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Kyocera 6-K 2007

Documents found in this filing:

  1. 6-K
  2. Graphic
  3. Graphic
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 July 2007

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: July 30, 2007


Table of Contents

Information furnished on this form :

EXHIBITS

 

Exhibit
Number

    

1.

   Consolidated Financial Results for the Three Months Ended June 30, 2007


Table of Contents

Consolidated Results of Kyocera Corporation and its Subsidiaries

for the Three Months Ended June 30, 2007

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

1. Consolidated financial information for the three months ended June 30, 2007 :

(1) Consolidated results of operations :

 

     Japanese Yen
     Three months ended June 30,     Year ended March 31,
     2006     2007     2007

Net sales

   ¥291,201 million     ¥315,450 million     ¥1,283,897 million

% change from the previous period

   10.5 %   8.3 %  

Profit from operations

   29,902 million     31,616 million     135,102 million

% change from the previous period

   121.6 %   5.7 %  

Income from continuing operations before income taxes

   36,065 million     40,484 million     156,540 million

% change from the previous period

   121.1 %   12.3 %  

Net income

   20,072 million     24,984 million     106,504 million

% change from the previous period

   133.3 %   24.5 %  

Earnings per share :

      

Basic

   ¥106.82     ¥132.30     ¥566.03

Diluted

   106.61     131.93     564.79

Note :

In accordance with the Statement of Financial Accounting Standards (SFAS) No.144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the consolidated statement of income for the three months ended June 30, 2006 has been retrospectively reclassified as for the discontinued operations.

(2) Consolidated financial position :

 

    Japanese Yen  
    June 30,     March 31,  
    2006     2007     2007  

Total assets

  ¥1,973,816 million     ¥2,151,570 million     ¥2,130,464 million  

Stockholders’ equity

  1,319,510 million     1,543,254 million     1,514,560 million  

Stockholders’ equity to total assets

  66.9 %   71.7 %   71.1 %

Stockholders’ equity per share

  ¥7,021.14     ¥8,166.01     ¥8,028.45  

 

- 1 -


Table of Contents

(3) Consolidated cash flows :

 

     Japanese Yen
     Three months ended June 30,    Year ended March 31,
     2006    2007    2007

Cash flows from operating activities

   ¥ 27,604 million    ¥ 35,010 million    ¥ 149,644 million

Cash flows from investing activities

     (61,083) million      (35,060) million      (151,703) million

Cash flows from financing activities

     240 million      (3,549) million      (20,645) million

Cash and cash equivalents at end of period

     266,624 million      286,562 million      282,208 million

 

2. Consolidated financial forecast for the year ending March 31, 2008 :

 

     Japanese Yen  
     Year ending March 31, 2008  

Net sales

   ¥ 1,330,000 million  

% change from the year ended March 31, 2007

     3.6 %

Profit from operations

   ¥ 151,000 million  

% change from the year ended March 31, 2007

     11.8 %

Income before income taxes

   ¥ 166,000 million  

% change from the year ended March 31, 2007

     6.0 %

Net income

   ¥ 103,000 million  

% change from the year ended March 31, 2007

     (3.3 )%

Notes :

1. There is no change in the above forecast for the year ending March 31, 2008 from the original forecast, which was shown in the Form 6-K submitted on April 26, 2007.

2. Forecast of earnings per share : ¥543.89

Net income per share amount is computed based on SFAS No.128.

Forecast of earnings per share is computed based on the diluted average number of shares outstanding during the three months ended June 30, 2007.

With regard to forecasts set forth above, please refer to the accompanying “Forward Looking Statements” on page 12.

 

3. Change in accounting policies except due to new accounting standards : None

 

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Table of Contents

Business Results, Financial Condition and Prospects

1. Business Result for the Three Months Ended June 30, 2007

(1) Economic Situation and Business Environment

Despite a lack of vitality in industrial production, the overall domestic economy during the three months ended June 30, 2007 (the first quarter) continued at a pace of moderate expansion, as evidenced by factors such as an increase in capital expenditures. At the same time, the U.S. economy grew steadily despite concerns over the impact of issues related to housing loans for consumers with low creditworthiness on personal consumption. Increases in exports and production led to growth in the European economy.

In the digital consumer equipment market, which is the principal market for Kyocera Corporation and its consolidated subsidiaries (“Kyocera Group” or “Kyocera”), demand for passive components for such equipment expanded due to increased market strength compared with the three months ended June 30, 2006 (the previous first quarter).

(2) Consolidated Financial Results

Consolidated net sales for the first quarter amounted to ¥315,450 million, an increase of 8.3% compared with the previous first quarter, reflecting a substantial increase in sales in the Equipment Business and steady growth in sales in most of the Components Business.

The Components Business recorded a decline in profit compared with the previous first quarter due primarily to a downturn in demand for semiconductor parts used in some imaging devices and automotive components for overseas markets together with the impact of an increase in depreciation costs. However, the Equipment Business posted a substantial increase in profit due mainly to improved profitability in the Telecommunications Equipment Group, which made up for a decline in profit in the Components Business. As a result, profits for Kyocera Group as a whole increased, compared with the previous first quarter. Profit from operations increased by 5.7% to ¥31,616 million compared with the previous first quarter. Income from continuing operations before income taxes increased by 12.3% to ¥40,484 million compared with the previous first quarter due to increases in interest and dividend income and equity in earnings of affiliates and unconsolidated subsidiaries. Net income increased by 24.5% to ¥24,984 million compared with the previous first quarter.

