RNS Number:7038E
TDK Corporation
5 December 2002
A number of non material typographical changes have been made to
the Interim Results announcement released on November 22, 2002 at 12:31 under
RNS No 1495E.
The changes are identified with an asterisk (*).
The full amended text is shown below.
PART 1
Exhibit 1
(Translation)
ABBREVIATED NOTICE REGARDING THE INTERIM SETTLEMENT OF ACCOUNTS
ON A CONSOLIDATED BASIS FOR THE YEAR ENDING MARCH 31, 2003
October 31, 2002
Name of Listed Company: TDK Corporation (the "Company")
Securities Code No.: 6762
(URL http://www.tdk.co.jp/)
Stock Exchange(s) Where the Company's
Shares are Listed in Japan The Company's shares are listed on the Tokyo Stock
(Section) Exchange and the Osaka Securities Exchange.
Location of Head Tokyo
Office: Mr. Hajime Sawabe, President & Representative Director
Name of Representative:
Any inquiry relating hereto should be made
to: Mr. Michinori Katayama, General Manager
Name and Position of the Person in Corporate Communications Dept.
Charge: (03) 5201-7102
Telephone Number:
Date of Resolutions of the Board of
Directors having approved the Interim
Settlement of Accounts October 31, 2002
Whether or not the U.S. GAAP has been Adopted.
adopted
1. Business Results for the current interim business period (from April 1, 2002 to September 30, 2002)
(1) Results of operations
Net
Earnings
per
Share
after
Adjust-
Earnings Net Earnings ment
before per of the
Net Sales Operating Income Taxes Net Earnings Share Latent
Profit Shares
(Y Mil.) (Y Mil.) (Y Mil.) (Y Mil.) (Y) (Y)
For the six 296,380 10,019 7,636 4,645 34.98 -
months ended
September 30,
2002:
Increase or 9.5% - - 153.5%
decrease in
comparison with
the corresponding
period of
accounts for the
preceding
business year (%)
For the six 270,786 ^ 2,811 ^ 3,082 1,832 13.78 -
months ended
September 30,
2001:
Increase or ^ 23.1% - - ^ 94.4%
decrease in
comparison with
the corresponding
period of
accounts for the
preceding
business year (%)
For the year 570,511 ^ 43,722 ^ 43,697 ^ 25,771 ^ 193.91 -
ended March 31,
2001:
(Notes) 1. Profit arising from investments in non-consolidated companies accounted for by the equity
method:
As at September 30, 2002: Y204 million
As at September 30, 2001: ^ Y38 million
As at March 31, 2002: ^ Y957 million
2. Average number of shares in issue during the interim period or at the end of the business year
(consolidated):
As at September 30, 2002: 132,802,249 shares
As at September 30, 2001: 132,940,078 shares
As at March 31, 2002: 132,900,177 shares
3. Change of accounting method: None
4. Presentation of percentages in the above list shows increase or decrease ratio in comparison
with the corresponding period of the preceding business year.
5. "Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the
Vendor's Products)" (the Emerging Issues Task Force ("EITF") 01-9) has been adopted for the
year ending March 31, 2003. Accordingly, the figures of the six months ended Sep. 30, 2001 and
the year ended March 31, 2002 have been restated.
(2) Consolidated financial conditions
Ratio of
Stockholders'
Equity to
Total Stockholders'
As at Total Assets Stockholders' Assets Equity per Share
Equity
(Y Mil.) (Y Mil.) (%) (Y)
September 30, 2002 727,674 564,595 77.6 4,256.79
September 30, 2001 748,935 603,934 80.6 4,545.60
March 31, 2002 749,910 583,927 77.9 4,395.07
(Note) Number of shares in issue at the end of the interim period or the business year (consolidated):
As at September 30, 2002: 132,634,092 shares
As at September 30, 2001: 132,861,204 shares
As at March 31, 2002: 132,859,576 shares
(3) Conditions of consolidated cash flows
Cash flows Cash flows Cash flows Balance of cash and
from from from cash equivalents at
operating investing financing the end of business
As at activities activities activities year
(Y mil.) (Y mil.) (Y mil.) (Y mil.)
September 30, 44,070 ^ 13,345 ^ 4,340 147,822
2002
September 30, 22,442 ^ 37,059 ^ 7,293 126,709
2001
March 31, 2002 41,504 ^ 57,903 ^ 13,202 125,761
-2-
(4) Matters concerning the consolidated companies and companies as to investments in which the equity method of
accounting has been carried out.
