Kyocera 6-K 2009 Table of ContentsFORM 6-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 For the month of October 2009 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 ContentsSIGNATURE 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 : October 30, 2009
Table of ContentsInformation furnished on this form:
Table of ContentsConsolidated Financial Results of Kyocera Corporation and its Subsidiaries for the Six Months Ended September 30, 2009 The consolidated financial information is prepared using accounting principles generally accepted in the United States of America. 1. Consolidated Financial Information for the Six Months Ended September 30, 2009: (1) Consolidated results of operations:
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Table of Contents2. Dividends:
3. Consolidated Financial Forecast for the Year Ending March 31, 2010:
Net income attributable to shareholders of Kyocera Corporation is computed in the same manner as net income for the year ended March 31, 2009. Forecast of earnings per share attributable to shareholders of Kyocera Corporation is computed based on the diluted average number of shares outstanding during the six months ended September 30, 2009.
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Table of Contents4. Others: (1) Increase or decrease in significant subsidiaries during the six months ended September 30, 2009: None. (2) Adoption of concise quarterly accounting method or procedure: Not applicable. (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: None. (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.
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Table of ContentsBusiness Results, Financial Conditions and Prospects 1. Business Results for the Six Months Ended September 30, 2009 (1) Economic Situation and Business Environment In the six months ended September 30, 2009 (the “first half”), overseas economies registered indications of recovery as corporate production activities expanded, driven by economic stimulus packages and financial measures in various countries. In the Japanese economy, inventory adjustments in the manufacturing industry ended and exports increased, while personal consumption showed signs of improvement, supported by an economic stimulus package. However, private capital investment remained at a low level, resulting in only moderate economic recovery. Amid this economic environment, in the digital consumer equipment market, which is a principal market for Kyocera Corporation and its consolidated subsidiaries (“Kyocera Group” or “Kyocera”), production activities hit bottom in the three months ended March 31, 2009 and have picked up since the beginning of the year started from April 1, 2009, notably for mobile phone handsets and personal computers (PCs). Demand for components used in such equipment has increased as a result, although stopping short of genuine recovery and remaining at a low level compared with the six months ended September 30, 2008 (the “previous first half”), which reflects a continuation of the harsh business environment. (2) Consolidated Financial Results Demand for components fell compared with the previous first half, while sales of mobile phone handsets were down in Japan and overseas, and sales of information equipment decreased due primarily to curtailed information technology investment. In addition, the yen appreciated against the Euro and U.S. dollar. As a result, consolidated net sales in the first half decreased by 26.5% compared with the previous first half to ¥483,903 million. In this harsh business environment featuring significantly reduced sales, Kyocera promoted comprehensive cost-cutting measures that included reducing production costs and worked to improve productivity throughout the Kyocera Group. Despite these efforts, profit from operations for the first half was down 85.8% compared with the previous first half to ¥8,858 million. Income before income taxes for the first half decreased by 76.8% compared with the previous first half to ¥17,148 million, and net income attributable to shareholders of Kyocera Corporation for the first half amounted to ¥8,728 million, a decrease of 80.7% compared with the previous first half. Average exchange rates for the first half were ¥95 to the U.S. dollar and ¥133 to the Euro, marking appreciation by ¥11 (approximately 10%) and ¥30 (approximately 18%), respectively, compared with those of the previous first half. As a result of the yen’s appreciation, net sales and income before income taxes for the first half were down by approximately ¥45.0 billion and ¥13.5 billion, respectively, compared with the previous first half.
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Note: Net income attributable to shareholders of Kyocera Corporation is computed in the same manner as net income for the six months ended September 30, 2008. (3) Consolidated results by reporting segment (i) Components Business: For the first half, sales in the components business decreased by 28.7% to ¥245,081 million, and operating profit decreased by 86.2% to ¥5,579 million compared with the previous first half. 1) Fine Ceramic Parts Group This reporting segment includes fine ceramic parts and automotive components. Although demand for digital consumer equipment parts, such as sapphire substrates for LEDs, showed a trend toward recovery in the first half, it was nonetheless down compared with the previous first half. In addition, demand remained low in semiconductor fabrication equipment components and automotive components compared with the previous first half, despite signs of recovery primarily due to the end of inventory adjustment by customers. As a result, sales and operating profit both decreased for the first half compared with the previous first half. 2) Semiconductor Parts Group This reporting segment includes ceramic packages and organic packages, etc. Demand for ceramic packages, mainly for crystal and SAW devices and for CCD/CMOS image sensors, showed a trend toward recovery in line with resurgence in production, particularly for mobile phone handsets and digital cameras. However, sales and operating profit in this reporting segment for the first half decreased, falling short of the level recorded in the previous first half, when demand was strong.
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Table of Contents3) Applied Ceramic Products Group This reporting segment includes solar power generating systems, cutting tools, medical and dental implants, as well as jewelry and applied ceramic related products. For the solar energy business, solid sales in the Japanese market were recorded due to rapid expansion of demand on the back of governmental subsidy policies, while overall sales in this business in the first half decreased compared with the previous first half due to sluggish demand in European and U.S. markets coupled with price declines and the yen’s appreciation. In addition, production activities in automotive related industries were at a low level, driving a decrease in demand for cutting tools. As a result, overall sales and operating profit in this reporting segment both decreased for the first half when compared with the previous first half. 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. Although demand for ceramic capacitors, crystal-related components and connectors for the first half increased due to recovery in digital consumer equipment production activity due to the end of inventory adjustments by customers, it fell short of levels recorded in the previous first half. Adding in the impact of appreciation of the yen, sales and operating profit for the first half both decreased in this reporting segment compared with the previous first half. (ii) Equipment Business: Sales in the equipment business for the first half decreased by 26.9% to ¥190,900 million compared with the previous first half, and operating profit decreased by 91.3% to ¥857 million compared with the previous first half. 1) Telecommunications Equipment Group This reporting segment includes mobile phone handsets and PHS related products, etc. Sales in this reporting segment for the first half decreased substantially compared with the previous first half due to weakened replacement demand for mobile phone handsets in the Japanese market, while sales of mobile phone handsets also decreased in the U.S. market due to declining personal consumption and to a cyclical low for Kyocera’s new handset model introductions. Operating loss even expanded for the first half compared with the previous first half due to the decline in sales despite efforts to streamline operations, including reorganization of development and sales systems, and comprehensive cost reductions aimed at boosting profitability going forward.
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Table of Contents2) Information Equipment Group This reporting segment includes ECOSYS brand printers and digital MFPs, etc. In July 2009, Kyocera newly made two Korean distributors of document equipment consolidated subsidiaries through acquisitions of their common stock in order to expand sales in the Asian market. Nonetheless, stagnant global demand caused by a severe curtailment of information technology investment coupled with a decline in selling prices and appreciation of the yen for the first half led to a decrease in sales compared with the previous first half. Operating profit for the first half was down from the previous first half despite the recording of gains from sales of real estates overseas. (iii) Others This reporting segment includes various information and communications technology services and materials for electronic components, etc. Sales in the Information and Communication Technologies (ICT) business and telecommunications engineering business decreased due to a curtailment of investment for telecommunications infrastructure. Demand for materials for electronic components also decreased due to stagnation in production for various electronic devices. As a result, sales in this reporting segment for the first half decreased by 12.8% compared with the previous first half to ¥57,825 million. Operating profit for the first half decreased by 87.0% compared with the previous first half to ¥1,798 million due to a decline in sales and the absence of a gain on sale of real estates recorded in the previous first half in the amount of approximately ¥10.6 billion.
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Table of ContentsConsolidated Sales by Reporting Segment
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Table of Contents(4) Consolidated Sales by Geographic Area
Sales decreased in all geographic areas due to harsh business situation caused by sluggish global economies. 1) Japan Sales decreased compared with the previous first half due to a decline in sales in the Telecommunications Equipment Group, especially mobile phone handsets, and to a decline in components demand as a whole, although sales increased in the solar energy business in the Applied Ceramic Products Group. 2) Europe Sales decreased compared with the previous first half due mainly to a decline in demand of the Electronic Device Group, the Applied Ceramic Products Group and the Information Equipment Group, coupled with the impact of appreciation of the yen. 3) United States of America Sales decreased compared with the previous first half due mainly to a decline in sales in mobile phone handsets in the Telecommunications Equipment Group and the Electronic Device Group. 4) Asia Sales decreased compared with the previous first half due mainly to a decline in sales in the components business due to stagnant production of digital consumer equipment such as mobile phone handsets and PCs. 5) Others Sales decreased compared with the previous first half due to a decline in sales in mobile phone handsets in the Telecommunications Equipment Group and the Information Equipment Group.
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Table of Contents2. Consolidated Financial Position Consolidated Cash Flows Cash and cash equivalents at September 30, 2009 increased by ¥30,381 million to ¥299,628 million compared with those at March 31, 2009.
(1) Cash flow from operating activities Net cash provided by operating activities in the first half increased by ¥326 million to ¥67,806 million from ¥67,480 million in the previous first half. This was primarily related to an increase in accounts payable, which significantly decreased in the previous first half, and a decrease in net income. (2) Cash flow from investing activities Net cash used in investing activities in the first half decreased by ¥161,908 million to ¥5,004 million from ¥166,912 million in the previous first half. This was due mainly to decreases in payments for property, plant and equipment and intangible assets, and acquisitions of businesses as well as an increase in withdrawal of certificate deposits and time deposits. (3) Cash flow from financing activities Net cash used in financing activities in the first half increased by ¥8,942 million to ¥23,133 million from ¥14,191 million in the previous first half. This was due mainly to increases in payments of short-term borrowings and long-term debt.