 

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Table of Contents
     (Yen in millions, except per share amounts and exchange rate)
     Three months ended June 30,     
     2006    2007    Increase
     Amount    % of
net sales
   Amount    % of
net sales
  

(Decrease)

(%)

Net sales

   291,201    100.0    315,450    100.0    8.3

Profit from operations

   29,902    10.3    31,616    10.0    5.7

Income from continuing operations before income taxes

   36,065    12.4    40,484    12.8    12.3

Net income

   20,072    6.9    24,984    7.9    24.5

Diluted earnings per share

   106.61       131.93       23.8

Average US$ exchange rate

   115       121      

Average Euro exchange rate

   144       163      

Note 1. Kyocera sold its shares in Kyocera Leasing Co., Ltd., a subsidiary engaged in financing services; as a result, business results for Kyocera Leasing Co., Ltd. for the previous first quarter have been recorded as income from discontinued operations in conformity with accounting principles generally accepted in the U.S. As a result, reclassified consolidated net sales for the previous first quarter decreased by ¥1,495 million compared with the result previously announced, reclassified profit from operations decreased by ¥740 million and income from continuing operations before income taxes for the previous first quarter decreased by ¥862 million, respectively.

(3) Implemented Management Measures and Significant Decisions

AVX Corporation (AVX), a U.S. subsidiary, decided to make American Technical Ceramics Corp., a U.S.-based maker of electronic components, into a wholly-owned subsidiary in June 2007, with the goal of strengthening its advanced components business such as high frequency ceramic capacitors. In doing so, AVX will expand its product line-up and its sales networks for high-value-added products.

 

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Table of Contents

(4) Consolidated Financial Results by Reporting Segment

Components Business :

Sales in the Components Business increased by 5.5% compared with the previous first quarter to ¥162,695 million, while operating profit decreased by 8.4% to ¥23,456 million.

Consolidated results by reporting segment in the Components Business are as follows.

1) Fine Ceramic Parts Group

Sales of semiconductor processing equipment increased during the first quarter. However, sales of automotive components for overseas markets slumped. As a result, in this reporting segment sales increased, while operating profit decreased, compared with the previous first quarter.

2) Semiconductor Parts Group

Sales and operating profit in this reporting segment decreased compared with the previous first quarter. Despite an increase in sales of organic packages, there was an adjustment in demand for certain ceramic packages used in imaging devices.

3) Applied Ceramic Products Group

While sales increased in this reporting segment compared with the previous first quarter due primarily to growth recorded in the solar energy business and the cutting tools business, profitability in the medical materials business deteriorated due to reduction in official prices. As a result, operating profit decreased in this reporting segment.

 

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4) Electronic Device Group

Sales increased in this reporting segment compared with the previous first quarter. Apart from an increase in sales at AVX, sales of ceramic capacitors for flat-panel TVs and game consoles and of timing devices for mobile phone handsets grew. Operating profit slightly decreased due to an increase in depreciation.

Equipment Business:

Sales in the Equipment Business increased by 14.8% to ¥127,231 million, and operating profit increased by 55.6% to ¥9,037 million compared with the previous first quarter.

Consolidated results by reporting segment in the Equipment Business are as follows.

1) Telecommunications Equipment Group

Sales in this reporting segment increased compared with the previous first quarter due to robust sales of new mobile phone handsets in Japan. Operating profit improved compared with the previous first quarter due to the positive effect of sales growth in the domestic mobile phone handsets business and a reduction in loss at Kyocera Wireless Corp.

2) Information Equipment Group

Sales and operating profit increased in this reporting segment due to sales contribution of color printers and multifunctional systems released late in the year ended March 31, 2007 (fiscal 2007).

Others:

Sales in this reporting segment slightly increased by 0.2% to remain roughly on par with the previous first quarter at ¥31,628 million. Operating profit increased by 82.4% to ¥1,297 million compared with the previous first quarter due mainly to sales growth at Kyocera Communication Systems Co., Ltd. and reduced loss in the optical-related business.

 

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Table of Contents

Consolidated Sales by Reporting Segment

 

     (Yen in millions)  
     Three months ended June 30,        
     2006     2007     Increase
(Decrease)
%
 
     Amount     % of
net sales
    Amount     % of
net sales
   

Fine Ceramic Parts Group

   18,617     6.4     20,545     6.5     10.4  

Semiconductor Parts Group

   36,013     12.4     35,277     11.2     (2.0 )

Applied Ceramic Products Group

   31,258     10.7     33,420     10.6     6.9  

Electronic Device Group

   68,307     23.5     73,453     23.3     7.5  
                              

Total Components Business

   154,195     53.0     162,695     51.6     5.5  

Telecommunications Equipment Group

   50,577     17.4     59,959     19.0     18.5  

Information Equipment Group

   60,266     20.7     67,272     21.3     11.6  
                              

Total Equipment Business

   110,843     38.1     127,231     40.3     14.8  

Others

   31,556     10.8     31,628     10.0     0.2  

Adjustments and eliminations

   (5,393 )   (1.9 )   (6,104 )   (1.9 )    
                              

Net sales

   291,201     100.0     315,450     100.0     8.3  
                              

 

