Interim Results
Maruwa Co Ld
14 November 2006
14 November 2006
MARUWA CO., LTD.
3-83, Minamihonjigahara-cho, Owariasahi-city, Aichi-pref., 488-0044 JAPAN
Interim Results for Fiscal 2007
MARUWA CO., LTD. today announced interim consolidated business results for the fiscal year ending 31 March
2007 as follows;
*The financial statements are prepared in conformity with the accounting principles generally accepted in
Japan.
*US dollar amounts are converted for convenience only at the rate of US$1 = 117.90yen.
*Consolidated subsidiaries: 8 companies (Maruwa (Malaysia) Sdn. Bhd., Taiwan Maruwa Co., Ltd., MARUWA
Electronics (Taiwan) Co., Ltd., Maruwa Europe Ltd., Maruwa America Corp., Maruwa Electronic (India) Pvt.Ltd.,
MARUWA QUARTZ Co., Ltd., and Hokko Denshi Co., Ltd.)
I. Summary of Consolidated Interim Results
(1) Summary of consolidated statement of income
JPY million JPY million USD thousand
For 6-month period For 6-month Change % For year ended For 6-month
period period
1 Apr. - 30 Sept. 1 Apr. - 30 Sept. 31 March 1 Apr. - 30 Sept.
2006 2005 2006 2006
Net sales 9,763 9,005 8.4% 20,278 82,807
Operating income 822 718 14.5% 1,693 6,972
Income before 972 547 77.7% 1,669 8,244
income taxes
Net income 631 282 123.8% 1,135 5,352
JPY USD
Net income per 57.60 26.06 121.0% 103.82 0.49
share
*Average number of 10,960,935 10,803,643 10,880,952
issued shares
(2) Summary of consolidated financial condition
JPY million JPY million USD thousand
As of 30 Sept. As of 30 Sept. Change % As of 31 March As of 30 Sept.
2006 2005 2006 2006
Total Assets 32,496 30,538 6.4% 33,044 275,623
Shareholders' equity 27,037 25,272 7.0% 26,557 229,321
Shareholders' equity 83.2% 82.8% 80.4%
ratio
JPY USD
Shareholders' equity 2,465.43 2,315.35 6.5% 2,423.40 20.91
per share
*Number of issued 10,966,660 10,914,860 10,956,360
shares at the year end
(3) Summary of consolidated statement of cash flows
JPY million JPY million USD thousand
For 6-month period For 6-month Change % For year For 6-month
period ended period
1 Apr. - 30 Sept. 1 Apr. - 30 Sept. 31 March 1 Apr. - 30
Sept.
2006 2005 2006 2006
Net cash provided by 788 423 86.3% 2,036 6,684
operating activities
Net cash used in (1,425) (181) 687.3% (1,234) (12,087)
investing activities
Net cash used in (185) 164 212.8% 51 (1,569)
financing activities
Cash and cash 7,226 7,401 -2.4% 7,899 61,289
equivalents at end of
term
II. Outlook for the full fiscal 2007 ending 31 March 2007
JPY million
Full year
Net sales 24,530
Net income 1,690
Net income per share 154.25
*Cautionary statements: the above forecasts are forward-looking statements involving risks and
uncertainties. Due to a number of factors, actual results may differ significantly from these estimates.
Management Policies
(1) Basic management policy
Based on the basic corporate principle - The three roots of our trunk:
Advancement of the company, Welfare of the workforce, and Satisfaction of the
shareholders,- MARUWA group strives to differentiate us from our peers by
consistently being professional of material technology and following quality
first policy, and to enhance the corporate value to meet the expectations of all
the stakeholders.
Based on this policy, it is MARUWA's management policy to survive among severe
global business competition as well as to develop No.1 products in global niche
markets by reinforcing its core business with a selection and concentration
strategy.
(2) Dividend policy
As a profit allocation policy, MARUWA considers to allocate acquired
cash-flows through operations to active investment into new growing areas,
consolidated results-considered dividends, and the appropriation of retained
earnings for flexible use against management environment changes. We have made
efforts to increase dividends since the previous term, focusing on profit
returns to shareholders while we hold the internal reserves for strategic
investment required to expand our core business continuously.
(3) Targeted management indices
MARUWA emphasizes operating income ratio as an important index to indicate
profitability. We set a medium-to-long term target - net sales 40 billion yen
and operating income ratio 20%. For this goal, we are determined to establish
profit-acquiring system of production and sales together toward solid growth in
the electronic components industry amid rapid changes and severe competition.
(4) Business strategies in medium-to-long term
We have enforced to build up an operational system responsive to market
changes, learning from the management lessons of the IT bubble and its collapse
in 2000 and 2001. As a result, we achieved the enhancement of financial
condition and the establishment of profitability. Now the whole MARUWA group is
focusing on the mid-term target - total sales 40 billion yen / operating income
margin 20%.
For a medium-to-long term growth strategy, in addition to the development and
creation of new products and businesses within the company, we will maintain our
M&A strategy to acquire business or products that could create a synergetic
effect with our material technology and other base technologies and product
line-ups.
Together with above expansion strategy, MARUWA aims for being a respected
company by sticking with the basis of manufacturing and contributing to local
societies with fulfillment of social responsibility.
Management issues
1. Enhance the businesses acquired through M&A
The businesses acquired through M&A in the past have grown by management
efforts from deficit to the level that can contribute to revenue. We will start
working for new growth, further enhancing the business structure as well as
adding synergetic effects with our core businesses.
2. Start the mass-production of new developed products
We will start the mass-production of the products developed with our unique
material technology to earn profits aggressively.
3. Improve material technology and product development capability
For more customers' satisfaction, each product will be staffed with sales
engineers in charge of product planning and development in order to supply
products that meet the needs of customers in rapidly changing markets in the
name of 'MARUWA of material technology'.
4. Strengthen the sales force in overseas
To increase sales in the global manufacturing areas of our customers and the
markets of important international companies, we will strengthen and increase
overseas sales sites, take the needs of customers in advance, expand new
customers, and improve our market shares.
Review of Operations and Financial Condition
I. Operating Results
Quarterly JPY million
Fiscal 2006 Fiscal 2007
1Q 2Q 3Q 4Q 1Q 2Q
Net sales 4,481 4,524 5,082 6,191 4,878 4,885
Operating income 398 321 522 452 420 402
Net income 51 231 399 454 357 274
Semiannually JPY million
Fiscal 2006 Fiscal 2007
For 6-month period For 6-month period For 6-month period
1 April - 30 Sept 1 Oct.2005 - 31 1 Apr. - 30 Sept.
2005 Mar. 2006 2006
Net sales 9,005 11,273 9,763
Operating income 718 975 822
Net income 282 853 631
(1) Review of operations
Japanese economy in the first half of this fiscal term has been favorable,
supported by increases of capital expenditures among enterprises and by consumer
spending. Global economy continued to expand as U.S economy showed underlying
strength.
In such circumstances, our business environment has been generally solid,
influenced by an aggressive production increase trend in IT-related industries.
Net sales in this first half were 9,763 million yen, an increase of 8.4% with
the first half of the previous year.
As for profits, operating income increased 14.5% to 822 million yen compared
to the previous fist half due to a revenue increase in Circuit Ceramics,
contribution by Machinery Ceramics, which was enhanced in profitability through
the last year, and a decrease of loss in Lighting Equipment business in spite of
expenses for the reorganization of manufacturing equipments.
Net income increased 123.8% to 631 million yen compared to the first half of
last year.
Considering operating results stated above, as for interim dividend in this
first half, we will pay 12 yen per share, as announced in May 2006, up 3 yen
compared with the previous first half.
(2) Review of operating results by segment
JPY million
Fiscal 2006 Fiscal 2007
For 6-month period For 6-month period For 6-month period
1 Apr. - 30 Sept. 1 Oct.05 - 31 Mar. 2006 1 Apr. - 30 Sept.
2005 2006
Ceramic Components:
Net sales 8,299 8,329 8,843
Operating income 1,198 1,036 1,294
Lighting Equipment:
Net sales 706 2,944 920
Operating income (244) 217 (124)
Total:
Net sales 9,005 11,273 9,763
Operating income 954 1,253 1,170
Elimination:
Net sales -- -- --
Operating income (236) (278) (348)
Consolidated:
Net sales 9,005 11,273 9,763
Operating income 718 975 822
Quarterly sales results of Ceramic Components segment by product division
JPY million
Fiscal 2006 Fiscal 2007
1Q 2Q 3Q 4Q 1Q 2Q
Circuit Ceramics 1,649 1,576 1,519 1,601 1,778 1,908
Machinery Ceramics 1,129 1,117 1,135 1,063 1,148 1,189
RF Products 344 364 417 464 407 354
EMC Components 1,096 1,024 1,075 1,055 1,046 1,013
Total 4,218 4,081 4,146 4,183 4,379 4,464
*RF=Radio Frequency
JPY million
Fiscal 2006 Fiscal 2007
For 6-month period For 6-month period For 6-month period
1 Apr. - 30 Sept. 1 Oct.05 - 31 Mar. 1 Apr. - 30 Sept.
2005 2006 2006
Circuit Ceramics 3,225 3,120 3,686
Machinery Ceramics 2,246 2,198 2,337
RF Products 708 881 761
EMC Components 2,120 2,130 2,059
Total 8,299 8,329 8,843
*RF=Radio Frequency
Circuit Ceramics
Circuit Ceramics include ceramic substrates for chip resistors which are
essential for a wide range of electronic appliances, glazed ceramic substrates
for thermal printer head (TPH) for FAX or barcode label printers, large ceramic
substrates for hybrid ICs, and Aluminum Nitride (AlN) for power modules and
automobiles.
