-----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, UUoDdpiMaSKbCe3XJP+zZJDTWIf2eJ77ZwjhLnBv/T19oXWu6Xa15q2IKGa3mcpf JFLECc/emHKZ9OaOeJALqQ== 0000929624-99-002076.txt : 19991210 0000929624-99-002076.hdr.sgml : 19991210 ACCESSION NUMBER: 0000929624-99-002076 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991209 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: 99771474 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 REVIEW OF OPERATIONS THIRD QUARTER 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, 1999 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 9, 1999 By /s/ Peter Chang ---------------------- -------------------- Peter Chang Vice President REVIEW OF OPERATIONS THIRD QUARTER 1999 AND NINE MONTHS ENDED SEPTEMBER 30, 1999 To our Shareholders: We are pleased to announce our third quarter ended September 30, 1999 results. Third Quarter ended September 30, 1999 compared to Third Quarter ended September 30, 1998 Net sales for the three months ended September 30, 1999 were $50.3 million compared with $48.9 million for the same period in 1998. Net income for the third quarter of 1999 was $0.7 million compared with a net loss of $0.3 million for the same period in 1998. The Company's net sales increased by 2.8% in the third quarter of 1999 due to the increase in baby diapers sales volume in the North American and Australian regions and the increase in adult incontinence sales volume in all regions. Gross profit as a percentage of net sales increased by 5.9% to 33.6% for the third quarter of 1999 from 27.7% for the same period in 1998. Gross margin for the North American, Asian and European operations improved due to better manufacturing efficiency and implementation of "go local and go direct" strategy in Asian operations. Selling, general and administrative expenses as a percentage of net sales for the third quarter of 1999 increased to 31.0% from 27.6% for the corresponding period in 1998 due to stepping up of promotional activities in the Asian, Australian and European operations. The Company realized a gain of $0.7 million from the sale of its factory building in Singapore in the third quarter of 1999. Interest expense for the third quarter of 1999 was $0.6 million, the same level as in the same period in 1998. The Company recognized an exchange loss of $0.5 million this quarter, primarily due to the realization of currency translation reserves for the Company's dormant operations in Canada and Switzerland. The Company's taxes in the United States were reduced by a net tax credit of approximately $0.4 million. Nine Months concluding September 30, 1999 compared to Nine Months concluding September 30, 1998 The Company's net sales for the nine-month period in 1999 were $152.6 million compared with $151.2 million for the same period in 1998. Gross profit as a percentage of net sales increased to 32.7% in the nine-month period ended September 30, 1998 from 27.7% for the same period in 1998. Selling, general and administrative expenses increased to $45.5 million for the nine-month period in 1999 from $43.1 million for the corresponding period in 1998, primarily due to stepping up promotional activities in the Asian, Australian and European operations. Interest expense for the nine-month period in 1999 was $1.7 million, the same level as in the corresponding period in 1998. Exchange losses recognized for the three quarters ended 1999 were $0.7 million, which included an exchange loss of $0.4 million on realization of currency translation reserve loss for the Company's dormant operations. Income taxes were reduced by a net tax credit of approximately $0.4 million in respect of the United States operations. The Company's net income for the nine months ended September 30, 1999 was $2.6 million, compared with a net loss of $2.2 million for the same period in 1998. Brandon Wang, Chairman of the Company, said "I am very pleased to see that our Company recovered rapidly from the loss position in 1998 and is growing in sales volume and profitability. The improvement in manufacturing efficiency, the consolidation of the European operations and the "go local and go direct" strategy in Asia have contributed positively to our profitability. We shall continue to expand adult incontinence markets and upgrade the features in baby diapers products. We are looking forward to a more profitable Year 2000 and to increase our shareholders' value." 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, Thailand, Indonesia and Malaysia. Additionally, the Company distributes its products throughout Asia, Australia, North America and Europe. The Company produces private label disposable diapers, adult incontinence products and training pants at certain of its operations. Its best selling brands include "Fitti(R)", "Pet Pet(R)", "Cosics(R)", "Cosifits(R)", "Baby Love(R)", "Togs(R)", "Carcs(R)", "Vlcsi(R)", "Dispo 123(TM)", "Certainty(R)", "Handy(TM)" and "Merit(R)". November 22, 1999 STATEMENTS OF OPERATIONS AND BALANCE SHEET DATA The Statements of Operations for the three-month and nine-month periods ending September 30, 1999 and 1998, and the Balance Sheet information as of September 30, 1999, 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, 1999 1998 1999 1998 Net sales $50,282 $ 48,895 $152,605 $151,201 ======= ======== ======== ======== Gross profit 16,904 13,550 49,961 41,893 Gain on sale of property, plant and equipment 423 - 932 - Selling, general & administrative expenses (15,572) (13,478) (45,450) (43,092) ------- -------- -------- -------- Operating income (loss) 1,755 72 5,443 (1,199) Interest expense (551) (590) (1,736) (1,790) Exchange loss (538) (125) (690) (2) Other income 277 391 557 873 ------- -------- -------- -------- Income (loss) before income taxes 943 (252) 3,574 (2,118) Provision for income taxes 65 (418) (590) (772) Minority interest (261) 323 (365) 676 ------- -------- -------- -------- Net income (loss) $ 747 $ (347) $ 2,619 $ (2,214) ======= ======== ======== ======== Earnings (loss) per share $ 0.11 $ (0.05) $ 0.39 $ (0.33) ======= ======== ======== ======== Weighted average number of shares outstanding 6,675 6,675 6,675 6,675 ======= ======== ======== ========
STATEMENTS OF COMPREHENSIVE INCOME (Dollars in thousands)
Three months ended Nine months ended September 30, September 30, 1999 1998 1999 1998 Net income (loss) $ 747 $ (347) $ 2,619 $(2,214) Other comprehensive income (expense), before tax Foreign currency translation adjustments (1,155) 1,245 (375) (865) ------- ------ ------- ------- Comprehensive income (expense) $ (408) $ 898 $ 2,244 $(3,079) ======= ====== ======= =======
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 (Dollars in thousands, unaudited) September 30, December 31, 1999 1998 Working capital $ 32,547 $ 30,091 Total assets 120,373 133,909 Long-term debt 8,440 20,957 Shareholders' equity 70,258 68,013 At September 30, 1999 the Company had cash totaling $12.4 million. -----END PRIVACY-ENHANCED MESSAGE-----