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Table of Contents

Consolidated Operating Profit by Reporting Segment

 

     (Yen in millions)  
     Three months ended June 30,       
     2006    2007   

Increase

(Decrease)
%

 
     Amount     % of
segment
sales
   Amount     % of
segment
sales
  

Fine Ceramic Parts Group

   3,431     18.4    3,045     14.8    (11.3 )

Semiconductor Parts Group

   5,511     15.3    4,023     11.4    (27.0 )

Applied Ceramic Products Group

   6,389     20.4    6,136     18.4    (4.0 )

Electronic Device Group

   10,269     15.0    10,252     14.0    (0.2 )
                            

Total Components Business

   25,600     16.6    23,456     14.4    (8.4 )

Telecommunications Equipment Group

   (2,843 )      (369 )       

Information Equipment Group

   8,651     14.4    9,406     14.0    8.7  
                            

Total Equipment Business

   5,808     5.2    9,037     7.1    55.6  

Others

   711     2.3    1,297     4.1    82.4  
                            

Operating profit

   32,119     11.0    33,790     10.7    5.2  

Corporate

   4,342        4,917        13.2  

Equity in (losses) earnings of affiliates and unconsolidated subsidiaries

   (343 )      1,772         

Adjustments and eliminations

   (53 )      5         
                            

Income from continuing operations before income taxes

   36,065     12.4    40,484     12.8    12.3  
                            

Note 2. From April 1, 2007, the “Optical Equipment Group,” previously a separate reporting segment, has been reclassified into “Others.” Accordingly, sales and operating profit for the previous first quarter have been retroactively reclassified.

Note 3. For the reasons set forth in Note 1 on page 4 and Note 2 above, net sales of “Others” in the previous first quarter increased by ¥1,118 million and “Adjustments and eliminations” decreased by ¥(219) million compared with those previously announced. Also, operating profit of “Others” in the previous first quarter decreased by ¥1,329 million, and “Adjustments and eliminations” increased by ¥(1) million compared with those previously announced.

(5) Consolidated Sales by Geographic Area

 

     (Yen in millions)  
     Three months ended June 30,       
     2006    2007    Increase
(Decrease)
(% )
 
     Amount    % of
net sales
   Amount    % of
net sales
  

Japan

   112,328    38.6    121,804    38.6    8.4  

USA

   61,703    21.2    62,692    19.9    1.6  

Asia

   51,128    17.5    57,480    18.2    12.4  

Europe

   46,468    16.0    55,383    17.6    19.2  

Others

   19,574    6.7    18,091    5.7    (7.6 )
                          

Net sales

   291,201    100.0    315,450    100.0    8.3  
                          

Note 4. For the reasons set forth in Note 1 on page 4, consolidated sales in Japan in the previous first quarter decreased by ¥1,495 million, compared with that of previously announced.

 

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Table of Contents

1) Japan

Sales increased compared with the previous first quarter due to large growth for mobile phone handsets and products in the Fine Ceramic Parts Group.

2) United States of America

Sales slightly increased compared with the previous first quarter due to growth in mobile phone handsets and products in the Information Equipment Group, which was partly offset by decline in sales of the Electronic Device Group and the Semiconductor Parts Group.

3) Asia

Sales substantially increased compared with the previous first quarter due to growth for products in the Electronic Device Group although sales in Personal Handyphone System decreased.

4) Europe

Sales increased largely compared with the previous first quarter due to growth for the Information Equipment Group coupled with growth in solar energy business.

5) Others

Sales decreased compared with the previous first quarter due to decline in sales of the Telecommunication Equipment Group in Oceania.

 

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Table of Contents

2. Cash flows

Cash and cash equivalents at June 30, 2007 increased by ¥4,354 million to ¥286,562 million compared with those at March 31, 2007.

 

     (Yen in millions)  
     Three months ended June 30,  
     2006     2007  

Cash flows from operating activities

   27,604     35,010  

Cash flows from investing activities

   (61,083 )   (35,060 )

Cash flows from financing activities

   240     (3,549 )

Effect of exchange rate changes on cash and cash equivalents

   (946 )   7,953  

Net (decrease) increase in cash and cash equivalents

   (34,185 )   4,354  

Cash and cash equivalents at beginning of period

   300,809     282,208  

Cash and cash equivalents at end of period

   266,624     286,562  

1) Cash Flows from Operating Activities

Net cash provided by operating activities in the first quarter increased by ¥7,406 million to ¥35,010 million from the previous first quarter of ¥27,604 million. Although payments of income taxes increased, net income increased by ¥4,912 million and cash and cash equivalent in connection with receivables and inventories significantly increased compared with the previous first quarter.

2) Cash Flows from Investing Activities

Net cash used in investing activities in the first quarter decreased by ¥26,023 million to ¥35,060 million from the previous first quarter of ¥61,083 million. This was due mainly to a decrease in deposit of negotiable certificate of deposits and time deposits compared with the previous first quarter.

3) Cash Flows from Financing Activities

Cash flows from financing activities changed from ¥240 million of net cash provided by during the previous first quarter to ¥3,549 million of net cash used in during this first quarter. This was due mainly to decreases in proceeds of issuance of short and long term debt and increases in dividends paid.