Total sales of this division were 3,686 million yen, up 14.3% compared to the
first half of the previous term, reflected solid orders in information
communication devices such as mobile phones and PCs and industrial machineries
markets.
Ceramic substrates for chip resistors continuously enjoyed high demands,
gradually showing positive effects from preparation for a production increase.
Also, an increase of demand for large substrates for power modules contributed
to increase in revenue.
Machinery Ceramics
Machinery Ceramics include quarts glass products mainly for semiconductor
equipment, magnetic head-supporting blocks for PCs, and ceramic facet valves.
The products in this division require high precision process techniques.
In this division, quartz glass products, which had been inactive in the second
half of last year, saw a sales recovery; on the other hand, some products which
tend to have little demand posted sales decreases. Therefore, total interim
sales were 2,337 million yen, up 4.1% compared to the interim results of last
year.
Radio Frequency Products
Radio Frequency Products include device products such as band pass filters for
mobile phones and other wireless communication appliances, dielectric ceramics
for filters used in mobile communications or antennas, and thin film substrates
for optical information and communications.
Total sales of this division were 761 million yen, up 7.5% compared to the
interim results of last term.
Device products sales increased thanks to products for base stations and
wireless communications for commercial-use. Thin-film products were affected
from inventory adjustments by customers.
EMC Components
EMC Components include multi-layer ceramic capacitors of high-voltage/
high-capacitance mainly for digital cameras, LCD backlights, and power supply of
electronic devices, and components as a countermeasure against noise/surge,
including EMI filters, chip varistors, chip beads, and inductors. Such
components against noise/surge are expected to be more required in the future
for various electronic appliances such as information communication tools
including mobile phones and PCs, digital home appliances, amusement equipment,
and automotive electronics.
Total sales were 2,059 million yen, down 2.9% compared to the last first half.
EMI filters and chip varistors increased in sales; on the other hand, a part
of lineups were influenced by inventory adjustments at customers.
Lighting Equipment
This segment includes lighting equipment for public works such as roads and
bridges, and sales tend to be largely concentrated in the end of a fiscal term,
and expenses exceed sales until then.
Total sales in this first half were 920 million yen, an increase of 30.3%, and
operating loss was 124 million yen.
Operating loss was significantly reduced due to a sales increase in the first
half and cost reduction efforts continued from the previous term.
II. Financial condition
JPY million JPY million
As of 30 September As of 31 March As of 30 September Change
to 31 Mar.2006
2005 2006 2006 Amount %
Total assets 30,538 33,044 32,496 -548 -1.7%
Total liabilities 5,266 6,487 5,459 -1,028 -15.8%
Total shareholders' 25,272 26,557 27,037 480 1.8%
equity
Shareholders' equity 82.8% 80.4% 83.2% 2.8%
ratio
JPY million JPY million
For 6-month period For 6-month For 6-month period Change
period
to 30 Sept. 2005
1 Apr. - 30 Sept. 1 Oct. 05 - 31 1 Apr. - 30 Sept. Amount %
2005 Mar. 2006 2006
Net cash provided by 423 1,613 788 365 86.3%
operating activities
Net cash used in (181) (1,053) (1,425) -1244 687.3%
investing activities
Net cash used in 164 (113) (185) -349 212.8%
financing activities
Cash and cash 7,401 7,899 7,226 -175 -2.4%
equivalents
at end of term
Net sales 9,005 11,273 9,763 758 -8.4%
Capital expenditures 746 991 1,155 409 54.8%
Depreciation 756 858 805 49 6.5%
Total assets at the end of at the end of this first half were 32,496 million
yen, a decrease of 548 million yen compared to the end of last term as a result
of operating activities in this half year. This was mainly due to a decrease in
trade notes and accounts receivable in relation to a distinctive business trend
at MARUWA SHOMEI Co., Ltd. Inventories increased 211 million yen, and net
property, plant and equipment increased 286 million yen due to an increase of
machineries with capital expenditures compared to last year end, respectively.
Total liabilities decreased 5,459 million yen, a decrease of 1,028 million yen
compared to the last year end due also to a decrease in trade notes and accounts
payable at MARUWA SHOMEI.
