RNS Number:4259Q
Pioneer Corporation
31 January 2007
For Immediate Release
January 31, 2007
Pioneer Announces Business Results for 3Q Fiscal 2007
TOKYO - Pioneer Corporation today announced its consolidated
third-quarter and nine-month business results, for the periods ended December
31, 2006.
Consolidated Financial Highlights
(In millions of yen except per share information)
Three months Nine months
ended December 31 ended December 31
2006 2005 % to 2006 2005 % to
prior prior
year year
Operating revenue 214,601 216,960 98.9 594,920 556,044 107.0
Operating income (loss) 5,034 4,870 103.4 16,725 (11,794) -
Income (loss) from
continuing operations
before income taxes 5,481 3,876 141.4 18,105 (40,277) -
Income (loss) from
continuing operations 2,436 1,155 210.9 8,869 (57,052) -
Income from discontinued
operations, net of tax - 248 - 2,775 411 675.2
Net income (loss) 2,436 1,403 173.6 11,644 (56,641) -
Basic net income (loss) per share:
Income (loss) from continuing
operations 13.97 6.62 50.85 (327.08)
Income from discontinued
operations, net of tax - 1.42 15.91 2.35
Net income (loss) 13.97 8.04 66.76 (324.73)
Diluted net income (loss) per share:
Income (loss) from continuing
operations 12.46 5.70 45.61 (327.08)
Income from discontinued
operations, net of tax - 1.31 14.65 2.35
Net income (loss) 12.46 7.01 60.26 (324.73)
Note: In fiscal 2006, the Company sold a subsidiary engaged in the development
of cable TV software, and in the second quarter of fiscal 2007, sold
subsidiaries involved in the electronic components business. The operating
results of these subsidiaries and the gain on the sales are presented as income
from discontinued operations in the above table. Previously reported amounts
have been reclassified accordingly.
Consolidated Business Results
For the third quarter of fiscal 2007, the three months ended December 31, 2006,
consolidated operating revenue decreased 1.1% compared with the third quarter of
fiscal 2006 to Y214,601 million (US$1,803.4 million). This was mainly due to
lower sales of plasma displays, DVD recorders and car audio products, despite
higher sales of DVD drives and car navigation systems.
Operating income increased 3.4% year on year to Y5,034 million
(US$42.3 million). This increase was due to an improved gross profit margin. Net
income increased 73.6% to Y2,436 million (US$20.5 million) as a result of gain
on sale of investment securities.
During the third quarter of fiscal 2007, the average value of the
Japanese yen was weaker against the U.S. dollar and the euro by 0.4% and 8.2%,
respectively, compared with the third quarter of fiscal 2006.
Home Electronics sales decreased 1.7% year on year to Y112,990 million (US$949.5
million). Plasma display sales declined approximately 10% mainly due to a
substantial drop in OEM (original equipment manufacturing) sales. Sales of
own-brand models decreased in Japan but increased in Europe. Plasma display
sales accounted for approximately 48% of Home Electronics sales. Furthermore,
sales of DVD drives and
DJ equipment rose, but sales of DVD recorders fell compared with the same period
in the previous year.
In terms of geographic sales, sales in Japan declined 27.1% to Y
19,991 million (US$168.0 million), while overseas sales increased 6.2% to Y
92,999 million (US$781.5 million).
Operating income in this segment was Y2,689 million (US$22.6
million), compared with an operating loss of Y1,733 million in the same period
in the previous year. This was mainly attributable to an improved gross profit
margin for plasma displays due mainly to the benefits of business restructuring
measures.
Car Electronics sales increased 1.2% year on year to Y85,394 million (US$717.6
million) due to higher sales of car navigation systems, which was partially
offset by a drop in sales of car audio products. In car navigation systems, OEM
sales rose largely in North America. In car audio products, consumer-market
sales fell substantially in North America, while OEM sales declined in North
America but rose in Japan. Total OEM sales in this segment accounted for
approximately 38% of Car Electronics sales.
In terms of geographic sales, sales in Japan rose 4.5% year on year
to Y33,507 million (US$281.6 million), while overseas sales declined 0.9% to Y
51,887 million (US$436.0 million) compared with the previous year.
Operating income in this segment declined 33.8% compared with the
third quarter of fiscal 2006 to Y3,175 million (US$26.7 million), principally
reflecting higher sales costs for car navigation systems, as well as lower sales
of car audio products in North America, both for consumer markets.
In Patent Licensing, royalty revenue decreased 82.3% to Y349 million (US$2.9
million), from the third quarter of fiscal 2006. This decrease was attributable
to the impact of the expiration of some patents licensed to the optical disc
industry.
Operating income in this segment declined 94.2% to Y68 million
(US$0.6 million), compared with the same period in the previous fiscal year.
In the Others segment, sales rose 1.6% year on year to Y15,868 million (US$133.3
million), reflecting higher sales of organic light-emitting diode (OLED)
displays.
In terms of geographic sales, sales in Japan increased 27.2% to Y
9,526 million (US$80.1 million), while overseas sales declined 22.0% to Y6,342
million (US$53.3 million).
Operating loss in this segment was Y431 million (US$3.6 million),
compared with an operating loss of Y670 million in the same period in the
previous fiscal year. This was mainly attributable to improved profitability in
OLED displays due to the benefits of business restructuring measures.
For the nine-month period ended December 31, 2006, consolidated operating
revenue rose 7.0% year on year to Y594,920 million (US$4,999.3 million).
Operating income was Y16,725 million (US$140.5 million), compared with an
operating loss of Y11,794 million in the same period a year earlier. Net income
was Y11,644 million (US$97.8 million), compared with a net loss of Y56,641
million in the same period in the previous fiscal year.
Note: Operating income (loss) in each business segment represents operating
income (loss) before elimination of intersegment transactions.
Cash Flows
During the nine-month period ended December 31, 2006, operating activities used
net cash of Y25,365 million (US$213.2 million). This was mainly attributable to
increases in trade receivables of Y27,459 million (US$230.7 million) and
inventories of Y29,447 million (US$247.5 million), as well as a decrease in
accrued liabilities of Y6,306 million (US$53.0 million), which outweighed cash
provided by net income of Y11,644 million (US$97.8 million) and depreciation and
amortization of Y28,195 million (US$236.9 million). Investing activities used
net cash of Y19,851 million (US$166.8 million). Although the sale of
subsidiaries in the second quarter provided net cash of Y10,862 million (US$91.3
million), we used Y32,313 million (US$271.5 million) mainly for capital
expenditures related to car electronics products and plasma displays, as well as
for the construction of a new office building in Kawasaki City. Financing
activities used net cash of Y896 million (US$7.5 million), mainly for dividend
payments.
Consequently, cash and cash equivalents at December 31, 2006 were Y
77,219 million (US$648.9 million), Y44,461 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, which were announced on October 31, 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 800,000 820,000 (20,000) 754,964
Operating income (loss) 12,000 18,000 (6,000) (16,409)
Income (loss) before income taxes 13,500 19,000 (5,500) (71,165)
Net income (loss) 5,000 10,000 (5,000) (84,986)
We have lowered our previous projection for operating revenue due to
lower-than-expected shipments of plasma displays mainly to North America and
Europe, in light of a rapid fall in market prices in the year-end sales season.
In terms of profitability, despite positive factors such as the
benefits of the weak yen and cost cutting initiatives, we have lowered our
previous projections for operating income, income before income taxes and net
income, mainly due to anticipated lower output of plasma displays and higher
costs related to plasma display sales promotion in the fourth quarter.
We are assuming average yen-U.S. dollar and yen-euro exchange rates
of Y118 and Y154, respectively, for the revised projections.
