RNS Number:7178G
Pioneer Corporation
31 October 2007
For Immediate Release
October 31, 2007
Pioneer Announces Business Results for 2Q Fiscal 2008
TOKYO - Pioneer Corporation today announced its consolidated
second-quarter and semiannual business results, and non-consolidated semiannual
business results, for the periods ended September 30, 2007.
Consolidated Financial Highlights
(In millions of yen except per share information)
Three months Six months
ended September 30 ended September 30
2007 2006 % to 2007 2006 % to
prior prior
year year
Operating revenue Y200,520 Y188,643 106.3% Y383,161 Y380,319 100.7%
Operating income 939 4,614 20.4 2,262 11,691 19.3
Income from continuing
operations before income
taxes 1,460 4,620 31.6 17,645 12,624 139.8
Income (loss) from
continuing operations (2,395) 887 - 9,936 6,433 154.5
Income from discontinued
operations, net of tax - 2,659 - - 2,775 -
Net income (loss) Y(2,395) Y3,546 -% Y9,936 Y9,208 107.9%
Net income (loss) per share:
Basic Y(13.73) Y20.33 Y56.97 Y52.79
Diluted Y(13.73) Y18.32 Y51.65 Y47.80
Note: In fiscal 2007, the Company sold subsidiaries involved in the electronic
components business. The operating results of these subsidiaries and the gain on
the sale 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 second quarter of fiscal 2008, the three months ended September 30,
2007, consolidated operating revenue increased 6.3% from the second quarter of
fiscal 2007 to Y200,520 million (US$1,743.7 million), mainly due to higher sales
of car audio products and DVD drives for PCs, and the weaker yen, despite lower
sales of plasma displays.
Operating income was Y939 million (US$8.2 million), a decrease of 79.6% year on
year, mainly due to a drop in earnings in the Others segment and worsening
profitability in plasma displays, despite higher earnings in the Car Electronics
business. In addition to the drop in operating income, there was an increase in
income taxes in connection with accumulated losses at the parent company,
Pioneer Corporation. Consequently, Pioneer recorded a net loss of Y2,395 million
(US$20.8 million), compared with net income of Y3,546 million in the second
quarter of fiscal 2007.
During the second quarter of fiscal 2008, the average value of the Japanese yen
was weaker against the U.S. dollar and the euro by 1.4% and 8.5%, respectively,
compared with the second quarter of fiscal 2007.
Car Electronics sales increased 10.9% year on year to Y92,730 million (US$806.3
million), mainly due to increased sales of both car audio products and car
navigation systems. In car navigation systems, OEM (original equipment
manufacturing) sales rose in North America, but OEM and consumer-market sales
dropped in Japan. In car audio products, consumer-market sales rose in Central
and South America, and Russia, and OEM sales were also higher both in Japan and
overseas. Total OEM sales in this segment accounted for approximately 38% of Car
Electronics sales.
In terms of geographic sales, sales in Japan decreased 0.5% to Y28,415 million
(US$247.1 million), and overseas sales rose 16.8% to Y64,315 million (US$559.3
million).
Operating income in this segment increased 7.9% year on year to Y6,026 million
(US$52.4 million) mainly due to higher sales of car audio products, despite a
decrease in the gross profit margin of car navigation systems.
Home Electronics sales increased 4.6% year on year to Y89,449 million (US$777.8
million). Overall plasma display sales decreased due to a drop in sales of
plasma displays for OEM and business use, although home-use sales rose slightly,
reflecting sales growth in Europe partially offset by lower sales in North
America and Japan. Sales of plasma displays accounted for approximately 41% of
total Home Electronics sales. In addition, sales of DVD drives for PCs rose, but
sales of DVD recorders decreased.
In terms of geographic sales, sales in Japan declined 26.4% to Y10,612 million
(US$92.3 million), while overseas sales rose 10.9% to Y78,837 million (US$685.5
million).
The operating loss in this segment was Y4,105 million (US$35.7 million),
compared with an operating loss of Y3,681 million in the corresponding period of
the previous fiscal year. This mainly reflected higher expenses primarily
related to new worldwide marketing activities centered on plasma displays that
are currently under way, despite improving profitability in DVD recorders.
In Patent Licensing, royalty revenue decreased 38.4% year on year to Y308
million (US$2.7 million). 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 57.8% to Y79 million (US$0.7 million)
from the same period of the previous fiscal year.