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Table of Contents3. Consolidated Financial Forecasts for the Year Ending March 31, 2010 In the first half, solar energy product prices continued to face conditions that were tougher than expected overseas, while production activity for digital consumer equipment recovered strongly and beyond initial projections, and demand for components mainly in the Semiconductor Parts Group expanded steadily. In terms of demand for components used in digital consumer equipment from the three months ended December 31, 2009 (the “third quarter”) onward, demand trends remain unclear for the period following the Christmas selling season overseas, and accordingly Kyocera has made no changes to sales and profit forecasts for the year ending March 31, 2010 (“fiscal 2010”) announced in April 2009. Consolidated Forecasts for the year ending March 31, 2010
Notes:
Although there is continued cause for uncertainty in the business environment from the third quarter onward, particularly trends in the world economy and exchange rates, Kyocera will strive vigorously to secure orders for products where demand is forecast to continue growing, as well as to enhance profitability by further cutting costs and improving productivity, as means to achieve full-year financial forecasts. As shown on the following page, Kyocera has made certain changes to forecasts in each reporting segment in light of the first half results and the projected business environment from the third quarter onward.
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Table of ContentsConsolidated Sales by Reporting Segment
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Table of ContentsForward-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.
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Table of Contents4. Other Information Change in accounting principles, procedures and financial statements’ presentation: Recently adopted Accounting Standards Kyocera adopted the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 105, “Generally Accepted Accounting Principles” (former Statement of Financial Accounting Standards (SFAS) No. 168, “The FASB Accounting Standards Codification and Hierarchy of Generally Accepted Accounting Principles - a replacement of FASB Statement No. 162”) in the three months ended September 30, 2009. This accounting standard compiles all generally accepted accounting principles in the U.S. and establishes “Accounting Standard Codification” as the single official source of authoritative generally accepted accounting standards. The adoption of this accounting standard had no impact on Kyocera’s consolidated results of operations, financial position and cash flows. Kyocera adopted FASB ASC 805, “Business Combination” (former SFAS No. 141 (revised 2007), “Business Combinations”) in this first half, which requires assets, liabilities and noncontrolling interests be measured at fair value. Under this accounting standard, transaction and restructuring costs are required to be generally expensed, as well as contingent consideration and in-process research and development be recorded at fair value on acquisition date as a part of fair value of acquired business. Any tax adjustment made after the measurement period impacts income tax expenses. This accounting standard also requires companies to recognize an asset acquired or a liability assumed in a business combination that arises from a contingency at fair value, at the acquisition date, if the acquisition-date fair value of that asset or liability can be determined during the measurement period. The adoption of this accounting standard had no material impact on Kyocera’s consolidated results of operations, financial position and cash flows. Kyocera adopted FASB ASC 810, “Consolidation” (former SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements - an Amendment of Accounting Research Bulletin No. 51”) in this first half. This accounting standard requires that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements, and requires that changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary shall be accounted for as equity transactions. Upon the adoption of this accounting standard, noncontrolling interests, which were previously referred to as minority interests and classified between total liabilities and shareholders’ equity on the consolidated balance sheets, are now included as a separate component of total equity. The presentation of consolidated statements of income and cash flows has also been changed. In addition, in accordance with a requirement of this accounting standard, certain reclassification of previously reported amounts have been made to the consolidated balance sheet at March 31, 2009, the consolidated statement of income for the six months ended September 30, 2008 and the consolidated statement of cash flow for the six months ended September 30, 2008.
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Table of Contents5. Supplemental Information
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Table of Contents6. Consolidated Financial Statements (1) CONSOLIDATED BALANCE SHEETS (Unaudited)
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Table of Contents(2) CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Note: Basic earnings per share attributable to shareholders of Kyocera Corporation was computed based on the average number of shares of common stock outstanding during each period, and diluted earnings per share attributable to shareholders of Kyocera Corporation was computed based on the diluted average number of shares of stock outstanding during each period.
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Table of Contents(3) CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
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Table of Contents(4) SEGMENT INFORMATION (Unaudited) 1. Reporting segments:
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Table of Contents2. Geographic segments (Net sales and Operating profit (loss) by geographic area) :
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Table of Contents3. Geographic segments (Net sales by region):
(5) CAUTIONARY STATEMENT FOR PREMISE OF A GOING CONCERN Not applicable. (6) CAUTIONARY STATEMENT FOR SIGNIFICANT CHANGES IN EQUITY Not applicable.
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