- Company Announces First Half Cash Dividend of $0.10 Per Share -
MACAO--(BUSINESS WIRE)--November 13, 2025--
Deswell Industries, Inc. (Nasdaq: DSWL) today announced its unaudited financial results for the first six months of fiscal 2026, ended September 30, 2025.
Net sales for the six months ended September 30, 2025 were $33.2 million, a decrease of 5.5% compared to net sales of $35.2 million for the six months ended September 30, 2024. Net sales decreased by 13.8% to $5.0 million in the plastic segment and by 3.9% to $28.2 million in the Company's electronic segment.
Total gross margin was 23.4% of net sales during the six months ended September 30, 2025, as compared to 19.5% for the corresponding period of last year. Gross margin in the plastic segment decreased slightly to 18.3% of net sales in the segment for the first half of fiscal 2026, compared to 19.5% of net sales in the segment for the corresponding period of last fiscal year. As a percentage of sales, gross margin in the plastic segment slightly decreased due to an increase in labor costs resulting from the raise in minimum hourly wage, offset by continued control in the consumption of raw materials in the first six months of fiscal 2026. Gross profit margin in the electronic segment increased to 24.3% compared to 19.5% of net sales in the segment for the first half of last fiscal year. This was mainly due to higher-margin offerings, justified by enhanced value-added services delivered to customers, and continuous cost control measures in raw materials and labor costs for the first six months of fiscal 2026. Operating income in the first half of fiscal 2026 was $2.5 million, compared to operating income of $1.8 million for the same period of fiscal 2025.
The Company reported net income of $7.5 million for the six months ended September 30, 2025, compared to net income of $6.2 million for the six months ended September 30, 2024. This was primarily due to increases in total gross margin and non-operating income for the six months ended September 30, 2025, as compared to the same period of fiscal 2025. Deswell reported basic and diluted income per share of $0.47 for the first half of fiscal 2026 (based on 15,935,000 and 15,935,000 weighted average shares outstanding, respectively), as compared to basic and diluted income per share of $0.39 for the first half of fiscal 2025 (based on 15,935,000 and 15,935,000 weighted average shares outstanding, respectively).
The Company's financial position remained strong, with $23.4 million in cash and cash equivalents and working capital totaling $85.1 million as of September 30, 2025. Furthermore, the Company has no long-term or short-term borrowings as of September 30, 2025.
Mr. Edward So, Chief Executive Officer, commented, "To date in fiscal year 2026, our performance reflects our resilience amid a challenging global economic landscape. While overall sales declined, driven primarily by softened worldwide demand, gross margins expanded as a result of higher-margin offerings with enhanced value-added services delivered to customers. New product introductions continue to outperform legacy lines, demonstrating the strength of our innovation pipeline. As we navigate a challenging economic landscape, our strategic priorities -- accelerating speed-to-market, rigorous internal cost controls, close supplier partnerships, and targeted reinvestments -- position us to stabilize performance and preserve competitiveness through the current cycle."
First Half Dividend
The Company also announced that its board of directors today declared a cash dividend of $0.10 per share for the first six months of fiscal 2026. The dividend will be payable on December 23, 2025 to shareholders of record as of December 2, 2025.
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 Statements
Statements 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.
