Interim Results
Maruwa Co Ld
10 November 2005
10 November 2005
MARUWA CO., LTD.
3-83, Minamihonjigahara-cho, Owariasahi-city, Aichi-pref., 488-0044 JAPAN
MARUWA CO., LTD. announces Interim Results for the six-month period ended
30th September 2005
*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 =
109.93 yen.
*Consolidated subsidiaries: 7 companies
1. Summary of Consolidated Interim
Results
(1) Summary of consolidated statement of income
JPY million JPY million JPY million USD thousand
For six-month For six-month For six-month
period ended period ended For year ended period ended
30th Sept. 30th Sept. Change % 31st March 30th Sept.
2005 2004 2005 2005
Net sales 9,005 8,157 10.4% 15,529 81,914
Operating income 718 688 4.4% 1,357 6,536
Income before income 547 511 7.0% 1,180 4,976
taxes
Net income 282 755 -62.6% 1,225 2,561
JPY JPY USD
Net income per share 26.06 69.58 112.40 0.20
(2) Summary of consolidated financial condition
JPY million JPY million JPY million USD thousand
As of 30th Sept. As of 30th Change % As of 31st As of 30th
Sept. March Sept.
2005 2004 2005 2005
Total Assets 30,538 28,443 7.4% 28,465 277,794
Shareholders' equity 25,272 24,110 4.8% 24,328 229,889
Shareholders' equity 82.8% 84.8% -2.4% 85.5%
ratio
JPY JPY USD
Shareholders' equity per 2,315.35 2,237.07 2,256.48 20.80
share
(3) Summary of consolidated statement of cash flows
JPY million JPY million JPY million USD thousand
For For For six-month
six-month six-month
period ended period ended For year period ended
ended
30th Sept. 30th Sept. Change % 31st March 30th Sept.
2005 2004 2005 2005
Cash flows from operating 423 1,286 -67.1% 3,319 3,844
activities
Cash flows from investing (181) (953) -- (2,062) (1,646)
activities
Cash flows from financing 164 (428) -- (583) 1,489
activities
Cash and cash equivalents 7,401 6,154 20.3% 6,935 67,322
at the end of the period
2. Projections
Consolidated earnings forecast for full fiscal 2006 ending 31st
March 2006
JPY million
Net sales 21,230
Net income 1,120
*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 expand into new
fields and to survive among severe global business competition as well as to
develop N.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 are
determined to expand our business and to improve dividend payout ratio
continually.
(3) Targeted management indices
MARUWA emphasizes operating income ratio as an important index to indicate
profitability. We set a medium-to-long term target, 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 and management issues
In the midst of the IT era, in which quick adjustment and sustained growth are
required to ride on the rapidly changing market, MARUWA, whose core competence
is our technologies, has accumulated base technologies such as ceramic material
technology, electronic device technology, and multi-layering technology, and
lined up unique electronic components with combinations of these technologies,
promoting its business mainly in information-communication and digital home
appliances areas. Recently, we are also focusing on components for near-future
automobiles as a ceramic manufacturer while seeking for possibilities in new
fields such as a lighting equipment business started in this year. Also,
developing our fields from quartz glass to semiconductor manufacturing, we
supply our products for the electronic components industry from a wider range of
materials. MARUWA continues to increase our corporate value by improving
profitability and growth potential, aiming to become a strong specialist based
on manufacturing, focusing on quality rather than size, instead of being a
multi-line company.
As for management issues, we are determined to make intensive and collective
efforts on management objectives set out as plain as possible, taking advantage
of small corporate size that is suitable for company/department-wide efforts.
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. While we aimed to extend into new fields with our new
business and products which either had been developed in-house or acquired
through M&A, we also thoroughly strengthened the internal system to enhance
defensiveness to keep up with rapidly-changing markets in fiscal 2003, followed
by actions to promote aggressiveness including the enhancement of R&D activities
and a sales system in fiscal 2004. In last year, fiscal 2005, we continued to
enhance operations focusing on cash-flows in each business and production
division while restructuring businesses acquired through M&A in the past, and
promoting mass-production and profit contribution of newly-developed items to
firm the foundation for growth to next level.