Number of consolidated subsidiaries: 73
Number of non-consolidated subsidiaries: none
(Number of non-consolidated subsidiaries
as to investments in which the equity
method of accounting has been carried out: none)
Number of affiliates: 7
(Number of affiliates as to
investments in which the equity method
of accounting has been carried out: 7)
(5) Change of consolidation and companies as to investments in which the equity method of accounting has been
carried out:
Consolidated subsidiaries: (Newly included) 1
(Exclusion) 5
Companies as to investments in which the equity method of (Newly included) -
accounting has been carried out: (Exclusion) -
2. Business Forecast for the business year ending March 31, 2003 (April 1, 2002 - March 31, 2003)
Earnings before
Net Sales Income taxes Net Earnings
(Y Mil.) (Y Mil.) (Y Mil.)*
For the business year ending March 585,000 18,300 13,000
31, 2003
(Reference) Net earnings per share expected for the business year ending March
31, 2002: Y98.01
Please refer to page 11 of the attached documents for the preconditions or other
related matters used for the above business forecast.
(Note)
The estimates of business results are rendered in accordance with Japanese regulations. All these estimates are
forward-looking statements based on a number of assumptions. Actual results may differ substantially depending
on a number of factors including but not limited to economic trends, exchange rates and changes in technology
involving the Company's products.
-3-
Exhibit 2
(Translation)
ABBREVIATED NOTICE REGARDING THE INTERIM SETTLEMENT OF ACCOUNTS
ON A NON-CONSOLIDATED BASIS FOR THE YEAR ENDING MARCH 31, 2003
October 31, 2002
Name of Listed Company: TDK Corporation (the "Company")
Securities Code No.: 6762
(URL http://www.tdk.co.jp/)
Stock Exchange(s) Where the Company's
Shares are Listed (Section) The Company's shares are listed on the Tokyo Stock Exchange and the Osaka
Securities Exchange.
Location of Head Tokyo
Office:
Name of Representative: Mr. Hajime Sawabe, President & Representative Director
Any inquiry relating hereto should be made to:
Name and Position of the Person in Charge: Mr. Michinori Katayama, General Manager
Corporate Communications Dept.
Telephone Number: (03) 5201-7102
Date of Resolutions of the Board of Directors having
approved Interim Settlement of Accounts October 31, 2002
Commencement Date of Payment of Interim Dividends December 6, 2002
Whether or not the system to pay interim dividends
has been provided for in the Article of Provided.
Incorporation
Whether or not the new unit share system
has been adopted Adopted. (100 shares constituting one unit)
1. Business Results for the current interim business period (from April 1, 2002 to September 30, 2002)
(1) Results of Operations
Net
Earnings
per
Net Sales Operating Profit Recurring Profit Net Earnings Share
(Y Mil.) (Y Mil.) (Y Mil.) (Y Mil.) (Y)
For the six months
ended
September 30, 2002: 167,260 3,480 6,937 1,056 7.96
Increase or
decrease in
comparison with the
corresponding
period of
accounts for the
preceding
business year (%) 2.0% - ^50.3% ^89.2%
For the six months
ended
September 30, 2001: 164,023 ^319 13,970 9,752 73.22
Increase or
decrease in
comparison with the
corresponding
period of
accounts for the
preceding
business year (%) ^29.9% - ^60.1% 345.3%
For the year ended
March 31,
2002: 317,811 ^8,507 7,580 ^3,794 ^28.55
(Notes) 1. Average number of shares in issue during the interim period or the business year:
As at September 30, 2002: 132,802,249 shares
As at September 30, 2001: 133,189,659 shares
As at March 31, 2002: 132,900,177 shares
2. Change of accounting method: None
3. Presentation of percentages in the above list shows increase or decrease ratio in comparison
with the corresponding period of the preceding business year.
(2) Dividends
Interim Dividend per Share Annual Dividend per Share
(Y) (Y)
For the six months ended September 30, 2002: 25.00 -
For the six months ended September 30, 2001: 30.00 -
For the year ended March 31, 2002: - 50.00
(3) Financial Conditions
Ratio of
Stockholders'
Stockholders' Equity to Total Stockholders'
Total Assets Equity Assets Equity per Share
(Y Mil.) (Y Mil.) (%) (Y)
As at September 30, 2002 510,925 423,471 82.9 3,192.78
As at September 30, 2001 540,838 447,425 82.7 3,359.31
As at March 31, 2002 522,140 426,439 81.7 3,209.70
(Notes) (1) Number of shares in issue at the end of the interim period or the business year:
As at September 30, 2002: 132,634,092 shares
As at September 30, 2001: 133,189,659 shares
As at March 31, 2002: 132,859,576 shares
(2) Number of treasury stock at the end of the interim period or the business year:
As at September 30, 2002: 555,567 shares
As at March 31, 2002: 330,083 shares
-2-
2. Business Forecast for the business year ending March 31, 2003 (April 1, 2002 - March 31, 2003)
Net Earnings Annual Dividend (Year-end
Net Sales Recurring Profit for the Year per Share dividend)
(Y Mil.) (Y Mil.) (Y Mil.) (Y) (Y)
For the business year ending March 31, 2003 320,000 6,300 300 50.0 25.0
(Reference) Net earnings per share expected for the business year ending
March 31, 2003: Y2.26
Please refer to page 11 of the attached documents for the preconditions or other
related matters used for the above business forecast.
