1st Quarter Results
Konami Corporation
7 August 2003
Consolidated Financial Results
for the First Quarter Ended June 30, 2003
(Prepared in Accordance with U.S. GAAP)
August 7, 2003
KONAMI CORPORATION
Address: 4-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo, Japan
Stock code number, TSE: 9766
Ticker symbol, NYSE: KNM
URL: http://www.konami.com
Shares listed: Tokyo Stock Exchange, New York Stock Exchange, London Stock Exchange and
Singapore Exchange
Representative: Kagemasa Kozuki, Chairman of the Board and Chief Executive Officer
Contact: Noriaki Yamaguchi, Executive Vice President and Chief Financial Officer
(Phone: +81-3-5220-0163)
1. Preparation Basis for Consolidated Financial Results for the First Quarter Ended June 30, 2003
(1) Adoption of U.S. GAAP: Yes
(2) Change in accounting principles: None
(3) Number of consolidated subsidiaries and affiliated companies accounted for by the equity
method
Number of consolidated subsidiaries: 27
Number of affiliated companies accounted for by the equity method: 3
(4) Changes in reporting entities
Number of consolidated subsidiaries added: 2
Number of consolidated subsidiaries removed: 3
Number of affiliated companies added: 0
Number of affiliated companies removed: 0
(5) Financial information presented herein was not audited by independent public accountants.
(6) Consolidated financial statements for the first quarter in the previous year was not prepared
in accordance with U.S. GAAP. Therefore, U.S. GAAP consolidated financial information for the
first quarter ended June 30, 2002 is not presented herein. However, figures for the year
ended March 31, 2003 presented herein was prepared in accordance with U.S. GAAP.
2. Consolidated Financial Results for the First Quarter Ended June 30, 2003
(Amounts are rounded to the nearest million)
(1) Consolidated Results of Operations
(Millions of yen, except per share data)
Net revenues Operating income Income (loss) before
(loss) income taxes, minority
interest and equity in
net loss of affiliated
companies
Three months ended June 30, 2003 Y 57,425 Y 9,590 Y 9,623
Three months ended June 30, 2002 - - -
Year ended March 31, 2003 253,657 (21,870) (22,096)
Net income (loss) Diluted net income
Net income (loss) per share (Yen) per share (Yen)
Three months ended June 30, 2003 Y 4,175 Y 34.65 -
Three months ended June 30, 2002 - - -
Year ended March 31, 2003 (28,519) (234.58) -
Notes:
1. Equity in net loss of affiliated companies
Three months ended June 30, 2003: Y502 million
Year ended March 31, 2003: Y1,288 million
2. Weighted-average common shares outstanding (consolidated)
Three months ended June 30, 2003: 120,484,327 shares
Year ended March 31, 2003: 121,572,154 shares
3. Net income (loss) per share was calculated in accordance with Statement of Financial Accounting
Standards (SFAS) No. 128 'Earnings per Share' .
(2) Consolidated Financial Position
(Millions of yen, except per share amounts)
Total Equity-assets Total shareholders'
shareholders'
Total assets equity Ratio equity per share (Yen)
June 30, 2003 Y 276,960 Y 90,967 32.8% 755.01
June 30, 2002 - - - -
March 31, 2003 278,250 90,406 32.5 750.35
Note:
Number of shares outstanding (consolidated)
June 30, 2003: 120,484,298 shares
March 31, 2003: 120,484,375 shares
(3) Consolidated Cash Flows
(Millions of yen)
Net cash provided by (used in) Cash and
Operating Investing Financing cash equivalents
activities activities activities at end of period
Three months ended June 30, 2003 Y 2,558 Y (1,738) Y (5,038) Y 71,169
Three months ended June 30, 2002 - - - -
Year ended March 31, 2003 27,711 (12,242) (16,443) 74,680
3. Forecast for the year ending March 31, 2004
There was no change in our forecast since we previously announced.
