INC.
Consolidated Statements of Operations (unaudited)
(U.S. dollars in thousands, except per share data)
Quarter ended
June 30,
1999 1998
-----------------------
Net sales $ 12,081 $ 15,447
Cost of sales 7,489 8,771
------------ -----------
Gross profit 4,592 6,676
Selling, general and
administrative
expenses 2,667 3,037
------------ -----------
Operating income 1,925 3,639
Interest expense 0 (51)
Other income, net 335 376
------------ -----------
Income before income taxes 2,260 3,964
Income taxes 187 101
------------ -----------
Income before minority interests 2,073 3,863
Minority interests (40) 701
------------ -----------
Net income $ 2,113 $ 3,162
============= ============
Basic:
Net income per share (note 3) $ 0.39 $ 0.58
============= ============
Weighted average common shares 5,476 5,479
============= ============
outstanding (in thousands)
Diluted:
Net income per share (note 3) $ 0.39 $ 0.56
============= ============
Weighted average common
and potential 5,476 5,623
Common shares (in thousands) ============ ===========
DESWELL INDUSTRIES, INC.
Consolidated Balance Sheet
(U.S. dollars in thousands)
June 30, March 31,
1999 1999
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 25,309 $ 27,556
Restricted cash 2,918 2,376
Accounts receivable, net 8,878 7,796
Trading investment 0 134
Inventories 6,720 5,902
Prepaid expenses and other
current assets 2,134 4,116
Income taxes receivable 397 397
-------------- -------------
Total current assets 46,356 48,277
Property, plant and equipment - net 15,373 15,639
Goodwill 432 357
Long term investment 1,343 0
---------------- ---------------
Total assets $ 63,504 $ 64,273
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,529 $ 2,873
Customer deposits and
accrued expenses 3,474 4,138
Income taxes payable 280 200
--------------- ----------------
Total current liabilities 7,283 7,211
-------------- ---------------
Minority interests 8,315 8,280
-------------- ---------------
Deferred income tax 15 15
--------------- ---------------
Shareholders' equity
Common stock
- authorized 20,000,000
shares; issued and outstanding
5,476,131 shares at June 30, 1999
and at March 31, 1999 55 55
Additional paid-in capital 26,841 25,355
Retained earnings 20,995 23,357
--------------- ---------------
Total shareholders' equity 47,891 48,767
--------------- ---------------
Total liabilities and
shareholders' equity $ 63,504 $ 64,273
============== ==============
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