(Note)
The estimates of business results are rendered in accordance with Japanese regulations. All these estimates
are forward-looking statements based on a number of assumptions. Actual results may differ substantially
depending on a number of factors including but not limited to economic trends, exchange rates and changes in
technology involving the Company's products.
-3-
Exhibit 3
(Translation)
TDK IMMEDIATE RELEASE
October 31, 2002
Name of Listed Company: TDK Corporation (the "Company")
Securities Code No.: 6762
Stock Exchange(s) where the Company's shares are listed in Japan:
The Tokyo Stock Exchange and the
Osaka Securities Exchange
Name of Representative: Mr. Hajime Sawabe
President and Representative Director
Any inquiry related hereto should be made to:
Corporate Communications Dept.
TEL 03(5201)7102
Notice of Business Results for the Interim Settlement of Accounts of the
Business Year Ending March 31, 2003
For the business year ending March 31, 2003, we hereby announce the
results of the second quarter settlement and the interim settlement of
consolidated accounts and the results of the interim settlement of
non-consolidated accounts based on the United States generally accepted
accounting principles (U.S. GAAP).
1) Summary of Business Results
Consolidated Results (for the interim period from April 1, 2002 to
September 30, 2002) (U.S. GAAP)
(Millions of yen)
Period April 1, 2002 - April 1, 2001 -
September 30, 2002 September 30, 2001 Increase or decrease
Items Amount Ratio (%) Amount Ratio (%) Amount Ratio (%)
Net Sales 296,380 100.0 270,786 100.0 25,594 9.5
Operating Profit (^loss) 10,019 3.4 ^2,811 ^1.0 12,830 -
Earnings before Income Taxes(^loss) 7,636 2.6 ^3,082 ^1.1 10,718 -
Interim Net Earnings 4,645 1.6 1,832 0.7 2,813 153.5
Interim Net Earnings per Share 34.98 yen 13.78 yen
(Sales Breakdown)
(Millions of yen)
Period April 1, 2002 - April 1, 2001 -
September 30, 2002 September 30, 2001 Increase or Decrease
Items Amount Ratio (%) Amount Ratio (%) Amount Ratio (%)
Electronic materials & components 234,272 79.0 209,607 77.4 24,665 11.8
Electronic materials 88,918 30.0 81,367 30.1 7,551 9.3
Electronic devices 59,293 20.0 54,264 20.0 5,029 9.3
Recording devices 78,173 26.4 64,022 23.6 14,151 22.1
Semiconductors & others 7,888 2.6 9,954 3.7 ^2,066 ^20.8
Recording media & systems 62,108 21.0 61,179 22.6 929 1.5
Total 296,380 100.0 270,786 100.0 25,594 9.5
Overseas Sales (included in 212,091 71.6 185,616 68.5 26,475 14.3
the total)
(Notes)
1. Net earnings per share for the interim period are calculated on the basis of weighted average number of shares
of common stock in issue (the aggregate number of issued shares).
2. "Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor's Products)"
(the Emerging Issues Task Force ("EITF") 01-9) has been adopted for the year ending March 31, 2003. Accordingly,
the figures of the corresponding period of the previous year have been restated.
- 2 -
Non-Consolidated Results (for the interim period from April 1, 2002 to September 30, 2002)
(Millions of yen)
Period April 1, 2002 - April 1, 2001 -
September 30, 2002 September 30, 2001 Increase or decrease
Items Amount Ratio (%) Amount Ratio (%) Amount Ratio (%)
Net Sales 167,260 100.0 164,023 100.0 3,237 2.0
Operating Profit (^loss) 3,480 2.1 ^319 ^0.2 3,799 -
Recurring Profit 6,937 4.1 13,970 8.5 ^7,033 ^50.3
Interim Net Earnings 1,056 0.6 9,752 5.9 ^8,696 ^89.2
Interim Net Earnings per Share 7.96 yen 73.22 yen
Interim Dividends per Share 25.00 yen 30.00 yen
(Notes)
1. Any amount less than one million yen is omitted. The same shall apply hereafter.
2. Net earnings per share for the interim period are calculated on the basis of weighted average number of shares
of common stock (the aggregate number of issued shares).
