| DESWELL INDUSTRIES, INC. |
| CONSOLIDATED STATEMENTS OF OPRATIONS (UNAUDITED) |
| (U.S. dollars in thousands, except per share date) |
|
| Quarter ended | Six months ended |
| September 30, | September 30, |
| 1998 | 1997 | 1998 | 1997 |
| (Unaudited) | (Unaudited) |
| Net sales | $15,795 | $18,083 | $31,242 | $32,667 |
| Cost of sales | 9,359 | 10,572 | 18,130 | 18,897 |
| Gross profit | 6,436 | 7,511 | 13,112 | 13,770 |
| Selling, general and administrative expenses | 2,493 | 3,604 | 5,530 | 6,605 |
| Operating income | 3,943 | 3,907 | 7,582 | 7,165 |
| Interest expense | (153) | - | (204) | (1) |
| Other income, net | 389 | 235 | 765 | 392 |
| Income before income taxes | 4,179 | 4,142 | 8,143 | 7,556 |
| Income taxes | 101 | 87 | 202 | 238 |
| Income before minority interests | 4,078 | 4,055 | 7,941 | 7,318 |
| Minority interests | 748 | 828 | 1,449 | 1,412 |
| Net income | $3,330 | $3,227 | $6,492 | $5,906 |
|
| Basic earnings per share (note 3) | $0.61 | $0.65 | $1.18 | $1.21 |
|
| Weighted average number of shares outstanding (in thousands) | 5,479 | 4,969 | 5,479 | 4,895 |
|
|
| Diluted earnings per share (note 3) | $0.60 | $0.60 | $1.18 | $1.10 |
|
| Diluted weighted average number of shares outstanding (in thousands) | 5,511 | 5,421 | 5,523 | 5,358 |
| DESWELL INDUSTRIES, INC. |
| CONSOLIDATED BALANCE SHEET |
| ( U.S. dollars in thousands) |
| September 30, | | March 31, |
| 1998 | | 1998 |
| ASSETS | | (Unaudited) |
|
| Current assets : |
| Cash and cash equivalents | $ 28,562 | | $ 21,902 |
| Restricted cash | 2,098 | | 2,927 |
| Accounts receivable, net | 7,425 | | 10,079 |
| Inventories | 6,615 | | 6,415 |
| Prepaid expenses and other current assets | 1,972 | | 1,640 |
| Income taxes receivable | 366 | | 218 |
| Total current assets | 47,038 | | 43,181 |
| Property, plant and equipment - net | 15,859 | | 15,582 |
| Goodwill | 369 | | 381 |
| Total assets | $ 63,266 | | $ 59,144 |
|
| LIABILITIES AND SHAREHOLDERS' EQUITY |
|
| Current liabilities |
| Short-term borrowings | $ 264 | | $ - |
| Accounts payable | 3,140 | | 3,763 |
| Customer deposits and accrued expenses | 3,697 | | 3,175 |
| Income taxes payable | 403 | | 275 |
| Total current liabilities | 7,504 | | 7,213 |
| Minority interests | 8,154 | | 6,705 |
| Deferred income tax | 15 | | 15 |
|
| Shareholders' equity |
| Common stock |
| - authorized 20,000,000 shares; issued and outstanding |
| 5,479,131 shares at September 30, 1998 and |
| at March 31, 1998 | 55 | | 55 |
| Additional paid-in capital | 22,402 | | 22,402 |
| Retained earnings | 25,136 | | 22,754 |
| Total shareholders' equity | 47,593 | | 45,211 |
| Total liabilities and shareholders' equity | $ 63,266 | | $ 59,144 |