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Kyocera 6-K 2005

Documents found in this filing:

  1. 6-K
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Form 6-K
Table of Contents

FORM 6-K

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

 

For the month of October 2005

 

Commission File Number: 1-07952

 

KYOCERA CORPORATION

 

6 Takeda Tobadono-cho, Fushimi-ku,

Kyoto 612-8501, Japan

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F      X            Form 40-F

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Registration S-T Rule 101(b)(1):    

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Registration S-T Rule 101(b)(7):    

 

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes                      No      X    

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b); 82-


Table of Contents

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

 

KYOCERA CORPORATION

/s/ AKIHIKO TOYOTANI


Akihiko Toyotani

General Manager of

Finance Division

 

Date: October 27, 2005


Table of Contents

Information furnished on this form:

 

EXHIBITS

 

Exhibit
Number


   
1.   Consolidated Financial Results for the six Months Ended September 30, 2005
2.   Notice regarding Interim Dividend relating to the Fiscal Period Ending March 31, 2006


Table of Contents
LOGO  

October 27, 2005

    KYOCERA CORPORATION

 

Consolidated Financial Highlights

Results for the Six Months Ended September 30, 2005

 

     (Yen in millions, except per share amounts and exchange rates)

 
     Six Months Ended September 30,

  

Increase
(Decrease)

(%)


 
     2005

   2004

  

Net sales

   545,258    600,562    (9.2 )

Profit from operations

   35,349    62,092    (43.1 )

Income before income taxes

   46,135    67,253    (31.4 )

Net income

   24,214    42,549    (43.1 )

Average exchange rates :

                

US$

   109    110    —    

Euro

   136    133    —    

Earnings per share :

                

Net income

                

Basic

   129.16    226.94    —    

Diluted

   129.15    226.85    —    

Capital expenditures

   52,021    28,631    81.7  

Depreciation

   28,082    27,296    2.9  

R&D expenses

   29,328    27,432    6.9  

Total assets

   1,862,928    1,785,505    —    

Stockholders’ equity

   1,241,695    1,177,648    —    

Sales of products manufactured outside Japan to net sales (%)

   29.5    33.4    —    

 

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Table of Contents

Consolidated Results of Kyocera Corporation and its Subsidiaries

for the Six Months Ended September 30, 2005

 

The consolidated financial statements are in conformity with accounting principles generally accepted in the United States of America.

 

Date of the board of directors’ meeting for the interim consolidated results : October 27, 2005

 

1. Results for the six months ended September 30, 2005

 

(1) Consolidated results of operations :

 

     Japanese yen

     Six months ended September 30,

  Year ended March 31,

     2005

  2004

  2005

Net sales

   ¥ 545,258 million   ¥ 600,562 million   ¥ 1,180,655 million

% change from the previous period

     (9.2)%     15.9%      

Profit from operations

     35,349 million     62,092 million     100,968 million

% change from the previous period

     (43.1)%     175.3%      

Income before income taxes

     46,135 million     67,253 million     107,530 million

% change from the previous period

     (31.4)%     167.7%      

Net income

     24,214 million     42,549 million     45,908 million

% change from the previous period

     (43.1)%     170.1%      

Earnings per share :

                  

Basic

   ¥ 129.16   ¥ 226.94   ¥ 244.86

Diluted

     129.15     226.85     244.81

 

Notes :

 

1. Equity in (losses) earnings of affiliates and unconsolidated subsidiaries :

 

Six months ended September 30, 2005

  ¥     (236) million

Six months ended September 30, 2004

  ¥        582 million

Year ended March 31, 2005

  ¥  (1,678) million

 

2. Average number of shares outstanding during the period :

 

Six months ended September 30, 2005

  187,478,104 shares

Six months ended September 30, 2004

  187,492,144 shares

Year ended March 31, 2005

  187,488,658 shares

 

3. Change in accounting policies :

  None

 

 

(2) Consolidated financial condition :

 

     Japanese yen

     September 30,

  March 31,

     2005

  2004

  2005

Total assets

   ¥ 1,862,928 million   ¥ 1,785,505 million   ¥ 1,745,519 million

Stockholders’ equity

     1,241,695 million     1,177,648 million     1,174,851 million

Stockholders’ equity to total assets

     66.6%     66.0%     67.3%

Stockholders’ equity per share

     ¥6,623.25     ¥6,281.06     ¥6,266.50

 

Notes : Total number of shares outstanding as of :

 

    September 30, 2005

  187,475,323 shares

    September 30, 2004

  187,491,883 shares

    March 31, 2005

  187,481,084 shares

 

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Table of Contents
(3) Consolidated cash flows :

 

     Japanese yen

     Six months ended September 30,

   Year ended March 31,

     2005

   2004

   2005

Cash flows from operating activities

   ¥ 71,772 million    ¥ 88,891 million    ¥ 145,523 million

Cash flows from investing activities

     (123,091) million      (144,177) million      (132,494) million

Cash flows from financing activities

     (9,657) million      (53,582) million      (67,344) million

Cash and cash equivalents at end of period

     253,885 million      256,965 million      310,592 million

 

 

(4) Scope of consolidation and application of the equity method :

 

Number of consolidated subsidiaries : 167

 

Number of subsidiaries accounted for by the equity method : 2

 

Number of affiliates accounted for by the equity method : 12

 

 

(5) Changes in scope of consolidation and application of the equity method :

 

     Consolidation

   Equity method

Increase

   2    0

Decrease

   0    2

 

 

2. Consolidated financial forecast for the year ending March 31, 2006 :

 

     Year ending March 31, 2006

Net sales

   ¥ 1,200,000 million

Income before income taxes

   ¥ 125,000 million

Net income

   ¥ 73,000 million

 

Note:

 

Forecast of earnings per share :

  389.34

 

Net income per share amounts is computed based on Statement of Financial Accounting Standards (SFAS) No.128.

Forecast of earnings per share is computed based on the diluted average number of shares outstanding during the six months that ended September 30, 2005.

 

With regard to forecasts set forth above, please refer to the accompanying “Forward Looking Statements” on page 21.

 

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Table of Contents

KYOCERA GROUP

 

Kyocera group consists of Kyocera Corporation, 169 subsidiaries and 12 affiliates.

(Chart of the group companies)

LOGO

 

Note: Others include affiliates that are accounted for by the equity method.

 

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Table of Contents

Management Policies

 

1. Management Goal and Strategies

 

Kyocera Corporation and its consolidated subsidiaries (Kyocera) strive to be a “creative company that continues to grow in 21st century.” To achieve this goal, Kyocera promotes “high-value-added diversification” in accordance with the following criteria and management system.

 

1) Criteria

 

“Value added business” is defined as a business generating pre-tax profit ratio of 15% or more. Whether or not to remain in a field is based on a judgment of the existence of an evident need in the relevant markets and the possibility of serving that market need from the current or future attainable technologies.

 

2) Management System

 

Kyocera’s unique management system allows it to make accurate and swift assessments of individual business conditions to facilitate timely decision-making and maximize synergies among businesses.

 

By promoting the development of business diversification, Kyocera aims to drive stable and continuous corporate growth in a rapidly changing business environment.

 

The most important management resource for successful business diversification is technological prowess. Based on this conviction, Kyocera strives to expand and diversify applications through advancement and specialization of its technical expertise, thereby promptly responding to the variety of market needs brought about by rapid changes in society. Kyocera also views sales competency and brand awareness as vital management resources for business expansion, and constantly works to strengthen these elements.

 

Further, Kyocera will maintain a sound financial position to enable to pursue new business development and market creation.

 

 

2. Specific Policies

 

1) Efficient Resource Management

 

Kyocera will concentrate management resources into “value added” fields and its candidates. With the objective of outstripping the competition and becoming leader in each business area, Kyocera will create new markets and technologies through the integration of Group resources, including technical and sales competencies, while utilizing external management resources when it is necessary.

 

Authorization of decision-making on planning, execution and control of the business is delegated to each Corporate Business Division and Business Division to act as an independent company, in order to speed up management decision-making processes.

 

A prime emphasis is placed on cash flows, in particular, boosting returns on capital investment, improving inventory control and shortening lead-times.

 

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Table of Contents

2) Emphasizing Consolidated Group Results

 

Kyocera will increase its profitability of each operating segment on a consolidated basis by strengthening ties between Kyocera Group companies and each Corporate Business Group of Kyocera Corporation, and by maximizing synergies. Kyocera will also employ a global strategy in each business and optimize R&D, production and sales structures.

 

3) Focusing on Stockholder Value

 

In order to increase stockholder value (market capitalization), Kyocera seeks to generate a higher return on investment to maximize future profits and cash flows. A stock option plan will be extended to senior managers within Kyocera to further increase value by ensuring their interests in agreement with stockholders and investors.

 

 

3. Basic Profit Distribution Policy

 

Historically, Kyocera has set dividend amounts with the goal of maintaining stable payment of dividends. In the interest of shareholders, however, Kyocera has decided, commencing with the year end dividend relating to the fiscal year ended March 31, 2005 (fiscal 2005), to change this policy to establish a greater linkage between dividend amounts and the Group’s performance. In particular, Kyocera will determine dividend amounts based on an overall assessment that will take into consideration capital expenditures necessary for the further development of Kyocera from a medium to long-term perspective, while also aiming for a payout ratio of approximately 20 to 25% on a consolidated basis.