(Sales Breakdown)
(Millions of yen)
Period April 1, 2002 - April 1, 2001 -
September 30, 2002 September 30, 2001 Increase or Decrease
Items Amount Ratio (%) Amount Ratio (%) Amount Ratio (%)
Electronic materials & components 146,384 87.5 140,647 85.7 5,737 4.1
Electronic materials 70,620 42.2 64,624 39.4 5,996 9.3
Electronic devices 45,694 27.3 39,835 24.3 5,859 14.7
Recording devices 24,055 14.4 26,486 16.1 ^2,431 ^9.2
Semiconductors & others 6,013 3.6 9,700 5.9 ^3,687 ^38.0
Recording media & systems 20,876 12.5 23,376 14.3 ^2,500 ^10.7
Total 167,260 100.0 164,023 100.0 3,237 2.0
Overseas Sales (included in 90,622 54.2 82,183 50.1 8,439 10.3
the total)
- 3 -
Consolidated
The Second Quarter of the Business Year
Consolidated Results (for the second quarter of the business year from July 1, 2002 to September 30, 2002) (U.S. GAAP)
(Millions of yen)
Period July 1, 2002 - July 1, 2001 -
September 30, 2002 September 30, 2001 Increase or decrease
Items Amount Ratio (%) Amount Ratio (%) Amount Ratio (%)
Net Sales 147,672 100.0 130,542 100.0 17,130 13.1
Operating Profit (^loss) 4,033 2.7 ^5,400 ^4.1 9,433 -
Earnings before Income Taxes (^loss) 4,333 2.9 ^5,646 ^4.3 9,979 -
Interim Net Earnings 2,484 1.7 625 0.5 1,859 297.4
Interim Net Earnings per Share 18.71 yen 4.71 yen
(Sales Breakdown)
(Millions of yen)
Period July 1, 2002 - July 1, 2001 -
September 30, 2002 September 30, 2001 Increase or Decrease
Items Amount Ratio (%) Amount Ratio (%) Amount Ratio (%)
Electronic materials & components 116,102 78.6 99,286 76.1 16,816 16.9
Electronic materials 43,058 29.2 37,467 28.7 5,591 14.9
Electronic devices 29,449 19.9 25,714 19.7 3,735 14.5
Recording devices 39,832 27.0 31,188 23.9 8,644 27.7
Semiconductors & others 3,763 2.5 4,917 3.8 ^1,154 ^23.5
Recording media & systems 31,570 21.4 31,256 23.9 314 1.0
Total 147,672 100.0 130,542 100.0 17,130 13.1
Overseas Sales (included in 105,900 71.7 88,871 68.1 17,029 19.2
the total)
(Notes)
1. Net earnings per share for the interim period are calculated on the basis of weighted average number of shares
of common stock in issue (the aggregate number of issued shares).
2. "Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor's Products)"
(the Emerging Issues Task Force ("EITF") 01-9) has been adopted for the year ending March 31, 2003. Accordingly,
the figures of the corresponding period of the previous business year have been restated.
- 4 -
2) Conditions of Corporate Group
The Corporate Group consists of TDK Corporation (the "Company"), its 73 subsidiaries and 7 affiliates and engages in
manufacturing and sale of electronic materials & components and recording media & systems products.
Contents of businesses, and the relation of the Company and its associated companies to such businesses are as follows:
Division Major products Principal companies
Electronic materials & components
Electronic materials ferrite cores, ferrite magnets, The Company
rare-earth *metal magnets, ceramic TDK-MCC Corporation
capacitors TDK Taiwan Corporation
TDK Corporation of America
28 other companies
(domestic: 5, overseas: 23)
(Total number: 32)
Electronic devices high-frequency circuit components, The Company
noise filters, piezoelectric products, TDK Hong Kong Co., Ltd.
sensors, inductors, transformers, TDK Taiwan Corporation
switching power supplies, DC-DC TDK Akita Manufacturing Corp.
converters, DC-AC inverters 27 other companies
(domestic: 7, overseas: 20)
(Total number: 31)
Recording devices GMR heads, thermal heads, optical The Company
heads SAE Magnetics (H. K.) Ltd.
TDK Philippines Corporation
14 other companies
(domestic: 1, overseas: 13)
(Total number: 17)
Semiconductors & others semiconductor ICs, organic The Company
electroluminescent (EL), anechoic TDK Semiconductor Corporation
chambers 16 other companies
(domestic: 7, overseas: 9)
(Total number: 18)
Recording media & systems audiotapes, videotapes, CD-Rs, MDs, The Company
DVDs, "BS"/"CS" parabolic antenna, PC TDK Recording Media Europe S.A.
softwares, PC cards, data storage TDK Electronics Corporation
tapes used TDK Marketing Corporation
in computers 17 other companies
(domestic: 2, overseas: 15)
(Total number: 21)
- 5 -
3) Management Policy
1. Fundamental Policy for Management of the Company
The Company was founded in 1935 for the purpose of the first industrial development in the world of ferrite,
a magnetic material. The Company has engaged in research and development of a variety of other electronic
materials and components based on its initial corporate philosophy of contributing to culture and industry
through creativity.