1. Organizational Structure of the Konami Group
The Konami Group is a conglomerate engaged in global operations in the
entertainment industry and is comprised of KONAMI CORPORATION (the 'Company'),
its 27 consolidated subsidiaries and 3 equity method affiliates.
Each of the Company, its subsidiaries and affiliated companies is categorized
into business segments based on its operations as stated below.
Business segment categorization is based on the same criteria explained below
under ' 6. Segment Information (Unaudited)'.
Business Segments Major Companies
Computer & Video Games Domestic The Company (*1, Note 5), Konami Marketing Japan, Inc. (*4)
Konami Computer Entertainment Studios, Inc. (*3)
Konami Computer Entertainment Tokyo, Inc.
Konami Computer Entertainment Japan, Inc.
Konami Mobile & Online, Inc.
HUDSON SOFT CO., LTD. (*7)
Genki Co., Ltd. (*7)
Overseas Konami of America, Inc. (*2), Konami of Europe GmbH
Konami Marketing (Asia) Ltd.
Konami Software Shanghai, Inc., One other company
Exercise Entertainment Domestic Konami Sports Corporation (*5, Note 3)
Konami Sports Life Corporation, One other company
Toy & Hobby Domestic The Company (*1, Note 5)
Konami Marketing Japan, Inc. (*4)
Konami Music Entertainment, Inc.
Konami Traumer, Inc. (*1)
Overseas Konami of America, Inc. (*2)
Konami of Europe GmbH.
Konami Marketing (Asia) Ltd.
Amusement Domestic The Company (*1, Note 5)
Konami Marketing Japan, Inc. (*4)
KPE, Inc., One other company
Overseas Konami Marketing, Inc. (*2)
Konami Corporation of Europe B.V (*6)
Konami Marketing (Asia) Ltd.
Gaming Domestic The Company (*1, Note 5)
Overseas Konami Gaming, Inc.
Konami Australia Pty Ltd., One other company
Other Domestic Konami Marketing Japan, Inc. (*4)
Konami School, Inc. (Note 4)
Konami Real Estate, Inc.
TAKARA CO., LTD. (*7) , One other company
Overseas Konami Marketing of Europe Ltd. (*6)
Konami Corporation of Europe B.V. (*6), One other company
Notes:
1. Companies that have operations categorized in more than one segment are included in each segment in
which they operate.
2. Primary changes in major companies for the three months ended June 30, 2003 are as follows:
(*1) The Company acquired 77.8% of the issued shares of Traumer, Inc. and added Traumer to its
subsidiaries on April 17, 2003. Consequently, the corporate name of Traumer, Inc. was changed to
Konami Traumer, Inc. on the acquisition date.
(*2) On April 18, 2003, the Company transferred its arcade game sales operations in the U.S. from
Konami of America, Inc. to the newly established Konami Marketing, Inc.
(*3) Konami Computer Entertainment Osaka, Inc. merged with Konami Computer Entertainment Studios,
Inc. on May 1, 2003 and changed its corporate name to Konami Computer Entertainment Studios,
Inc. on June 18, 2003.
(*4) On May 1, 2003, Konami Marketing Japan, Inc. merged with Konami Service, Inc. in order to
improve customer satisfaction by integrating their sales, marketing and customer service
businesses.
(*5) On May 1, 2003, Konami Sports Corporation merged with Konami Athletics Inc. in order to improve
the efficiency of their operations and enhance customer convenience.
(*6) On June 1, 2003, Konami Marketing of Europe Ltd. transferred its amusement business to Konami
Corporation of Europe B.V.
(*7) These are equity method affiliates.
3. On July 31, 2003, in order to enhance its business in Kinki area (western part of Japan), Konami
Sports Corporation acquired fitness club business from Hankyu Dentetsu Corporation and its
subsidiary, Okicey Corporation.
4. On July 31, 2003, Konami School, Inc. changed its name to Konami Computer Entertainment School.
5. On August 1, 2003, the Company established Konami School, Inc. in order to find talent for our
whole business segments.