 

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3. Consolidated Financial Forecast for the Year Ending March 31, 2008

Performance in the first quarter progressed steadily toward the attainment of full-year forecasts. Production activities for personal computers and mobile phone handsets are expected to be further brisk from the second quarter of the year ending March 31, 2008 (fiscal 2008) onward. As a result, Kyocera forecasts growth in demand of components used in these products. Profits are therefore expected to increase in the Components Business. Kyocera also forecasts growth in the solar energy business in light of plans to increase production volume of solar cells and modules in the second half of fiscal 2008. In addition, an ongoing program of new product introductions is expected to boost sales and profits in the Equipment Business.

Consolidated forecasts for fiscal 2008 are as follows and there is no revision of our initial forecasts.

Consolidated forecasts for fiscal 2008 (Released on April 26, 2007)

 

     (Yen in millions, except per share amounts and exchange rates)  
     Fiscal 2008 Forecasts   

Increase

(Decrease)

from Fiscal 2007

(% )

 
     Amount   

% of

net sales

  

Net sales

   1,330,000    100.0    3.6  

Profit from operations

   151,000    11.4    11.8  

Income before income taxes

   166,000    12.5    6.0  

Net income

   103,000    7.7    (3.3 )

Diluted earnings per share

   543.89       (3.7 )

Average US$ exchange rate

   110        

Average Euro exchange rate

   150        
                

Note 5. The average U.S. dollar and Euro exchange rates set forth above are the forecast average from July 1, 2007 to March 31, 2008.

Note 6. Forecast of diluted earnings per share for fiscal 2008 set forth above is computed based on the diluted average number of shares outstanding during the first quarter.

 

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Table of Contents

Note 7. 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, particularly including China; unexpected changes in economic, political and legal conditions in China; our ability to develop, launch and produce innovative products, including meeting quality and delivery standards, and our ability to otherwise meet the advancing technical requirements of our customers, particularly in the highly competitive markets for ceramics, semiconductor parts and electronic components manufacturing delays or defects resulting from outsourcing or internal manufacturing processes which may adversely affect our production yields and operating results; factors that may affect our exports, including a strong yen, political and economic instability, difficulties in collection of accounts receivable, decrease in cost competitiveness of our products, increases in shipping and handling costs, difficulty in staffing and managing international operations, and inadequate protection of our intellectual property; changes in exchange rates, particularly between the yen and the U.S. dollar and euro, respectively, in which we make significant sales; inability to secure skilled employees, particularly engineering and technical personnel; insufficient protection of our trade secrets and patents; holding licenses to continue to manufacture and sell certain of its products, the expense of which may adversely affects its results of operations; future initiatives and in-process research and development may not produce the desired results; events that may impact negatively on our markets or supply chain, including terrorist acts and outbreaks of diseases; the occurrence of natural disasters, such as earthquakes, in locations where our manufacturing and other key business facilities are located; and fluctuations in the value of, and impairment losses on, securities and other assets held by us, and changes in accounting principles. 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
    

(Unaudited)

June 30, 2006

  

(Unaudited)

June 30, 2007

   March 31, 2007
     Amount     %    Amount     %    Amount     %

Current assets :

              

Cash and cash equivalents

   ¥ 266,624        ¥ 286,562        ¥ 282,208    

Short-term investments

     129,941          215,888          213,495    

Trade notes receivables

     24,981          23,388          25,033    

Trade accounts receivables

     199,679          227,590          236,380    

Less allowances for doubtful accounts and sales returns

     (7,055 )        (6,333 )        (5,960 )  

Inventories

     203,030          211,773          209,188    

Deferred income taxes

     40,911          46,239          45,390    

Other current assets

     75,596          81,202          40,757    
                                      

Total current assets

     933,707     47.3      1,086,309     50.5      1,046,491     49.1
                                      

Non-current assets :

              

Investments and advances :

              

Investments in and advances to affiliates and
unconsolidated subsidiaries

     7,017          11,941          10,093    

Securities and other investments

     582,216          660,474          690,568    
                                      

Total investments and advances

     589,233     29.9      672,415     31.2      700,661     32.9

Property, plant and equipment, at cost :

              

Land

     58,375          57,604          56,806    

Buildings

     251,710          266,971          261,998    

Machinery and equipment

     705,111          748,955          729,636    

Construction in progress

     8,232          10,071          7,362    

Less accumulated depreciation

     (737,524 )        (800,460 )        (774,896 )  
                                      

Total property, plant and equipment, at cost

     285,904     14.5      283,141     13.2      280,906     13.2

Goodwill

     31,166     1.6      34,204     1.6      32,894     1.5

Intangible assets

     30,041     1.5      23,876     1.1      24,657     1.2

Other assets

     103,765     5.2      51,625     2.4      44,855     2.1
                                      

Total non-current assets

     1,040,109     52.7      1,065,261     49.5      1,083,973     50.9
                                      

Total assets

   ¥ 1,973,816     100.0    ¥ 2,151,570     100.0    ¥ 2,130,464     100.0
                                      

 

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Table of Contents
     Yen in millions
     (Unaudited)    (Unaudited)     
     June 30, 2006    June 30, 2007    March 31, 2007
     Amount     %    Amount     %    Amount     %

Current liabilities :

              