 

Kyocera’s goal of constantly enhancing profitability will ensure greater returns for stockholders to meet their expectations. In order to be a “creative company that continues to grow in the 21st century”, Kyocera will aggressively strive to cultivate new businesses and markets and to develop new technologies, acquiring external management resources when necessary. Kyocera will maintain a healthy and stable financial position and therefore, internal reserves shall be utilized for this purpose.

 

 

4. Challenges

 

Kyocera aims to be a “creative company that continues to grow in the 21st century” by promoting “high-value-added diversification” as its core management strategy. To achieve this goal, Kyocera seeks to make its component and equipment businesses highly profitable, and has set the target of a pre-tax profit ratio of over 15% in the medium to long term.

 

In the components business, Kyocera will conduct strategic investments aimed at boosting profitability through a strengthened business basis. Specifically, investments will be aggressively channeled into businesses focused on large ceramic parts for LCD fabrication equipment, ceramic packages, organic packages, solar energy products, cutting tools and organic EL displays.

 

In the equipment business, Kyocera seeks to swiftly raise profitability in the two business areas of telecommunications equipment and optical equipment. In the telecommunications equipment business, Kyocera completed structural reforms that saw it outsource the manufacture of mobile phone handsets of a U.S. subsidiary in the first half in order to considerably transform cost structure and reduce manufacturing costs. In the optical equipment business, Kyocera proceeded its structural reforms and began concentrating on the optical components business, and in particular, on camera modules for mobile phones. From the second half onward, we will strive to expand sales and profits by maximizing the positive effects of structural reforms implemented in recent times.

 

 

5. Corporate Governance Guidelines and Policy Implementation

 

1) Basic Guidelines concerning Corporate Governance

 

Kyocera’s corporate governance is designed to ensure extremely sound, transparent and effective management and thereby best protect the interests of stockholders. No discussion of corporate governance at Kyocera would be complete without first looking at the “Kyocera Philosophy,” which provides both the moral and intellectual backbone for Kyocera’s management style.

 

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Table of Contents

The “Kyocera Philosophy” was created by Kyocera’s founder, as he codified his views on the subject of business management. He was convinced that one of the most important points for the management of the company was that the “Kyocera Philosophy” should apply to the actions of all who work for the enterprise—directors, managers and employees alike. The “Kyocera Philosophy” embodies many principles, covering subjects ranging from the fundamentals of business management to the specifics of day-to-day operations. Its principles demand impartial, fair and totally transparent management, while emphasizing the importance of maximizing profits by eliminating waste, minimizing expenses and maximizing revenues. The “Kyocera Philosophy” demands particularly high standards of ethical behavior from all leaders within the company. Managers are never allowed to put their personal interests ahead of the company’s interests. From the beginning, Kyocera has been guided by principles that have naturally worked toward achieving the corporate governance goals mentioned above.

 

Kyocera’s management believes that the standards and criteria applied by all members of the enterprise hold the key to achieving the aims of corporate governance. At its core, the “Kyocera Philosophy” exhorts workers to use the criterion of what they judge “the right thing to do as human being” as the basis for guiding all actions and decisions. Because of their universal nature, the principles of the “Kyocera Philosophy” are as applicable to Kyocera’s worldwide operations as they are to any other business.

 

During fiscal 2005, Kyocera managers and employees in Japan attended an aggregated total of 49,998 training and education sessions designed to promote deeper understanding of the “Kyocera Philosophy.” The “Kyocera Philosophy” also formed an important part of our orientation efforts for new recruits and on-the-job training programs. A total of 1,011 managers at Kyocera subsidiaries outside Japan received training along these lines in fiscal 2005.

 

Kyocera emphasizes a so-called “amoeba” management system in which operations are managed at the level of small groups. This system is believed to reflect the “Kyocera Philosophy” best, and is regarded as the source of Kyocera’s strength in creating highly motivated management by getting all employees involved in the daily operation of the company. Explicit delegation of responsibilities to small groups has the added advantage of promoting transparency in all details of management, while creating a system that promotes efficiency. In Kyocera’s experience, these processes maintain sound business management practices, which in turn translate into greater benefits for all stakeholders.

 

To make these principles work in practice, a system of checks and balances is also crucial. Kyocera has adopted the corporate governance model outlined in the Commercial Code of Japan that is based on the use of corporate auditors. In this system, the board of corporate auditors oversees the management decisions of the board of directors and policy execution by executive officers. In addition, to ensure a systematic and sustained approach to compliance management throughout Kyocera, Kyocera established a Risk Management Department.

 

By respecting the “Kyocera Philosophy” as a corporate culture and completing internal management control system apart from management aspect, Kyocera aims to achieve solid corporate governance as our stockholders expect.

 

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Table of Contents

2) Corporate Governance Policy Implementation

 

a) Corporate Governance System

 

The Kyocera Management Research Institute was established so that the principles and values contained in the “Kyocera Philosophy” could be shared and further understood among Kyocera worldwide. The “Philosophy education programs” for managers and executives take place in the training center in the Institute constantly and on a large scale.

 

Kyocera introduced an executive officer system in June 2003 to increase management efficiency. At the same time, the number of members on the Board of Directors was reduced from 26 to 13 thereby promoting more effective discussions on important issues related to management and speeding up decision-making. Kyocera also employs a corporate auditor system. Of the five corporate auditors, three are appointed externally.

 

Kyocera makes routine audits to ensure that business operations throughout the Group comply with all pertinent regulations and internal rules. An Internal Audit Division has been set up to report the findings of the audit to all directors and corporate auditors. Furthermore, as a company listed on the New York Stock Exchange (NYSE), Kyocera is promoting the establishment of an internal control system in accordance with Section 404 of the U.S. corporate reform law (“Sarbanes-Oxley Act), which will be applied from fiscal 2007. In May 2005, Kyocera set up Global Audit Division which deals with the requirements of the Sarbanes-Oxley Act of 2002 in addition to Internal Audit Division. Kyocera will develop its internal control system which underpins the foundations of corporate governance and strengthen the internal management compliances of Kyocera.

 

Kyocera has also created a risk management system based on the following key objectives: to predict potential risks in corporate activities as a preventative measure; to ensure risk contingencies that minimize physical loss (human, material and financial) and a decline in brand image if the need arises; and, to help realize philosophy and policy by making management more stable and maintaining and enhancing societal trust. Kyocera’s risk management system connects a vertical structure of risk managers in each business division, led by the Risk Management Department at Headquarters, and a horizontal structure of risk management departments in each business location. It also enhances compliance management by promoting the appropriate observance of laws and regulations, high moral standards in the workplace and the implementation of audits, including legal audits. As part of the system, an Emergency Management Department has been established as a complement to the crisis management manual to ensure appropriate actions are taken to limit damage in times of crises.

 

Kyocera conducts corporate auditors’ meetings in order to determine auditing standard, auditing policies, auditing plan and to delineate the work responsibilities of corporate auditors. In addition, auditors attend monthly Board of Directors’ meetings as well as other important meetings, giving them the opportunity to listen firsthand to the Business Execution Department and gain an understanding of the progress of business execution. Through this, they can effectively review the extent to which a director’s duties are being fulfilled. Furthermore, each auditor periodically receives reports from the Internal Audit Division.

 

Kyocera has contracted Chuo Aoyama Audit Corporation to act as the auditor responsible for its audits, until now, under Japanese Commercial Code and Stock Exchange Act. The audit system in fiscal 2006 is as follows.

 

Names of the certified public accountants to audit and terms of auditing until fiscal 2006

Engagement partners:

   Yukihiro Matsunaga    11years
     Minamoto Nakamura    4years
     Keiichiro Kagi    1 year

 

Members to assist auditing

Certified public accountants:

   7

Junior accountants:

   9

Others:

   6

 

b) Outline of Vested Interest with External Auditors

 

Of Kyocera’s three external auditors, one is Kyocera’s corporate lawyer.

 

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Table of Contents

LOGO

 

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Table of Contents

Business Results and Financial Condition

 

1. Business Results for the Six Months Ended September 30, 2005

 

(1) Economic Situation and Business Environment

 

The Japanese economy showed steady signs of recovery during the six months ended September 30, 2005 (the first half), especially in terms of private sector demand, spurred primarily by increasing private capital investment and moderate revitalization in personal spending due to an increase in employees’ income. Overseas, the economy lacked strength in Europe, while the U.S. economy continued to expand through personal consumption and healthy growth was manifest in the Asian economy.

 

In the electronics industry, which is a key market for Kyocera, despite a moderate rebound in production activities, which had slowed since last summer, the decreasing market price for digital consumer equipment caused component prices to fall in the components business. As a result, the business situation continues to be tough.

 

(2) Operating Highlights

 

  1) In March 2005, Kyocera Corporation received a notice of tax assessment based on transfer pricing adjustments from the Osaka Regional Tax Bureau, and filed a complaint against the tax assessment with the authority in May 2005.

 

  2) In May 2005, Kyocera decided to outsource the manufacture of mobile phone handsets of Kyocera Wireless Corp. (KWC), a U.S. subsidiary, and to sell KWC’s manufacturing equipment and inventories to Flextronics International Ltd. (Flextronics), a leading provider of electronics manufacturing services. The production transfer was completed in September 2005. Through this outsourcing, KWC intends to reduce its manufacturing costs significantly and also to quickly enhance its business operation through specializing in research, development, sales and marketing of mobile phone handsets.

