RNS Number:3252I
TDK Corporation
10 August 2001
Contacts;
TDK Corporation(Tokyo) Corporate Communications Department
Michinori Katayama +81 (3) 5201-7102
TDK U.S.A. Corporation Francis J. Sweeney +1 (516) 535-2600
TDK UK Limited Ron Matier +44 (1737) 773773
TOKYO-August 7, 2001 TDK Corporation today announced its consolidated business
results for the first quarter of fiscal 2002, the three-month period ended June
30, 2001 is as follows:
1) Consolidated results
Consolidated results for the first quarter of fiscal 2002, the three-month
period from April 1, 2001 through June 30, 2001, is as follows:
Yen millions US$ thousands % change
Net sales 141,000 1,128,000 ( -19.6%)
Operating profit (%) 2.589 ( 1.8%) 20,712 ( -86.5%)
Income before
income taxes (%) 2,564 ( 1.8%) 20,512 ( -86.6%)
Net income (%) 1,207 ( 0.9%) 9,656 ( -90.6%)
Note:
The amounts shown in U.S. Dollars are converted at the rate of U.S.$1=Yen 125,
the opening rate on the Tokyo Foreign Exchange Market on June 29, 2001.
- 1 -
2) Summary
Consolidated results for the first quarter of fiscal 2002, the three-month
period from April 1, 2001 through June 30, 2001, are as follows:
Net sales decreased 19.6% to Y141,000 million (US$1,128,000 thousand), while
operating profit fell 86.5% to Y2,589 million (US$20,712 thousand). Income
before income taxes fell 86.6% to Y2,564 million (US$20,512 thousand) and net
income dropped 90.6% to Y1,207 million (US$9,656 thousand). Net income per
common share was Y9.07 (US$0.07).
Income taxes as a proportion of income before income taxes for the three-month
period increased relative to the same period of the previous fiscal year. This
reflected the fact that there were no tax benefits from losses posted by certain
overseas subsidiaries due to local tax regulations.
Average first quarter yen exchange rates for the U.S. dollar and euro were Y123
and Y107, respectively, as the yen depreciated 15% versus the dollar and 7%
versus the euro, compared with the previous year's first quarter. This had the
effect of increasing net sales by approximately Y10.3 billion and operating
profit by approximately Y2.7 billion.
In the electronic materials and components segment, net sales decreased 23.7% to
Y110,351 million (US$882,808 thousand).
Within this segment, sales in the electronic materials sector declined 16.6% to
Y43,900 million (US$351,200 thousand). The fourth-quarter slowdown of the U.S.
economy in the previous fiscal year prompted inventory corrections at TDK's
customers in a broad range of product categories, hampering sales. The effects
of these corrections lingered in the three-month period under review. In terms
of products, sales of multilayer chip capacitors for mobile phones and PCs and
peripherals decreased. Sales of ferrite cores used in audio and visual products
and PCs and peripherals fell sharply. Although magnet sales decreased, the
increasing use of electronics in automobiles kept demand strong in this market
sector. In this quarter, sales volumes of automotive magnets decreased only
slightly but monetary sales rose marginally due to fall in the yen's value.
In the electronic devices sector, sales decreased 21.4% to Y28,550 million
(US$228,400 thousand) due to the residual effects of the U.S. slowdown, as in
the electronic materials sector. High-frequency component sales fell sharply,
reflecting a cooling mobile phone market and inventory reductions at
manufacturers. A high proportion of TDK's high-frequency components are used in
mobile phones. Sales of inductive devices also decreased due to falling demand
in the audio and visual products, PC and peripherals and communications markets.
Inductors for automotive applications, although a small share of sales, continue
to perform well. In this quarter, volumes were down marginally but the weaker
yen lifted monetary sales somewhat. Demand for power supplies for audio and
visual products and video game systems was relatively strong, with sales
increasing slightly.