Shareholders' equity increased 480 million yen with payment of dividends and
posting of net income.
As a result, shareholders' equity ratio at the end of this first half end was
83.2%, up 2.8 points from the previous year end.
Net cash provided from operating activities was 788 million yen, up 365 million
yen compared with the previous first half due mainly to 972 million yen of net
income before taxes, 805 million yen of depreciation, and 300 million yen of a
decrease in retirement benefits.
Net cash used in investing activities totaled 1,425 million yen, up 1,244
million yen compared to the first half of previous year, due especially to
capital expenditures to prepare for an increase in Circuit Ceramics production;
1,023 million yen in payment for purchase of net property, plant and equipment;
286 million yen in loan receivable mainly for a subsidiary in India.
Net cash used in financing activities amounted to 185 million yen, increasing
349 million yen from the last first half mostly because of 74 million yen of
loan payment and 132 million yen of dividends payment.
Consequently, cash and cash equivalents at the end of this first half were
7,226 million yen, down 175 million yen compared to the end of the previous
first half since net cash used in investing and financing activities were larger
than net cash provided in operating activities.
Trends of cash-flows indices are as follows;
For year ended For year ended For year ended
31 March 2005 31 March 2006 31 March 2007
Interim Final Interim Final Interim
Shareholders' equity ratio 84.8% 85.5% 82.8% 80.4% 83.2%
Shareholders' equity ratio 64.7% 80.3% 104.7% 100.8% 97.2%
at market value
Debt redemption period 0.2 0.1 0.5 0.2 0.3
(year)
Interest coverage ratio 427.2 316.1 203.4 251.9 233.0
Note)
Shareholders' equity ratio : Shareholders' equity / Total assets
Shareholders' equity ratio at market value : Total market value of shares /
Total assets
Debt redemption period : Interest-bearing debts / Cash flows from operating
activities
Interest coverage ratio : Cash flows from operating activities / Interest
payment
*Each index is calculated with consolidated financial figures.
*Total market value of shares is calculated by multiplying the share value as of
the end of the fiscal year by the total number of issued shares after deduction
of own shares at the end of the year.
*For cash flows from operating activities, the figure in the consolidated cash
flows statement is used. Interest-bearing debt includes all debts for which
interests are paid among the liabilities booked in the consolidated balance
sheet. For interest payment, the figure of interest expenses paid booked in the
consolidated cash flows statement is used.
III. Outlook for Full Fiscal 2007
JPY million
For year ended For year ending Change
31st March 2006 31st March 2007 Amount %
Net sales 20,278 24,530 4,252 21.0%
Operating income 1,693 2,750 1,057 62.4%
Net income 1,135 1,690 555 48.9%
As for Ceramic Components business, a high demand is continuously expected in
the electronic components market.
In Circuit Ceramics division, new equipments were installed for production
increase in this first half in order to further expand a market share in Alumina
substrates, expecting its effect in the second half of this year.
Machinery Ceramics division expects solid demands for quartz glass products
even though some products are coming to an end.
In Radio Frequency Products division, sales of thin film products decreased,
but it will recover to a certain level. Sales of device products are expected
to recover in demand from the second half of this term.
EMC Components division will aggressively expand in sales as sales increases
for component lineups including EMI filters and inductors in the second half.
Considering these conditions, outlook for fiscal 2007 is not changed from the
figures announced in May 2006. Meanwhile, net income is expected to include a
loss of 100 million yen from disposal of equipments.
*Cautionary statements: the above forecasts are based on the present business
environment and currently-available information, and include forward-looking
statements involving risks and uncertainties. The reader is cautioned not to
place reliance entirely on the above forecasts for making investment decisions.
Due to a number of factors such as future economic situations and market
environment changes, actual results may differ significantly from these
estimates. Also, please refer to Risks for business operations.
IV. Risks for business operations
MARUWA considers following issues as risks which may have influence on
operating results, share price, and financial conditions of MARUWA group.
Forward-looking statements contained in this document are due to discussion by
MARUWA group as of the date this document was released.
1. Reliance on the electronic components market
Our major customers are electronic components makers which are influenced by the
semiconductor market. The semiconductor market has been fluctuating cyclically
by the influence of the market's distinctive 'silicon cycle' due to market
prices and technological innovation progress in addition to general economic
influence.
In the past, our operations were impacted by plunge in orders when the
electronics and semiconductor markets declined. Even though we expect the
electronics market will expand in the medium-term led by smaller sized products
with multi-functions and rapidly developing automotive components, our
operations may be adversely affected in case that the growth of the electronics
market slows down due to influences of general economy or cyclical slump of the
semiconductor market.
