Deswell Industries Inc. Announces Earnings of $0.43 Per Share for the Third Quarter.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. 24, 2003 Deswell Industries, Inc. (Nasdaq: DSWL)
- Sales Up 25% and Operating Income Up 33% -
- Third Quarter Dividend of $0.20 Per Share -
- Company Corrects Weighted Average Shares Outstanding
for the Second Quarter and First Half of Fiscal 2003 -
Deswell Industries, Inc. (Nasdaq: DSWL) today announced its results for the third quarter and nine months ended December December: see month. 31, 2002. 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 $25.3 million, an increase of 25% compared to sales of $20.2 million in the third quarter ended December 31, 2001. 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 33% to $4.6 million, compared to $3.4 million in the previous year. Net income for the quarter increased 10% to $3.8 million, compared to $3.4 million in the previous year. The Company previously announced a 3-for-2 stock split of record date July July: see month. 8, 2002, payable on July 22, 2002. The stock split increased the number of fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. shares outstanding from approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 5.7 million shares to 8.5 million shares. After accounting for the stock split, 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 $0.43 (based on 8,850,000 weighted average shares outstanding), compared to $0.41 (based on 8,433,000 weighted average shares outstanding) in the third quarter ended December 31, 2001. Net sales for the nine months ended December 31, 2002 were $71.2 million, an increase of 11% compared to sales of $64.3 million for the corresponding period in 2001. Operating income increased 5% to $11.8 million, compared to $11.2 million in the previous year. Net income was $11.1 million, compared to $10.4 million in the previous year. Diluted earnings per share increased to $1.28 based on 8,706,000 weighted average shares outstanding, compared to $1.24 based on 8,418,000 weighted average shares outstanding for the nine months ended December 31, 2001. The Company also announced that it has corrected its weighted average shares outstanding for the second quarter and six months ended September September: see month. 30, 2002 (see attached table). This miscalculation mis·cal·cu·late tr. & intr.v. mis·cal·cu·lat·ed, mis·cal·cu·lat·ing, mis·cal·cu·lates To count or estimate incorrectly. mis·cal affected earnings per share results for the three- and six-month periods. After accounting for the stock split, diluted earnings per share were $0.43 (based on 8,609,000 weighted average shares outstanding), compared to $0.43 (based on 8,421,000 weighted average shares outstanding) in the second quarter ended December 31, 2001. After accounting for the stock split, diluted earnings per share for the six months were $0.86 (based on 8,599,000 weighted average shares outstanding), compared to $0.83 (based on 8,409,000 weighted average shares outstanding) for the six-months ended September 30, 2001. The Company's cash and cash equivalents on December 31, 2002 were $33.1 million, as compared to $31.5 million on March 31, 2002. Working capital was $64.5 million as of December 31, 2002, versus $54.9 million as of March 31, 2002. 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. or 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. 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, "We are quite pleased with our 25% growth for the quarter. It is particularly gratifying grat·i·fy tr.v. grat·i·fied, grat·i·fy·ing, grat·i·fies 1. To please or satisfy: His achievement gratified his father. See Synonyms at please. 2. that we performed well in both of our divisions. Specifically, we posted a 22% increase in injection-molded plastic products, as well as a 29% increase in our electronic and metallic products. We believe this continued strong performance is reflective Refers to light hitting an opaque surface such as a printed page or mirror and bouncing back. See reflective media and reflective LCD. of our outstanding reputation for superior quality and customer service. During the quarter, we reduced our SG&A as a percentage of revenue by over three hundred basis points. We also increased our working capital and strengthened our balance sheet. As a result of our solid performance and growing cash position, we decided to increase our dividend to $0.20 per share. Looking ahead, we remain focused on increasing our market share, while effectively managing our expenses." Mr. Lau continued, "Our electronic and metallic products continue to generate strong results. Given the solid performance of this division, we recently acquired an additional 20% interest from our minority shareholders. We believe this investment reflects our long-term confidence in the future of this business. We currently anticipate 15%-20% growth in our electronic