We desire to be a corporation that will always provide high value to all stakeholders through ongoing
efforts to devise new ideas and a spirit of taking on challenges, and will keep generating inspiration and
excitement of highest caliber.
2. Fundamental Policy for Distribution of Profits
The Company considers it one of the important goals of management to return profits to its stockholders, and
will distribute such profits with comprehensive reference to the level of return on equity (ROE), dividends
on equity (DOE), etc., and future trends in its business results.
With respect to internal reserves, the Company will invest in research and development of new technologies
including magneto-optical recording, mobile communications, recording devices with large capacities,
semiconductor applied products and data communications, in response to rapid technological innovation in the
electronics industry. At the same time the Company will develop new products and technologies, and enhance
its competitiveness, in response to the further development of internationalization.
3. Medium, Long-Term Operating Strategies
Rapid innovations in information technology (IT), including the Internet, has accelerated the speed of
business. It is now possible to quickly differentiate products and services with value from those without.
This is an era where only those companies with true value will survive. The Company will determine its
strengths and weaknesses and will devote energy to the areas where it can further enhance its specialized
expertise. In this way, the Company desires to continue to improve its corporate value into the twenty-first
century.
In order to respond to these changes in circumstances, the Company aims to become an exciting company and to
increase its corporate value. It has initiated a project entitled "Exciting 108", a new medium-term project
to be implemented over four years from April 2000 until the end of the business year ending March 31, 2004.
The following three principles will be established and implemented as basic strategies for this project:
I Seeking to become an e-material solution provider
Based on the keywords "speed" and "timing", the Company will develop e-material solutions, which will
anticipate and quickly solve customer problems, using technologies for materials in which the Company's
strengths lie. E-material solutions represent a method of rapidly producing and providing
high-value-added products to customers. In particular, during the medium term, the Company will
aggressively engage in the business areas of recording and communications.
- 7 -
II Build a world-class management system
The concept of borders is increasingly disappearing from business and management. Labor and employment
practices are also changing rapidly. The Company will rapidly establish a variety of systems through
which management may respond to such changes taking place in its evolving business environment.
III Challenge to zero emissions
The Company aims at the accomplishment of eco-factories with zero emissions, which will completely
eliminate, reuse and recycle waste discharged from its plants. As a final goal, the Company desires to
be able to recycle 100% of its produced wastes and accomplish zero emissions.
By accomplishing these three principles, the Company will maximize corporate value, exist in harmony with
the world and contribute to society.
The Company will implement various policies based on the above-mentioned principles. However, the Company
will take flexible steps in this direction in consideration of the current severe operating environment.
4. Corporate Ethics
The Company is fully aware that corporate activities in contravention of the corporate ethics will
jeopardize its continuance and has, therefore, set out the "TDK Corporate Code of Ethics". The Company
endeavors to promote such ethics and improve its risk management capabilities.
5. Policies for Corporate Governance
Upon approval at the Ordinary General Meeting of Stockholders held on June 27, 2002 and a meeting of the
Board of Directors held thereafter, the Company introduced the following policies as stated below, in order
to improve the soundness of the corporation, transparency and stockholders' value, envisaging further
improvement of the corporate governance.
(1) Activating the Board of Directors: In order to reinforce the supervising ability of the Board of
Directors regarding business operations, one outside Director was newly elected. At the same time, the
number of Directors was decreased to seven (7) Directors from the current twelve (12) Directors in
order to activate the Board of Directors.
(2) Introduction of the Corporate Officers' System: A Corporate Officers' system consisting of 18 corporate
officers was introduced, in order to strengthen operating capabilities and management efficiencies.
This will facilitate quick decision-making based on the authority to be delegated, and serve to clearly
define responsibilities and authority in the process of business operations.
(3) Establishment of the Remuneration Committee: A Remuneration Committee, the chief of which is the
outside Director and which consists of a corporate officer in charge of personnel and outside experts,
etc., has been established as an advisory committee of the Board of Directors. For the purpose of
sharing interests among Directors, stockholders and corporate officers, a remuneration system that
responds to the business results of the Company was introduced, which involves, among other things, an
expansion of the scope of Directors' and corporate officers' remuneration that is linked with business
results, and the suspension of the reserve for retirement
- 8 -
grants for officers hereafter. The scope of the stock option plan was also expanded to include executives of
affiliates of the Company, as well as Directors, managing staff and corporate officers of the Company.
6. Policies for Reduction in the Investment Unit
The Company changed one unit (1 tan-gen) of shares from 1,000 shares to 100 shares on August 1, 2000, in
order to facilitate the circulation of shares of the Company and expand types of investors. The Company is
in the process of considering ho to deal with the reduction in its investment unit of shares hereafter,
taking carefully into account expenses incurred therewith and the effect thereof, etc. At this stage,
concrete policies and schedule have not yet been determined.
