RNS Number:9751Q
TDK Corporation
5 February 2002
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-February 5, 2002 TDK Corporation today announced its consolidated business
results for the third quarter of fiscal 2002, the three-month period ended
December 31, 2001, and for the nine-month period from April 1, 2001 through
December 31, 2001.
1) - 1. The third quarter results
Consolidated results for the third quarter of fiscal 2002, the three-month
period from October 1, 2001 through December 31, 2001, are as follows:
Yen millions U.S.$ thousands % change
Net sales 149,177 1,130,129 (-17.2 %)
Operating income (loss) (%) (14,171) (-9.5 %) (107,356) ( - )
Income (loss) before
income taxes (%) (13,805) (-9.3 %) (104,583) ( - )
Net income (loss) (%) (9,759) (-6.5 %) (73,932) ( - )
1) - 2. The nine-month period results
Consolidated results for the nine-month period from April 1, 2001 through
December 31, 2001, are as follows:
Yen millions U.S.$ thousands % change
Net sales 421,797 3,195,432 (-20.7 %)
Operating income (loss) (%) (16,982) (-4.0%) (128,652) ( - )
Income (loss) before
income taxes (%) (16,887) (-4.0 %) (127,932) ( - )
Net income (loss) (%) (7,927) (-1.9 %) (60,053) ( - )
Note: The amounts shown in U.S. Dollars are converted at the rate of U.S.$1=Yen
132, the opening rate on the Tokyo Foreign Exchange Market on Dec. 28,
2001.
TDK Corporation Announces Fiscal 2002 Third-Quarter Consolidated Results
2) Summary
Consolidated results for the third quarter of fiscal 2002, the three-month
period from October 1, 2001 through December 31, 2001, are as follows:
TDK posted net sales of Y149,177 million (US$1,130,129 thousand), down 17.2%
year on year, and an operating loss of Y14,171 million (US$107,356 thousand),
compared with operating income of Y18,083 million in the same period of the
previous fiscal year. Furthermore. TDK posted a loss before income taxes of
Y13,805 million (US$104,583 thousand), compared with income before income taxes
of Y15,552 million in the same period of the previous fiscal year. TDK also
posted a net loss of Y9,759 million (US$73,932 thousand), compared with net
income of Y10,392 million a year earlier. Consequently, net loss per common
share was Y73.45 (US$0.56).
The third-quarter operating loss is partly attributable to the recording of
Y7,282 million (US$55,167 thousand) in expenses related to structural reforms
for restoring TDK's ability to generate earnings.
Average exchange rates for the yen were Y123 and Y111 versus the U.S. dollar and
euro, respectively, as the yen weakened by 12% and 16% in relation to these two
currencies compared with the same period a year ago. TDK estimates that the
depreciation of the yen had the net effect of lifting net sales by approximately
Y10.6 billion and reducing the operating loss by approximately Y2.9 billion.
In the electronic materials and components segment, net sales fell 24.2% to
Y107,592 million (US$815,091 thousand).
Within this segment, sales in the electronic materials sector dropped 29.7% to
Y39,384 million (US$298,364 thousand). Multilayer chip capacitors, which account
for the majority of sector sales, saw a year-on-year drop in sales. In
particular, sales of these capacitors for use in mobile phones, which had grown
significantly in the same period of the previous fiscal year, fell sharply.
There was a slight rise in demand for multilayer chip capacitors for automotive
applications, fueled by the increasing use of electronics in automobiles.
However, these sales still represent only a small fraction of overall sales of
this product. In ferrite cores and magnets, ferrite cores for use in data-
communications devices such as ADSL (Asymmetric Digital Subscriber Lines)
devices, which saw strong demand last year, recorded a sharp decrease in sales,
reflecting a drop-off in IT investment-related demand. Intensifying competition
in deflection yoke cores and flyback transformer cores-both key components in
TVs and PC monitors-led to lower sales of these products. Magnet sales fell
overall due to waning demand for use in motors for PCs and peripherals and audio
and visual products.