2. Response to technological innovation
Amid the rapidly changing market requiring quick adjustment and sustainable
growth, MARUWA group aims to increase our corporate values by enhancing
profitability and growth, promoting product development in new areas with
integration of our developed core technologies For this purpose, we believe it
is important to recruit necessary personnel and train employees.
In principle, MARUWA group conducts technological development in response to
market needs, and will keep developing new products in the future. In case,
however, we fail to catch up with development speed the market requires and to
enhance production capacity, our operations may be affected along with the drop
of our market shares
3. Product cycle in the electronic components market (risks of inventories at
the market)
In electronics markets, new products are constantly supplied supported by
continuous technological innovation. Especially, when demands for new products
with non-conventional functions are heightened in a full scale, orders rush
temporarily due to competition for components among set makers. However,
overestimation for demands among those set makers may cause an excess of
inventories supply in the markets and saturation of the markets. In such market
environment, our group business operations may be affected.
4. Regulations for environmental protection
Various regulations are applied to us about the usage, storage, destruction
and disposal of chemical products used in manufacturing processes. We have
never been complaint regarding environmental regulations, and we believe that we
comply with currently applicable environmental law and regulations. In case,
however, that we are imposed any compensation or fine regarding a delay in
response to future tightening of regulations and forced to halt production or
terminate businesses, that we are required a large amount of expenditure for
equipment or other expenses, and that we are accused of failing to comply with
regulations for the usage, control and disposal of hazardous materials,
operating results of the group may be impacted.
5. Risks on a growth strategy through M&A
MARUWA group focuses on M&A (merger, acquisition and affiliation of
businesses) as a part of our growth strategy. Regarding the cases which we were
involved, acquired businesses were improved into revenue sources relatively in a
short period with intensive investment in personnel and materials after M&A,
following careful preliminary assessment. In the future, we are also planning
on expanding business areas and exploring new fields, continuously carrying on M
&A. Future M&A, however, may not be linked to the resources of profits unlike
our past M&A cases. In case that restructuring at acquired businesses is
prolonged or operating costs are mounted, the group's operating results and
financial condition may be impacted.
6. Reliance on material suppliers
For ceramics production, we purchase low materials such as alumina from
several low material refining companies outside MARUWA group. Although we have
ensured supply by appropriately increasing a number of trading suppliers
according to materials price trend or our production volume, there is no
guarantee that we will never have shortage of materials. The shortage of
materials may cause escalating of materials prices, slowdown of supply, or
increase of materials costs at our group, consequently affecting operating
results and financial condition of the group.
7. Dependence on key persons
The future growth of MARUWA group highly depends on key figures such as
competent researchers or engineers since we mainly engage in manufacturing of
electronic materials and components in rapid technological innovation.
Therefore, it is essential for the management to ensure those core figures and
to train them; otherwise, the future growth and operating results of the group
may be impacted.
On the other hand, active employment of highly capable or experienced
engineers may largely increase recruitment and labor costs, influencing our
operating results and financial status.
8. Violations of intellectual property rights of other companies
MARUWA group aggressively promotes the development of new products, and
prepare against the risks of violations at research and development with full
preliminary research about intellectual property rights held by other companies.
If we become an object of a suit for the fact of violations happened beyond
our control, the group's business results and financial condition may be
influenced.
9. Exchange rate fluctuations
MARUWA group trades in foreign currency including U.S. dollar, Euro or
Malaysia ringgit other than in yen. Also, we hold production and sales sites
around the world, and some items on consolidated financial statements are
converted into yen from originally traded foreign currency. Consequently, at the
time of consolidation of financial statements, conversion into yen may affect
the results of overseas companies of the group. MARUWA uses foreign exchange
forward contracts if necessary to manage exposures resulting from fluctuations
in foreign currency exchange, but it is impossible to avoid all the influences
of foreign currency exchange. Therefore, our operating results may be affected
by the fluctuations of foreign currency exchange.
10. Political and economic situations in Malaysia
Maruwa (Malaysia) Sdn.Bhd., a 100% owned consolidated subsidiary of MARUWA,
produces and sells products of Circuit Ceramics and Machinery Ceramics
divisions, consisting of 19.3% of total sales for the first half ended in
September 2006. Since there are instability factors in Malaysian political
situation because of being a multiethnic state, future political conditions and
financial instability may influence our operating results in case that there are
difficulty for the Malaysian subsidiary to continue its operations.
11. Dependence on public works
The lighting equipment business largely depends on public projects. It is a
trend for public works in Japan to be focused on efficient projects such as for
major/core cities, sightseeing cities matched with a national plan for promoting
sightseeing, and development of central urban areas fit for an aging society,
shifting from conventional pork-barrel projects. Compensating for this change
of public works, MARUWA has promoted sales expansion and product development;
however, our business results may be affected in case that the proceeding of
public project delays due to various factors.