2. Business Performance and Cash Flows
(1) Business Review
Overview
With respect to the entertainment industry, the industry that most concerns us,
the first quarter saw sales of video game software platforms such as PlayStation
2 leveling off, while online games have become more popular with the expansion
of broadband.
The entertainment industry has broadened due to increasing social recognition of
the importance of intellectual property creation, such as the government
providing protection and nurturing support for intellectual properties, and
universities establishing game-related studies.
We performed well in each business segment for the three months ended June 30,
2003, especially in the Computer & Video Games and Toy & Hobby business
segments, as the Yu-Gi-Oh! products, a home video game software title and card
game experienced solid sales in the U.S. into the second consecutive year and
experienced growth in sales and popularity in Europe.
The Exercise Entertainment business segment set out to improve customer
satisfaction and to extend the network of facilities. The Toy & Hobby business
segment developed Kids Smile, a new brand of intellectual education toys, which
was introduced in the market in April 2003 and has received favorable reviews.
The Amusement business segment marked stable growth mainly with e-AMUSEMENT
products. The Gaming business segment marked a favorable sales growth in the
U.S. by diversifying its product line-up. Sales in Australia also increased
steadily. We intend to extend our business capacity as a leading global operator
in the entertainment industry.
As a result, consolidated net revenues for the three months ended June 30, 2003,
amounted to Y57,425 million, and consolidated operating income, consolidated net
income before tax and consolidated net income were Y9,590 million, Y9,623
million and Y4,175 million, respectively.
Performance by business segment
Summary of net revenues by business segment:
Millions of yen
Three months ended
June 30, 2003
Computer & Video Games Y 13,103
Exercise Entertainment 18,987
Toy & Hobby 16,632
Amusement 6,597
Gaming 2,543
Other 1,168
Less: Intersegment revenues (1,605)
Consolidated net revenues Y 57,425
In the Computer & Video Games segment, domestic sales of titles for PlayStation
2, including The Baseball 2003: THE BATTLE BALL PARK-SENGEN PERFECT PLAY
PRO-YAKYU released in March 2003, made favorable progress. Two titles for Game
Boy Advance, Yu-Gi-Oh! Duel Monsters International: World Wide Edition and
CASTLEVANIA: Akatsuki no Minuet, sold well. As for the overseas market, Silent
Hill 3 for PlayStation 2, which was released in Europe in June 2003, sold well
also. Yu-Gi-Oh! World Wide Edition for Game Boy Advance, released for North
America and Europe, marked significant sales growth in both areas, following
Japan.
As a result, consolidated net revenues of the Computer & Video Games segment
were Y13,103 million.
With regard to the Exercise Entertainment segment, in our sports club business,
we promoted the expansion of the Konami Sports Club facility networks and set
out to improve customer satisfaction. We opened the Aoyama branch (Tokyo), the
third facility of GRANCISE, our highest service level brand, in April 2003, and
renewed the Benten-cho branch (Osaka) in May 2003. On March 24, 2003, for more
effective operation, we acquired all the shares of NISSAY ATHLETICS COMPANY and
changed its name to Konami Athletics Inc. It was merged into Konami Sports
Corporation on May 1, 2003.
As for new products and services, in June 2003, we agreed to collaborate with
Hakuba-mura (Nagano) in an outdoor sports-related program, followed by the
introduction of nature camps for children in July 2003, which enjoyed
popularity.
Utilizing our entertainment knowledge and technology, we introduced EZTWISTER
and EZBODYCROSS, new exercise entertainment products that are fitness machines
for commercial use and are being placed in Konami Sports Club. We also made
efforts to increase the sales of existing products such as Aerobics Revolution,
which allows players to enjoy realistic aerobics activities at home.
As a result, the consolidated net revenues of the Exercise Entertainment segment
were Y 18,987 million.