In the electronic devices sector, sales decreased 33.7% to Y26,048 million
(US$197,333 thousand). Inductive device sales fell overall as demand dropped in
the key audio and visual products and PCs and peripherals markets. Partially
offsetting this fall was a marginal increase in sales of inductive devices for
use in automobiles as more sophisticated electronics technologies find their way
into vehicles. Sales of high-frequency components declined dramatically from
their peak in the corresponding period of the prior fiscal year. This was
attributable to the slowdown in demand for mobile phones, an application that
accounts for a high proportion of sales of these components. Sales of other
products in this sector were on a par with the previous year as a result of
brisk demand for DC-DC converters for video game systems.
In the recording devices sector, sales were Y38,259 million (US$289,841
thousand), down 3.2% year on year. TDK regained market share in the third
quarter through a gradual increase in shipments of 40gigabyte/disk HDD heads,
which have won plaudits from customers. Consequently, sales of HDD heads rose
markedly from the second quarter to around the same level of sales in the
corresponding period of the previous fiscal year. Sales of other heads declined
as demand dropped off.
Sales in the semiconductors & others sector declined 44.4% to Y3,901 million
(US$29,553 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, which had been a driving
force last year, declined.
In the recording media & systems segment, sales increased 8.7% to Y41,585
million year on year (US$315,038 thousand). Sales of optical discs,
predominantly CD-Rs, rose on higher volumes despite lower year-on-year prices.
Also lifting sales in this segment were three other factors: the yen's
depreciation; growth in recording equipment sales due to the start of sales also
in Europe (sales were launched in the U.S. last fall); and sales of new game
software. These factors offset lower audiotape and videotape sales due to a
decline in total demand for those products.
By region, sales in Japan decreased 33.0% to Y40,894 million (US$309,803
thousand), reflecting lower year-on-year sales in most product categories. Of
particular note was the recording media & systems segment, where sales declined
because the contribution to sales of recording equipment is small relative to
other regions. In the Americas, sales declined 12.4% to Y29,504 million
(US$223,515 thousand), owing to soft demand for electronic materials and
electronic devices. This outweighed higher sales in the recording media &
systems segment, which were lifted by sales of recording equipment and the
launch of new game software. In Europe, sales decreased 28.9% to Y21,496 million
(US$162,849 thousand), reflecting sluggish demand for electronic materials and
electronic devices. In particular, there was a significant decline in sales of
high-frequency components mainly for GSM and other mobile phone formats. Sales
in the recording media & systems segment increased with the start of recording
equipment sales in the current fiscal year. However, this increase was not
sufficient to offset the declines. In Asia (excluding Japan) and Others, sales
increased 3.7% to Y57,283 million (US$433,962 thousand), mainly as a result of
TDK regaining market share in recording devices. These higher sales more than
offset soft demand for electronic materials and electronic devices.
The overall result was a 9.1% decline in overseas sales year on year to Y108,283
million (US$820,326 thousand). Overseas sales accounted for 72.6% of
consolidated net sales, up 6.5 percentage points from 66.1%.
Fiscal 2002 Projections
TDK has revised downward its consolidated and non-consolidated projections for
fiscal 2002, the year ending March 31, 2002, which were announced in November
last year. The projections are based principally on the following assumptions:
• The yen-U.S. dollar exchange rate for the fourth quarter is assumed at Y130,
compared with the previous estimate of Y120 for the second half of the fiscal
year.
• The electronic materials and components segment is expected to see a
continuation of declining demand for components across the board as customers
step up efforts to reduce inventories. Prices are also expected to fall
further than November 2001 projections.
• TDK expects to continue to regain market share in the recording devices
segment as more 40 gigabyte/disk HDD heads, which have won ready acceptance
from customers, are shipped in the fourth quarter.
TDK perceives the present market difficulties, characterized by some as the
bursting of the IT bubble, as different in nature from an ordinary recessionary
climate. To counter this situation, TDK believes that it is necessary to take
actions to lower its break-even point and improve asset efficiency with the view
to dramatically restoring its ability to generate earnings from the next fiscal
year onward. TDK began implementing a plan in November 2001 to trim its
consolidated head count as well as other measures. TDK will also implement
additional structural reform measures, such as offering a special redundancy
package and disposing of idle/unwanted facilities, in the fourth quarter. The
estimated expenses associated with structural reforms, including those that have
already been implemented, have been factored into the projections shown below.
TDK's consolidated and non-consolidated projections include estimated structural
reform expenses of Y21,400 million and Y9,000 million, respectively.
