Business Context and Reporting Period
Deswell Industries, Inc. (Nasdaq: DSWL) filed a Form 6-K on August 6, 2009. The company manufactures injection-molded plastic parts, electronic products, and metallic components for OEMs and contract manufacturers from facilities in the People's Republic of China.
Key Financial Metrics
This filing does not provide standard financial statements, revenue, profit, cash flow, margins, debt, or liquidity metrics. The primary financial data disclosed relates to a specific asset transaction:
- Asset Sale Price: Approximately $7.3 million.
- Asset Description: Real property in Shekou, Shenzhen, China (approx. 112,900 sq. ft.).
- Original Cost: Approximately $1,461,000 (purchased in fiscal 2000).
- Expected Gain: The company expects to record a gain on the sale, net of transaction costs.
Material Changes
The filing announces a material change in the company's asset base through the agreement to sell a former manufacturing facility. The Shekou plant was closed in 2007 after operations were transitioned to a larger facility in Houjie, Dongguan. The property has been held for sale since the closure.
Guidance, Outlook, and Risks
Transaction Timeline: The sale is targeted to close by the end of November 2009, pending required local government transfer and other approvals.
Financial Impact: If the sale closes as anticipated, the gain will be recorded in the third fiscal quarter ending December 31, 2009.
Risks: The transaction is contingent upon obtaining necessary regulatory approvals. The filing does not provide specific guidance on future revenue or earnings beyond this asset sale.
Investor Verification Checklist
- Verify the final closing date of the Shekou property sale against the November 2009 target.
- Confirm the actual net gain recorded in the Q3 2009 financial statements after transaction costs.
- Monitor for any delays in local government approvals that could impact the closing timeline.
- Review subsequent filings for updated liquidity positions following the receipt of sale proceeds.