Kyocera 6-K 2009
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 January 2009
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: January 29, 2009
for the Nine Months Ended December 31, 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 nine months ended December 31, 2008 :
(1) Consolidated results of operations :
(2) Consolidated financial position :
- 1 -
2. Dividends :
There was no revision on the above forecasts of dividend from those previously announced.
3. Consolidated financial forecasts for the year ending March 31, 2009 :
consolidated financial forecasts were revised from those previously announced in October 2008.
Earnings per share amount 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 nine months ended December 31, 2008.
- 2 -
4. Others :
(1) Increase or decrease in significant subsidiaries during this period :
(2) Adoption of concise quarterly accounting method or procedure :
(3) Changes in accounting principles, procedures and financial statements presentation :
Changes due to adoption of new accounting standards :
Please refer to the accompanying 4. Other Information on page 14.
Changes due to other than adoption of new accounting standards :
(4) Number of shares (common stock) :
Instruction for forecasts and other notes:
With regard to the premise of the forecasts set forth elsewhere in this Form 6-K, please refer to the accompanying Forward-Looking Statements on page 13.
- 3 -
Business Results, Financial Conditions and Prospects
1. Business Results for the Nine Months Ended December 31, 2008
(1) Economic Situation and Business Environment
In the nine months from April 1, 2008 to December 31, 2008 (this nine months), and particularly since fall in the year 2008, the impact of the financial crisis sparked by the sub-prime loan problem has affected the real economy, resulting in rapid global economic deterioration. In the Japanese economy, corporate production activity slowed down due to sharp decrease of exports. Further, appreciation of the yen against the U.S. dollar, Euro and other currencies significantly affected corporate performance, while private capital investment decreased and consumer spending weakened. As a result, the Japanese economic downturn is becoming increasingly pronounced.
Amid this deterioration in the global economy, the digital consumer equipment market, which is a principal market for Kyocera Corporation and its consolidated subsidiaries (Kyocera Group or Kyocera), posted sluggish growth in sales of high-end mobile phone handsets and personal computers (PCs), as well as in sales of flat panel TV sets due in part to stagnant consumer spending. In addition, the business environment has changed dramatically, particularly on account of the sharp decline in information technology investment, and as a result, demand for component decreased significantly compared with the nine months ended December 31, 2007 (the previous nine months). Despite the harsh environment as a whole, however, the solar energy market continued to expand worldwide due in part to subsidies from national governments.
(2) Consolidated Financial Results
Sales and profits for this nine months decreased compared with the previous nine months due to the significant impact of the deteriorating business environment, notably a slowdown in demand and the yens appreciation. Consolidated net sales for this nine months amounted to ¥902,577 million, a decrease of 6.6% compared with the previous nine months.
Profit from operations for this nine months decreased by 38.9% compared with the previous nine months to ¥67,257 million due mainly to a decrease in demand as well as product selling price erosion. Income before income taxes for this nine months decreased by 37.6% compared with the previous nine months to ¥82,409 million. Net income for this nine months decreased by 32.0% compared with the previous nine months to ¥56,768 million.
- 4 -
Average exchange rates for this nine months were ¥103 to the U.S. dollar and ¥151 to the Euro, marking appreciation of ¥14 and ¥12, respectively, compared with the previous nine months. As a result, net sales and income before income taxes after translation into the yen for this nine months were, for calculation purposes, pushed down by approximately ¥68.0 billion and ¥16.5 billion, respectively.
- 5 -
(3) Consolidated Financial Results by Reporting Segment
(i) Components Business:
Sales and operating profit decreased in the components business except for the Applied Ceramic Products Group for this nine months. Consequently, sales in the components business for this nine months decreased by 6.2% to ¥478,535 million, and operating profit decreased by 38.3% to ¥47,505 million.
This reporting segment includes fine ceramic components and automotive components.
As a result of a general decline in production activity in numerous industries, namely, the semiconductor and automotive industries, overall sales and operating profit in this reporting segment decreased compared with the previous nine months.
This reporting segment includes ceramic packages and organic packages.
As a result of a rapid deterioration of demand for ceramic packages and organic packages mainly used for digital consumer equipment and servers from the latter half of the three months ended September 30, 2008, sales remains flat compared with the previous nine months. Operating profit decreased due to a negative impact of price erosions for components compared with the previous nine months.
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.
For the solar energy business, despite the adverse impact of the yens appreciation, in response to strong demand particularly in Europe and the United States, Kyocera expanded its production volume globally. As a result, both sales and operating profit in this reporting segment increased compared with the previous nine months.
This reporting segment includes electronic components such as various types of capacitors, crystal related products, connectors, and thin-film products such as thermal printheads and liquid crystal displays.
A slowdown in demand for digital consumer equipment such as high-end mobile phone handsets and PCs, coupled with a decline in selling prices for electronic components as well as the yens appreciation resulted in decreases in sales and operating profit compared with the previous nine months.
- 6 -
(ii) Equipment Business:
Sales in the equipment business for this nine months decreased by 8.0% to ¥345,165 million, and operating profit decreased by 87.5% to ¥3,943 million compared with the previous nine months.
This reporting segment includes mobile phone handsets as well as PHS handsets, base stations for PHS/EVDO, and iBurstTM related equipment.
Although the mobile phone handset related business newly acquired from SANYO Electric Co., Ltd. (SANYO) contributed to sales, replacement demand for mobile phone handsets in the Japanese market weakened due to the introduction of a new retail method, and sales in overseas markets also decreased. As a result, sales remains at the same level as the previous nine months. Moreover, this reporting segment recorded an operating loss in this nine months due to a decrease in sales of highly profitable handsets in the Japanese market and due to price erosions in overseas market.