Consolidated Projections for Fiscal 2002
Revised Change As of Nov.
Projection (Y millions 2001
Y millions or %) from Y millions
FY01
Net sales Y565,000 -18.1% Y560,000
Operating income (loss) (36,000) Y56,323 (1,300)
Income (loss) before
income taxes (35,900) Y64,516 (2,600)
Net income (loss) (23,000) Y43,983 0
Non-Consolidated Projections for Fiscal 2002
Revised Change As of Nov.
Projection (Y millions 2001
Y millions or %) from Y millions
FY01
Net sales Y312,000 -31.8% Y317,000
Operating income (loss) (7,800) Y26,084 (2,800)
Current income (loss) 7,800 -84.4% 12,900
Net income (loss) 950 -89.1% 8,200
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.
CONSOLIDATED
3) Consolidated results for the third quarter of fiscal 2002
(1) Financial highlights
The third The third
quarter of FY2002 quarter of FY2001
(Oct. 1,2001 - (Oct. 1, 2000 -
Dec. 31, 2001) Dec. 31, 2000) change
(Yen (U.S.$ (Yen
millions) % thousands) millions) % %
Net sales 149,177 100.0 1,130,129 180,174 100.0 -17.2
Operating income
(loss) (14,171) -9.5 (107,356) 18,083 10.0 -
Income (loss)
before income taxes (13,805) -9.3 (104,583) 15,552 8.6 -
Net income (loss) (9,759) -6.5 (73,932) 10,392 5.8 -
Net income (loss) per
common share and
per ADS Yen (73.45) U.S.$ (0.56) Yen 78.08
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 (loss) 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 7 affiliates whose
financial statements are accounted for by the equity method.
4. U.S.$1=Yen 132
(2) Sales breakdown
The third The third
quarter of FY2002 quarter of FY2001
(Oct. 1,2001 - (Oct. 1, 2000 -
Dec. 31, 2001) Dec. 31, 2000) change
(Yen (U.S.$ (Yen
millions) % thousands) millions) % %
Electronic materials
and components 107,592 72.1 815,091 141,922 78.8 -24.2
Electronic materials 39,384 26.4 298,364 56,062 31.1 -29.7
Electronic devices 26,048 17.5 197,333 39,304 21.8 -33.7
Recording devices 38,259 25.6 289,841 39,537 22.0 -3.2
Semiconductors &
Others 3,901 2.6 29,553 7,019 3.9 -44.4
Recording media &
systems 41,585 27.9 315,038 38,252 21.2 8.7
Total sales 149,177 100.0 1,130,129 180,174 100.0 -17.2
Overseas sales 108,283 72.6 820,326 119,148 66.1 -9.1
Note. U.S.$1=Yen 132
CONSOLIDATED
4) Consolidated results for the nine-month period from April 1, 2001
through December 31, 2001.
(1) Financial highlights
The nine-month period of FY2002 The nine-month period of FY2001 change
(April 1,2001-Dec. 31, 2001) (April 1, 2000 - Dec. 31, 2000)
(Yen millions) % (U.S.$ thousands) (Yen millions) % %
Net sales 421,797 100.0 3,195,432 532,200 100.0 -20.7
Operating income (loss) (16,982) -4.0 (128,652) 54,532 10.2 -
Income (loss) before (16,887) -4.0 (127,932) 63,383 11.9 -
income taxes
Net income (loss) (7,927) -1.9 (60,053) 42,997 8.1 -
Net income (loss) Yen (59.67) U.S.$ (0.45) Yen 323 04
per common share
and per ADS
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 (loss) 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 7 affiliates whose financial statements are accounted
for by the equity method.
