Company: DSWL
Filing Date: 2025-11-13
Form Type: 6-K
Source: 0001171843-25-007261
Chunk: 10

Company: DESWELL INDUSTRIES INC
Filing Date: 2025-11-13
Form: 6-K
Chunk 10
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5.

Net income – The Company had a net income of $7,519,000 for
the six months ended September 30, 2025, as compared to net income of $6,185,000 for the six months ended September 30, 2024. The
increased net income for the first six months of fiscal 2026 was mainly attributed to the increases in non-operating income in the plastic
segment, as well as gross margin in the electronic segment as described above.

Net income for the plastic segment for the six months ended September
30, 2025 totaled $3,499,000, as compared to a net income of $3,495,000 for the corresponding six months in fiscal 2025. The slight
increase in net income in the first six months of fiscal 2026 for the plastic segment was mainly attributable to the increase in non-operating
income in fiscal 2026 as described above.

Net income for the electronic segment for the six months ended September
30, 2025 was $4,579,000, compared to net income of $3,381,000 for the corresponding six months of fiscal 2025. The increase in net income
in the first six months of fiscal 2026 for the electronic segment was mainly attributable to the increase in gross margin as described
above.

Liquidity and Capital Resources

The Company relies primarily upon internally-generated funds to finance
its operations and investments.

As of September 30, 2025, the Company had working capital of $85,064,000
as compared to $78,771,000 at March 31, 2025. The Company has generated sufficient funds from its operating activities to
finance its operations and believes there is little need for external financing. The Company had no short-term borrowings or
long-term borrowings as of September 30, 2025.

As of September 30, 2025, the Company had cash and cash equivalents
of $23,382,000, as compared to $13,438,000 as of September 30, 2024. During the six months ended September 30, 2025, net cash
provided by operating activities was $2,235,000. Net cash used in investing activities was $5,392,000, mainly due to increases of $1,785,000
in fixed deposits maturing over three months, cash used in purchases of $7,450,000 of marketable