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TDK CONSOLIDATED
Recording devices sales decreased 33.5% to Y32,834 million (US$262,672
thousand), reflecting lower demand for HDD heads. This was the result of TDK's
delay, relative to competitors, in supplying mainstream 30gigabyte/disk HDD
heads, which resulted in TDK losing market share. The sales decline also
reflected the scaling back of HDD production at customers, which was prompted by
lackluster PC demand.
Sales in the semiconductors & others sector dropped 20.9% to Y5,067 million
(US$40,536 thousand). Sales of semiconductors for WAN/LAN and set-top box modems
fell sharply due to the continuing downturn in the semiconductor market as
demand for communications infrastructure equipment declined. Higher sales of
anechoic chambers and measurement systems due to orders received in the previous
fiscal year partly offset the fall in semiconductor sales.
In the recording media & systems segment, sales increased 0.1% to Y30,649
million (US$245,192 thousand). Sales of CD-Rs increased on higher volumes,
despite lower year-on-year prices. Also contributing to higher sales in this
segment were the yen's depreciation and the beginning of sales of recording
equipment last fall. Negating these gains to a large extent were lower audiotape
and videotape sales as total demand fell.
By region, sales in Japan decreased 23.3% to Y43,505 million (US$348,040
thousand), reflecting lower sales in all categories, most notably recording
devices. In Europe, sales declined 9.1% to Y19,836 million (US$158,688 million)
due to soft demand for high-frequency components for mobile phones, which
reflected a cooling mobile phone market. This outweighed sales growth in the
recording media & systems segment, where CD-Rs turned in a strong performance.
In Asia (excluding Japan) and Others, sales decreased 24.0% to Y50,027 million
(US$400,216 thousand). Mirroring Japan, sales fell in all product sectors,
noticeably in recording devices. In the Americas, sales declined 10.7% to
Y27,632 million (US$221,056 thousand), despite higher sales in the recording
media & systems segment, which were fueled by sales of recording equipment that
were launched last fall. Dragging down results were lackluster performances in
electronic materials and electronic devices.
The overall result was a 17.8% fall in overseas sales year on year to Y97,495
million (US$779,960 thousand). Overseas sales accounted for 69.1% of
consolidated net sales, a 1.5 percentage point increase from 67.6%.
- 3 -
Fiscal 2002 Projections
TDK has revised downward its consolidated projections for fiscal 2002, the year
ending March 31, 2002, which were announced in May this year, as detailed below.
The consolidated projections are based principally on the following assumptions:
* The yen-U.S. dollar exchange rate during the fiscal year was initially
estimated to be Y120. TDK currently estimates the same rate for the second
and subsequent quarters.
* In the electronic materials and components segment, as of May 2001, TDK
expected that there would be a gradual, across-the-board recovery for PCs,
mobile phones and audio and visual products from the second quarter onward,
after the markets bottomed out in the first quarter. However, no signs of
such an upturn have materialized. TDK thus expects results in the electronic
materials and components segment for the first half of fiscal 2002 to fall
short of its May projections.
* In the recording media & systems segment, TDK expects demand for CD-Rs and
recording equipment to fall slightly short of its May projections due to the
economic slowdown.
At present, TDK believes that the second-half recovery which was the basis for
its May 2001 projections is extremely unlikely. However, because there are many
uncertainties concerning present second-half projections, TDK has not revised
projections for the full year based on this outlook. Therefore, the revised
full-year projections shown below incorporate only the new projections for the
second quarter. TDK will review second-half projections at a later date and
announce revised full-year projections if necessary to reflect any revisions.
Consolidated Projections for Fiscal 2002
Revised % change As of May
Projection from FY01 2001
Y millions Y millions
Net sales Y645,000 -6.5% Y690,000
Operating profit 30,000 -46.7% 40,000
Income before income taxes 31,000 -51.9% 42,000
Net income 21,000 -52.3% 28,500
Cautionary Statement About Projections
Projections for the fiscal year ending March 31, 2002 are based on assumptions
and beliefs of TDK and its group companies in accordance with data currently
available. Consequently, these projections should not be relied upon as the sole
basis for evaluating TDK. Actual results may differ substantially from the
projections depending on a number of factors.