4. U.S.$1=Yen 132
(2) Sales breakdown
The nine-month period of FY2002 The nine-month period of FY2001 change
(April 1, 2001 - Dec. 31, 2001) (April 1, 2000 - Dec. 31, 2000)
(Yen millions) % (U.S.$ thousands) (Yen millions) % %
Electronic materials
and components 317,242 75.2 2,403,348 431,161 81.0 -26.4
Electronic materials 120,751 28.6 914,780 165,385 31.1 -27.0
Electronic devices 80,312 19.0 608,424 114,372 21.5 -29.8
Recording devices 102,281 24.3 774,856 131,294 24.6 -22.1
Semiconductors & Others 13,898 3.3 105,288 20,110 3.8 -30.9
Recording media & systems 104,555 24.8 792,084 101,039 19.0 3.5
Total sales 421,797 100.0 3,195,432 532,200 100.0 -20.7
Overseas sales 295,689 70.1 2,240,068 357,694 67.2 -17.3
Note: U.S.$1=Yen 132
CONSOLIDATED
5) Statements of income
The third quarter The third quarter of
FY2001
The third quarter of FY2002 (Oct. 1, 2000 -
(Oct 1, 2001 - Dec. 31, 2001) Dec. 31, 2000) change
(Yen millions) % (U.S.$ thousands) (Yen millions) % %
Net sales 149,177 100.0 1,130,129 180,174 100.0 -17.2
Cost of sales 123,721 82.9 937,280 127,894 71.0 -3.3
Gross profit 25,456 17.1 192,849 52,280 29.0 -51.3
Selling, general and 32,345 21.7 245,038 34,197 19.0 -5.4
administrative expenses
Restructuring cost 7,282 4.9 55,167 - - -
Operating income (loss) (14,171) -9.5 (107,356) 18,083 10.0 -
Other income (deductions):
Interest and dividend income 379 2,871 1,167
Interest expense 309 2,341 447
Foreign exchange gain (loss) 977 7,402 198
Other, net (681) (5,159) (3,449)
Other income (deductions) 366 0.2 2,773 (2,531) -1.4 -
total
Income (loss) before income (13,805) -9.3 (104,583) 15,552 8.6 -
taxes
Income taxes (4,173) -2.8 (31,613) 4,960 2.7 -
Income (loss) before minority (9,632) -6.5 (72,970) 10,592 5.9 -
interests
Minority interests (127) - (962) (200) -0.1 -
Net income (loss) (9,759) -6.5 (73,932) 10,392 5.8 -
Net income (loss) per common Yen (73.45) US$(0.56) Yen 78.08
share
Average common shares 132,861 thousands 133,103 thousands
outstanding
Notes:
1. The figures for net income (loss) per common share are calculated based upon
the weighted average number of shares of common stock (the total outstanding
number).
2. U.S.$1=Yen 132
3. Statements of income for the third quarter of fiscal 2001 and 2002 are
unaudited by independent auditors.
The nine-month period
The nine-month period of
FY2001
The nine-month period of FY2002 (April 1, 2000 - change
(April, 1, 2001 - Dec. 31, 2001) Dec. 31, 2000)
(Yen millions) % (U.S.$ thousands) (Yen millions) % %
Net sales 421,797 100.0 3,195,432 532,200 100.0 -20.7
Cost of sales 337,030 79.9 2,553,258 377,462 70.9 -10.7
Gross profit 84,767 20.1 642,174 154,738 29.1 -45.2
Selling, general and 93,353 22.1 707,220 100,206 18.9 -6.8
administrative expenses
Restructuring cost 8,396 2.0 63,606 - - -
Operating income (loss) (16,982) -4.0 (128,652) 54,532 10.2 -
Other Income (deductions):
Interest and dividend income 1,667 12,629 3,753
Interest expense 981 7,432 797
Gain on contribution of investment
securities to pension trust - - 12,518
Foreign exchange gain (loss) 463 3,508 (1,343)
Other, net (1,054) (7,985) (5,280)
Other income (deductions) total 95 - 720 8,851 1.7 -
Income (loss) before income taxes (16,887) -4.0 (127,932) 63,383 11.9 -
Income taxes (7,750) -1.8 (58,712) 19,807 3.7 -
Income (loss) before minority (9,137) -2.2 (69,220) 43,576 8.2 -
interests
Minority interests 1,210 0.3 9,167 (579) -0.1 -
Net income (loss) (7,927) -1.9 (60,053) 42,997 8.1 -
Net income (loss) per common shares Yen (59.67) US$ (0.45) Yen 323.04
Average common shares outstanding 132,861 thousands 133,103 thousands
Notes:
1. The figures for net income (loss) per common share are calculated based upon
the weighted average number of shares of common stock (the total outstanding
number).
