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Deswell Industries, Inc. Announces Third Quarter Results
Business Wire - February 12, 1999 10:35
HONG KONG--(BUSINESS WIRE)--Feb. 12, 1999--Deswell Industries, Inc. (NASDAQ NM Symbol: DSWLF) today announced its results for the third quarter and nine months ended December 31, 1998.
Net sales for the quarter were $12.6 million, a decrease of 34% compared to sales of $19.0 million in the third quarter ended December 31, 1997. Operating income decreased 57% to $2.3 million, compared to $5.3 million in the previous year, and net income decreased 49% to $2.1 million, compared to $4.2 million in the previous year. Basic earnings per share and diluted earnings per share decreased 54% and 50% to $0.39 and $0.39 respectively (based on 5,478,000 and 5,487,000 weighted average shares outstanding, respectively), compared to $0.84 and $0.78 respectively (based on 4,994,000 and 5,357,000 weighted average shares outstanding, respectively), in the third quarter ended December 31, 1997.
Net sales for the nine months ended December 31, 1998 were $43.9 million, a decrease of 15% compared to sales of $51.7 million for the corresponding period in 1997. Operating income decreased 21% to $9.9 million, compared to $12.5 million in the previous year, and net income decreased 15% to $8.6 million, compared to $10.1 million in the previous year. Basic earnings per share and diluted earnings per share decreased 23% and 17% to $1.58 and $1.56 respectively (based on 5,478,000 and 5,525,000 weighted average shares outstanding, respectively), compared to $2.05 and $1.88 respectively (based on 4,928,000 and 5,362,000 weighted average shares outstanding, respectively), for the nine months ended December 31, 1997.
The Company reported a continued strong financial position. Cash and cash equivalents have increased to 28.2 million at December 31, 1998 compared to $21.9 million at March 31, 1998. Working capital was $39.3 million as of December 31, 1998, versus $36.0 million as of March 31, 1998, and our current ratio was 6.2, with no long-term debt.
Mr. Richard Lau, Chief Executive Officer commented, "The Company as well as its customers continued to be affected by the recent Asian economic turmoil. There was a reduction in orders from Mita Industrial (H.K.) Co., Ltd. as a result of its reorganization, and from some other existing customers in the plastic molding operation. The 43% decrease in revenues at our electronics division was primarily due to the decrease in orders from subcontracted PCB assembly customers as well as reduced prices in both the sub-contracted and OEM business. Management is working hard to broaden its customer base in the electronics division. With regards to our plastic tooling division, it is now running near full capacity and we are also ready to upgrade and increase the tooling capacity to meet increasing demand. We are confident that the Company will recover as market conditions improve."
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 Industrial (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 |
