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Deswell Announces Third Quarter 2013 Results

Stocks in this article: DSWL

Net sales for the nine months ended December 31, 2012 were $44.6 million, a decrease of 15.3%, compared to sales of $52.6 million for the corresponding period in fiscal 2012. Operating loss for the nine months ended December 31, 2012 was $1.0 million, compared to an operating loss of $0.5 million for the first nine months of fiscal 2012. The Company reported net income of $0.008 million in the first nine months of fiscal 2013, compared to a net loss of $0.7 million for the nine months ended December 31, 2011. Deswell reported basic and diluted net income per share of $0.0005 for the first nine months of fiscal 2013, (based on 16,482,000 and 16,559,000 weighted average share outstanding, respectively), compared to a basic and diluted loss per share of ($0.05), (based on 16,197,000 and 16,202,000 weighted average shares outstanding, respectively), for the prior corresponding period.

The Company's financial position remained strong at the end of the third quarter of fiscal year 2013, with $28.4 million in cash and cash equivalents at December 31, 2012, compared to $33.1 million at March 31, 2012. Working capital totaled $60.6 million as of December 31, 2012, versus $60.9 million as of March 31, 2012. Furthermore, the Company has no long-term or short-term borrowings as of December 31, 2012.

Mr. Franki Tse, Chief Executive Officer, commented, “Weakening demand in our export markets impacted sales and margins. We also continue to see increasing Chinese manufacturing costs and a shortage of available labor. In spite of these headwinds, we are focused on closely partnering with our customers, suggesting new product concepts and providing sophisticated design and development services. Our machinery and equipment is state of the art, and we continue to upgrade it while proactively managing our expenses. We are also aggressively seeking new customers. As the U.S. and European economies improve, we believe our efforts will result in improved performance for our shareholders. Meanwhile, our balance sheet is strong with cash and no debt. Cash from operations for the nine months ended December 31 totaled $6.2 million, and we continue to return capital to shareholders through dividends."

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