In the Others segment, sales decreased 5.0% year on year to Y18,033 million
(US$156.8 million), mainly reflecting lower sales of business-use AV systems,
factory automation systems and passive-matrix organic light-emitting diode
(OLED) displays.
In terms of geographic sales, sales in Japan decreased 19.1% to Y10,516 million
(US$91.4 million), while overseas sales increased 25.5% to Y7,517 million
(US$65.4 million).
Operating income in this segment was Y191 million (US$1.7 million), down 92.0%
year on year. This was mainly attributable to worsening profitability in
business-use AV systems and map software.
For the first half of fiscal 2008, the six months ended September 30, 2007,
consolidated operating revenue rose 0.7% year on year to Y383,161 million
(US$3,331.8 million). Operating income was Y2,262 million (US$19.7 million),
down 80.7% year on year. Net income rose 7.9% to Y9,936 million (US$86.4
million), mainly due to a gain on sale of all land and buildings at the
Tokorozawa Plant and some at the Omori plant, which was recorded in the first
quarter of fiscal 2008.
Note: Operating income (loss) in each business segment represents operating
income (loss) before elimination of intersegment transactions.
Cash Flows
During the first half of fiscal 2008, operating activities used net cash of Y
5,165 million (US$44.9 million). This mainly reflected an increase in trade
notes and receivables of Y5,191 million (US$45.1 million), and an increase in
inventories of Y32,309 million (US$280.9 million). There were also adjustments
for a gain on sale and disposal of fixed assets of Y12,650 million (US$110.0
million), for which we received most of the cash proceeds in fiscal 2007, and
other items. These factors outweighed cash provided by net income of Y9,936
million (US$86.4 million), depreciation and amortization of Y16,772 million
(US$145.8 million) and an increase in trade payables of Y22,636 million
(US$196.8 million). Investing activities used net cash of Y36,755 million
(US$319.6 million). This reflected capital expenditures of Y25,310 million
(US$220.1 million), mainly related to the newly established Kawasaki Plant and
car electronics products, as well as Y14,342 million (US$124.7 million) for the
purchase of shares of consolidated subsidiaries, chiefly the purchase of shares
of Tohoku Pioneer Corporation through a tender offer. Financing activities
provided net cash of Y21,693 million (US$188.6 million), mainly through an
increase in short-term borrowings.
Consequently, cash and cash equivalents at September 30, 2007 were Y82,120
million (US$714.1 million), Y19,700 million lower than at March 31, 2007.
Dividends
Pioneer positions its dividend policy as one of its highest management
priorities. On the basis of maintaining stable dividends, the Company sets
dividend payments appropriately in light of its financial position, consolidated
business results, and other factors. Retained earnings are effectively used
primarily to develop businesses, as well as reinforce competitiveness and our
management base.
Based on this dividend policy, Pioneer has decided to pay an interim dividend
for fiscal 2008 of Y5.0 (US$0.04) per share of common stock, the same amount as
the previous fiscal year.
Business Forecasts for Fiscal 2008
We revised our consolidated business forecasts for fiscal 2008, ending March 31,
2008, which were announced on May 14, 2007, as follows:
(In millions of yen)
Revised Previous
projections projections
for fiscal 2008 for fiscal 2008 Changes Results
(A) (B) (A - B) for fiscal 2007
Operating revenue Y820,000 Y835,000 Y(15,000) Y797,102
Operating income 10,000 15,000 (5,000) 12,487
Income (loss) before income
taxes 26,000 29,000 (3,000) (7,717)
Net income (loss) Y 6,000 Y 12,500 Y (6,500) Y (6,761)
We have lowered our previous operating revenue forecast because plasma display
sales are projected to fall below initial forecasts chiefly in North America and
Europe, although sales of car audio products and DVD drives for PCs are expected
to surpass initial forecasts on a full-year basis.
Turning to profitability, we have reduced our previous forecasts for operating
income, income before income taxes and net income. This comes mainly on
expectations of a larger-than-projected loss in the Home Electronics business
due to lower plasma display sales, although income in the Car Electronics
business is projected to beat initial forecasts.
We are assuming average yen-U.S. dollar and yen-euro exchange rates of Y115 and
Y155, respectively, for the revised projections.
Plasma Display Panel Production Structure
Pioneer' new plasma displays, which were launched worldwide beginning
in the summer of 2007, have earned high marks in terms of their picture and
sound quality, and design. However, we expect sales volumes of plasma displays
to fall below initial sales volume projections. Weighing these factors, Pioneer
has decided not to construct a new plasma display plant for now. Furthermore, we
plan to stop production at an existing production line with low productivity.
