RNS Number:9624G
Pioneer Corporation
31 July 2006
For Immediate Release
July 31, 2006
Pioneer Announces Business Results for 1Q Fiscal 2007
TOKYO - Pioneer Corporation today announced its consolidated
first-quarter business results for the period ended June 30, 2006.
Consolidated Financial Highlights
(In millions of yen except per share information)
Three months ended June 30
2006 2005 % to
prior
year
Operating revenue 191,676 159,196 120.4
Operating income (loss) 7,077 (8,931) -
Income (loss) from continuing operations before income
taxes 8,004 (6,672) -
Income (loss) from continuing operations 5,546 (5,369) -
Net income (loss) 5,662 (5,343) -
Basic net income (loss) per share:
Income (loss) from continuing operations 31.80 (30.78)
Net income (loss) 32.46 (30.63)
Diluted net income (loss) per share:
Income (loss) from continuing operations 28.87 (30.78)
Net income (loss) 29.48 (30.63)
Note: In fiscal 2006, the Company sold a subsidiary engaged in the development
of cable TV software, and reached a preliminary agreement on the sale of
subsidiaries involved in the electronic components business. As a result, the
operating results of these subsidiaries are presented as income from
discontinued operations in the consolidated statements of operations. Previously
reported amounts have been reclassified accordingly.
Consolidated Business Results
For the first quarter of fiscal 2007, the three months ended June 30, 2006,
consolidated operating revenue increased 20.4% from the first quarter of fiscal
2006 to Y191,676 million (US$1,666.7 million), mainly due to higher sales of
plasma displays, car navigation systems and car audio products.
Operating income was Y7,077 million (US$61.5 million), compared
with an operating loss of Y8,931 million in the corresponding period a year
earlier. This reflected higher sales, as well as an improvement in the gross
profit margin due to the benefits of business restructuring reforms started in
the previous fiscal year and the weaker yen. Net income totaled Y5,662 million
(US$49.2 million), compared with a net loss of Y5,343 million in the
corresponding period in fiscal 2006.
During the first quarter of fiscal 2007, the average value of the
Japanese yen was weaker against the U.S. dollar and the euro by 5.9% and 5.7%,
respectively, compared with the first quarter of fiscal 2006.
Home Electronics sales increased 32.0% year on year to Y83,451 million (US$725.7
million). Plasma display sales rose by approximately 32%. This was mainly due to
strong demand in Europe and North America for own-brand high-resolution models,
which Pioneer is concentrating on, despite a drop in OEM (original equipment
manufacturing) sales. Sales of plasma displays accounted for approximately 47%
of total Home Electronics sales. In addition, sales of recordable DVD drives
increased.
In terms of geographic sales, sales in Japan declined 3.5% to Y
16,450 million (US$143.0 million), while overseas sales climbed 45.1% to Y67,001
million (US$582.6 million).
The operating loss in this segment was Y397 million (US$3.5
million), showing a significant improvement compared with an operating loss of Y
12,358 million in the corresponding period of the previous fiscal year. In
addition to growth in sales, the gross profit margin increased due to the
benefits of business restructuring reforms and efforts to strictly control costs
and improve manufacturing efficiency.
Car Electronics sales increased 11.1% year on year to Y91,336 million (US$794.2
million), reflecting higher sales of car navigation systems and car audio
products. In car navigation systems, consumer-market sales remained firm in
Japan and OEM sales rose. In car audio products, consumer-market sales expanded
primarily in Central and South America, as well as Europe, while OEM sales rose
in North America and Japan. OEM sales in this segment accounted for
approximately 33% of total Car Electronics sales.
In terms of geographic sales, sales in Japan increased 14.6% to Y
34,318 million (US$298.4 million), while overseas sales rose 9.1% to Y57,018
million (US$495.8 million).
Operating income in this segment increased 41.7% year on year to Y
7,532 million (US$65.5 million) due to the sales increase.
In Patent Licensing, royalty revenue increased 12.3% year on year to Y1,261
million (US$11.0 million).
Operating income rose Y416 million to Y787 million (US$6.8 million).
In the Others segment, sales rose 23.5% to Y15,628 million (US$135.9 million),
mainly reflecting higher sales of factory automation systems in Japan.