Regarding New Plasma Display Plant
At 2007 International CES we received high marks for plasma displays featuring
new panel technology that we plan to introduce worldwide. However, in light of
the results of the 2006 year-end sales season, we have decided to postpone
investment in a new manufacturing site for plasma displays.
Decisions on the scale of the new plant and the timing of investment
will be based on the outlook for market trends, as well as a wide range of
considerations such as the creation of a more efficient manufacturing framework
or joint investments with other companies.
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. It is not 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 for 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
expenditures; (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 global 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 Y119=US$1.00, the approximate rate
prevailing on December 31, 2006.
Attached are consolidated financial statements for the three months and the nine
months ended December 31, 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 December 31
2006 2005 % to
Amount % to total Amount to total prior year
Domestic 19,991 9.3 27,405 12.6 72.9
Overseas 92,999 43.4 87,561 40.4 106.2
Home Electronics 112,990 52.7 114,966 53.0 98.3
Domestic 33,507 15.6 32,051 14.8 104.5
Overseas 51,887 24.2 52,352 24.1 99.1
Car Electronics 85,394 39.8 84,403 38.9 101.2
Domestic - - - - -
Overseas 349 0.2 1,977 0.9 17.7
Patent Licensing 349 0.2 1,977 0.9 17.7
Domestic 9,526 4.5 7,488 3.5 127.2
Overseas 6,342 2.8 8,126 3.7 78.0
Others 15,868 7.3 15,614 7.2 101.6
Domestic 63,024 29.4 66,944 30.9 94.1
Overseas 151,577 70.6 150,016 69.1 101.0
Total 214,601 100.0 216,960 100.0 98.9
(In millions of yen)
Nine months ended December 31
2006 2005 % to
Amount % to total Amount to total prior year
Domestic 52,593 8.8 63,473 11.4 82.9
Overseas 231,149 38.9 196,451 35.3 117.7
Home Electronics 283,742 47.7 259,924 46.7 109.2
Domestic 96,389 16.2 88,228 15.9 109.2
Overseas 163,975 27.6 156,528 28.1 104.8
Car Electronics 260,364 43.8 244,756 44.0 106.4
Domestic - - - - -
Overseas 2,110 0.4 7,262 1.3 29.1
Patent Licensing 2,110 0.4 7,262 1.3 29.1
Domestic 30,819 5.2 22,504 4.0 136.9
Overseas 17,885 2.9 21,598 4.0 82.8
Others 48,704 8.1 44,102 8.0 110.4
Domestic 179,801 30.2 174,205 31.3 103.2
Overseas 415,119 69.8 381,839 68.7 108.7
Total 594,920 100.0 556,044 100.0 107.0
(2) CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions of yen)
Three months ended December 31
2006 2005 % to
prior year
Operating revenue:
Net sales 214,252 214,983 99.7
Royalty revenue 349 1,977 17.7
Total operating revenue 214,601 216,960 98.9
Operating costs and expenses:
Cost of sales 163,780 166,739 98.2
Selling, general and administrative expenses 45,787 45,351 101.0
Total operating costs and expenses 209,567 212,090 98.8
Operating income 5,034 4,870 103.4
Other income (expenses):
Interest income 1,550 737 210.3
Foreign exchange loss (1,947) (1,423) 136.8
Interest expense (462) (307) 150.5
Other-net 1,306 (1) -
Total other income (expenses) 447 (994) -
Income from continuing operations before income taxes 5,481 3,876 141.4
Income taxes 2,634 2,510 104.9
Minority interest in earnings of subsidiaries (406) (241) 168.5
Equity in earnings (losses) of affiliated companies (5) 30 -
Income from continuing operations 2,436 1,155 210.9
Income from discontinued operations, net of tax - 248 -
Net income 2,436 1,403 173.6
(In millions of yen)
Nine months ended December 31
2006 2005 % to
prior year
Operating revenue:
Net sales 592,810 548,782 108.0