4) Operating Results and Financial Conditions
1. Outline of business results for the interim settlement of accounts for the six months ended September 30,
2002
We hereby report the results of the interim settlement of accounts for the six months ended September 30, 2002.
On a consolidated basis, for the interim period ended September 30,
2002, net sales amounted to Y296,380 million (up 9.5% from the corresponding
period of the preceding business year); operating profit amounted to Y10,019
million (operating loss of Y2,811 million was stated for the corresponding
period of the preceding business year); earnings before income taxes amounted to
Y7,636 million (losses before income taxes of Y3,082 million was stated for the
corresponding period of the preceding business year); net earnings for the
interim period under review amounted to Y4,645 million (up 153.5% from the
corresponding period of the preceding business year); and net earnings per share
for the interim period under review amounted to Y34.98.
The average exchange rates of the yen against the U.S. dollar and the
Euro during the interim period under review depreciated to Y123 and Y117,
respectively (down 1% and 9%, respectively, from the corresponding period of the
preceding business year). As a result, business results increased when converted
to yen. The amounts by which net sales and operating profit were favorably
affected by such exchange rates were approximately Y3.9 billion and Y500
million, respectively.
Outline of sales by division are set forth based on the following
classifications.
Electronic materials & components segment
Overall sales of this segment amounted to Y234,272 million (up 11.8%
from the corresponding period of the preceding business year). Sales of this
segment for the first quarter of the business year increased as inventory
adjustments of the Company's business partners progressed and the Company began
to receive orders of components from these business partners from the beginning
of the year. However, orders began to decrease in June and thus sales for the
second quarter of the business year decreased slightly compared to those of the
first quarter. An outline of each product is as follows:
Electronic materials
Sales in this sector amounted to Y88,918 million (up 9.3% from the
corresponding period of the preceding business year).
- 9 -
*
Sales of *capacitors for the interim period under review increased
compared to those of the corresponding period of the preceding business year due
to increase in sales of products of audio and visual ("AV") areas such as DVD
players and video games, PC related areas as well as automobile areas in line
with development and increase in electronic parts utilized in automobiles.
Overall sales of ferrite cores decreased as demand for cores required
for data communications relating to information technologies ("IT") did not
recover and sales of deflection yoke cores which are major components for TV and
PC monitors decreased due to severe competition, although sales of cores for
back light of LCD panels and cores for power supplies used mainly for AVs were
favorable. Overall sales of magnets increased slightly due to steady increase of
sales of magnets required for automobiles and components segments, which had
begun in the preceding business year.
Electronic devices
Sales in this sector amounted to Y59,293 million (up 9.3% from the
corresponding period of the preceding business year).
Overall sales of inductive devices increased slightly due to an
increase in sales of PC related areas and automobile areas in line with
development and an increase in electronic parts utilized in automobiles,
although sales of products in data communication areas grew but only at a lower
rate.
In high-frequency components, the sales ratio of products used for data
communications, mainly cellular phones, is high. Sales decreased slightly
compared to those of corresponding period of the preceding business year due to
strong demand to reduce selling price, while sales have begun to recover
compared to those of latter half of the preceding business year.
Overall sales of other products increased due to favorable sales of DC/
DC converters for entertainment devices.
Recording devices
Sales in this sector amounted to Y78,173 million (up 22.1% from the
corresponding period of the preceding business year). Sales of heads for
hard-disc drives ("HDDs") increased due to recovery of the Company's market
share, mainly owing to an increase in market share of the 40 Gigabyte Disc
products, which were highly valued by customers of the Company. Sales of other
head products decreased due to the slowdown of demand, among other factors.
Semiconductors & others
Sales in this sector amounted to Y7,888 million (down 20.8% from the
corresponding period of the preceding business year). Sales of ICs for WAN/LAN
and set-top box modems decreased substantially as investment in data
infrastructure equipment remained sluggish. Furthermore, sales of business
related to anechoic testing chambers for noise reduction decreased as projects
therefor were called off or postponed successively due to global economic
downturn and future uncertainty.
- 10 -
Recording media & systems segment
Sales in this segment amounted to Y62,108 million (up 1.5% from the
corresponding period of the preceding business year). A decrease in sales of
audio tapes due to shrinking demand, was made up by an increase in sales of data
storage tapes for PCs which acquired regulatory approval of a new standard
called "Linear Tape-Open" ("LTO") in the preceding business year and those of
software related products. Sales of videotapes during the interim period under
review increased slightly, fueled by World Cup Soccer. Sales of optical media
stayed almost even due to decrease in demand for MDs and decline in selling
price of CD-R write-once disks, although demand for CD-Rs and DVDs increased.