The Toy & Hobby segment maintained solid sales of the Yu-Gi-Oh! Trading Card
Game in the U.S. into its second consecutive year. The Yu-Gi-Oh! card game has
been sold in Europe specifically in Italy and Germany since the end of the
previous fiscal year ended March 31, 2003, and we are fully promoting the global
expansion of the product. GATABITE, a new card game combined with a rhinoceros
and stag beetle picture book, was released in June 2003. We entered a new market
of intellectual education toys in Japan in April 2003, introducing SOUND
CUBE-KUN, a cube block puzzle to memorize the names and shapes of the objects
through sounds while having fun.
As a result, consolidated net revenues of the Toy & Hobby segment were Y 16,632
million.
Amusement segment maintained a favorable acceptance in the market into its
second consecutive year. e-AMUSEMENT products for amusement arcades, the
MAH-JONG FIGHT CLUB series, which are video games that allow players to compete
directly with players in other arcade game locations via an online amusement
connection, were well accepted in the market. Sales of beatmania, GUITAR FREAKS
and drummania, music simulation game series, remained strong with the
introduction of new variations, and the e-AMUSEMENT system contributed to sales
as well.
As for token-operated products, GI-TURFWILD, the large-scale token-operated
horse racing games, led the GI series, featuring a realistic sense of actually
'being there,' and enjoyed popularity. FORTUNE ORB Chapter 2, a new version of
FORTUNE ORB, a large-sized 'penny-falls' game machine popular for its
entertaining stage effects, marked favorable sales, and the sales of Fantasic
Fever, a new product, grew well.
The LCD unit business contributed to sales by introducing differentiated
products and attractive products to customers.
As a result, consolidated net revenues of the Amusement segment were Y6,597
million.
The Gaming segment acquired gaming licenses from 19 states in the U.S. We
diversified the line-up of our main product, video slot machines, and sales are
improving steadily in California and Nevada. We continue to work for further
diversification of this product line.
We have acquired gaming licenses in every Australian state, and sales in New
South Wales and Queensland remain especially strong. Sales in the neighboring
country, New Zealand, were solid. We will promote market development outside
Australia, including Europe, in the future.
As a result, consolidated net revenues of the Gaming segment were Y2,543
million.
Consolidated net revenues for the Other segment were Y1,168 million.
(2) Cash Flows
Cash flow summary for the three months ended June 30, 2003:
Millions of Yen
Three months ended
June 30, 2003
Net cash provided by operating activities Y 2,558
Net cash used in investing activities (1,738)
Net cash used in financing activities (5,038)
Effect of exchange rate changes on cash and cash equivalents 707
Net decrease in cash and cash equivalents (3,511)
Cash and cash equivalents at June 30, 2003 71,169
Cash flows from operating activities:
Net cash provided by operating activities amounted to Y2,558 million for the
three months ended June 30, 2003. This resulted primarily from a net income of
Y4,175 million due to overall favorable results, especially in the Toy & Hobby
segment, and a decrease in trade notes and accounts receivables of Y5,926
million, offsetting an increase in inventories of Y5,865 million and a decrease
in trade notes and accounts payable of Y2,556 million.
Cash flows from investing activities:
Net cash used in investing activities amounted to Y1,738 million for the three
months ended June 30, 2003. This resulted primarily from acquisitions of
property and equipment relating to the Exercise Entertainment segment totaling
Y1,241 million.
Cash flows from financing activities:
Net cash used in financing activities amounted to Y5,038 million for the three
months ended June 30, 2003. This was primarily due to payments of dividends of
Y5,318 million.
