SG&A expenses in the plastic segment increased by $13,000 to $2,309,000 or 17.9% of net sales for the second half of fiscal 2022, compared to $2,296,000 or
20.6% of net sales for the corresponding period in fiscal 2021. In terms of total SG&A expense, the increase was due to an increase of $19,000 in local government taxes and charges, as compared with the same period in the prior fiscal
year. However, the SG&A expense as a percentage of sales was relatively lower than fiscal 2021 as total sales revenues increased during the second half of fiscal 2022.
SG&A expenses in the electronic segment increased by $85,000 to $2,665,000 or 8.1% of net sales for the six months ended March 31, 2022, compared to
$2,580,000 or 9.9% of net sales for the corresponding period in fiscal 2021. The increase was primarily related to an increase of $39,000 in local government taxes and charges, of $15,000 in audit fees and $7,000 in utility charges, when
compared to the corresponding period in the prior fiscal year. As total sales revenues increased during the second half of fiscal 2022, the SG&A expense as a percentage of sales in fiscal 2022 was relatively lower than that in fiscal
2021.
Other Income (Expense) - Other expense was $37,000 for the six months ended March 31, 2022, as compared to other income of $321,000 in the corresponding six
months of the prior fiscal year.
On a segment basis, other expense attributable to the plastic segment for the six months ended March 31, 2022 was $53,000, as compared to other income of
$471,000 for the same period in the prior fiscal year. The decrease in other income was mainly due to an exchange loss of $13,000, a provision of $15,000 for doubtful debts and a loss of $26,000 from the disposal of fixed assets during the
second half of fiscal 2022, as compared to an exchange gain of $448,000 and a gain of $29,000 from disposal of fixed assets during the same period of fiscal 2021.
Other income attributable to the electronic segment for the six months ended March 31, 2022 was $16,000, as compared with other expenses of $150,000 for the
corresponding period in the prior fiscal year. The increase in other income was mainly due to a gain of $138,000 from sales of materials and others, offsetting an exchange loss of $124,000 during the six months ended March 31, 2022, as
compared to an exchange loss of $327,000, offsetting gains of $134,000 from sales of materials and others, and a reversal of provisions for $40,000 from doubtful debts during the same period of last fiscal year.
Operating Income - Operating income was $1,704,000 for the six months ended March 31, 2022, as compared to operating income of $2,302,000 in the corresponding
six months in the prior fiscal year.
Corporate expenses of $817,000 and $714,000 were incurred during the second half of fiscal 2022 and 2021, respectively.
On a segment basis, the operating income of the plastic segment was $116,000 in the six months ended March 31, 2022, as compared to operating income of
$1,068,000 in the corresponding period in fiscal 2021. The decrease in operating income in the plastic segment was mainly due to the decreases in profit margin and other income as described above.
The electronic segment reported operating income of $2,405,000 in the six months ended March 31, 2022, compared to operating income of $1,948,000 in the
corresponding period in fiscal 2021. The increase in operating income was mainly due to an increase in sales, lower SG&A expense as a percentage of sales, and an increase in other income as described above.
Non-Operating Income – Non-operating income for the six months ended March 31, 2022 was $2,020,000, as compared to a non-operating income of $4,641,000 in the
corresponding period in fiscal 2021. This was primarily due to decreases of $2,510,000 in unrealized gains of marketable securities, offsetting increases of $140,000 from realized gain on sale of marketable securities and of $186,000 from
rental income during the six months ended March 31, 2022, as compared to the same six months of the prior fiscal year.
Income Taxes – Income tax for the six months ended March 31, 2022 represented current tax expense of $195,000 and a deferred tax benefit of $533,000, as compared
to current tax expense of $160,000 and a deferred tax provision of $84,000 in the corresponding six months of the prior fiscal year.
On a segment basis, there was current tax expense of $41,000 and a deferred tax benefit of $274,000 in the plastic segment for the six months ended March 31,
2022, as compared to a current tax expense of $38,000 and a deferred tax provision of $84,000 during the year-ago six months. In the electronic segment, there was current tax expense of $154,000 and a deferred tax benefit of $259,000 for the
six months ended March 31, 2022, as compared to current tax expense of $122,000 for the corresponding six months of fiscal 2021.
Net Income – The Company had a net income of $4,062,000 for the six months ended March 31, 2022, as compared to net income of $6,699,000 for the six
months ended March 31, 2021. The decrease in net income for the second half of fiscal 2022 was mainly attributed to decreases in gross margin and non-operating income as described above.