12. Product liability
MARUWA group are making full efforts to ensure optimal quality suited for
characteristics of products. However, in the event of unexpected quality
problem, operating results of the group may be significantly affected.
Consolidated Balance Sheet
JPY million USD thousand
As of 30 September As of 30 Change As of 31st Change As of 30
September March September
2006 2005 2006 2006
ASSETS
Current assets:
Cash & deposits 7,247 7,403 (156) 7,899 (652) 61,467
Notes and accounts 6,542 5,719 823 7,003 (461) 55,488
receivable, trade
Inventories 3,080 2,723 357 2,869 211 26,124
Other current assets 667 448 219 834 (167) 5,657
Allowance for (9) (7) (2) (17) 8 (76)
doubtful
accounts
Total current assets 17,527 16,286 1,241 18,588 (1,061) 148,660
Fixed assets:
(Property, plant & equipment)
Land 3,454 3,246 208 3,412 42 29,296
Building & 3,842 3,991 (149) 3,969 (127) 32,587
structures
Machinery & 4,132 3,917 215 3,949 183 35,047
equipments
Construction in 298 134 164 152 146 2,528
progress
Other 647 563 84 605 42 5,487
Net property, plant 12,373 11,851 522 12,087 286 104,945
&
equipment
(Investment & other assets)
Investment 749 809 (60) 784 (35) 6,353
securities
Other 1,847 1,592 255 1,585 262 15,665
Total investments & 2,596 2,401 195 2,369 227 22,018
other assets
Total fixed assets 14,969 14,252 717 14,456 513 126,963
Total assets 32,496 30,538 1,958 33,044 (548) 275,623
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes & accounts 1,639 1,403 236 2,590 (951) 13,902
payable, trade
Accrued bonus 344 233 111 334 10 2,918
Other current 2,149 1,959 190 2,057 92 18,227
liabilities
Total current 4,132 3,595 537 4,981 (849) 35,047
liabilities
Long-term
liabilities:
Long-term debt 114 261 (147) 187 (73) 967
Accrued pension & 177 322 (145) 300 (123) 1,501
severance costs
Other 1,036 1,088 (52) 1,019 17 8,787
Total long-term 1,327 1,671 (344) 1,506 (179) 11,255
liabilities
Total liabilities 5,459 5,266 193 6,487 (1,028) 46,302
JPY million USD thousand
As of 30 September As of 30 Change As of 31st Change As of 30
September March September
2006 2005 2006 2006
Shareholders' equity:
Common stock, no par 6,710 6,683 27 6,710 -- 56,913
value
Capital surplus 9,747 9,735 12 9,747 -- 82,672
Retained earnings 10,954 9,768 1,186 10,522 432 92,909
Net unrealized gains 0 44 (44) 38 (38) 0
(losses)
on
available-for-sale
securities
Foreign currency (143) (680) 537 (206) 63 (1,213)
translation
adjustment
Advance on 1 8 (7) -- 1 8
subscription
of own shares
Treasury stock, at (232) (286) 54 (254) 22 (1,968)
cost
Total shareholders' 27,037 25,272 1,765 26,557 480 229,321
equity
Total liabilities & 32,496 30,538 1,958 33,044 (548) 275,623
shareholders' equity
Consolidated Statements of Income
JPY million USD thousand
For 6-month period For 6-month Change For year ended For 6-month
period period
1 Apr. - 30 Sept. 1 Apr. - 30 31st March 1 Apr. - 30
Sept. Sept.
