Deswell Announces Second Half 2022 Results
- Company Announces Second Half Cash Dividend of 0.10 Per Share -
Net sales for the six months ended
Total gross margin decreased to
Operating income for the second half of fiscal 2022 decreased from
The Company reported net income of
Net sales for the year ended
The Company's financial position remained strong, with
Mr.
Mr. So concluded, “Our balance sheet remains solid, with a strong cash position and no debt, providing us the financial resources to continue executing our long-term growth strategy to grow our market recognition among existing and potential new customers as a consistent and reliable manufacturing partner. As we begin moving through fiscal 2023, we remain focused on delivering operational excellence to capitalize on the interest we’re seeing from the marketplace, with the goal of driving continued growth and profitability moving forward.”
Second Half Dividend
The Company also announced that its board of directors today declared a cash dividend of
Dividends to be declared in the future will depend upon the Company’s future growth and earnings, of which there can be no assurance, and the Company’s cash flow needs for future development.
About Deswell
Deswell manufactures injection-molded plastic parts and components, electronic products and subassemblies, and metallic molds and accessory parts for original equipment manufacturers (“OEMs”) and contract manufacturers at its factories in the People’s
To learn more about
Forward-Looking Statements
Statements in this press release that are "forward-looking statements" are based on current expectations and assumptions that are subject to risks and uncertainties. For example, our statements regarding our expected growth in sales from the electronic division in the coming year and our efforts to reduce overhead costs in our plastic division are forward-looking statements. Actual results could differ materially because of the following factors, among others, which may cause revenues and income to fall short of anticipated levels or our overhead expenses to increase: our dependence on a few major customers; vigorous competition forcing product price reductions or discounts; the timing and amount of significant orders from our relatively few significant customers; continuing increases in resin prices that cannot be passed on to customers; unexpected production delays; obsolete inventory or product returns; losses resulting from fraudulent activity of our customers or employees; labor shortages that increase labor and costs; changes in the mix of product products we manufacture and sell; adverse currency fluctuations in the Renminbi and
For further information regarding risks and uncertainties associated with the Company’s business, please refer to the “Risk Factors” section of Company’s Annual Report on Form 20-F, copies of which may be obtained from the Website maintained by the
All information in this release is made as of the date of this press release. Deswell undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in Deswell’s expectations.
CONSOLIDATED BALANCE SHEET
(
|
|
|
||||||
2022 |
|
2021 |
||||||
ASSETS |
(Unaudited) |
|
(Audited) |
|||||
Current assets : |
||||||||
Cash and cash equivalents | $ |
13,465 |
|
$ |
20,223 |
|
||
Time deposits maturing over three months |
|
4,354 |
|
|
2,700 |
|
||
Time deposits maturing over twelve months-current |
|
1,564 |
|
|
- |
|
||
Marketable securities (note2) |
|
24,499 |
|
|
22,373 |
|
||
Accounts receivable, net |
|
18,195 |
|
|
14,708 |
|
||
Inventories (note 3) |
|
23,819 |
|
|
16,193 |
|
||
Prepaid expenses and other current assets |
|
2,054 |
|
|
2,489 |
|
||
Total current assets |
|
87,950 |
|
|
78,686 |
|
||
Property, plant and equipment - net |
|
27,017 |
|
|
27,323 |
|
||
Time deposits maturing over twelve months |
|
313 |
|
|
1,851 |
|
||
Deferred income tax assets |
|
|
259 |
|
|
|
- |
|
Total assets | $ |
115,539 |
|
$ |
107,860 |
|
||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||
Current liabilities |
||||||||
Accounts payable | $ |
9,838 |
|
$ |
9,522 |
|
||
Accrued payroll and employee benefits |
|
7,611 |
|
|
7,107 |
|
||
Customer deposits |
|
2,343 |
|
|
1,683 |
|
||
Other accrued liabilities |
|
2,950 |
|
|
2,016 |
|
||
Income taxes payable |
|
1,232 |
|
|
886 |
|
||
Total current liabilities |
|
23,974 |
|
|
21,214 |
|
||
Deferred income tax liabilities |
|
659 |
|
|
957 |
|
||
Total liabilities |
|
24,633 |
|
|
22,171 |
|
||
Shareholders' equity |
||||||||
Common shares nil par value - authorized 30,000,000 shares, | ||||||||
17,061,810 shares issued as of
17,081,810 shares issued as of
15,915,239 shares outstanding as of |
||||||||
15,935,239 shares outstanding as of |
|
53,202 |
|
|
53,143 |
|
||
|
(2,821 |
) |
|
(2,821 |
) |
|||
Additional paid-in capital |
|
7,973 |
|
|
7,989 |
|
||
