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Kyocera 6-K 2014

Documents found in this filing:

  1. 6-K
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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 October 2014

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 Accounting Group

Date: October 30, 2014


Table of Contents

Information furnished on this form:

EXHIBITS

 

Exhibit
    Number    

   

1.

  Consolidated Financial Results of Kyocera Corporation and its Subsidiaries for the Six Months Ended September 30, 2014


Table of Contents

 

LOGO

Consolidated Financial Results of Kyocera Corporation and its Subsidiaries

for the Six Months Ended September 30, 2014

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 Six Months Ended September 30, 2014

 

(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             %      

Six Months ended September 30, 2014

    714,329        2.1        54,751        (5.9     68,118        (1.4     43,649        1.7   

Six Months ended September 30, 2013

    699,663        15.0        58,203        124.8        69,053        93.3        42,930        69.2   

(Note) Comprehensive income:

120,677 million yen for the six months ended September 30, 2014, (24.2)% of change from previous period

159,209 million yen for the six months ended September 30, 2013, 487.2% 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  

Six Months ended September 30, 2014

     118.98         118.98   

Six Months ended September 30, 2013

     117.02         117.02   

Kyocera Corporation undertook a stock split at the ratio of two-for-one of all common stock on October 1, 2013. “Net income attributable to shareholders of Kyocera Corporation per share–Basic” and “Net income attributable to shareholders of Kyocera Corporation per share–Diluted” during the six months ended September 30, 2013 are calculated under the assumption that the stock split had been undertaken at the beginning of the year ended March 31, 2014 in accordance with the standard related to earnings per share.

(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      %  

September 30, 2014

     2,773,673         2,088,342         2,009,597         72.5   

March 31, 2014

     2,636,704         1,987,226         1,910,083         72.5   

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, 2014

             80.00                 40.00           

Year ending March 31, 2015

             40.00                 40.00         80.00   

(Note) Kyocera Corporation has adopted a resolution at the meeting of its Board of Directors held on October 30, 2014 to pay “End of second quarter” dividends (or interim dividends) per share of 40.00 yen for the year ended March 31, 2015. “End of second quarter” dividend per share of 80.00 yen for the year ended March 31, 2014 was calculated based on the number of shares before the stock split undertaken on October 1, 2013.

 

1


Table of Contents

3. Consolidated Financial Forecasts for the Year Ending March 31, 2015

(% 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, 2015

     1,580,000         9.2         135,000         12.0         158,000         8.0         97,000         9.3         264.40   

(Note) Forecast of earnings per share attributable to shareholders of Kyocera Corporation is calculated based on the diluted average number of shares outstanding during the six months ended September 30, 2014.

(Notes)

(1) Increase or decrease in significant subsidiaries during the six months ended September 30, 2014: 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:

 

377,618,580 shares at September 30, 2014

   377,618,580 shares at March 31, 2014

(ii) Number of treasury stock:

 

10,754,038 shares at September 30, 2014

   10,751,865 shares at March 31, 2014

(iii) Average number of shares outstanding:

 

366,865,668 shares for the six months ended September 30, 2014

  

366,875,459 shares for the six months ended September 30, 2013

“Average number of shares outstanding” for the six months ended September 30, 2013 are calculated under the assumption that the stock split undertaken on October 1, 2013 had been undertaken at the beginning of the year ended March 31, 2014.

Presentation of Situation of Review Procedure

The consolidated financial information included in this report is out of scope of the review procedure under the Financial Instruments and Exchange Law of Japan. The 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.

 

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Accompanying Information

1. BUSINESS RESULTS, FINANCIAL CONDITION AND PROSPECTS

(1) Business Results for the Six Months Ended September 30, 2014

Economic Situation and Business Environment

During the six months ended September 30, 2014 (“the first half”), the Japanese economy posted sluggish growth compared with the six months ended September 30, 2013 (“the previous first half”) due to stagnation in personal consumption reflecting the impact of an increase in the consumption tax rate, despite a moderate increase in capital investment. Overseas, the U.S. economy expanded on the back of solid growth in personal consumption and capital investment. The Chinese economy continued to post stable growth, while the European economy showed signs of slowing due to slumping domestic demand.

