Company: DSWL
Filing Date: 2025-07-29
Form Type: 20-F
Source: 0001174947-25-001096
Chunk: 65

Company: DESWELL INDUSTRIES INC
Filing Date: 2025-07-29
Form: 20-F
Item: Item 5
Chunk 65
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ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Except for statements of historical facts, this section contains forward-looking statements involving risks and uncertainties. You can identify these statements by forward looking words including “expect,” “anticipate,” “believe,” “seek,” and “estimate.” Forward looking statements are not guarantees of Deswell’s future performance or results and the Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under the section of this Report entitled ITEM 3 “ Key Information - Risk Factors.”

Operating Results

The following discussion should also be read in conjunction with the consolidated financial statements and notes thereto included following ITEM 18 of this Report. The Company prepares its financial statements in accordance with U. S. GAAP.

General

The Company’s revenues are derived from the manufacture and sale of injection-moldedplastic parts and components, electrical products and subassemblies and metallic molds and accessories.

The manufacturing of the metallic components is a production process which may emit pollutants. During the year ended March 31, 2015, the Company gradually outsourced manufacturing of the metal components used in assembly of the Company’s audio products. As of March 31, 2015, all of the metallic components used in assembly of the Company’s audio products were provided by third party suppliers. The Company carries out all of its manufacturing operations in Southern China, where it has been able to take advantage of the lower overhead costs and labor rates as compared to Hong Kong. At the same time, the proximity of the Company’s factories in Southern China to Hong Kong permits the Company to easily manage its manufacturing operations from Macao, and facilitates transportation of its products through Hong Kong.

PRC Income Taxes

In accordance with the PRC Income Tax Law, the standard income tax rate for all subsidiaries operating in the PRC is 25%.

Table of Contents

Business Segment Information

Deswell’s operations are generally organized in two segments: plastic injection molding, which we sometimes refer to as the “plastics segment,” and electronic products assembling. The Company’s reportable segments are strategic business units that offer different products and services. See Note 16 of Notes to Consolidated Financial Statements. The following table sets forth selected consolidated financial information presented as a percentage of net sales by segment for each of the three years in the period ended March 31, 2025:

                                                    Year ended March 31, 2023                                 Year ended March 31