 

  3) Since June 2005, Kyocera implemented a new executive officer system to enhance Kyocera Group’s management organization under a global consolidation system, and accordingly, appointed a Chief Executive Officer (CEO), a Chief Financial Officer (CFO) and a Chief Operating Officer (COO). The CEO will take responsibility for mid and long-term Group management policy and strategy formulation and execution, while the CFO will be responsible for constructing and executing a financial strategy for the Group that ensures the effective implementation of these management strategies. The COO will be in charge of daily management issues and business execution to achieve yearly management plans. At the same time, Kyocera also introduced a new corporate business group system, headed by newly appointed executive officers. These business group leaders will be responsible for each product line on a global and consolidated basis.

 

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  4) In June 2005, Kyocera entered into a purchase agreement with IBM Japan, Ltd. to purchase the land, building and other assets of the Yasu Office (Yasu City, Shiga Prefecture) owned by IBM Japan, Ltd. The transfer took place in August. Going forward, Kyocera intends to make the most effective use of the acquired assets to provide meaningful enhancement to the future business of Kyocera Group.

 

  5) Kyocera determined to accept a tender bid for shares of Taito Corporation (Taito), an equity-method affiliate engaged in the amusement business, by Square Enix Co., Ltd. and sold its entire holding of shares of Taito (133,260 shares, approximately 36.02% of outstanding shares) in September, 2005. The profit on sale of shares of Taito was ¥6,931 million.

 

(3) Consolidated Financial Results

 

(Yen in millions, except per share amounts and exchange rates)  
     Six months ended September 30,

   Increase
(Decrease)
(%)


 
     2005

   2004

  

Net sales

   545,258    600,562    (9.2 )

Profit from operations

   35,349    62,092    (43.1 )

Income before income taxes

   46,135    67,253    (31.4 )

Net income

   24,214    42,549    (43.1 )

Diluted earnings per share

   129.15    226.85    —    

Average US$ exchange rate

   109    110    —    

Average Euro exchange rate

   136    133    —    

 

Consolidated net sales and profits in the first half decreased compared with the six months ended September 30, 2004 (the previous first half).

 

Although Applied Ceramic Products Group, which includes solar energy products and cutting tools, posted an increase in sales and profits compared with the previous first half due to burgeoning demand, component prices dropped significantly while component demand for electronic equipment did not recovered rapidly. Consequently, overall sales and profits in the components business fell short of levels recorded in the previous first half. Sales and profits in the equipment business declined compared with the previous first half mainly because KWC was in the process of executing structural reforms, in Telecommunications Equipment Group.

 

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Table of Contents
(4) Consolidated Sales and Operating Profits by Reporting Segment

 

Consolidated sales and operating profit result by reporting segment is as follows,

 

(Yen in millions)  
     Six months ended September 30,

    Increase
(Decrease)
(%)


 
     2005

    2004

   

Net sales

   545,258     600,562     (9.2 )

Total components business

   277,937     291,849     (4.8 )

Fine Ceramic Parts Group

   33,258     38,920     (14.5 )

Semiconductor Parts Group

   63,544     68,148     (6.8 )

Applied Ceramic Products Group

   55,752     44,991     23.9  

Electronic Device Group

   125,383     139,790     (10.3 )

Total equipment business

   217,773     265,873     (18.1 )

Telecommunications Equipment Group

   91,084     132,357     (31.2 )

Information Equipment Group

   118,433     116,800     1.4  

Optical Equipment Group

   8,256     16,716     (50.6 )

Others

   59,034     56,193     5.1  

Adjustments and eliminations

   (9,486 )   (13,353 )   —    
    

 

 

Operating profit

   37,108     59,948     (38.1 )

Total components business

   32,564     46,640     (30.2 )

Fine Ceramic Parts Group

   4,805     6,224     (22.8 )

Semiconductor Parts Group

   7,251     10,612     (31.7 )

Applied Ceramic Products Group

   9,337     7,563     23.5  

Electronic Device Group

   11,171     22,241     (49.8 )

Total equipment business

   (160 )   7,148     —    

Telecommunications Equipment Group

   (9,355 )   (4,899 )   —    

Information Equipment Group

   13,244     19,404     (31.7 )

Optical Equipment Group

   (4,049 )   (7,357 )   —    

Others

   4,704     6,160     (23.6 )
    

 

 

Corporate

   9,170     6,683     37.2  

Equity in earnings of affiliates and unconsolidated subsidiaries

   (236 )   582     —    

Adjustments and eliminations

   93     40     132.5  

Income before income taxes

   46,135     67,253     (31.4 )

 

Notes:

 

Kyocera had previously classified its operations into four reporting segments: “Fine Ceramics Group,” “Electronic Device Group,” “Equipment Group” and “Others.” Kyocera changed its segmentation to make clarify the nature of each operations and to make its management structure more efficiently. Kyocera currently has the following eight reporting segments: “Fine Ceramic Parts Group,” “Semiconductor Parts Group,” “Applied Ceramic Products Group,” “Electronic Device Group,” “Telecommunications Equipment Group,” “Information Equipment Group,” “Optical Equipment Group” and “Others.” Consolidated results for the six months ended September 30, 2004 have been reclassified accordingly.

 

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Table of Contents

1) Fine Ceramic Parts Group

 

There was a drop in demand in the key product area of ceramic parts for semiconductor fabrication equipment due to delayed recovery of demand. In addition, sapphire products for LCD projectors were negatively impacted by a decline in unit prices caused by intensifying market competition. As a result, sales and operating profit in this segment decreased compared with the previous first half.

 

2) Semiconductor Parts Group

 

Slower recovery of demand for components for digital consumer equipment led to lower revenue from the ceramic package business, and consequently, sales and operating profit in this segment decreased compared with the previous first half. Nonetheless, in the organic package business, demand of packages and substrates for servers and digital consumer equipment grew steadily.

 

3) Applied Ceramic Products Group

 

Sales and profits in this segment increased compared with the previous first half. Sales of solar energy products increased significantly due to rising demand, particularly in Europe. Meanwhile, sales of cutting tools also grew due to healthy production activity in the automobile industry. In the medical materials business, Japan Medical Materials Corporation, established in fiscal 2005, has fully contributed to sales in this segment since the start of fiscal 2006.

 

4) Electronic Device Group

 

Despite steady growth in sales of thermal printheads, sales of other core products such as crystal-related components, ceramic capacitors and connectors were severely impacted by falling component prices. As a result, sales and profits in this segment decreased compared with the previous first half, when performance was strong.

 

5) Telecommunications Equipment Group

 

Sales and profits in this segment decreased compared with the previous first half. Although sales of mobile phones in the domestic market increased due to the launch of new models, revenues were down overseas as KWC was in the process of executing structural reforms. In the PHS-related business, sales of PHS handsets and base stations for the Chinese market decreased. The introduction of flat rate voice charges in Japan, however, has driven steady growth in subscriber numbers, and as a result, sales of PHS handsets and base stations in the domestic market increased.

 

6) Information Equipment Group

 

Sales in this segment increased compared with the previous first half as Kyocera enjoyed steady growth in sales of page printers and digital multifunctional products in Europe and the United States. Operating profit declined, however, due to the impact of a decline in unit prices and increasing development costs for new products, notably color models scheduled for release from the second half of the year ending March 31, 2006 (the second half).

 

7) Optical Equipment Group

 

Sales in this segment decreased compared with the previous first half owing to the downsizing of the camera equipment business. With regard to operating profit, loss from the camera equipment business was kept to a minimum owing to the positive effects of structural reforms.

 

8) Others

 

Kyocera Communication Systems Co., Ltd. (KCCS) posted solid growth from its telecommunications engineering business. And sales of one of KCCS’s subsidiaries which was newly consolidated into Kyocera Group during the fiscal 2005, were included from the start of fiscal 2006. Consequently, sales in this segment increased. Operating profit in this segment decreased compared with the previous first half due mainly to the impact of a decline in sales and profits at Kyocera Chemical Corporation.

 

- 13 -


Table of Contents

(5) Consolidated Orders and Production by Reporting Segment

 

(Yen in millions)  
     Six months ended September 30,

    Increase
(Decrease)
(%)


 
     2005

    2004

   

Orders

   579,826     614,813     (5.7 )

Total components business

   291,546     298,416     (2.3 )

Fine Ceramic Parts Group

   33,566     40,696     (17.5 )

Semiconductor Parts Group

   68,971     67,274     2.5  

Applied Ceramic Products Group

   58,241     46,956     24.0  

Electronic Device Group

   130,768     143,490     (8.9 )

Total equipment business

   236,704     271,453     (12.8 )

Telecommunications Equipment Group

   110,467     137,457     (19.6 )

Information Equipment Group

   118,275     116,560     1.5  

Optical Equipment Group

   7,962     17,436     (54.3 )

Others

   61,930     58,267     6.3  

Adjustments and eliminations

   (10,354 )   (13,323 )   —    
    

 

 

Production

   536,466     617,958     (13.2 )

Total components business

   276,545     302,222     (8.5 )

Fine Ceramic Parts Group

   32,963     39,694     (17.0 )

Semiconductor Parts Group

   64,055     69,860     (8.3 )

Applied Ceramic Products Group

   55,164     46,165     19.5  

Electronic Device Group

   124,363     146,503     (15.1 )

Total equipment business

   218,143     277,007     (21.3 )

Telecommunications Equipment Group

   93,910     137,319     (31.6 )

Information Equipment Group

   116,617     124,522     (6.3 )

Optical Equipment Group

   7,616     15,166     (49.8 )

Others

   41,778     38,729     7.9  
    

 

 

 

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Table of Contents

(6) Consolidated Sales by Geographic Area

 

               (Yen in millions)  
     Six months ended September 30,

  

Increase
(Decrease)

(%)


 
           2005      

         2004      

  

Sales

   545,258    600,562    (9.2 )

Japan

   220,191    227,772    (3.3 )

USA

   112,642    130,505    (13.7 )

Asia

   91,643    116,357    (21.2 )

Europe

   87,848    83,906    4.7  

Others

   32,934    42,022    (21.6 )

 

1) Japan

 

Sales in Japan decreased compared with the previous first half, because sales in components business for digital consumer equipment stayed low. In addition, sales of Optical Equipment Group decreased due to the reduction of camera equipment business. On the other hand, sales of telecommunications engineering business and solar energy business increased.

