Kyocera 6-K 2005
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 April 2005
Commission File Number: 1-07952
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-
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.
Date: April 27, 2005
Consolidated Financial Highlights
Result for the Year Ended March 31, 2005
- 1 -
Kyocera Corporation and its Consolidated Subsidiaries
The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America.
Date of the board of directors meeting for the consolidated result for the year : April 27, 2005
1. Results for the year ended March 31, 2005 :
(1) Consolidated results of operations :
(2) Consolidated financial position :
- 2 -
(3) Consolidated cash flows :
(4) Scope of consolidation and application of the equity method :
Number of consolidated subsidiaries : 165
Number of non-consolidated subsidiaries accounted for by the equity method: 2
Number of affiliates accounted for by the equity method : 14
(5) Changes in scope of consolidation and application of the equity method :
2. Forecast for the year ending March 31, 2006 :
Forecast of earnings per share : ¥431.94
Net income per share amounts is computed based on Statement of Financial Accounting Standards No.128.
Forecast of earnings per share is computed based on the diluted average number of shares outstanding during the year ended March 31, 2005.
With regard to forecasts set forth above, please refer to the accompanying Forward Looking Statements on page 18.
- 3 -
Kyocera group consists of Kyocera Corporation, 167 subsidiaries and 14 affiliates.
(Chart of the group companies)
Note : Others include affiliates that are accounted for by the equity method.
- 4 -
1. Management Goal and Strategies
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.
Kyoceras 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.
2. Specific Policies
1) Efficient Resource Management
2) Emphasizing Consolidated Group Results
- 5 -
3) Focusing on Stockholder Value
3. Basic Profit Distribution Policy
4. Policy Encouraging Individual Share Ownership
Kyocera intends to improve performance in the telecommunications equipment business and optical instruments business that was sluggish in the fiscal year ended March 31, 2005 (fiscal 2005). In the mobile phone handset business, Kyocera will implement additional structural reforms at Kyocera Wireless Corp. (KWC) to improve its profitability. With regard to PHS-related products, Kyocera will strive for business expansion through the introduction of next-generation base stations and handsets in line with the commencement of new high-speed data communication services in Japan. In addition to creating new markets and launching more cost-competitive products overseas, Kyocera will also strive to capture new customers for its high-speed wireless internet systems. Kyocera seeks to boost profitability in the optical instruments business by maximizing the positive effects of structural reforms executed in fiscal 2005. Other initiatives aimed at improving profitability in this business include expanding the business for optical components, especially optical modules for mobile phones, and increasing productivity at production sites in China.
2) Enhance Profitability of Components Business
- 6 -
6. Corporate Governance Guidelines and Policy Implementation
- 7 -
2) Corporate Governance Policy Implementation
a) Corporate Governance System
Names of the certified public accountants to audit and terms of auditing until fiscal 2005
<Compensation paid to Director and Corporate Auditor>
The amount above includes retirement benefit.
<Compensation paid to the external auditor>
- 8 -
b) Outline of Vested Interest with External Auditors
c) Corporate Governance Policy Implementation during the Year Ended March 31, 2005
- 9 -
Business Results and Financial Condition
1. Business Results for the Year Ended March 31, 2005
(1) Economic Situation and Business Environment
(2) Consolidated Financial Results
3) Effect of Exchange Rate Fluctuations
- 10 -
(3) Operating Highlights
- 11 -
(4) Consolidated Operating Segments
Commencing in the third quarter of fiscal 2004 (October to December 2003), net sales and operating profit of the Precision Machine Division of Kyocera Corporation, previously included within Others, have been charged to Corporate. Accordingly, previously published net sales and operating profit of this operating segment for the six months ended September 30, 2003 was restated.
1) Fine Ceramics Group
2) Electronic Device Group
3) Equipment Group
- 12 -
(5) Orders and Production (Consolidated)
(6) Geographic Segments (Consolidated)
Sales increased because sales of Kyocera Kinseki Corporation, which became a wholly-owned subsidiary of Kyocera in fiscal 2004, were fully added to the total sales from the start of fiscal 2005, and also due to increased sales of components business such as fine ceramic parts, organic packages, solar systems, cutting tools. In addition, sales of KCCS also increased.
Sales dropped slightly, due mainly to decreased sales of telecommunications equipment coupled with intensified price competition, though sales of information equipment increased.
Sales grew considerably, due mainly to increased sales of information equipment and telecommunications equipment as well as electronic devices.
Sales increased, due to increased sales of information equipment and also to increased sales of solar systems.
- 13 -
2. Cash Flow
Cash and cash equivalents at the end of fiscal 2005 decreased by ¥50,540 million to ¥310,592 million compared with the end of fiscal 2004.
<Cash Flows from Operating Activities>
Net cash provided by operating activities in fiscal 2005 increased by ¥82,948 million to ¥145,523 million from fiscal 2004 of ¥62,575 million. This was due to a significant decrease in receivables by collection, including the short-term finance receivables, although net income decreased by ¥22,178 million to ¥45,908 compared with fiscal 2004. In addition, due to settlement regarding LaPine Case of ¥35,454 million in fiscal 2004, net cash provided by operating activities in fiscal 2005 increased compared with fiscal 2004.