Meanwhile, we will reinforce production of our 1080p high-definition plasma
displays, which have earned a strong reputation in the markets.
Going forward, while carefully monitoring market developments and our sales
performance, we will continue to work on building a more efficient production
structure that matches the scale of our business.
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' 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.
Basic Management Policies and Medium-term Management Strategies
Pioneer positions customer satisfaction at the core of management. We seek to
offer innovative, high-quality, and value-added electronics products that create
new value for customers, aiming to realize the Pioneer Group'
philosophy, "Move the Heart and Touch the Soul," with more
people around the world.
Based on this group philosophy, Pioneer formulated a group vision: "To
become a company that encourages all its members to work as a team, with
everyone customer-focused, integrating each one' professionalism in
pursuing innovations one after another." This vision will serve as a
reference point for the activities of individual employees and is expected to
underpin improvement in Pioneer' performance.
In June 2006, Pioneer set management targets of consolidated operating revenue
of Y950 billion and operating income of at least Y30 billion for the fiscal year
ending March 31, 2009. However, Pioneer faces a more severe business
environment, characterized by greater-than-expected decreases in prices of
large, flat-panel TVs and intensifying competition in this product domain. In
light of these circumstances, the Company is carefully formulating a medium-term
business plan. This plan will give due consideration to the plasma display
production structure and other issues.
On September 20, 2007, Pioneer and Sharp Corporation agreed to establish a
comprehensive business alliance and a capital alliance to ensure a close and
firm business alliance. Through joint development, the business alliance targets
the effective use of each other' technologies in the next-generation
DVD, network-related, car electronics and imaging fields and the achievement of
further innovation in each field. In addition, Pioneer and Sharp will strengthen
business ties and increase transactions and trade volume between both companies
by actively adopting each other' products and components.
On October 1, 2007, Pioneer made Tohoku Pioneer Corporation, which was
previously listed on the Second Section of the Tokyo Stock Exchange, a wholly
owned subsidiary. This move is intended to develop Tohoku Pioneer into a core
company in the production of car stereos and speakers within the Pioneer Group.
We seek to achieve higher competitiveness and profitability in order to further
reinforce market superiority in the Car Electronics business and Home
Electronics business, the core businesses of the Pioneer Group.
In the Car Electronics business, Pioneer aims to grow its earnings by allocating
more resources to maintain a leading position in consumer markets and to drive
further expansion in the OEM business, as well as by developing products more
efficiently. Furthermore, to pave the way for further business expansion in this
segment, Pioneer is expanding production capacity at overseas sites.
In the Home Electronics business, where new marketing activities are under way,
we are working to improve earnings by providing new forms of value for
customers, mainly through plasma displays, in terms of picture quality, product
design, user friendliness, quality, and sound as well as by further enhancing
the image of our brands and focusing on profitable products.
Going forward, we consider the Car Electronics business and the Home Electronics
business as our growth drivers, and thus remain focused on increasing earnings
in the Car Electronics business and improving profitability in the Home
Electronics business.
Issues to Be Addressed
The overall economic outlook is for continued stable growth, supported by
favorable corporate earnings and consumer spending, despite soaring materials
prices, including crude oil prices, and concerns about the effects of a credit
crunch in financial markets, especially in North America. Meanwhile, Pioneer
faces extremely challenging business conditions due to fiercer competition
involving its core products.
In the Car Electronics business, Pioneer aims to increase earnings in both
consumer and OEM markets.
In car audio products for consumer markets, Pioneer is focusing on growing
markets such as Central and South America and Russia, which are expected to
continue to expand, in order to retain its position of leadership in these
products. The Company will also offer products that stand apart from those of
other companies by delivering new value and functions. In car navigation systems
for consumer markets, we will drive further growth in Japan, where Pioneer
' car navigation systems have enjoyed a strong reputation. We will also
continue to actively press ahead with business expansion in North America and
Europe, where Pioneer car navigation systems with built-in audio/video functions
have been launched at mass-market prices. Aiming to curb burgeoning software
development costs accompanying product advancements, Pioneer is reforming
product development processes and pursuing internal sharing and standardization
in this area.
In OEM, Pioneer seeks to drive further business expansion in both car audio
products and car navigation systems. We will do this by offering new proposals
to customers by leveraging our product planning capabilities, which have
garnered strong support from consumer markets.
