RNS Number : 2882A
Pioneer Corporation
31 July 2008
For Immediate Release
July 31, 2008
Pioneer Announces Business Results for 1Q Fiscal 2009
TOKYO - Pioneer Corporation today announced its consolidated first-quarter business results for the period ended June 30, 2008.
Consolidated Financial Highlights
(In millions of yen except per share information)
Three months ended June 30
2008 2007 % to
prior
year
Operating revenue �160,966 �182,641 88.1%
Operating income (loss) (6,219) 1,323 -
Income (loss) before income taxes (5,676) 16,185 -
Net income (loss) �(7,744) �12,331 -%
Net income (loss) per share:
Basic �(37.77) �70.70
Diluted �(37.77) �64.68
Consolidated Business Results
For the first quarter of fiscal 2009, the three months ended June 30, 2008, consolidated operating revenue decreased 11.9% from the
first quarter of fiscal 2008 to �160,966 million (US$1,518.5 million). This decrease mainly reflected lower sales of car audio products for
consumer markets and DVD drives, as well as a drop in sales of plasma displays.
Operating loss was �6,219 million (US$58.7 million), compared with operating income of �1,323 million in the first quarter of fiscal
2008, reflecting lower operating revenue and a decrease in the gross profit margin. The net loss was �7,744 million (US$73.1 million). This
compares with net income of �12,331 million in the first quarter of fiscal 2008, mainly reflecting a gain of �11,903 million on sale of all
land and buildings at the Tokorozawa Plant and some at the Omori Plant.
During the first quarter of fiscal 2009, the average value of the Japanese yen appreciated 15.5% against the U.S. dollar and
depreciated 0.4% against the euro, compared with the first quarter of fiscal 2008.
Car Electronics operating revenue decreased 9.2% year on year to �88,095 million (US$831.1 million). Overall sales of car navigation
systems decreased year on year, mainly because consumer-market sales declined overseas, despite increasing in Japan, while OEM sales rose
slightly. Overall sales of car audio products also declined year on year, mainly reflecting a drop in overseas consumer-market sales,
despite higher OEM sales primarily in China. Total OEM sales in this segment accounted for approximately 41% of Car Electronics operating
revenue, compared with approximately 36% in the first quarter of fiscal 2008.
In terms of geographic operating revenue, operating revenue in Japan increased 7.5% year on year to �34,892 million (US$329.2
million) while overseas operating revenue decreased 17.6% to �53,203 million (US$501.9 million).
Operating income in this segment decreased 77.6% year on year to �1,704 million (US$16.1 million) mainly due to lower
consumer-market sales of car audio products and car navigation systems.
Home Electronics operating revenue decreased 17.4% year on year to �57,343 million (US$541.0 million). This largely reflected a drop in
plasma display sales due to lower overseas sales volume, as well as lower sales of DVD drives and DVD recorders. Sales of display products
accounted for approximately 33% of Home Electronics operating revenue, compared with approximately 34% in the first quarter of fiscal 2008.
In terms of geographic operating revenue, operating revenue in Japan declined 48.1% year on year to �6,628 million (US$62.5
million), while overseas operating revenue decreased 10.5% to �50,715 million (US$478.4 million).
The operating loss in this segment was �7,394 million (US$69.8 million) compared with an operating loss of �5,437 million in the
first quarter of fiscal 2008. This was chiefly due to a larger loss in the plasma display business due to falling sales and a decrease in
the gross profit margin.
In the Others segment, operating revenue decreased 4.1% year on year to �15,528 million (US$146.5 million) due to lower sales of organic
light-emitting diode displays.
In terms of geographic operating revenue, operating revenue in Japan was mostly the same as in the first quarter of fiscal 2008 at
�10,369 million (US$97.8 million), while overseas operating revenue decreased 11.6% year on year to �5,159 million (US$48.7 million).
The operating loss in this segment was �264 million (US$2.5 million) compared with an operating loss of �750 million in the first
quarter of fiscal 2008. The main reason for this improvement was a smaller loss in speaker units for cellular phones.
Notes:
1.Operating income (loss) in each business segment represents operating income (loss) before elimination of intersegment transactions.
2.Effective from the first quarter of fiscal 2009, the patent licensing business, which was previously classified as an independent
business segment, has been included in the "Others" segment because of its reduced importance to consolidated business results. Figures for
the corresponding period of fiscal 2008 have been reclassified.
Consolidated Financial Position
Total assets as of June 30, 2008 were �613,220 million (US$5,785.1 million), an increase of �37,104 million from March 31, 2008. This
mainly reflected increases in current assets such as trade receivables, less allowance, and inventories. Trade receivables, less allowance
rose �14,257 million to �107,325 million (US$1,012.5 million), mainly reflecting a decrease in the amount of securitized accounts
receivable. Inventories rose �18,795 million to �122,963 million (US$1,160.0 million), mainly reflecting the stockpiling of new plasma
display models and consumer-market car electronics products.
Total liabilities were �360,697 million (US$3,402.8 million), up �33,338 million from March 31, 2008. This mainly reflected
increases in current liabilities such as short-term borrowings and trade payables. Short-term borrowings rose �33,188 million to �48,000
million (US$452.8 million). Trade payables increased �15,654 million to �101,849 million (US$960.8 million), reflecting increased purchasing
of materials mainly for use in plasma displays and car navigation systems.
Total shareholders' equity was �251,068 million (US$2,368.6 million), an increase of �3,673 million from March 31, 2008. This mainly
reflected a decrease of �11,417 million in accumulated other comprehensive loss, primarily due to improvement in foreign currency
translation adjustments, despite a �7,744 million drop in retained earnings.
Cash Flows
During the first quarter of fiscal 2009, operating activities used net cash of �28,460 million (US$268.5 million). The main factors
reducing cash were an increase in inventories of �14,123 million (US$133.2 million), an increase in trade receivables of �10,618 million
(US$100.2 million), a decrease in other accrued liabilities of �10,064 million (US$94.9 million) and a net loss of �7,744 million (US$73.1
million). These factors outweighed an increase in trade payables of �13,386 million (US$126.3 million), depreciation and amortization of
�6,930 million (US$65.4 million) and other factors increasing cash. Investing activities used net cash of �8,297 million (US$78.3 million),
mainly due to capital expenditures in the Car Electronics business. Financing activities provided net cash of �30,624 million (US$288.9
million), mainly through an increase in short-term borrowings.
Consequently, cash and cash equivalents at June 30, 2008 were �79,384 million (US$748.9 million), down �1,796 million from March 31,
2008.
Business Forecasts for Fiscal 2009
Consolidated business forecasts for fiscal 2009, ending March 31, 2009, have not been changed from those announced on May 13, 2008, as
shown below. We assume average yen-U.S. dollar and yen-euro exchange rates of �105 and �155, respectively, for these forecasts.
(In millions of yen)
First half Full year
Forecasts for Results for Percent Forecasts 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) -%
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 continuously design and develop highly
rated products and services in fiercely competitive markets, which are characterized by continual product launches, rapid technological
development, intense price-based competition, subjective and changing consumer preferences and other factors; (iv) our ability to
successfully implement our business strategies; (v) our ability to compete, as well as develop and implement successful sales and
distribution strategies, in light of technological developments in and affecting our businesses; (vi) our continued ability to devote
sufficient resources to research and development, and capital expenditure; (vii) our ability to continuously enhance our brand image; (viii)
the success of our joint ventures and alliances; (ix) the success of our business restructuring plans; and (x) the outcome of
contingencies.
Pioneer Corporation is a leading global manufacturer of consumer- and business-use electronics products such as audio, video and car
electronics. Its shares are 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 �106 =US$1.00, the
approximate rate prevailing on June 30, 2008.
Attached are consolidated financial statements for the three months ended June 30, 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/
(1) CONSOLIDATED BALANCE SHEETS
(In millions of yen)
June 30 March 31
2008 2007 Increase 2008 Increase
(Decrease) (Decrease)
ASSETS
Current assets:
Cash and cash equivalents � 79,384 � 86,506 � (7,122) � 81,180 � (1,796)
Trade receivables, less 107,325 131,186 (23,861) 93,068 14,257
allowance
Inventories 122,963 131,114 (8,151) 104,168 18,795
Other current assets 73,666 77,674 (4,008) 70,821 2,845
Total current assets 383,338 426,480 (43,142) 349,237 34,101
Investments and long-term 36,913 28,146 8,767 36,397 516
receivables
Property, plant and equipment, 124,356 146,191 (21,835) 122,752 1,604
less depreciation
Intangible assets 16,929 18,824 (1,895) 17,738 (809)
Other assets 51,684 47,414 4,270 49,992 1,692
Total assets � 613,220 � 667,055 � (53,835) � 576,116 � 37,104
LIABILITIES, MINORITY INTERESTS AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings � 48,000 � 38,368 � 9,632 � 14,812 � 33,188
Current portion of long-term 13,269 5,731 7,538 13,672 (403)
debt
Trade payables 101,849 119,062 (17,213) 86,195 15,654
Other current liabilities 92,616 99,964 (7,348) 107,328 (14,712)
Total current liabilities 255,734 263,125 (7,391) 222,007 33,727
Long-term debt 71,227 85,021 (13,794) 72,041 (814)
Other long-term liabilities 33,736 23,945 9,791 33,311 425
Total liabilities 360,697 372,091 (11,394) 327,359 33,338
Minority interests 1,455 2,479 (1,024) 1,362 93
Shareholders' equity:
Common stock 69,824 49,049 20,775 69,824 -
Capital surplus 103,578 82,995 20,583 103,578 -
Retained earnings 137,551 177,652 (40,101) 145,295 (7,744)
Accumulated other (48,761) (4,756) (44,005) (60,178) 11,417
comprehensive loss
Treasury stock (11,124) (12,455) 1,331 (11,124) -
Total shareholders' equity 251,068 292,485 (41,417) 247,395 3,673
Total liabilities, minority � 613,220 � 667,055 � (53,835) � 576,116 � 37,104
interests and
shareholders' equity
Breakdown of accumulated other
comprehensive loss:
Pension liability adjustments � (12,264) � (5,099) � (7,165) � (12,279) � 15
Net unrealized gains on 2,442 8,087 (5,645) 1,943 499
securities
Foreign currency translation (38,939) (7,744) (31,195) (49,842) 10,903
adjustments
Total accumulated other � (48,761) � (4,756) � (44,005) � (60,178) � 11,417
comprehensive loss
(2) CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions of yen)
Three months ended June 30
2008 2007 % to
prior
year
Operating revenue:
Net sales � 160,907 � 182,534 88.2%
Royalty revenue 59 107 55.1
Total operating revenue 160,966 182,641 88.1
Operating costs and expenses:
Cost of sales 129,019 138,733 93.0
Selling, general and administrative 38,166 42,585 89.6
expenses
Total operating costs and expenses 167,185 181,318 92.2
Operating income (loss) (6,219) 1,323 -
Other income (expenses):
Interest income 1,035 1,790 57.8
Foreign exchange gain 223 429 52.0
Interest expense (415) (543) 76.4
Other-net (300) 13,186 -
Total other income 543 14,862 3.7
Income (loss) before income taxes (5,676) 16,185 -
Income taxes 1,959 3,651 53.7
Minority interest in earnings of (48) (92) 52.2
subsidiaries
Equity in losses of affiliated (61) (111) 55.0
companies
Net income (loss) � (7,744) � 12,331 -%
(3) CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of yen)
Three months ended June 30
2008 2007
I. Cash flows from operating activities:
Net income (loss) �(7,744) �12,331
Depreciation and amortization 6,930 8,717
Gain on sale and disposal of fixed assets, (322) (12,923)
net
Increase in trade receivables (10,618) (9,389)
Increase in inventories (14,123) (21,702)
Increase in trade payables 13,386 23,919
Decrease in other accrued liabilities (10,064) (9,445)
Other (5,905) (5,688)
Net cash used in operating activities (28,460) (14,180)
II. Cash flows from investing activities:
Payment for purchase of fixed assets (8,890) (15,460)
Payment for purchase of shares of - (13,704)
consolidated subsidiaries
Other 593 1,511
Net cash used in investing activities (8,297) (27,653)
III. Cash flows from financing activities:
Increase in short-term borrowings and 31,293 24,699
long-term debt
Dividends paid (513) (872)
Other (156) (879)
Net cash provided by financing activities 30,624 22,948
Effect of exchange rate changes on cash and 4,337 3,571
cash equivalents
Net decrease in cash and cash equivalents (1,796) (15,314)
Cash and cash equivalents, beginning of 81,180 101,820
period
Cash and cash equivalents, end of period � 79,384 � 86,506
Free cash flows (I + II) � (36,757) � (41,833)
(4) OPERATING REVENUE BY SEGMENT
(In millions of yen)
Three months ended June 30
2008 2007 % to
Amount % to total Amount % to total prior year
Domestic � 34,892 21.7% � 32,458 17.8% 107.5%
Overseas 53,203 33.0 64,559 35.3 82.4
Car Electronics 88,095 54.7 97,017 53.1 90.8
Domestic 6,628 4.1 12,763 7.0 51.9
Overseas 50,715 31.5 56,668 31.0 89.5
Home Electronics 57,343 35.6 69,431 38.0 82.6
Domestic 10,369 6.4 10,355 5.6 100.1
Overseas 5,159 3.3 5,838 3.3 88.4
Others 15,528 9.7 16,193 8.9 95.9
Domestic 51,889 32.2 55,576 30.4 93.4
Overseas 109,077 67.8 127,065 69.6 85.8
Total � 160,966 100.0% � 182,641 100.0% 88.1%
(5) 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)
Three months ended June 30
2008 2007 % to prior year
Operating Operating Operating Operating Operating Operating
Revenue Income Revenue Income Revenue Income
(Loss) (Loss) (Loss)
Car Electronics � 88,564 � 1,704 � 97,511 � 7,609 90.8% 22.4%
Home Electronics 57,456 (7,394) 69,592 (5,437) 82.6 -
Others 23,998 (264) 24,812 (750) 96.7 -
Total 170,018 (5,954) 191,915 1,422 88.6 -
Corporate and Eliminations (9,052) (265) (9,274) (99) - -
Consolidated � 160,966 � (6,219) � 182,641 � 1,323 88.1% -%
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 three segments: "Car Electronics," "Home Electronics," 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
Others:
organic light-emitting diode displays, factory automation systems, speaker units, electronics devices and parts, telephones, AV accessories,
business-use AV systems and licensing of patents related to laser optical disc technologies
3.Effective from the first quarter of fiscal 2009, the patent licensing business, which was previously classified as an independent
business segment, has been included in the "Others" segment because of its reduced importance to consolidated business results. Figures for
the corresponding period of fiscal 2008 have been reclassified.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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