This reporting segment includes ECOSYS brand printers and digital MFPs.
The yens appreciation and significant worldwide decreases in investment in information equipment in the corporate sector caused by the financial crisis and the economic downturn had a large negative impact on sales of digital MFPs and printers. As a result, sales and operating profit in this reporting segment decreased compared with the previous nine months.
(iii) Others :
This reporting segment includes various information and communications technology services, and materials for electronic components.
Sales in this reporting segment for this nine months decreased by 2.9% compared with the previous nine months to ¥96,973 million due primarily to a decrease in sales of materials for electronic components. Operating profit increased by 126.4% compared with the previous nine months to ¥15,241 million due to gains on sales of certain real estates in Japan and overseas in the second quarter.
- 7 -
Consolidated Sales by Reporting Segment
- 8 -
(4) Consolidated Sales by Geographic Area
Despite the addition of the mobile phone handset related business from SANYO, sales remained at the same level as the previous nine months because sales of the components business and equipment business as a whole decreased on the back of a sharp decline in demand.
Sales decreased compared with the previous nine months due to a decline in sales in the Telecommunication Equipment Group and in the Information Equipment Group affected by the economic downturn.
Sales of the solar energy business in the Applied Ceramic Products Group increased, however, sales decreased compared with the previous nine months due mainly to a decline in sales of printers and digital MFPs in the Information Equipment Group, as well as in sales in the Electronic Devices Group affected by the economic deterioration and the yens appreciation.
Sales decreased compared with the previous nine months due mainly to a decline in sales in the Electronic Device Group caused by the yens appreciation and a slowdown in demand for components on the back of the adjustments of production of digital consumer equipment.
Despite the addition of the mobile phone handset related business from SANYO, sales remained at the same level as the previous nine months due to decline in sales in the Information Equipment Group.
- 9 -
2. Consolidated Financial Position
Cash and cash equivalents at December 31, 2008 decreased by ¥202,578 million to ¥245,008 million compared with those at March 31, 2008.
(1) Cash flow from operating activities
Net cash provided by operating activities in this nine months decreased by ¥41,256 million to ¥69,701 million from ¥110,957 million in the previous nine months. This reflected that a decrease in net income and an increase in cash outflows with payable exceeded an increase in cash inflows with receivables.
(2) Cash flow from investing activities
Net cash used in investing activities in this nine months increased by ¥71,944 million to ¥191,859 million from ¥119,915 million in the previous nine months. This was due mainly to a decrease in proceeds from sales and maturities of securities.
(3) Cash flow from financing activities
Net cash used in financing activities in this nine months increased by ¥37,224 million to ¥57,718 million from ¥20,494 million in the previous nine months. This was due mainly to Kyoceras acquisition of its own shares in the market as its treasury stock during November 28, 2008 to December 22, 2008.
- 10 -
3. Consolidated Financial Forecasts for the Year Ending March 31, 2009
Based on the performance for this nine months as well as the outlook for the global economy and business environment for the three months ending March 31, 2009 (the fourth quarter), the following revisions have been made to Kyoceras consolidated financial forecasts for the year ending March 31, 2009 (fiscal 2009) previously announced in October 2008.
Consolidated Forecasts for Fiscal 2009
Note : Diluted earnings per share, as set forth in the previous forecast, have been revised for the figure as of October 30, 2008 as set forth above using a number of shares calculated using the weighted average method for the six months ended September 30, 2008.
The global economy and the market for digital consumer equipment are currently worse than those expected when the previous forecast was announced in October 2008, and will be deteriorated even further in the fourth quarter. In addition, Kyocera may record one-off costs in the fourth quarter associated with certain assets required to be measured by fair value or market value. Accordingly, net sales and profits are forecasted to be lower than the previous forecast announced in October 2008.
In light of the extremely severe business environment, Kyocera will strive to secure orders by reinforcing its marketing activities, particularly exploring customer needs, and to reduce costs thoroughly, which includes downsizing the plans of capital investment. Kyocera also aims to establish highly profitable business basis by strengthening the development of new products and future technologies throughout Kyocera Group, and by strategically promoting further enhancements in quality. Kyocera Group will work cooperatively to implement these measures in order to steadily improve performance when demand recovers.
- 11 -
Consolidated Sales by Reporting Segment
- 12 -
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.
- 13 -
4. Other Information
Change in accounting principles, procedures and financial statements presentation:
Recently adopted Accounting Standards
In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (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 period 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.
- 14 -
5. Supplemental Information
- 15 -
6. Consolidated Financial Statements
(1) CONSOLIDATED BALANCE SHEETS
- 16 -
Note: Accumulated other comprehensive income is as follows :
- 17 -
(2) CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
- 18 -
- 19 -
(4) SEGMENT INFORMATION (Unaudited)
Reporting segments :
- 20 -
Geographic segments (Sales and Operating profits by geographic area) :
- 21 -
Geographic segments (Sales by region) :
(5) Cautionary statement for premise of a going concern
(6) Cautionary statement for significant changes in shareholders equity
Based on the resolution at the meeting of the Board of Directors held on November 27, 2008, Kyocera acquired its own shares in the market as its treasury stock from November 28, 2008 to December 22, 2008. The total number of shares acquired and the total acquisition price were 6,256,000 shares and ¥38,000 million, respectively. Due mainly to this acquisition, the balance of treasury stock at December 31, 2008 increased by ¥35,265 million, to ¥50,554 million, compared to that at March 31, 2008.
- 22 -