RNS Number : 2937U
Pioneer Corporation
13 May 2008
For Immediate Release
May 13, 2008
Pioneer Announces Business Results for Fiscal 2008
TOKYO - Pioneer Corporation today announced its business results on consolidated and non-consolidated bases for fiscal 2008, ended March
31, 2008.
Consolidated Financial Highlights
(In millions of yen except per share information)
Year ended March 31
2008 2007 % to
prior
year
Operating revenue ¥774,477 ¥797,102 97.2%
Operating income 10,907 12,487 87.3
Income (loss) from continuing 3,434 (7,717) -
operations
before income taxes
Loss from continuing operations (17,992) (9,536) -
Income from discontinued operations, - 2,775 -
net of tax
Net loss ¥ (17,992) ¥ (6,761) -%
Net loss per share:
Basic ¥(98.23) ¥(38.76)
Diluted ¥(98.23) ¥(38.76)
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.
Consolidated Business Results
In fiscal 2008, the year ended March 31, 2008, consolidated operating revenue decreased 2.8% year on year to ¥774,477 million
(US$7,744.8 million). This decrease mainly reflected a drop in sales of plasma displays and DVD recorders, despite higher sales of DVD
drives, Blu-ray Disc-related devices, car audio products and car navigation systems.
Operating income decreased 12.7% year on year to ¥10,907 million (US$109.1 million), chiefly due to a larger loss in the plasma
display business, despite higher earnings in the Car Electronics business. The net loss was ¥17,992 million (US$179.9 million), compared
with a net loss of ¥6,761 million in the previous fiscal year. This was due mainly to impairment losses of ¥23,293 million (US$232.9
million) primarily on plasma display production facilities, and higher income taxes following an evaluation of deferred tax assets, despite
a gain on sale of all land and buildings at the Tokorozawa Plant and some at the Omori Plant.
During fiscal 2008, the average value of the Japanese yen appreciated 2.4% against the U.S. dollar and depreciated 7.1% against the
euro, compared with the previous fiscal year.
Car Electronics sales increased 4.5% year on year to ¥373,883 million (US$3,738.8 million) due to higher sales of both car navigation
systems and car audio products. In car navigation systems, consumer-market sales were mostly the same as in the previous fiscal year, while
OEM sales increased in North America. In car audio products, consumer-market sales increased in Central and South America, but decreased in
North America due to market contraction, while OEM sales rose in Japan, China and North America. Total OEM sales in this segment accounted
for approximately 39% of Car Electronics sales in fiscal 2008, compared with approximately 36% in fiscal 2007.
In terms of geographic sales, sales in Japan were ¥126,362 million (US$1,263.6 million), largely unchanged from fiscal 2007, while
overseas sales increased 6.9% year on year to ¥247,521 million (US$2,475.2 million).
Operating income in this segment rose 18.3% to ¥26,154 million (US$261.5 million). This principally reflected lower selling
expenses for consumer-market products, such as advertising and sales promotion expenses, despite higher development expenses in the OEM
business.
Home Electronics sales decreased 8.8% year on year to ¥329,530 million (US$3,295.3 million). Plasma display sales declined due to a
drop in sales volume mainly in North America and Europe. Plasma display sales accounted for approximately 40% of Home Electronics sales,
compared with approximately 49% in the previous fiscal year. Sales of DVD drives and Blu-ray Disc-related devices rose, while sales of DVD
recorders fell.
In terms of geographic sales, sales in Japan declined 21.4% to ¥46,285 million (US$462.9 million), and overseas sales decreased
6.4% to ¥283,245 million (US$2,832.5 million).
The operating loss in this segment was ¥17,968 million (US$179.7 million), compared with an operating loss of ¥15,814 million in
the previous fiscal year. This was mainly attributable to the larger loss in the plasma display business due to falling sales, despite a
smaller loss in DVD recorders reflecting a reduction in development expenses.
In Patent Licensing, royalty revenue decreased 57.1% year on year to ¥1,999 million (US$20.0 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 59.5% to ¥1,591 million (US$15.9 million), in line with the decrease in royalty revenue.
In the Others segment, sales decreased 5.5% year on year to ¥69,065 million (US$690.7 million). This mainly reflected lower sales of
factory automation (FA) systems and business-use AV systems.