Royalty revenue 2,110 7,262 29.1
Total operating revenue 594,920 556,044 107.0
Operating costs and expenses:
Cost of sales 447,164 435,940 102.6
Selling, general and administrative expenses 131,031 131,898 99.3
Total operating costs and expenses 578,195 567,838 101.8
Operating income (loss) 16,725 (11,794) -
Other income (expenses):
Interest income 3,635 1,988 182.8
Foreign exchange loss (2,332) (2,485) 93.8
Interest expense (1,078) (1,027) 105.0
Other-net 1,155 (26,959) -
Total other income (expenses) 1,380 (28,483) -
Income (loss) from continuing operations before
income taxes 18,105 (40,277) -
Income taxes 8,848 (4,425) -
Minority interest in losses (earnings) of subsidiaries (405) 3,928 -
Equity in earnings (losses) of affiliated companies 17 (25,128) -
Income (loss) from continuing operations 8,869 (57,052) -
Income from discontinued operations, net of tax 2,775 411 675.2
Net income (loss) 11,644 (56,641) -
(3) CONSOLIDATED BALANCE SHEETS
(In millions of yen)
December 31 March 31
2006 2005 Increase/ 2006 Increase/
(Decrease) (Decrease)
ASSETS
Current assets:
Cash and cash equivalents 77,219 104,506 (27,287) 121,680 (44,461)
Trade receivables, less allowance 139,211 151,396 (12,185) 107,563 31,648
Inventories 138,677 116,228 22,449 104,226 34,451
Assets held for sale - - - 25,577 (25,577)
Others 74,448 77,498 (3,050) 69,626 4,822
Total current assets 429,555 449,628 (20,073) 428,672 883
Investments and long-term receivables 27,313 30,384 (3,071) 29,772 (2,459)
Property, plant and equipment,
less depreciation 162,471 168,110 (5,639) 160,231 2,240
Intangible assets 19,199 21,850 (2,651) 20,576 (1,377)
Other assets 39,693 42,810 (3,117) 38,795 898
Total assets 678,231 712,782 (34,551) 678,046 185
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings and current
portion of long-term debt 37,846 46,936 (9,090) 30,370 7,476
Trade payables 108,414 116,873 (8,459) 102,082 6,332
Liabilities held for sale - - - 17,863 (17,863)
Others 117,821 110,509 7,312 121,977 (4,156)
Total current liabilities 264,081 274,318 (10,237) 272,292 (8,211)
Long-term debt 87,564 88,470 (906) 92,970 (5,406)
Other long-term liabilities 23,650 41,685 (18,035) 25,425 (1,775)
Total liabilities 375,295 404,473 (29,178) 390,687 (15,392)
Minority interests 14,660 14,716 (56) 14,109 551
Shareholders' equity:
Common stock 49,049 49,049 - 49,049 -
Capital surplus 82,971 82,872 99 82,910 61
Retained earnings 184,598 202,607 (18,009) 173,826 10,772
Accumulated other comprehensive loss (15,891) (28,495) 12,604 (20,092) 4,201
Treasury stock (12,451) (12,440) (11) (12,443) (8)
Total shareholders' equity 288,276 293,593 (5,317) 273,250 15,026
Total liabilities and
shareholders' equity 678,231 712,782 (34,551) 678,046 185
Breakdown of accumulated other
comprehensive loss:
Minimum pension liability adjustments (5,166) (11,620) 6,454 (3,680) (1,486)
Net unrealized holding gain on securities 8,073 10,216 (2,143) 10,352 (2,279)
Cumulative foreign currency translation
adjustments (18,798) (27,091) 8,293 (26,764) 7,966
Total accumulated other
comprehensive loss (15,891) (28,495) 12,604 (20,092) 4,201
(4) CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of yen)
Three months Nine months
ended December 31 ended December 31
2006 2005 2006 2005
I. Cash flows from operating activities:
Net income (loss) 2,436 1,403 11,644 (56,641)
Depreciation and amortization 9,695 11,300 28,195 35,422
Increase in trade receivables (17,494) (21,598) (27,459) (14,438)
(Increase) decrease in inventories 3,240 13,247 (29,447) (1,388)
Increase (decrease) in trade payables (12,781) 9,981 4,403 17,997
