Condensed Financial Information of Deswell Industries, Inc.

12 Months Ended

Mar. 31, 2026

Condensed Financial Information of Deswell Industries, Inc. [Abstract]

Condensed Financial Information of Deswell Industries, Inc.

17. Condensed Financial Information of Deswell Industries, Inc.

The condensed financial statements for parent company only, have been prepared in accordance with accounting principles generally accepted in the United States of America. Under the PRC laws and regulations, Deswell Industries, Inc.’s PRC subsidiaries are restricted in their ability to transfer certain of their net assets to Deswell Industries, Inc. in the form of dividend payments, loans or advances. The amounts restricted include paid-in capital and statutory reserves, as determined pursuant to PRC generally accepted accounting principles, totaling $51,984 (equivalent to RMB376 million) and $47,761 (equivalent to RMB314 million) as of March 31, 2025 and 2026, respectively.

Balance sheets

		March 31,
		2025				2026
Assets
Current assets:
Cash and cash equivalents		$	212			$	72
Prepaid expenses and other current assets			50				51
Amounts due from subsidiaries			7,016				6,159
Total current assets			7,278				6,282
Investments in subsidiaries			95,861				104,030
Total assets		$	103,139			$	110,312

Liabilities and shareholders’ equity
Current liabilities:
Accrued payroll and employee benefits		$	1,013			$	915
Other accrued liabilities			6				7
Total current liabilities			1,019				922
Total shareholders’ equity			102,120				109,390
Total liabilities and shareholders’ equity		$	103,139			$	110,312

Statements of comprehensive income

		Year ended March 31,
		2024				2025				2026
Equity in earnings of subsidiaries		$	8,229			$	11,854			$	11,357
Operating expenses			520				716				730
Income before income taxes			7,709				11,138				10,627
Income taxes			—				—				—
Net income			7,709				11,138				10,627
Share of other comprehensive income of subsidiaries			—				—				—
Total comprehensive income		$	7,709			$	11,138			$	10,627

Statements of cash flows

		Year ended March 31,
		2024				2025				2026
Cash flows from operating activities
Net income		$	7,709			$	11,138			$	10,627
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in earnings of subsidiaries			(8,229	)			(11,854	)			(11,357	)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets			(2	)			(3	)			(1	)
Amounts due from subsidiaries			252				960				857
Other accrued liabilities			(444	)			(233	)			(97	)
Net cash (used in) provided by operating activities			(714	)			8				29

Cash flows from investing activities
Dividends received from subsidiary			3,188				3,188				3,188
Net cash provided by investing activities			3,188				3,188				3,188

Cash flows from financing activities
Dividends paid			(3,188	)			(3,188	)			(3,188	)
Repurchase of treasury stock			--				--				(169	)
Net cash used in financing activities			(3,188	)			(3,188	)			(3,357	)

Net (decrease) increase in cash and cash equivalents			(714	)			8				(140	)
Cash and cash equivalents, beginning of year			918				204				212
Cash and cash equivalents, end of year		$	204			$	212			$	72

Basis of presentation

In Deswell Industries, Inc.-only financial statements, Deswell Industries, Inc.’s investments in subsidiaries are stated at cost plus its equity interest in undistributed earnings of subsidiaries since inception. Accordingly, such financial statements should be read in conjunction with the Company’s consolidated financial statements.

Deswell Industries, Inc. records its investments in its subsidiaries under the equity method of accounting as prescribed in ASC 323 “Investment-Equity Method and Joint Ventures”. Such investment is presented on the balance sheets as “Investments in subsidiaries” and share of the subsidiaries’ profit or loss as “Equity in earnings (loss) of subsidiaries”, on the statements of comprehensive income.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted.