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Kyocera 6-K 2013

Documents found in this filing:

  1. 6-K
  2. Graphic
  3. Graphic
Form 6-K
Table of Contents

FORM 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 under

the Securities Exchange Act of 1934

For the month of January 2013

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):  ¨


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/ SHOICHI AOKI

Shoichi Aoki

Director,

Managing Executive Officer and

General Manager of

Corporate Financial and Business Systems

Administration Group

Date: January 31, 2013


Table of Contents

Information furnished on this form:

EXHIBITS

 

Exhibit
    Number    

   

1.

  Consolidated Financial Results of Kyocera Corporation and its Subsidiaries for the Nine Months Ended December 31, 2012


Table of Contents

LOGO

Consolidated Financial Results of Kyocera Corporation and its Subsidiaries

for the Nine Months Ended December 31, 2012

The consolidated financial information is prepared in accordance with accounting principles generally accepted in the United States of America.

1. Consolidated Financial Results for the Nine Months Ended December 31, 2012

 

(1) Consolidated results of operations

               (% of change from previous period)   
     Net sales     Profit from operations     Income before income taxes     Net income attributable to
shareholders of

Kyocera Corporation
 
     Million yen      %     Million yen      %     Million yen      %         Million yen              %      

Nine Months ended December 31, 2012

     926,524         4.6        51,234         (42.0     68,882         (32.9     44,970         (37.6

Nine Months ended December 31, 2011

     885,389         (7.5     88,373         (26.2     102,604         (22.9     72,110         (23.1

(Note) Comprehensive income:

95,546 million yen for the nine months ended December 31, 2012, 156.7% of change from previous period

37,225 million yen for the nine months ended December 31, 2011, (18.0%) of change from previous period

 

     Net income
attributable

to  shareholders of
Kyocera Corporation
per share -Basic
     Net income
attributable

to  shareholders of
Kyocera Corporation
per share -Diluted
 
     Yen      Yen  

Nine Months ended December 31, 2012

     245.15         245.15   

Nine Months ended December 31, 2011

     393.07         393.07   

(2) Consolidated financial condition

 

     Total assets      Total equity      Kyocera Corporation
shareholders’ equity
     Kyocera  Corporation
shareholders’ equity
to total assets
 
     Million yen      Million yen      Million yen      %  

December 31, 2012

     2,114,320         1,605,604         1,540,811         72.9   

March 31, 2012

     1,994,103         1,534,241         1,469,505         73.7   

2. Dividends

 

     Dividends per share  
     End of
first  quarter
     End of
second  quarter
     End of
third  quarter
     Year-end      Annual  
     Yen      Yen      Yen      Yen      Yen  

Year ended March 31, 2012

             60.00                 60.00         120.00   

Year ending March 31, 2013

             60.00                 60.00         120.00   

(Note) Year-end dividend per share for the year ending March 31, 2013 is the forecast at date of disclosure of this report.

3. Consolidated Financial Forecasts for the Year Ending March 31, 2013

(% of change from previous year)

     Net sales      Profit  from
operations
    Income before
income  taxes
    Net income
attributable to
shareholders of

Kyocera Corporation
    Net income
attributable to
shareholders of
Kyocera Corporation
per share
 
     Million yen      %      Million yen      %     Million yen      %     Million yen      %     Yen  

Year ending March 31, 2013

     1,280,000         7.5         73,000         (25.3     91,500         (20.4     57,000         (28.2     310.72   

Forecast of earnings per share attributable to shareholders of Kyocera Corporation is computed based on the diluted average number of shares outstanding during the nine months ended December 31, 2012.

 

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(Notes)

(1) Increase or decrease in significant subsidiaries during the nine months ended December 31, 2012: None.

(2) Adoption of concise quarterly accounting method or procedure: None.

(3) Changes in accounting policies:

(i) Changes due to adoption of new accounting standards: Please refer to the accompanying “2. OTHER INFORMATION” on page 12.

(ii) Changes due to other than adoption of new accounting standards: None.

(4) Number of shares (common stock):

(i) Number of shares issued:

 

191,309,290 shares at December 31, 2012    191,309,290 shares at March 31, 2012

(ii) Number of treasury stock:

 

7,868,129 shares at December 31, 2012    7,865,370 shares at March 31, 2012

(iii) Average number of shares outstanding:

 

183,442,420 shares for the nine months ended December 31, 2012    183,453,025 shares for the nine months ended December 31, 2011

Presentation of Situation of Review Procedure

The consolidated financial information included in this report is out of scope of review procedure under the Financial Instruments and Exchange Law of Japan. Review procedure under the Financial Instruments and Exchange Law of Japan has not been completed at the date of disclosure of this report.

