|
|
DESWELL INDUSTRIES, INC.
|
|
CONSOLIDATED BALANCE SHEET
|
|
( U.S. dollars in thousands)
|
March 31,
|
March 31,
|
|||||||
2019
|
2018
|
|||||||
ASSETS
|
(Unaudited)
|
(Audited)
|
||||||
Current assets :
|
||||||||
Cash and cash equivalents
|
$
|
14,371
|
$
|
15,192
|
||||
Time deposits maturing over three months
|
371
|
2,190
|
||||||
time deposits maturing over twelve months
|
-
|
3,129
|
||||||
Marketable securities (note 2)
|
24,446
|
17,282
|
||||||
Accounts receivable,net.
|
15,734
|
15,912
|
||||||
Inventories (note 3)
|
13,030
|
12,933
|
||||||
Prepaid expenses and other current assets
|
2,006
|
2,267
|
||||||
Total current assets
|
69,958
|
68,905
|
||||||
Property, plant and equipment - net
|
30,211
|
31,494
|
||||||
Total assets
|
$
|
100,169
|
$
|
100,399
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
Current liabilities
|
||||||||
Accounts payable
|
$
|
6,253
|
$
|
8,596
|
||||
Accrued payroll and employee benefits
|
5,676
|
5,566
|
||||||
Customer deposits
|
1,298
|
1,707
|
||||||
Other accrued liabilities
|
1,662
|
1,873
|
||||||
Income taxes payable
|
657
|
603
|
||||||
Total current liabilities
|
15,546
|
18,345
|
||||||
Deferred income tax liabilities
|
659
|
775
|
||||||
Total liabilities
|
16,205
|
19,120
|
||||||
Shareholders' equity
|
||||||||
Common shares nil par value - authorized 30,000,000 shares,
|
||||||||
shares issued and outstanding as of March 31, 2019 and
|
||||||||
March 31, 2018 - 15,885,239, respectively.
|
53,063
|
53,063
|
||||||
Treasury stock at cost; 1,146,571 shares as of March 31, 2019 and 2018
|
(2,821
|
)
|
(2,821
|
)
|
||||
Additional paid-in capital
|
8,005
|
8,005
|
||||||
Accumulated other comprehensive income
|
5,316
|
5,316
|
||||||
Retained earnings
|
20,401
|
17,716
|
||||||
Total shareholders' equity
|
83,964
|
81,279
|
||||||
Total liabilities and shareholders' equity
|
$
|
100,169
|
$
|
100,399
|
Six months ended
|
Year ended
|
|||||||||||||
March 31,
|
March 31,
|
|||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||
Net sales
|
$
|
31,786
|
$
|
30,908
|
$
|
66,581
|
$
|
60,667
|
||||||
Cost of sales
|
26,306
|
27,015
|
56,311
|
50,953
|
||||||||||
Gross profit
|
5,480
|
3,893
|
10,270
|
9,714
|
||||||||||
Selling, general and administrative expenses
|
4,696
|
4,372
|
9,459
|
8,806
|
||||||||||
Other income (expense), net
|
(501
|
)
|
696
|
(278
|
)
|
894
|
||||||||
Operating income (loss)
|
283
|
217
|
533
|
1,802
|
||||||||||
Non-operating income, net (note 3)
|
1,402
|
2,265
|
3,884
|
4,395
|
||||||||||
Income before income taxes
|
1,685
|
2,482
|
4,417
|
6,197
|
||||||||||
Income taxes
|
169
|
(39
|
)
|
1447
|
7
|
|||||||||
Net income attributable to Deswell Industries, Inc.
|
$
|
1,516
|
$
|
2,521
|
$
|
4,273
|
$
|
6,190
|
||||||
Other comprehensive income |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
||||||
Comprehensive income (loss) attributable to Deswell Industries, Inc.
|
$
|
1,516
|
$
|
2,521
|
$
|
4,273
|
$
|
6,190
|
||||||
Net income per share attributable to
|
||||||||||||||
Deswell Industries, Inc. (note 5)
|
||||||||||||||
Basic:
|
||||||||||||||
Net income per share
|
$
|
0.10
|
$
|
0.16
|
$
|
0.27
|
$
|
0.39
|
||||||
Weighted average common shares outstanding
|
||||||||||||||
shares (in thousands)
|
15,885
|
15,885
|
15,885
|
15,885
|
||||||||||
Diluted:
|
||||||||||||||
Net income (loss) per share
|
$
|
0.10
|
$
|
0.16
|
$
|
0.27
|
$
|
0.39
|
||||||
Weighted average number of shares
|
||||||||||||||
outstanding (in thousands)
|
15,969
|
15,953
|
16,059
|
15,985
|
DESWELL INDUSTRIES, INC.