In terms of geographic sales, sales in Japan decreased 11.3% to ¥42,996 million (US$430.0 million), while overseas sales increased
5.8% to ¥26,069 million (US$260.7 million).
Operating income in this segment was ¥161 million (US$1.6 million), down 93.4% year on year. This was mainly attributable to lower
profitability in FA systems and business-use AV systems due to lower sales.
Note:Operating income (loss) in each business segment represents operating income (loss) before elimination of intersegment
transactions.
Cash Flows
During fiscal 2008, operating activities provided net cash of ¥22,032 million (US$220.3 million). This was due mainly to adjustments
for non-cash expenses, such as depreciation and amortization of ¥33,309 million (US$333.1 million), impairment losses of ¥23,293 million
(US$232.9 million) on property, plant and equipment, and deferred taxes of ¥13,277 million (US$132.8 million). These outweighed the
following factors reducing cash: a net loss of ¥17,992 million (US$179.9 million), a decrease in other accrued liabilities of ¥12,337
million (US$123.4 million) and a gain on sale and disposal of fixed assets of ¥11,742 million (US$117.4 million), for which we received
most of the cash proceeds in fiscal 2007. Investing activities used net cash of ¥72,373 million (US$723.7 million). This reflected capital
expenditures of ¥41,989 million (US$419.9 million), mainly related to the Car Electronics business and the newly established Kawasaki
Plant, as well as ¥19,750 million (US$197.5 million) for the purchase of Sharp Corporation shares as part of a business and capital alliance with Sharp. Additionally, cash of ¥14,732 million (US$147.3
million) was used for the purchase of shares of consolidated subsidiaries, mainly for making Tohoku Pioneer Corporation a wholly owned
subsidiary. Financing activities provided net cash of ¥35,932 million (US$359.3 million), mainly through proceeds of ¥41,358 million
(US$413.6 million) from a third-party allotment of newly issued Pioneer shares to Sharp.
Consequently, cash and cash equivalents at March 31, 2008 were ¥81,180 million (US$811.8 million), a decrease of ¥20,640 million
from March 31, 2007.
The alliance with Sharp provided net cash of ¥21,608 million (US$216.1 million), after offsetting the aforementioned purchase of
Sharp shares against the above proceeds from the third-party allotment of newly issued Pioneer shares to Sharp.
Dividends
Pioneer positions its dividend policy as one of the 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 a year-end dividend of ¥2.5 (US$0.03) per share of common stock for
fiscal 2008, a decrease of ¥2.5 from that for the previous fiscal year. The decision to reduce the year-end dividend mainly reflects the
Company's large losses for fiscal 2008 on both non-consolidated and consolidated bases. This year-end dividend is subject to approval by the
ordinary general meeting of shareholders to be held in June 2008. The total annual dividend for fiscal 2008, including the interim dividend,
will be ¥7.5 per share.
Business Forecasts for Fiscal 2009
Consolidated business forecasts for fiscal 2009, the year ending March 31, 2009, are as follows:
(In millions of yen)
First half Full year
Projections for Results for Percent Projections for Results for Percent
fiscal 2009 fiscal 2008 changes fiscal 2009 fiscal 2008 changes
Operating revenue ¥350,000 ¥383,161 -8.7% ¥780,000 ¥774,477 +0.7%
Operating income (loss) (15,000) 2,262 - 7,000 10,907 -35.8
Income (loss) before income (15,000) 17,645 - (7,500) 3,434 -
taxes
Net income (loss) ¥ (18,000) ¥ 9,936 -% ¥ (19,000) ¥ (17,992) -%
For fiscal 2009, Pioneer is forecasting operating revenue of ¥780,000 million on a full-year basis, largely on a par with fiscal 2008.
This mainly reflects projected sales increases in the Car Electronics business, particularly for car navigation systems in the Japanese
consumer market and car audio products primarily in Central and South America, as well as projected sales decreases in the Home Electronics
business, chiefly for plasma displays.
For the full year, we are forecasting a 35.8% year-on-year decrease in operating income to ¥7,000 million. This forecast mainly
reflects projected higher development expenses in the Car Electronics business. However, Pioneer expects to see profitability in the display
business of the Home Electronics business improve from the second half as a result of restructuring measures.
Furthermore, business restructuring expenses of ¥15,000 million are planned for the second half. Consequently, Pioneer is
forecasting a loss before income taxes of ¥7,500 million and a net loss of ¥19,000 million.