3. Consolidated Balance Sheets (Unaudited)
Millions of Yen Thousands of
U.S. Dollars
June 30, 2003 March 31, 2003 June 30, 2003
% %
ASSETS
CURRENT ASSETS:
Cash and cash equivalents Y 71,169 Y 74,680 $ 594,065
Trade notes and accounts 23,751 29,107 198,255
receivable, net of
allowance for doubtful
accounts of Y855 million
($7,137 thousand) and
Y976 million at June 30,
2003 and March 31, 2003,
respectively
Inventories 19,398 13,359 161,920
Deferred income taxes, 12,349 12,820 103,080
net
Prepaid expenses and 8,443 6,739 70,476
other current assets
Total current assets 135,110 48.8 136,705 49.1 1,127,796
PROPERTY AND EQUIPMENT, 46,657 16.8 46,284 16.6 389,458
net
INVESTMENTS AND OTHER
ASSETS:
Investments in marketable 222 189 1,853
securities
Investments in affiliates 11,609 12,422 96,903
Identifiable intangible 46,369 46,503 387,053
assets
Goodwill 463 125 3,865
Lease deposits 24,604 24,489 205,376
Other assets 11,926 11,533 99,549
Total investments and 95,193 34.4 95,261 34.3 794,599
other assets
TOTAL ASSETS Y 276,960 100.0 Y 278,250 100.0 $ 2,311,853
Millions of Yen Thousands of
U.S. Dollars
June 30, 2003 March 31, 2003 June 30, 2003
% %
LIABILITIES AND
SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings Y 5,272 Y 8,308 $ 44,007
Current portion of long-term 2,683 1,815 22,396
debt and capital lease
obligations
Trade notes and accounts 16,657 18,684 139,040
payable
Accurued income taxes 13,003 13,788 108,539
Accrued expenses 17,697 18,968 147,721
Deferred revenue 6,374 5,535 53,205
Other current liabilities 5,243 4,676 43,765
Total current liabilities 66,929 24.2 71,774 25.8 558,673
LONG-TERM LIABILITIES:
Long-term debt and capital 67,233 63,514 561,210
lease obligations, less
current portion
Accrued pension and 2,416 2,345 20,167
severance costs
Deferred income taxes, net 19,021 18,854 158,773
Other long-term liabilities 2,453 2,502 20,476
Total long-term liabilities 91,123 32.9 87,215 31.3 760,626
TOTAL LIABILITIES 158,052 57.1 158,989 57.1 1,319,299
MINORITY INTEREST IN 27,941 10.1 28,855 10.4 233,230
CONSOLIDATED SUBSIDIARIES
COMMITMENTS AND - - - - -
CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock, no par value-
Authorized 450,000,000 47,399 17.1 47,399 17.0 395,651
shares; issued128,737,566
shares at June 30, 2003 and
March 31, 2003
Additional paid-in capital 46,736 16.9 46,736 16.8 390,117
Legal reserve 2,163 0.8 2,163 0.8 18,055
Retained earnings 18,940 6.8 18,981 6.8 158,097
Accumulated other 1,392 0.5 790 0.3 11,619
comprehensive income
Total 116,630 42.1 116,069 41.7 973,539
Treasury stock, at cost-
8,253,268 shares and @@(25,663) (9.3) (25,663) (9.2) (214,215)
8,253,191 shares at
June 30, 2003 and March 31,
2003, respectively
Total shareholders' equity 90,967 32.8 90,406 32.5 759,324
TOTAL LIABILITIES AND Y 276,960 100.0 Y 278,250 100.0 $ 2,311,853
SHAREHOLDERSf EQUITY
4. Consolidated Statements of Operations (Unaudited)
Millions of Yen Thousands of
U.S. Dollars
Three months Year ended Three months
ended March 31, 2003 ended
June 30, 2003 June 30, 2003
% %
NET REVENUES:
Product sales revenue Y 38,914 Y 178,766 $324,825
Service revenue 18,511 74,891 154,516
Total net revenues 57,425 100.0 253,657 100.0 479,341
COSTS AND EXPENSES:
Costs of products sold 21,241 112,364 177,304
Costs of services 14,808 62,515 123,606
rendered
Impairment charge for - 47,599 -
goodwill and other
intangible assets
Selling, general and 11,786 53,049 98,381
administrative
