Kyocera 6-K 2008
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 2008
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:
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Yes No X
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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 : July 30, 2008
for the Three Months ended June 30, 2008
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, 2008 :
(1) Consolidated results of operations :
(2) Consolidated financial position :
2. Dividends :
Dividends per share for the year ending March 31, 2009 are forecasted to be 120 yen on annual basis.
3. Consolidated financial forecast for the year ending March 31, 2009 :
Earnings per share amount 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 three months ended June 30, 2008.
4. Others :
(1) Increase or decrease in significant subsidiaries during this period :
(2) Adoption of simplified accounting method :
(3) Change in accounting policies :
There were changes in accounting policies due to new accounting standards.
Please refer to the accompanying 4. Others, Change in accounting policies : Recently adopted Accounting Standards on page 13.
(4) Number of shares (common stock) :
With regard to forecasts set forth above, please refer to the accompanying Forward-Looking Statements on page 12.
Business Results, Financial Conditions and Prospects
1. Business Results for the Three Months Ended June 30, 2008
(1) Economic Situation and Business Environment
During the three months ended June 30, 2008 (the first quarter), continuing concern over financial instability coupled with rising prices for crude oil and raw materials led to heightened likeliness of a slowdown in world economy. Corporate earnings and private capital investment posted sluggish growth, and personal consumption weakened due to deteriorating employment conditions in Europe and the United States, and to increasing global inflation fears.
In the digital consumer equipment market, which is the principal market for Kyocera Corporation and its consolidated subsidiaries (Kyocera Group or Kyocera), although production of personal computers was steady compared with the three months ended June 30, 2007 (the previous first quarter), demand for mobile phone handsets with advanced functions slackened in the European and U.S. markets, and there were production adjustments in the Chinese market, which led to weakened surrounding environment for the components business. The solar energy market continued to expand on the back of burgeoning demand amid increasing awareness of solar power as a viable alternative energy.
(2) Consolidated Financial Results
Consolidated net sales for the first quarter amounted to ¥331,758 million, an increase of 5.2% compared with the previous first quarter due to the addition of sales from the mobile phone business of SANYO Electric Co., Ltd. (SANYO), acquired on April 1, 2008 and an increase in sales of solar energy business, etc.
Profit from operations for the first quarter decreased by 11.6% to ¥27,962 million compared with the previous first quarter due to appreciation of yen against U.S. dollars and to an increase in depreciation expense, etc. Income before income taxes for the first quarter decreased by 8.8% to ¥36,905 million compared with the previous first quarter. Net income for the first quarter also decreased by 12.1% to ¥21,962 million compared with the previous first quarter.
(3) Consolidated Financial Results by Reporting Segment
Consolidated results by reporting segment are as follows.
Sales in the components business increased by 3.8% compared with the previous first quarter to ¥168,820 million, while operating profit decreased by 3.9% to ¥22,534 million with an operating profit ratio of 13.3%.
1) Fine Ceramic Parts Group
This reporting segment includes fine ceramic components and automotive components.
As a result of a decrease in sales of components for semiconductor fabrication equipment and automotive components, overall sales and operating profit in this reporting segment decreased compared with the previous first quarter.
2) Semiconductor Parts Group
This reporting segment includes ceramic packages and organic packages.
Sales of ceramic packages for crystal and SAW devices and ceramic packages for image sensors increased, reflecting growing use in mobile phone handsets and digital still cameras. Furthermore, improved profitability was achieved for organic packages business through the effect of increased sales and productivity. As a result, overall sales and operating profit increased significantly compared with the previous first quarter.
3) Applied Ceramic Products Group
This reporting segment includes solar cells and modules, solar power generating systems, cutting tools, medical and dental implants, and jewelry and applied ceramic related products.
Both sales and operating profit increased considerably for the first quarter in this reporting segment compared with the previous first quarter due mainly to substantial growth in sales in the solar energy business overseas, notably in Europe and the United States.
4) Electronic Device Group
This reporting segment includes electronic components such as various types of capacitors, crystal related products and connectors, and thin-film products such as thermal printheads.
Sales of crystal units and so forth for digital consumer equipment grew steadily for the first quarter. However, a decline in unit selling prices for ceramic capacitors due to deterioration in the supply and demand relationship, particularly in the Asia region, led to decreases in overall sales and operating profit in this reporting segment compared with the previous first quarter.
Sales in the equipment business increased by 7.8% to ¥137,109 million, while operating profit decreased by 11.1% compared with the previous first quarter to ¥8,038 million with an operating profit ratio of 5.9%.
1) Telecommunications Equipment Group
This reporting segment includes mobile phone handsets as well as PHS base stations and handsets.
Sales in this reporting segment increased significantly during the first quarter compared with the previous first quarter due to the addition of the mobile phone business of SANYO in April and an increase in sales of PHS related products. Operating profit increased compared with the previous first quarter due to a successful reduction in production costs in the domestic mobile phone handset business and the positive effect of sales growth in PHS related products.
2) Information Equipment Group
This reporting segment includes ECOSYS brand printers and digital MFPs.
Sales and operating profit for the first quarter both decreased in this reporting segment compared with the previous first quarter due to weakened demand for printers and digital multifunctional peripherals on the back of a decline in investment in information equipment in the corporate sector reflecting sluggish market conditions in the United States, coupled with a severe business environment, characterized in particular by intensifying price competition.