Instruction for Forecasts and Other Notes

Cautionary Statement for Forecasts:

With regard to forecasts set forth above, please refer to the accompanying “Forward-Looking Statements” on page 11.

 

2


Table of Contents

Accompanying Information

1. BUSINESS RESULTS, FINANCIAL CONDITION AND PROSPECTS

(1) Business Results for the Nine Months Ended December 31, 2012

Economic Situation and Business Environment

During the nine months ended December 31, 2012 (“the nine months”), despite increases in personal consumption and public investment, the economic environment in Japan weakened from the three months ended December 31, 2012 as a slowdown in overseas economies led to sluggish growth in exports. With respect to the overseas economic environment, the U.S. economy expanded moderately on the back of growth in personal consumption and recovery in housing investment. On the other hand, the European economy remained in a recessionary phase due to the impact of the financial crisis. Slowdown in the Chinese economy intensified due mainly to weakening exports.

The digital consumer equipment market, which is the principal market for Kyocera Corporation and its consolidated subsidiaries (“Kyocera Group” or “Kyocera”), was slow overall as shipment volume declined for conventional mobile phone handsets, PCs and flat-screen TVs despite growing demand for smartphones and tablet PCs compared with the nine months ended December 31, 2011 (“the previous nine months”). In contrast, demand for solar power generation systems increased rapidly in the solar energy market in Japan due to the introduction of the feed-in tariff for renewable energy in July 2012.

Consolidated Financial Results

Average exchange rates for the nine months were ¥80 to the U.S. dollar, marking depreciation of ¥1 (approximately 1%) from ¥79 for the previous nine months, and ¥102 to the Euro, marking appreciation of ¥9 (approximately 8%) from ¥111 for the previous nine months. As a result of the effect of currency exchange rate fluctuations, net sales and income before income taxes for the nine months were pushed down by approximately ¥5 billion and ¥4 billion, respectively, compared with the previous nine months.

Despite continued harsh conditions in Kyocera’s business environment, characterized in particular by the impact of the currency fluctuations and sluggish growth in component demand, sales increased in the Semiconductor Parts Group and the Applied Ceramic Products Group. In addition, subsidiaries newly consolidated in the previous year ended March 31, 2012, provided a contribution. As a result, consolidated net sales for the nine months increased by ¥41,135 million, or 4.6%, to ¥926,524 million, compared with ¥885,389 million for the previous nine months.

Profit decreased compared with the previous nine months due primarily to the recording at AVX Corporation, a U.S. subsidiary, of a charge of ¥21.3 billion for environmental remediation in New Bedford Harbor, Massachusetts in the U.S. coupled with price erosion in electronic components and the impact of the currency fluctuations. Profit from operations decreased by ¥37,139 million, or 42.0%, to ¥51,234 million, compared with ¥88,373 million for the previous nine months. Income before income taxes decreased by ¥33,722 million, or 32.9%, to ¥68,882 million, compared with ¥102,604 million for the previous nine months, and net income attributable to shareholders of Kyocera Corporation decreased by ¥27,140 million, or 37.6%, to ¥44,970 million, compared with ¥72,110 million for the previous nine months.

 

     Nine months ended December 31,      Increase
(Decrease)
 
     2011      2012     
     Amount      %      Amount      %      Amount     %  
     (Yen in millions, except per share amounts and exchange rates)  

Net sales

   ¥ 885,389         100.0       ¥ 926,524         100.0       ¥ 41,135        4.6   

Profit from operations

     88,373         10.0         51,234         5.5         (37,139     (42.0

Income before income taxes

     102,604         11.6         68,882         7.4         (33,722     (32.9

Net income attributable to shareholders of Kyocera Corporation

     72,110         8.1         44,970         4.9         (27,140     (37.6

Diluted earnings per share attributable to shareholders of Kyocera Corporation

     393.07                 245.15                          

Average US$ exchange rate

     79                 80                          

Average Euro exchange rate

     111                 102                          

 

 

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Table of Contents

Consolidated Results by Reporting Segment

1) Fine Ceramic Parts Group

Component demand was down compared with the previous nine months in the industrial machinery market, including for semiconductor fabrication equipment, and in the digital consumer equipment market. As a result, sales and operating profit in this reporting segment decreased compared with the previous nine months.

2) Semiconductor Parts Group

Sales and operating profit in this reporting segment increased compared with the previous nine months due to growth in demand for ceramic packages primarily for smartphones.

3) Applied Ceramic Products Group

Sales in this reporting segment increased compared with the previous nine months due to sales growth in the solar energy business supported by growing demand in Japan as well as sales growth in the cutting tool business. Operating profit increased significantly due to increased sales and cost reductions in the solar energy business.

4) Electronic Device Group

Sales in this reporting segment increased compared with the previous nine months due to sales contribution from Kyocera Display Corporation. An operating loss was recorded, however, due primarily to the recording of the environmental remediation charge at AVX Corporation.

5) Telecommunications Equipment Group

Despite strong sales of smartphones in Japan and overseas, sales in this reporting segment decreased compared with the previous nine months due to a decline in sales of conventional mobile phone handsets in Japan. Operating profit increased compared with the previous nine months, however, due to an improvement in profitability in overseas business.

6) Information Equipment Group

Sales in this reporting segment decreased slightly compared with the previous nine months due to the impact of the yen’s appreciation against the Euro despite an increase in sales in key markets overseas on a local currency basis which resulted from new product introductions and vigorous sales expansion activities. Operating profit decreased compared with the previous nine months due mainly to the impact of the yen’s appreciation against the Euro.

7) Others

Sales and operating profit in this reporting segment increased compared with the previous nine months due primarily to an increase in sales at Kyocera Communication Systems Co., Ltd.

 

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Net Sales by Reporting Segment

 

     Nine months ended December 31,     Increase
(Decrease)
 
     2011     2012    
     Amount     %     Amount     %     Amount     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 61,346        6.9      ¥ 56,937        6.1      ¥ (4,409     (7.2

Semiconductor Parts Group

     117,733        13.3        127,362        13.8        9,629        8.2   

Applied Ceramic Products Group

     133,600        15.1        136,726        14.8        3,126        2.3   

Electronic Device Group

     165,360        18.7        207,801        22.4        42,441        25.7   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     478,039        54.0        528,826        57.1        50,787        10.6   

Telecommunications Equipment Group

     136,568        15.4        127,360        13.7        (9,208     (6.7

Information Equipment Group

     178,967        20.2        178,445        19.3        (522     (0.3
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     315,535        35.6        305,805        33.0        (9,730     (3.1

Others

     111,265        12.6        115,009        12.4        3,744        3.4   

Adjustments and eliminations

     (19,450     (2.2     (23,116     (2.5     (3,666       
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net sales

   ¥ 885,389        100.0      ¥ 926,524        100.0      ¥ 41,135        4.6   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating Profit (Loss) by Reporting Segment

 

  

   
     Nine months ended December 31,     Increase
(Decrease)
 
     2011     2012    
     Amount     %*     Amount     %*     Amount     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 9,618        15.7      ¥ 6,429        11.3      ¥ (3,189     (33.2

Semiconductor Parts Group

     22,294        18.9        22,848        17.9        554        2.5   

Applied Ceramic Products Group

     7,231        5.4        9,906        7.2        2,675        37.0   

Electronic Device Group

     21,897        13.2        (7,223            (29,120       
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     61,040        12.8        31,960        6.0        (29,080     (47.6

Telecommunications Equipment Group

     811        0.6        1,671        1.3        860        106.0   

Information Equipment Group

     22,607        12.6        15,752        8.8        (6,855     (30.3
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     23,418        7.4        17,423        5.7        (5,995     (25.6

Others

     5,532        5.0        7,320        6.4        1,788        32.3   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit

     89,990        10.2        56,703        6.1        (33,287     (37.0

Corporate gains and Equity in earnings of affiliates
and unconsolidated subsidiaries

     13,394               13,350               (44     (0.3

Adjustments and eliminations

     (780            (1,171            (391       
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

   ¥ 102,604        11.6      ¥ 68,882        7.4      ¥ (33,722     (32.9
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
* % to net sales of each corresponding segment

 

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Table of Contents

Net Sales by Geographic Area

1) Japan

Sales in Japan for the nine months decreased slightly compared with the previous nine months due primarily to a decline in sales volume of mobile phone handsets, despite sales growth in the solar energy business.

2) Asia

Sales in Asia for the nine months increased compared with the previous nine months due to increased component demand for digital consumer equipment and sales growth in the solar energy business.

3) United States of America

Sales in the United States of America for the nine months increased compared with the previous nine months due to the newly contribution of Kyocera Display Corporation and increased sales in the Telecommunications Equipment Group.

4) Europe

Sales in Europe for the nine months decreased compared with the previous nine months affected by a decline in demand in the solar energy business and the yen’s appreciation against the Euro.

5) Others

Sales in Others for the nine months decreased slightly compared with the previous nine month due primarily to sluggish component demand, despite an increase in sales in the Information Equipment Group.

 

     Nine months ended December 31,      Increase
(Decrease)
 
     2011      2012     
     Amount      %      Amount      %      Amount     %  
     (Yen in millions)  

Japan

   ¥ 419,364         47.4       ¥ 413,315         44.6       ¥ (6,049     (1.4

Asia

     154,377         17.4         172,023         18.6         17,646        11.4   

United States of America

     118,861         13.4         157,983         17.0         39,122        32.9   

Europe

     151,249         17.1         141,863         15.3         (9,386     (6.2

Others

     41,538         4.7         41,340         4.5         (198     (0.5
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Net sales

   ¥ 885,389         100.0       ¥ 926,524         100.0       ¥ 41,135        4.6   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

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Table of Contents

(2) Consolidated Financial Condition

Consolidated Cash Flows

Cash and cash equivalents at December 31, 2012 increased by ¥28,105 million to ¥301,393 million from ¥273,288 million at March 31, 2012.

1) Cash flows from operating activities

Net cash provided by operating activities for the nine months increased by ¥26,881 million to ¥89,095 million from ¥62,214 million for the previous nine months. This was due mainly to cash flow adjustments related to receivables, inventories and other non-current liabilities which exceeded a significant decrease in net income.

2) Cash flows from investing activities

Net cash used in investing activities for the nine months increased by ¥3,167 million to ¥42,346 million from ¥39,179 million for the previous nine months. This was due mainly to that an increase in payment for purchase of available-for-sale securities in addition to decreases in withdrawal of time deposits and certificate of deposits and in proceeds from sales and maturities of available-for-sale and held-to-maturity securities exceeded decreases in acquisitions of time deposits and certificate of deposits and in payment for held-to-maturity securities as well as decreases in acquisitions of business and in payment for purchases of property, plant and equipment.

3) Cash flows from financing activities

Net cash used in financing activities for the nine months decreased by ¥5,279 million to ¥28,156 million from ¥33,435 million for the previous nine months. This was due mainly to decreases in payments of short-term borrowings and long-term debts as well as a decrease in dividends paid.

 

     Nine months ended December 31,  
           2011                 2012        
     (Yen in millions)  

Cash flows from operating activities

   ¥ 62,214      ¥ 89,095   

Cash flows from investing activities

     (39,179     (42,346

Cash flows from financing activities

     (33,435     (28,156

Effect of exchange rate changes on cash and cash equivalents

     (9,241     9,512   

Net increase (decrease) in cash and cash equivalents

     (19,641     28,105   

Cash and cash equivalents at beginning of period

     273,471        273,288   

Cash and cash equivalents at end of period

   ¥ 253,830      ¥ 301,393   

 

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(3) AVX Corporation Reached Settlement with the Environmental Protection Agency and Commonwealth of Massachusetts regarding the New Bedford Harbor Superfund Site

On October 10, 2012, AVX Corporation (AVX), a consolidated subsidiary of Kyocera Corporation in the United States, and the Environmental Protection Agency (EPA) announced that they had reached a financial settlement with respect to the EPA’s ongoing clean up of the New Bedford Harbor Superfund site in New Bedford, Massachusetts.

AVX’s involvement in this site arose from the operations of an alleged legal predecessor, Aerovox Corporation, which produced liquid filled capacitors adjacent to the harbor from the late 1930s through the early 1970s. Subsequent owners of the facility are dissolved or in bankruptcy. AVX itself never produced this type of capacitor, nor does it do so today.

Following legal action brought in 1983, AVX reached a settlement agreement with the United States and the Commonwealth of Massachusetts with respect to their claims relating to harbor clean up and alleged natural resource damages in 1992. That agreement was contained in a Consent Decree whereby AVX paid $72 million, including interest, toward the harbor clean up and natural resource damages. That agreement included reopener provisions allowing the EPA to institute new proceedings against AVX, including the right to seek to have AVX perform or pay for additional clean up under certain circumstances.