<Cash Flows from Investing Activities>
Net cash used by investing activities in fiscal 2005 increased by ¥162,075 million to ¥132,494 million from net cash provided in fiscal 2004 of ¥29,581 million. This was due mainly to increases in purchases of the government bonds and negotiable certificate of deposits in consideration of current and future financial position according to our investment policy. In addition, due to withdrawal of restricted cash for settlement regarding LaPine Case in fiscal 2004, net cash used by investing activities in fiscal 2005 increased compared with fiscal 2004.
<Cash Flows from Financing Activities>
Net cash used in financing activities in fiscal 2005 increased by ¥46,922 million to ¥67,344 million from fiscal 2004 of ¥20,422 million. This was due mainly to a decrease in proceeds from issuance of long-term debt and an increase in repayments of long-term debt.
- 14 -
<Cash Flows Indexes (Consolidated)>
All indexes are computed on a consolidated basis.
Interest bearing debts represent all debts with interest expense included in consolidated balance sheets.
3. Capital Expenditures and Depreciation (Consolidated)
4. Non-Consolidated Results for the Year Ended March 31, 2005
5. Cash Dividends for the Year
With regard to year-end dividends, it will be decided at the 51st General Meeting of Shareholders, scheduled for June 28, 2005, that a cash distribution shall be made at the rate of 50 yen per share. Accordingly, total dividends for the year, including the interim dividend of 30 yen per share already paid, shall amount to 80 yen per share, up 20 yen per share from fiscal 2004.
- 15 -
Basic Outlook and Future Management and Business Strategies
1. Economic Situation and Business Environment for the Year Ending March 31, 2006
2. Consolidated Forecasts for the Year Ending March 31, 2006
- 16 -
3. Outlook and Future Business Strategies by Operating Segment (Consolidated)
<Fine Ceramics Group>
<Electronic Device Group>
- 17 -
4. Non-Consolidated Forecasts for the Year Ending March 31, 2006
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; the extent and pace of future growth or contraction in information technology-related markets around the world, including those for communications and personal computers; and events that may impact negatively on our markets or supply chain, including terrorist acts and outbreaks of diseases such as SARS. 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.
- 18 -
CONSOLIDATED BALANCE SHEETS
- 19 -
Note 1: Accumulated other comprehensive income is as follows:
- 20 -
CONSOLIDATED STATEMENTS OF INCOME
- 21 -
- 22 -
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
( Yen in millions and shares in thousands)
- 23 -
CONSOLIDATED STATEMENTS OF CASH FLOWS
- 24 -
SUPPLEMENTAL CASH FLOW INFORMATION
- 25 -
1. Operating segments :
- 26 -
2. Geographic segments (Sales and operating profit by geographic area) :
- 27 -
3. Geographic segments (Sales by region) :
- 28 -
INVESTMENTS IN DEBT AND EQUITY SECURITIES
Investments in debt and equity securities at March 31, 2005 and 2004, included in short-term investments (current assets) and securities and other investments (non-current assets) are summarized as follows :
- 29 -
BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS
1. Scope of consolidation and application of the equity method :
Major consolidated subsidiaries :
KYOCERA WIRELESS CORPORATION
KYOCERA MITA CORPORATION
KYOCERA ELCO CORPORATION
Major affiliates accounted for by the equity method :
2. Changes in scope of consolidation and application of the equity method :
3. Summary of significant accounting policies
Kyoceras consolidated financial statements are prepared 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 of cost or market, the cost being determined by the average method. All other inventories are mainly stated at the lower of cost or 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 mainly 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 life.
- 30 -
( 5 ) Accounting for allowance and accruals
Allowance for doubtful accounts :
Kyocera provided based on the past actual ratio of losses on bad debt in addition to estimation of uncollectible amount based on the analysis of certain individual receivables.
Accrued pension and severance cost:
Kyocera adopts Statement of Financial Accounting Standards No. 87, Employers Accounting for Pensions, pension and severance 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.
- 31 -
The non-consolidated financial statements are prepared in conformity with accounting principles generally accepted in Japan.
Date of the board of directors meeting for the result for the year : April 27, 2005
Date of the general meeting of shareholders : June 28, 2005
1. Results for the year ended March 31, 2005 :
(1) Results of operations :
1. Average number of common stock outstanding during the year
2. Change in accounting policies : None
(2) Dividend information :
- 32 -
(3) Financial Condition :
Notes : Total number of shares outstanding as of :
Total number of treasury stock as of :
2. Forecast for the year ending March 31, 2006 :
Note: Forecast of earnings per share: ¥239.70
With regard to the forecasts set forth above, please refer to the accompanying Forward Looking Statements on page 18.
- 33 -
- 34 -
- 35 -
STATEMENTS OF INCOME
- 36 -
PROPOSED APPROPRIATION OF RETAINED EARNINGS