-----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, KY3EZSrDZvfOpGYB7hc46jdQ30902QI7BNocyxXHHfabPwaB3JuzONwFsfXicScW 3TTCF5PzOwLt44NEz3RjAA== 0000950008-97-000158.txt : 19970520 0000950008-97-000158.hdr.sgml : 19970520 ACCESSION NUMBER: 0000950008-97-000158 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970516 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: 1934 Act SEC FILE NUMBER: 000-19804 FILM NUMBER: 97610536 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 March, 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 INTERNATIONAL LTD. REVIEW OF OPERATIONS FIRST QUARTER 1997 To our Shareholders: We are pleased to announce our first quarter 1997 results. The Company's net sales for the first quarter ended March 31, 1997 declined by 8.6% to $56.8 million compared to $62.1 for the corresponding period in 1996. Net income for the period ended March 31, 1997 was $1.5 million, an increase of 30.0% compared to $1.1 million for the corresponding period in 1996. The Company's earnings per share in the first quarter of 1997 were $0.22, increased 57.1% compared to the same period in 1996, reflecting the decrease in weighted average number of shares outstanding as a result of the Company's tender offer transaction, which was completed in December 1996 and the ongoing share repurchase program. The Company's net sales continued to be adversely affected by the intense price and promotional competition in North American and European markets. Gross profit margin as a percentage of net sales increased by 6.1% to 36.1% in the first quarter of 1997 from 30.0% in the corresponding period in 1996, primarily due to lower fluff wood pulp price. Selling, general and administrative expenses as a percentage of net sales increased to 30.3% for the first quarter of 1997 from 27.0% for the same period in 1996 due to higher advertising and promotional expense to meet aggressive price and promotional competition in the North American market. Interest expense for the first quarter of 1997 was maintained at $0.6 million, the same as in the first quarter of 1996 due to the same level of bank borrowings. The Company reported an exchange loss of $644,000 in the first quarter of 1997, representing a loss of $0.10 earnings per share, primarily due to the unfavorable currency movement in translation of the intercompany loan denominated in Swiss Franc. Other income of $501,000 in the first quarter of 1997 included interest income and a one-time settlement by a former tenant of the Company's Australian operation. Brandon Wang, the Chairman of the Company, said: "The Company achieved a satisfactory result in the first quarter of 1997 despite the keen competition in North American and European regions. The Company increased spending in advertising and promotion expense to counteract the aggressive competition in North America and to expand the sales in Asia. We believe that the Company has excellent opportunities in the Asia Pacific region. We have entered into a joint venture agreement with our -1- distributor in Indonesia to start up a manufacturing operation which is scheduled to operate early next year. DSG International Limited and its predecessors have been in the business of manufacturing and distributing disposable diapers since 1973. With manufacturing plants in Hong Kong, California, Georgia, Australia, England, Singapore, Canada, Switzerland, China and Thailand, the Company distributes its products throughout Asia, Australia, North America, and Europe. The Company also 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)", "Cosios(R)", "Cosifits(R)", "Baby Love(R)", "Togs(R)", "Cares(R)", "Vlesi(R)", "Dispo 123(TM)" and "Certainty(R)". May 16, 1997 -2- STATEMENTS OF OPERATIONS AND BALANCE SHEET DATA (In thousands, except earnings per share) The Statements of Operations for the three months ended March 31, 1996 and March 31, 1997, and the Balance Sheet information as of March 31, 1997 have been derived from unaudited financial statements which, in the opinion of the management, include all adjustments necessary, consisting only of normal recurring adjustments for a fair presentation of the results of operations for such periods. The results for the three-month period are not necessarily indicative of the results for the full year. STATEMENTS OF OPERATIONS Three Months Ended March 31, 1997 1996 Net sales $56,768 $62,109 ------- ------- Gross profits 20,532 18,658 Selling, general & administrative expenses 17,213 16,744 ------ ------ Operating income 3,319 1,914 Interest expense (603) (592) Exchange gain (loss) (644 331 Other Income 501 411 --- --- Income before income taxes 2,573 2,064 Provision for income taxes (1,120) (958) Minority interest in losses - 12 ------- ------ Net income $1,453 $1,118 ------- ------ Earnings per share $ 0.22 $ 0.14 Weighted average number of share outstanding 6,675 7,850 -3- BALANCE SHEET DATA March 31, 1997 December 31, 1996 (unaudited) Working capital $35,762 $31,683 Total assets 145,571 141,910 Long-term debt 21,826 21,940 (including deferred purchase consideration) Shareholders' equity 75,298 74,639 At March 31, 1997 the Company had cash of $12.2 million SHARE REPURCHASE PROGRAM During the first quarter of 1997, the Company repurchased 5,000 shares from the public for a total cash consideration of $67,500. -4- 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: May 12, 1997 By /s/ Peter Chang ---------------- ----------------------- Peter Chang Vice President -----END PRIVACY-ENHANCED MESSAGE-----