In terms of geographic sales, sales in Japan increased 52.9% to Y
10,031 million (US$87.2 million), while overseas sales declined 8.2% to Y5,597
million (US$48.7 million).
Operating income in this segment was Y238 million (US$2.1 million)
compared with an operating loss of Y886 million in the corresponding period of
the previous fiscal year. This reflected higher sales, as well as improved
profitability in organic light-emitting diode displays due to the benefits of
business restructuring reforms.
Note: Operating income (loss) in each business segment represents operating
income (loss) before elimination of intersegment transactions.
Cash Flows
During the first quarter of fiscal 2007, operating activities used net cash of Y
24,160 million (US$210.1 million). This was mainly due to an increase in trade
receivables and inventories of Y28,971 million (US$251.9 million), as well as a
decrease in accrued liabilities of Y16,787 million (US$146.0 million) mainly due
to payments of retirement charges relating to the incentive-based early
retirement plan implemented last fiscal year. These factors outweighed cash
provided by the net income of Y5,662 million (US$49.2 million) and depreciation
and amortization of Y9,152 million (US$79.6 million) for this period. Meanwhile,
investing activities used net cash of Y8,047 million (US$70.0 million). This
reflected Y8,320 million (US$72.3 million) for capital expenditures related to
car electronics products and plasma displays. Financing activities provided net
cash of Y200 million (US$1.7 million), mainly by an increase in the short-term
borrowings.
Consequently, cash and cash equivalents at June 30, 2006 were Y 88,818 million
(US$772.3 million), Y32,862 million lower than at March 31, 2006.
Business Forecasts for Fiscal 2007
We revised our consolidated business forecasts for fiscal 2007, ending March 31,
2007, from those announced on April 27, 2006, as follows:
(In millions of yen)
Revised Previous
projections projections
for fiscal 2007 for fiscal 2007 Changes Results
(A) (B) (A - B) for fiscal 2006
Operating revenue 845,000 830,000 15,000 754,964
Operating income (loss) 18,000 12,000 6,000 (16,409)
Income (loss) before income taxes 19,000 13,500 5,500 (71,165)
Net income (loss) 7,500 3,000 4,500 (84,986)
The above upward revisions to consolidated business forecasts reflect
first-quarter sales and income that were ahead of plan due to
smaller-than-anticipated price declines for plasma displays and recordable DVD
drives. On the other hand, we foresee rising prices for raw materials as a
negative factor.
We are assuming that the yen-U.S. dollar and the yen-euro exchange
rates average Y115 and Y140, respectively, for these projections.
Cautionary Statement with Respect to Forward-Looking Statements
Statements made in this release with respect to our current plans, estimates,
strategies and beliefs, and other statements that are not historical facts are
forward-looking statements about our future performance. These statements are
based on management's assumptions and beliefs in light of the
information currently available to it. We caution that a number of important
risks and uncertainties could cause actual results to differ materially from
those discussed in the forward-looking statements, and therefore you should not
place undue reliance on them. You also should not believe that it is our
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. We disclaim any such
obligation. Risks and uncertainties that might affect us include, but are not
limited to, (i) general economic conditions in our markets, particularly levels
of consumer spending; (ii) exchange rates, particularly between the yen and the
U.S. dollar, euro, and other currencies in which we make significant sales or in
which our assets and liabilities are denominated; (iii) our ability to continue
to design and develop and win acceptance of our products and services, which are
offered in highly competitive markets characterized by continual new product
introductions, rapid developments in technology, severe price competition and
subjective and changing consumer preferences; (iv) our ability to successfully
implement our business strategies; (v) our ability to compete, as well as
develop and implement successful sales and distribution strategies, in light of
technological developments in and affecting our businesses; (vi) our continued
ability to devote sufficient resources to research and development, and capital
expenditure; (vii) our ability to continuously enhance our brand image; (viii)
the success of our joint ventures and alliances; (ix) the success of our
business restructuring plans; and (x) the outcome of contingencies.
Pioneer Corporation is a leading manufacturer of consumer- and business-use
electronics products such as audio, video and car electronics. Its shares are
traded on the Tokyo Stock Exchange.
# # # # # #
The U.S. dollar amounts in this release represent translation of Japanese yen,
for convenience only, at the rate of Y115=US$1.00, the approximate rate
prevailing on June 30, 2006.
Attached are consolidated financial statements for the three months ended
June 30, 2006.
