RNS Number:1911B
Pioneer Corporation
31 July 2007
For Immediate Release
July 31, 2007
Pioneer Announces Business Results for 1Q Fiscal 2008
TOKYO - Pioneer Corporation today announced its consolidated
first-quarter business results for the period ended June 30, 2007.
Consolidated Financial Highlights
(In millions of yen except per share information)
Three months ended June 30
2007 2006 % to
prior year
Operating revenue Y182,641 Y191,676 95.3%
Operating income 1,323 7,077 18.7
Income from continuing operations before income taxes
16,185 8,004 202.2
Income from continuing operations 12,331 5,546 222.3
Income from discontinued operations,
net of tax - 116 -
Net income Y 12,331 Y 5,662 217.8%
Net income per share:
Basic Y70.70 Y32.46
Diluted Y64.68 Y29.48
Note:In fiscal 2007, the Company sold subsidiaries involved in the electronic
components business. The operating results of these subsidiaries are presented
as income from discontinued operations in the table above.
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/
Consolidated Business Results
For the first quarter of fiscal 2008, the three months ended June 30, 2007,
consolidated operating revenue decreased 4.7% from the first quarter of fiscal
2007 to Y182,641 million (US$1,484.9 million). This decrease mainly reflected a
drop in sales of plasma displays, despite higher sales of car navigation systems
and DVD drives, and the weaker yen.
Operating income decreased 81.3% to Y1,323 million (US$10.8 million) from the
corresponding period a year earlier. This mainly reflected deterioration in the
profitability of the Home Electronics segment primarily due to lower sales. Net
income totaled Y12,331 million (US$100.3 million), approximately 2.2 times the
corresponding period in fiscal 2007, due to a gain on sale of all land and
buildings at the Tokorozawa Plant and some at the Omori Plant of Y11,903 million
(US$96.8 million).
During the first quarter of fiscal 2008, the average value of the Japanese yen
was weaker against the U.S. dollar and the euro by 5.2% and 11.6%, respectively,
compared with the first quarter of fiscal 2007.
Car Electronics sales increased 6.2% year on year to Y97,017 million (US$788.8
million), due to higher sales of both car navigation systems and car audio
products. In car navigation systems, consumer-market and OEM sales decreased in
Japan, but both increased in North America. In car audio products,
consumer-market sales increased in Central and South America, but decreased in
North America; meanwhile, OEM sales declined in North America, but rose in Japan
and China. Total OEM sales in this segment accounted for approximately 36% of
Car Electronics sales.
In terms of geographic sales, sales in Japan decreased 5.4% to Y32,458 million
(US$263.9 million) and overseas sales increased 13.2% to Y64,559 million
(US$524.9 million).
Operating income in this segment increased 1.0% year on year to Y7,609 million
(US$61.9 million) due to sales growth.
Home Electronics sales decreased 14.7% year on year to Y69,431 million (US$564.5
million). There was a drop in plasma display sales, from the corresponding
period a year earlier, which saw favorable sales, because the large, flat-panel
TV market experienced fiercer competition and in line with Pioneer' s
expectations of moderate sales of the current generation of plasma displays upon
launching new models in North America and Europe. Sales of plasma displays
accounted for approximately 34% of Home Electronics sales. Sales of DVD drives
rose year on year, but sales of DVD recorders decreased mainly in Japan.
In terms of geographic sales, sales in Japan declined 11.3% to Y12,763 million
(US$103.8 million), while overseas sales decreased 15.4% to Y56,668 million
(US$460.7 million).
Operating loss in this segment was Y5,437 million (US$44.2 million), compared
with an operating loss of Y452 million in the corresponding period of the
previous fiscal year. This was due mainly to deterioration in the profitability
of plasma displays resulting from the drop in sales.
In Patent Licensing, royalty revenue decreased 91.5% year on year to Y107
million (US$0.9 million). This decrease was attributable to the impact of the
expiration of some patents licensed to the optical disc industry.
Operating loss in this segment was Y76 million (US$0.6 million), compared with
operating income of Y787 million in the corresponding period of the previous
fiscal year.