and metallic products business for fiscal 2003." Mr. Lau concluded, "We are also pleased to announce that we recently completed construction of our Dongguan facility. We expect this new facility will substantially increase the capacity of our 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. The new facility will also help reduce payroll payroll a list of employees, their salary rates, tax deductions, amounts paid, payroll tax, long service leave entitlements. and other operating costs operating costs npl → gastos mpl operacionales . However, due to a governmental delay in the approval of our facility, we do not expect the plant to be fully operational until the end of June June: see month. . We do not anticipate that this delay in getting Phase I operational will impact our ability to serve the growing needs of our customers. Furthermore, we remain confident that we will achieve 20%-25% growth in our injection-molded plastic products for fiscal 2003." Third Quarter Dividends The Company also announced that on February February: see month. 18, 2003 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 $0.20 per share for the third quarter. The dividend will be payable on March 24, 2003 to shareholders of record as of March 10, 2003. 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., 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. tables follow
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,
----------------- -----------------
2002 2001 2002 2001
----------------- -----------------
(Unaudited) (Unaudited)
Net sales $25,272 $20,217 $71,180 $64,290
Cost of sales 16,799 12,992 47,527 41,978
-------- -------- -------- --------
Gross profit 8,473 7,225 23,653 22,312
Selling, general and administrative
expenses 3,890 3,778 11,873 11,103
-------- -------- -------- --------
Operating income 4,583 3,447 11,780 11,209
Interest expense - (8) (6) (19)
Other income, net 206 156 1,035 480
-------- -------- -------- --------
Income before income taxes 4,789 3,595 12,809 11,670
Income taxes 366 87 79 492
-------- -------- -------- --------
Income before minority interests 4,423 3,508 12,730 11,178
Minority interests 636 78 1,580 744
-------- -------- -------- --------
Net income $3,787 $3,430 $11,150 $10,434
======== ======== ======== ========
Basic earnings per share $0.43 $0.41 $1.30 $1.24
======== ======== ======== ========
Weighted average number of shares
outstanding (in thousands) 8,726 8,402 8,574 8,401
======== ======== ======== ========
Diluted earnings per share $0.43 $0.41 $1.28 $1.24
======== ======== ======== ========
Diluted weighted average number of
shares outstanding (in thousands) 8,850 8,433 8,706 8,418
======== ======== ======== ========
DESWELL INDUSTRIES, INC.
CORRECTED EPS AND WEIGHTED AVERAGE SHARES OUTSTANDING FOR FISCAL
SECOND QUARTER AND FIRST HALF FISCAL 2003 (UNAUDITED)
Quarter ended Six months ended
September 30, September 30,
----------------- -----------------
2002 2001 2002 2001
(revised) (revised)
---------- ------ ---------- ------
Basic earnings per share $0.43 $0.43 $0.87 $0.83
========== ====== ========== ======
Weighted average number of shares
outstanding (in thousands) 8,600 8,402 8,498 8,400
========== ====== ========== ======
Diluted earnings per share $0.43 $0.43 $0.86 $0.83
========== ====== ========== ======
Diluted weighted average number of
shares outstanding (in thousands) 8,609 8,421 8,599 8,409
========== ====== ========== ======
DESWELL INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEET
(U.S. dollars in thousands)
December 31, March 31,
2002 2002
------------ ----------
ASSETS (Unaudited) (Audited)
Current assets :
Cash and cash equivalents $33,107 $31,534
Restricted cash 2,431 2,861
Marketable securities 5,030 1,115
Accounts receivable, net 22,143 16,888
Inventories 13,216 13,225
Prepaid expenses and other current assets 3,827 3,421
Income taxes receivable 372 428
------------ ----------
Total current assets 80,126 69,472
Property, plant and equipment - net 27,320 24,794
Goodwill 119 478
------------ ----------
Total assets $107,565 $94,744
============ ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $9,875 $7,583
Bank loans - 482
Customer deposits and accrued expenses 5,146 6,320
Income taxes payable 560 165
------------ ----------
Total current liabilities 15,581 14,550
------------ ----------
Deferred income tax 15 15
------------ ----------
Minority interests 11,889 10,528
------------ ----------
Shareholders' equity
Common stock
- authorized 30,000,000 shares;
issued and outstanding
8,773,955 shares at December 31,
2002 and 8,370,496 shares
at March 31, 2002 (note 4) 57 56
Additional paid-in capital 30,681 26,522
Retained earnings 49,342 43,073
------------ ----------
Total shareholders' equity 80,080 69,651
------------ ----------
Total liabilities and
shareholders' equity $107,565 $94,744
============ ==========
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