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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 April, 2000
DSG International Limited
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(Translation of registrant's name into English)
17/F Watson Centre, 16-22 Kung Yip Street,
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Kwai Chung, Hong Kong
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Tel No. 852-2427-6951
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(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
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[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
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[If "yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b), 82-________.]
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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
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(Registrant)
Date: April 24, 2000
-------------- By /s/ Peter Chang
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Peter Chang
Vice President
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REVIEW OF OPERATIONS
FOURTH QUARTER 1999 AND
YEAR ENDED DECEMBER 31, 1999
To our Shareholders:
We are pleased to announce our fourth quarter ended December 31, 1999 results.
Fourth Quarter ended December 31, 1999 compared to Fourth Quarter ended December
31, 1998
The Company's net sales for the three-month ended December 31, 1999 were $53.2
million compared with net sales of $56.7 million for the same period in 1998.
Net income for the fourth quarter of 1999 was $1.8 million compared with $3.8
million for the same period in 1998.
The decrease in the Company's net sales by 6.1% in the fourth quarter of 1999
compared with the same period in 1998 was primarily due to the sale of private
label business of the Company's operation in Switzerland. The net sales in other
geographical locations in the fourth quarter of 1999 maintained the same level
as the corresponding period in 1998.
Gross profit as a percentage of net sales was 33.4% in the fourth quarter of
1999 compared with 31.8% for the same period in 1998. The higher margin was
attributable to the sale of unprofitable business in Switzerland. Selling,
general and administrative expenses for the fourth quarter of 1999 increased to
$15.9 million compared with $12.2 million in the fourth quarter of 1998,
primarily due to higher expenditure on advertising and promotion activities and
additional administrative expenses in the newly commenced operations in Asian
region and a $1.5 million reversal of previous accrued executive compensation in
1998. The other income of $0.7 million in the fourth quarter was due to a
reclassification of gain on sales of asset in Switzerland from selling, general
and administrative expense.
Year ended December 31, 1999 compared to Year ended December 31, 1998
The Company's net sales for the year 1999 were $205.8 million compared with
$207.9 million in 1998. Net income for the year 1999 increased significantly to
$4.4 million compared with $1.6 million in 1998.
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The Company's net sales in 1999 was slightly lower than last year by 1.0%. The
Company's sales in North America, Australia and Asia increased in 1999 despite
of the intense competition in the regions and the lost of sales due to the sale
of Switzerland private label business in the first quarter of 1999. Gross profit
margin in 1999 was higher than 1998 by 4.1% due to the improvement of production
efficiency in all regional segments and the implementation of go local and go
direct strategy in Asian operations. Selling, general and administrative
expenses increased by $6.0 million to $61.3 million in 1999 due to the stepping
up of advertising and promotion activities in Asian and Australian regions and a
reduction of $2.0 million in executive compensation in 1998. The gain on
disposals of property, plant and equipment of $1.0 million in 1999 was mainly
due to the sales of property and equipment in Singapore and Switzerland
operations. The Company's other income in 1999 included gain on sale of assets
in Switzerland operation.
Brandon Wang, the Chairman of the Company, said: "1999 was a challenging year
for DSG since a series of strategic plans were implemented in American, Asian
and European regions. The gross profit margin, operating income were greatly
improved and the results were proved successful and encouraging. In the adult
incontinence area, the Company continues to record a double digit growth of the
business in 1999. In year 2000, we are aiming to increase the Company's
profitability and shareholder value through product feature improvement and
assimiliation of information technology to enhance the Company future earning
potential in the information technology era."
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)", "Cosies(R)", "Cosifits(R)", "Baby Love(R)", "Babyjoy (R)", "Togs(R)",
"Cares(R)", "Vlesi(R)", "Dispo 123(TM)", "Certainty(R)", "Handy(TM)" and
"Merit(R)".
March 27, 2000
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STATEMENTS OF OPERATIONS
AND BALANCE SHEET DATA
The Statements of Operations for the three-month period and year ending December
31, 1999 and 1998, and the Balance Sheet information as of December 31, 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
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three months ended Year ended
December 31, December 31,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Net sales $53,237 $56,724 $205,842 $207,925
======= ======= ======== ========
Gross profit 17,761 18,035 67,722 59,928
Gain on disposals of property,
plant and equipment 102 42 1,034 42
Selling, general &
administrative expenses (15,871) (12,226) (61,321) (55,318)
Restructuring costs - (897) - (897)
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Operating income 1,922 4,954 7,435 3,755
Interest expense (470) (721) (2,208) (2,511)
Exchange loss (307) (309) (997) (311)
Other income 757 72 1,314 945
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Income before
income taxes 1,970 3,996 5,544 1,878
Provision for income taxes (397) 519 (987) (253)
Minority interest 243 (679) (122) (3)
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Net income $ 1,816 $ 3,836 $ 4,435 $ 1,622
======== ======== ========= =========
Earnings per share $ 0.27 $ 0.57 $ 0.66 $ 0.24
======== ======== ========= =========
Weighted average number
of shares outstanding 6,675 6,675 6,675 6,675
======== ======= ========= =========
</TABLE>
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STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)
<TABLE>
<CAPTION>
Three months ended Year ended
December 31, December 31,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Net income $ 1,816 $ 3,836 $ 4,435 $ 1,622
Other comprehensive income
before tax
Foreign currency translation
adjustments 1,040 2,478 665 1,613
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Comprehensive income $ 2,856 $ 6,314 $ 5,100 3,235
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</TABLE>
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)
December 31, December 31,
1999 1998
Working capital $ 35,999 $ 30,091
Total assets 121,847 133,909
Long-term debt 11,893 20,957
Shareholders' equity 70,302 68,013
At December 31, 1999 the Company had cash and cash equivalents of $14.4 million.