In the Others segment, sales decreased 9.1% year on year to Y16,086 million
(US$130.8 million). This mainly reflected lower sales of factory automation
systems, despite higher sales of passive-matrix organic light-emitting diode
displays.
In terms of geographic sales, sales in Japan decreased 14.3% to Y10,355 million
(US$84.2 million), while overseas sales were up 2.2% at Y5,731 million (US$46.6
million).
Operating loss in this segment was Y674 million (US$5.5 million) compared with
operating income of Y293 million in the corresponding period of the previous
fiscal year. This mainly reflected worsened profitability in speaker units for
cellular phones due to falling prices.
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 2008, operating activities used net cash of Y
14,180 million (US$115.3 million). This was mainly due to increases in trade
receivables of Y9,389 million (US$76.3 million) and inventories of Y21,702
million (US$176.4 million), a decrease in accrued liabilities of Y9,445 million
(US$76.8 million), as well as a gain on sale and disposal of fixed assets of Y
12,923 million (US$105.1 million), for which we received most of the cash
proceeds in fiscal 2007. These factors outweighed cash provided by net income of
Y12,331 million (US$100.3 million), depreciation and amortization of Y8,717
million (US$70.9 million) and an increase in trade payables of Y23,919 million
(US$194.5 million). Meanwhile, investing activities used net cash of Y27,653
million (US$224.8 million). This reflected Y15,460 million (US$125.7 million)
for capital expenditures mainly related to the newly established Kawasaki Plant
and car electronics products, as well as Y13,704 million (US$111.4 million) for
the purchase of shares of Tohoku Pioneer Corporation through a tender offer.
Financing activities provided net cash of Y22,948 million (US$186.6 million),
mainly through an increase in short-term borrowings.
Consequently, cash and cash equivalents at June 30, 2007 were Y86,506 million
(US$703.3 million), Y15,314 million lower than at March 31, 2007.
Business Forecasts for Fiscal 2008
Consolidated business forecasts for fiscal 2008, ending March 31, 2008, have not
been changed from those announced on May 14, 2007, as shown below. We assume
average yen-U.S. dollar and yen-euro exchange rates of Y115 and Y155
respectively, for these projections.
(In millions of yen)
First Half Full Year
Projections Results Percent Projections Results Percent
for for change for for change
fiscal 2008 fiscal fiscal 2008 fiscal
2007 2007
Operating revenue Y368,000 Y380,319 -3.2% Y835,000 Y797,102 +4.8%
Operating income (loss) (3,500) 11,691 - 15,000 12,487 +20.1
Income (loss) before
income taxes 9,500 12,624 -24.7 29,000 (7,717) -
Net income (loss) Y 3,000 Y 9,208 -67.4% Y 12,500 Y (6,761) -%
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 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 global manufacturer of consumer- and
business-use electronics products such as audio, video and car electronics. Its
shares are listed 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 Y123=US$1.00, the approximate rate
prevailing on June 30, 2007.
Attached are consolidated financial statements for the three months ended June
30, 2007.
of operations.
