Deswell Industries, Inc. Announces Third Quarter Results; Net Sales Up 20% and Net Income Up 22%; Earnings Per Share of $0.67.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. 21, 2001 Deswell Industries, Inc. (Nasdaq Symbol: DSWL) today announced its results for the third quarter and nine months ended December December: see month. 31, 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 were $21.4 million, an increase of 20% compared to sales of $17.8 million in the third quarter ended December 31, 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 4% to $3.3 million, compared to $3.2 million in the previous year, and net income increased 22% to $3.6 million, compared to $2.9 million in the previous year. 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 22% and 21% to $0.67 and $0.66 respectively (based on 5,358,000 and 5,454,000 weighted average shares outstanding, respectively), compared to $0.55 and $0.54 respectively (based on 5,348,000 and 5,415,000 weighted average shares outstanding, respectively), in the third quarter ended December 31, 1999. Net sales for the nine months ended December 31, 2000 were $64.0 million, an increase of 39% compared to sales of $46.0 million for the corresponding period in 1999. Operating income increased 31% to $11.2 million, compared to $8.6 million in the previous year, and net income increased 23% to $10.4 million, compared to $8.4 million in the previous year. Basic earnings per share and diluted earnings per share increased 25% and 24% to $1.94 and $1.92 respectively (based on 5,352,000 and 5,407,000 weighted average shares outstanding, respectively), compared to $1.55 and $1.54 respectively (based on 5,433,000 and 5,451,000 weighted average shares outstanding, respectively), for the nine months ended December 31, 1999. The Company reported a continued strong financial position with book value per share of $10.97 and cash per share of $4.51. 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. . 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, chief executive officer, commented, "We are pleased with our continued growth in revenue in the third quarter ended December 31, 2000. Jetcrown, our plastics division, recorded a 21% and 30% increase in net revenue for the quarter and for the nine months respectively over the prior year. Our plastic injection plant in Dongguan began to provide the much needed added capacity for the business we anticipate from existing customers. Our aggressive build-out Build-out is an urban planner’s estimate of the amount and location of potential development for an area. Build-out is one step of the land use planning process. Evaluation of potential development impacts begins with a build-out analysis. of the new Dongguan facility impacted our operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: during the quarter as the factory started to come on-line, but we anticipate operating margins to improve as volume increases. Furthermore, we are very excited about the recently leased 1.3 million square feet of land in Dongguan, and we are currently preparing designs and selecting contractors which we expect will take three to five months." "Kwanasia and Kwanta, our electronics and metallics divisions, recorded a 18% and 56% increase in net revenue for the quarter and for the nine months respectively over the prior year and we expect that all divisions should perform well for the rest of the year. Our focus in coming years is on building out our capacity for our existing and new customers while focusing on cost controls to maximize In a graphical environment, to enlarge a window to the full size of the screen. See Win Maximize windows. profitability for shareholders," concluded Mr. Lau. 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,
2000 1999 2000 1999
---- ---- ---- ----
(Unaudited) (Unaudited)
Net sales $21,376 $17,809 $63,971 $46,000
Cost of sales 13,757 11,554 40,942 28,426
------- ------ ------- ------
Gross profit 7,619 6,255 23,029 17,574
Selling, general and
administrative expenses 4,282 3,054 11,801 8,998
----- ----- ------- -----
Operating income 3,337 3,201 11,228 8,576
Interest expense - - (5) -
Other income, net 436 281 610 926
----- ----- --- ---
Income before income taxes 3,773 3,482 11,833 9,502
Income taxes 97 339 560 698
----- ----- ------ -----
Income before minority
interests 3,676 3,143 11,273 8,804
Minority interests 87 199 916 411
----- ----- ------ -----
Net income $3,589 $2,944 $10,357 $8,393
====== ===== ====== ======
Basic earnings per share $0.67 $0.55 $1.94 $1.55
====== ===== ====== ======
Weighted average number of
shares outstanding
(in thousands)
5,358 5,348 5,352 5,433
====== ===== ===== ======
Diluted earnings per share $0.66 $0.54 $1.92 $1.54
====== ===== ===== ======
Diluted weighted average
number of shares outstanding
(in thousands) 5,454 5,415 5,407 5,451
====== ====== ===== ======
DESWELL INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEET
(U.S. dollars in thousands)
December 31, March 31,
2000 2000
---- ----
ASSETS (Unaudited)
Current assets :
Cash and cash equivalents $21,905 $27,156
Restricted cash 2,244 2,129
Marketable securities - 1,308
Accounts receivable, net 17,994 10,607
Inventories 12,247 10,932
Prepaid expenses and other current assets 4,321 2,295
Income taxes receivable - 164
------- ------
Total current assets 58,711 54,591
Property, plant and equipment - net 21,275 16,701
Goodwill 522 549
------- ------
Total assets $80,508 $71,841
======= ======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $5,834 $5,401
Customer deposits and accrued expenses 5,640 4,362
Income taxes payable 415 101
------- ------
Total current liabilities 11,889 9,864
------- ------
Minority interests 9,835 8,931
------- ------
Deferred income tax 15 15
------- ------
Shareholders' equity
Common stock
- authorized 20,000,000 shares; issued and
outstanding
5,357,931 shares at December 31, 2000 and
5,347,931 shares at March 31, 2000
54 53
Additional paid-in capital 24,227 24,100
Retained earnings 34,488 28,878
------ ------
Total shareholders' equity 58,769 53,031
------ ------
Total liabilities and shareholders'
equity $80,508 $71,841
====== ======
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