This fiscal 2006 is considered as our starting point for growth based on the
past enhancement efforts. MARUWA is determined to found a solid, unique
management system with an eye on a global development. 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.
Aiming for further expansion in Asian markets, we acquired our second overseas
production site for electronic components in Chennai, India, next to the
Malaysian plant, now preparing for operations to be started in January, 2006.
This plant, as a core plant, is expected to contribute to increasing of
production capacity among the other 3 plants overseas.
As for entry into the automotive components industry, which is expected to
grow in the future, as a intensive strategic field, we are at the final phase of
R&D of products for automobiles promoted in recent years with our ceramic
material and processing technologies, now advancing the preparation of mass
production to be started in next year or later.
(5) Corporate governance
1. Basic policy for corporate governance
MARUWA is enhancing our governance structure based on our principal management
issue to realize efficient management, approaching promptly and resiliently to
the rapidly changing electronic components market. As a public being in the
society, we commit ourselves to building up corporate governance structure by
improving evaluation and internal control in order to pursue sustainable growth
toward next stage. Also, we vow to enhance the quality of governance to
exercise open and transparent management to the society and stock markets as a
global public company.
i. Governance structure
MARUWA adopts the auditing system for governance. Our governance structure
consists of the board of directors, the board of auditors, and the internal
auditing office under the direct control of the president. There are 5
directors. They discuss important issues at regular or special meetings of the
board of directors. MARUWA introduced operating officers from this term for the
purpose of clarifying power and responsibility, and enhancing corporate
governance by separating decision-making and supervision, and operations.
Moreover, directors and officers responsible for business divisions, including
operating officers, started to have a meeting together every month to carry on
business strategies proactively.
There is no outside director.
There are 3 auditors, including 2 outside auditors. They attend every meeting
of the board of directors to audit the directors in principle. In addition,
they work with internal audit officers who directly belong to the management to
audit directors and operating officers who are responsible on a practical level
and to propose improvement measures.
ii. Interest and personal relationship with outside auditors
There is no special interest between MARUWA and outside auditors.
Review of Operations and Financial Condition
I. Interim Operating Results
JPY million
Previous Current
1Q 2Q 3Q 4Q 1Q 2Q
Net sales 4,176 3,980 3,758 3,615 4,481 4,524
Operating income 308 380 378 291 398 321
Net income 156 599 352 118 51 231
Previous Current
For six-month period For six-month For six-month period
period
ended 30th Sept. 2004 ended 31st Mar. ended 30th Sept.
2005 2005
Net sales 8,157 7,372 9,005
Operating income 688 669 718
Net income 755 470 282
(1) Review of operations
The electronic components market eventually shifted to a recovery trend,
except for the semiconductor-related market, after a series of inventory
adjustments since the latter half of the previous year, as still facing severe
dropdown of product prices.
Under these circumstances, MARUWA group also generally benefited from the
recovery of the electronic components market. Net sales increased 10.4% to
9,005 million yen due to new product lineups of EMC Components compared to the
interim results of last year which had enjoyed an active market of digital home
devices.
Net income except for Lighting Equipment segment also increased 74.1% to 1,198
million yen compared to the interim results in the previous year thanks to
effects of the various measures carried on in recent years, including cut-down
of inventories, lead-time reduction, quality and yield rate improvement,
production enhancement by saving cost, restructuring of acquired businesses
which had been in deficit and product lineups, and profitability improvement of
new products.
The Lighting Equipment business, however, resulted in a loss of 244 million
yen because of its particularity different from our other businesses that its
sales concentrate in the second half of a fiscal term, and until then its
expenses largely exceed sales. This amount of loss is within the estimate at
the beginning of this year.
As a result, operating income was 718 million yen, an increase of 4.4%
compared to the previous interim results.
Net income was 282 million yen due mainly to the payment of 261 million yen as
retirement benefits for directors on the termination of this retirement benefits
system, and 77 million yen loss on the sales of surplus plant assets as a result
of integration of quartz glass manufacturing. Net income largely decreased
62.6% in comparison with 755 million yen of the previous interim result which
included 452 million yen of positive tax effect due to the merger of a
subsidiary.
From these operating situations above, as for dividends, we resolved to pay 9
yen per share, an increase of 1.5 yen compared to the last year-end as we
announced in May.