In the display business, Pioneer will leverage its technological edge in panel
technologies to offer plasma displays with high picture quality. Efforts will
also focus on offering unique value propositions by enhancing combinations and
links between plasma displays and other audio/video products, and reinforcing
Pioneer' brand strategy. In doing so, we aim to develop businesses with
an emphasis on profitability rather than merely pursuing expansion.
Furthermore, we will consider adding liquid crystal displays of smaller sizes
than our plasma displays to our lineup in order to augment our display products.
We plan to move forward on this front with the cooperation of Sharp with whom we
recently formed a business alliance.
In the optical disc business, Pioneer is focusing on Blu-ray Disc products,
having already shifted the core of development from DVD products. We will offer
new value propositions worldwide based on combinations of Blu-ray Disc players
and plasma displays. In Blu-ray Disc drives for PCs, we aim to enhance
profitability by accelerating the pace of product development.
Through the business alliance with Sharp, we will mutually utilize each company
' resources and promote joint development in each business, in order to
develop new products and businesses and improve the efficiency of development
activities, with the aim of improving our performance.
Other Important Management Matters
Based on a resolution by the Board of Directors on September 20, 2007, Pioneer
plans to issue 30,000,000 new shares (14.3% of post-allotment issued shares)
through a third-party allotment to Sharp on December 20, 2007 for Y41,550
million. The funds raised by Pioneer from the issuance of new shares will be
used mainly for working capital, including for the business alliance and joint
development with Sharp. On the same date, Pioneer plans to subscribe to
10,000,000 shares of Sharp' treasury stock (0.9% of Sharp'
issued shares) through a third-party allotment at a cost of Y19,750 million.
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 Y115=US$1.00, the approximate rate
prevailing as of September 30, 2007.
Attachments:
I. Consolidated financial statements for the three months and the six months
ended September 30, 2007
II. Non-consolidated financial statements for the six months ended September 30,
2007
I. CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND THE SIX MONTHS ENDED SEPTEMBER 30, 2007
(1) OPERATING REVENUE BY SEGMENT
(In millions of yen)
Three months ended September 30
2007 2006 % to
Amount % to total Amount % to total prior year
Domestic Y 28,415 14.2% Y 28,564 15.1% 99.5%
Overseas 64,315 32.0 55,070 29.2 116.8
Car Electronics 92,730 46.2 83,634 44.3 110.9
Domestic 10,612 5.3 14,421 7.6 73.6
Overseas 78,837 39.3 71,103 37.7 110.9
Home Electronics 89,449 44.6 85,524 45.3 104.6
Domestic - - - - -
Overseas 308 0.2 500 0.3 61.6
Patent Licensing 308 0.2 500 0.3 61.6
Domestic 10,516 5.2 12,993 7.0 80.9
Overseas 7,517 3.8 5,992 3.1 125.5
Others 18,033 9.0 18,985 10.1 95.0
Domestic 49,543 24.7 55,978 29.7 88.5
Overseas 150,977 75.3 132,665 70.3 113.8
Total Y200,520 100.0% Y188,643 100.0% 106.3%
(In millions of yen)
Six months ended September 30
2007 2006 % to
Amount % to total Amount % to total prior year
Domestic Y 60,873 15.9% Y 62,882 16.5% 96.8%
Overseas 128,874 33.6 112,088 29.5 115.0
Car Electronics 189,747 49.5 174,970 46.0 108.4
Domestic 23,375 6.1 28,814 7.6 81.1
Overseas 135,505 35.4 138,091 36.3 98.1
Home Electronics 158,880 41.5 166,905 43.9 95.2
Domestic - - - - -
Overseas 415 0.1 1,761 0.5 23.6
Patent Licensing 415 0.1 1,761 0.5 23.6
Domestic 20,871 5.4 25,081 6.6 83.2
Overseas 13,248 3.5 11,602 3.0 114.2
Others 34,119 8.9 36,683 9.6 93.0
Domestic 105,119 27.4 116,777 30.7 90.0
Overseas 278,042 72.6 263,542 69.3 105.5
Total Y383,161 100.0% Y380,319 100.0% 100.7%