Accumulated other comprehensive income |
|
5,316 |
|
|
5,316 |
|
||
Retained earnings |
|
27,236 |
|
|
22,062 |
|
||
Total shareholders' equity |
|
90,906 |
|
|
85,689 |
|
||
Total liabilities and shareholders' equity | $ |
115,539 |
|
$ |
107,860 |
|
CONSOLIDATED STATEMENT OF OPERATIONS & COMPREHENSIVE INCOME
(UNAUDITED)
(
Six months ended |
|
Year ended |
|||||||||||||
|
|
|
|||||||||||||
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||||||
|
|
||||||||||||||
|
|||||||||||||||
Net sales |
$ |
45,708 |
|
|
$ |
37,196 |
|
|
$ |
85,490 |
|
|
$ |
64,886 |
|
Cost of sales |
|
38,176 |
|
|
|
29,625 |
|
|
|
71,538 |
|
|
|
51,720 |
|
Gross profit |
|
7,532 |
|
|
|
7,571 |
|
|
|
13,952 |
|
|
|
13,166 |
|
Selling, general and administrative expenses |
|
5,791 |
|
|
|
5,590 |
|
|
|
11,139 |
|
|
|
10,310 |
|
Other income (expense), net |
|
(37 |
) |
|
|
321 |
|
|
|
74 |
|
|
|
405 |
|
Operating income |
|
1,704 |
|
|
|
2,302 |
|
|
|
2,887 |
|
|
|
3,261 |
|
Non-operating income, net |
|
2,020 |
|
|
|
4,641 |
|
|
|
5,308 |
|
|
|
5,445 |
|
Income before income taxes |
|
3,724 |
|
|
|
6,943 |
|
|
|
8,195 |
|
|
|
8,706 |
|
Income tax (benefit) expense |
|
(338 |
) |
|
|
244 |
|
|
|
(165 |
) |
|
|
475 |
|
Net income attributable to |
$ |
4,062 |
|
|
$ |
6,699 |
|
|
$ |
8,360 |
|
|
$ |
8,231 |
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income |
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
Total comprehensive income attributable to |
$ |
4,062 |
|
|
$ |
6,699 |
|
|
$ |
8,360 |
|
|
$ |
8,231 |
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|||||||||
Net income per share attributable to |
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|||||||||
Basic: |
|
|
|
|
|
|
|
||||||||
Net income per share | $ |
0.25 |
|
|
$ |
0.42 |
|
|
$ |
0.52 |
|
|
$ |
0.52 |
|
Weighted average common shares outstanding shares (in thousands) |
|
15,935 |
|
|
|
15,915 |
|
|
|
15,929 |
|
|
|
15,915 |
|
|
|
|
|
|
|
|
|||||||||
Diluted: |
|
|
|
|
|
|
|
||||||||
Net income per share | $ |
0.25 |
|
|
$ |
0.42 |
|
|
$ |
0.52 |
|
|
$ |
0.51 |
|
Weighted average common shares outstanding (in thousands) |
|
16,038 |
|
|
|
15,995 |
|
|
|
16,137 |
|
|
|
16,047 |
|
|
|||||||
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) |
|||||||
|
|
|
|||||
( |
Year ended |
||||||
|
|||||||
2022 |
|
2021 |
|||||
Cash flows from operating activities : |
|||||||
Net income | $ |
8,360 |
|
$ |
8,231 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization |
|
1,736 |
|
|
1,755 |
|
|
(Reversal of) provision for credit losses |
|
(148 |
) |
|
397 |
|
|
Usage of obsolescence allowance of inventories, net |
|
(25 |
) |
|
- |
|
|
Loss (gain) on disposal of property, plant and equipment |
|
24 |
|
|
(22 |
) |
|
Unrealized holding gains on marketable securities |
|
(872 |
) |
|
(2,010 |
) |
|
Gain on sales of marketable securities |
|
(1,073 |
) |
|
(333 |
) |
|
Scrip dividend received |
|
- |
|
|
(19 |
) |
|
Exchange loss (gain) from marketable securities |
|
117 |
|
|
(661 |
) |
|
Deferred income tax (benefit) expense |
|
(557 |
) |
|
206 |
|
|
Changes in operating assets and liabilities: |
|
|
|||||
Accounts receivable |
|
(3,339 |
) |
|
(2,804 |
) |
|
Inventories |
|
(7,601 |
) |
|
(7,615 |
) |
|
Prepaid expenses and other current assets |
|
435 |
|
|
(737 |
) |
|
Accounts payable |
|
316 |
|
|
4,918 |
|
|
Accrued payroll and employee benefits |
|
504 |
|
|
1,030 |
|
|
Customer deposits |
|
660 |
|
|
511 |
|
|
Other accrued liabilities |
|
934 |
|
|
298 |
|
|
Income taxes payable |
|
346 |
|
|
151 |
|
|
Net cash (used in) provided by operating activities |
|
(183 |
) |
|
3,296 |
|
|
Cash flows from investing activities |
|||||||
Purchase of property, plant and equipment |
|
(1,504 |
) |
|
(551 |
) |
|
Proceeds from disposal of property, plant and equipment |
|
50 |
|
|
81 |
|
|
Purchase of marketable securities |
|
(11,543 |
) |
|
(6,059 |
) |
|
Proceeds from disposal of marketable securities |
|
11,245 |
|
|
6,150 |
|
|
Increase in fixed deposits maturing over three months |
|
(1,654 |
) |
|
(1,917 |
) |
|
Increase in fixed deposits maturing over twelve months |
|
(26 |
) |
|
(427 |
) |
|
Net cash used in investing activities |
|
(3,432 |
) |
|
(2,723 |
) |
|
Cash flows from financing activities |
|||||||
Dividends paid |
|
(3,186 |
) |
|
(2,864 |
) |
|
Exercise of stock options |
|
43 |
|
|
- |
|
|
Net cash used in financing activities |
|
(3,143 |
) |
|
(2,864 |
) |
|
Net decrease in cash and cash equivalents |
|
(6,758 |
) |
|
(2,291 |
) |
|
Cash and cash equivalents, beginning of year |
|
20,223 |
|
|
22,514 |
|
|
Cash and cash equivalents, end of year |
|
13,465 |
|
|
20,223 |
|
|
Supplementary disclosures of cash flow information: |
|||||||
Cash paid during the year for: | |||||||
Interest |
|
- |
|
|
- |
|
|
Income taxes |
|
68 |
|
|
236 |
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