3rd Quarter Results

RNS Number : 3351G
Maruwa Co Ld
29 January 2010
 



29 January 2010

MARUWA CO., LTD.

3-83, Minamihonjigahara-cho, Owariasahi-city, Aichi-pref., 488-0044 JAPAN


Consolidated financial results for the third quarter of Fiscal 2010


MARUWA CO., LTD. today announced its consolidated financial results for the second quarter of Fiscal 2010 <1 April 2009 - 31 December 2009> as follows;

I. Summary of Consolidated Financial Results

(1) Summary of consolidated operating results


 

JPY million

 

 

3rd Quarter

3rd Quarter

Change %


2008

2009

 

Net sales

13,493 

10,560 

-21.7%

Operating income

617 

643 

-62.6%

Income before income taxes

863 

745 

-13.7%

Net income

476 

619 

-21.5%





Net income per share:

 

JPY


  Basic

44.28 

57.69 


  Diluted

-

--


(2) Summary of consolidated financial condition


 

JPY million

 

As of 31 Dec.

As of 31st March


2009

2009

Total assets

29,009 

28,749 

Total net assets

25,699 

25,284 

Equity ratio

88.6%

87.9%


JPY

JPY

Shareholders' equity per share

2,391.68 

2,358.54 

II. Dividends


 

JPY per share


Fiscal 2009

Fiscal 2010(forecast)

Interim

14 

14 

Year-end

14 

14 

Annual

28 

28 

III. Outlook for the fiscal 2010 <1 April 2009 - 31 March 2010>

 The forecast figures for business results and dividends announced in 8 May 2009 are changed as bellow. Net sales are increased because of an increase in orders much more than we had expected.  Incomes are also increased due to restructuring countermeasures, including closing and merging factories and offices and reducing costs and inventory,



JPY million

 

 

Full year

Net sales


15,000 

Operating income

1,100 

Net income


900 

Net income per share

83.78 

  Review of Operations

1. Review of Operations


The Japanese economy in the third quarter has been recovering from the world-wide recession. The world economy, also, is beginning to show signs of improvement. 


However, it is still difficult to foresee the situation for the both the Japanese economy and the world economy for the next half year due to rising unemployment rates, decreased consumer spending and other problems.


In Maruwa's business sector, demand for the digital products market in Asian countries, including China, and for environmentally friendly hybrid cars has increased in Japan. Because of this, our turnover for these three quarters was 10,560 million yen, which is much more than we had expected. Similarly, operating profit was improved by 643 million yen, which is also much more than we had anticipated. These results were due to an increase in orders and to restructuring countermeasures, including closing and merging factories and offices and reducing costs and inventory. 


2. Operating Results by Business Sector


The Ceramic Components Sector

The total sales for this business segment was 9,672 million yen, and our operating profit was 1,057 million yen, with sales increasing every month. Strong sales results, together with cost-cutting measures, resulted in an overall increase in profit.


Circuit Ceramics

Total sales of the Circuit Ceramics division for these three quarters was 4,078 million yen, and this third quarter increased 7.9% from the second quarter of this year. This was due to an increase in orders of Alumina substrate for the chip resistors market in China and South East Asia, as well as to an increase in orders for power module substrate for hybrid cars in Japan.


Machinery Ceramics

Total sales for the Machinery Ceramics division for these three quarters was 1,924 million yen. The upturn of the semiconductor equipment market, including LED products and Memory for PCs influenced the sales of quartz glass products. 


Radio Frequency Products

Total sales of the Radio Frequency Products division for these three quarters was remained stable as 1,408 million yen. The new 3G mobile system market in China influenced the good turnover of these products.


EMC Components 

Total sales of the EMC Components Division for these three quarters was 2,262 million yen, and this third quarter increased by 11.3% from the second quarter of this year. Upward demand in the digital devices market, for example for PCs and flat screen televisions in China, Southeast Asia and Korea, influenced turnover in this area.


Lighting Equipment Segment

Total sales of the Lighting Equipment segment for these three quarters was 887 million yen and operating loss was 33 million yen. Turnover for LED lighting devices has increased consistently in the public utilities markets in Japan. We are continuing to press forward with the development of new LED lighting products.


 

 


 

JPY million

 

3rd Quarter

3rd Quarter

 

 

1 April- 31 Dec.

 

1 April- 31 Dec.

 

2008

2009

Ceramic Components:

 

 

 

 

Net sales 


12,730 


9,673 

Operating income

 

1,125 

 

1,057 

Lighting Equipment:





Net sales 


763 


887 

Operating income

 

(127)

 

(33)

Total:





Net sales 

13,493 

10,560 

Operating income

 

998 

 

1,024 

Elimination:





Net sales 

 

--

 

--

Operating income

 

(381)

 

(381)

Consolidated:





Net sales 

 

13,493 

 

10,560 

Operating income

 

617 

 

643 


Quarterly sales results of Ceramic Components segment by product division


For year ended 31 March

 

 

 