Total costs and 47,835 83.3 275,527 108.6 399,291
expenses
Operating income 9,590 16.7 (21,870) (8.6) 80,050
(loss)
OTHER INCOME
(EXPENSES):
Interest income 108 373 902
Interest expense (182) (938) (1,519)
Gain on sale of - 904 -
subsidiary shares
Other, net 107 (565) 893
Other income 33 0.1 (226) (0.1) 276
(expenses), net
INCOME (LOSS) BEFORE 9,623 16.8 (22,096) (8.7) 80,326
INCOME TAXES, MINORITY
INTEREST AND EQUITY IN
NET LOSS OF AFFILIATED
COMPANIES
INCOME TAXES 4,628 8.1 6,186 2.4 38,631
INCOME (LOSS) BEFORE 4,995 8.7 (28,282) (11.1) 41,695
MINORITY INTEREST AND
EQUITY IN NET LOSS OF
AFFILIATED COMPANIES
MINORITY INTEREST IN 0.5 (1,051) (0.4) 2,655
INCOME (LOSS) OF 318
CONSOLIDATED
SUBSIDIARIES
EQUITY IN NET LOSS OF 502 0.9 1,288 0.5 4,190
AFFILIATED COMPANIES
NET INCOME (LOSS) Y 4,175 7.3 Y (28,519) (11.2) $ 34,850
PER SHARE DATA:
Yen U.S. Dollars
Three months Year ended Three months ended
ended March 31, 2003 June 30, 2003
June 30, 2003
Basic and diluted net income (loss) per share Y 34.65 Y (234.58) $ 0.29
Weighted-average common shares outstanding 120,484,327 121,572,154
Note: Net income per share was calculated in accordance with Statement of Financial Accounting Standards (SFAS)
No. 128 'Earnings per Share'. Konami had no dilutive securities outstanding at June 30, 2003 and March
31, 2003, and therefore there is no difference between basic and diluted EPS.
5. Consolidated Statements of Cash Flows (Unaudited)
Millions of Yen Thousands of U.S. Dollars
Three months Year ended Three months
ended March 31, 2003 ended
June 30, 2003 June 30, 2003
Cash flows from operating activities:
Net income (loss) Y 4,175 Y (28,519) $ 34,850
Adjustments to reconcile net income
to net cash provided by operating
activities -
Depreciation and amortization 1,988 11,979 16,594
Impairment charge for goodwill and - 47,599 -
other intangible assets
Provision for doubtful receivables (287) 429 (2,396)
Loss on sale or disposal of property 305 2,344 2,546
and equipment, net
Gain on sale of subsidiary shares - (904) -
Equity in net loss of affiliated 502 1,288 4,190
companies
Minority interest 318 (1,051) 2,655
Deferred income taxes 665 (11,326) 5,551
Change in assets and liabilities, net
of business acquired:
Decrease in trade notes and accounts 5,926 4,580 49,466
receivable
Decrease (increase) in inventories (5,865) 2,556 (48,957)
Decrease in trade notes and accounts (2,556) (1,521) (21,336)
payable
Increase (decrease) in accrued income (913) 394 (7,621)
taxes
Decrease in accrued expenses (1,920) (2,271) (16,027)
Increase in deferred revenue 839 1,669 7,003
Other, net (619) 465 (5,166)
Net cash provided by operating 2,558 27,711 21,352
activities
Cash flows from investing activities:
Purchases of investments in - (315) -
subsidiaries
Proceeds from sales of investments in - 2,081 -
subsidiaries
Capital expenditures (1,241) (15,357) (10,359)
Proceeds from sales of property and 12 2,234 100
equipment
Acquisition of new subsidiaries, net (206) (449) (1,719)
of cash acquired
Decrease in time deposits, net 63 516 526
Increase in lease deposits, net (111) (306) (927)
Other, net (255) (646) (2,129)
Net cash used in investing activities (1,738) (12,242) (14,508)
Cash flows from financing activities:
Net decrease in short-term borrowings (3,103) (2,448) (25,902)
Proceeds from long-term debt 4,199 15,402 35,050
Repayments of long-term debt (2) (2,765) (17)
Principal payments under capital (584) (3,439) (4,874)
