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Deswell Announces Second Quarter Results

Stock quotes in this article: DSWL 

Deswell Industries, Inc. (Nasdaq: DSWL) today announced its financial results for the fiscal second quarter ended September 30, 2011.

Net sales for the second quarter ended September 30, 2011 were $18.0 million, a decrease of 25.0% compared to net sales of $24.0 million for the same quarter ended September 30, 2010. Net sales decreased by 41.3% to $7.7 million in the Company’s plastic segment and by 5.2% to 10.3 million in the electronic and metallic segment. The operating loss in the second quarter was $0.2 million, compared to an operating loss of $1.7 million for the same quarter of fiscal 2011.

Total gross margin increased to 14.0% in the second quarter ended September 30, 2011 compared to 12.0% in the same quarter last year. Gross profit margin in the plastic segment increased to 16.3% of net sales for the second quarter of fiscal 2012 compared to 10.5% of net sales for the same quarter of last fiscal year. The increase of gross profit margin was mainly due to an increase in the selling price of products, production of high margin items and improvement in operating efficiency. Gross profit margin in the electronic and metallic segment decreased to 12.3% of net sales for the second quarter ended September 30, 2011 compared to 14.0% of net sales for the year-ago quarter. The decrease in gross margin in the electronic and metallic segment was mainly attributable to an increase in the labor cost as a result in overtime allowances as well as increase in factory overheads.

The Company reported a net loss of $0.9 million for the second quarter ended September 30, 2011 compared to a net loss of $1.6 million for the quarter ended September 30, 2010. Basic and diluted net loss per share was ($0.056), (based on 16,197,000 and 16,199,000 weighted average shares outstanding, respectively) compared to basic and diluted net loss per share of ($0.10), (based on 16,194,000 and 16,205,000 weighted average shares outstanding, respectively) for the same quarter ended September 30, 2010.

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