 

2) USA

 

Although sales of Information Equipment Group increased, sales of mobile handsets declined. Consequently, the sales decreased compared to the previous first half.

 

3) Asia

 

Sales in components business and Telecommunications Equipment Group decreased.

 

4) Europe

 

Sales increased compared with the previous first half because demand for solar energy products was strong.

 

5) Others

 

Sales decreased compared with the previous first half due mainly to decreased sales of mobile handsets in Latin America.

 

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Table of Contents

2. Cash Flow

 

Cash and cash equivalent at September 30, 2005 decreased by ¥56,707 million to ¥253,885 million compared with at March 31, 2005.

 

    

(Yen in millions)

 

 
     Six Months Ended September 30,

 
     2005

    2004

 

Cash flow from operating activities

   71,772     88,891  

Cash flow from investing activities

   (123,091 )   (144,177 )

Cash flow from financing activities

   (9,657 )   (53,582 )

Effect of exchange rate changes on cash and cash equivalent

   4,269     4,701  

Net decrease in cash and cash equivalent

   (56,707 )   (104,167 )

Cash and cash equivalent at beginning of period

   310,592     361,132  

Cash and cash equivalent at end of period

   253,885     256,965  

 

(1) Cash flow from operating activities

 

Net cash provided by operating activities for the first half decreased by ¥17,119 million to ¥71,772 million from the previous first half of ¥88,891 million. This was due mainly to a decrease in net income by ¥18,335 million to ¥24,214 million compared with the previous first half.

 

(2) Cash flow from investing activities

 

Net cash used in investing activities in the first half decreased by ¥21,086 million to ¥123,091 million from the previous first half of ¥144,177 million. This was due mainly to increases in proceeds from sales of investment securities and an investment in an affiliate, which exceeded increases in payments for purchases of investment securities and property, plant, equipment and intangible assets.

 

(3) Cash flow from financing activities

 

Net cash used in financing activities for the first half decreased by ¥43,925 million to ¥9,657 million from the previous first half of ¥53,582 million. This was due mainly to a significant decrease in payments of long-term debt.

 

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Table of Contents

3. Capital Expenditures and Depreciation

 

(Yen in millions)
     Six Months Ended September 30,

    Increase
(Decrease)
(%)


     2005

    2004

   
     Amount

   % to net sales

    Amount

   % to net sales

   

Capital expenditures

   52,021    9.5 %   28,631    4.8 %   81.7

Depreciation

   28,082    5.2 %   27,296    4.5 %   2.9

 

In this first half, Kyocera made aggressive capital expenditures including the establishment of new production bases and the expansion of production capability in order to expand organic packages, solar energy products and so on in the future. Due to these factors, capital expenditures for the first half increased significantly compared with the previous first half.

 

 

4. Non-Consolidated Financial Results

 

(Yen in millions)  
     Six Months Ended September 30,

    

Increase

(Decrease)
(%)


 
     2005

     2004

    

Net sales

   220,901      250,463      (11.8 )

Profit from operations

   12,383      21,297      (41.9 )

Recurring profit

   26,903      34,937      (23.0 )

Net income

   31,865      20,512      55.3  

 

 

5. Business Risk

 

Please see “Forward-Looking Statements” on page 21 for details of business risk.

 

- 17 -


Table of Contents

Business Outlook

 

1. Consolidated Forecasts for the Year Ending March 31, 2006 (Announced on October 27, 2005)

 

Kyocera has made the following revisions to forecasts for the fiscal year ending March 31, 2006 (April 1, 2005 to March 31, 2006), which was announced on April 27, 2005.

 

(Yen in millions, except per share amounts and exchange rates)

 

     Forecast for FY2006 announced on

   Result for
FY2005


  

Increase

(Decrease) to
the result for
FY2005

(%)


     October 27, 2005

   April 27, 2005

     

Net sales

   1,200,000    1,240,000    1,180,655    1.6

Profit from operations

   105,000    124,000    100,968    4.0

Income before income taxes

   125,000    135,000    107,530    16.2

Net income

   73,000    81,000    45,908    59.0

Diluted earnings per share

   389.34    432.00    244.81    —  

Average US$ exchange rate

   108    106    108    —  

Average Euro exchange rate

   132    129    135    —  

 

Notes:

 

1. The above forecast of earnings per share announced on April 27, 2005 is re-computed in July 2005 based on the diluted average number of shares outstanding during the three months ended June 30, 2005.
2. The above forecasts of exchange rates announced on April 27, 2005 are revised in July 2005, however, the forecasts for the sales and profits were not changed at that time because the impact of the change of the exchange rates were so slight.

 

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Table of Contents

< Consolidated Forecasts by Reporting Segments >

 

Consolidated forecasts by reporting segments are revised, accordingly, as follows,

 

(Yen in millions)  
     Forecast for FY2006 announced on

    Result for
FY2005


   

Increase

(Decrease) to
the result for
FY2005

(%)


 
     October 27, 2005

    April 27, 2005

     

Net sales

   1,200,000     1,240,000     1,180,655     1.6  

Total components business

   575,000     596,000     558,547     2.9  

Fine Ceramic Parts Group

   68,000     75,000     73,711     (7.7 )

Semiconductor Parts Group

   134,000     139,000     127,960     4.7  

Applied Ceramic Products Group

   115,000     124,000     93,879     22.5  

Electronic Device Group

   258,000     258,000     262,997     (1.9 )

Total equipment business

   512,000     535,000     527,839     (3.0 )

Telecommunications Equipment Group

   245,000     268,000     250,918     (2.4 )

Information Equipment Group

   251,000     243,000     241,145     4.1  

Optical Equipment Group

   16,000     24,000     35,776     (55.3 )

Others

   127,000     131,000     118,040     7.6  

Adjustments and eliminations

   (14,000 )   (22,000 )   (23,771 )   —    

 

- 19 -


Table of Contents
                       (Yen in millions)  
     Forecast for FY2006 announced on

    Result for
FY2005


   

Increase

(Decrease) to
the result for
FY2005

(%)


 
     October 27, 2005

    April 27, 2005

     

Operating profit

   108,000     130,000     100,520     7.4  

Total components business

   72,000     81,000     81,620     (11.8 )

Fine Ceramic Parts Group

   10,500     10,500     11,535     (9.0 )

Semiconductor Parts Group

   16,500     18,000     17,550     (6.0 )

Applied Ceramic Products Group

   18,500     21,500     17,129     8.0  

Electronic Device Group

   26,500     31,000     35,406     (25.2 )

Total equipment business

   24,000     35,000     5,881     308.1  

Telecommunications Equipment Group

   (1,000 )   7,000     (14,918 )   —    

Information Equipment Group

   30,500     30,000     36,186     (15.7 )

Optical Equipment Group

   (5,500 )   (2,000 )   (15,387 )   —    

Others

   12,000     14,000     13,019     (7.8 )
    

 

 

 

Corporate and others

   17,000     5,000     7,010     142.5  

Income before income taxes

   125,000     135,000     107,530     16.2  

 

With regard to the business environment in the second half, component demand is projected to increase compared with the first half in line with expected new digital consumer products for the Christmas season. Meanwhile, the decline in component prices is expected to ease somewhat compared with the first half due to an improved demand-supply situation. Accordingly, Kyocera expects to be able to increase profitability in the components business in the second half compared with the first half. The equipment business is forecast to have improved profitability compared with the first half due to sales growth in PHS-related products, information equipment, and particularly mobile handsets overseas.

 

Nevertheless, component prices on the whole are projected to decline more than previous estimates, on a full-year basis. Also, sales of mobile handsets and PHS-related products overseas are expected to fall short of previous estimates. As a result, consolidated net sales are forecast to fall below previous estimates by ¥40 billion. This in turn means that profits are also forecast to drop short of previous estimates.

