Some random notes from the Deswell Annual Meeting today:
Present from Deswell were Mr. Lau, Mr. Lam, and Mr. Seung, along with John Nesbett of Lippert/Heilshorn. There were 8 or 9 shareholders.
Mita. Mita HK will continue to operate. The 50% reduction is to reduce their inventory in preparation for the sale to Kyocera. Hopefully a short-term reduction, Deswell is poised to quickly ramp up production as required. Mita verbally promised reduction is temporary. Major end market for Mita copiers is US and Europe.
Cash. 90% of cash is in US$ accounts in HK banks.
Kwanasia. Current capacity utilization is 65-70%. Expansion has cost about $2 million. Moving to new building later this year.
Vtech. Was 8% of sales last year, now more then 10%.
Behringer. CEO owned 10% of DSWLF, he bought another 100,000 shares at $17.
Inter-Tel. DSWLF met with CEO in Phoenix. "a most productive meeting". They like the way DSWLF does business and the support they give Inter-Tel. Promised more business, including PCB. Also developing IP telephone by end of year, want Deswell involved.
Have not laid off any workers, as they are skilled and need time to train, expect slow-down to be short term.
Dividend. 1/3 of net earnings. Another 1/3 to cash reserves, last 1/3 to expansion and new equipment. No bonuses to management, they depend on dividend.
Have a number of big and small new clients, nothing ready to announce.
Jetcrown running at 85% of capacity, compared to over 90% last year, but capacity was expanded.
Dennis |
