FACT SHEET

 As of September 8, 2000:
Price   $17.75
Trailing 12 Months Diluted EPS   $1.86
P/E Ratio   9.5x
52 Week Price Range   $11.50 - $18.50
Market Capitalization   $95 Million
Fiscal Year End   March 31
Insider Ownership   50.5%
Shares Outstanding   5.4 million
Price to EBITDA   5.3x

THE COMPANY:

Deswell Industries Inc. consists of four manufacturing facilities: Jetcrown Industrial Ltd., Jetcrown Industrial (Dongguan) Ltd, as well as a minority interest in Kwanasia Electronics and Kwanta Precision Metals. Deswell's executive offices are in Hong Kong while all of its manufacturing activities are conducted at separate plastics, electronics and metallics factories located in the Shenzhen Special Economic Zone, China.

PRODUCTS:

Plastic Molding - Deswell Industries produces a wide variety of plastic parts and components that are used in the manufacture of consumer and industrial products. This includes cases and parts for telephones, fax and copy machines, pagers and personal organizers.

Electronics - Products manufactured by Deswell include complex printed circuit board assemblies using surface mount ("SMT") and pin-through-hole ("PHT") interconnection technologies and finished products such as telephones, telephone answering machines, sophisticated studio-quality audio equipment and computer peripherals such as CD-ROM drives and LAN and sound cards.

Metals - Products manufactured by Deswell include metallic molds and accessory parts used in audio equipment, telephones and copying machines.

KEY CUSTOMERS:

Net Sales.
Basic Earnings.

INVESTMENT HIGHLIGHTS:

Attractive Valuation - At $17.75 per share, Deswell is trading at 9.5x earnings and 5.3x EBITDA. This is slightly above the Company's book value of $10.30.

Industry Trends - The injection molding industry has benefited in recent years from the trend among major users to outsource an increasing portion of their component requirements. Similarly in the electronics industry, OEMs have turned increasingly to outside contract manufactures to avoid the rising costs of operating a manufacturing site and the need to add more sophisticated and expensive manufacturing processes and equipment.

Expanding Capacity - Deswell continues to aggressively expand its production facilities, ensuring capacity to meet the increasing demands of its customers and expand its addressable market. The Company recently announced it expanded operations to a new 170,000 square foot production facility for its new plastic subsidiary, Jetcrown Industrial (Dongguan) Ltd.

Strong Balance Sheet - As of June 30, 2000, Deswell had $27.7 million in cash and cash equivalents with no long term debt. Due to the Company's long-standing and healthy balance sheet, the board of directors has declared dividends for four consecutive years. For fiscal 2000, regular cash dividends totaled $0.88 per share.

Selected Consolidated Statement of Operations
(in thousands, except per share)
Three Months Ended
Year Ended
6/30/00
6/30/99
3/31/00
3/31/99
(unaudited)
(audited)
Net Sales
$ 17,786
$ 12,081
$ 60,958
$ 53,439
Total Cost of Sales
11,531
7,489
38,262
32,179
Gross Profit
6,255
4,592
22,696
21,260
S&A Expenses
3,435
2,667
11,970
10,364
Operating Income
2,820
1,925
10,726
10,896
Income Before Income Taxes
3,049
2,260
11,621
11,529
Income Taxes
204
187
890
462
Minority Interests
88
(40)
433
1,575
Net Income
2,757
2,113
10,298
9,492
Diluted Earnings per Share
0.51
0.39
1.89
1.72
Diluted Shares Outstanding
5,407
5,476
5,449
5,524


Selected Balance Sheet Data

  6/30/00 3/31/00 3/31/99
 
(unaudited)
    
Cash and cash equivalents $ 27,783 $ 27,156 $ 27,556
Inventories 12,213 10,932 5,902
Total current liabilities 9,863 9,864 7,211
Long Term Debt - -      
Shareholders' equity 55,720 53,031 48,767


VALUATION METRICS:
P/E Ratio     9.5x Cash Per
Share         $5.14 Book Value Per
Share       $10.30

INVESTOR CONTACT:
 John G. Nesbett / Ryan J. Daniels Lippert/Heilshorn & Associates 212.838.3777

The information contained herein was obtained from the management of DESWELL INDUSTRIES, INC. and other sources we believe to be reliable. This does not constitute the solicitation of the purchase or sale of securities. Lippert/Heilshorn & Associates, Inc. is employed by the Company as its investor relations firm SEPTEMBER 2000

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