2. U.S.$1=Yen 132
3. Statements of income for the nine-month period of fiscal 2001 and 2002 are
unaudited by independent auditors.
6) Balance sheets CONSOLIDATED
ASSETS
As of Dec. 31, 2001 As of Sep. 30, 2001 Change
(Yen millions) % (U.S.$ thousands) (Yen millions) % %
Current assets 406,097 52.9 3,076,493 404,776 54.0 0.3
Cash and cash equivalents 117,561 890,614 126,709
Net trade receivables 143,054 1,083,743 129,004
Inventories 110,879 839,992 117,409
Prepaid expenses and other current 34,603 262,144 31,654
assets
Investments and advances 24,530 3.2 185,833 22,173 3.0 10.6
Net property, plant, and equipment 280,198 36.5 2,122,712 277,477 37.1 1.0
Other assets 57,405 7.4 434,886 44,509 5.9 29.0
TOTAL 768,230 100.0 5,819,924 748,935 100.0 2.6
LIABILITIES AND STOCKHOLDERS' EQUITY
As of Dec. 31, 2001 As of Sep. 30, 2001 Change
(Yen millions) % (U.S.$ thousands) (Yen millions) % %
Current liabilities 109,623 14.3 830,477 106,866 14.3 2.6
Short-term debt 2,541 19,250 3,654
Trade payables 50,398 381,803 49,583
Accrued expenses and other current 56,257 426,189 50,899
liabilities
Income taxes 427 3,235 2,730
Long-term debt, excluding current 535 - 4,053 612 0.1 -12.6
installments
Retirement and severance benefits 54,321 7.1 411,523 33,303 4.4 63.1
and others
Total liabilities 164,479 21.4 1,246,053 140,781 18.8 16.8
Minority Interests 4,730 0.6 35,833 4,220 0.6 12.1
Common stock 32,641 247,280 32,641
Additional paid-in capital 63,051 477,659 63,051
Legal reserve 15,710 119,015 15,710
Retained earnings 537,960 4,075,455 551,705
Accumulated other comprehensive (46,755) (354,204) (55,591)
income (loss)
Treasury stock (3,586) (27,167) (3,582)
Total stockholders' equity 599,021 78.0 4,538,038 603,934 80.6 -0.8
TOTAL 768,230 100.0 5,819,924 748,935 100.0 2.6
Total common shares outstanding 132,861 thousands 132,861 thousands
Notes:
1. U.S.$1=Yen 132
2. Balance sheets as of Dec. 31, 2001 are unaudited by independent auditors.
7) Sales by Region
The Third Quarter
The third quarter of FY2002 The third quarter of FY2001
(Oct.1,2001 - Dec.31,2001) (Oct.1,2000 - Dec.31,2000) change
(Yen millions) % (U.S.$ thousands) (Yen millions) % %
Americas 29,504 19.8 223,515 33,676 18.7 -12.4
Europe 21,496 14.4 162,849 30,218 16.8 -28.9
Asia and others 57,283 38.4 433,962 55,254 30.6 3.7
Overseas sales total 108,283 72.6 820,326 119,148 66.1 -9.1
Japan 40,894 27.4 309,803 61,026 33.9 -33.0
Net sales 149,177 100.0 1,130,129 180,174 100.0 -17.2
Notes:
1. Sales by region are classified by geographic areas of the buyer.
2. U.S.$1=Yen 132
The nine-month period
The nine-month period of FY2002 The nine-month period of FY2001 change
(April 1,2001 - Dec.31,2001) (April 1,2000 - Dec.31,2000)
(Yen millions) % (U.S.$ thousands) (Yen millions) % %
Americas 81,523 19.3 617,599 96,565 18.1 -15.6
Europe 59,498 14.1 450,742 75,950 14.3 -21.7
Asia and others 154,668 36.7 1,171,727 185,179 34.8 -16.5
Overseas sales total 295,689 70.1 2,240,068 357,694 67.2 -17.3
Japan 126,108 29.9 955,364 174,506 32.8 -27.7
Net sales 421,797 100.0 3,195,432 532,200 100.0 -20.7
Notes:
1. Sales by region are classified by geographic areas of the buyer.
2. U.S.$1=Yen 132
This information is provided by RNS
The company news service from the London Stock Exchange
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