(2) Review of interim operating results by product divisions
Consolidated sales results by segment
JPY million
Previous Current
For six-month period For six-month period For six-month period
ended 30th Sept. ended 31st Mar. 2005 ended 30th Sept. 2005
2004
Ceramic Components:
Net sales 8,157 7,372 8,299
Operating income 688 669 1,198
Lighting Equipment:
Net sales -- -- --
Operating income -- -- --
Total:
Net sales 8,157 7,372 9,005
Operating income 688 669 954
Elimination:
Net sales -- -- --
Operating income -- -- (236)
Consolidated:
Net sales 8,157 7,372 9,005
Operating income 688 669 718
Consolidated sales results of Ceramic Components segment by product divisions
JPY million
Previous Current
1Q 2Q 3Q 4Q 1Q 2Q
Circuit Ceramics 1,746 1,566 1,479 1,421 1,649 1,576
Machinery Ceramics 1,363 1,376 1,257 1,256 1,129 1,117
RF Products 259 270 302 265 344 364
EMC Components 808 768 720 673 1,096 1,024
Total 4,176 3,980 3,758 3,615 4,218 4,081
Previous Current
For six-month period For six-month For six-month period
period
ended 30th Sept. ended 31st Mar. ended 30th Sept. 2005
2004 2005
Circuit Ceramics 3,312 2,900 3,225
Machinery Ceramics 2,739 2,513 2,246
RF Products 529 567 708
EMC Components 1,576 1,393 2,120
Total 8,156 7,373 8,299
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.
This division was reflected a recovery trend for information communication
markets such as mobile phones and PCs, although its sales decreased 2.7% to
3,225 million yen compared to the remarkably favorable sales in the first half
of the previous year.
AlN substrates posted solid sales due to favorable demands for power
modules-related products since the second half of the first quarter, and are
expected further contribution to net profits in the latter half of this year.
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.
Total sales for this division were 2,246 million yen, a decrease of 18.0%
compared to the previous interim results due to inactive orders for quartz glass
products, a core of this division.
Radio Frequency Products
Radio Frequency Products include device products such as VCO (voltage
controlled oscillators) for mobile phones and other wireless communication
appliances, device products such as band pass filters, dielectric ceramics for
filters used in mobile communications or antennas, and thin film substrates for
optical information and communications.
Total sales of this division increased 33.8% to 708 million yen compared to
the previous interim results blessed by good demands from communications and
digital home device industries.
Device products showed stable sales due to favorable orders for business
wireless communications and base stations. Thin-film products also had
increasing sales, starting the enhancement of manufacturing equipment for the
expansion of mass-production, and the development of new fields and customers
for further expansion.
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 of EMC Components increased 34.5% to 2,120 million yen compared
to the previous interim results due to a recovery trend in the electronic
components market and new product lineups added in this term.
EMI filters gained stable orders for base stations for mobile phones, digital
home devices such as digital TVs and DVDs, and amusement-related equipment. To
respond to a future demand increase, we started to improve productivity and to
enhance manufacturing capacity. Chip varistors are anticipated to gain solid
sales due to favorable orders for automobiles also in the latter half of the
year.
Lighting Equipment
This segment started since this year as a new business; it posted total sales
in the midterm 706 million yen, and operating loss 244 million yen.
This segment includes lighting equipment for public works such as roads and
bridges, and sales tend to be concentrated in the fourth quarter, especially in
March, accounting for expenses exceeding a sales amount up to then.
The amount of loss was reduced greater than the estimate at the beginning of the
year due to our various efforts for cost reduction by the review of sales
location or cutting of purchases cost since the beginning of the year. We are
determined to continue to make these efforts in the second half of this term so
as to improve annual profitability of this division significantly.