DESWELL INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEET
(U.S. dollars in thousands)
September 30, March 31,
2025 2025
--------------- -----------
ASSETS (Unaudited) (Audited)
Current assets :
Cash and cash equivalents $ 23,382 $ 28,133
Fixed deposits maturing over three
months 21,216 19,431
Time deposits maturing over twelve
months - current portion - 2,761
Marketable securities (note 3) 26,890 25,175
Held-to-maturity Investment 8,180 -
Accounts receivable, net 13,901 9,914
Inventories (note 2) 10,130 9,462
Prepaid expenses and other current
assets 1,221 1,612
---------- -------
Total current assets 104,920 96,488
Property, plant and equipment - net 22,954 23,385
Deferred income tax assets 337 335
Time deposits maturing over twelve
months - -
---------- -------
Total assets $ 128,211 $120,208
========== =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 7,263 $ 5,740
Accrued payroll and employee benefits 8,414 7,779
Customer deposits 1,855 2,058
Other accrued liabilities 1,132 1,014
Income taxes payable 1,192 1,126
---------- -------
Total current liabilities 19,856 17,717
Deferred income tax liabilities 310 371
---------- -------
Total liabilities 20,166 18,088
Shareholders' equity
Common shares nil par value;
authorized 30,000,000 shares;
17,081,810 shares issued;
15,935,239 shares outstanding as of
March 31, 2025 and September 30,
2025 53,202 53,202
Treasury stock at cost; 1,146,571
shares as of March 31, 2025 and
September 30, 2025 (2,821) (2,821)
Additional paid-in capital 7,973 7,973
Accumulated other comprehensive
income 5,316 5,316
Retained earnings 44,375 38,450
---------- -------
Total shareholders' equity 108,045 102,120
---------- -------
Total liabilities and
shareholders' equity $ 128,211 $120,208
========== =======
DESWELL INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS & COMPREHENSIVE INCOME
(UNAUDITED)
(U.S. dollars in thousands, except per share data)
Six months ended
September 30,
--------------------
2025 2024
----------- -------
Net sales $ 33,230 $35,176
Cost of sales 25,442 28,312
------- ------
Gross profit 7,788 6,864
Selling, general and administrative
expenses 5,432 5,404
Other income, net 158 360
------- ------
Operating income 2,514 1,820
Non-operating income, net 5,172 4,646
------- ------
Income before income taxes 7,686 6,466
Income taxes 167 281
------- ------
Net income attributable to Deswell
Industries, Inc. $ 7,519 $ 6,185
Other comprehensive income $ - $ -
------- ------
Comprehensive income attributable to
Deswell Industries, Inc. $ 7,519 $ 6,185
======= ======
Net income per share attributable to
Deswell Industries, Inc. (note 4)
Basic:
Net income per share $ 0.47 $ 0.39
======= ======
Weighted average common shares
outstanding
shares (in thousands) 15,935 15,935
======= ======
Diluted:
Net income per share $ 0.47 $ 0.39
======= ======
Weighted average number of shares
outstanding (in thousands) 15,935 15,935
======= ======
DESWELL INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(U.S. dollars in thousands)
Six months ended Six months ended
September 30, September 30,
-------------------- --------------------
2025 2024
-------------------- --------------------
Cash flows from operating
activities :
Net income $ 7,519 $ 6,185
Adjustments to reconcile
net income to net cash
provided by operating
activities :
Depreciation and
amortization 741 764
Provision for doubtful
accounts 16 44
(Reversal of) additional
charges for obsolescence
allowance of inventories,
net (284) 350
Gain on disposal of
property, plant and
equipment (26) (8)
Unrealized holding gain on
marketable securities (930) (2,961)
Realized gain on disposal
of marketable securities (2,881) -
Scrip dividend received - (73)
Deferred tax credit (63) (22)
Changes in operating
assets and liabilities :
Accounts receivable (4,003) (5,226)
Inventories (384) (5)
Prepaid expenses and
other current assets 391 (169)
Accounts payable 1,523 3,041
Accrued payroll and
employee benefits 635 493
Customer deposits (203) 1,166
Other accrued liabilities 118 (86)
Income taxes payable 66 217
------------ ------------
Net cash provided by
operating activities 2,235 3,710
------------ ------------
Cash flows from investing
activities
Purchase of property,
plant and equipment (326) (129)
Proceeds from disposal
of property, plant and
equipment, 42 25
Purchase of marketable
securities (7,450) (1,275)
Proceeds from disposal
of marketable
securities 9,546 -
Increase in fixed
deposits maturing over
three months (1,785) (8,205)
Release of (Increase in)
fixed deposits maturing
over twelve months -
current 2,761 (2,800)
Release of fixed
deposits maturing over
twelve months - 2,799
(Decrease) Increase in
Held-to-maturity
Investment (8,180) 5,157
------------ ------------
Net cash used in investing
activities (5,392) (4,428)
------------ ------------
Cash flows from financing
activities
Dividends paid (1,594) (1,594)
------------ ------------
Net cash used in financing
activities (1,594) (1,594)
------------ ------------
Net decrease in cash and
cash equivalents (4,751) (2,312)
Cash and cash equivalents,
at beginning of period 28,133 15,750
------------ ------------
Cash and cash equivalents,
at end of period 23,382 13,438
============ ============
Supplementary disclosures
of cashflow information :
Cash paid during the
period for :
Interest - -
Income taxes 170 126
============ ============
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CONTACT: Investor Relations Contact:
John Nesbett/Jennifer Belodeau
IMS Investor Relations
203.972.9200
jnesbett@imsinvestorrelations.com
(END) Dow Jones Newswires
November 13, 2025 09:10 ET (14:10 GMT)