Sales in Japan amounted to Y84,289 million (down 1.0% from the
corresponding period of the preceding business year). Although sales of DC/DC
converters for entertainment devices were favorable, sales of many other
products were sluggish compared to other regions.
In the American region, sales amounted to Y56,294 million (up 11.6%
from the corresponding period of the preceding business year). Sales of
recording devices increased due to recovery of market share and sales of
recording media & systems segment, mainly data storage tapes for PCs, increased.
In Europe, sales amounted to Y34,368 million (down 9.1% from the
corresponding period of the preceding business year). Such a decrease in sales
is attributable to the sluggish sales in high-frequency components for
GSM-format cellular phones as well as decreased demand for audiotapes and MDs in
recording media & systems segment.
Sales in Asia and other regions amounted to Y121,429 million (up 24.8%
from the corresponding period of the preceding business year). Sales in these
regions increased due to an increase in sales of recording devices owing to
recovery of market share and an increase in orders of electronic materials and
electronic device products.
Consequently, overseas sales totaled Y212,091 million (up 14.3% from
the corresponding period of the preceding business year). The ratio of overseas
sales to total sales on a consolidated basis was up 3.1 percentage points to
71.6% compared with 68.5% in the corresponding period of the preceding business
year.
On a non-consolidated basis, net sales amounted to Y167,260 million (up
2.0 % from the corresponding period of the preceding business year); recurring
profit amounted to Y6,937 million (down 50.3 % from the corresponding period of
the preceding business year); net earnings for the six months ended September
30, 2002, on the other hand, amounted to Y1,056 million (down 89.2 % from the
corresponding period of the preceding business year) and interim net earnings
per share was Y7.96.
Sales of the electronic materials & components segment on a
non-consolidated basis amounted to Y146,384 million (up 4.1 % from the
corresponding period of the preceding business year) due to favorable sales of
*capacitors and DC/DC converters for entertainment devices. Sales of the
recording media & systems segment on a non-consolidated basis amounted to Y
20,876 million (down 10.7 % from the corresponding period of the preceding
business year) due to a decrease in demand for audiotapes and MDs, among others.
At the meeting of the Board of Directors held today, an interim
dividend of Y25 per share for the interim period ended September 30, 2002 was
decided upon.
- 11 -
2. Financial conditions
1) Condition of assets, liabilities and stockholders' equity
* Total assets: Y727,674 million (a decrease of 3.0% compared with the end of the preceding business year)
* Stockholders' equity: Y564,595 million (a decrease of 3.3% compared with the end of the preceding business year)
* Ratio of stockholders' 77.6% (a decrease of 0.3% compared with the end of the preceding business year)
As of September 30, 2002, cash and cash equivalents increased by Y
22,061 million, and trade receivables and inventories decreased by Y5,031
million and Y7,435 million, respectively, compared with the end of the preceding
business year. Tangible fixed assets decreased by Y21,550 million due to review
of the contents of capital investment. As a result, total assets decreased by Y
22,236 million compared with the end of preceding business year.
Other current liabilities decreased by Y15,879 million as retirement
allowances were paid during the interim period under review to employees who
retired early due to the structural reform for recovery of profitability which
was implemented in the preceding business year. Trade payables and accrued
expenses for retirement annuity increased by Y3,287 million and Y8,326 million,
respectively. As a result, total liabilities decreased by Y2,736 million
compared with the end of preceding business year.
With respect to capital, other comprehensive income decreased by Y
20,101 million due to an increase in the amount of capital deduction of the
foreign currency translation adjustments. However, other retained earnings
increased by Y1,716 million. As a result, total stockholders' equity decreased
by Y19,332 million compared with the end of preceding business year.
2) Cash flows for the interim period ended September 30, 2002:
(Millions of yen)
Interim period ended Interim period ended
September 30, 2002 September 30, 2001 Fluctuation
Cash flows from operating activities 44,070 22,442 21,628
Cash flows from investing activities ^13,345 ^37,059 23,714
Cash flows from financing activities ^4,340 ^7,293 2,953
Exchange fluctuation equivalents (^loss) ^4,324 ^2,298 ^2,026
Increase in cash and cash equivalents(^loss) 22,061 ^24,208 46,269
Balance of cash and cash equivalents
as at beginning of business year 125,761 150,917 ^25,156
Balance of cash and cash equivalents
as at end of business year 147,822 126,709 21,113
* Cash flows from operating activities increased by Y21,628 million from the corresponding period of
the preceding business year to Y44,070 million. Depreciation and amortization totaled Y28,503 million,
approximately the same level as that for the corresponding period of the
- 12 -
preceding business year. Trade receivables decreased by Y24,674 million and trade payables and taxes payables
increased by Y19,325 million and Y16,900 million, respectively.