lease obligations
Dividends paid (5,318) (6,324) (44,390)
Purchases of treasury stock by parent 0 (10,660) 0
company
Purchases of treasury stock by (178) (4,516) (1,486)
subsidiaries
Other, net (52) (1,693) (434)
Net cash used in financing activities (5,038) (16,443) (42,053)
Effect of exchange rate changes on 707 466 5,902
cash and cash equivalents
Net decrease in cash and cash (3,511) (508) (29,307)
equivalents
Cash and cash equivalents, beginning 74,680 75,188 623,372
of the period
Cash and cash equivalents, end of the Y 71,169 Y 74,680 $ 594,065
period
6. Segment Information (Unaudited)
a . Operations in Different Industries
Computer Exercise Elimin-
Three months & Enter- ations
ended Video tain- Toy & Amuse- and Consoli-
June 30, 2003 Games ment Hobby ment Gaming Other Tota1 Corporate dated
(Millions of Yen)
Net revenue:
Customers Y 12,461 Y 18,985 Y 16,606 Y 6,379 Y 2,543 Y 451 Y 57,425 - Y 57,425
Intersegment 642 2 26 218 0 717 1,605 Y (1,605) -
Total 13,103 18,987 16,632 6,597 2,543 1,168 59,030 (1,605) 57,425
Operating expenses 10,867 18,860 10,124 4,327 2,207 1,295 47,680 155 47,835
Operating income (loss) Y 2,236 Y 127 Y 6,508 Y 2,270 Y 336 Y (127) Y 11,350 Y (1,760) Y 9,590
Computer Exercise Elimin-
Year & Enter- ations
ended Video tain- Toy & Amuse- and Consoli-
March 31, 2003 Games ment Hobby ment Gaming Other Tota1 Corporate dated
(Millions of Yen)
Net revenue:
Customers Y 85,891 Y 78,437 Y 45,887 Y 33,105 Y 8,215 Y 2,122 Y 253,657 - Y 253,657
Intersegment 1,585 88 61 1,200 - 3,398 6,332 Y (6,332) -
Total 87,476 78,525 45,948 34,305 8,215 5,520 259,989 (6,332) 253,657
Operating expenses 73,489 127,937 29,319 27,035 8,384 6,330 272,494 3,033 275,527
Operating income Y 13,987 Y (49,412) Y 16,629 Y 7,270 Y (169) Y (810) Y (12,505) Y (9,365) Y (21,870)
(loss)
Computer Exercise Elimin-
Three months & Enter- ations
ended Video tain- Toy & Amuse- and Consoli-
June 30, 2003 Games ment Hobby ment Gaming Other Tota1 Corporate dated
(Thousands of U.S. Dollars)
Net revenue:
Customers $ 104,015 $158,473 $138,614 $ 53,247 $21,227 $ 3,765 $ 479,341 - $ 479,341
Intersegment 5,359 16 217 1,820 0 5,985 13,397 $ (13,397) -
Total 109,374 158,489 138,831 55,067 21,227 9,750 492,738 (13,397) 479,341
Operating 90,709 157,429 84,508 36,119 18,422 10,810 397,997 1,294 399,291
expenses
Operating income $ 18,665 $ 1,060 $ 54,323 $ 18,948 $ 2,805 $ (1,060) $ 94,741 $ (14,691) $ 80,050
(loss)
Notes:
1. Primary businesses of each segment are as follows:
Computer & Video Games : Production and sale of home-use video game
software
Exercise Entertainment : Operation of health and fitness clubs
Toy & Hobby : Production and sale of character related
products
Amusement : Manufacture and sale of amusement arcade
games and token-operated games
Gaming : Manufacture and sale of gaming machines for
overseas market
Other: Real estate management services provided
primarily to our subsidiaries
2. Intersegment revenues primarily consists of sub-licensing of intellectual property rights from
Computer & Video Games and Toy & Hobby to Amusement and Gaming, sales of hardware and components
from Amusement and Gaming to Computer & Video Games and Exercise Entertainment, and administrative
services provided by shared-service subsidiaries included in Other. Eliminations and corporate
primarily consist of eliminations of intercompany profits on inventories and expenses for corporate
headquarters.
