Deswell Industries, Inc. Announces Fourth Quarter and Year-End Results
- Yearly Sales Increase 49%, Yearly Net Income Up 48% -
HONG KONG--(BUSINESS WIRE)--May 27, 1998-- - Final Dividend $0.50 Per Share and
Special Cash Dividend $0.25 Per Share -
Deswell Industries, Inc. (NASDAQ NM: DSWLF - news) today announced results for the fourth quarter and year ended March 31, 1998.
Net sales for the year ended March 31, 1998 were $66.2 million, an increase of 49% compared to sales of $44.5 million for the year ended March 31, 1997. Operating income increased 42% to $15.9 million, compared to $11.1 million in the previous year, and net income increased 48% to $13.0 million, compared to $8.7 million in the previous year. Basic earnings per share and diluted earnings per share increased to $2.59 and $2.43 respectively (based on 5,006,000 and 5,341,000 weighted average shares outstanding, respectively), compared to $1.90 and $1.82 respectively (based on 4,610,000 and 4,809,000 weighted average shares outstanding, respectively), for the year ended March 31, 1997.
Net sales for the fourth quarter increased 15% to $14.5 million compared to sales of $12.7 million in the fourth quarter ended March 31, 1997. Operating income increased 9% to $3.4 million for the most recent quarter, compared to $3.1 million for the year-ago quarter. Net income for the fourth quarter increased 29% to $2.9 million compared to $2.2 million for the year-ago quarter. Basic earnings per share and diluted earnings per share increased to $0.55 and $0.52 respectively (based on 5,244,000 and 5,463,000 weighted average shares outstanding, respectively), compared to $0.47 and $0.44 respectively (based on 4,704,000 and 5,117,000 weighted average shares outstanding, respectively), in the fourth quarter ended March 31, 1997.
The earnings per share calculations for the fourth quarter of 1998 reflect the increase in weighted average common shares outstanding from 4,704,000 in the fourth quarter ended March 31, 1997 to 5,244,000 in the fourth quarter ended March 31, 1998. The increase was primarily a result of the exercise of public warrants, representatives' warrants and stock options during the year and the Warrant Redemption exercise in February 1998.
The Company also announced that on May 26, 1998 its Board of Directors declared a regular final dividend of $0.50 per share (compared to $0.40 per share in 1997) and a special cash dividend of $0.25 per share. The dividends will be payable on June 29 to shareholders of record as of June 15, 1998.
The Company reported cash and cash equivalents increased to $21.9 million as of March 31, 1998 compared to $12.0 million as of March 31, 1997. Working capital was $36.0 million as of March 31, 1998, versus $21.4 million as of March 31, 1997. The Company has no short term and long term debt.
Mr. Lau, Chairman and Chief Executive Officer, commented, ''We are pleased with our company's strong growth in fiscal 1998. While we achieved a 15% sales increase in the fourth quarter, it is important to note that this period is traditionally slow for us due to the Lunar New Year holidays in January and February. Our fourth quarter sales increase was primarily driven by a 34% increase in sales at Jetcrown, our injection molded plastics division, as well as a healthy 207% increase in our metallic products division compared to the fourth quarter last year. While the metallic division remains less than 10% of our sales, we are pleased with this division's progress. Sales for our electronics division, Kwanasia, decreased 19.7% compared to the fourth quarter last year. This decrease is mainly attributable to the significant increases in shipment in the third quarter to meet customer's seasonal requirements and to avoid the production lag period during the Lunar New Year holidays in January and February 1998.''
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 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''), and pin-through hole (''PHT'') interconnection 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 [Nasdaq:INTL - news], Behringer Holdings (Pte) Ltd., Vtech Communications Ltd., Prod-Art Company Limited and Shakespeare (H.K.) Limited.
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