Deswell Industries, Inc. (Nasdaq: DSWL) announced its financial results for the fiscal fourth quarter ended March 31, 2011.
Net sales for the fourth quarter ended March 31, 2011 were $16.0 million, a decrease of 4.1% compared to net sales of $16.7 million for the same quarter ended March 31, 2010. Net sales decreased by 19.0% to $7.4 million in the plastic segment and increased by 13.9% to $8.6 million in the Company’s electronic and metallic segment. The operating loss in the fourth quarter of fiscal 2011 was $0.4 million, compared to operating loss of $1.2 million for the same quarter of fiscal 2010.
Total gross margin increased to 15.3% in the fourth quarter ended March 31, 2011 compared to 12.6% in the same quarter last year. Gross profit margin in the plastic segment decreased to 19.5% of net sales for the fourth quarter of fiscal 2011 compared to 21.9% of net sales for the same quarter of last fiscal year. The decreased gross margin in the plastic segment was mainly due to an increase in labor costs resulting from a raise in the minimum wage rate offsetting decreases in raw material cost and factory overhead as a percentage of sales during the quarter. Gross profit margin in the electronic and metallic segment increased to 11.6% of net sales for the fourth quarter ended March 31, 2011, compared to 1.2% of net sales for the year-ago quarter. The increase in gross margin in the electronic and metallic segment was mainly attributable to a decrease in raw materials cost resulting from lower stock provisions made, and decreased labor costs driven by lower headcount, offsetting the costs related to the raise in minimum wage rate, as compared to the prior year quarter.
The Company reported a net loss of $0.6 million for the fourth quarter ended March 31, 2011 compared to net loss of $0.9 million for the quarter ended March 31, 2010. Basic and diluted net loss per share was $0.04, (based on 16,195,000 and 16,204,000 weighted average shares outstanding, respectively) compared to basic and diluted net loss per share of $0.06, (based on 16,190,000 and 16,203,000 weighted average shares outstanding, respectively) for the same quarter ended March 31, 2010.
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