Net income for the plastic segment for the six months ended March 31, 2022 totaled $2,538,000, as compared to net income of $4,994,000 for the corresponding
six months in fiscal 2021. The decreased net income in the second six months of fiscal 2022 for the plastic segment was mainly the result of decreases in gross margin and non-operating income, as described above.
Net income for the electronic segment for the six months ended March 31, 2022 was $2,341,000, compared to net income of $2,419,000 for the corresponding six
months of fiscal 2021. The decrease in net income in the second half of fiscal 2022 for the electronic segment was mainly attributable to decreases in non-operating income as described above.
Year Ended March 31, 2022 Compared to Year Ended March 31, 2021
Net Sales - The Company's net sales for the year ended March 31, 2022 were $85,490,000, an increase of $20,604,000 or 31.8% as compared to $64,886,000 in the
corresponding period in fiscal 2021. The increase was related to increases in sales revenues of $2,990,000 in our plastic segment, and of $17,614,000 in our electronic segment, respectively, as compared with the respective net sales from
these segments in the corresponding period of the prior fiscal year.
The revenue increase in the plastic segment was mainly due to an increase in orders of $5,125,000 for robotic mops and vacuum cleaners for automatic floor
cleaning stations from a new customer, and of $1,238,000 for office equipment, and tooling products, offsetting a decrease in orders of $2,050,000 for plastic and gardening tool boxes, and other gardening tool accessories, as well as a
decrease of $1,138,000 for motor vehicle products and telephone equipment from other existing customers.
The revenue increase in the electronic segment was mainly due to an increase of $8,252,000 in orders for home entertainment products, and $7,752,000 in orders
for professional audio instruments of mixing consoles and digital audio workstations from other existing customers.
Gross Profit - Gross profit for the year ended March 31, 2022 was $13,952,000, representing a gross profit margin of 16.3%. This is compared with the overall
gross profit and gross profit margin of $13,166,000 or 20.3% for the year ended March 31, 2021.
Gross profit in the plastic segment decreased by $1,136,000 to $3,545,000 or 15.5% of net sales for the year ended March 31, 2022, as compared to $4,681,000 or
23.6% of net sales for the same period in the prior fiscal year. The decrease in gross profit and margin for the plastic segment was mainly due to the decreases in sales revenues from major clients with different product mix requiring
higher raw materials consumption, as well as the relatively higher spoilage rate resulting from production of the products for the new customer.
Gross profit in the electronic segment increased by $1,922,000 to $10,407,000 or 16.6% of net sales for the year ended March 31, 2022, as compared to
$8,485,000 or 18.8% of net sales in the prior fiscal year. The gross margin decrease is attributed to increases in raw materials cost as a result of the continuing scarcity of and surging demand from the automotive industry for primary
materials such as semi-conductor chips, when compared with last fiscal year.
Selling, General and Administrative Expenses - SG&A expenses for the year ended March 31, 2022 slightly increased by $829,000 to $11,139,000 or 13.0% of
total net sales, as compared to $10,310,000 or 15.9% of total net sales for the year ended March 31, 2021.
Corporate expenses slightly increased by $84,000 to $1,395,000 for the year ended March 31, 2022, as compared to $1,311,000 for the year ended March 31, 2021
related to a slight increase in professional fees.
SG&A expenses in the plastic segment increased by $103,000 to $4,302,000 or 18.8% of net sales for the year ended March 31, 2022, compared to $4,199,000 or
21.1% of net sales for fiscal 2021. The increase was primarily related to increases of $70,000 in selling expense, and of $43,000 in local government taxes and charges, as compared with the same period in the prior fiscal year.
SG&A expenses in the electronic segment increased by $642,000 to $5,442,000 or 8.7% of net sales for the year ended March 31, 2022, compared to
$4,800,000 or 10.7% of net sales for fiscal 2021. The increase was mainly due to increases of $500,000 in staff costs and welfare, of $68,000 in audit, legal and professional fees, as well as $84,000 in local government taxes and charges,
when compared to prior fiscal year. However, SG&A expense as a percentage of sales was relatively lower than fiscal 2021 as total sales revenues increased during fiscal 2022.
Other Income, Net - Other income was $74,000 for the year ended March 31, 2022, as compared to other income of $405,000 in the prior fiscal year.
On a segment basis, other income attributable to the plastic segment for the year ended March 31, 2022 was $15,000, as compared to other income of $614,000
for the prior fiscal year. Other income was lower in fiscal 2022 mainly due to a reversal of provision of $148,000 for doubtful receivables, and a gain of $57,000 on sales of materials, offsetting an exchange loss of $165,000 during
fiscal 2022, as compared to an exchange gain of $1,003,000 and a provision of $438,000 for doubtful debts in fiscal 2021.