We are assuming average yen-U.S. dollar and yen-euro exchange rates of ¥105 and ¥155, respectively.
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.
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's 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's 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's performance.
Looking at medium-term management strategies, Pioneer will make a group-wide effort to expand its Car Electronics business and improve
earnings in the Home Electronics business, with the aim of improving its operating results and generating stable earnings.
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, Pioneer has endeavoured to increase production capacity at overseas sites. Through these
initiatives, Pioneer aims to maintain an operating margin of around 6% in the Car Electronics business over the medium term.
In the Home Electronics business, Pioneer will work to improve profitability in the display business by implementing sweeping
restructuring measures, while growing its audio/video product business, which mainly involves Blu-ray Disc players, and its professional
sound & visual (Pro SV) business, which involves DJ equipment. In this way, Pioneer aims to restore profitability in the Home Electronics
business as a whole in fiscal 2010.
Through the business alliance with Sharp Corporation, we will utilize each other's resources and promote joint development in each
of our businesses, in order to develop new products and businesses and improve the efficiency of development activities.
Through the aforementioned initiatives, the Company aims to achieve medium-term management targets of consolidated operating revenue of
¥900 billion and operating income of ¥37 billion in fiscal 2011, the year ending March 31, 2011.
Issues to Be Addressed
The overall economic outlook is for continuing increases in materials prices, including crude oil prices, growing uncertainty over a
possible downturn in consumer spending in developed countries stemming from recent financial instability in the U.S., as well as exchange
rate volatility. Meanwhile, Pioneer faces extremely challenging business conditions due to fiercer competition involving its core products.
In the Car Electronics business, specifically car navigation systems for the consumer market in Japan, Pioneer will launch models with
telematics functions employing mobile phones and the Internet. This is part of efforts to transform car navigation systems into
comprehensive in-vehicle information terminals offering much more than merely car navigation in a bid to stimulate new demand. Another goal
is to counter growing demand for portable navigation devices. Here, Pioneer will expand its customer base for in-dash car navigation systems
by proposing value not offered by portable navigation devices. For instance, Pioneer is developing in-dash car navigation systems with
built-in audio/video functions that feature connectivity with peripheral electronics and innovative device operability.
In OEM car navigation systems, we will concentrate on winning contracts for assembly line products worldwide for automakers. At the same
time, we will grow business in the domestic dealer options market. Through these measures, Pioneer aims to expand the scope of its car
navigation system business as a whole.
In car audio/video products for consumer markets, we will compensate for contraction in the consumer markets in Japan, North America and
Europe by actively responding to rapid market expansion in the BRICs nations. Concurrently, we plan to maintain profitability by shifting
our center of gravity from models equipped with CD players to those with higher value-added DVD players. We will also vigorously offer new
value propositions by responding to a variety of media and networks. In these ways, we aim to maintain our market share.
On the development front, Pioneer will work to boost efficiency by implementing reforms of increasingly complex software development
processes and by embracing common platforms for OEM products for which orders are growing. These and other measures will help us to maintain
profitability as we grow our business.
In the Home Electronics business, Pioneer is focusing on improving profitability by growing sales of Blu-ray Disc-related products, as
well as by restructuring its display business.
In the display business, Pioneer reached a basic agreement with Matsushita Electric Industrial Co., Ltd. in April 2008 on procuring
plasma display panels from this company from the summer of 2009. This follows Pioneer's decision to terminate in-house plasma display panel
production after panel production is completed for models scheduled for release in 2008. Pioneer's proprietary technologies will be adopted
by Matsushita as part of the process of supplying plasma display panels to Pioneer. The two companies plan to cooperate on developing panels
befitting Pioneer's commitment to high picture quality and premium-grade products.
Pioneer plans to convert certain panel production facility to a final display assembly center, and a product distribution and inspection
center for the Japanese market. The Company also plans to redeploy some production and development personnel to growth businesses in other
fields.
Furthermore, Pioneer plans to successively roll out Sharp-supplied LCD TVs starting in Europe in August 2008. Going forward, Pioneer
plans to develop LCD TVs that combine its proprietary technologies with sophisticated LCD panels to be supplied by Sharp, for an expanding
number of regions.
These restructuring measures in the display business began in fiscal 2009, and are expected to have a significant beneficial effect on
profitability from fiscal 2010.
