-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RBKtX8FxkxNU0aWP6TSQHjTK7pRGvRJl3pmvcRKxGSok4e9yUH45ZE+wZnaWM6Ue WVfS7MCJOAbA5U3xrUcK3w== 0000929624-98-002087.txt : 19981228 0000929624-98-002087.hdr.sgml : 19981228 ACCESSION NUMBER: 0000929624-98-002087 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19981223 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DSG INTERNATIONAL LTD CENTRAL INDEX KEY: 0000883230 STANDARD INDUSTRIAL CLASSIFICATION: CONVERTED PAPER & PAPERBOARD PRODS (NO CONTAINERS/BOXES) [2670] IRS NUMBER: 000000000 STATE OF INCORPORATION: D8 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: SEC FILE NUMBER: 000-19804 FILM NUMBER: 98774737 BUSINESS ADDRESS: STREET 1: 17/F WATSON CENTRE STREET 2: 16-22 KUNG YIP ST CITY: KWAI CHUNG HONG KONG STATE: K3 BUSINESS PHONE: 8524276951 MAIL ADDRESS: STREET 1: 17/F WATSON CENTRE STREET 2: 16-22 KUNG YIP ST CITY: KWAI CHUNG HONG KONG STATE: K3 6-K 1 FORM 6-K FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 For the month of December, 1998 DSG International Limited ------------------------- (Translation of registrant's name into English) 17/F Watson Centre, 16-22 Kung Yip Street, ------------------------------------------ Kwai Chung, Hong Kong --------------------- Tel. No. 852-2427-6951 ---------------------- (Address of principal executive offices) [Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.] Form 20-F x Form 40-F ------ ------ [Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.] Yes No x ------ ------ [If "yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-__________.] SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. DSG International Limited ----------------------------------- (Registrant) Date: December 23, 1998 By /s/ Peter Chang ---------------------- ---------------------- Peter Chang Vice President DISPOSABLE SOFT [LOGO APPEARS HERE] GOODS THIRD QUARTER REPORT 1998 [GRAPHIC ART APPEARS HERE] REVIEW OF OPERATIONS THIRD QUARTER 1998 AND NINE MONTHS ENDED SEPTEMBER 30, 1998 To our Shareholders: We are pleased to announce our third quarter ended September 30, 1998 results. THIRD QUARTER ENDED SEPTEMBER 30, 1998 COMPARED TO THIRD QUARTER ENDED SEPTEMBER 30, 1997 The Company's net sales for the three-month ended September 30, 1998 were $48.9 million compared with net sales of $58.3 million for the same period in 1997. Net loss for the third quarter of 1998 was $0.3 million compared with net loss of $2.0 million for the same period in 1997. Although the Company's sales in Asia Pacific region had a moderate recovery in the third quarter of 1998 over the previous quarter, the Company's sales declined compared with the same period in 1997, primarily due to the decrease in volume in both North America and Europe. Gross profit as a percentage of net sales reduced by 4.0% to 27.7% for the third quarter of 1998 from 31.7% of the same period in 1997. The reduction in gross profit was due to lowered unit selling prices and productivity in the Company's operations in North America and higher cost of imported raw materials in the Asia Pacific operations. On the other hand, the Company continued to reduce its selling, general and administrative expenses, and as a percentage to net sales, the expenses for the third quarter of 1998 dropped to 27.6% from 31.2% for the corresponding period in 1997. Interest expense for the third quarter of 1998 was $0.6 million, compared with $0.8 million for the same period in 1997. The Company recognized exchange loss of $0.1 million in this quarter, which was less than the $1.7 million loss for the same period in 1997. NINE MONTHS CONCLUDING SEPTEMBER 30, 1998 COMPARED TO NINE MONTHS CONCLUDING SEPTEMBER 30, 1997 The Company's net sales for the nine-month period in 1998 were $151.2 million compared to $179.2 million for the same period in 1997. Gross profit as a percentage of net sales decreased to 27.7% in the nine-month period ended September 30, 1998, from 34.0% for the same period in 1997. Selling, general and administrative expenses were reduced by $11.4 million to $43.1 million for the nine-month period in 1998 from $54.5 million for the corresponding period in 1997. Interest expense for the nine-month period in 1998 was $1.8 million, reduced from $2.2 million for the same period in 1997 due to retirement of debt. Exchange loss recognized was significantly reduced to $2,000 in 1998 compared with $2.5 million in 1997. Overall, the Company's net loss for the nine-month ended September 30, 1998 was $2.2 million, compared with net income of $0.8 million for the same period in 1997. Brandon Wang, the Chairman