(2) CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions of yen)
Three months ended September 30
2007 2006 % to
prior year
Operating revenue:
Net sales Y200,212 Y188,143 106.4%
Royalty revenue 308 500 61.6
Total operating revenue 200,520 188,643 106.3
Operating costs and expenses:
Cost of sales 154,998 142,817 108.5
Selling, general and administrative expenses 44,583 41,212 108.2
Total operating costs and expenses 199,581 184,029 108.5
Operating income 939 4,614 20.4
Other income (expenses):
Interest income 1,124 1,136 98.9
Foreign exchange loss (261) (986) 26.5
Interest expense (386) (217) 177.9
Other - net 44 73 60.3
Total other income 521 6 -
Income from continuing operations before
income taxes 1,460 4,620 31.6
Income taxes 3,927 3,470 113.2
Minority interest in earnings of subsidiaries (46) (245) 18.8
Equity in earnings (losses) of affiliated companies 118 (18) -
Income (loss) from continuing operations (2,395) 887 -
Income from discontinued operations, net of tax - 2,659 -
Net income (loss) Y (2,395) Y 3,546 -%
(In millions of yen)
Six months ended September 30
2007 2006 % to
prior year
Operating revenue:
Net sales Y382,746 Y378,558 101.1%
Royalty revenue 415 1,761 23.6
Total operating revenue 383,161 380,319 100.7
Operating costs and expenses:
Cost of sales 293,731 283,384 103.7
Selling, general and administrative expenses 87,168 85,244 102.3
Total operating costs and expenses 380,899 368,628 103.3
Operating income 2,262 11,691 19.3
Other income (expenses):
Interest income 2,914 2,085 139.8
Foreign exchange gain (loss) 168 (385) -
Interest expense (929) (616) 150.8
Other-net 13,230 (151) -
Total other income 15,383 933 -
Income from continuing operations before
income taxes 17,645 12,624 139.8
Income taxes 7,578 6,214 122.0
Minority interest in losses (earnings) of subsidiaries (138) 1 -
Equity in earnings of affiliated companies 7 22 31.8
Income from continuing operations 9,936 6,433 154.5
Income from discontinued operations, net of tax - 2,775 -
Net income Y 9,936 Y 9,208 107.9%
(3) CONSOLIDATED BALANCE SHEETS
(In millions of yen)
September 30 March 31
2007 2006 Increase 2007 Increase
(Decrease) (Decrease)
ASSETS
Current assets:
Cash and cash equivalents Y 82,120 Y109,822 Y(27,702) Y101,820 Y(19,700)
Trade receivables, less allowance 123,552 119,106 4,446 117,875 5,677
Inventories 137,762 139,030 (1,268) 105,331 32,431
Other current assets 72,117 70,826 1,291 69,066 3,051
Total current assets 415,551 438,784 (23,233) 394,092 21,459
Investments and long-term receivables 25,133 27,795 (2,662) 27,219 (2,086)
Property, plant and equipment, less 146,703 159,857 (13,154) 146,475 228
depreciation
Intangible assets 19,192 19,482 (290) 18,248 944
Other assets 48,395 42,232 6,163 49,440 (1,045)
Total assets Y654,974 Y688,150 Y(33,176) Y635,474 Y 19,500
LIABILITIES, MINORITY INTERESTS AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings and current
portion of long-term debt Y 53,795 Y 40,270 Y 13,525 Y 18,605 Y 35,190
Trade payables 114,685 120,322 (5,637) 93,351 21,334
Other current liabilities 113,027 116,351 (3,324) 130,757 (17,730)
Total current liabilities 281,507 276,943 4,564 242,713 38,794
Long-term debt 73,943 89,225 (15,282) 86,015 (12,072)
Other long-term liabilities 23,769 25,168 (1,399) 24,341 (572)
Total liabilities 379,219 391,336 (12,117) 353,069 26,150
Minority interests 2,383 14,056 (11,673) 14,289 (11,906)
Shareholders' equity:
Common stock 49,049 49,049 - 49,049 -
Capital surplus 82,995 82,959 36 82,983 12
Retained earnings 174,083 182,162 (8,079) 165,321 8,762
Accumulated other comprehensive loss (20,296) (18,964) (1,332) (16,784) (3,512)
Treasury stock (12,459) (12,448) (11) (12,453) (6)
Total shareholders' equity 273,372 282,758 (9,386) 268,116 5,256
Total liabilities, minority interests and
shareholders' equity Y654,974 Y688,150 Y(33,176) Y635,474 Y 19,500
