RNS Number:9447M
Pioneer Corporation
31 January 2008
For Immediate Release
January 31, 2008
Pioneer Announces Business Results for 3Q Fiscal 2008
TOKYO - Pioneer Corporation today announced its consolidated
third-quarter and nine-month business results, for the periods ended December
31, 2007.
Consolidated Financial Highlights
(In millions of yen except per share information)
Three months Nine months
ended December 31 ended December 31
2007 2006 % to 2007 2006 % to
prior prior
year year
Operating revenue Y211,039 Y214,601 98.3% Y594,200 Y594,920 99.9%
Operating income 6,887 5,034 136.8 9,149 16,725 54.7
Income from continuing
operations before income
taxes 7,620 5,481 139.0 25,265 18,105 139.5
Income from continuing
operations 1,688 2,436 69.3 11,624 8,869 131.1
Income from discontinued
operations, net of tax - - - - 2,775 -
Net income Y1,688 Y2,436 69.3% Y11,624 Y11,644 99.8%
Net income per share:
Basic Y9.43 Y13.97 Y66.07 Y66.76
Diluted Y8.31 Y12.46 Y59.68 Y60.26
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 third quarter of fiscal 2008, the three months ended December 31, 2007,
consolidated operating revenue decreased 1.7% compared with the third quarter of
fiscal 2007 to Y211,039 million (US$1,851.2 million). This was mainly due to
lower sales of plasma displays and DVD recorders, despite higher sales of car
audio products and the beneficial effect of the yen's depreciation
against the euro.
Operating income was Y6,887 million (US$60.4 million), an increase
of 36.8% year on year, mainly due to higher earnings in the Car Electronics
business and improved profitability in the Others segment, despite a larger loss
in the plasma display business. Net income decreased 30.7% year on year to Y
1,688 million (US$14.8 million), mainly because of an increase in income taxes
in connection with accumulated losses at the parent company, Pioneer
Corporation.
During the third quarter of fiscal 2008, the average value of the
Japanese yen appreciated 4.1% against the U.S. dollar and depreciated 7.3%
against the euro, compared with the third quarter of fiscal 2007.
Car Electronics sales increased 8.5% year on year to Y92,691 million (US$813.1
million) due to higher sales of car audio products, while sales of car
navigation systems remained mostly the same. In car navigation systems,
consumer-market and OEM (original equipment manufacturing) sales both decreased
in Japan, but rose in North America. In car audio products, consumer-market
sales rose in Central and South America, and OEM sales increased in North
America, China and Japan. Total OEM sales in this segment accounted for
approximately 40% of Car Electronics sales.
In terms of geographic sales, sales in Japan remained mostly the
same at Y33,519 million (US$294.0 million), while overseas sales increased 14.0%
to Y59,172 million (US$519.1 million) compared with the same period of the
previous year.
Operating income in this segment increased 86.0% year on year to Y
5,905 million (US$51.8 million) due to higher sales of car audio products and
lower selling expenses for consumer-market car navigation systems.
Home Electronics sales decreased 9.6% year on year to Y100,512 million (US$881.7
million). Overall plasma display sales declined due to decreases in home-use
sales in Europe and North America, despite higher home-use sales in Japan, and
due to decreases in OEM and business-use sales. Plasma display sales accounted
for approximately 42% of Home Electronics sales. Sales of Blu-ray Disc-related
devices and DVD drives rose, but sales of DVD recorders decreased.
In terms of geographic sales, sales in Japan declined 19.0% to Y
14,709 million (US$129.0 million), and overseas sales decreased 7.7% to Y85,803
million (US$752.7 million).
Operating income in this segment was down 72.8% year on year at Y777
million (US$6.8 million). This mainly reflected a larger loss in plasma displays
in line with lower sales of these products, despite improved profitability in
DVD recorders.
In Patent Licensing, royalty revenue decreased 57.6% to Y148 million (US$1.3
million) from the third quarter of fiscal 2007. This decrease was attributable
to the impact of the expiration of some patents licensed to the optical disc
industry.