On April 18, 2012, the EPA issued to AVX a Unilateral Administrative Order directing AVX to perform the remainder of the harbor clean up, invoking the clean up reopeners described above.

After settlement negotiations, including mediation, between the parties, the current proposed agreement with the EPA and the Commonwealth of Massachusetts was reached whereby AVX will pay $366 million, plus interest computed from August 1, 2012, in three installments over a two-year period for use by the EPA and the Commonwealth to complete the clean up of the harbor, and the EPA will withdraw the Unilateral Administrative Order.

The recent proposed agreement is contained in a Supplemental Consent Decree that modifies certain provisions of the 1992 Consent Decree, including elimination of the governments’ right to invoke the clean up reopener provisions in the future. The EPA filed the Supplemental Consent Decree in the United States District Court for the District of Massachusetts on October 10, 2012. A public comment period ended on December 17, 2012 and currently the EPA and the Commonwealth are reviewing the public comments and formulating responses. The settlement requires approval by the United States District Court before becoming final.

AVX recorded a charge of ¥21,300 million ($266 million) with respect to this matter for the nine months ended December 31, 2012 in addition to a charge of ¥7,900 million ($100 million) recorded in the year ended March 31, 2012. Kyocera included this charge in selling, general and administrative expenses in the consolidated statement of income for the nine months ended December 31, 2012.

 

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(4) Consolidated Financial Forecasts for the Year Ending March 31, 2013

During the three months ended December 31, 2012, component demand was sluggish and fell short of projections in the digital consumer equipment market, as well as in the general industrial machinery market.

In the three months ending March 31, 2013, it is expected that overall demand in the digital consumer equipment market will be lower than the expectation in October 2012, although sales in the solar energy business in Japan will grow significantly.

Based on this expectation, Kyocera has revised its financial forecasts for the year ending March 31, 2013 announced on October 31, 2012, as set forth below and has also revised its segment forecasts, as set forth on the following page.

Kyocera has also revised its forecast of average exchange rates in the three months ending March 31, 2013 from the projections announced on October 31, 2012, from ¥79 to ¥88 against the U.S. dollar and from ¥101 to ¥118 against the Euro. As a result, the full-year forecast of average exchange rates for the year ending March 31, 2013 has been revised to ¥82 to the U.S. dollar and ¥106 to the Euro.

 

     Results for
the year ended
March 31, 2012
     Forecasts for the year ending
March 31, 2013 announced on
     Increase
(Decrease)
to Results
 
        October 31, 2012
(Previous)
     January 31, 2013
(Revised)
    
     Amount      %      Amount      %      Amount      %      %  
     (Yen in millions, except exchange rates)  

Net sales

   ¥ 1,190,870         100.0       ¥ 1,320,000         100.0       ¥ 1,280,000         100.0         7.5   

Profit from operations

     97,675         8.2         100,000         7.6         73,000         5.7         (25.3

Income before income taxes

     114,893         9.6         115,000         8.7         91,500         7.1         (20.4

Net income attributable to shareholders of Kyocera Corporation

     79,357         6.7         75,000         5.7         57,000         4.5         (28.2

Average US$ exchange rate

     79                 79                 82                   

Average Euro exchange rate

     109                 101                 106                   

 

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Table of Contents

Net Sales by Reporting Segment

 

     Results for
the year ended

March 31, 2012
    Forecasts for the year ending
March 31, 2013 announced on
    Increase
(Decrease)
to Results
 
       October 31, 2012
(Previous)
    January 31, 2013
(Revised)
   
     Amount     %     Amount     %     Amount     %     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 80,372        6.7      ¥ 77,000        5.8      ¥ 74,800        5.8        (6.9

Semiconductor Parts Group

     153,420        12.9        170,000        12.9        164,800        12.9        7.4   

Applied Ceramic Products Group

     179,784        15.1        210,000        15.9        210,000        16.4        16.8   

Electronic Device Group

     228,721        19.2        284,000        21.5        272,400        21.3        19.1   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     642,297        53.9        741,000        56.1        722,000        56.4        12.4   

Telecommunications Equipment Group

     178,669        15.0        201,000        15.2        178,700        14.0        0.0   

Information Equipment Group

     243,457        20.4        241,000        18.3        249,100        19.4        2.3   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     422,126        35.4        442,000        33.5        427,800        33.4        1.3   

Others

     151,987        12.8        164,000        12.4        160,600        12.6        5.7   