2008

 

 

 

2009

 

 


1Q

2Q

3Q

4Q

1Q

2Q

3Q

Circuit Ceramics

1,868 

1,907 

1,239 

813 

1,201 

1,384 

1,493 

Machinery Ceramics

1,164 

1,116 

865 

473 

471 

753 

700 

RF Products

487 

529 

506 

355 

405 

506 

497 

EMC Components

1,087 

1,254 

708 

545 

671 

753 

838 

Total

4,606 

4,806 

3,318 

2,186 

2,748 

3,396 

3,528 


3. Financial Condition


Total assets as of the end of this third quarter were 29,009 million yen, up 0.9 percent from the end of last fiscal year due especially to an increase in current assets. Inventory assets decrease 357 million from the end of last fiscal year due to the improvement of production lead time. 

Total liabilities, especially due to a decrease in accounts payable, decreased 109 million yen to 3,310 million yen from the previous year-end. 

Total net assets increased 415 million yen to 25,699 million yen. As a result, capital asset ratio became 88.6 percent


Cash and cash equivalents at the end of this third quarter were 7,899 million yen.


Cash flow from operating activities was 1,900 million yen, a decrease of 338 million yen compared to the last fiscal year. The main reason for the decreased cash flow was the increase of accounts receivable, which was due to an increase in orders. Cash flow from investment activities was 817 million yen. This was due primarily to payment for the acquisition of tangible fixed assets. Cash flow financing activities were 243 million yen.


  

Consolidated Balance Sheet



 

 

JPY million

 

3rd Quarter

(Reference)

 

As of 31 Dec.

As of 31st March

 

2009

2009

ASSETS

 

 

Current assets:



Cash & deposits

8,404 

7,505 

Trade notes and accounts receivable

4,655 

4,304 

Inventories:



Merchandise and finished goods

972 

1,105 

Work-in-process

789 

746 

Raw materials

951 

1,218 

Deferred tax assets

147 

156 

Other current assets

138 

264 

Allowance for doubtful accounts

(10)

(8)

Total current assets

16,046 

15,290 




Property, plant & equipment:



Land

3,165 

3,161 

Buildings & structures

7,464 

7,370 

Machinery & equipment

12,007 

11,944 

Other

2,770 

2,826 

Construction in progress

707 

443 

Total property, plant & equipment

26,113 

25,744 

Less, accumulated depreciation

(14,826)

(14,035)

Net property, plant & equipment

11,287 

11,709 




Investment & other assets:



Total investments & other assets

1,676 

1,750 




Total assets

29,009 

28,749 


 



LIABILITIES



Current liabilities:



Trade notes & accounts payable

1,242 

1,352 

Current portion of long-term debt

Accrued income taxes

137 

30 

Accrued bonus

158 

241 

Accrued bonus to directors

Other

1,209 

1,180 

Total current liabilities

2,755 

2,811 




Long-term liabilities:



Long-term debt

122 

125 

Negative goodwill]

15 

57 

Other

418 

472 

Total long-term liabilities

555 

654 




Total liabilities

3,310 

3,465 




NET ASSETS



Shareholders' equity:



Common stock

6,710 

6,710 

Capital surplus

9,747 

9,747 

Retained earnings

11,566 

11,252 

Treasury stock, at cost

(693)

(742)

Total shareholders' equity

27,330 

26,967 




Valuation and translation adjustments:



Net unrealized gains(losses)on available-for-sale securities

(163)

(201)

Foreign currency translation adjustments

(1,473)

(1,482)

Total valuation and translation adjustments

(1,636)

(1,683)

A subscription warrant and Minority stockholders share





Total net assets

25,699 

25,284 

Total liabilities and net assets

29,009 

28,749 







Consolidated Statements of Income



 

 

JPY million

 

3rd Quarter

3rd Quarter

 

1 April- 31 Dec.

1 April- 31 Dec.


2008

2009

Net sales

13,493 

10,560 

Cost of sales

10,265 

7,660 

Gross profit

3,228 

2,900 

Selling, general & administrative

2,611 

2,257 

 expenses



Operating income

617 

643 

Other income (expenses):



Interest & dividend income

50 

45 

Interest expenses

(3)

(2)

Rent income

86 

86 

Rent expenses on real estates for investments

(45)

(48)

Securities operation profit

-

Foreign exchange gain (loss), net

122 

(19)

Amortization of negative goodwill

62 

43 

Gain on sales of property, plant and equipment

56 

Loss on valuation of inventories securities

(5)

-

Loss on disposal or sales of property, plant and equipment

(53)

(46)

Loss on valuation of inventories

(28)

-

Investment securities clearance profit and loss

-

23 

Extra retirement benefits

(23)

(16)

Other, net

27 

32 

Other income (expenses), net

246 

102 

Income before income taxes

863 

745 




Income taxes:



Current

169 

171 

Deferred

218 

(45)

Total income taxes

387 

126 

Minority stockholders profit and loss

-

Net income

476 

619 



 