This segment posted an operating loss of Y55 million (US$0.5
million) in line with the decrease in royalty revenue, compared with operating
income of Y68 million in the same period of the previous fiscal year.
In the Others segment, sales decreased 0.2% year on year to Y17,688 million
(US$155.2 million), mainly reflecting a drop in sales of factory automation
systems, despite higher sales of electronic devices and parts.
In terms of geographic sales, sales in Japan decreased 3.0% to Y
11,017 million (US$96.6 million), while overseas sales increased 4.7% to Y6,671
million (US$58.5 million).
Operating income in this segment was Y503 million (US$4.4 million),
improving from an operating loss of Y598 million in the third quarter of fiscal
2007. This was mainly attributable to improved profitability in map software and
factory automation systems.
For the nine-month period ended December 31, 2007, consolidated operating
revenue decreased 0.1% year on year to Y594,200 million (US$5,212.3 million).
Operating income was Y9,149 million (US$80.3 million), down 45.3% year on year.
Meanwhile, net income decreased 0.2% year on year to Y11,624 million (US$102.0
million), with the decrease limited mainly by a gain on sale of all land and
buildings at the Tokorozawa Plant and some at the Omori Plant, which was posted
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 nine-month period ended December 31, 2007, operating activities used
net cash of Y7,400 million (US$64.9 million). The main factors reducing cash
were an increase in trade notes and receivables of Y9,477 million (US$83.1
million), an increase in inventories of Y29,060 million (US$254.9 million) and a
decrease in other accrued liabilities of Y5,116 million (US$44.9 million), as
well as adjustments for a gain on sale and disposal of fixed assets of Y12,402
million (US$108.8 million), for which we received most of the cash proceeds in
fiscal 2007. These factors outweighed factors increasing cash, such as net
income of Y11,624 million (US$102.0 million), depreciation and amortization of Y
26,154 million (US$229.4 million) and an increase in trade payables of Y16,221
million (US$142.3 million). Investing activities used net cash of Y66,005
million (US$579.0 million). This reflected capital expenditures of Y34,240
million (US$300.4 million), mainly related to the car electronics business and
the newly established Kawasaki Plant, as well as Y14,672 million (US$128.7
million) for the purchase of shares of consolidated subsidiaries, mainly for
making Tohoku Pioneer Corporation a wholly owned subsidiary. Additionally, cash
of Y19,750 million (US$173.2 million) was used for the purchase of Sharp
Corporation shares as part of a business and capital alliance with Sharp.
Financing activities provided net cash of Y64,741 million (US$567.9 million)
mainly through an increase in borrowings of Y27,536 million (US$241.5 million)
and proceeds of Y41,358 million (US$362.8 million) from newly issued Pioneer
shares through third-party allotment to Sharp.
Consequently, cash and cash equivalents at December 31, 2007 were Y
93,755 million (US$822.4 million), a decrease of Y8,065 million from March 31,
2007.
The alliance with Sharp provided net cash of Y21,608 million (US$189.5 million),
after offsetting the aforementioned purchase of Sharp shares against the above
proceeds from newly issued Pioneer shares through third-party allotment to
Sharp.
Business Forecasts for Fiscal 2008
We revised our consolidated business forecasts for fiscal 2008, ending March 31,
2008, which were announced on October 31, 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 Y800,000 Y820,000 Y(20,000) Y797,102
Operating income 10,000 10,000 0 12,487
Income (loss) before income
taxes 26,000 26,000 0 (7,717)
Net income (loss) Y6,000 Y6,000 Y0 Y(6,761)
We have lowered our previous operating revenue forecast because plasma display
sales are projected to fall below forecasts chiefly in Europe and North America.
Turning to profitability, we have not revised our previous income forecasts.
This mainly reflects expectations of an increase in income in the
Car Electronics business due primarily to an improving gross profit margin in
this business and higher sales of car audio products for consumer markets in
Central and South America, despite larger losses in the Home Electronics
business due to lower plasma display sales.
We are assuming average yen-U.S. dollar and yen-euro exchange rates
of Y105 and Y155, respectively, for the revised 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. 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 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 Y114=US$1.00, the approximate rate
prevailing as of December 31, 2007.
