Company: DSWL
Filing Date: 2025-11-13
Form Type: 6-K
Source: 0001171843-25-007261
Chunk: 7

Company: DESWELL INDUSTRIES INC
Filing Date: 2025-11-13
Form: 6-K
Chunk 7
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of net sales in the segment for the six months ended September 30, 2025, as compared to $1,126,000 or 19.5% of net sales in the segment
for the same period in the prior fiscal year. As a percentage of sales, gross margin in the plastic segment slightly decreased for the
first six months of fiscal 2026 due to the increase in labor costs resulting from the raise in minimum hourly wage, despite the ongoing
measures taken to control labor and raw material costs as compared to the same period for the last fiscal year.

Gross profit in the electronic segment increased by $1,137,000 to $6,875,000
or 24.3% of net sales in the segment for the six months ended September 30, 2025, as compared to $5,738,000 or 19.5% of net sales in the
segment for the same period of last fiscal year. The increase in gross margin for the first six months of fiscal 2026 was mainly due to
higher-margin offerings, justified by enhanced value-added services delivered to customers, as well as ongoing measures taken to control
labor headcount and to limit overtime allowances, as compared to the corresponding period of last fiscal year.

Selling, general and administrative expenses - SG&A expenses for the six
months ended September 30, 2025 were $5,432,000 or 16.3% of total net sales, as compared to $5,404,000 or 15.4% of total net sales for
the six months ended September 30, 2024.

Corporate expenses decreased by $132,000 to $559,000 for the six months ended
September 30, 2025 as compared to $691,000 for the same period ended September 30, 2024. The decrease was primarily due to the allocation
of certain professional expenses to the subsidiaries.

SG&A expense in the plastic segment increased to $1,671,000 or 33.5% of
net sales in the segment for the first half of fiscal 2026, as compared to $1,644,000 or 28.4% of net sales in the segment for the corresponding
period of fiscal 2025. The slight increase in SG&A expense for the first six months of fiscal 2026 was mainly due to an increase of
$25,000 in administration staff costs and welfare, as compared with the same period in