|
||||||||
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
|
||||||||
( U.S. dollars in thousands )
|
Year ended
|
|||||||
Mar 31,
|
||||||||
2019
|
2018
|
|||||||
Cash flows from operating activities :
|
||||||||
Net income
|
$ |
4,273
|
$ |
6,190
|
||||
Adjustments to reconcile net loss to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
2,114
|
2,138
|
||||||
Provision for (reversal of) doubtful accounts, net
|
403
|
(674
|
)
|
|||||
Additional charges for obsolescence allowance of inventories, net
|
256
|
296
|
||||||
Loss on disposal of property, plant and equipment
|
22
|
61
|
||||||
Unrealized holding gain on marketable securities
|
(891
|
)
|
(1,401
|
)
|
||||
Gain on sales of marketable securities
|
(746
|
)
|
(609
|
)
|
||||
Scrip dividend received
|
(33
|
)
|
(168
|
)
|
||||
Deferred income tax
|
(116
|
)
|
(114
|
)
|
||||
Changes in operating assets and liabilities :
|
||||||||
Accounts receivable
|
(225
|
)
|
(2,079
|
)
|
||||
Inventories
|
(353
|
)
|
(2,541
|
)
|
||||
Prepaid expenses and other current assets
|
261
|
152
|
||||||
Accounts payable
|
(2,343
|
)
|
3,444
|
|||||
Accrued payroll and employee benefits
|
110
|
923
|
||||||
Customer deposits
|
(409
|
)
|
(445
|
)
|
||||
Other accrued liabilities
|
(211
|
)
|
399
|
|||||
Income taxes payable
|
54
|
127
|
||||||
Net cash provided by operating activities
|
2,166
|
5,699
|
||||||
Cash flows from investing activities
|
||||||||
Purchase of property, plant and equipment
|
(878
|
)
|
(1,707
|
)
|
||||
Proceeds from sale of property, plant and equipment, net of transaction costs
|
25
|
6
|
||||||
Purchase of marketable securities
|
(12,704
|
)
|
(5,357
|
)
|
||||
Proceeds from sales of marketable securities
|
7,210
|
6,580
|
||||||
Release of fixed deposits maturing over three months
|
1,819
|
3,232
|
||||||
Decrease in (increase in) fixed deposits maturing over twelve months
|
3,129
|
(227
|
)
|
|||||
Net cash (used in) provided by investing activities
|
(1,399
|
)
|
2,527
|
|||||
Cash flows from financing activities
|
||||||||
Dividends paid
|
(1,588
|
)
|
(1,112
|
)
|
||||
Net cash used in financing activities
|
(1,588
|
)
|
(1,112
|
)
|
||||
Net (decrease) increase in cash and cash equivalents
|
(821
|
)
|
7,114
|
|||||
Cash and cash equivalents, beginning of year
|
15,192
|
8,078
|
||||||
Cash and cash equivalents, end of year
|
14,371
|
15,192
|
||||||
Supplementary disclosures of cash flow information :
|
||||||||
Cash paid during the year for :
|
||||||||
Interest
|
-
|
-
|
||||||
Income taxes
|
-
|
85
|
1.
|
|
Management’s Statement
|
|
|
In the opinion of Management, the accompanying unaudited financial statements contain all adjustments (all of which are normal and recurring in nature) necessary to present fairly the financial position of Deswell Industries, Inc. (the Company) at March 31, 2019 and March 31, 2018, the results of operations for the six months and year ended March 31, 2019 and March 31, 2018, and the cash flows for the year ended March 31, 2019 and 2018. The notes to the Consolidated Financial Statements contained in the Form 20-F Annual Report filed on July 13, 2018 under the Securities Exchange Act of 1934 should be read in conjunction with these Consolidated Financial Statements. |
2.
|
|
Marketable securities and other securities investments
|
|
|
Marketable securities and other securities investments include debt and equity securities of which the aggregate fair value, unrealized gain (loss) and cost
are as follows:
|
March 31, 2019
|
||||||||||||
Cost
|
Gross
Unrealized
gain
|
Fair value
|
||||||||||
Marketable securities
|
||||||||||||
Equity securities
|
$
|
21,746
|
$
|
2,700
|
$
|
24,446
|
March 31, 2018
|
||||||||||||
Cost
|
Gross
Unrealized
gain
|
Fair value
|
||||||||||
Marketable securities
|
||||||||||||
Equity securities
|
$
|
15,473
|
$
|
1,809
|
$
|
17,282
|
3.
|
|
Inventories
|
March 31,
|
March 31,
|
||||||
2019
|
2018
|
||||||
Inventories by major categories :
|
|||||||
Raw materials
|
$
|
7,020
|
$
|
6,961
|
|||
Work in progress
|
3,884
|
3,698
|
|||||
Finished goods
|
2,126
|
2,274
|
|||||
|
$
|
13,030
|
$
|
12,933
|
4.
|
|
Earnings Per Share
|
|
The basic net income per share and diluted net income per share are computed in accordance with ASC No. 260, "Earnings Per Share" (formerly the SFAS No.128
“Earnings Per Share”).
|
|
The basic net income per share is computed by dividing income available to common holders by the weighted average number of common shares outstanding
during the period. Diluted net income per share gives effect to all potentially dilutive common shares outstanding during the period.
|
|
The weighted average number of common shares outstanding is adjusted to include the number of additional common shares that would have been outstanding if
the potentially dilutive common shares had been issued. In computing the dilutive effect of potential common shares, the average stock price for the period is used in determining the number of treasury shares assumed to be
purchased with the proceeds from the exercise of options.
|
|
The net income for the six months ended March 31, 2019 and 2018 were both from the Company’s continuing operations.
|