Attached are consolidated financial statements for the three months and the nine
months ended December 31, 2007.
(1) OPERATING REVENUE BY SEGMENT
(In millions of yen)
Three months ended December 31
2007 2006 % to
Amount % to total Amount % to total prior year
Domestic Y33,519 15.9% Y33,507 15.6% 100.0%
Overseas 59,172 28.0 51,887 24.2 114.0
Car Electronics 92,691 43.9 85,394 39.8 108.5
Domestic 14,709 7.0 18,157 8.5 81.0
Overseas 85,803 40.6 92,969 43.3 92.3
Home Electronics 100,512 47.6 111,126 51.8 90.4
Domestic - - - - -
Overseas 148 0.1 349 0.2 42.4
Patent Licensing 148 0.1 349 0.2 42.4
Domestic 11,017 5.2 11,360 5.3 97.0
Overseas 6,671 3.2 6,372 2.9 104.7
Others 17,688 8.4 17,732 8.2 99.8
Domestic 59,245 28.1 63,024 29.4 94.0
Overseas 151,794 71.9 151,577 70.6 100.1
Total Y211,039 100.0% Y214,601 100.0% 98.3%
(In millions of yen)
Nine months ended December 31
2007 2006 % to
Amount % to total Amount % to total prior year
Domestic Y94,392 15.9% Y96,389 16.2% 97.9%
Overseas 188,046 31.6 163,975 27.6 114.7
Car Electronics 282,438 47.5 260,364 43.8 108.5
Domestic 38,084 6.4 46,971 7.9 81.1
Overseas 221,308 37.3 231,060 38.8 95.8
Home Electronics 259,392 43.7 278,031 46.7 93.3
Domestic - - - - -
Overseas 563 0.1 2,110 0.4 26.7
Patent Licensing 563 0.1 2,110 0.4 26.7
Domestic 31,888 5.4 36,441 6.1 87.5
Overseas 19,919 3.3 17,974 3.0 110.8
Others 51,807 8.7 54,415 9.1 95.2
Domestic 164,364 27.7 179,801 30.2 91.4
Overseas 429,836 72.3 415,119 69.8 103.5
Total Y594,200 100.0% Y594,920 100.0% 99.9%
(2) CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions of yen)
Three months ended December 31
2007 2006 % to
prior year
Operating revenue:
Net sales Y210,891 Y214,252 98.4%
Royalty revenue 148 349 42.4
Total operating revenue 211,039 214,601 98.3
Operating costs and expenses:
Cost of sales 157,817 163,780 96.4
Selling, general and administrative expenses 46,335 45,787 101.2
Total operating costs and expenses 204,152 209,567 97.4
Operating income 6,887 5,034 136.8
Other income (expenses):
Interest income 1,562 1,550 100.8
Foreign exchange loss (367) (1,947) 18.8
Interest expense (357) (462) 77.3
Other-net (105) 1,306 -
Total other income 733 447 164.0
Income from continuing operations before
income taxes 7,620 5,481 139.0
Income taxes 5,929 2,634 225.1
Minority interest in earnings of subsidiaries (63) (406) 15.5
Equity in earnings (losses) of affiliated companies 60 (5) -
Income from continuing operations 1,688 2,436 69.3
Income from discontinued operations, net of tax - - -
Net income Y1,688 Y2,436 69.3%
(In millions of yen)
Nine months ended December 31
2007 2006 % to
prior year
Operating revenue:
Net sales Y593,637 Y592,810 100.1%
Royalty revenue 563 2,110 26.7
Total operating revenue 594,200 594,920 99.9
Operating costs and expenses:
Cost of sales 451,548 447,164 101.0
Selling, general and administrative expenses 133,503 131,031 101.9
Total operating costs and expenses 585,051 578,195 101.2
Operating income 9,149 16,725 54.7
Other income (expenses):
Interest income 4,476 3,635 123.1
Foreign exchange loss (199) (2,332) 8.5
Interest expense (1,286) (1,078) 119.3
Other-net 13,125 1,155 -
Total other income 16,116 1,380 -
Income from continuing operations before
income taxes 25,265 18,105 139.5
Income taxes 13,507 8,848 152.7
Minority interest in earnings of subsidiaries (201) (405) 49.6
Equity in earnings of affiliated companies 67 17 394.1