 

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Table of Contents

2. Non-Consolidated Forecasts for the Year Ending March 31, 2006 (Announced on October 27, 2005)

 

(Yen in millions)  
     Forecast for FY2006 announced on

  

Result for

FY2005


  

Increase

(Decrease) to

the result for
FY2005

(%)


 
     October 27, 2005

   April 27, 2005

     

Net sales

   477,000    513,000    493,271    (3.3 )

Profit from operations

   33,000    37,000    33,822    (2.4 )

Recurring profit

   60,000    64,000    66,434    (9.7 )

Net income

   57,000    45,000    34,327    66.1  

 

Note: Forward-Looking Statements

 

Certain of the statements made in this document are forward-looking statements (within the meaning of Section 21E of the U.S. Securities and Exchange Act of 1934), which are based on our current assumptions and beliefs in light of the information currently available to us. These forward-looking statements involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors include, but are not limited to: general economic conditions in our markets, which are primarily Japan, North America, Europe, and Asia, including in particular China; changes in exchange rates, particularly between the yen and the U.S. dollar and euro, respectively, in which we make significant sales; our ability to launch innovative products and otherwise meet the advancing technical requirements of our customers, particularly in the highly competitive markets for ceramics, semiconductor parts and electronic components; and the extent and pace of future growth or contraction in information technology-related markets around the world, including those for communications and personal computers; fluctuations in the value of securities and other assets held by us and changes in accounting principles; business performance of other companies with which we maintain business alliances; laws and regulations relating to the taxation, and to manufacturing and trade; events that may impact negatively on our markets or supply chain, including terrorist acts and outbreaks of diseases; and the occurrence of natural disasters, such as earthquakes, in locations where our manufacturing and other key business facilities are located. Such risks, uncertainties and other factors may cause our actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. We undertake no obligation to publicly update any forward-looking statements included in this document.

 

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Table of Contents

CONSOLIDATED BALANCE SHEETS

 

     Yen in millions

     September 30, 2005

   March 31, 2005

   September 30, 2004

     Amount

    %

   Amount

    %

   Amount

    %

Current assets :

                                      

Cash and cash equivalents

   ¥ 253,885          ¥ 310,592          ¥ 256,965      

Short-term investments

     94,526            34,938            74,262      

Trade notes receivable

     25,439            29,552            33,549      

Trade accounts receivable

     196,743            201,374            211,504      

Short-term finance receivables

     42,194            40,801            42,820      

Less allowances for doubtful accounts and sales returns

     (7,919 )          (7,981 )          (7,569 )    

Inventories

     200,607            213,411            239,612      

Deferred income taxes

     38,985            38,659            39,408      

Other current assets

     29,136            34,229            31,207      
    


 
  


 
  


 

Total current assets

     873,596     46.9      895,575     51.3      921,758     51.6
    


 
  


 
  


 

Non-current assets :

                                      

Investments in and advances to affiliates and unconsolidated subsidiaries

     12,037            30,623            24,240      

Securities and other investments

     539,423            430,437            440,844      
    


 
  


 
  


 

Total investments and advances

     551,460     29.6      461,060     26.4      465,084     26.0

Long-term finance receivables

     74,247     4.0      66,427     3.8      73,477     4.1

Property, plant and equipment, at cost :

                                      

Land

     58,553            55,210            55,021      

Buildings

     241,692            225,964            223,956      

Machinery and equipment

     680,879            656,780            642,657      

Construction in progress

     13,679            14,384            9,815      

Less accumulated depreciation

     (713,078 )          (693,341 )          (675,190 )    
    


 
  


 
  


 
       281,725     15.1      258,997     14.9      256,259     14.4

Goodwill

     30,727     1.7      28,110     1.6      28,589     1.6

Intangible assets

     30,124     1.6      15,847     0.9      17,495     1.0

Other assets

     21,049     1.1      19,503     1.1      22,843     1.3
    


 
  


 
  


 

Total non-current assets

     989,332     53.1      849,944     48.7      863,747     48.4
    


 
  


 
  


 

Total assets

   ¥ 1,862,928     100.0    ¥ 1,745,519     100.0    ¥ 1,785,505     100.0
    


 
  


 
  


 

 

- 22 -


Table of Contents
     Yen in millions

 
     September 30, 2005

    March 31, 2005

    September 30, 2004

 
     Amount

    %

    Amount

    %

    Amount

    %

 

Current liabilities :

                                          

Short-term borrowings

   ¥ 67,422           ¥ 66,556           ¥ 78,044        

Current portion of long-term debt

     53,123             44,051             4,406        

Trade notes and accounts payable

     90,713             86,872             120,646        

Other notes and accounts payable

     50,208             34,690             36,232        

Accrued payroll and bonus

     36,769             34,821             35,725        

Accrued income taxes

     25,137             31,180             23,641        

Other accrued expenses

     31,143             28,849             30,029        

Other current liabilities

     17,595             17,338             17,223        
    


 

 


 

 


 

Total current liabilities

     372,110     20.0       344,357     19.7       345,946     19.4  
    


 

 


 

 


 

Non-current liabilities :

                                          

Long-term debt

     25,920             33,557             70,743        

Accrued pension and severance costs

     27,397             31,166             36,929        

Deferred income taxes

     123,151             96,345             89,680        

Other non-current liabilities

     11,595             4,761             5,386        
    


 

 


 

 


 

Total non-current liabilities

     188,063     10.1       165,829     9.5       202,738     11.3  
    


 

 


 

 


 

Total liabilities

     560,173     30.1       510,186     29.2       548,684     30.7  
    


 

 


 

 


 

Minority interests in subsidiaries

     61,060     3.3       60,482     3.5       59,173     3.3  

Stockholders’ equity :

                                          

Common stock

     115,703             115,703             115,703        

Additional paid-in capital

     162,060             162,061             162,087        

Retained earnings

     931,468             916,628             918,894        

Accumulated other comprehensive income

     63,890             11,839             12,262        

Treasury stock, at cost

     (31,426 )           (31,380 )           (31,298 )      
    


 

 


 

 


 

Total stockholders’ equity

     1,241,695     66.6       1,174,851     67.3       1,177,648     66.0  
    


 

 


 

 


 

Total liabilities, minority interests and stockholders’ equity

   ¥ 1,862,928     100.0     ¥ 1,745,519     100.0     ¥ 1,785,505     100.0  
    


 

 


 

 


 

Note 1: Accumulated other comprehensive income is as follows:

 

     Yen in millions

 
     September 30, 2005

    March 31, 2005

    September 30, 2004

 

    Net unrealized gains on securities

   ¥       84,536     ¥       42,461     ¥       39,996  

    Net unrealized losses on derivative financial instruments

   ¥       (13 )   ¥       (27 )   ¥       (22 )

    Minimum pension liability adjustments

   ¥       (1,629 )   ¥       (1,629 )   ¥       (1,477 )

    Foreign currency translation adjustments

   ¥       (19,004 )   ¥       (28,966 )   ¥       (26,235 )

 

Note 2:

  Applying Opinion of the Accounting Principles Board No.18, “The Equity Method of Accounting for Investments in Common Stock” to the newly increased affiliate accounted for by the equity method, the previous years’ consolidated financial statements have been adjusted for the change.

 

- 23 -


Table of Contents

CONSOLIDATED STATEMENTS OF INCOME

 

     Yen in millions, except per share amounts

 
     Six months ended September 30,

   

Increase

(Decrease)


    Year ended March 31,

 
     2005

    2004

      2005

 
     Amount

    %

    Amount

    %

    %

    Amount

    %

 

Net sales

   ¥ 545,258     100.0     ¥ 600,562     100.0     (9.2 )   ¥ 1,180,655     100.0  

Cost of sales

     391,867     71.9       429,643     71.5     (8.8 )     855,067     72.4  
    


 

 


 

 

 


 

Gross profit

     153,391     28.1       170,919     28.5     (10.3 )     325,588     27.6  

Selling, general and administrative expenses

     118,042     21.6       108,827     18.2     8.5       224,620     19.0  
    


 

 


 

 

 


 

Profit from operations

     35,349     6.5       62,092     10.3     (43.1 )     100,968     8.6  

Other income or expenses :

                                                

Interest and dividend income

     3,886     0.7       2,728     0.5     42.4       6,396     0.5  

Interest expense

     (633 )   (0.1 )     (613 )   (0.1 )   —         (1,275 )   (0.1 )

Foreign currency transaction gains and losses, net

     (91 )   (0.0 )     2,096     0.3     —         2,618     0.2  

Equity in (losses) earnings of affiliates and unconsolidated subsidiaries

     (236 )   (0.1 )     582     0.1     —         (1,678 )   (0.1 )

Gain on sale of investment in an affiliate

     6,931     1.3       —       —       —         —       —    

Other, net

     929     0.2       368     0.1     152.4       501     0.0  
    


 

 


 

 

 


 

Total other income

     10,786     2.0       5,161     0.9     109.0       6,562     0.5  
    


 

 


 

 

 


 

Income before income taxes and minority interests

     46,135     8.5       67,253     11.2     (31.4 )     107,530     9.1  

Income taxes

     20,449     3.8       22,748     3.8     (10.1 )     58,480     4.9  
    


 

 


 

 

 


 

Income before minority interests

     25,686     4.7       44,505     7.4     (42.3 )     49,050     4.2  

Minority interests

     (1,472 )   (0.3 )     (1,956 )   (0.3 )   —         (3,142 )   (0.3 )
    


 

 


 

 

 


 

Net income

   ¥ 24,214     4.4     ¥ 42,549     7.1     (43.1 )   ¥ 45,908     3.9  
    


 

 


 

 

 


 

Earnings per share:

                                                

Net income:

                                                

Basic

   ¥ 129.16           ¥ 226.94                 ¥ 244.86        

Diluted

   ¥ 129.15           ¥ 226.85                 ¥ 244.81        

Weighted average number of shares of common stock outstanding (shares in thousands) :

                                                

Basic

     187,478             187,492                   187,489        

Diluted

     187,497             187,569                   187,528        

 

- 24 -


Table of Contents

Notes:

 

1. Kyocera applies the Statement of Financial Accounting Standards Board (SFAS) No.130, “Financial Reporting of Comprehensive Income.” Based on this standard, comprehensive income for the six months ended September 30, 2005 and 2004 was an increase of 76,265 million yen and an increase of 32,765 million yen, respectively.
2. Earnings per share amounts were computed based on SFAS No.128, “Earnings per Share.” Under SFAS No.128, basic earnings per share was computed based on the average number of shares of common stock outstanding during each period and diluted earnings per share assumed the dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock.