Short-term borrowings

   ¥ 99,062        ¥ 21,998        ¥ 15,250    

Current portion of long-term debt

     17,728          5,501          5,853    

Trade notes and accounts payable

     103,863          95,400          100,295    

Other notes and accounts payable

     44,631          47,708          49,134    

Accrued payroll and bonus

     45,889          49,493          41,680    

Accrued income taxes

     17,756          15,732          36,475    

Other accrued liabilities

     31,778          32,756          33,391    

Other current liabilities

     19,701          28,341          24,110    
                                      

Total current liabilities

     380,408     19.3      296,929     13.8      306,188     14.4
                                      

Non-current liabilities :

              

Long-term debt

     31,848          6,984          7,283    

Accrued pension and severance liabilities

     24,844          16,922          16,297    

Deferred income taxes

     140,975          201,593          206,858    

Other non-current liabilities

     10,735          14,417          12,355    
                                      

Total non-current liabilities

     208,402     10.5      239,916     11.2      242,793     11.4
                                      

Total liabilities

     588,810     29.8      536,845     25.0      548,981     25.8
                                      

Minority interests in subsidiaries

     65,496     3.3      71,471     3.3      66,923     3.1

Stockholders’ equity :

              

Common stock

     115,703          115,703          115,703    

Additional paid-in capital

     161,960          162,528          162,363    

Retained earnings

     978,261          1,072,926          1,055,293    

Accumulated other comprehensive income

     91,269          211,213          203,056    

Treasury stock, at cost

     (27,683 )        (19,116 )        (21,855 )  
                                      

Total stockholders’ equity

     1,319,510     66.9      1,543,254     71.7      1,514,560     71.1
                                      

Total liabilities, minority interests and stockholders’ equity

   ¥ 1,973,816     100.0    ¥ 2,151,570     100.0    ¥ 2,130,464     100.0
                                      

Note : Accumulated other comprehensive income is as follows.

 

     Yen in millions
     June 30, 2006     June 30, 2007     March 31, 2007

Net unrealized gains on securities

   ¥ 104,270     ¥ 177,110     ¥ 184,670

Net unrealized (losses) gains on derivative financial instruments

   ¥ (134 )   ¥ (49 )   ¥ 63

Minimum pension liability adjustments

   ¥ (2,057 )          

Pension adjustments

         ¥ 14,831     ¥ 15,419

Foreign currency translation adjustments

   ¥ (10,810 )   ¥ 19,321     ¥ 2,904

 

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CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

 

     Yen in millions and shares in thousands, except per share amounts  
     Three months ended June 30,     Increase  
     2006     2007     (Decrease)  
     Amount     %     Amount     %     Amount     %  

Net sales

   ¥ 291,201     100.0     ¥ 315,450     100.0     ¥ 24,249     8.3  

Cost of sales

     200,345     68.8       219,826     69.7       19,481     9.7  
                                          

Gross profit

     90,856     31.2       95,624     30.3       4,768     5.2  

Selling, general and administrative expenses

     60,954     20.9       64,008     20.3       3,054     5.0  
                                          

Profit from operations

     29,902     10.3       31,616     10.0       1,714     5.7  

Other income (expenses) :

            

Interest and dividend income

     4,586     1.6       6,309     2.0       1,723     37.6  

Interest expense

     (219 )   (0.1 )     (410 )   (0.1 )     (191 )    

Foreign currency transaction (losses) gains, net

     (55 )   (0.0 )     1,009     0.3       1,064      

Equity in (losses) earnings of affiliates and unconsolidated subsidiaries

     (343 )   (0.1 )     1,772     0.6       2,115      

Gains (losses) on sales of securities, net

     1,810     0.6       (14 )   (0.0 )     (1,824 )    

Other, net

     384     0.1       202     0.0       (182 )   (47.4 )
                                          

Total other income

     6,163     2.1       8,868     2.8       2,705     43.9  
                                          

Income from continuing operations before income taxes and minority interests

     36,065     12.4       40,484     12.8       4,419     12.3  

Income taxes

     15,080     5.2       13,972     4.4       (1,108 )   (7.3 )
                                          

Income from continuing operations before minority interests

     20,985     7.2       26,512     8.4       5,527     26.3  

Minority interests

     (1,394 )   (0.5 )     (1,528 )   (0.5 )     (134 )    
                                          

Income from continuing operations

     19,591     6.7       24,984     7.9       5,393     27.5  

Income from discontinued operations

     481     0.2                 (481 )    
                                          

Net income

   ¥ 20,072     6.9     ¥ 24,984     7.9     ¥ 4,912     24.5  
                                          

Earnings per share :

            

Income from continuing operations :

            

Basic

   ¥ 104.26       ¥ 132.30        

Diluted

   ¥ 104.06       ¥ 131.93        

Income from discontinued operations :

            

Basic

   ¥ 2.56                

Diluted

   ¥ 2.55                

Net income :

            

Basic

   ¥ 106.82       ¥ 132.30        

Diluted

   ¥ 106.61       ¥ 131.93        

Weighted average number of shares of common stock outstanding :

            

Basic

     187,901         188,846        

Diluted

     188,283         189,378        

 

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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 three months ended June 30, 2006 and 2007 were an increase of ¥38,394 million and an increase of ¥33,141 million, 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 converted into common stock, exercised or resulted in the issuance of common stock.

 

3. In accordance with SFAS No.144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the consolidated financial statement for the three months ended June 30, 2006 has been retrospectively reclassified as for the discontinued operations.