 



7. Consolidated Statement of Cash Flows



 

 

JPY million

 

3rd Quarter

3rd Quarter

 

1 April- 31 Dec.

1 April- 31 Dec.

 

2008

2009

Cash flows from operating activities:



Income before income taxes

863 

745 

Adjustments for:



Depreciation

1,469 

1,211

Amortization of negative goodwill

(62)

(43)

Decrease in allowance for doubtful accounts

37 

(6)

Loss on sales of investment securities

(24)

Gain on disposal or sales of property, plant & equipment

(3)

43 

Interest & dividend income

(50)

(44)

Foreign exchange (gain) loss

111 

Decrease (increase) in trade notes & accounts receivable

1,242 

(347)

Increase in inventories

(313)

355 

Decrease in trade notes & accounts payable

(451)

(116)

Other

(467)

138 

Sub-total

2,379 

1,918

Interest & dividend income received

52 

48 

Interest expenses paid

(2)

(2)

Income taxes paid

(191)

(64)

Net cash provided by operating activities

2,238 

1,900




Cash flows from investment activities:



Payments into time deposits

(347)

(55)

Proceeds from withdrawal of time deposits

20 

-

Payments for purchase of property, plant & equipment

(1,545)

(995)

Proceeds from sales of property, plant & equipment

296 

81 

Payments for purchase of investment securities

(164)

(226)

Proceeds from sales of investment securities

21 

380 

Payments for purchase of intangible assets

-

(20)

Purchase of investments in subsidiaries

(10)

-

Insrease in intangible fixed assets

(6)

-

Other

(27)

17 

Net cash used in investing activities

(1,762)

(818)

Cash flows from financing activities:



Payments of long-term debt

(4)

(4)

Proceeds from clearance of treasury stock

-

45 

Cash dividends paid

(255)

(283)

Payments for purchase of treasury stock

(102)

Net cash used in financing activities

(361)

(242)

Effect of exchange rate changes on cash & cash equivalents

(410)

(3)

Net increase (decrease) in cash & cash equivalents

(295)

837 

Cash and cash equivalents at beginning of year

6,146 

7062

Increase in cash and cash equivalents from newly consolidated subsidiary




10 

0

Cash and cash equivalents at end of year

5,861 

7,899 




  

Segment Information













(1) business segments














JPY million



3rd Quarter <1 April - 31 December 2008>



Ceramic Components

Lighting Equipment

Total

Eliminations or corporate

Consolidated


Net sales:







External customers

12,730 

763 

13,493 

--

13,493 


Inter-segment

20 

-

20 

(20)

--


Total net sales

12,750 

763 

13,513 

(20)

13,493 


Operating income (loss)

1,125 

(127)

998 

(381)

617 










JPY million



3rd Quarter <1 April - 31 December 2009>



Ceramic Components

Lighting Equipment

Total

Eliminations or corporate

Consolidated


Net sales:



 


 


External customers

9,673 

887 

10,560 

--

10,560 


Inter-segment

33 

38 

(38)

--


Total net sales

9,706 

892 

10,598 

(38)

10,560 


Operating income (loss)

1,057 

(33)

1,024 

(381)

643 
















(2) Geographic segments














JPY million


3rd Quarter <1 April - 31 December 2008>


Japan

Asia

Europe & America

Total

Eliminations or corporate

Consolidated

Net sales:







External customers

10,179 

2,300 

1,014 

13,493 

--

13,493 

Inter-segment

897 

1,120 

2,018 

(2,018)

--

Total net sales

11,076 

3,420 

1,015 

15,511 

(2,018)

13,493 

Operating income

629 

323 

51 

1,003 

(386)

617 









JPY million


3rd Quarter <1 April - 31 December 2009>


Japan

Asia

Europe & America

Total

Eliminations or corporate

Consolidated

Net sales:







External customers

8,658 

1,602 

300 

10,560 

--

10,560 

Inter-segment

348 

795 

35 

1,178 

(1,178)

--

Total net sales

9,006 

2,397 

335 

11,738 

(1,178)

10,560 

Operating income

957 

91 

(9)

1,039 

(396)

643 















(3) Net overseas sales by customer's geographic location












JPY million




3rd Quarter <1 April - 31 December 2008>




Asia 

Europe

Other

Total



Overseas sales

4,774 

486 

560 

5,820 



Consolidated net sales

 

 

 

13,493 



Percentage (%)

35.4%

3.6%

4.2%

43.1%











JPY million




3rd Quarter <1 April - 31 December 2009>




Asia 

Europe

Other

Total



Overseas sales

3,531 

527 

430 

4,488 



Consolidated net sales

 

 

 

10,560 



Percentage (%)

33.4%

5.0%

4.1%

42.5%

















*Countries are divided in geographical vicinity.





*Principal countries or jurisdictions in each geographic segment are as follows:



Asia: Malaysia, Taiwan, Korea, China,and India





Europe: Germany and the United Kingdom





Other: The United States













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