II. Financial Condition
JPY million
Changes
As of 30th As of 31st As of 30th compared to 31st
Sept.2004 Mar.2005 Sept.2005 Mar.2004
Total assets 28,443 28,465 30,538 2,073 7.3%
Total liabilities 4,333 4,137 5,266 1,129 27.3%
Total shareholders' 24,110 24,328 25,272 944 3.9%
equity
Shareholders' equity 84.8% 85.5% 82.8% -2.7%
ratio
JPY million
Changes
For six-month For six-month For six-month compared to six-month
period period period
ended 30th ended 31st ended 30th period ended 31st
Sept.2004 Mar.2005 Sept.2005 Mar. 05
Net cash provided by 1,286 2,033 423 (1,610) -79.2%
operating activities
Net cash used in (953) (1,109) (181) 928 83.7%
investing activities
Net cash used in (428) (155) 164 319 -205.8%
financing activities
Cash and cash 6,154 6,935 7,401 466 6.7%
equivalents
at end of term
Net sales 8,157 7,372 9,005 1,633 22.2%
Capital investment 453 800 746 (54) -6.8%
Depreciation 715 766 756 (10) -1.3%
Total assets at the end of the first half of this year were 30,538 million
yen, an increase of 2,073 million yen as a result of operating activities in
this six-month period, including an increase of 1,487 million yen due to the
acquisition of MARUWA SHOMEI Co., Ltd. ('MARUWA SHOMEI'), a new consolidated
subsidiary from this year. Net property, plant and equipment increased 543
million yen due mainly to the assets of MARUWA SHOMEI.
Total liabilities were 5,266 million yen, an increase of 1,129 million yen
also due mainly to 1,381 million yen of liabilities that MARUWA SHOMEI held.
As for the use of internal reserve, MARUWA aims to invest in the mass
production of new products and, to pursue high proactiveness and timely M&A
strategies.
Net cash provided from operating activities was 423 million yen, a decrease of
1,610 million yen from the second half of the last year. The major negative
factors are a decrease of accrued pension and severance costs, 856 million yen,
and a decrease of 1,416 million yen of trade notes and trade accounts payable.
On the other hand, the main factors of cash increase were a 903 million decrease
of trade notes and accounts receivable, and the positive adjustment of
depreciation, 756 million yen. Taxes paid were 70 million yen. The business
particularity of MARUWA SHOMEI mainly contributed to the increase and decrease
of trade notes and accounts payable and receivable.
Net cash used in investing activities totaled 181 million yen, a decrease of 927
million yen compared to the cash used in the latter six-month period of the
previous term. The principal investments in this term were 466 million yen of
the purchases of net property, plant and equipment, and 9 million yen of the
acquisition of the shares of MARUWA SHOMEI Co., Ltd. As for the acquisition of
MARUWA SHOMEI, the actual cash flow was positive 358 million yen since cash
assets were acquired together.
Net cash provided in financing activities amounted to 164 million yen, including
311 million yen of proceeds from sales of own shares upon the exercises of stock
options, and payments for long-term debt, 74 million yen.
Consequently, cash and cash equivalents at the end of the first half period of
this year increased 466 million yen to 7,401 million yen compared to the end of
the previous year since net cash provided from operating and financing
activities were larger than net cash used in investing activities.
III. Outlook of the Full Fiscal 2006
JPY million
For year ended For year ending Change
31st March 2005 31st March 2006 Amount %
Net sales 15,529 21,230 5,701 36.7%
Operating income 1,357 2,100 743 54.8%
Net income 1,225 1,120 -105 -8.6%
As for the ceramic components business, MARUWA generally anticipates that
favorable sales will continue in the second half of the year due to a desirable
level of demands. As for the lighting equipment business, greater sales than
our expectation as of the beginning of the term as well as the improvement of
benefits are anticipated due to our continual efforts to enhance operations.
In Circuit Ceramics division, MARUWA plans to increase production capacity for
next term as well as responding to orders from domestic manufacturers led by
favorable digital electronics markets.
In Machinery Ceramics division, we endeavor to strengthen sales capacity as
well as to establish an efficient operating system by centralizing and
streamlining of management through the merger between MARUWA QUARTZ Co., Ltd.
and MARUWA TFG Co., LTd. scheduled in January, 2006 despite a slow recovery of
demands from the semiconductor equipment market
As for Radio Frequency Products, we will keep up with a remarkably short
product life cycle of end products, making efforts to expand sales for new
applications according to demand trends. In strong production divisions such as
thin-film products, we aim to enhance manufacturing capacity and to increase
sales even further.