 

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Table of Contents

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

 

(Yen in millions and shares in thousands)  

(Number of shares of common stock)


   Common
stock


  

Additional

paid-in capital


    Retained
earnings


    Accumulated other
comprehensive
income


    Treasury stock,
at cost


    Comprehensive
income


 

Balance at March 31, 2004 (187,484) as previously reported

   ¥ 115,703    ¥ 162,091     ¥ 885,262     ¥ 22,046     ¥ (31,356 )        

Adjustment prior to March 31, 2004

                    (3,293 )                        

Balance at March 31, 2004 (187,484) as adjusted

     115,703      162,091       881,969       22,046       (31,356 )        
    

  


 


 


 


       

Net income for the year

                    45,908                     ¥ 45,908  

Other comprehensive income

                            (10,207 )             (10,207 )
                                           


Total comprehensive income for the year

                                          ¥ 35,701  
                                           


Cash dividends

                    (11,249 )                        

Purchase of treasury stock (21)

                                    (170 )        

Reissuance of treasury stock (18)

            (5 )                     146          

Stock option plan of a subsidiary

            (25 )                                
    

  


 


 


 


       

Balance, March 31, 2005 (187,481)

     115,703      162,061       916,628       11,839       (31,380 )        
    

  


 


 


 


       

Net income for the period

                    24,214                     ¥ 24,214  

Other comprehensive income

                            52,051               52,051  
                                           


Total comprehensive income for the period

                                          ¥ 76,265  
                                           


Cash dividends

                    (9,374 )                        

Purchase of treasury stock (10)

                                    (77 )        

Reissuance of treasury stock (4)

            (1 )                     31          
    

  


 


 


 


       

Balance, September 30, 2005 (187,475 )

   ¥ 115,703    ¥ 162,060     ¥ 931,468     ¥ 63,890     ¥ (31,426 )        
    

  


 


 


 


       

 

(Yen in millions and shares in thousands)  

(Number of shares of common stock)


   Common
stock


  

Additional

paid-in capital


    Retained
earnings


    Accumulated other
comprehensive
income


    Treasury stock,
at cost


    Comprehensive
income


 

Balance at March 31, 2004 (187,484) as previously reported

   ¥115,703    ¥ 162,091     ¥ 885,262     ¥ 22,046     ¥ (31,356 )        

Adjustment prior to March 31, 2004

                  (3,293 )                        

Balance at March 31, 2004 (187,484) as adjusted

   115,703      162,091       881,969       22,046       (31,356 )        
    
  


 


 


 


       

Net income for the period

                  42,549                     ¥ 42,549  

Other comprehensive income

                          (9,784 )             (9,784 )
                                         


Total comprehensive income for the period

                                        ¥ 32,765  
                                         


Cash dividends

                  (5,624 )                        

Purchase of treasury stock (8)

                                  (74 )        

Reissuance of treasury stock (16)

          (4 )                     132          
    
  


 


 


 


       

Balance, September 30, 2004 (187,492) as adjusted

   ¥115,703    ¥ 162,087     ¥ 918,894     ¥ 12,262     ¥ (31,298 )        
    
  


 


 


 


       

 

Note : As a result of an increase in an affiliated company accounted for by the equity method in the year ended March 31, 2005, the financial data on Balance at March 31, 2004 and at September 30, 2004 have been adjusted as if the equity method had been applied at inception in accordance with Accounting Principles Board Opinion No.18, “The Equity Method of Accounting for Investments in Common Stock.”

 

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Table of Contents

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

     Yen in millions

 
     Six months ended September 30,

    Year ended March 31,

 
     2005

    2004

    2005

 

Cash flows from operating activities:

                        

Net income

   ¥ 24,214     ¥ 42,549     ¥ 45,908  

Adjustments to reconcile net income to net cash provided by operating activities :

                        

Depreciation and amortization

     31,763       31,089       65,909  

Write-down of inventories

     4,303       7,493       10,405  

Gain on sale of investment in an affiliate

     (6,931 )     —         —    

Decrease in receivables

     7,771       50,272       68,558  

Decrease (increase) in inventories

     10,417       (44,324 )     (25,598 )

Increase (decrease) in notes and accounts payable

     5,317       3,222       (31,914 )

Other, net

     (5,082 )     (1,410 )     12,255  
    


 


 


Net cash provided by operating activities

     71,772       88,891       145,523  
    


 


 


Cash flows from investing activities :

                        

Payments for purchases of securities

     (76,743 )     (60,340 )     (92,087 )

Payments for purchases of investments and advances

     (127 )     (452 )     (11,858 )

Sales and maturities of securities

     38,539       19,929       49,674  

Proceeds from sales of investment in an affiliate

     24,133       —         —    

Payments for purchases of property, plant and equipment, and intangible assets

     (49,655 )     (30,574 )     (64,201 )

Proceeds from sales of property, plant and equipment, and intangible assets

     1,933       1,982       2,920  

Acquisitions of businesses, net of cash acquired

     —         (2,794 )     (2,794 )

Deposit of negotiable certificate of deposits and time deposits

     (77,056 )     (72,600 )     (112,903 )

Withdrawal of negotiable certificate of deposits and time deposits

     18,121       516       95,220  

Other, net

     (2,236 )     156       3,535  
    


 


 


Net cash used in investing activities

     (123,091 )     (144,177 )     (132,494 )
    


 


 


Cash flows from financing activities :

                        

Increase (decrease) in short-term debt

     367       (7,047 )     (18,490 )

Proceeds from issuance of long-term debt

     4,783       8,662       21,077  

Payments of long-term debt

     (3,756 )     (48,847 )     (58,720 )

Dividends paid

     (10,447 )     (6,409 )     (12,614 )

Net purchases of treasury stock

     (47 )     55       (28 )

Other, net

     (557 )     4       1,431  
    


 


 


Net cash used in financing activities

     (9,657 )     (53,582 )     (67,344 )
    


 


 


Effect of exchange rate changes on cash and cash equivalents

     4,269       4,701       3,775  
    


 


 


Net decrease in cash and cash equivalents

     (56,707 )     (104,167 )     (50,540 )

Cash and cash equivalents at beginning of period

     310,592       361,132       361,132  
    


 


 


Cash and cash equivalents at end of period

   ¥ 253,885     ¥ 256,965     ¥ 310,592  
    


 


 


 

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Table of Contents

SUPPLEMENTAL CASH FLOW INFORMATION

 

     Yen in millions

 
     Six months ended September 30,

    Year ended March 31,

 
     2005

   2004

    2005

 

Cash paid during the period for :

                       

Interest

   ¥ 917    ¥ 1,277     ¥ 2,331  

Income taxes

     31,586      18,165       40,055  

Acquisitions of businesses :

                       

Fair value of assets acquired

     —      ¥ 8,471     ¥ 8,478  

Fair value of liabilities assumed

     —        (2,672 )     (2,683 )

Minority interests

     —        (2,444 )     (2,440 )

Cash acquired

     —        (561 )     (561 )
    

  


 


       —      ¥ 2,794     ¥ 2,794  
    

  


 


 

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Table of Contents

SEGMENT INFORMATION

 

1. Operating segments :

 

     Yen in millions

 
     Six months ended September 30,

   

Increase

(Decrease)


    Year ended March 31,

 
     2005

    2004

      2005

 
     Amount

    Amount

    %

    Amount

 

Net sales :

                              

Fine Ceramic Parts Group

   ¥ 33,258     ¥ 38,920     (14.5 )   ¥ 73,711  

Semiconductor Parts Group

     63,544       68,148     (6.8 )     127,960  

Applied Ceramic Products Group

     55,752       44,991     23.9       93,879  

Electronic Device Group

     125,383       139,790     (10.3 )     262,997  

Telecommunications Equipment Group

     91,084       132,357     (31.2 )     250,918  

Information Equipment Group

     118,433       116,800     1.4       241,145  

Optical Equipment Group

     8,256       16,716     (50.6 )     35,776  

Others

     59,034       56,193     5.1       118,040  

Adjustments and eliminations

     (9,486 )     (13,353 )   —         (23,771 )
    


 


 

 


     ¥ 545,258     ¥ 600,562     (9.2 )   ¥ 1,180,655  
    


 


 

 


Operating profit :

                              

Fine Ceramic Parts Group

   ¥ 4,805     ¥ 6,224     (22.8 )   ¥ 11,535  

Semiconductor Parts Group

     7,251       10,612     (31.7 )     17,550  

Applied Ceramic Products Group

     9,337       7,563     23.5       17,129  

Electronic Device Group

     11,171       22,241     (49.8 )     35,406  

Telecommunications Equipment Group

     (9,355 )     (4,899 )   —         (14,918 )

Information Equipment Group

     13,244       19,404     (31.7 )     36,186  

Optical Equipment Group

     (4,049 )     (7,357 )   —         (15,387 )

Others

     4,704       6,160     (23.6 )     13,019  
    


 


 

