Company: DSWL
Filing Date: 2025-07-29
Form Type: 20-F
Source: 0001174947-25-001096
Chunk: 74

Company: DESWELL INDUSTRIES INC
Filing Date: 2025-07-29
Form: 20-F
Item: Item 5
Chunk 74
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 the year ended March 31, 2023. The increase in net income was mainly due to the increase in non-operatingincome, as described above.

Net income for the plastic segment for the year ended March 31, 2024 was $2,234,000, as compared to a net loss of $2,290,000 for the 2023 fiscal year. The increase in net income in the plastic segment was mainly due to an increase in non-operatingincome as described above.

Net income for the electronic segment for the year ended March 31, 2024 was $6,737,000, as compared to net income of $5,761,000 for the 2023 fiscal year. The increase in net income in the electronic segment was mainly attributable to increases in gross margin as well as in non-operatingincome as described above.

Seasonality

The following table sets forth certain unaudited financial information sequentially on a semi-annualbasis for the each of the years ending March 31, 2023, March 31, 2024, and March 31, 2025 (in thousands):

                         Year ended March 31,                                                                          
                         2023                                                                                          
                         H1                                                                                            
 ───────────────────────────────────────────────────────────────────────────────────────────────────────────────────────
  Net sales              $                         44,438      32,899      37,730      31,638      35,176      32,434  
  Gross profit                                      7,114       5,725       7,362       6,541       6,864       6,779  
  Operating income                                  2,040         847       2,302       1,483       1,820       1,494  
  Net income (loss)                                  (560       2,619       3,557       4,152       6,185       4,953  

Impact of Inflation

Historically, the Company focused upon increasing transaction volume in order to compensate for inflation in China, where virtually all of the Company’s assets and employees are located and inflation in China had little impact on Deswell. However, inflation in China has recently affected the Company significantly.

In May 2025, the monthly inflation rate in China is low and remains subdued. The Consumer Price Index has been falling year-on-year, with a 0.1% decrease in both April and May. According to