With regards to Blu-ray Disc-related products, Pioneer will strive to launch products in a timely manner to boost sales. In particular,
we will conduct businesses focused on Blu-ray Disc players and Blu-ray Disc drives for PCs, both of which are expected to find growing
markets.
In the speaker business, Pioneer is working to raise efficiency and expand business by concentrating speaker development and production
for a broad range of products at Tohoku Pioneer Corporation, which became a wholly owned subsidiary in October 2007. These products range
from car speakers and home-use speakers, to speaker units for cellular phones, TVs and other products.
Proposed Changes in Management (Previously Announced on March 31, 2008)
Pioneer has announced the following proposed changes in management, which are subject to approval by the ordinary general meeting of
shareholders to be held on June 26, 2008.
(1)Candidates for directors to be newly elected:
*Mr. Susumu Kotani, currently Senior Executive Officer, and General Manager of Home Entertainment Business Group, will be elected as
Managing Director.
*Mr. Masanori Koshoubu, currently Senior Executive Officer, and General Manager of Research & Development Group and General Manager of
Technology Development Center, will be elected as Managing Director.
(2)Mr. Akira Haeno, currently Managing Director, will be promoted to Senior Managing Director and Representative Director.
(3)Mr. Shinji Yasuda, currently Managing Director, and in charge of Research & Development Group and Intellectual Property Division,
will retire at the conclusion of the shareholder's meeting.
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 translations of Japanese yen, for convenience only, at the rate of ¥100=US$1.00, the
approximate rate prevailing on March 31, 2008.
Attachments:
I.Consolidated financial statements for the year ended March 31, 2008
II.Non-consolidated financial statements for the year ended March 31, 2008
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/
I. CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2008
(1) OPERATING REVENUE BY SEGMENT
(In millions of yen)
Year ended March 31
2008 2007 % to
Amount % to total Amount % to total prior year
Domestic ¥126,362 16.3% ¥126,278 15.8% 100.1%
Overseas 247,521 32.0 231,531 29.1 106.9
Car Electronics 373,883 48.3 357,809 44.9 104.5
Domestic 46,285 6.0 58,856 7.4 78.6
Overseas 283,245 36.5 302,654 38.0 93.6
Home Electronics 329,530 42.5 361,510 45.4 91.2
Domestic - - - - -
Overseas 1,999 0.3 4,661 0.6 42.9
Patent Licensing 1,999 0.3 4,661 0.6 42.9
Domestic 42,996 5.5 48,485 6.1 88.7
Overseas 26,069 3.4 24,637 3.0 105.8
Others 69,065 8.9 73,122 9.1 94.5
Domestic 215,643 27.8 233,619 29.3 92.3
Overseas 558,834 72.2 563,483 70.7 99.2
Total ¥774,477 100.0% ¥797,102 100.0% 97.2%
(2) CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions of yen)
Year ended March 31
2008 2007 % to
prior
year
Operating revenue:
Net sales ¥772,478 ¥792,441 97.5%
Royalty revenue 1,999 4,661 42.9
Total operating revenue 774,477 797,102 97.2
Operating costs and expenses:
Cost of sales 601,875 614,444 98.0
Selling, general and administrative 161,695 170,171 95.0
expenses
Total operating costs and expenses 763,570 784,615 97.3
Operating income 10,907 12,487 87.3
Other income (expenses):
Interest income 6,508 5,873 110.8
Foreign exchange loss (1,031) (2,558) 40.3
Interest expense (1,897) (2,622) 72.3
Other-net (11,053) (20,897) 52.9
Total other expenses (7,473) (20,204) 37.0
Income (loss) from continuing 3,434 (7,717) -
operations before income taxes
Income taxes 21,256 1,758 -
Minority interest in earnings of (306) (404) 75.7
subsidiaries
Equity in earnings of affiliated 136 343 39.7
companies
Loss from continuing operations (17,992) (9,536) -
Income from discontinued operations, - 2,775 -
net of tax
Net loss ¥ (17,992) ¥ (6,761) -%
(3) CONSOLIDATED BALANCE SHEETS
(In millions of yen)
March 31
2008 2007 Increase
(Decrease)
ASSETS
Current assets:
Cash and cash equivalents ¥ 81,180 ¥101,820 ¥(20,640)
Trade receivables, less 93,068 117,875 (24,807)
allowance
Inventories 104,168 105,331 (1,163)
Other current assets 70,821 69,066 1,755