2006 2005 2006 2006
Net sales 9,763 9,005 758 20,278 82,807
Cost of sales 6,919 6,342 577 14,494 58,685
Gross profit 2,844 2,663 181 5,784 24,122
Selling, general & 2,022 1,945 77 4,091 17,150
administrative
expenses
Operating income 822 718 104 1,693 6,972
Other income
(expenses):
Interest & dividend 22 18 4 35 187
income
Interest expenses (3) (4) 1 (8) (25)
Foreign exchange gain 41 (70) 111 (158) 348
(loss), net
Other, net 90 (115) 205 107 762
Other income, net 150 (171) 321 (24) 1,272
Income before income 972 547 425 1,669 8,244
taxes
Income taxes:
Current 331 97 234 299 2,807
Deferred 10 168 (158) 235 85
341 265 76 534 2,892
Net income 631 282 349 1,135 5,352
Consolidated Statements of Shareholders' Equity
JPY million
Common Capital Retained Net unrealized Foreign Treasury Advance on Total
stock surplus earnings gains(losses) on currency stock subscription shareholders'
available-for-sale translation of own equity
securities adjustment shares
Balance at 31 6,710 9,747 10,522 38 (206) (254) -- 26,557
March 2006
Net income 631 631
Cash dividends (131) (131)
Directors' bonus (5) (5)
Decrease on new (60) (60)
consolidation
Change in net (38) (38)
unrealized gains
on available-for-
sale securities
Translation 63 63
adjustment
Advance on 1 1
subscription of
own shares
Changes in (3) 22 19
treasury stock
Balance at 30 6,710 9,747 10,954 0 (143) (232) 1 27,037
September 2006
USD thousand
Common Capital Retained Net unrealized Foreign Treasury Advance on Total
stock surplus earnings gains(losses) on currency stock subscription shareholders'
available-for-sale translation of own equity
securities adjustment shares
Balance at 31 56,913 82,672 89,245 321 (1,747) (2,154) -- 225,250
March 2006
Net income 5,352 5,352
Cash dividends (1,111) (1,111)
Directorsf bonus (42) (42)
Decrease on new (510) (510)
consolidation
Change in net (321) (321)
unrealized gains
on available-for-
sale securities
Translation 534 534
adjustment
Advance on 8 8
subscription of
own shares
Changes in (25) 186 161
treasury stock
Balance at 30 56,913 82,672 92,909 0 (1,213) (1,968) 8 229,321
September 2006
Consolidated Statement of Cash Flows
JPY million USD thousand
For 6-month period For 6-month For year For 6-month
period ended period
1 Apr. - 30 Sept. 1 Apr. - 30 Change 31st March 1 Apr. - 30
Sept. Sept.
2006 2005 2006 2006
Operating activities:
Income before income 972 547 425 1,669 8,244
taxes
Adjustments for:
Depreciation 805 756 49 1,614 6,828
Amortization of (107) (107) -- (214) (908)
consolidation goodwill
Increase (decrease) in (9) (4) (5) 7 (76)
allowance for doubtful accounts
Increase(decrease) in (300) (856) 556 (878) (2,545)
accrued
pension & severance costs
Loss (gain) on sales of -- -- -- (146) --
investment securities
Loss on disposal of 55 79 (24) 140 466
property, plant &
equipment
Interest & dividends income (22) (18) (4) (39) (187)
Foreign exchange (gain) (35) 56 (91) 159 (297)
loss
(Increase) decrease in 610 903 (293) (303) 5,174
notes & accounts
receivable
(Increase) decrease in (143) 82 (225) (23) (1,213)
inventories
Increase (decrease) in (1,081) (1,416) 335 (250) (9,169)
accounts payable
Other 267 458 (191) 389 2,267
Sub total 1,012 480 532 2,125 8,584
Interest & dividend income 21 17 4 38 178
received
Interest expenses paid (3) (4) 1 (8) (25)
Income taxes paid (242) (70) (172) (119) (2,053)
Net cash provided by 788 423 365 2,036 6,684
operating activities
Investment activities:
Payments for purchase of (1,023) (466) (557) (1,452) (8,677)
property, plant &
equipment
Proceeds from sales of 165 8 157 78 1,399
property, plant &
equipment
Payments for disposal of -- (46) 46 (47) --
property, plant &
equipment
Payments for purchase of (198) (59) (139) (309) (1,679)
investment securities
Proceeds from sales of -- 5 (5) 163 --
investment securities
Proceeds from purchase of -- 358 (358) 358 --
stocks of subsidiaries
Payments for purchase of (67) -- (67) (23) (568)
stocks of subsidiaries
Loan receivable (286) -- (286) -- (2,426)
Increase in intangible fixed (4) (10) 6 (29) (34)
assets
Other (12) 29 (41) 27 (102)
Net cash used in (1,425) (181) (1,244) (1,234) (12,087)
investing
activities
JPY million USD thousand
For 6-month period For 6-month For year For 6-month
period ended period
1 Apr. - 30 Sept. 1 Apr. - 30 Change 31st March 1 Apr. - 30
Sept. Sept.