Income from continuing operations 11,624 8,869 131.1
Income from discontinued operations, net of tax - 2,775 -
Net income Y11,624 Y11,644 99.8%
(3) CONSOLIDATED BALANCE SHEETS
(In millions of yen)
December 31 March 31
2007 2006 Increase 2007 Increase
(Decrease) (Decrease)
ASSETS
Current assets:
Cash and cash equivalents Y 93,755 Y 77,219 Y16,536 Y 101,820 Y (8,065)
Trade receivables, less allowance 127,906 139,211 (11,305) 117,875 10,031
Inventories 135,101 138,677 (3,576) 105,331 29,770
Other current assets 72,779 74,448 (1,669) 69,066 3,713
Total current assets 429,541 429,555 (14) 394,092 35,449
Investments and long-term receivables 44,586 27,313 17,273 27,219 17,367
Property, plant and equipment, less 145,786 162,471 (16,685) 146,475 (689)
depreciation
Intangible assets 18,801 19,199 (398) 18,248 553
Other assets 45,599 39,693 5,906 49,440 (3,841)
Total assets Y 684,313 Y 678,231 Y 6,082 Y 635,474 Y 48,839
LIABILITIES, MINORITY INTERESTS AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings and current
portion of long-term debt Y57,608 Y37,846 Y19,762 Y18,605 Y39,003
Trade payables 108,278 108,414 (136) 93,351 14,927
Other current liabilities 104,623 117,821 (13,198) 130,757 (26,134)
Total current liabilities 270,509 264,081 6,428 242,713 27,796
Long-term debt 73,115 87,564 (14,449) 86,015 (12,900)
Other long-term liabilities 22,848 23,650 (802) 24,341 (1,493)
Total liabilities 366,472 375,295 (8,823) 353,069 13,403
Minority interests 1,397 14,660 (13,263) 14,289 (12,892)
Shareholders' equity:
Common stock 69,824 49,049 20,775 49,049 20,775
Capital surplus 103,578 82,971 20,607 82,983 20,595
Retained earnings 175,421 184,598 (9,177) 165,321 10,100
Accumulated other comprehensive loss (21,255) (15,891) (5,364) (16,784) (4,471)
Treasury stock (11,124) (12,451) 1,327 (12,453) 1,329
Total shareholders' equity 316,444 288,276 28,168 268,116 48,328
Total liabilities, minority interests and
shareholders' equity Y684,313 Y678,231 Y6,082 Y635,474 Y48,839
Breakdown of
accumulated other comprehensive loss:
Minimum pension liability adjustments - Y Y 5,166 - -
(5,166)
Pension liability adjustments Y(5,137) - (5,137) Y(5,009) Y(128)
Net unrealized gains on securities 5,857 8,073 (2,216) 7,405 (1,548)
Foreign currency translation adjustments (21,975) (18,798) (3,177) (19,180) (2,795)
Total accumulated other
comprehensive loss Y(21,255) Y Y (5,364) Y (16,784) Y(4,471)
(15,891)
(4) CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of yen)
Three months Nine months
ended December 31 ended December 31
2007 2006 2007 2006
I. Cash flows from operating activities:
Net income Y1,688 Y2,436 Y11,624 Y11,644
Depreciation and amortization 9,382 9,695 26,154 28,195
Loss (gain) on sale and disposal of fixed assets 248 118 (12,402) (579)
Increase in trade receivables (4,286) (17,494) (9,477) (27,459)
(Increase) decrease in inventories 3,249 3,240 (29,060) (29,447)
Increase (decrease) in trade payables (6,415) (12,781) 16,221 4,403
Increase (decrease) in other accrued liabilities (5,635) 1,560 (5,116) (6,306)
Other (466) (2,284) (5,344) (5,816)
Net cash used in operating activities (2,235) (15,510) (7,400) (25,365)
II. Cash flows from investing activities:
Payment for purchase of fixed assets (8,930) (11,836) (34,240) (32,313)
Payment for purchase of shares of consolidated
subsidiaries (330) - (14,672) -
Payment for purchase of marketable equity securities