 

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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
    Comprehensive
income

Balance, March 31, 2006 (187,755)

   ¥ 115,703    ¥ 161,994    ¥ 967,576     ¥ 72,947    ¥ (29,143 )  

Net income for the year

           106,504          ¥ 106,504

Other comprehensive income

             112,551        112,551
                   

Total comprehensive income for the year

                ¥ 219,055
                   

Adjustment for initially applying SAFS No. 158, net of taxes

             17,558     

Cash dividends

           (18,787 )       

Purchase of treasury stock (24)

                (251 )  

Reissuance of treasury stock (918)

        127           7,539    

Stock option plan of subsidiaries

        242          
                                       

Balance, March 31, 2007 (188,649)

     115,703      162,363      1,055,293       203,056      (21,855 )  

(Unaudited)

               

Cumulative effect of applying FIN 48 to opening balance (Note)

           3,968         

Net income for the period

           24,984          ¥ 24,984

Other comprehensive income

             8,157        8,157
                   

Total comprehensive income for the period

                ¥ 33,141
                   

Cash dividends

           (11,319 )       

Purchase of treasury stock (5)

                (60 )  

Reissuance of treasury stock (341)

        102           2,799    

Stock option plan of subsidiaries

        63          
                                       

Balance, June 30, 2007 (188,985)

   ¥ 115,703    ¥ 162,528    ¥ 1,072,926     ¥ 211,213    ¥ (19,116 )  
                                       

 

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Table of Contents
     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
    Comprehensive
income

Balance, March 31, 2006 (187,755)

   ¥ 115,703    ¥ 161,994     ¥ 967,576     ¥ 72,947    ¥ (29,143 )  

(Unaudited)

              

Net income for the period

          20,072          ¥ 20,072

Other comprehensive income

            18,322        18,322
                  

Total comprehensive income for the period

               ¥ 38,394
                  

Cash dividends

          (9,387 )       

Purchase of treasury stock (4)

               (43 )  

Reissuance of treasury stock (183)

        (34 )          1,503    
                                        

Balance, June 30, 2006 (187,934)

   ¥ 115,703    ¥ 161,960     ¥ 978,261     ¥ 91,269    ¥ (27,683 )  
                                        

Note :

In June 2006, the Financial Accounting Standard Board (FASB) issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No.109” (FIN 48) which clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with SFAS No. 109, “Accounting for Income Taxes.” FIN 48 also provides guidance on derecognition, classification, interest and penalties, disclosure and transitional measures. Cumulative effect of applying FIN 48, which was effective April 1, 2007, increased the opening balance of retained earnings by ¥3,968 million.

 

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

 

     Yen in millions  
     Three months ended June 30,  
     2006     2007  

Cash flows from operating activities :

    

Net income

   ¥ 20,072     ¥ 24,984  

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

    

Depreciation and amortization

     16,699       19,242  

Write-down of inventories

     1,640       2,205  

(Gains) losses on sales of securities, net

     (1,810 )     14  

Minority interests

     1,394       1,528  

Decrease in receivables

     4,002       17,132  

(Increase) decrease in inventories

     (15,355 )     1,953  

Increase (decrease) in notes and accounts payable

     3,109       (16,223 )

Decrease in accrued income taxes

     (10,138 )     (20,013 )

Increase in other current liabilities

     9,583       11,605  

Other, net

     (1,592 )     (7,417 )
                

Net cash provided by operating activities

     27,604       35,010  
                

Cash flows from investing activities :

    

Payments for purchases of securities

     (19,516 )     (11,915 )

Sales and maturities of securities

     16,009       21,316  

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

     (18,219 )     (17,839 )

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

     309       300  

Deposit of negotiable certificate of deposits and time deposits

     (85,924 )     (49,664 )

Withdrawal of negotiable certificate of deposits and time deposits

     46,249       22,533  

Other, net

     9       209  
                

Net cash used in investing activities

     (61,083 )     (35,060 )
                

Cash flows from financing activities :

    

Increase in short-term debt

     8,324       5,847  

Proceeds from issuance of long-term debt

     1,451        

Payments of long-term debt

     (1,326 )     (914 )

Dividends paid

     (9,508 )     (11,174 )

Purchase of treasury stock

     (43 )     (60 )

Reissuance of treasury stock

     1,469       2,901  

Other, net

     (127 )     (149 )
                

Net cash provided by (used in) financing activities

     240       (3,549 )
                

Effect of exchange rate changes on cash and cash equivalents

     (946 )     7,953  
                

Net (decrease) increase in cash and cash equivalents

     (34,185 )     4,354  

Cash and cash equivalents at beginning of period

     300,809       282,208  
                

Cash and cash equivalents at end of period

   ¥ 266,624     ¥ 286,562  
                

 

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SEGMENT INFORMATION (Unaudited)

1. Reporting segments :

 

     Yen in millions  
     Three months ended June 30,              
     2006     2007     Increase (Decrease)  
     Amount     Amount     Amount     %  

Net sales :

        

Fine Ceramic Parts Group

   ¥ 18,617     ¥ 20,545     ¥ 1,928     10.4  

Semiconductor Parts Group

     36,013       35,277       (736 )   (2.0 )