 


       37,108       59,948     (38.1 )     100,520  

Corporate

     9,170       6,683     37.2       8,683  

Equity in (losses) earnings of affiliates and unconsolidated subsidiaries

     (236 )     582     —         (1,678 )

Adjustments and eliminations

     93       40     132.5       5  
    


 


 

 


Income before income taxes

   ¥ 46,135     ¥ 67,253     (31.4 )   ¥ 107,530  
    


 


 

 


Depreciation and amortization :

                              

Fine Ceramic Parts Group

   ¥ 1,937     ¥ 2,023     (4.3 )     ¥4,320  

Semiconductor Parts Group

     4,349       3,869     12.4       8,922  

Applied Ceramic Products Group

     2,830       1,992     42.1       4,645  

Electronic Device Group

     10,144       10,134     0.1       21,723  

Telecommunications Equipment Group

     3,049       4,019     (24.1 )     8,101  

Information Equipment Group

     5,245       4,195     25.0       8,953  

Optical Equipment Group

     944       1,245     (24.2 )     2,909  

Others

     1,793       2,363     (24.1 )     4,070  

Corporate

     1,472       1,249     17.9       2,266  
    


 


 

 


Total

   ¥ 31,763     ¥ 31,089     2.2       ¥ 65,909  
    


 


 

 


Capital expenditures :

                              

Fine Ceramic Parts Group

   ¥ 2,442     ¥ 1,851     31.9     ¥ 4,394  

Semiconductor Parts Group

     15,484       3,365     360.1       7,111  

Applied Ceramic Products Group

     9,698       2,113     359.0       7,584  

Electronic Device Group

     8,884       10,320     (13.9 )     19,453  

Telecommunications Equipment Group

     1,015       3,620     (72.0 )     5,170  

Information Equipment Group

     6,633       3,539     87.4       11,751  

Optical Equipment Group

     111       1,799     (93.8 )     2,248  

Others

     5,738       914     527.8       2,279  

Corporate

     2,016       1,110     81.6       3,186  
    


 


 

 


Total

   ¥ 52,021     ¥ 28,631     81.7     ¥ 63,176  
    


 


 

 


 

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Table of Contents

2. Geographic segments (Sales and Operating profits by geographic area) :

 

     Yen in millions

 
     Six months ended September 30,

   

Increase

(Decrease)


    Year ended March 31,

 
     2005

    2004

      2005

 
     Amount

    Amount

    %

    Amount

 

Net sales:

                              

Japan

   ¥ 234,653     ¥ 259,600     (9.6 )   ¥ 525,432  

Intra-group sales and transfer between geographic areas

     153,233       164,220     (6.7 )     314,149  
    


 


 

 


       387,886       423,820     (8.5 )     839,581  
    


 


 

 


United States of America

     127,527       166,827     (23.6 )     307,490  

Intra-group sales and transfer between geographic areas

     11,007       13,711     (19.7 )     25,299  
    


 


 

 


       138,534       180,538     (23.3 )     332,789  
    


 


 

 


Asia

     81,144       78,674     3.1       147,654  

Intra-group sales and transfer between geographic areas

     55,529       59,642     (6.9 )     118,877  
    


 


 

 


       136,673       138,316     (1.2 )     266,531  
    


 


 

 


Europe

     89,666       86,288     3.9       180,604  

Intra-group sales and transfer between geographic areas

     16,593       15,313     8.4       30,475  
    


 


 

 


       106,259       101,601     4.6       211,079  
    


 


 

 


Others

     12,268       9,173     33.7       19,475  

Intra-group sales and transfer between geographic areas

     3,783       3,921     (3.5 )     7,559  
    


 


 

 


       16,051       13,094     22.6       27,034  
    


 


 

 


Adjustments and eliminations

     (240,145 )     (256,807 )   —         (496,359 )
    


 


 

 


     ¥ 545,258     ¥ 600,562     (9.2 )   ¥ 1,180,655  
    


 


 

 


Operating Profits :

                              

Japan

   ¥ 30,323     ¥ 54,484     (44.3 )   ¥ 91,760  

United States of America

     (3,054 )     5,793     —         2,091  

Asia

     5,864       8,636     (32.1 )     13,055  

Europe

     533       (698 )   —         (1,482 )

Others

     69       740     (90.7 )     1,245  
    


 


 

 


       33,735       68,955     (51.1 )     106,669  

Adjustments and eliminations

     3,466       (8,967 )   —         (6,144 )
    


 


 

 


       37,201       59,988     (38.0 )     100,525  

Corporate

     9,170       6,683     37.2       8,683  

Equity in (losses) earnings of affiliates and unconsolidated subsidiaries

     (236 )     582     —         (1,678 )
    


 


 

 


Income before income taxes

   ¥ 46,135     ¥ 67,253     (31.4 )   ¥ 107,530  
    


 


 

 


 

- 30 -


Table of Contents

3. Geographic segments (Sales by region) :

 

     Yen in millions

     Six months ended September 30,

    

Increase

(Decrease)


     Year ended March 31,

     2005

     2004

        2005

     Amount

    %

     Amount

    %

     Amount

    %

     Amount

    %

Japan

   ¥ 220,191     40.4      ¥ 227,772     37.9      ¥ (7,581 )   (3.3 )    ¥ 472,417     40.0

United States of America

     112,642     20.7        130,505     21.7        (17,863 )   (13.7 )      248,333     21.0

Asia

     91,643     16.8        116,357     19.4        (24,714 )   (21.2 )      203,848     17.3

Europe

     87,848     16.1        83,906     14.0        3,942     4.7        175,850     14.9

Others

     32,934     6.0        42,022     7.0        (9,088 )   (21.6 )      80,207     6.8
    


 
    


 
    


 

  


 

Net sales

   ¥ 545,258     100.0      ¥ 600,562     100.0      ¥ (55,304 )   (9.2 )    ¥ 1,180,655     100.0
    


 
    


 
    


 

  


 

Sales outside Japan

   ¥ 325,067            ¥ 372,790            ¥ (47,723 )   (12.8 )    ¥ 708,238      

Sales outside Japan to net sales

     59.6 %            62.1 %                           60.0 %    

 

- 31 -


Table of Contents

INVESTMENTS IN DEBT AND EQUITY SECURITIES

 

Available-for-sale securities are recorded at fair value, with unrealized gains and losses excluded from income and reported in other comprehensive income, net of tax. Held-to-maturity securities are recorded at amortized cost.

 

Investments in debt and equity securities as of September 30, 2005, March 31, 2005 and September 30, 2004, included in short-term investments (current assets) and in securities and other investments (non-current assets) are summarized as follows :

 

     Yen in millions

     September 30, 2005

   March 31, 2005

     Cost

   Aggregate
fair values


   Gross
unrealized
gains


   Gross
unrealized
losses


   Cost

  

Aggregate

fair values


   Gross
unrealized
gains


   Gross
unrealized
losses


Available-for-sale securities :

                                                       

Corporate debt securities

   ¥ 2,724    ¥ 2,769    ¥ 55    ¥ 10    ¥ 2,024    ¥ 2,029    ¥ 13    ¥ 8

Other debt securities

     101,653      101,490      87      250      73,886      73,773      199      312

Equity securities

     272,147      414,354      142,264      57      272,006      343,208      71,448      246
    

  

  

  

  

  

  

  

Total available-for-sale securities

     376,524      518,613      142,406      317      347,916      419,010      71,660      566
    

  

  

  

  

  

  

  

Held-to-maturity securities :

                                                       

Other debt securities

     33,224      32,834      —        390      22,900      22,545      —        355
    

  

  

  

  

  

  

  

Total held-to-maturity securities

     33,224      32,834      —        390      22,900      22,545      —        355
    

  

  

  

  

  

  

  

Total investments in debt and equity securities

   ¥ 409,748    ¥ 551,447    ¥ 142,406    ¥ 707    ¥ 370,816    ¥ 441,555    ¥ 71,660    ¥ 921
    

  

  

  

  

  

  

  

 

     September 30, 2004

     Cost

  

Aggregate

fair values


   Gross
unrealized
gains


   Gross
unrealized
losses


Available-for-sale securities :

                           

Corporate debt securities

   ¥ 1,728    ¥ 1,723    ¥ 6    ¥ 11

Other debt securities

     71,134      70,999      84      219

Equity securities

     281,560      347,671      69,556      3,445
    

  

  

  

Total available-for-sale Securities

     354,422      420,393      69,646      3,675
    

  

  

  

Held-to-maturity securities :

                           

Other debt securities

     17,650      17,598      —        52
    

  

  

  

Total held-to-maturity securities

     17,650      17,598      —        52
    

  

  

  

Total investments in debt and equity securities

   ¥   372,072    ¥   437,991    ¥   69,646    ¥   3,727
    

  

  

  

 

Note: Cost represents amortized cost for debt securities and acquisition cost for equity securities. The cost basis of the individual securities is written down to fair value as a new cost basis when other-than-temporary impairment is recognized.

 

- 32 -


Table of Contents

BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS

 

1. Scope of consolidation and application of the equity method :

 

Major consolidated subsidiaries:

    
     AVX CORPORATION
     KYOCERA WIRELESS CORPORATION
     KYOCERA MITA CORPORATION
     KYOCERA ELCO CORPORATION

Major affiliates accounted for by the equity method :

     WILLCOM, INC.