In the digital consumer equipment market, which is the principal market for Kyocera Corporation and its consolidated subsidiaries (“Kyocera Group” or “Kyocera”), demand for smartphones grew, particularly in emerging countries, and in the automotive market, sales increased steadily, mainly in China and the United States. Growth in the solar energy market in Japan, however, slowed considerably due mainly to the impact of the consumption tax rate increase and the end of government subsidies supporting solar power generation systems for residential use.

Consolidated Financial Results

Consolidated net sales for the first half amounted to ¥714,329 million, an increase of ¥14,666 million, or 2.1%, compared with ¥699,663 million for the previous first half due to increased sales in the Semiconductor Parts Group and the Information Equipment Group, despite declines in sales in the Electronic Device Group, which conducted structural reforms in the year ended March 31, 2014 (“the previous fiscal year”), and the Telecommunications Equipment Group.

Profit for the first half decreased compared with the previous first half due primarily to a decrease in profit in the Applied Ceramic Products Group mainly reflecting a decline in product selling prices, despite a significant increase in profit in the Information Equipment Group and more than double-digit increases in profit in the Fine Ceramic Parts Group and the Electronic Device Group. Profit from operations for the first half decreased by ¥3,452 million, or 5.9%, to ¥54,751 million, compared with ¥58,203 million for the previous first half. Income before income taxes decreased by ¥935 million, or 1.4%, to ¥68,118 million, compared with ¥69,053 million for the previous first half. On the other hand, net income attributable to shareholders of Kyocera Corporation in the first half increased by ¥719 million, or 1.7%, to ¥43,649 million, compared with ¥42,930 million for the previous first half due to decreased income taxes through the tax system revision in Japan.

Average exchange rates for the first half were ¥103 to the U.S. dollar, marking depreciation of ¥4 (approximately 4%) from ¥99 for the previous first half, and ¥139 to the Euro, marking depreciation of ¥9 (approximately 7%) from ¥130 for the previous first half.

 

     Six months ended September 30,      Increase
(Decrease)
 
     2013      2014     
     Amount      %      Amount      %      Amount     %  
     (Yen in millions, except exchange rates)  

Net sales

   ¥ 699,663         100.0       ¥ 714,329         100.0       ¥ 14,666        2.1   

Profit from operations

     58,203         8.3         54,751         7.7         (3,452     (5.9

Income before income taxes

     69,053         9.9         68,118         9.5         (935     (1.4

Net income attributable to shareholders of Kyocera Corporation

     42,930         6.1         43,649         6.1         719        1.7   

Average US$ exchange rate

     99                 103                          

Average Euro exchange rate

     130                 139                          

 

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Table of Contents

Consolidated Results by Reporting Segment

1) Fine Ceramic Parts Group

Sales and operating profit in this reporting segment increased significantly compared with the previous first half due to an increase in sales of components for industrial machinery such as semiconductor processing equipment and of automotive components such as camera modules.

2) Semiconductor Parts Group

Sales in this reporting segment increased compared with the previous first half due to contribution from sales by Kyocera Circuit Solutions, Inc., which became a consolidated subsidiary of Kyocera in October 2013, and to an increase in sales of ceramic packages for telecommunications infrastructure and digital consumer equipment, particularly smartphones. Operating profit, however, decreased compared with the previous first half due primarily to the impact of a decline in demand for organic packages used in servers and to a decrease in product selling prices.

3) Applied Ceramic Products Group

The cutting tool business showed steady growth due to an increase of production volume on the part of automotive related market. Sales in the solar energy business, however, decreased compared with the previous first half due to the absence of sales contributions from large-scale solar projects for the public and commercial sectors recorded in the previous first half. As a result, sales in this reporting segment as a whole decreased compared with the previous first half. Operating profit decreased compared with the previous first half due to a decline in prices of solar modules.