Breakdown of
accumulated other comprehensive loss:
Minimum pension liability adjustments - Y(4,650) Y 4,650 - -
Pension liability adjustments Y (5,105) - (5,105) Y (5,009) Y (96)
Net unrealized gains on securities 6,116 9,342 (3,226) 7,405 (1,289)
Foreign currency translation adjustments (21,307) (23,656) 2,349 (19,180) (2,127)
Total accumulated other
comprehensive loss Y(20,296) Y(18,964) Y(1,332) Y(16,784) Y(3,512)
(4) CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In millions of yen)
Accumulated
Other Total
Common Capital Retained Comprehensive Treasury Shareholders'
Stock Surplus Earnings Loss Stock Equity
Balance at March 31, 2006 Y49,049 Y82,910 Y173,826 Y(20,092) Y(12,443) Y273,250
Net loss (6,761) (6,761)
Other comprehensive
income 3,308 3,308
Value ascribed to stock
options 73 73
Cash dividends
(Y10 per share) (1,744) (1,744)
Purchase and sales of
treasury stock, net (10) (10)
Balance at March 31, 2007 49,049 82,983 165,321 (16,784) (12,453) 268,116
Adjustment pursuant to
FIN 48 (302) (302)
Net income 9,936 9,936
Other comprehensive
loss (3,512) (3,512)
Value ascribed to stock
options 12 12
Cash dividends
(Y5 per share) (872) (872)
Purchase and sales of
treasury stock, net (6) (6)
Balance at September 30, Y49,049 Y82,995 Y174,083 Y(20,296) Y(12,459) Y273,372
2007
(5) CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of yen)
Three months Six months
ended September 30 ended September 30
2007 2006 2007 2006
I. Cash flows from operating activities:
Net income (loss) Y (2,395) Y 3,546 Y 9,936 Y 9,208
Depreciation and amortization 8,055 9,348 16,772 18,500
Loss (Gain) on sale and disposal fixed assets 273 (885) (12,650) (697)
(Increase) decrease in trade receivables 4,198 1,765 (5,191) (9,965)
Increase in inventories (10,607) (15,446) (32,309) (32,687)
Increase (decrease) in trade payables (1,283) 9,519 22,636 17,184
Increase (decrease) in other accrued liabilities 9,964 8,921 519 (7,866)
Other 810 (2,463) (4,878) (3,532)
Net cash provided by (used in) operating activities 9,015 14,305 (5,165) (9,855)
II. Cash flows from investing activities:
Payment for purchase of fixed assets (9,850) (12,157) (25,310) (20,477)
Payment for purchase of shares of consolidated
subsidiaries (638) - (14,342) -
Proceeds from sale of discontinued operations - 10,862 - 10,862
Other 1,386 1,584 2,897 1,857
Net cash provided by (used in) investing activities (9,102) 289 (36,755) (7,758)
III. Cash flows from financing activities:
Increase (decrease) in short-term borrowings
and long-term debt (372) 5,742 24,327 7,198
Dividends paid - - (872) (436)
Other (883) (907) (1,762) (1,727)
Net cash provided by (used in) financing activities (1,255) 4,835 21,693 5,035
Effect of exchange rate changes on cash and
cash equivalents (3,044) 1,575 527 720
Net increase (decrease) in cash and cash equivalents (4,386) 21,004 (19,700) (11,858)
Cash and cash equivalents, beginning of period 86,506 88,818 101,820 121,680
Cash and cash equivalents, end of period Y 82,120 Y109,822 Y 82,120 Y109,822
Free cash flows (I + II) Y(87) Y14,594 Y(41,920) Y(17,613)
(6) 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 September 30
2007 2006 % to prior year
Operating Operating Operating Operating Operating Operating
Revenue Income Revenue Income Revenue Income
Car Electronics Y 93,274 Y 6,026 Y 84,124 Y 5,586 110.9% 107.9%
Home Electronics 89,644 (4,105) 85,732 (3,681) 104.6 -
Patent Licensing 425 79 500 187 85.0 42.2
Others 26,729 191 27,788 2,399 96.2 8.0
Total 210,072 2,191 198,144 4,491 106.0 48.8
Corporate and Eliminations (9,552) (1,252) (9,501) 123 - -
Consolidated Y200,520 Y 939 Y188,643 Y 4,614 106.3% 20.4%
(In millions of yen)
Six months ended September 30
2007 2006 % to prior year
Operating Operating Operating Operating Operating Operating
Revenue Income Revenue Income Revenue Income