Applied Ceramic Products Group

     31,258       33,420       2,162     6.9  

Electronic Device Group

     68,307       73,453       5,146     7.5  

Telecommunications Equipment Group

     50,577       59,959       9,382     18.5  

Information Equipment Group

     60,266       67,272       7,006     11.6  

Others

     31,556       31,628       72     0.2  

Adjustments and eliminations

     (5,393 )     (6,104 )     (711 )    
                              
   ¥ 291,201     ¥ 315,450     ¥ 24,249     8.3  
                              

Operating profit :

        

Fine Ceramic Parts Group

   ¥ 3,431     ¥ 3,045     ¥ (386 )   (11.3 )

Semiconductor Parts Group

     5,511       4,023       (1,488 )   (27.0 )

Applied Ceramic Products Group

     6,389       6,136       (253 )   (4.0 )

Electronic Device Group

     10,269       10,252       (17 )   (0.2 )

Telecommunications Equipment Group

     (2,843 )     (369 )     2,474      

Information Equipment Group

     8,651       9,406       755     8.7  

Others

     711       1,297       586     82.4  
                              
     32,119       33,790       1,671     5.2  

Corporate

     4,342       4,917       575     13.2  

Equity in (losses) earnings of affiliates and unconsolidated subsidiaries

     (343 )     1,772       2,115      

Adjustments and eliminations

     (53 )     5       58      
                              

Income from continuing operations before income taxes and minority interests

   ¥ 36,065     ¥ 40,484     ¥ 4,419     12.3  
                              

Depreciation and amortization :

        

Fine Ceramic Parts Group

   ¥ 905     ¥ 1,459     ¥ 554     61.2  

Semiconductor Parts Group

     2,770       3,129       359     13.0  

Applied Ceramic Products Group

     1,811       2,006       195     10.8  

Electronic Device Group

     4,430       5,274       844     19.1  

Telecommunications Equipment Group

     1,547       2,241       694     44.9  

Information Equipment Group

     3,252       2,788       (464 )   (14.3 )

Others

     1,311       1,561       250     19.1  

Corporate

     637       784       147     23.1  
                              

Total

   ¥ 16,663     ¥ 19,242     ¥ 2,579     15.5  
                              

Capital expenditures :

        

Fine Ceramic Parts Group

   ¥ 990     ¥ 1,174     ¥ 184     18.6  

Semiconductor Parts Group

     3,310       2,027       (1,283 )   (38.8 )

Applied Ceramic Products Group

     845       1,717       872     103.2  

Electronic Device Group

     5,404       5,113       (291 )   (5.4 )

Telecommunications Equipment Group

     943       542       (401 )   (42.5 )

Information Equipment Group

     3,915       1,924       (1,991 )   (50.9 )

Others

     730       792       62     8.5  

Corporate

     575       1,755       1,180     205.2  
                              

Total

   ¥ 16,712     ¥ 15,044     ¥ (1,668 )   (10.0 )
                              

 

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

 

     Yen in millions  
     Three months ended June 30,              
     2006     2007     Increase (Decrease)  
     Amount     Amount     Amount     %  

Net sales :

        

Japan

   ¥ 119,482     ¥ 128,689     ¥ 9,207     7.7  

Intra-group sales and transfer between geographic areas

     91,654       93,725       2,071     2.3  
                              
     211,136       222,414       11,278     5.3  
                              

United States of America

     71,539       73,213       1,674     2.3  

Intra-group sales and transfer between geographic areas

     8,941       8,739       (202 )   (2.3 )
                              
     80,480       81,952       1,472     1.8  
                              

Asia

     45,263       49,761       4,498     9.9  

Intra-group sales and transfer between geographic areas

     36,880       42,908       6,028     16.3  
                              
     82,143       92,669       10,526     12.8  
                              

Europe

     48,824       57,739       8,915     18.3  

Intra-group sales and transfer between geographic areas

     10,064       10,546       482     4.8  
                              
     58,888       68,285       9,397     16.0  
                              

Others

     6,093       6,048       (45 )   (0.7 )

Intra-group sales and transfer between geographic areas

     2,595       3,587       992     38.2  
                              
     8,688       9,635       947     10.9  
                              

Adjustments and eliminations

     (150,134 )     (159,505 )     (9,371 )    
                              
   ¥ 291,201     ¥ 315,450     ¥ 24,249     8.3  
                              

Operating profit :

        

Japan

   ¥ 23,162     ¥ 23,897     ¥ 735     3.2  

United States of America

     2,449       2,203       (246 )   (10.0 )

Asia

     5,212       5,592       380     7.3  

Europe

     1,755       2,758       1,003     57.2  

Others

     1,578       774       (804 )   (51.0 )
                              
     34,156       35,224       1,068     3.1  

Adjustments and eliminations

     (2,090 )     (1,429 )     661      
                              
     32,066       33,795       1,729     5.4  

Corporate

     4,342       4,917       575     13.2  

Equity in (losses) earnings of affiliates and unconsolidated subsidiaries

     (343 )     1,772       2,115      
                              

Income from continuing operations before income taxes and minority interest

   ¥ 36,065     ¥ 40,484     ¥ 4,419     12.3  
                              

 

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3. Geographic segments (Sales by region) :

 

     Yen in millions  
     Three months ended June 30,    Increase (Decrease)  
     2006    2007   
     Amount     %    Amount     %    Amount     %  

