Company: DSWL
Filing Date: 2025-11-13
Form Type: 6-K
Source: 0001171843-25-007261
Chunk: 1

Company: DESWELL INDUSTRIES INC
Filing Date: 2025-11-13
Form: 6-K
Chunk 1
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. 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