Total current assets 349,237 394,092 (44,855)
Investments and long-term 36,397 27,219 9,178
receivables
Property, plant and equipment, 122,752 146,475 (23,723)
less depreciation
Intangible assets 17,738 18,248 (510)
Other assets 49,992 49,440 552
Total assets ¥576,116 ¥635,474 ¥(59,358)
LIABILITIES, MINORITY INTERESTS AND SHAREHOLDERS'
EQUITY
Current liabilities:
Short-term borrowings and ¥ 28,484 ¥ 18,605 ¥ 9,879
current portion
of long-term debt
Trade payables 86,195 93,351 (7,156)
Other current liabilities 107,328 130,757 (23,429)
Total current liabilities 222,007 242,713 (20,706)
Long-term debt 72,041 86,015 (13,974)
Other long-term liabilities 33,311 24,341 8,970
Total liabilities 327,359 353,069 (25,710)
Minority interests 1,362 14,289 (12,927)
Shareholders' equity:
Common stock 69,824 49,049 20,775
Capital surplus 103,578 82,983 20,595
Retained earnings 145,295 165,321 (20,026)
Accumulated other (60,178) (16,784) (43,394)
comprehensive loss
Treasury stock (11,124) (12,453) 1,329
Total shareholders' equity 247,395 268,116 (20,721)
Total liabilities, minority ¥576,116 ¥635,474 ¥(59,358)
interests and
shareholders' equity
Breakdown of accumulated other
comprehensive loss:
Pension liability adjustments ¥(12,279) ¥ (5,009) ¥ (7,270)
Net unrealized gains on 1,943 7,405 (5,462)
securities
Foreign currency translation (49,842) (19,180) (30,662)
adjustments
Total accumulated other ¥(60,178) ¥(16,784) ¥(43,394)
comprehensive loss
(4) CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In millions of yen)
Common Capital Retained Accumulated Treasury Total
Stock Surplus Earnings Other Stock Sharehol
Comprehensive ders'
Loss Equity
Balance at March 31, 2006 ¥49,049 ¥82,910 ¥173,826 ¥(20,092) ¥(12,443) ¥273,250
Net loss (6,761) (6,761)
Other comprehensive 3,308 3,308
income
Value ascribed to stock 73 73
options
Cash dividends (1,744) (1,744)
(¥10 per share)
Acquisition and disposal (10) (10)
of treasury stock, net
Balance at March 31, 2007 49,049 82,983 165,321 (16,784) (12,453) 268,116
Adjustment pursuant to (302) (302)
FIN 48
Net loss (17,992) (17,992)
Other comprehensive (43,394) (43,394)
loss
Issuance of new shares 20,775 20,583 41,358
Value ascribed to stock 12 12
options
Cash dividends (1,385) (1,385)
(¥7.5 per share)
Acquisition and disposal (347) 1,329 982
of treasury stock, net
Balance at March 31, 2008 ¥69,824 ¥103,578 ¥145,295 ¥(60,178) ¥(11,124) ¥247,395
(5) CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of yen)
Year ended March 31
2008 2007
I. Cash flows from operating activities:
Net loss ¥ (17,992) ¥ (6,761)
Depreciation and amortization 33,309 41,127
Deferred income taxes 13,277 (7,422)
Impairment losses of long-lived assets 23,293 22,711
Loss (gain) on sale and disposal of fixed (11,742) 185
assets, net
Decrease (increase) in trade receivables 18,869 (6,348)
Decrease (increase) in inventories (6,986) 4,380
Decrease in trade payables (358) (11,841)
Decrease in other accrued liabilities (12,337) (12,444)
Other (17,301) (6,835)
Net cash provided by operating activities 22,032 16,752
II. Cash flows from investing activities:
Payment for purchase of fixed assets (41,989) (41,932)
Payment for purchase of shares of consolidated (14,732) (485)
subsidiaries
Payment for purchase of marketable equity (19,843) (2,478)
securities
Proceeds from sale of discontinued operations - 10,949
Other 4,191 17,478
Net cash used in investing activities (72,373) (16,468)
III. Cash flows from financing activities:
Decrease in short-term borrowings and (980) (17,012)
long-term debt
Dividends paid (1,744) (1,308)
Proceeds from issuance of new shares, net of 41,358 -
issuance cost
Other (2,702) (3,353)
Net cash provided by (used in) financing 35,932 (21,673)
activities
Effect of exchange rate changes on cash and (6,231) 1,529
cash equivalents
Net decrease in cash and cash equivalents (20,640) (19,860)
Cash and cash equivalents, beginning of year 101,820 121,680
Cash and cash equivalents, end of year ¥ 81,180 ¥101,820
Free cash flows (I + II) ¥(50,341) ¥284
(6) SEGMENT INFORMATION
The following segment information is prepared pursuant to the regulations under the Financial Instruments and Exchange Law of Japan.