(1) OPERATING REVENUE BY SEGMENT
(In millions of yen)
Three months ended June 30
2007 2006 % to
Amount % to total Amount % to total prior year
Domestic Y 32,458 17.8% Y 34,318 17.9% 94.6%
Overseas 64,559 35.3 57,018 29.8 113.2
Car Electronics 97,017 53.1 91,336 47.7 106.2
Domestic 12,763 7.0 14,393 7.5 88.7
Overseas 56,668 31.0 66,988 35.0 84.6
Home Electronics 69,431 38.0 81,381 42.5 85.3
Domestic - - - - -
Overseas 107 0.1 1,261 0.7 8.5
Patent Licensing 107 0.1 1,261 0.7 8.5
Domestic 10,355 5.6 12,088 6.3 85.7
Overseas 5,731 3.2 5,610 2.8 102.2
Others 16,086 8.8 17,698 9.1 90.9
Domestic 55,576 30.4 60,799 31.7 91.4
Overseas 127,065 69.6 130,877 68.3 97.1
Total Y182,641 100.0% Y191,676 100.0% 95.3%
(2) CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions of yen)
Three months ended June 30
2007 2006 % to
prior year
Operating revenue:
Net sales Y182,534 Y190,415 95.9%
Royalty revenue 107 1,261 8.5
Total operating revenue 182,641 191,676 95.3
Operating costs and expenses:
Cost of sales 138,733 140,567 98.7
Selling, general and administrative expenses 42,585 44,032 96.7
Total operating costs and expenses 181,318 184,599 98.2
Operating income 1,323 7,077 18.7
Other income (expenses):
Interest income 1,790 949 188.6
Foreign exchange gain 429 601 71.4
Interest expense (543) (399) 136.1
Other - net 13,186 (224) -
Total other income 14,862 927 -
Income from continuing operations before income taxes 16,185 8,004 202.2
Income taxes 3,651 2,744 133.1
Minority interest in losses (earnings) of subsidiaries (92) 246 -
Equity in earnings (losses) of affiliated companies (111) 40 -
Income from continuing operations 12,331 5,546 222.3
Income from discontinued operations, net of tax - 116 -
Net income Y 12,331 Y 5,662 217.8%
(3) CONSOLIDATED BALANCE SHEETS
(In millions of yen)
June 30 March 31
2007 2006 Increase 2007 Increase
(Decrease) (Decrease)
ASSETS
Current assets:
Cash and cash equivalents Y 86,506 Y 88,818 Y (2,312) Y101,820 Y(15,314)
Trade receivables, less allowance 131,186 121,240 9,946 117,875 13,311
Inventories 131,114 121,587 9,527 105,331 25,783
Assets held for sale - 22,553 (22,553) - -
Others 77,674 70,534 7,140 69,066 8,608
Total current assets 426,480 424,732 1,748 394,092 32,388
Investments and long-term receivables 28,146 27,011 1,135 27,219 927
Property, plant and equipment, less 146,191 157,813 (11,622) 146,475 (284)
depreciation
Intangible assets 18,824 19,440 (616) 18,248 576
Other assets 47,414 41,244 6,170 49,440 (2,026)
Total assets Y 667,055 Y670,240 Y (3,185) Y635,474 Y 31,581
LIABILITIES, MINORITY INTERESTS AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings and current portion of
long-term debt Y 44,099 Y 35,297 Y 8,802 Y 18,605 Y 25,494
Trade payables 119,062 111,404 7,658 93,351 25,711
Liabilities held for sale - 15,249 (15,249) - -
Others 99,964 107,090 (7,126) 130,757 (30,793)
Total current liabilities 263,125 269,040 (5,915) 242,713 20,412
Long-term debt 85,021 88,888 (3,867) 86,015 (994)
Other long-term liabilities 23,945 24,044 (99) 24,341 (396)
Total liabilities 372,091 381,972 (9,881) 353,069 19,022
Minority interests 2,479 13,730 (11,251) 14,289 (11,810)
Shareholders' equity:
Common stock 49,049 49,049 - 49,049 -
Capital surplus 82,995 82,947 48 82,983 12
Retained earnings 177,652 179,488 (1,836) 165,321 12,331
Accumulated other comprehensive loss (4,756) (24,500) 19,744 (16,784) 12,028
Treasury stock (12,455) (12,446) (9) (12,453) (2)
Total shareholders' equity 292,485 274,538 17,947 268,116 24,369
Total liabilities, minority interests and
shareholders' equity Y 667,055 Y 670,240 Y (3,185) Y 635,474 Y 31,581
Breakdown of accumulated other comprehensive
loss:
Minimum pension liability adjustments - Y (3,902) Y 3,902 - -
Pension liability adjustments Y (5,099) - (5,099) Y (5,009) Y (90)
Net unrealized holding gain on securities 8,087 8,803 (716) 7,405 682
Foreign currency translation adjustments (7,744) (29,401) 21,657 (19,180) 11,436
Total accumulated other comprehensive loss Y (4,756) Y(24,500) Y19,744 Y(16,784) Y 12,028
(4) CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of yen)