Car Electronics Y190,785 Y13,635 Y175,913 Y13,118 108.5% 103.9%
Home Electronics 159,236 (9,542) 167,246 (4,133) 95.2 -
Patent Licensing 616 3 1,761 974 35.0 0.3
Others 51,350 (483) 54,169 2,692 94.8 -
Total 401,987 3,613 399,089 12,651 100.7 28.6
Corporate and Eliminations (18,826) (1,351) (18,770) (960) - -
Consolidated Y383,161 Y 2,262 Y380,319 Y11,691 100.7% 19.3%
(In millions of yen)
Six months ended September 30
2007 2006 % to prior year
Operating Operating Operating Operating Operating Operating
Revenue Income Revenue Income Revenue Income
Japan Y 336,676 Y 2,031 Y 322,597 Y 5,525 104.4% 36.8%
North America 97,049 (802) 99,623 4,271 97.4 -
Europe 78,976 (815) 80,026 1,528 98.7 -
Other Regions 201,451 6,435 175,437 2,862 114.8 224.8
Total 714,152 6,849 677,683 14,186 105.4 48.3
Corporate and Eliminations (330,991) (4,587) (297,364) (2,495) - -
Consolidated Y 383,161 Y 2,262 Y 380,319 Y11,691 100.7% 19.3%
Note: Geographic segment information is based on the location of the parent
company and its subsidiaries.
(In millions of yen)
Six months ended September 30
2007 2006 % to
Amount % to total Amount % to total prior year
Japan Y105,119 27.4% Y116,777 30.7% 90.0%
North America 95,596 25.0 100,175 26.3 95.4
Europe 80,496 21.0 83,252 21.9 96.7
Other Regions 101,950 26.6 80,115 21.1 127.3
Consolidated Y383,161 100.0% Y380,319 100.0% 100.7%
Note: Operating revenue by geographic market is based on the location of each
unaffiliated customer.
Notes:
1. The Company' 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' 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 the second quarter of fiscal 2007, the Company sold subsidiaries involved
in the electronic components business. The operating results of these
subsidiaries and the gain on the sale are presented as income from discontinued
operations in the consolidated statements of operations.
5. In the first quarter of fiscal 2008, 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.
6. From May 15, 2007 to June 19, 2007, the Company made a tender offer bid to
make Tohoku Pioneer Corporation (a 67.1% owned subsidiary) a wholly-owned
subsidiary, and acquired 30.5% shares of common stock of Tohoku Pioneer for Y
13,506 million. In addition, effective on October 1, 2007, the Company acquired,
through a share exchange, Tohoku Pioneer's shares which had not been
acquired through the tender offer, and Tohoku Pioneer became a wholly-owned
subsidiary of the Company.
7. From this fiscal 2008, the Company adopted the Financial Accounting Standards
Board Interpretation No. 48, "Accounting for Uncertainty in Income
Taxes, an interpretation of FASB Statement No. 109" ("FIN 48
"). As a result, the amount of /302 million has been recognized to the
beginning balance of the Company's retained earnings upon the adoption
of FIN 48.
II. NON-CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED
SEPTEMBER 30, 2007
(1) CONDENSED STATEMENTS OF OPERATIONS
(In millions of yen)
Six months ended September 30
2007 2006 % to
prior year
Net sales Y285,446 Y270,886 105.4%
Cost of sales 253,825 234,989 108.0
Selling, general and administrative expenses 41,003 41,825 98.0
Operating loss (9,381) (5,928) -
Non-operating income - net 1,476 425 347.3
Ordinary loss (7,905) (5,503) -
Other income - net 11,653 4,381 266.0
Income (loss) before income taxes 3,747 (1,122) -
Income taxes 1,689 (308) -
Net income (loss) Y 2,057 Y(813) -%
(2) CONDENSED BALANCE SHEETS
(In millions of yen)
September 30 March 31
2007 2006 2007
ASSETS
Current assets:
Cash Y 17,652 Y 43,289 Y 30,367
Notes and accounts receivable - trade 56,361 49,847 50,462
Inventories 31,227 35,298 28,630
Other current assets 45,238 48,937 44,733
Total current assets 150,480 177,373 154,192
Fixed assets:
Tangible 60,360 56,273 63,904
Intangible 33,334 28,366 31,348
