Deswell Industries, Inc. · NASDAQ:DSWL

Deswell Industries — Investor Presentation (September 2005)

19 slides from Deswell Industries's investor presentation, September 2005

  1. Slide 1: Deswell Industries, Inc.

    D E S W E L L DESWELL INDUSTRIES, INC. I N D NASDAQ: DSWL U September 2005 S T R I E S

  2. Slide 2: Overview

    D E Overview S W E • Founded: 1987 L L • Location: Macau (Corporate) Dongguan & Shekou (Operations) I N • Business: Plastic Injection Molding D Electronics Assembly U S Metallic Parts Manufacturing T R • Customers I Include: Digidesign, Inter-Tel, Kyocera Mita, E Epson, Peavey, Line 6, Vtech etc. S

  3. Slide 3: Financials At-A-Glance

    D E Financials At-A-Glance S W E • IPO 1995 L • Market Cap: $221.97 million (as of 9/12/05) L • Share Out: 14.8 million • Float: 8.5 million I N Year Ended March 2005 D U • Revenues: $125.6 million S • Gross Margin: 26.7 % T • Net Profit Margin: 12.1% R • Dividend: $0.65 (per share) I E • Cash: $28.

  4. Slide 4: Deswell Industries, Inc.

    D E Deswell Industries, Inc. S W E L Deswell Deswell L Industries Industries Inc. Inc. I N D Kwanasia Kwanasia U Jetcrown Jetcrown Electronics Electronics S Plastics Plastics &&Metals Metals (100%) (100%) T (76%) (76%) R I E S

  5. Slide 5: Plastic Injection Molding Overview

    D E Plastic Injection Molding Overview S W E • Leading injection molding company in China L L  Approx. 1.2 million square feet of manufacturing space I N  3,800 employees D U • Focus on high-end injection molding products S T  High precision R  High cosmetic requirements I E  Large scale inject

  6. Slide 6: Plastic Injection Molding Expansion

    D E Plastic Injection Molding Expansion S W E • New manufacturing campus in Dongguan L L  40% additional capacity added in 2004  25% additional capacity added in 2005 I N  $40 million invested over past three years from cash D flow U S • Benefits of new facility include: T  Lower rental rates R

  7. Slide 7: Plastic Injection Molding

    D E Plastic Injection Molding S W E • Plastic Injection L L  368 injection molding machines  $3 million in new machinery last year I N  18 double injection machines D  only 2% of companies in China have U S double injection capabilities T  Fully automated clean rooms R I  $10 million earmarked

  8. Slide 8: Plastic Injection Molding

    D E Plastic Injection Molding S W E • Mold Design and Production L  70 to 100 molds per month L  Utilize most precise and efficient mold making machinery: I N  29 electrical discharge machines (EDM) D  30 computer numerical control machines (CNC) U  85 numerical control machines (NC) S • Export

  9. Slide 9: Plastic Injection Molding Sample Key Customers

    D Plastic Injection Molding E Sample Key Customers S W E L L I N D U S T R I E S

  10. Slide 10: Electronics Assembly Overview

    D E Electronics Assembly Overview S W E L • Full-service assembly for primarily L high-end products I • Competitive advantages include: N  Expertise in professional audio equipment D U  In-house metal manufacturing S T  Injection molding through Jetcrown R I • Growth resurgence in 2004 E S

  11. Slide 11: Electronics Assembly Key Customers

    D Electronics Assembly E Key Customers S W E L • Peavey (audio) L • Digidesign (audio) I N • Line 6 (audio) D U • Inter-Tel (telecom) S T R I E S

  12. Slide 12: Electronics Assembly Metals Division

    D Electronics Assembly E S Metals Division W E • Metal parts, primarily casings, for such L products as: L  Digital mixing boards I N  Guitar amplifiers  ATM machines D U S  Pay phones T R • Audio companies prefer metal casing to I better shield frequency E S

  13. Slide 13: Revenues

    D E Revenues S W E $ In Millions L L I N D U S T R I E S Year Ended March 31

  14. Slide 14: Revenue Growth Drivers

    D E Revenue Growth Drivers S W E L • Continued penetration of audio manufacturing sector L I • Significantly expanded sales & marketing N D • New premier injection molding facility U attracting prospects S T • Export mold making division R I E S

  15. Slide 15: Net Income

    D E Net Income S W E $ In Millions L L $14.7 $13.0 $13.3 $12.8 $10.3 $10.2 I $9.5 $8.7 N D U S T R I E S Year Ended March 31

  16. Slide 16: Profitability Drivers

    D E Profitability Drivers S W E • Focus on higher margin manufacturing L IMD L laser etching I • Lower SG&A at new facility because N less rent labor D U S • Raw material prices currently high and expected T to decrease R • Closing original Shenzhen plastics facility will save I E estimated $1 m

  17. Slide 17: Healthy Balance Sheet

    D E Healthy Balance Sheet S W (In thousands, except per share data) E L Fiscal Year: 2003 2004 2005 L Cash & Cash Equivalents $ 34,400 $ 30,193 $ 28,073 Working Capital $ 58,223 $ 52,876 $ 57,576 I Short-Term Debt None None None N Long-Term Debt None None None D U Total Assets $ 106,172 $ 113,534 $

  18. Slide 18: Cash Dividend History

    D E Cash Dividend History S W E $0.96 L $0.80 L $0.70 $0.67 $0.59 $0.59 $0.60 I $0.43 N D U S T R I E *Includes a special cash dividend of $0.25 per share S

  19. Slide 19: Conclusion

    D E Conclusion S W E L • Benefiting from manufacturing outsourcing L to China I • New injection molding facility adds growth N capacity and reduces SG&A D U • Resurgence in growth at electronics S manufacturing division driven by T penetration of audio niche R I • High yield and strong cash position

Deswell Industries — Investor Presentation (September 2005) on 6ix