For further information, please contact:
Investor Relations Department, Corporate Branding and Communications Division
Pioneer Corporation, Tokyo
Phone: +81-3-3495-6773 / Fax: +81-3-3495-4301
E-mail: pioneer_ir@post.pioneer.co.jp
IR Website: http://pioneer.jp/ir-e/
(1) OPERATING REVENUE BY SEGMENT
(In millions of yen)
Three months ended June 30
2006 2005 % to
Amount % to total Amount % to total prior year
Domestic 16,450 8.6 17,040 10.7 96.5
Overseas 67,001 34.9 46,165 29.0 145.1
Home Electronics 83,451 43.5 63,205 39.7 132.0
Domestic 34,318 17.9 29,941 18.8 114.6
Overseas 57,018 29.8 52,272 32.8 109.1
Car Electronics 91,336 47.7 82,213 51.6 111.1
Domestic - - - - -
Overseas 1,261 0.7 1,123 0.7 112.3
Patent Licensing 1,261 0.7 1,123 0.7 112.3
Domestic 10,031 5.2 6,561 4.1 152.9
Overseas 5,597 2.9 6,094 3.9 91.8
Others 15,628 8.1 12,655 8.0 123.5
Domestic 60,799 31.7 53,542 33.6 113.6
Overseas 130,877 68.3 105,654 66.4 123.9
Total 191,676 100.0 159,196 100.0 120.4
(2) CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions of yen)
Three months ended June 30
2006 2005 % to
prior year
Operating revenue:
Net sales 190,415 158,073 120.5
Royalty revenue 1,261 1,123 112.3
Total operating revenue 191,676 159,196 120.4
Operating costs and expenses:
Cost of sales 140,567 125,944 111.6
Selling, general and administrative expenses 44,032 42,183 104.4
Total operating costs and expenses 184,599 168,127 109.8
Operating income (loss) 7,077 (8,931) -
Other income (expenses):
Interest income 949 627 151.4
Foreign exchange gain (loss) 601 (742) -
Interest expense (399) (395) 101.0
Other - net (224) 2,769 -
Total other income (expenses) 927 2,259 41.0
Income (loss) from continuing operations before
income taxes 8,004 (6,672) -
Income taxes 2,744 (1,588) -
Minority interest in losses of subsidiaries 246 568 43.3
Equity in earnings (losses) of affiliated companies 40 (853) -
Income (loss) from continuing operations 5,546 (5,369) -
Income from discontinued operations, net of tax 116 26 446.2
Net income (loss) 5,662 (5,343) -
(3) CONSOLIDATED BALANCE SHEETS
(In millions of yen)
June 30 March 31
2006 2005 Increase/ 2006 Increase/
(Decrease) (Decrease)
ASSETS
Current assets:
Cash and cash equivalents 88,818 114,770 (25,952) 121,680 (32,862)
Trade receivables, less allowance 121,240 109,699 11,541 107,563 13,677
Inventories 121,587 125,968 (4,381) 104,226 17,361
Assets held for sale 22,553 - 22,553 25,577 (3,024)
Others 70,534 73,627 (3,093) 69,626 908
Total current assets 424,732 424,064 668 428,672 (3,940)
Investments and long-term receivables 27,011 24,593 2,418 29,772 (2,761)
Property, plant and equipment,
less depreciation 157,813 205,477 (47,664) 160,231 (2,418)
Intangible assets 19,440 22,804 (3,364) 20,576 (1,136)
Other assets 41,244 37,870 3,374 38,795 2,449
Total assets 670,240 714,808 (44,568) 678,046 (7,806)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings and current portion
of long-term debt 35,297 58,437 (23,140) 30,370 4,927
Trade payables 111,404 98,285 13,119 102,082 9,322
Liabilities held for sale 15,249 - 15,249 17,863 (2,614)
Others 107,090 88,260 18,830 121,977 (14,887)
Total current liabilities 269,040 244,982 24,058 272,292 (3,252)
Long-term debt 88,888 80,357 8,531 92,970 (4,082)
Other long-term liabilities 24,044 42,458 (18,414) 25,425 (1,381)
Minority interests 13,730 17,691 (3,961) 14,109 (379)
Shareholders' equity:
Common stock 49,049 49,049 - 49,049 -
Capital surplus 82,947 82,797 150 82,910 37
Retained earnings 179,488 255,213 (75,725) 173,826 5,662
Accumulated other comprehensive loss (24,500) (45,306) 20,806 (20,092) (4,408)
Treasury stock (12,446) (12,433) (13) (12,443) (3)
Total shareholders' equity 274,538 329,320 (54,782) 273,250 1,288
Total liabilities and
shareholders[?c=8217] equity 670,240 714,808 (44,568) 678,046 (7,806)
Breakdown of accumulated other
comprehensive loss:
Minimum pension liability adjustments (3,902) (11,255) 7,353 (3,680) (222)
Net unrealized holding gain on securities 8,803 6,499 2,304 10,352 (1,549)
Cumulative foreign currency translation
adjustments (29,401) (40,550) 11,149 (26,764) (2,637)
Total accumulated other
comprehensive loss (24,500) (45,306) 20,806 (20,092) (4,408)
(4) CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of yen)
Three months ended June 30
2006 2005
I. Operating activities:
Net income (loss) 5,662 (5,343)
Depreciation and amortization 9,152 12,547
Decrease (Increase) in trade receivables (11,730) 22,878
Increase in inventories (17,241) (16,031)
Increase in trade payables 7,665 2,409
Decrease in accrued liabilities (16,787) (8,085)
Other (881) (9,435)
Net cash used in operating activities (24,160) (1,060)
II. Investing activities:
Payment for purchase of fixed assets (8,320) (8,927)
Other 273 4,003
Net cash used in investing activities (8,047) (4,924)
III. Financing activities:
Increase in short-term borrowings
and long-term debt 1,456 6,049
Dividends paid (436) (2,180)
Other (820) (1,039)
Net cash provided by financing activities 200 2,830
Effect of exchange rate changes on cash
and cash equivalents (855) 1,243
Net decrease in cash and cash equivalents (32,862) (1,911)
Cash and cash equivalents, beginning of period 121,680 116,681
Cash and cash equivalents, end of period 88,818 114,770
Free cash flow (I + II) (32,207) (5,984)
(5) SEGMENT INFORMATION
The following segment information is prepared pursuant to the regulations under
the Securities and Exchange Law of Japan.
(In millions of yen)
Three months ended June 30
2006 2005 % to prior year
Operating Operating Operating Operating Operating Operating
Revenue Income Revenue Income Revenue Income
Home Electronics 83,660 (397) 63,508 (12,358) 131.7 -
Car Electronics 91,789 7,532 82,608 5,314 111.1 141.7
Patent Licensing 1,261 787 1,123 371 112.3 212.1
Others 24,235 238 21,914 (886) 110.6 -
Total 200,945 8,160 169,153 (7,559) 118.8 -
Corporate and Eliminations (9,269) (1,083) (9,957) (1,372) - -
Consolidated 191,676 7,077 159,196 (8,931) 120.4 -
Notes:
1. The Company[?c=8217]s consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in the United States of
America.
2. The consolidated financial statements include the accounts of the parent
company and 123 subsidiaries and the investments in 3 affiliated companies
accounted for on an equity basis.
3. In fiscal 2006, the Company sold a subsidiary engaged in the development of
cable TV software, and reached a preliminary agreement on the sale of
subsidiaries involved in the electronic components business. The assets and
liabilities of subsidiaries expected to be sold have been classified as held for
sale at March 31, 2006 and June 30, 2006. Assets held for sale are recorded at
the lower of their carrying amount or fair value less costs to sell. The
operating results of these subsidiaries are presented as income from
discontinued operations in the consolidated statements of operations. This
presentation is made in accordance with the Statement of Financial Accounting
Standards No.144, [?c=8220]Accounting for the Impairment or Disposal of
Long-Lived Assets.[?c=8221] Reclassifications have been made to previously
reported operating revenue by segment, consolidated statements of operations and
segment information to conform to this presentation.
Summarized selected financial information of the discontinued operations for the
three months ended June 30, 2005 and 2006 is as follows:
(In millions of yen)
Three months ended June 30
2006 2005
Operating revenue 7,644 4,987
Operating income 274 62
Income before income taxes 182 62
Income taxes 66 36
Income from discontinued operations 116 26
This information is provided by RNS
The company news service from the London Stock Exchange
END
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