-----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, Km/qgrGSGF9ImgE7WSO6KpJTGgpTEH5XKnpg5IzhZr9HI0M2PH3sXtGl9zs3s1me +9S77jwjoCnL8dMmLywv4A== 0000929624-97-001072.txt : 19970929 0000929624-97-001072.hdr.sgml : 19970929 ACCESSION NUMBER: 0000929624-97-001072 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19970911 SROS: NASD 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: 97678873 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 September, 1997 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-__________.] DSG 1997 SECOND QUARTER REPORT REVIEW OF OPERATIONS SECOND QUARTER 1997 AND SIX MONTHS ENDED JUNE 30, 1997 To our Shareholders: We are pleased to announce our second quarter and first half 1997 results. SECOND QUARTER ENDING JUNE 30, 1997 COMPARED TO SECOND QUARTER ENDING JUNE 30, 1996 The net sales for DSG International Limited ("the Company") for the three-month period ending June 30, 1997, were $64.2 million, an increase of 7.0% over the same period in 1996. Although the Company's net income in 1997 was $1.4 million, compared with last year's $2.3 million, and earnings per share in the second quarter of 1997 were $0.21, rather than $0.29, the Company is maintaining its overall volume sales on disposable baby diapers and is broadening its niche within the adult incontinence marketplace. While 1997 has seen the Company creating further inroads in the disposable baby diaper markets, especially within its Asian Pacific and Australian regions, long range strategies were further implemented toward continuing the Company's marketshare expansion in the area of adult incontinence. On April 1, 1997, the Company acquired the entire share capital of a Wisconsin adult incontinence and disposable baby diaper manufacturer for a cash consideration of $3.8 million. Also within the second quarter, the Company acquired an adult incontinence manufacturing firm and equipment in the Netherlands and a medical care distribution company in Belgium for a total cash consideration of $1.4 million. The incontinence business from the Netherlands was integrated into the Company's Swiss operations. Intense pricing and promotional competition continuously affected sales performance for both North America and Europe. Gross profit as a percentage of net sales for the second quarter of 1997 was 34.1%, slightly less than that of the same period last year. Selling, general and administrative expenses as a percentage of net sales increased to 29.8% for the second quarter of 1997. This figure was up from 27.4% in 1996, due to increased advertising and promotional expenses for the North American region; consequently, the Company's operating margin narrowed from 7.3% in the second quarter of 1996 to 4.3% during the second quarter of 1997. Interest expenses for the Company in the second quarter of 1997 came to $807,000, compared with $606,000 for the same period last year. Increased borrowing to accommodate recent acquisitions, along with the working capital requirements of these newly purchased companies, contributed to this change. Other income for the Company resulted in a shift from $585,000, in the second quarter of 1996, to $132,000 during the second quarter of 1997, primarily due to variances in interest income. SIX MONTHS CONCLUDING JUNE 30, 1997 COMPARED TO SIX MONTHS CONCLUDING JUNE 30, 1996 The Company's net sales for the six-month interval ending June 30, 1997, were $121.0 million, close to the sales of $122.1 million for the corresponding 1996 period. During this six-month period in 1997, gross profit as a percentage of net sales was 35.1%, showing an increase of 2.8% over the same duration in 1996. This fluctuation was primarily the result of higher margin contributions from the Company's Asian Pacific and Australian regions. Operating income for the Company during the first half of 1997 was $6.1 million, a $0.2 million decline from the comparative period's income in 1996. This was again the result of increases in advertising and promotional expenses within the North American market and additional selling, general and administrative expenses from the newly purchased companies. Interest expenses for the six-month period ending June 30, 1997, totaled $1.4 million, compared to $1.2 million for the same period in 1996, and resulted from increased borrowing for the acquisition and working capital requirements of the newly purchased companies. Following an unfavorable movement in European currencies against the U.S. Dollar, the Company reported an exchange loss on translation adjustment of $866,000 for the period ending June 30, 1997. STATEMENTS OF OPERATIONS AND BALANCE SHEET DATA The Statements of Operations for three-month and six-month periods ending June 30, 1997 and 1996, and the Balance Sheet information as of June 30, 1997, are derived from unaudited financial statement 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 these 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 Six Months Ended June 30, June 30, 1997 1996 1997 1996 Net sales $64,183 $59,995 $120,951 $122,104 ======= ======= ======== ======== Gross profit 21,884 20,810 42,416 39,468 Selling, general & administrative expenses 19,117 16,448 36,330 33,192 ------- ------- -------- -------- Operating income 2,767 4,362 6,086 6,276 Interest expense (807) (606) (1,410) (1,198) Exchange (loss) gain (222) (74) (866) 257 Other income 132 585 633 996 ------- ------- -------- -------- Income before income taxes 1,870 4,267 4,443 6,331 Provision for income taxes (353) (1,975) (1,473) (2,933) Minority interest in losses (99) (14) (99) (2) ------- ------- -------- -------- Net income $ 1,418 $ 2,278 $ 2,871 $ 3,396 ======= ======= ======== ======== Earnings per share $ 0.21 $ 0.29 $ 0.43 $ 0.43 ======= ======= ======== ======== Average number of shares outstanding 6,673 7,795 6,674 7,823 ======= ======= ======== ========
BALANCE SHEET DATA (In thousands)
June 30, December 31, 1997 1996 (unaudited) Working capital $ 31,440 $ 31,714 Total assets 157,400 141,910 Long-term debt (including deferred purchase consideration) 23,515 21,940 Shareholder's equity 76,220 74,639
At June 30, 1997 the Company had cash of $11.1 million. Regarding the Company's second quarter results, DSG Chairman Mr. Brandon Wang stated, "I am pleased to welcome our newest acquisitions on board and am particularly gratified with he commitment we have made to expanding our niche within the adult incontinence market. With respect to the Company's net income, it was negatively impacted by a total of $0.11 per share, primarily due to the losses incurred in the newly acquired companies and the unfavorable European currency movement against the U.S. Dollar. While we are continuing to move toward further growth in disposable baby diaper sales, we are confident the expansion we are achieving in the adult incontinence marketplace will provide us with a more diversified position. As a significant percentage of the world's population is aging, the demand for sophisticated, life-style enhancing products is proportionately increasing, and DSG is in a position to successfully respond to that need." DSG International Limited and its predecessors have been in the business of manufacturing and distributing disposable diapers since 1973. With manufacturing plants in California, Georgia and Wisconsin, the Company also maintains facilities in Hong Kong, Australia, Great Britain, Singapore, Canada, 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) and Certainty(R). August 15, 1997 [PHOTO APPEARS HERE] DSG INTERNATIONAL LTD 17th Floor Watson Centre Kung Yip Street Kwai Chung Hong Kong Tel: (852) 2427 6951 Fax: (852) 2480 4491 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: September 11, 1997 By /s/ Peter Chang ------------------- --------------- Peter Chang Vice President -----END PRIVACY-ENHANCED MESSAGE-----