In EMC Components division, we are determined to promote sales activities for
new applications and of newly developed items to gain orders.
In addition, a large amount of loss is not expected in the second half of this
year.
As a result, forecast figures for the fiscal 2006 are unchanged from the
announced in August.
*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 17.8% of total sales for the midterm in September 2005.
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.
Consolidated Balance Sheets
JPY million JPY million JPY million USD thousand
As of As of As of As of
30th Sept. 30th Sept. 31st March 30th Sept.
2005 2004 Change % 2005 Change % 2005
ASSETS
Current assets:
Cash & deposits 7,403 6,154 20.3% 6,935 6.7% 67,344
Notes and accounts 5,719 4,931 16.0% 4,712 21.4% 52,021
receivable, trade
Inventories 2,723 2,855 -4.6% 2,554 6.6% 24,772
Other current assets 448 798 -43.9% 633 -29.2% 4,078
Allowance for doubtful (7) (4) -- (4) -- (67)
accounts
Total current assets 16,286 14,734 10.5% 14,830 9.8% 148,148
Property, plant &
equipment:
Building & structures 3,991 3,660 9.0% 3,703 7.8% 36,307
Machinery & equipments 3,917 3,963 -1.2% 3,829 2.3% 35,635
Land 3,246 2,920 11.2% 2,957 9.8% 29,523
Other 563 607 -7.2% 577 -2.4% 5,118
Construction in progress 134 191 -29.8% 242 -44.6% 1,221
Net property, plant & 11,851 11,341 4.5% 11,308 4.8% 107,805
equipment
Investment & other
assets:
Investment securities 809 638 26.8% 701 15.4% 7,356
Other 1,592 1,730 -8.0% 1,626 -2.1% 14,486
Total investments & other 2,401 2,368 1.4% 2,327 3.2% 21,841
assets
Total assets 30,538 28,443 7.4% 28,465 7.3% 277,794
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes & accounts 1,403 789 77.8% 797 76.0% 12,763
payable, trade
Accrued bonus 233 195 19.5% 195 19.5% 2,122
Other 1,959 1,461 34.1% 1,419 38.1% 17,816
Total current 3,595 2,445 47.0% 2,411 49.1% 32,702
liabilities
Long-term liabilities:
Long-term debt 261 409 -36.2% 335 -22.1% 2,376
Accrued pension & 322 828 -61.1% 858 -62.5% 2,931
severance costs
Other 1,088 651 67.1% 533 104.1% 9,896
Total long-term 1,671 1,888 -11.5% 1,726 -3.2% 15,203
liabilities
Total liabilities 5,266 4,333 21.5% 4,137 27.3% 47,904
Shareholders' equity:
Common stock, 6,683 6,683 0.0% 6,683 0.0% 60,797
authorized:
26,000,000 shares; issued &
outstanding:
11,050,000 shares in
2002
Additional paid-in 9,735 9,710 0.3% 9,710 0.3% 88,555
capital
Retained earnings 9,768 9,187 6.3% 9,577 2.0% 88,854
Net unrealized gains on 44 2 -- 16 175.0% 400
other securities
Foreign currency (680) (891) -- (1,077) -- (6,186)
translation adjustment
Advance on subscription 8 -- -- -- -- 72
of own shares
Treasury stock, at cost (286) (581) -- (581) -- (2,604)
Total shareholders' 25,272 24,110 4.8% 24,328 3.9% 229,889
equity
Total liabilities & 30,538 28,443 7.4% 28,465 7.3% 277,793
shareholders' equity
Consolidated Statements of Income
JPY million JPY million JPY million USD thousand
Six-month Six-month Six-month
period ended period ended Year ended period ended
30th Sept. 30th Sept. Change % 31st March 30th Sept.