 

 

2. Changes in scope of consolidation and application of the equity method :

 

Consolidation

 

  (Increase)    2    KYOCERA ASIA PACIFIC(THAILAND)CO.,LTD. and another
  (Decrease)    None     
Equity method          
  (Increase)    None     
  (Decrease)    2    TAITO CORPORATION and another

 

 

3. Summary of significant accounting policies

 

Kyocera’s consolidated financial statements are in conformity with accounting principles generally accepted in the United States of America.

 

(1) Valuation of inventories

 

Finished goods and work in process are mainly stated at the lower cost of market, the cost being determined by the average method. All other inventories are mainly stated at the lower cost of market, the cost being determined by the first-in, first-out method.

 

(2) Valuation of securities

 

Kyocera adopts Statement of Financial Accounting Standards No.115, “Accounting for Certain Investments in Debt and Equity Securities.”

 

Held-to-maturity securities are recorded at amortized cost.

 

Available-for-sales securities are recorded at fair value, with unrealized gains and losses excluded from income and recorded in other comprehensive income, net of tax.

 

(3) Depreciation method of Property, Plant and Equipment

 

Depreciation is computed at rates based on the estimated useful lives of assets using the declining balance method.

 

(4) Goodwill and other intangible assets

 

Kyocera adopts Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets.”

 

Goodwill and intangible assets with indefinite useful lives are not amortized, but instead are tested for impairment at least annually.

 

Intangible assets with definite useful lives are amortized over their respective estimate useful lives.

 

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( 5 ) Accounting for allowance and accruals

 

Allowance for doubtful accounts :

 

Allowances for doubtful accounts are provided at an estimated amount of the past actual ratio of losses on bad debts.

 

Certain allowances are provided for estimated uncollectible receivables.

 

Accrued pension and severance cost:

 

Kyocera adopts Statement of Financial Accounting Standards No. 87, “Employers’ Accounting for Pensions”, pension and severence cost is accrued based on the projected benefit obligations and the fair value of plan assets at the balance sheet date. If the accumulated benefit obligation (i.e., obligations deducting an effect of future compensation levels from projected benefit obligations) exceeds the fair value of plan assets, a minimum pension liability equal to this difference is reflected in the consolidated balance sheets by recognizing an additional minimum pension liability. Unrecognized prior service cost is amortized by the straight-line method over the average remaining service period of employees. Unrecognized actuarial loss is recognized by amortizing a portion in excess of a corridor (i.e., 10% of the greater of the projected benefit obligations or the fair value of plan assets) by the straight-line method over the average remaining service period of employees.

 

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Non-Consolidated Results of Kyocera Corporation (parent company)

for the Six Months Ended September 30, 2005

 

The interim non-consolidated financial statements are in conformity with accounting principles generally accepted in Japan.

 

Date of the board of directors’ meeting for the interim results : October 27, 2005

Payment date of interim dividends : December 5, 2005

 

1. Results for the six months ended September 30, 2005 :

 

(1) Results of operations :

 

     Japanese yen

     Six months ended September 30,

    Year ended March 31,

     2005

    2004

    2005

Net sales

   ¥ 220,901 million     ¥ 250,463 million     ¥ 493,271 million

% change from the previous period

     (11.8 )%     5.3 %      

Profit from operations

     12,383 million       21,297 million       33,822 million

% change from the previous period

     (41.9 )%     21.2 %      

Recurring profit

     26,903 million       34,937 million       66,434 million

% change from the previous period

     (23.0 )%     33.5 %      

Net income

     31,865 million       20,512 million       34,327 million

% change from the previous period

     55.3 %     26.9 %      
    


 


 

Earnings per share

   ¥ 169.97     ¥ 109.40     ¥ 182.77
    


 


 

 

Notes :

    

1. Average number of common stock outstanding during the period :

    

Six months ended September 30, 2005

   187,478,104 shares

Six months ended September 30, 2004

   187,492,144 shares

Year ended March 31, 2005

   187,488,658 shares

2. Change in accounting policies :

   None

 

(2) Dividend information :

 

     Japanese yen

     Six months ended September 30,

   Year ended March 31,

     2005

   2004

   2005

Interim dividends per share

   ¥ 50.00    ¥ 30.00      —  

Annual dividends per share

     —        —      ¥ 80.00

 

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(3) Financial Condition :

 

     Japanese yen

 
     September 30,

    March 31,

 
     2005

    2004

    2005

 

Total assets

   ¥ 1,343,060 million     ¥ 1,233,908 million     ¥ 1,232,069 million  

Stockholders’ equity

     1,100,768 million       1,025,776 million       1,036,744 million  
    


 


 


Stockholders’ equity to total assets

     82.0 %     83.1 %     84.1 %
    


 


 


Stockholders’ equity per share

   ¥ 5,871.53     ¥ 5,471.05     ¥ 5,529.54  

 

 

Notes : Total number of shares outstanding as of :

    

September 30, 2005

   187,475,323 shares

September 30, 2004

   187,491,883 shares

March 31, 2005

   187,481,084 shares

Total number of treasury stock as of :

    

September 30, 2005

   3,833,967 shares

September 30, 2004

   3,817,407 shares

March 31, 2005

   3,828,206 shares

 

2. Forecast for the year ending March 31, 2006 :

 

     Japanese yen

    

Year ending

March 31, 2006


Net sales

   ¥ 477,000 million

Recurring profit

     60,000 million

Net income

     57,000 million

Annual dividends per share

     100.00

(Year-end dividends per share)

     50.00

Note : Forecast for annual earnings per share:

   ¥ 303.72

 

With regard to forecasts set forth above, please refer to the accompanying “Forward Looking Statements” on page 21.

 

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BALANCE SHEETS

 

     Yen in millions

     September 30, 2005

   March 31, 2005

   September 30, 2004

     Amount

    %

   Amount

    %

   Amount

    %

Current assets :

                                      

Cash and bank deposits

   ¥ 142,633          ¥ 154,347          ¥ 158,313      

Trade notes receivable

     39,963            40,249            45,630      

Trade accounts receivable

     84,134            90,666            88,650      

Marketable securities

     208            12,606            1,517      

Finished goods and merchandise

     17,450            15,483            23,840      

Raw materials

     18,353            21,663            24,128      

Work in process

     18,710            20,217            19,676      

Supplies

     553            625            532      

Deferred income taxes

     15,144            12,525            10,879      

Short-term loans to subsidiaries

     2,191            3,766            3,343      

Other accounts receivable

     7,302            5,413            5,884      

Other current assets

     1,913            1,004            831      

Allowances for doubtful accounts

     (133 )          (139 )          (140 )    
    


 
  


 
  


 

Total current assets

     348,421     25.9      378,425     30.7      383,083     31.0
    


 
  


 
  


 

Non-current assets :

                                      

Tangible fixed assets :

                                      

Buildings

     36,411            33,378            34,569      

Structures

     2,165            2,131            2,185      

Machinery and equipment

     40,804            36,706            35,250      

Vehicles

     30            27            31      

Tools, furniture and fixtures

     7,578            7,652            8,677      

Land

     33,323            32,277            31,972      

Construction in progress

     5,783            1,958            985      
    


 
  


 
  


 

Total tangible fixed assets

     126,094     9.4      114,129     9.3      113,669     9.2
    


 
  


 
  


 

Intangible assets :

                                      

Patent rights and others

     11,234            2,192            2,651      
    


 
  


 
  


 

Total intangible assets

     11,234     0.8      2,192     0.2      2,651     0.2
    


 
  


 
  


 

Investments and other assets :

                                      

Investments in securities

     519,536            407,221            424,972      

Investments in subsidiaries and affiliates

     278,675            284,996            263,362      

Investments in subsidiaries and affiliates other than equity securities

     27,033            23,254            23,063      

Long-term loans

     31,581            19,744            19,797      

Long-term prepaid expenses

     4,296            5,035            5,882      

Security deposits

     1,922            2,173            2,236      

Other investments

     569            5,700            5,733      

Allowances for doubtful accounts

     (351 )          (4,850 )          (4,590 )    

Allowances for impairment loss on securities

     (5,950 )          (5,950 )          (5,950 )    
    


 
  


 
  


 

Total investments and other assets

     857,311     63.9      737,323     59.8      734,505     59.6
    


 
  


 
  


 

Total non-current assets

     994,639     74.1      853,644     69.3      850,825     69.0
    


 
  


 
  


 

Total assets

   ¥ 1,343,060     100.0    ¥ 1,232,069     100.0    ¥ 1,233,908     100.0
    


 
  


 
  


 

 

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Table of Contents
     Yen in millions

 
     September 30, 2005

    March 31, 2005

    September 30, 2004

 
     Amount

    %

    Amount

    %

    Amount

    %

 

Current liabilities :

                                          

Trade accounts payable

   ¥ 45,926           ¥ 42,602           ¥ 59,572        

Current portion of long-term debt

     —               —               0        

Other payables

     25,250             13,737             12,645        

Accrued expenses

     5,799             6,165             6,399        

Income taxes payables

     10,700             13,800             8,401        

Deposits received

     2,519             2,845             2,378        

Accured bonuses

     9,849             9,215             10,035        

Provision for warranties

     332             493             411        

Provision for sales returns

     208             232             189        

Other current liabilities

     669             680             494        
    


 

 


 

 


 

Total current liabilities

     101,252     7.5       89,769     7.3       100,524     8.2  
    


 

 


 

 


 

Non-current liabilities :

                                          

Long-term debt

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