The electronics markets in which TDK operates are highly susceptible to rapid
changes. Furthermore, TDK operates not only in Japan, but in many other
countries. As such, factors that can have significant effects on its results
include, but are not limited to, shifts in technology, demand, prices,
competition, economic environments and foreign exchange rates.
- 4 -
3) Consolidated results for the first quarter of fiscal 2002
(1) Financial highlights
The first quarter of FY2002 The first quarter of FY2001
(April 1, 2001 - June 30, 2001) (April 1, 2000 - June 30, 2000)
(Yen (US$ (Yen Change
millions) % thousands) millions) % %
Net sales 141,000 100.0 1,128,000 175,322 100.0 -19.6
Operating
profit 2,589 1.8 20,712 19,233 11.0 -86.5
Income
before
income
taxes 2,564 1.8 20,512 19,091 10.9 -86.6
Net income 1,207 0.9 9,656 12,835 7.3 -90.6
Net income
per common
share and
per ADS Yen 9.07 US$ 0.07 Yen 96.37
Notes:
1. The financial statements are prepared in conformity with accounting
principles generally accepted in the United States of America.
2. The figures for net income per common share are calculated based upon the
weighted average number of shares of common stock (the total outstanding
number).
3. During this consolidated accounting period, the company had 77 subsidiaries
(26 in Japan and 51 overseas). The company also had 8 affiliates whose
financial statements are accounted for by the equity method.
4. U.S.$1- Yen 125
(2) Sales breakdown
The first quarter of FY2002 The first quarter of FY2001
(April 1, 2001 - June 30, 2001) (April 1, 2000 - June 30, 2000)
(Yen (US$ (Yen Change
millions) % thousands) millions) % %
Electronic
materials
and
components 110,351 78.3 882,808 144,708 82.5 -23.7
Electronic
materials 43,900 31.1 351,200 52,614 30.0 -16.6
Electronic
devices 28,550 20.3 228,400 36,308 20.7 -21.4
Recording
devices 32,834 23.3 262,672 49,383 28.2 -33.5
Semiconductors
& Others 5,067 3.6 40,536 6,403 3.6 -20.9
Recording
media &
systems 30,649 21.7 245,192 30,614 17.5 0.1
Total sales 141,000 100.0 1,128,000 175,322 100.0 -19.6
Overseas sales 97,495 69.1 779,960 118,603 67.6 -17.8
Notes:
1. Overseas sales for the first quarter of FY2001 have been revised
(see P8 "(5) Sales by Region" for details).
2. U.S.$1=Yen 125
- 5 -
(3) Statements of income
The first quarter of FY2002 The first quarter of FY2001
(April 1, 2001 - June 30, 2001) (April 1, 2000 - June 30, 2000)
(Yen (U.S.$ (Yen Change
millions) % thousands) millions) % %
Net sales 141,000 100.0 1,128,000 175,322 100.0 -19.6
Cost of sales 106,202 75.3 849,616 124,503 71.0 -14.7
Gross profit 34,798 24.7 278,384 50,819 29.0 -31.5
Selling,
general and
administrative
expenses 32,209 22.9 257,672 31,586 18.0 2.0
Operating
profit 2,589 1.8 20,712 19,233 11.0 -86.5
Other income
(deductions):
Interest and
dividend income 713 5,704 1,240
Interest
expense (360) (2,880) (179)
Foreign
exchange
gain (loss) (92) (736) (935)
Other, net (286) (2,288) (268)
Other Income
(deductions)
total (25) - (200) (142) -0.1 -82.4
Income before
income taxes 2,564 1.8 20,512 19,091 10.9 -86.6
Income taxes 1,257 0.9 10,056 6,072 3.5 -79.3
Income before
minority
interests 1,307 0.9 10,456 13,019 7.4 -90.0
Minority
interests (100) - (800) (184) -0.1 -45.7
Net income 1,207 0.9 9,656 12,835 7.3 -90.6
Net income per
common share Yen 9.07 US$ 0.07 Yen 96.37
Average common
shares
outstanding 133,019 thousands 133,190 thousands
Notes:
1. The figures for net income per common share are calculated based upon the
weighted average number of shares of common stock (the total outstanding
number).