of the Company, stated "I see the gradual recovery of the Asian currencies against the US dollar, and I am very pleased to see that our key Asian operations are benefited. We are pressing ahead with our projects in South East Asian countries, and coupled with this "go local" strategy, I expect that our Asian operations would return to profitability very soon. In North America, where competition is so keen that only the highly efficiency operation will survive, we are committed to new generation high speed machines to improve efficiency and to reduce costs and we shall see the results in three to six months' time. In Europe, we plan to consolidate our operations, we anticipate certain restructuring costs in the coming quarter." DSG International Limited and its predecessors have been in the business of manufacturing and distributing disposable diapers since 1973. With manufacturing plants in Georgia and Wisconsin, the Company also maintains manufacturing operations in Hong Kong, Australia, Great Britain, Switzerland, China and Thailand. Additionally, the Company distributes its products throughout Asia, Australia, North America and Europe. The Company produces private label disposable diapers, adult incontinence products, feminine napkins and training pants at certain of its operations. Its best selling brands include "Fitti/R/", "Pet Pet/R/", "Cosies/R/", "Cosifits/R/", "Baby Love/R/", "Togs/R/", "Cares/R/", "Vlesi/R/", "Dispo 123/TM/", "Certainty/R/" and "Handy/TM/". December 8, 1998 STATEMENTS OF OPERATIONS AND BALANCE SHEET DATA The Statements of Operations for the three-month and nine-month periods ending September 30, 1998 and 1997, and the Balance Sheet information as of September 30, 1998, are derived from unaudited financial statements which, in the opinion of the management, include all necessary adjustments, consisting only of normally recurring adjustments, for a fair presentation of the results of operations for these time frames. The results for the periods, however, are not necessarily indicative of the results for the full year. STATEMENTS OF OPERATIONS (in thousands, except earnings per share)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 1998 1997 1998 1997 Net sales $48,895 $58,257 $151,201 $179,208 ======= ======= ======== ======== Gross profit 13,550 18,446 41,893 60,862 Selling, general & administrative expense 13,478 18,167 43,092 54,497 ------- ------- -------- -------- Operating income (loss) 72 279 (1,199) 6,365 Interest expense (590) (759) (1,790) (2,169) Exchange loss (125) (773) (2) (1,639) Other income 391 44 873 677 ------- ------- -------- -------- Income before income taxes (252) (1,209) (2,118) 3,234 Provision for income taxes (418) 74 (772) (1,399) Minority interest 323 15 676 (84) ------- ------- -------- -------- Net (loss) income $ (347) $(1,120) $ (2,214) $ 1,751 ======= ======= ======== ======== (Losses) earnings per share $ (0.05) $ (0.17) $ (0.33) $ 0.26 ======= ======= ======== ======== Weighted average number of shares outstanding 6,675 6,675 6,675 6,675 ======= ======= ======== ========
STATEMENTS OF COMPREHENSIVE INCOME (in thousands)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 1998 1997 1998 1997 Net (loss) income $ (347) $(1,120) $(2,214) $ 1,751 Other comprehensive income (expense), before tax Foreign currency translation adjustments 1,245 (2,149) (865) (3,318) Provision for income taxes -- -- -- -- ------- ------- ------- ------- Other comprehensive income (expense), net of tax 1,245 (2,149) (865) (3,318) ------- ------- ------- ------- Comprehensive income (expense) $ 898 $(3,269) $(3,079) $(1,567) ======= ======= ======= =======
During the year, the Company adopted the Statement of Financial Accounting Standards ("SFAS") No. 130 Reporting Comprehensive Income, issued by the Financial Accounting Standards Board. SFAS No. 130 requires the reporting of comprehensive income in addition to net income from operations. Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income. The inclusion represents all changes in equity except those resulting from investments by, and distributions to owners. BALANCE SHEET DATA (In thousands)
September 30, December 31, 1998 1997 (unaudited) Working capital $ 29,806 $ 30,823 Total assets 122,035 130,273 Long-term debt (including deferred purchase consideration) 19,124 21,281 Shareholders' equity 61,700 64,778
At September 30, 1998 the Company had cash totaling $11.2 million. DSG INTERNATIONAL LTD. 17th Floor Watson Centre Kung Yip Street Kwai Chung Hong Kong Tel: (852) 2427 6951 Fax: (852) 2480 4491 -----END PRIVACY-ENHANCED MESSAGE-----