Adjustments and eliminations

     (25,540     (2.1     (27,000     (2.0     (30,400     (2.4       
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net sales

   ¥ 1,190,870        100.0      ¥ 1,320,000        100.0      ¥ 1,280,000        100.0        7.5   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating Profit by Reporting Segment

 

  

     Results for
the year ended

March 31, 2012
    Forecasts for the year ending
March 31, 2013 announced on
    Increase
(Decrease)
to Results
 
       October 31, 2012
(Previous)
    January 31, 2013
(Revised)
   
     Amount     %*     Amount     %*     Amount     %*     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 12,622        15.7      ¥ 10,300        13.4      ¥ 7,100        9.5        (43.7

Semiconductor Parts Group

     27,754        18.1        30,000        17.6        26,300        16.0        (5.2

Applied Ceramic Products Group

     6,459        3.6        17,600        8.4        16,100        7.7        149.3   

Electronic Device Group

     16,036        7.0        2,500        0.9        (5,500              
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     62,871        9.8        60,400        8.2        44,000        6.1        (30.0

Telecommunications Equipment Group

     1,469        0.8        6,200        3.1        2,900        1.6        97.4   

Information Equipment Group

     29,451        12.1        21,000        8.7        21,200        8.5        (28.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     30,920        7.3        27,200        6.2        24,100        5.6        (22.1

Others

     8,054        5.3        11,500        7.0        10,300        6.4        27.9   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit

     101,845        8.6        99,100        7.5        78,400        6.1        (23.0

Corporate and others

     13,048               15,900               13,100               0.4   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

   ¥ 114,893        9.6      ¥ 115,000        8.7      ¥ 91,500        7.1        (20.4
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

* % to net sales of each corresponding segment

 

10


Table of Contents

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:

 

(1) General economic conditions in our markets, which are primarily Japan, North America, Europe and Asia;

 

(2) Economic, political and legal conditions and unexpected changes therein in countries or areas where we operate;

 

(3) Factors that may affect our exports, including the yen’s appreciation, political and economic instability, customs, and inadequate protection of our intellectual property;

 

(4) Fluctuation in exchange rates that may affect the value of our foreign assets or the prices of our products;

 

(5) Intensified competition in product pricing, technological innovation, R&D activities, product quality and speed of delivery;

 

(6) Manufacturing delays or defects resulting from outsourcing or internal manufacturing processes;

 

(7) Shortages and rising costs of electricity affecting our production and sales activities;

 

(8) The possibility that expansion of production capacity and in-process R&D activities may not produce the desired results;

 

(9) The possibility that companies or assets acquired by us may not produce the returns or benefits, or bring in business opportunities, which we expect;

 

(10) Inability to secure skilled employees, particularly engineering and technical personnel;

 

(11) The possibility of divulgence of our trade secrets and infringement of our intellectual property rights;

 

(12) The possibility that we may receive notice of claims of infringement of other parties’ intellectual property rights and claims for royalty payments;

 

(13) Increases in our environmental liability and in costs and expenses required to observe obligations imposed by environmental laws and regulations in Japan and other countries;

 

(14) Unintentional conflict with laws and regulations, or the possibility that newly enacted laws and regulations may limit our business operations;

 

(15) Events that may negatively impact our markets or supply chain, including terrorist acts, plague, war and similar events;

 

(16) Earthquakes and other related natural disasters affecting our operational facilities and our markets or supply chain, as well as social and economic infrastructure;

 

(17) Exposure to difficulties in collection of trade receivables due to customers’ worsening financial condition;

 

(18) The possibility of recognition of impairment losses on investment securities held by us due to declines in their value;

 

(19) The possibility that we may record impairment losses on long-lived assets, goodwill and intangible assets;

 

(20) The possibility that deferred tax assets may not be realized or additional liabilities for unrecognized tax benefits may be incurred; and

 

(21) Changes in accounting principles.

Such risks, uncertainties and other factors may cause our actual results, performance, achievements or financial condition to be materially different from any future results, performance, achievements or financial condition expressed or implied by these forward-looking statements. We undertake no obligation to publicly update any forward-looking statements included in this document.