2006 2005 2006 2006
Financing activities:
Payments of long-term (74) (74) -- (147) (628)
debt
Proceeds from issue of -- -- -- 52 --
new shares
Cash dividends paid (132) (81) (51) (180) (1,111)
Sales of treasury stock 23 311 (288) 349 195
Advance on subscription 1 8 (7) -- 0
of own shares
Purchase of treasury (3) 0 (3) (23) (25)
stock
Net cash provided by (185) 164 (349) 51 (1,569)
(used in) financing
activities
Effect of exchange rate 55 60 (5) 111 466
changes on cash & cash equivalents
Net increase (decrease) (767) 466 (1,233) 964 (6,506)
in
cash & cash
equivalents
Cash and cash 7,899 6,935 964 6,935 66,997
equivalents
at beginning of year
Increase in cash & cash 94 -- -- -- 798
equivalents
on new consolidation
Cash and cash 7,226 7,401 (175) 7,899 61,289
equivalents
at end of year
Segment Information
(1) Consolidated business segment information
JPY million JPY million USD thousand
For 6-month For 6-month For year ended For 6-month
period period period
1 Apr. - 30 Sept. 1 Apr. - 30 Sept. 31 March 1 Apr. - 30 Sept.
2006 2005 2006 2006
Ceramic Components:
Net sales 8,843 8,299 16,628 75,004
Operating expenses 7,549 7,101 14,394 64,029
Operating income 1,294 1,198 2,234 10,975
Lighting Equipment:
Net sales 920 706 3,650 7,803
Operating expenses 1,044 950 3,677 8,855
Operating income (124) (244) (27) (1,052)
Total:
Net sales 9,763 9,005 20,278 82,807
Operating expenses 8,593 8,051 18,071 72,884
Operating income 1,170 954 2,207 9,923
Elimination:
Net sales -- -- -- --
Operating expenses 348 236 514 2,951
Operating income (348) (236) (514) (2,951)
Consolidated:
Net sales 9,763 9,005 20,278 82,807
Operating expenses 8,941 8,287 18,585 75,835
Operating income 822 718 1,693 6,972
(2) Consolidated geographic segment information
JPY million JPY million USD thousand
For 6-month For 6-month For year ended For 6-month
period period period
1 Apr. - 30 Sept. 1 Apr. - 30 Sept. 31 March 1 Apr. - 30 Sept.
2006 2005 2006 2006
JAPAN
Net sales:
Unaffiliated customers 6,992 6,991 16,170 59,304
Intersegment 904 355 830 7,668
Total 7,896 7,346 17,000 66,972
Operating cost 7,122 6,685 15,354 60,407
Operating income 774 661 1,646 6,565
(loss)
ASIA
Net sales:
Unaffiliated customers 1,994 1,767 3,528 16,913
Intersegment 745 621 1,349 6,319
Total 2,739 2,388 4,877 23,232
Operating cost 2,309 1,987 4,206 19,585
Operating income 430 401 671 3,647
(loss)
JPY million JPY million USD thousand
For 6-month For 6-month For year ended For 6-month
period period period
1 Apr. - 30 Sept. 1 Apr. - 30 Sept. 31 March 1 Apr. - 30 Sept.
2006 2005 2006 2006
EUROPE and AMERICA
Net sales:
Unaffiliated 777 247 579 6,590
customers
Intersegment 1 1 2 8
Total 778 248 581 6,598
Operating cost 743 284 617 6,301
Operating income 35 (36) (36) 297
(loss)
TOTAL
Net sales:
Unaffiliated 9,763 9,005 20,278 82,807
customers
Intersegment 1,650 977 2,181 13,995
Total 11,413 9,982 22,459 96,802
Operating cost 10,174 8,956 20,177 86,293
Operating income 1,239 1,026 2,282 10,509
(loss)
ELIMINATION
Net sales:
Total (1,650) (977) (2,181) (13,995)
Operating cost (1,233) (669) (1,592) (10,458)
Operating income (417) (308) (589) (3,537)
(loss)
CONSOLIDATED
Net sales:
Total 9,763 9,005 20,278 82,807
Operating cost 8,941 8,287 18,585 75,835
Operating income 822 718 1,693 6,972
(loss)
(3) Net overseas sales by customer's geographic location
JPY million JPY million USD thousand
For 6-month For 6-month For year ended For 6-month
period period period
1 Apr. - 30 Sept. 1 Apr. - 30 Sept. 31st March 1 Apr. - 30 Sept.
2006 2005 2006 2006
Overseas sales:
Asia 3,240 3,055 6,376 27,481
Europe 320 200 375 2,714
Others 316 217 495 2,680
Total 3,876 3,472 7,246 32,875
Consolidated net 9,763 9,005 20,278 82,807
sales
% of consolidated net sales:
Asia 33.2% 33.9% 65.3%
Europe 3.3% 2.2% 3.8%
Others 3.2% 2.5% 5.1%
Total 39.7% 38.6% 74.2%
*Countries are divided in geographical
vicinity.
*Main countries included in each are as indicated below;
Asia - Malaysia, Taiwan, Korea, Hong Kong
Europe - Germany, England
Others - United States
*Overseas sales indicate net sales of the Company and its subsidiaries to customers outside Japan.
This information is provided by RNS
The company news service from the London Stock Exchange
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