(In millions of yen)
Year ended March 31
2008 2007 % to prior year
Operating Operating Operating Operating Operating Operating
Revenue Income Revenue Income Revenue Income
Car Electronics ¥375,885 ¥ 26,154 ¥359,802 ¥ 22,116 104.5% 118.3%
Home Electronics 330,200 (17,968) 362,157 (15,814) 91.2 -
Patent Licensing 2,616 1,591 5,423 3,924 48.2 40.5
Others 102,001 161 107,576 2,453 94.8 6.6
Total 810,702 9,938 834,958 12,679 97.1 78.4
Corporate and Eliminations (36,225) 969 (37,856) (192) - -
Consolidated ¥774,477 ¥ 10,907 ¥797,102 ¥ 12,487 97.2% 87.3%
(In millions of yen)
Year ended March 31
2008 2007 % to prior year
Operating Operating Operating Operating Operating Operating
Revenue Income Revenue Income Revenue Income
Japan ¥ 630,396 ¥ (6,375) ¥ 632,730 ¥ (941) 99.6% -%
North America 184,897 640 208,914 423 88.5 151.3
Europe 167,342 1,082 180,038 4,945 92.9 21.9
Other Regions 391,333 14,221 350,431 6,580 111.7 216.1
Total 1,373,968 9,568 1,372,113 11,007 100.1 86.9
Corporate and Eliminations (599,491) 1,339 (575,011) 1,480 - -
Consolidated ¥ 774,477 ¥10,907 ¥ 797,102 ¥12,487 97.2% 87.3%
Note: Geographic segment information is based on the location of the parent company and its subsidiaries.
(In millions of yen)
Year ended March 31
2008 2007 % to
Amount % to total Amount % to total prior year
Japan ¥215,643 27.8% ¥233,619 29.3% 92.3%
North America 180,911 23.4 208,615 26.2 86.7
Europe 169,146 21.8 186,637 23.4 90.6
Other Regions 208,777 27.0 168,231 21.1 124.1
Consolidated ¥774,477 100.0% ¥797,102 100.0% 97.2%
Note: Operating revenue by geographic market is based on the location of each unaffiliated customer.
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 and the gain on the sale are presented as "Income from discontinued operations" in the consolidated statements of operations.
5. In fiscal 2008, the Company sold all land and buildings at the Tokorozawa Plant and some at the Omori Plant. The gain on these
sales of ¥11,891 million 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 ¥13,506 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 total issued shares)
through a third-party allotment to Sharp Corporation for ¥41,550 million. On the same date, the Company also subscribed to 10,000,000
shares of Sharp's treasury stock (0.9% of Sharp's total issued shares) through a third-party allotment at a cost of ¥19,750 million.
8. 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, as of the beginning of fiscal 2008 the
amount of ¥302 million has been recognized to the balance of "Retained earnings" upon the adoption of FIN 48.