 

11


Table of Contents

2. OTHER INFORMATION

Changes in accounting policies

Recently Adopted Accounting Standards

On April 1, 2012, Kyocera adopted the Financial Accounting Standards Board (FASB)’s Accounting Standards Update (ASU) No. 2011-05, “Presentation of Comprehensive Income” and ASU No. 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05.” ASU No. 2011-05 requires entities to present net income and other comprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net income and other comprehensive income. It eliminates the current option to present the components of other comprehensive income as part of the statement of equity. ASU No. 2011-05 also requires reclassification adjustments and the effect of those adjustments on net income and other comprehensive income to be disclosed on the face of financial statements, however, the effective date of this requirement is deferred indefinitely by ASU No. 2011-12. As these accounting standards are a provision for presentation, the adoption of these accounting standards did not have an impact on Kyocera’s consolidated results of operations, financial condition and cash flows.

On April 1, 2012, Kyocera adopted the FASB’s ASU No. 2011-08, “Testing Goodwill for Impairment.” This accounting standard permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. An entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. As this accounting standard does not actually change how the impairment would be calculated, the adoption of this accounting standard did not have an impact on Kyocera’s consolidated results of operations, financial condition and cash flows.

 

12


Table of Contents

3. CONSOLIDATED FINANCIAL STATEMENTS

(1) Consolidated Balance Sheets (Unaudited)

 

     March 31, 2012      December 31, 2012      Increase
(Decrease)
 
     Amount     %      Amount     %     
     (Yen in millions)  

Current assets:

            

Cash and cash equivalents

   ¥ 273,288         ¥ 301,393         ¥ 28,105   

Short-term investments in debt and equity securities

     47,175           49,927           2,752   

Other short-term investments

     158,765           149,401           (9,364

Trade notes receivables

     19,349           22,678           3,329   

Trade accounts receivables

     225,578           229,140           3,562   

Less allowances for doubtful accounts and sales returns

     (4,583        (4,813        (230

Inventories

     270,336           302,138           31,802   

Advance payments

     68,685           66,713           (1,972

Deferred income taxes

     45,049           42,990           (2,059

Other current assets

     40,961           39,697           (1,264
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total current assets

     1,144,603        57.4         1,199,264        56.7         54,661   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Non-current assets:

            

Investments and advances:

            

Long-term investments in debt and equity securities

     372,779           420,469           47,690   

Other long-term investments

     19,098           13,725           (5,373
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total investments and advances

     391,877        19.6         434,194        20.6         42,317   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Property, plant and equipment:

            

Land

     60,600           60,872           272   

Buildings

     301,911           312,880           10,969   

Machinery and equipment

     719,146           750,257           31,111   

Construction in progress

     17,035           10,698           (6,337

Less accumulated depreciation

     (838,155        (872,577        (34,422
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total property, plant and equipment

     260,537        13.1         262,130        12.4         1,593   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Goodwill

     89,039        4.5         97,809        4.6         8,770   

Intangible assets

     49,653        2.5         53,282        2.5         3,629   

Other assets

     58,394        2.9         67,641        3.2         9,247   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total non-current assets

     849,500        42.6         915,056        43.3         65,556   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total assets

   ¥ 1,994,103        100.0       ¥ 2,114,320        100.0       ¥ 120,217   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

 

 

13


Table of Contents
     March 31, 2012     December 31, 2012     Increase
(Decrease)
 
     Amount     %     Amount     %    
     (Yen in millions)  

Current liabilities:

          

Short-term borrowings

   ¥ 4,062        ¥ 4,002        ¥ (60

Current portion of long-term debt

     10,610          9,557          (1,053

Trade notes and accounts payable

     102,699          106,365          3,666   

Other notes and accounts payable

     60,993          51,907          (9,086

Accrued payroll and bonus

     49,880          42,695          (7,185

Accrued income taxes

     13,496          18,209          4,713   

Other accrued liabilities

     29,940          36,010          6,070   

Other current liabilities

     29,368          41,562          12,194   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current liabilities

     301,048        15.1        310,307        14.7        9,259   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-current liabilities:

          

Long-term debt

     21,197          20,709          (488

Accrued pension and severance liabilities

     32,441          32,311          (130

Deferred income taxes

     90,179          107,543          17,364   

Other non-current liabilities

     14,997          37,846          22,849   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-current liabilities

     158,814        8.0        198,409        9.4        39,595   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     459,862        23.1        508,716        24.1        48,854   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Kyocera Corporation shareholders’ equity:

          

Common stock

     115,703          115,703            

Additional paid-in capital

     162,617          162,970          353   

Retained earnings

     1,324,052          1,347,009          22,957   

Accumulated other comprehensive income

     (81,639       (33,623       48,016   

Treasury stock, at cost

     (51,228       (51,248       (20
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Kyocera Corporation shareholders’ equity

