Deswell announces first half 2018 results
Macao--(business wire)--deswell industries, inc. (nasdaq: dswl) today announced its unaudited financial results for the first six months ended september 30, 2017. net sales for the first six months ended september 30, 2017 were $29.8 million, an increase of 44.2% compared to net sales of $20.6 million for the six months ended september 30, 2016. net sales increased by 30.6% to $13.8 million in the plastic segment and increased by 58.4% to $16.0 million in the company’s electronic segment. total gross margin increased to 19.6% of net sales during the six months ended september 30, 2017, as compared to 14.3% of net sales in the same period last year. gross profit margin in the plastic segment increased to 24.3% of net sales for the first half of fiscal 2018, compared to 17.9% of net sales for the corresponding period of last fiscal year. the increase in gross profit and margin in the plastic segment was mainly due to lower factory overhead, offsetting a slight increase in raw material and labor costs, as a percentage of sales. gross profit margin in the electronic segment increased to 15.5% of net sales for the first half of fiscal 2018, compared to 10.5% of net sales for the corresponding period of last fiscal year. the increase in gross profit and margin in the electronic segment was mainly attributable to a decrease in labor cost and factory overhead, as a percentage of net sales. the operating income in the first half of fiscal 2018 was $1.6 million, compared to an operating loss of $1.8 million for the same period of fiscal 2017. the company reported net income of $3.7 million for the six months ended september 30, 2017, compared to net income of $0.7 million for the six months ended september 30, 2016. this was primarily due to an increase in gross profit and decrease in sg&a expense, as a percentage of sales, for the six months ended september 30, 2017. deswell reported basic and diluted income per share of $0.23 for the first half of fiscal 2018 (based on 15,885,000 weighted average shares outstanding), compared to basic and diluted income per share of $0.04 (based on 16,056,000 weighted average shares outstanding), for the six months ended september 30, 2016. the company's financial position remained strong, with $11.7 million in cash and cash equivalents and working capital totaled $42.7 million as of september 30, 2017. furthermore, the company has no long-term or short-term borrowings as of september 30, 2017. mr. edward so, chief executive officer, commented, “our strong operating performance in the first half of 2018 is a result of the strategic initiatives we have focused on over the past few years. the top line growth reflects our efforts to drive revenue by expanding business with existing customers and adding new customers; both our plastic and electronic assembly segments saw strong growth in the period. furthermore, we have continued to reduce costs, enabling us to achieve enhanced margins and considerable growth in earnings per share. our pipeline is healthy, and we remain diligently focused on aligning with the right customers and products.” first half dividend the company also announces that its board of directors today decided no cash dividend will be paid for the first half of the fiscal year ended september 30, 2017. the company expects the distribution of dividend will be resumed no later than march 31, 2019. about deswell deswell manufactures injection-molded plastic parts and components, electronic products and subassemblies, and metallic molds and accessory parts 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. to learn more about deswell industries, inc., please visit the company’s website at www.deswell.com. forward-looking statementsstatements in this press release that are "forward-looking statements" are based on current expectations and assumptions that are subject to risks and uncertainties. for example, our statements regarding our expected growth in sales from the electronic division in the coming year and our efforts to reduce overhead costs in our plastic division are forward-looking statements. actual results could differ materially because of the following factors, among others, which may cause revenues and income to fall short of anticipated levels or our overhead expenses to increase: our dependence on a few major customers; vigorous competition forcing product price reductions or discounts; the timing and amount of significant orders from our relatively few significant customers; continuing increases in resin prices that cannot be passed on to customers; unexpected production delays; obsolete inventory or product returns; losses resulting from fraudulent activity of our customers or employees; labor shortages that increase labor and costs; changes in the mix of product products we manufacture and sell; adverse currency fluctuations in the renminbi and hong kong dollar when translated to us dollars; potential new accounting pronouncements; and the effects of travel restrictions and quarantines associated with major health problems, such as the severe acute respiratory syndrome, on general economic activity. for further information regarding risks and uncertainties associated with the company’s business, please refer to the “risk factors” section of company’s annual report on form 20-f, copies of which may be obtained from the website maintained by the securities and exchange commission at http://www.sec.gov. all information in this release is made as of the date of this press release. deswell undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in deswell’s expectations. 2017 2017 2017 2016 2017 2016