Japan

   ¥112,328     38.6    ¥121,804     38.6    ¥9,476     8.4  

United States of America

   61,703     21.2    62,692     19.9    989     1.6  

Asia

   51,128     17.5    57,480     18.2    6,352     12.4  

Europe

   46,468     16.0    55,383     17.6    8,915     19.2  

Others

   19,574     6.7    18,091     5.7    (1,483 )   (7.6 )
                                  

Net sales

   ¥291,201     100.0    ¥315,450     100.0    ¥24,249     8.3  
                                  

Sales outside Japan

   ¥178,873        ¥193,646        14,773     8.3  

Sales outside Japan to net sales

   61.4 %      61.4 %       

 

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Table of Contents

Appendix

Consolidated Orders and Production by Reporting Segment

Consolidated Orders by Reporting Segment

 

     (Yen in millions)  
     Three month ended June 30,     Increase
(Decrease)
(%)
 
     2006     2007    
     Amount     % of
orders
    Amount     % of
orders
   

Fine Ceramic Parts Group

   19,629     6.3     21,194     6.8     8.0  

Semiconductor Parts Group

   37,542     12.1     36,062     11.6     (3.9 )

Applied Ceramic Products Group

   32,985     10.7     34,162     10.9     3.6  

Electronic Device Group

   73,354     23.7     75,645     24.2     3.1  
                              

Total Components Business

   163,510     52.8     167,063     53.5     2.2  

Telecommunications Equipment Group

   58,714     18.9     50,872     16.3     (13.4 )

Information Equipment Group

   60,072     19.4     67,601     21.7     12.5  
                              

Total Equipment Business

   118,786     38.3     118,473     38.0     (0.3 )

Others

   32,960     10.6     32,256     10.3     (2.1 )

Adjustments and eliminations

   (5,391 )   (1.7 )   (5,799 )   (1.8 )    
                              

Orders

   309,865     100.0     311,993     100.0     0.7  
                              

Note 1. From April 1, 2007, the “Optical Equipment Group,” previously a separate reporting segment, has been reclassified into “Others.” Accordingly, previously reported orders for the previous first quarter have been retroactively reclassified.

Note 2. For the reasons set forth in Note 1 on page 4 and Note 1 above, orders of “Others” in the previous first quarter increased by ¥778 million, “Adjustments and eliminations” decreased by ¥(202) million and total of “Orders” decreased by ¥2,112 million compared with those previously announced.

 

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Table of Contents

Consolidated Production by Reporting Segment

 

    

(Yen in millions)

 
     Three month ended June 30,    Increase
(Decrease)
(%)
 
     2006    2007   
     Amount    % of
production
   Amount    % of
production
  

Fine Ceramic Parts Group

   18,659    6.2    20,634    6.5    10.6  

Semiconductor Parts Group

   37,473    12.6    35,642    11.3    (4.9 )

Applied Ceramic Products Group

   31,501    10.6    35,208    11.2    11.8  

Electronic Device Group

   69,283    23.3    75,306    23.9    8.7  
                          

Total Components Business

   156,916    52.7    166,790    52.9    6.3  

Telecommunications Equipment Group

   52,358    17.6    55,697    17.7    6.4  

Information Equipment Group

   65,830    22.1    69,103    21.9    5.0  
                          

Total Equipment Business

   118,188    39.7    124,800    39.6    5.6  

Others

   22,586    7.6    23,569    7.5    4.4  
                          

Production

   297,690    100.0    315,159    100.0    5.9  
                          

Note 3. From April 1, 2007, the “Optical Equipment Group,” previously a separate reporting segment, has been reclassified into “Others.” Accordingly, previously reported production for the previous first quarter have been retroactively reclassified.

 

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Table of Contents

LOGO

   July 30, 2007
  
   KYOCERA CORPORATION

Consolidated Financial Highlights (Unaudited)

Results for the Three Months Ended June 30, 2007

 

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

Increase

(Decrease) %

 
     2006    2007   

Net sales

   291,201    315,450    8.3  

Profit from operations

   29,902    31,616    5.7  

Income from continuing operations before income taxes

   36,065    40,484    12.3  

Net income

   20,072    24,984    24.5  

Average exchange rates :

        

US$

   115    121     

Euro

   144    163     

Earnings per share :

        

Net income :

        

Basic

   106.82    132.30    23.9  

Diluted

   106.61    131.93    23.8  

Capital expenditures

   16,712    15,044    (10.0 )

Depreciation

   14,427    16,281    12.9  

R&D expenses

   15,632    15,315    (2.0 )

Total assets

   1,973,816    2,151,570    9.0  

Stockholders’ equity

   1,319,510    1,543,254    17.0  

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

   34.1    33.7     

Note : Kyocera sold its shares in Kyocera Leasing Co., Ltd., a subsidiary engaged in financing services in the year ended March 31, 2007, and as a result, business results of Kyocera Leasing Co., Ltd. for the three months ended June 30, 2006 have been recorded as income from discontinued operations in conformity with accounting principles generally accepted in the U.S. As a result, reclassified consolidated net sales for the three months ended June 30, 2006 decreased by ¥1,495 million compared with the result previously announced, reclassified profit from operations decreased by ¥740 million, income from continuing operations before income taxes decreased by ¥862 million, capital expenditures decreased by ¥18 million, depreciation decreased by ¥17 million, respectively. The rate of sales of products manufactured outside Japan to net sales was 0.2 points higher than the result previously announced.

 

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