Kyocera 6-K 2013
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 August 2013
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): ¨
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: August 1, 2013
Information furnished on this form:
for the Three Months Ended June 30, 2013
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 Three Months Ended June 30, 2013
(Note) Comprehensive income (loss):
143,687 million yen for the three months ended June 30, 2013.
(25,765) million yen for the three months ended June 30, 2012.
(2) Consolidated financial condition
(Note) Dividends per share for the year ending March 31, 2014 are forecasted to be 160.00 yen on an annual basis.
3. Consolidated Financial Forecasts for the Year Ending March 31, 2014
(% of change from previous year)
Forecast of earnings per share attributable to shareholders of Kyocera Corporation is computed based on the diluted average number
of shares outstanding during the three months ended June 30, 2013.
(1) Increase or decrease in significant subsidiaries during the three months ended June 30, 2013: 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 3. OTHER INFORMATION on page 15.
(ii) Changes due to other than adoption of new accounting standards: None.
(4) Number of shares (common stock):
(i) Number of shares issued:
(ii) Number of treasury stock:
(iii) Average number of shares outstanding:
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 10.
1. BUSINESS RESULTS, FINANCIAL CONDITION AND PROSPECTS
(1) Business Results for the Three Months Ended June 30, 2013
Economic Situation and Business Environment
During the three months ended June 30, 2013 (the first quarter), the Japanese economy recovered moderately on the back of heightened expectations regarding governmental economic policy and the effect of already adopted financial measures coupled with an improvement in the export environment reflecting the yens depreciation, as well as signs of a turnaround in corporate earnings and personal consumption. Overseas, the U.S. economy was characterized by growth in personal consumption, expansion in housing investment and improvement in the employment situation, while the European economy was weak overall. At the same time, growth in the Chinese economy has continued to slow.
In the digital consumer equipment market, which is the principal market for Kyocera Corporation and its consolidated subsidiaries (Kyocera), shipment volume was sluggish overall for conventional mobile phones, PCs and flat-screen TVs, while shipment volume of smartphones and tablet PCs increased significantly compared with the three months ended June 30, 2012 (the previous first quarter). The solar energy market in Japan grew significantly compared with the previous first quarter due primarily to growth in demand in the public and commercial sectors resulting from the feed-in tariff for renewable energy.
Consolidated Financial Results
Consolidated net sales for the first quarter increased by ¥33,929 million, or 11.4%, to ¥331,655 million, compared with ¥297,726 million in the previous first quarter, due in part to increased sales in the Applied Ceramic Products Group and the Information Equipment Group, as well as the effect of the yens depreciation. Profit considerably exceeded that of the previous first quarter, reflecting the impact of sales growth and enhanced productivity in the Components Business, combined with the absence of an environmental remediation charge of ¥21,300 million at AVX Corporation, a U.S.-based consolidated subsidiary, which was recorded in the previous first quarter (Please refer to (3) Financial Settlement between AVX Corporation, the Environmental Protection Agency and Commonwealth of Massachusetts regarding the New Bedford Harbor Superfund Site on page 8). Profit from operations increased by ¥27,400 million to ¥25,398 million, compared with operating loss of ¥2,002 million in the previous first quarter. Income before income taxes increased by ¥30,086 million, or 636.5%, to ¥34,813 million, compared with ¥4,727 million in the previous first quarter, and net income attributable to shareholders of Kyocera Corporation increased by ¥16,081 million, or 244.8%, to ¥22,651 million, compared with ¥6,570 million in the previous first quarter.
Average exchange rates for the first quarter were ¥99 to the U.S. dollar, marking depreciation of ¥19 (approximately 24%) from ¥80 in the previous first quarter, and ¥129 to the Euro, marking depreciation of ¥26 (approximately 25%) from ¥103 in the previous first quarter. As a result, net sales and income before income taxes were pushed up by approximately ¥36 billion and ¥7 billion, respectively, compared with the previous first quarter.
Consolidated Results by Reporting Segment
1) Fine Ceramic Parts Group
Sales in this reporting segment decreased slightly compared with the previous first quarter due to a decline in component demand for flat-screen TVs and PCs, which more than off-set an increase in sales of automotive components. However, operating profit increased compared with the previous first quarter due primarily to the effect of a reduction in costs.
2) Semiconductor Parts Group
Sales and operating profit in this reporting segment increased compared with the previous first quarter due to growth in demand for ceramic packages for digital consumer equipment and communications infrastructure, as well as an increase in sales of organic packages such as those used in servers.
3) Applied Ceramic Products Group
Sales in the solar energy business increased substantially in the public and commercial sectors, including mega-solar power projects, and grew solidly in the residential sector as well. Sales in the cutting tool business also increased, and as a result overall sales in this reporting segment were up considerably from the previous first quarter. Operating profit increased significantly over the previous first quarter due primarily to higher sales in the solar energy business.
4) Electronic Device Group
Sales in this reporting segment increased compared with the previous first quarter due to growth in sales of capacitors and connectors, as well as the effect of the yens depreciation. Operating profit increased markedly due to the absence of the environmental remediation charge at AVX Corporation recorded in the previous first quarter, and the effect of a reduction in costs.
5) Telecommunications Equipment Group
Despite growth in sales of mobile phones overseas, sales of conventional mobile phones decreased in Japan. As a result, sales in this reporting segment decreased compared with the previous first quarter, and an operating loss was recorded.
6) Information Equipment Group
Sales in this reporting segment increased compared with the previous first quarter due to an increase in sales volume driven by new product introductions, as well as vigorous market cultivation and sales expansion activities, in addition to the effect of the yens depreciation. Operating profit increased compared with the previous first quarter despite an increase in costs such as sales promotion costs.
