-----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, EZeWqbww+NLY0f41w4sCkvx8xEMesKaAMaoAIcV+G1LcuL6aJXVPs/fLde5YeTEe Thj+NVDcrN1hZtSuS8B4Bw== 0000929624-98-001559.txt : 19980924 0000929624-98-001559.hdr.sgml : 19980924 ACCESSION NUMBER: 0000929624-98-001559 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19980923 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: 98713439 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 REPORT OF FOREIGN ISSUER 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, 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: September 23, 1998 By /s/Peter Chang ---------------------- ---------------------- Peter Chang Vice President DISPOSABLE SOFT [LOGO] GOODS SECOND QUARTER REPORT 1998 REVIEW OF OPERATIONS SECOND QUARTER 1998 AND SIX MONTHS ENDED JUNE 30, 1998 To our Shareholders: We are pleased to announce our second quarter and first half 1998 results. SECOND QUARTER ENDED JUNE 30, 1998 COMPARED TO SECOND QUARTER ENDED JUNE 30, 1997 Net sales for DSG International Limited ("the Company") for the three-month period ended June 30, 1998 declined 22.7% to $49.6 million compared with $64.2 million for the same period in 1997. The Company's net loss was $0.8 million in the second quarter of 1998, compared with net income of $1.4 million for the same period in 1997. The financial and economic situation in Asia Pacific continued to impact on the Company's operations in the region. The Company's sales in the Asia Pacific region declined both in dollar terms and in volume. The Company's sales in North America showed a slight volume improvement over the first quarter of 1998 that was attributed to the everyday-low-price strategy. However, the Company's sales declined when compared against the sales for the second quarter in 1997. In Europe, the Company's sales had negatively impacted as a result of the Company's Swiss operation losing a major customer in baby diapers in the second quarter of 1998. Gross profit as a percentage of net sales was 28.4% in the second quarter of 1998 compared with 34.1% for the same period in 1997. The decrease was primarily due to lower unit selling price in North America and the adverse impact of higher cost of imported raw materials in the Asia Pacific region. Selling, general and administrative expenses as a percentage of net sales was 29.2% in the second quarter of 1998, a reduction of 0.6% compared with 29.8% for the second quarter of 1997. Interest expense for the Company in the second quarter of 1998 was $601,000, compared with $807,000 for the same period last year due to retirement of borrowings. Other income for the Company increased from $132,000 in the second quarter of 1997, to $304,000 during the second quarter of 1998, primarily due to an increase in interest income. SIX MONTHS CONCLUDING JUNE 30, 1998 COMPARED TO SIX MONTHS CONCLUDING JUNE 30, 1997 The Company's net sales for the six-month period ended June 30, 1998 declined 15.4% to $102.3 million, compared with $121.0 million for the corresponding period in 1997. Gross profit as a percentage of net sales decreased to 27.7% in the six-month period ended June 30, 1998, from 35.1% in the same period in 1997. Selling, general and administrative expenses declined by $6.7 million to $29.6 million for the first half of 1998, from $36.3 million for the corresponding period in 1997. The Company's operating loss was $1.3 million during the first half of 1998 compared with operating income of $6.1 million during the same period in 1997. Interest expense for the six-month period ended June 30, 1998, totaled $1.2 million, compared to $1.4 million for the same period in 1997 as a result of retirement of borrowings. Mr. Brandon Wang, Chairman of the Company, stated "For the second quarter, we have seen some volume improvement in North America. The currency and economic situation continues to linger in the Asia Pacific region and the economy may not recover for a while. The Company is implementing a strategy to expeditously establish local manufacturing facilities in some of our key Asia Pacific markets. We expect the start up operations in Indonesia sometime during the fourth quarter. This "go local" strategy, will allow us not only to reduce costs but more importantly, it will allow us to build the foundation for market expansion when the economy of the region recovers." 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). September 2, 1998 STATEMENTS OF OPERATIONS AND BALANCE SHEET DATA The Statements of Operations for the three-month and six-month periods ending June 30, 1998 and 1997, and the Balance Sheet information as of June 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 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, 1998 1997 1998 1997 Net sales $49,601 $64,183 $102,306 $120,951 ======= ======= ======== ======== Gross profit 14,064 21,884 28,343 42,416 Selling, general & administrative expenses 14,490 19,117 29,614 36,330 ------- ------- -------- -------- Operating (loss) income (426) 2,767 (1,271) 6,086 Interest expense (601) (807) (1,200) (1,410) Exchange (loss) gain (101) (222) 123 (866) Other income 304 132 482 633 ------- ------- -------- -------- (Loss) income before income taxes (824) 1,870 (1,866) 4,443 Provision for income taxes (157) (353) (354) (1,473) Minority interest 195 (99) 353 (99) ------- ------- -------- -------- Net (loss) income $ (786) $ 1,418 $ (1,867) $ 2,871 ======= ======= ======== ======== (Loss) earnings per share - --basic and diluted $ (0.12) $ 0.12 $ (0.28) $ 0.43 ======= ======= ======== ======== Weighted average number of shares outstanding 6,675 6,673 6,675 6,674 ======= ======= ======== ========
STATEMENTS OF COMPREHENSIVE INCOME (in thousands) THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, 1998 1997 1998 1997 Net (loss) income $(786) $1,418 $(1,867) $2,871 Other comprehensive expense, before tax Foreign currency translation adjustments (2,118) (443) (2,110) (1,169) Provision for income taxes -- -- -- -- ------- ------- ------- ------ Other comprehensive expense, net of tax (2,118) (443) (2,110) (1,169) ------- ------- ------- ------ Comprehensive income (expense) $(2,904) $975 $(3,977) $1,702 ======= ======= ======= ====== ------- ------- ------- ------ 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) JUNE 30, December 31, 1998 1997 (unaudited) Working capital $29,828 $30,823 Total assets 119,543 130,273 Long-term debt (including deferred purchase consideration) 19,395 21,281 Shareholders' equity 60,801 64,778 At June 30, 1998 the Company had cash totaling $12.5 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-----