     1,469,505        73.7        1,540,811        72.9        71,306   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Noncontrolling interests

     64,736        3.2        64,793        3.0        57   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total equity

     1,534,241        76.9        1,605,604        75.9        71,363   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and equity

   ¥ 1,994,103        100.0      ¥ 2,114,320        100.0      ¥ 120,217   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Note: Accumulated other comprehensive income is as follows:

          
      March 31, 2012     December 31, 2012     Increase
(Decrease)
 
           (Yen in millions)  

Net unrealized gains on securities

     ¥ 40,735        ¥ 70,846      ¥ 30,111   

Net unrealized losses on derivative financial instruments

       (70       (99 )       (29

Pension adjustments

       (12,290       (13,824     (1,534

Foreign currency translation adjustments

       (110,014       (90,546     19,468   
  

 

 

   

 

 

   

 

 

 

Total

     ¥ (81,639     ¥ (33,623   ¥ 48,016   

 

14


Table of Contents

(2) Consolidated Statements of Income and Comprehensive Income (Unaudited)

Consolidated Statements of Income

 

     Nine months ended December 31,     Increase
(Decrease)
 
     2011     2012    
     Amount     %     Amount     %     Amount     %  
     (Yen in millions and shares in thousands, except per share amounts)  

Net sales

   ¥ 885,389        100.0      ¥ 926,524        100.0      ¥ 41,135        4.6   

Cost of sales

     635,035        71.7        686,879        74.1        51,844        8.2   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     250,354        28.3        239,645        25.9        (10,709     (4.3

Selling, general and administrative expenses

     161,981        18.3        188,411        20.4        26,430        16.3   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit from operations

     88,373        10.0        51,234        5.5        (37,139     (42.0

Other income (expenses):

            

Interest and dividend income

     12,690        1.4        13,521        1.4        831        6.5   

Interest expense

     (1,516     (0.2     (1,310     (0.1     206          

Foreign currency transaction gains, net

     2,982        0.4        4,304        0.5        1,322        44.3   

Other, net

     75        0.0        1,133        0.1        1,058          
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expenses)

     14,231        1.6        17,648        1.9        3,417        24.0   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     102,604        11.6        68,882        7.4        (33,722     (32.9

Income taxes

     25,328        2.9        24,457        2.6        (871     (3.4
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     77,276        8.7        44,425        4.8        (32,851     (42.5

Net income attributable to noncontrolling interests

     (5,166     (0.6     545        0.1        5,711          
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to shareholders of Kyocera Corporation

   ¥ 72,110        8.1      ¥ 44,970        4.9      ¥ (27,140     (37.6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share:

            

Net income attributable to shareholders of Kyocera Corporation:

            

Basic

   ¥ 393.07        ¥ 245.15         

Diluted

     393.07          245.15         

Average number of shares of common stock outstanding:

            

Basic

     183,453          183,442         

Diluted

     183,453          183,442         

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.

 

15


Table of Contents

Consolidated Statements of Comprehensive Income

 

     Nine months ended December 31,     Increase
(Decrease)
 
     2011     2012    
     Amount     Amount     Amount  
     (Yen in millions)  

Net income

   ¥ 77,276      ¥ 44,425      ¥ (32,851
  

 

 

   

 

 

   

 

 

 

Other comprehensive income (loss)—net of taxes

      

Net unrealized gains (losses) on securities

     (10,057     30,123        40,180   

Net unrealized losses on derivative financial instruments

     (32     (34     (2

Pension adjustments

     (944     (1,583     (639

Foreign currency translation adjustments

     (29,018     22,615        51,633   
  

 

 

   

 

 

   

 

 

 

Total other comprehensive income (loss)

     (40,051     51,121        91,172   
  

 

 

   

 

 

   

 

 

 

Comprehensive income

     37,225        95,546        58,321   

Comprehensive loss attributable to noncontrolling interests

     (1,455     (2,345     (890
  

 

 

   

 

 

   

 

 

 

Comprehensive income attributable to shareholders of Kyocera Corporation

   ¥ 35,770      ¥ 93,201      ¥ 57,431   
  

 

 

   

 

 

   

 

 

 

(3) Cautionary Statement for Premise of a Going Concern

None.

(4) Cautionary Statement for Significant Changes in Equity

None.

 

16

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