This reporting segment includes various information and communications technology services and chemical materials for electronic components.
Sales in this reporting segment for the first quarter increased by 1.7% compared with the previous first quarter to ¥32,178 million due primarily to increases in sales in the Information & Communication Technology (ICT) business and the telecommunications engineering business of Kyocera Communication Systems Co., Ltd. Operating profit decreased by 58.1% to ¥543 million compared with the previous first quarter, with an operating profit ratio of 1.7% due to an increase in overhead costs.
Consolidated Sales by Reporting Segment
Consolidated Operating Profit by Reporting Segment
(4) Consolidated Sales by Geographic Area
Sales increased compared with the previous first quarter due to an increase in sales in the Telecommunication Equipment Group, notably of mobile phone handsets.
2) United States of America
Sales decreased compared with the previous first quarter due mainly to a decline in sales of printers and digital multifunctional peripherals in the Information Equipment Group.
Sales increased compared with the previous first quarter due to sales growth in solar energy business in the Applied Ceramic Products Group.
Sales decreased compared with the previous first quarter due mainly to a decline in sales in the Electronic Device Group.
Sales increased compared with the previous first quarter due to increase in sales of mobile phone handsets in the Telecommunication Equipment Group.
2. Consolidated Financial Position
Cash and cash equivalents at June 30, 2008 decreased by ¥135,905 million to ¥311,681 million compared with those at March 31, 2008.
(1) Cash flow from operating activities
Net cash provided by operating activities in the first quarter increased by ¥5,628 million to ¥40,638 million from ¥35,010 million in the previous first quarter. Despite net income decreased, cash inflows with receivables increased.
(2) Cash flow from investing activities
Net cash used in investing activities in the first quarter increased by ¥138,180 million to ¥173,240 million from ¥35,060 million in the previous first quarter. This was due mainly to a large increase in acquisition of certificate deposits and time deposits, and payments for acquisitions of businesses.
(3) Cash flow from financing activities
Net cash used in financing activities in the first quarter increased by ¥8,602 million to ¥12,151 million from ¥3,549 million in the previous first quarter. This was due mainly to an increase in payments of short-term debt and a decrease in reissuance of treasury stock.
3. Consolidated Financial Forecast for the Year Ending March 31, 2009 (fiscal 2009)
Although we have revised our forecast for the average exchange rate of the Japanese yen against the Euro, there are no changes to full-year consolidated financial forecasts for the fiscal 2009 since the effect of this revision is insignificant.
Consolidated Forecasts for Fiscal 2009
Note : The forecast of earnings per share announced on July 30, 2008 is computed based on the diluted average number of shares outstanding during the first quarter.
The global economic situation in Japan and overseas is expected to remain severe during the second quarter of fiscal 2009 and thereafter due to continuing concern over financial instability in the United States and to heightened inflation worries triggered primarily by the rising costs of crude oil and raw materials. Despite these, production activities for digital consumer equipment are expected to expand steadily, and as a result, Kyocera forecasts moderate recovery in demand for components used in these products in the second half of fiscal 2009.
Based on this market environment outlook, we will strive to attain full-year forecasts by strengthening the foundations of each business, cultivating new markets and customers, and improving productivity, aiming for continuous expansion of sales and improvement of profitability of Kyocera Group as a whole.
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 the following lists.
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.
Change in accounting policies :
Recently adopted Accounting Standards
In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS No. 157, Fair Value Measurements. The purpose of SFAS No. 157 is to define fair value, establish a framework for measuring fair value and enhance disclosures about fair value measurements. The measurement and disclosure requirements related to financial assets and financial liabilities are effective April 1, 2008. The adoption of SFAS No. 157 for financial assets and financial liabilities has no material impact on Kyoceras consolidated results of operations and financial position.
In September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans-an amendment of FASB Statements No.87, 88, 106, and 132 (R). SFAS No. 158 requires an employer to measure the funded status of a benefit plan as of the date of its fiscal year-end statement of financial position for the years ending after December 15, 2008. Kyocera adopts this measurement date provision in the year ending March 31, 2009 and starts to measure the funded status of its benefit plans at the date of its fiscal year-end statement of financial position. As a result of applying the transition method of this provision, retained earnings and other comprehensive income at the beginning of the first quarter decreased by ¥522 million and ¥418 million, respectively.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial LiabilitiesIncluding an amendment of FASB Statement No. 115. SFAS No.159 provides companies with an option to report selected financial assets and liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected will be recognized in earnings. SFAS No.159 is effective beginning after April 1, 2008. The adoption of SFAS No. 159 has no significant impact on Kyoceras consolidated results of operations or financial position.
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
SFAS No. 158 - Employers Accounting for Defined Benefit Pension and Other Postretirement Plans-an amendment of FASB Statements No. 87, 88, 106, and 132 (R).
Please refer to page 13 4. Others, Change in accounting policies : Recently adopted Accounting Standards.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
SEGMENT INFORMATION (Unaudited)
1. Reporting segments :
2. Geographic segments (Sales and Operating profits by geographic area) :
3. Geographic segments (Sales by region) :
Note for the assumption of continuing operation :
Note in case where the amount of shareholders equity significantly changed :
Please refer to page 18 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY.
1. Consolidated Orders by Reporting Segment
2. Consolidated Production by Reporting Segment