Other income attributable to the electronic segment for the year ended March 31, 2022 was $59,000, as compared with other expense of $209,000 for the prior
fiscal year. The increase in other income was mainly due to a decrease of $248,000 in exchange loss and a gain of $92,000 on sales of materials as compared to last fiscal year, offsetting a reversal of $40,000 of provision for doubtful
debts during the year ended March 31, 2021.
Operating Income - Operating income was $2,887,000 for the year ended March 31, 2022, as compared to operating income of $3,261,000 in the prior fiscal
year.
Corporate expenses of $1,395,000 and $1,311,000 were incurred during the fiscal year of 2022 and 2021, respectively.
On a segment basis, the operating loss in the plastic segment was $742,000 in the year ended March 31, 2022, as compared to operating income of $1,096,000 in
fiscal 2021. The decrease in operating income in the plastic segment was mainly due to reduced gross profit and margin, as well as decrease in other income as described above.
The electronic segment reported operating income of $5,024,000 in the year ended March 31, 2022, compared to operating income of $3,476,000 in fiscal
2021. The increase in operating income was mainly due to the increase in sales, lower SG&A expense as a percentage of sales, and an increase in other income, as described above.
Non-Operating Income – Non-operating income for the year ended March 31, 2022 was $5,308,000, as compared to a non-operating income of $5,445,000 in last
fiscal year. The slight decrease in non-operating income was primarily due to increases of $741,000 from realized gain on sale of marketable securities, and $182,000 from rental income, offsetting a decrease of $1,138,000 in unrealized
gain on marketable securities, as compared to fiscal 2021.
Income Taxes – Current tax expense for the year ended March 31, 2022 was $402,000. The Company had a deferred tax benefit of $567,000. This is compared to a
current tax expense of $322,000 and a deferred tax provision of $153,000 in last fiscal year.
On a segment basis, there was current tax expense of $69,000 and a deferred tax benefit of $308,000 in the plastic segment for the year ended March 31, 2022,
as compared to a current tax expense of $60,000 and a deferred tax provision of $153,000 during the last fiscal year. In the electronic segment, there was current tax expense of $333,000 and a deferred tax benefit of $259,000 for the
year ended March 31, 2022, as compared to current tax expense of $262,000 in fiscal 2021.
Net Income – The Company had net income of $8,360,000 for the year ended March 31, 2022, as compared to net income of $8,231,000 for the year ended March 31,
2021. The increase in net income was mainly due to the increase in sales, offsetting by the decrease in gross margin as described above.
Net income for the plastic segment for the year ended March 31, 2022 was $5,453,000, as compared to net income of $6,016,000 for fiscal 2021. The decrease
in net income in the plastic segment was mainly due to a decrease in gross margin as described above.
Net income for the electronic segment for the year ended March 31, 2022 was $4,302,000, as compared to net income of $3,526,000 for fiscal 2021. The
increase in net income in the electronic segment was mainly attributable to an increase in sales, a lower SG&A expense as percentage of sales than prior fiscal year, and an increase in other income as described above.
Liquidity and Capital Resources
The Company relies primarily upon internally generated funds to finance its operations and investments.
As of March 31, 2022, the Company had working capital of $63,976,000, as compared to $57,472,000 at March 31, 2021. The Company has generated sufficient
funds from its operating activities to finance its operations and there is little need for external financing. The Company had no short-term borrowings or long-term borrowings as of March 31, 2022.
As of March 31, 2022, the Company had cash and cash equivalents of $13,465,000, as compared to $20,223,000 at March 31, 2021. During the year ended March
31, 2022, net cash used in operating activities was $183,000. Net cash used in investing activities was $3,432,000, which is mainly accounted for by cash used in the purchases of fixed assets of $1,504,000 and of marketable securities
of $11,543,000, as well as increases of $1,654,000 in fixed deposits maturing over three months, and $26,000 in time deposits maturing over twelve months, offsetting proceeds of $11,245,000 from the sale of marketable securities and of
$50,000 from the disposal of fixed assets during the year ended March 31, 2022. Net cash used in financing activities was comprised mainly of $3,186,000 in dividend payments in the year ended March 31, 2022.
As of March 31, 2022, the Company had no general banking facilities. The Company expects that working capital requirements and capital additions will be funded through
internally generated funds.