2. U.S.$1-Yen 125
3. Statements of income for the first quarter of fiscal 2001 and 2002 are
unaudited by independent auditors.
- 6 -
(4) Balance sheets
ASSETS
As of June 30, 2001 As of March 31, 2001 Change
(Yen (US$ (Yen
millions) % thousands) millions) % %
Current 416,314 52.6 3,330,512 452,913 55.2 -8.1
Cash and cash
equivalents 129,849 1,038,792 150,917
Net trade
receivables 132,123 1,056,984 156,585
Inventories 123,531 988,248 116,423
Prepaid
expenses and
other
Current
assets 30,811 246,488 28,988
Investments
and advances 22,979 2.9 183,832 21,143 2.6 8.7
Net property,
plant, and
equipment 283,377 35.8 2,267,016 276,625 34.0 1.7
Prepaid
pension cost 40,039 5.1 320,312 41,290 5.0 -3.0
Other assets 28,237 3.6 225,896 26,206 3.2 7.8
TOTAL 790,946 100.0 6,327,568 820,177 100.0 -3.6
LIABILITIES AND STOCKHOLDERS' EQUITY
As of June 30, 2001 As of March 31, 2001 Change
(Yen (US$ (Yen
millions) % thousands) millions) % %
Current
liabilities 119,232 15.1 953,856 146,142 17.8 -18.4
Short-term
debt 3,795 30,360 5,879
Trade
payables 53,161 425,288 64,673
Accrued
expenses and
other current
liabilities 56,160 449,280 55,952
Income taxes 6,116 46,928 19,638
Long-term
debt, excluding
current
installments 832 0.1 6,656 1,004 0.1 -17.1
Retirement and
severance
benefits and
others 32,289 4.1 258,312 31,848 3.9 1.4
Total
liabilities 152,353 19.3 1,218,824 178,994 21.8 -14.9
Minority
interests 3,455 0.4 27,640 3,434 0.4 0.6
Common stock 32,641 261,128 32,641
Additional
paid-in
capital 63,051 504,408 63,051
Legal reserve 15,374 122,992 13,409
Retained
earnings 551,416 4,411,328 556,165
Accumulated
other
comprehensive
income (loss) (24,677) (197,416) (24,851)
Treasury stock (2,667) (21,336) (2,666)
Total
stockholders'
equity 635,138 80.3 5,081,104 637,749 77.8 -0.4
TOTAL 790,946 100.0 6,327,568 820,177 100.0 -3.6
Common shares
outstanding 133,019 thousands 133,019 thousands
Notes:
1. U.S.$1-Yen 125
2. Balance sheet as of June 30, 2001 is unaudited by independent auditors.
- 7 -
(5) Sales by Region
The first quarter of FY2002 The first quarter of FY2001
(April 1, 2001 - (April 1, 2000 -
June 30, 2001) June 30, 2000) change
(yen (US$ (Yen
millions) % thousands) millions % %
Americas 27,632 19.6 221,056 30,959 17.7 -10.7
Europe 19,836 14.0 158,688 21,829 12.4 -9.1
Asia and others 50,027 35.5 400,216 65,815 37.5 -24.0
Overseas sales
total 97,495 69.1 779,960 118,603 67.6 -17.8
Japan 43,505 30.9 348,040 56,719 32.4 -23.3
Net sales 141,000 100.0 1,128,000 175,322 100.0 -19.6
Notes:
1. Sales by region are classified by geographic areas of the buyer.
2. Sales to the Americas and Japan for the first quarter of FY2001 have been
revised (3,876 million yen previously included in Japan has been reclassified
to the Americas).
3. U.S.$1 = Yen 125
- 8 -
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