Investments and others 204,139 200,814 190,518
Total fixed assets 297,835 285,454 285,770
Total assets Y448,315 Y462,827 Y439,963
LIABILITIES
Current liabilities:
Notes and accounts payable - trade Y 72,273 Y 76,040 Y 52,701
Accrued expenses 51,987 53,505 55,787
Other current liabilities 65,320 42,546 63,050
Total current liabilities 189,581 172,091 171,538
Long-term liabilities 61,831 71,860 72,019
Total liabilities 251,412 243,951 243,558
NET ASSETS
Shareholders' equity:
Common stock 49,048 49,048 49,048
Capital surplus 81,314 81,315 81,314
Retained earnings 73,760 94,920 72,574
Treasury stock (12,459) (12,449) (12,452)
Total shareholders' equity 191,664 212,834 190,485
Adjustments to valuation and translation:
Net unrealized gains on securities 5,197 6,288 6,041
Deferred gains (losses) on hedges 40 (247) (121)
Total adjustments to valuation and translation 5,238 6,041 5,920
Total net assets 196,902 218,876 196,405
Total liabilities and net assets Y448,315 Y462,827 Y439,963
(3) CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(In millions of yen)
Shareholders' Equity
Total
Common Capital Retained Treasury Shareholders'
Stock Surplus Earnings Stock Equity
Balance at March 31, 2007 Y49,048 Y81,314 Y72,574 Y(12,452) Y190,485
Dividends paid (872) (872)
Net income 2,057 2,057
Purchase and sales of
treasury stock, net (0) (6) (6)
Net change in items other
than shareholders' equity
Balance at September 30, 2007 Y49,048 Y81,314 Y73,760 Y(12,459) Y191,664
Adjustments to Total
Valuation and Translation Net Assets
Total
Net Deferred Adjustments
Unrealized Gains to Valuation
Gains on (Losses) and
Securities on Hedges Translation
Balance at March 31, 2007 Y6,041 Y(121) Y5,920 Y196,405
Dividends paid - (872)
Net income - 2,057
Purchase and sales of
treasury stock, net - (6)
Net change in items other
than shareholders' equity (844) 161 (682) (682)
Balance at September 30, 2007 Y5,197 Y40 Y5,238 Y196,902
(In millions of yen)
Shareholders' Equity
Total
Common Capital Retained Treasury Shareholders
Stock Surplus Earnings Stock Equity
Balance at March 31, 2006 Y49,048 Y81,315 Y96,169 Y(12,442) Y214,090
Dividends paid (436) (436)
Net loss (813) (813)
Purchase and sales of
treasury stock, net 0 (7) (7)
Net change in items other
than shareholders' equity
Balance at September 30, 2006 Y49,048 Y81,315 Y94,920 Y(12,449) Y212,834
Adjustments to Total
Valuation and Translation Net Assets
Total
Net Deferred Adjustments
Unrealized Gains to Valuation
Gains on (Losses) and
Securities on Hedges Translation
Balance at March 31, 2006 Y 7,409 - Y 7,409 Y221,500
Dividends paid - (436)
Net loss - (813)
Purchase and sales of
treasury stock, net - (7)
Net change in items other
than shareholders' equity (1,120) Y(247) (1,368) (1,368)
Balance at September 30, 2006 Y 6,288 Y(247) Y 6,041 Y218,876
(In millions of yen)
Shareholders' Equity
Common Capital Retained Treasury Total
Stock Surplus Earnings Stock Shareholders'
Equity
Balance at March 31, 2006 Y49,048 Y81,315 Y96,169 Y(12,442) Y214,090
Dividends paid (1,308) (1,308)
Net loss (22,286) (22,286)
Purchase and sales of
treasury stock, net 0 (10) (10)
Net change in items other
than shareholders' equity
Balance at March 31, 2007 Y49,048 Y81,314 Y72,574 Y(12,452) Y190,485
Adjustments to Total
Valuation and Translation Net Assets
Total
Net Deferred Adjustments
Unrealized Gains to Valuation
Gains on (Losses) and
Securities on Hedges Translation
Balance at March 31, 2006 Y 7,409 - Y 7,409 Y221,500
Dividends paid - (1,308)
Net loss - (22,286)
Purchase and sales of
treasury stock, net - (10)
Net change in items other
than shareholders' equity (1,368) Y(121) (1,489) (1,489)
Balance at March 31, 2007 Y 6,041 Y(121) Y 5,920 Y196,405
This information is provided by RNS
The company news service from the London Stock Exchange
END
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