Three months ended June 30
2007 2006
I. Cash flows from operating activities:
Net income Y 12,331 Y 5,662
Depreciation and amortization 8,717 9,152
Loss (gain) on sale and disposal of fixed assets (12,923) 188
Increase in trade receivables (9,389) (11,730)
Increase in inventories (21,702) (17,241)
Increase in trade payables 23,919 7,665
Decrease in accrued liabilities (9,445) (16,787)
Other (5,688) (1,069)
Net cash used in operating activities (14,180) (24,160)
II. Cash flows from investing activities:
Payment for purchase of fixed assets (15,460) (8,320)
Payment for purchase of shares of a consolidated subsidiary (13,704) -
Other 1,511 273
Net cash used in investing activities (27,653) (8,047)
III. Cash flows from financing activities:
Increase in short-term borrowings and long-term debt 24,699 1,456
Dividends paid (872) (436)
Other (879) (820)
Net cash provided by financing activities 22,948 200
Effect of exchange rate changes on cash and cash equivalents 3,571 (855)
Net decrease in cash and cash equivalents (15,314) (32,862)
Cash and cash equivalents, beginning of period 101,820 121,680
Cash and cash equivalents, end of period Y 86,506 Y 88,818
Free cash flows (I + II) Y (41,833) Y (32,207)
(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
2007 2006 % to prior year
Operating Operating Operating Operating Operating Operating
Revenue Income Revenue Income Revenue Income
Car Electronics Y 97,511 Y 7,609 Y 91,789 Y 7,532 106.2% 101.0%
Home Electronics 69,592 (5,437) 81,514 (452) 85.4 -
Patent Licensing 191 (76) 1,261 787 15.1 -
Others 24,621 (674) 26,381 293 93.3 -
Total 191,915 1,422 200,945 8,160 95.5 17.4
Corporate and Eliminations (9,274) (99) (9,269) (1,083) - -
Consolidated Y182,641 Y 1,323 Y191,676 Y 7,077 95.3% 18.7%
Notes:
1.The Company' s consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in the United States of
America, except for the disclosure of segment information.
2.The Company' s business is classified into four segments: "Car
Electronics," "Home Electronics," "Patent
Licensing" and "Others." Principal products and services
included in each segment are as follows:
Car Electronics
car navigation systems, car stereos, car AV systems and car speakers
Home Electronics
plasma displays, DVD recorders, DVD players, DVD drives, Blu-ray Disc players,
Blu-ray Disc drives, audio systems, audio components, DJ equipment and equipment
for cable TV systems
Patent Licensing
licensing of patents related to laser optical disc technologies
Others
organic light-emitting diode displays, factory automation systems, speaker
units, electronics devices and parts, telephones and business-use AV systems
3.Effective from this fiscal 2008, the Company classified telephones in
"Others," which were previously included in "Home
Electronics." Reclassifications have been made to previously reported
"operating revenue by segment" and "segment information
" to conform to this presentation.
4.In fiscal 2007, the Company sold subsidiaries involved in the electronic
components business. The operating results of these subsidiaries are presented
as income from discontinued operations in the consolidated statements of
operations.
5.A resolution has been made at the meeting of the Company' s Board of
Directors held on May 14, 2007, to make Tohoku Pioneer Corporation (a 67.1%
owned subsidiary) a wholly-owned subsidiary by acquiring its minority-held
shares and its stock acquisition rights, through a tender offer. The period of
the tender offer was from May 15, 2007 to June 19, 2007 and the Company acquired
30.5% shares for Y13,506 million, totaling 97.6% shares held as a result. With
respect to the shares of Tohoku Pioneer which the Company could not acquire
through the tender offer, the Company plans to conduct a share exchange.
6.In the first quarter of fiscal 2007, the Company sold all land and buildings
at the Tokorozawa Plant and some at the Omori Plant. The gain on these sales
has been included in "Other-net" in the consolidated statements
of operations.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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