2005 2004 2005 2005
Net sales 9,005 8,157 10.4% 15,529 81,914
Cost of sales 6,342 5,962 6.4% 11,187 57,688
Gross profit 2,663 2,195 21.3% 4,342 24,226
Selling, general & 1,945 1,507 29.1% 2,985 17,690
administrative
expenses
Operating income 718 688 4.4% 1,357 6,536
Other income
(expenses):
Interest & dividend 18 9 100.0% 22 164
income
Interest expenses (4) (6) -- (10) (38)
Foreign exchange gain 70 (22) -- 19 634
(loss), net
Other, net (255) (158) -- (208) (2,321)
Other income (171) (177) -- (177) (1,560)
(expenses), net
Income before income 547 511 7.0% 1,180 4,976
taxes
Income taxes:
Current 97 207 -53.1% 170 878
Deferred 168 (451) -- (215) 1,536
265 (244) -- (45) 2,414
Net income 282 755 -62.6% 1,225 2,561
Consolidated Statement of Cash Flows
JPY million JPY million JPY million USD thousand
Six-month Six-month Six-month
period ended period ended Year ended period ended
30th Sept. 30th Sept. Change % 31st March 30th Sept.
2005 2004 2005 2005
Operating activities:
Income before income 547 511 7.0% 1,180 4,976
taxes
Adjustments for:
Depreciation 756 715 5.7% 1,481 6,881
Amortization of (107) (78) -- (156) (971)
consolidated
adjustment account
Increase (decrease) in (4) 1 -- 1 (39)
allowance for doubtful
accounts
Decrease in accrued (856) (21) -- 108 (7,784)
pension & severance
costs
Loss on disposal/sales of 79 10 690.0% 122 720
property, plant &
equipment
Interest & dividend (18) (9) -- (22) (164)
income
Foreign exchange (gain) 56 (1) -- (29) 510
loss
(Increase) decrease in 903 (523) -- (331) 8,212
notes & accounts
receivable
(Increase) decrease in 82 779 -89.5% 1,089 748
inventories
Increase (decrease) in (1,416) (89) -- (86) (12,885)
accounts payable
Other 457 87 425.3% 105 4,156
Sub total 480 1,382 -65.3% 3,462 4,359
Interest & dividend 17 9 88.9% 22 159
income
received
Interest expenses paid (4) (6) -- (10) (38)
Income taxes paid (70) (99) -- (155) (636)
Net cash provided by 423 1,286 -67.1% 3,319 3,844
operating activities
Investment activities:
Payments for purchase of (466) (465) -- (1,236) (4,243)
property, plant &
equipment
Proceeds from sales of 8 16 -50.0% 18 74
property, plant &
equipment
Payments for disposal of (46) -- -- -- (422)
property, plant &
equipment
Payments for purchase of (59) (3) -- (59) (536)
investment securities
Proceeds from sales of 5 0 -- 1 41
investment securities
Acquisition of new 358 (497) (774) 3,257
consolidated subsidiary
Increase in intangible (10) (4) -- (6) (93)
fixed assets
Other 29 0 (6) 275
Net cash used in (181) (953) -- (2,062) (1,646)
investing
activities
Financing activities:
Payments of long-term (74) (74) -- (147) (671)
debt
Proceeds from sales of 311 1 -- 1
treasury stock
Advance on subscription 8 -- -- -- 72
Purchase of treasury 0 (279) -- (280) (2)
stock
Cash dividends paid (81) (76) -- (157) (740)
Net cash provided by 164 (428) -- (583) 1,489
(used in) financing
activities
Effect of exchange rate 60 47 27.7% 59 551
changes on cash & cash equivalents
Net increase 466 (48) -- 733 4,238
(decrease) in
cash & cash
equivalents
Cash and cash 6,935 6,202 11.8% 6,202 63,084
equivalents
at beginning of year
Cash and cash 7,401 6,154 20.3% 6,935 67,322
equivalents
at end of the period
Segment Information
(1) Consolidated business segment information
JPY million JPY million JPY million USD thousand
Six-month Six-month Six-month
period ended period ended Year ended period ended
30th Sept. 30th Sept. Change % 31st March 30th Sept.