Sales in this reporting segment increased compared with the previous first quarter due mainly to an increase in sales at Kyocera Communication Systems Co. Ltd. Operating profit decreased, however, due to an increase in basic R&D expenses for the development of new technologies and new products.
Net Sales by Reporting Segment
Operating Profit (Loss) by Reporting Segment
Net Sales by Geographic Area
Sales in Japan for the first quarter increased compared with the previous first quarter due primarily to an increase in sales in the solar energy business, despite a decrease in sales in the Telecommunications Equipment Group.
Sales in Asia for the first quarter increased compared with the previous first quarter due primarily to an increase in sales in the Electronic Device Group including connectors and capacitors, as well as the effect of the yens depreciation.
Sales in Europe for the first quarter increased compared with the previous first quarter due primarily to an increase in sales in the Information Equipment Group affected by growth in sales volume of printers and multifunctional products and the yens depreciation.
4) United States of America
Sales in the United States of America for the first quarter increased compared with the previous first quarter due to sales growth in the Information Equipment Group and the Telecommunications Equipment Group resulting from increased sales volume of mobile phones, as well as the effect of the yens depreciation.
Sales in Others for the first quarter increased compared with the previous first quarter due primarily to an increase in sales in the Information Equipment Group and the Telecommunications Equipment Group.
(2) Consolidated Financial Condition
Consolidated Cash Flows
Cash and cash equivalents at June 30, 2013 decreased by ¥24,568 million to ¥280,886 million from ¥305,454 million at March 31, 2013.
1) Cash flows from operating activities
Net cash provided by operating activities for the first quarter decreased by ¥902 million to ¥27,785 million from ¥28,687 million for the previous first quarter. This was due mainly to that increases in cash outflow adjustments related to certain liabilities, including notes and accounting payables, accrued income taxes as well as other current and non-current liabilities, exceeded increases in net income and cash inflow adjustments related to receivables.
2) Cash flows from investing activities
Net cash used in investing activities for the first quarter increased by ¥29,756 million to ¥47,380 million from ¥17,624 million for the previous first quarter. This was mainly because increases in acquisition of time deposits and certificate of deposits and in payment for purchase of held-to-maturity securities exceeded an increase in withdrawal of time deposits and certificate of deposits.
3) Cash flows from financing activities
Net cash used in financing activities for the first quarter increased by ¥1,855 million to ¥11,579 million from ¥9,724 million for the previous first quarter. This was due mainly to a decrease in proceeds from issuance of short-term debt.
(3) Financial Settlement between AVX Corporation, 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 EPAs ongoing clean up of the New Bedford Harbor Superfund site in New Bedford, Massachusetts.
AVXs 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 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. The settlement, which is currently being reviewed, requires approval by the United States District Court before becoming final.
AVX and Kyocera recorded a charge with respect to this matter of ¥7,900 million ($100 million) for the year ended March 31, 2012, and ¥21,300 million ($266 million) for the three months ended June 30, 2012, which were included in selling general and administrative expenses in the consolidated statements of income.
(4) Consolidated Financial Forecasts for the Year Ending March 31, 2014 (fiscal 2014)
While uncertainty remains regarding the trends of the European and Chinese economies going forward, the Japanese and the U.S. economies are expected to continue expanding from the second quarter (the three months from July 1 to September 30, 2013). The business environment is projected to improve in the digital consumer equipment and industrial machinery markets from the second quarter. In addition, demand for solar power generating systems is projected to continue rising in Japan.
Based on this outlook for the business environment, there is no change to the sales and profit forecasts for fiscal 2014 that were announced on April 25, 2013. Kyocera forecasts the average exchange rates of ¥95 to the U.S. dollar and ¥123 to the Euro from the second quarter to the fourth quarter (from July 1, 2013 to March 31, 2014). As a result, Kyocera has revised full-year exchange rate forecasts for fiscal 2014 to ¥96 to the U.S. dollar from ¥95 and ¥124 to the Euro from ¥123, reflecting the results of the first quarter.
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:
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.
2. CONSOLIDATED FINANCIAL STATEMENTS
(1) Consolidated Balance Sheets (Unaudited)
Note: Accumulated other comprehensive income is as follows:
(2) Consolidated Statements of Income and Comprehensive Income (Unaudited)
Consolidated Statements of Income
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.
Consolidated Statements of Comprehensive Income
(3) Notes to the consolidated financial statements
Cautionary Statement for Premise of a Going Concern
Cautionary Statement for Significant Changes in Equity
3. OTHER INFORMATION
Changes in accounting policies
Recently Adopted Accounting Standards
On April 1, 2013, Kyocera adopted the Financial Accounting Standards Board (FASB)s Accounting Standards Update (ASU) No. 2011-10, Derecognition of in Substance Real Estatea Scope Clarification. This accounting standard requires the reporting entity to apply the guidance in Accounting Standards Codification (ASC) 360-20, Property, Plant, and EquipmentReal Estate Sales to determine whether it should derecognize the in substance real estate when a parent ceases to have a controlling financial interest in a subsidiary that is in substance real estate as a result of default on the subsidiarys nonrecourse debt. The adoption of this accounting standard did not have a material impact on Kyoceras consolidated results of operations, financial condition and cash flows.
On April 1, 2013, Kyocera adopted the FASBs ASU No. 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment. This accounting standard permits an entity to first assess qualitative factors to determine whether it is more likely than not that the indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the impairment test. An entity is not required to calculate the fair value of the indefinite-lived intangible asset unless the entity determines that it is more likely than not that the indefinite-lived intangible asset is impaired. As this accounting standard did not actually change how the impairment would be calculated, the adoption of this accounting standard did not have an impact on Kyoceras consolidated results of operations, financial condition and cash flows.