II. NON-CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2008
(1) CONDENSED STATEMENTS OF OPERATIONS
(In millions of yen)
Year ended March 31
2008 2007 % to
prior
year
Net sales ¥537,754 ¥532,895 100.9%
Cost of sales 482,233 468,442 102.9
Selling, general and 78,145 81,730 95.6
administrative expenses
Operating loss (22,624) (17,277) -
Non-operating income-net 40,780 5,007 814.4
Ordinary income (loss) 18,156 (12,269) -
Other expenses-net (39,577) (10,518) -
Loss before income taxes (21,421) (22,788) -
Income taxes 9,975 (501) -
Net loss ¥ (31,396) ¥ (22,286) -%
(2) CONDENSED BALANCE SHEETS
(In millions of yen)
March 31 Increase
(Decrease)
2008 2007
ASSETS
Current assets:
Cash ¥ 19,297 ¥ 30,367 ¥(11,069)
Notes and accounts 44,299 50,462 (6,162)
receivable-trade
Inventories 28,431 28,630 (198)
Other current assets 58,113 44,733 13,380
Total current assets 150,142 154,192 (4,050)
Fixed assets:
Tangible 59,174 63,904 (4,729)
Intangible 37,099 31,348 5,751
Investments and others 203,886 190,518 13,367
Total fixed assets 300,161 285,770 14,390
Deferred assets 170 - 170
Total assets ¥450,474 ¥439,963 ¥ 10,510
LIABILITIES
Current liabilities:
Notes and accounts ¥ 48,186 ¥ 52,701 ¥ (4,514)
payable-trade
Accrued expenses 50,325 55,787 (5,461)
Other current liabilities 52,406 63,050 (10,643)
Total current liabilities 150,919 171,538 (20,619)
Long-term liabilities 98,276 72,019 26,257
Total liabilities 249,196 243,558 5,637
NET ASSETS
Shareholders' equity:
Common stock 69,823 49,048 20,775
Capital surplus 102,053 81,314 20,738
Retained earnings 39,099 72,574 (33,475)
Treasury stock (11,048) (12,452) 1,404
Total shareholders' equity 199,928 190,485 9,442
Adjustments to valuation and
translation:
Net unrealized gains on 1,299 6,041 (4,742)
securities
Deferred gains (losses) on 51 (121) 172
hedges
Total adjustments to valuation 1,350 5,920 (4,570)
and translation
Total net assets 201,278 196,405 4,872
Total liabilities and net ¥450,474 ¥439,963 ¥ 10,510
assets
(3) CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(In millions of yen)
Shareholders' Equity
Common Capital Retained Treasury Total
Stock Surplus Earnings Stock Sharehol
ders'
Equity
Balance at March 31, 2007 ¥49,048 ¥ 81,314 ¥ 72,574 ¥(12,452) ¥190,485
Issuance of new shares 20,775 20,775 41,550
Dividends paid (1,744) (1,744)
Net loss (31,396) (31,396)
Acquisition and disposal of (36) (334) 1,404 1,033
treasury stock, net
Net change in items other -
than shareholders' equity
Balance at March 31, 2008 ¥69,823 ¥102,053 ¥ 39,099 ¥(11,048) ¥199,928
Adjustments to Total
Valuation and Translation Net
Assets
Net Deferred Total
Unrealized Gains Adjustments
(Losses) to Valuation
Gains on on Hedges and
Securities Translation
Balance at March 31, 2007 ¥ 6,041 ¥(121) ¥ 5,920 ¥196,405
Issuance of new shares - 41,550
Dividends paid - (1,744)
Net loss - (31,396)
Acquisition and disposal of - 1,033
treasury stock, net
Net change in items other (4,742) 172 (4,570) (4,570)
than shareholders' equity
Balance at March 31, 2008 ¥ 1,229 ¥51 ¥ 1,350 ¥201,278
(In millions of yen)
Shareholders' Equity
Common Capital Surplus Retained Treasury Total
Stock Earnings Stock Sharehol
ders'
Equity
Balance at March 31, 2006 ¥49,048 ¥81,315 ¥ 96,169 ¥(12,442) ¥214,090
Dividends paid (1,308) (1,308)
Net loss (22,286) (22,286)
Acquisition and disposal of 0 (10) (10)
treasury stock, net
Net change in items other -
than shareholders' equity
Balance at March 31, 2007 ¥49,048 ¥81,314 ¥ 72,574 ¥(12,452) ¥190,485
Adjustments to Total
Valuation and Translation Net
Assets
Net Deferred Total
Unrealized Gains Adjustments
(Losses) to Valuation
Gains on on Hedges and
Securities Translation
Balance at March 31, 2006 ¥ 7,409 - ¥ 7,409 ¥221,500
Dividends paid - (1,308)
Net loss - (22,286)
Acquisition and disposal of - (10)
treasury stock, net
Net change in items other (1,368) ¥(121) (1,489) (1,489)
than shareholders' equity
Balance at March 31, 2007 ¥ 6,041 ¥(121) ¥15,920 ¥196,405
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR FKNKPCBKKQPD
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