Increase (decrease) in other accrued liabilities 1,560 3,513 (6,306) 6,250
Other (2,166) 2,825 (6,395) 34,689
Net cash provided by (used in) operating activities (15,510) 20,671 (25,365) 21,891
II. Cash flows from investing activities:
Payment for purchase of fixed assets (11,836) (7,049) (32,313) (26,331)
Proceeds from sale of discontinued operations - - 10,862 -
Other (257) 830 1,600 8,187
Net cash used in investing activities (12,093) (6,219) (19,851) (18,144)
III. Cash flows from financing activities:
Increase (decrease) in short-term borrowings
and long-term debt (4,193) (17,058) 3,005 (14,192)
Dividends paid (872) (1,308) (1,308) (3,488)
Other (866) (919) (2,593) (2,992)
Net cash used in financing activities (5,931) (19,285) (896) (20,672)
Effect of exchange rate changes on cash
and cash equivalents 931 2,141 1,651 4,750
Net decrease in cash and cash equivalents (32,603) (2,692) (44,461) (12,175)
Cash and cash equivalents, beginning of period 109,822 107,198 121,680 116,681
Cash and cash equivalents, end of period 77,219 104,506 77,219 104,506
Free cash flow (I + II) (27,603) 14,452 (45,216) 3,747
(5) SEGMENT INFORMATION
The following segment information is prepared pursuant to the regulations under
the Securities and Exchange Law of Japan.
(Business Segments)
(In millions of yen)
Three months ended December 31
2006 2005 % to prior year
Operating Operating Operating Operating Operating Operating
Revenue Income Revenue Income Revenue Income
Home Electronics 113,212 2,689 115,632 (1,733) 97.9 -
Car Electronics 85,930 3,175 84,808 4,795 101.3 66.2
Patent Licensing 388 68 2,047 1,176 19.0 5.8
Others 24,535 (431) 25,263 (670) 97.1 -
Total 224,065 5,501 227,750 3,568 98.4 154.2
Corporate and Eliminations (9,464) (467) (10,790) 1,302 - -
Consolidated 214,601 5,034 216,960 4,870 98.9 103.4
(In millions of yen)
Nine months ended December 31
2006 2005 % to prior year
Operating Operating Operating Operating Operating Operating
Revenue Income Revenue Income Revenue Income
Home Electronics 284,403 (1,556) 261,404 (27,231) 108.8 -
Car Electronics 261,843 16,293 245,932 13,005 106.5 125.3
Patent Licensing 2,149 1,042 7,371 5,145 29.2 20.3
Others 74,759 2,373 72,276 (2,336) 103.4 -
Total 623,154 18,152 586,983 (11,417) 106.2 -
Corporate and Eliminations (28,234) (1,427) (30,939) (377) - -
Consolidated 594,920 16,725 556,044 (11,794) 107.0 -
Notes:
1. The Company'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 120 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 in the second quarter of fiscal 2007, sold
subsidiaries involved in the electronic components business. The operating
results of these subsidiaries and the gain on the sales are presented as income
from discontinued operations in the consolidated statements of operations.
Reclassifications have been made to previously reported operating revenue by
segment, consolidated statements of operations, and segment information to
conform to this presentation.
Summarized financial information of the discontinued operations for
the three months and the nine months ended December 31, 2005 and 2006 is as
follows:
(In millions of yen)
Three months Nine months
ended December 31 ended December 31
2006 2005 2006 2005
Operating revenue - 10,705 10,442 21,519
Operating income - 158 425 434
Income before income taxes - 389 324 672
Gain on sales of discontinued
operations - 2,488 -
-
Income taxes - 141 37 261
Income from discontinued operations - 248 2,775 411
This information is provided by RNS
The company news service from the London Stock Exchange
END
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