(19,750) (1,679) (19,750) (1,679)
Proceeds from sale of discontinued operations - - - 10,862
Other (240) 1,422 2,657 3,279
Net cash used in investing activities (29,250) (12,093) (66,005) (19,851)
III. Cash flows from financing activities:
Increase (decrease) in short-term borrowings
and long-term debt 3,209 (4,193) 27,536 3,005
Dividends paid (872) (872) (1,744) (1,308)
Proceeds from new shares issued, net of stock issuance
cost 41,358 - 41,358 -
Other (647) (866) (2,409) (2,593)
Net cash provided by (used in) financing activities 43,048 (5,931) 64,741 (896)
Effect of exchange rate changes on cash and
cash equivalents 72 931 599 1,651
Net increase (decrease) in cash and cash equivalents 11,635 (32,603) (8,065) (44,461)
Cash and cash equivalents, beginning of period 82,120 109,822 101,820 121,680
Cash and cash equivalents, end of period Y93,755 Y77,219 Y93,755 Y77,219
Free cash flows (I + II) Y(31,485) Y(27,603) Y(73,405) Y(45,216)
(5) SEGMENT INFORMATION
The following segment information is prepared pursuant to the regulations under
the Financial Instruments and Exchange Law of Japan.
< Business Segments >
(In millions of yen)
Three months ended December 31
2007 2006 % to prior year
Operating Operating Operating Operating Operating Operating
Revenue Income Revenue Income Revenue Income
Car Electronics Y93,189 Y5,905 Y85,930 Y3,175 108.4% 186.0%
Home Electronics 100,677 777 111,309 2,856 90.4 27.2
Patent Licensing 301 (55) 388 68 77.6 -
Others 25,808 503 26,438 (598) 97.6 -
Total 219,975 7,130 224,065 5,501 98.2 129.6
Corporate and Eliminations (8,936) (243) (9,464) (467) - -
Consolidated Y211,039 Y6,887 Y214,601 Y5,034 98.3% 136.8%
(In millions of yen)
Nine months ended December 31
2007 2006 % to prior year
Operating Operating Operating Operating Operating Operating
Revenue Income Revenue Income Revenue Income
Car Electronics Y283,974 Y19,540 Y261,843 Y16,293 108.5% 119.9%
Home Electronics 259,913 (8,765) 278,555 (1,277) 93.3 -
Patent Licensing 917 (52) 2,149 1,042 42.7 -
Others 77,158 20 80,607 2,094 95.7 1.0
Total 621,962 10,743 623,154 18,152 99.8 59.2
Corporate and Eliminations (27,762) (1,594) (28,234) (1,427) - -
Consolidated Y594,200 Y9,149 Y594,920 Y16,725 99.9% 54.7%
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 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 the
sale has been included in "Other-net" in the consolidated statements of
operations.
6. From May 15, 2007 to June 19, 2007, the Company conducted a tender
offer to make 67.1%-owned Tohoku Pioneer Corporation a wholly owned subsidiary.
The Company acquired an additional 30.5% of Tohoku Pioneer's shares for
Y13,506 million through this tender offer. The Company then acquired the
remaining 2.4% of Tohoku Pioneer's shares through a share exchange
effective October 1, 2007, and Tohoku Pioneer accordingly became a wholly owned
subsidiary of the Company.
7. On December 20, 2007, the Company issued 30,000,000 new shares of
common stock (14.3% of post-allotment issued shares) through a third-party
allotment to Sharp Corporation for Y41,550 million. On the same date, the
Company also subscribed to 10,000,000 shares of Sharp's treasury stock (0.9% of
Sharp's issued shares) through a third-party allotment at a cost of Y19,750
million.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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