Deswell Announces Fourth Quarter 2013 Results

Deswell Industries, Inc. (Nasdaq: DSWL) today announced its financial results for the fiscal fourth quarter ended March 31, 2013.

Net sales for the fourth quarter ended March 31, 2013 were $9.5 million, a decrease of 22.0% compared to net sales of $12.2 million for the same quarter ended March 31, 2012. Net sales decreased by 1.8% to $4.8 million in the Company’s plastic segment and decreased by 35.6% to $4.7 million in the electronic and metallic segment. The operating loss in the fourth quarter was $2.7 million, compared to an operating loss of $1.7 million for the same quarter of fiscal 2012.

Total gross margin decreased to 3.5% in the fourth quarter ended March 31, 2013 compared to 11.6% in the same quarter last year. Gross profit margin in the plastic segment decreased to 2.2% of net sales for the fourth quarter of fiscal 2013 compared to 12.6% of net sales for the same quarter of last fiscal year. The decrease in gross profit and margin in the plastic segment was mainly due to increases in raw materials cost and in labor cost resulting from an increase in overtime allowances. Gross profit margin in the electronic and metallic segment decreased to 4.8% of net sales for the fourth quarter ended March 31, 2013 compared to 10.8% of net sales for the year-ago quarter. The decrease in gross profit and margin in the electronic and metallic segment was mainly attributed to an increase in labor costs as a percentage of sales, resulting from a higher labor rate and additional allowances.

The Company reported a net loss of $2 million for the fourth quarter ended March 31, 2013 compared to a net loss of $0.7 million for the quarter ended March 31, 2012. Deswell reported a basic and diluted loss per share of ($0.12) for the fourth quarter of fiscal 2013, (based on 16,794,000 and 16,810,000 weighted average shares outstanding, respectively) compared to a basic and diluted loss per share of ($0.04), (based on 16,197,000 and 16,202,000 weighted average shares outstanding, respectively) for the quarter ended March 31, 2012.

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