3. An impairment charge of Y47,599 million for goodwill and other intangible assets was included in
the operating expenses of the Exercise Entertainment segment for the year ended March 31, 2003.
b . Operations in Geographic Areas
Three months ended Japan Americas Europe Asia Total Eliminations Consolidated
June 30, 2003 /Oceania
(Millions of Yen)
Net revenue:
Customers Y 32,632 Y 15,098 Y 7,577 Y 2,118 Y 57,425 - Y 57,425
Intersegment 20,092 256 7 118 20,473 Y (20,473) -
Total 52,724 15,354 7,584 2,236 77,898 (20,473) 57,425
Operating expenses 44,122 15,312 6,706 1,677 67,817 (19,982) 47,835
Operating income Y 8,602 Y 42 Y 878 Y 559 Y 10,081 Y (491) Y 9,590
Year ended Japan Americas Europe Asia Total Eliminations Consolidated
March 31, 2003 /Oceania
(Millions of Yen)
Net revenue:
Customers Y 182,345 Y 47,729 Y 16,297 Y 7,286 Y 253,657 - Y 253,657
Intersegment 50,670 805 27 506 52,008 Y (52,008) -
Total 233,015 48,534 16,324 7,792 305,665 (52,008) 253,657
Operating expenses 258,551 47,112 14,917 6,236 326,816 (51,289) 275,527
Operating income (loss) Y (25,536) Y 1,422 Y 1,407 Y 1,556 Y (21,151) Y (719) Y (21,870)
Three months ended Japan Americas Europe Asia Total Eliminations Consolidated
June 30, 2003 /Oceania
(Thousands of U.S. Dollars)
Net revenue:
Customers $ 272,387 $ 126,027 $ 63,247 $ 17,680 $ 479,341 - $ 479,341
Intersegment 167,713 2,137 58 985 170,893 $ (170,893) -
Total 440,100 128,164 63,305 18,665 650,234 (170,893) 479,341
Operating expenses 368,297 127,813 55,977 13,998 566,085 (166,794) 399,291
Operating income $ 71,803 $ 351 $ 7,328 $ 4,667 $ 84,149 $ (4,099) $ 80,050
Note: 1. For the purpose of presenting its operations in geographic areas above, Konami and its subsidiaries
attribute revenues from external customers to individual countries in each area based on where
products are sold and services are provided.
2. An impairment charge of Y47,599 million for goodwill and other intangible assets was included in
the operating expenses of Japan segment for the year ended March 31, 2003.
Notes:
1. The U.S. dollar amounts included herein represent a translation using the mid
price for telegraphic transfer of U.S. dollars as of June 30, 2003 of Y119.80 to
$1 and are included solely for the convenience of the reader. The translation
should not be construed as a representation that the yen amounts have been,
could have been, or could in the future be converted into U.S. dollars at the
above or any other rate.
2. The consolidated financial statements presented herein were prepared in
accordance with accounting principles generally accepted in the United States of
America (U.S. GAAP).
3. The third quarter ended December 31, 2002 was the first period in which
Konami prepared its quarterly consolidated financial statements in accordance
with U.S. GAAP. Therefore, U.S. GAAP consolidated financial information for the
three months ended June 30, 2002 is not available.
4. Comprehensive income for the three months ended June 30, 2003 and for the
year ended March 31, 2003 consisted of the following:
Millions of yen Thousands of U.S.Dollars
Three months Year ended Three months ended
ended March 31, 2003 June 30, 2003
June 30, 2003
Net income (loss) Y 4,175 Y (28,519) $ 34,850
Other comprehensive income
(loss):
Foreign currency translation 600 85 5,008
adjustments
Net unrealized gains on 2 159 17
available-for-sale securities
602 244 5,025
Comprehensive income (loss) Y 4,777 Y (28,275) $ 39,875
This information is provided by RNS
The company news service from the London Stock Exchange
Friday, 17th May 2024
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