The Company's financial position remained strong at the end of the first quarter of fiscal year 2013, with $33.5 million in cash and cash equivalents at June 30, 2012, compared to $33.1 million at June 30, 2011. Working capital totaled $60.0 million as of June 30, 2012, versus $60.9 million as of June 30, 2011. Furthermore, the Company has no long-term or short-term borrowings at June 30, 2012.

Mr. Franki Tse, Chief Executive Officer, commented, “We still face the softening demand which reduced our sales significantly in this quarter. Although the global economic situation is still one of our major business concerns, we have been taking many steps to secure our sales: developing new market segments, broadening product ranges and diversifying into new business areas. We believe we will be able to capitalize on some opportunities currently under development to drive improved revenue during the coming quarters. As our balance sheet remains particularly strong with cash and no long or short term debt, we anticipate dividends to be declared in each of the coming three quarters will be at least $0.05 per share.”

First Quarter Dividends

The Company also announced that on August 15, 2012 its board of directors declared a cash dividend of $0.05 per share for the fiscal first quarter ended June 30, 2012. The dividends will be payable on September 11, 2012 to shareholders of record as of August 27, 2012.

About Deswell

Deswell manufactures injection-molded plastic parts and components, 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 finished products such as telephones, telephone answering machines, sophisticated studio-quality audio equipment and computer peripherals. The Company’s customers include Vtech Telecommunications Ltd. and Digidesign Inc.

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