2005 2004 2005 2005
Ceramic Components:
Net sales:
Unaffiliated customers 8,299 -- -- -- 75,494
Intersegment -- -- -- -- --
Total 8,299 -- -- -- 75,494
Operating cost 7,101 -- -- -- 64,599
Operating income 1,198 -- -- -- 10,895
(loss)
Lighting Equipment:
Net sales:
Unaffiliated customers 706 -- -- -- 6,420
Intersegment -- -- -- -- --
Total 706 -- -- -- 6,420
Operating cost 950 -- -- -- 8,640
Operating income (244) -- -- -- (2,220)
(loss)
Total:
Net sales:
Unaffiliated customers 9,005 -- -- -- 81,914
Intersegment -- -- -- -- --
Total 9,005 -- -- -- 81,914
Operating cost 8,051 -- -- -- 73,239
Operating income 954 -- -- -- 8,675
(loss)
Elimination:
Net sales:
Total -- -- -- -- --
Operating cost 236 -- -- -- 2,139
Operating income (236) -- -- -- (2,139)
(loss)
Consolidated:
Net sales:
Total 9,005 -- -- -- 81,914
Operating cost 8,287 -- -- -- 75,378
Operating income 718 -- -- -- 6,536
(loss)
NOTE ) Segment breakdown is not applicable for the previous interim and final
results.
(2) Consolidated geographic segment information
JPY million JPY million JPY million USD thousand
Six-month Six-month Six-month
period ended period ended Year ended period ended
30th Sept. 30th Sept. Change % 31st March 30th Sept.
2005 2004 2005 2005
JAPAN
Net sales:
Unaffiliated 6,991 5,948 17.5% 11,641 63,597
customers
Intersegment 355 470 -24.5% 805 3,234
Total 7,346 6,418 14.5% 12,446 66,830
Operating cost 6,685 5,845 14.4% 11,131 60,824
Operating income 661 573 15.4% 1,315 6,007
(loss)
ASIA
Net sales:
Unaffiliated 1,767 1,951 -9.4% 3,384 16,073
customers
Intersegment 621 557 11.5% 1,068 5,652
Total 2,388 2,508 -4.8% 4,452 21,725
Operating cost 1,987 2,066 -3.8% 3,725 18,075
Operating income 401 442 -9.3% 727 3,650
(loss)
EUROPE and AMERICA
Net sales:
Unaffiliated 247 258 -4.3% 504 2,244
customers
Intersegment 1 1 0.0% 2 8
Total 248 259 -4.2% 506 2,252
Operating cost 284 297 -4.4% 584 2,578
Operating income (36) (38) -- (78) (327)
(loss)
TOTAL
Net sales:
Unaffiliated 9,005 8,157 10.4% 15,529 81,914
customers
Intersegment 977 1,028 -5.0% 1,875 8,893
Total 9,982 9,185 8.7% 17,404 90,807
Operating cost 8,956 8,208 9.1% 15,440 81,477
Operating income 1,026 977 5.0% 1,964 9,330
(loss)
ELIMINATION
Net sales:
Total 977 1,028 -5.0% 1,875 8,893
Operating cost 669 739 -9.5% 1,268 6,099
Operating income 308 289 6.6% 607 2,794
(loss)
CONSOLIDATED
Net sales:
Total 9,005 8,157 10.4% 15,529 81,914
Operating cost 8,287 7,469 11.0% 14,172 75,378
Operating income 718 688 4.4% 1,357 6,536
(loss)
(3) Net overseas sales by customer's geographic
location
JPY million JPY million JPY million USD thousand
Six-month Six-month Six-month
period ended period ended Year ended period ended
30th Sept. 30th Sept. Change % 31st March 30th Sept.
2005 2004 2005 2005
Overseas sales:
Asia 3,055 3,117 -2.0% 5,677 27,795
Europe 200 187 7.0% 356 1,818
Others 217 229 -5.2% 430 1,970
Total 3,472 3,533 -1.7% 6,463 31,583
Consolidated net 9,005 8,157 10.4% 15,529 81,914
sales
% to consolidated net
sales:
Asia 33.9% 38.2% 36.6%
Europe 2.2% 2.3% 2.3%
Others 2.5% 2.8% 2.7%
Total 38.6% 43.3% 41.6%
*Overseas sales indicate net sales of the Company and its subsidiaries to
customers outside Japan.
*Countries are divided in
geographical vicinity.
*Main countries included in each area are indicated
below;
Asia - Malaysia, Taiwan, Korea, Hong Kong,
Shanghai
Europe - Germany, England
Others - United
States
END.
This information is provided by RNS
The company news service from the London Stock Exchange ZGMMMLGVGKZG
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