* Cash flows used in investing activities totaled Y13,345 million, a decrease of Y23,714 million
compared with the corresponding period of the preceding business year. This was mainly attributable to a
decrease in payments for acquisition of tangible fixed assets (a decrease of Y23,622 million from the
corresponding period of the preceding business year to Y14,472 million).
* Cash flows used in financing activities totaled Y4,340 million, a decrease of Y2,953 million compared
with the corresponding period of the preceding business year. Repayment for short-term loans payables decreased
by Y1,913 million, and payments for dividends decreased by Y1,334 million from the corresponding period of the
preceding business year.
3. Business Forecasts for the business year ending March 31, 2003
With respect to the business forecasts for the business year ending
March 31, 2003, on a consolidated basis and on a non-consolidated basis, the
Company hereby makes a revision of the business forecasts announced in August
(on a consolidated basis) and May (on a non-consolidated basis) 2002. In
estimating the figures stated below, the Company has taken the following
assumptions into consideration:
* Business forecasts were estimated at an average exchange rate of US$ = Y120 since the second quarter of the
business year and are again estimated at the same exchange rate for the latter half of the business year.
* With regard to electronic materials and electronic device products, the number of orders was gradually
increasing from the beginning of the business year, however, increase in the number of orders has begun to
slow down since June. It seems that recovery of demand is not strong enough due to future economic
uncertainty, mainly in the U.S. Therefore, it is predicted that operating environment surrounding the
electronic components industry continues to be severe.
* It is expected that in the latter half of the business year, sales of heads for HDDs, and the Company's
major recording device products which are highly valued by its customers, will continue to increase
steadily, in the same manner as in the first half of the year, although there are risks such as technical
difficulties and decrease in demand due to economic slowdown.
* It is expected that operating profit equivalent to Y20,000 million for the business year will be obtained
sufficiently by offsetting the decline of selling price which is predicted for the latter half of the
business year by cost improvements, etc.
- 13 -
Business Forecasts for the business year ending March 31, 2003
(Consolidated Business Forecast)
Increase or decrease
in comparison with
the preceding
Business forecast business year or the
for the year ending results of the Forecast as at
March 31, 2003 preceding business May, 2002
(Y Mil.) year (Y Mil.)
Net Sales 585,000 2.5% 580,000
Operating Profit 20,000 ^ Y43,722 million 20,000
Earnings before Income Taxes 18,300 ^ Y43,697 million 17,000
Net Earnings 13,000 ^ Y25,771 million 13,000
(Note) "Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor's
Products)" (the Emerging Issue Task Force "EITF") 01-9) has been adopted for the year ending March
31, 2003. Accordingly, the figures of the six months ended September 30, 2001 and the year ended
March 31, 2002 have been restated.
(Non-Consolidated Business Forecast)
Increase or decrease
in comparison with
the preceding
Business forecast business year or the
for the year ending results of the Forecast as at
March 31, 2003 preceding business May, 2002
(Y Mil.) year (Y Mil.)
Net Sales 320,000 0.7% 300,000
Operating Profit 1,800 ^Y8,507 million 4,000
Recurring Profit 6,300 - 16.9% 6,500
Net Earnings 300 ^Y3,794 million 2,000
(Matters to be noted regarding statements, etc. related to future)
All statements, etc. related to future other than historical facts, such as
business forecast, plan, policy, management strategy, objective and schedule of
the Company or the Group, as well as recognition and valuation of facts which
were included in (this Abbreviated Notice Regarding the Interim Settlement of
Accounts) ("Abbreviated Notice") are forward-looking statements based on
estimation, expectation, assumption, plan, recognition, valuation, etc. of the
Company as of the date of this Abbreviated Notice pursuant to information
obtained by the Company. Furthermore, amounts for forecast and estimation are
calculated based on certain premises (assumptions) in addition to facts which
were confirmed and recognized accurately in the past. There is no guarantee that
such statements, facts or premises (assumptions) are accurate from objective
viewpoint or that such statements, facts or premises (assumptions) will be
realized in the future. Therefore, such statement, facts or premises
(assumptions) may be
-14-
inaccurate from objective viewpoint or they may not be realized in the future,
and there are many risks and factors thereof. To be more precise, electronics
business market which is the main business field of the Group is subject to
sharp fluctuations, and in addition, as the Group executes its business not only
in Japan but also overseas, the business results of the Group may be affected by
factors such as technology, demand, price, competition status, change in
economic environment in various countries, fluctuation of exchange rates, etc.
(Risks and factors are not limited to those mentioned above.)
The premises (assumptions) on which the business forecasts indicated in this
Release are based, includes but are not limited to risks and factors mentioned
above.
-15-
This information is provided by RNS
The company news service from the London Stock Exchange
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