4) Electronic Device Group

Sales in this reporting segment decreased compared with the previous first half due to the impact of structural reforms implemented in the previous fiscal year to downsize certain operations, despite steady growth in sales of components for smartphones. Operating profit, however, increased considerably compared with the previous first half due mainly to a reduction in costs, as well as the effect of the aforementioned structural reforms.

5) Telecommunications Equipment Group

Sales and operating profit in this reporting segment decreased compared with the previous first half due to a decline in demand in Japan, despite growth in sales overseas primarily on account of new model introductions.

6) Information Equipment Group

Sales in this reporting segment increased compared with the previous first half as a result of an increase in sales volume, particularly of multifunctional products, due to active efforts to cultivate markets and to expand sales of new products. Operating profit increased significantly compared with the previous first half due in part to an increase in sales of consumables and to a reduction in costs.

7) Others

Sales in this reporting segment increased compared with the previous first half due to an increase in sales primarily at Kyocera Communication Systems Co., Ltd. and Kyocera Chemical Corporation. Operating profit increased compared with the previous first half due to the effect of the increase in sales.

 

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Table of Contents

Net Sales by Reporting Segment

 

     Six months ended September 30,     Increase  
     2013     2014     (Decrease)  
     Amount     %     Amount     %     Amount     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 38,187        5.5      ¥ 43,224        6.0      ¥ 5,037        13.2   

Semiconductor Parts Group

     87,063        12.4        102,173        14.3        15,110        17.4   

Applied Ceramic Products Group

     127,515        18.2        124,714        17.5        (2,801     (2.2

Electronic Device Group

     147,451        21.1        138,843        19.4        (8,608     (5.8
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     400,216        57.2        408,954        57.2        8,738        2.2   

Telecommunications Equipment Group

     96,557        13.8        91,555        12.8        (5,002     (5.2

Information Equipment Group

     144,525        20.7        157,648        22.1        13,123        9.1   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     241,082        34.5        249,203        34.9        8,121        3.4   

Others

     79,713        11.4        83,457        11.7        3,744        4.7   

Adjustments and eliminations

     (21,348     (3.1     (27,285     (3.8     (5,937       
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net sales

   ¥ 699,663        100.0      ¥ 714,329        100.0      ¥ 14,666        2.1   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Operating Profit (Loss) by Reporting Segment             
     Six months ended September 30,     Increase  
     2013     2014     (Decrease)  
     Amount     %*     Amount     %*     Amount     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 5,762        15.1      ¥ 7,009        16.2      ¥ 1,247        21.6   

Semiconductor Parts Group

     16,041        18.4        14,655        14.3        (1,386     (8.6

Applied Ceramic Products Group

     14,834        11.6        5,776        4.6        (9,058     (61.1

Electronic Device Group

     14,662        9.9        16,684        12.0        2,022        13.8   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     51,299        12.8        44,124        10.8        (7,175     (14.0

Telecommunications Equipment Group

     266        0.3        (1,258            (1,524       

Information Equipment Group

     10,449        7.2        17,207        10.9        6,758        64.7   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     10,715        4.4        15,949        6.4        5,234        48.8   

Others

     2,001        2.5        2,494        3.0        493        24.6   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit

     64,015        9.1        62,567        8.8        (1,448     (2.3

Corporate gains and equity in earnings of affiliates and
an unconsolidated subsidiary

     5,370               6,109               739        13.8   

Adjustments and eliminations

     (332            (558            (226       
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

   ¥ 69,053        9.9      ¥ 68,118        9.5      ¥ (935     (1.4
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
* % to net sales of each corresponding segment

 

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Table of Contents

Net Sales by Geographic Area

1) Japan

Sales in Japan decreased compared with the previous first half due primarily to a decline in sales for large-scale solar projects for public and commercial sectors, although sales in the Semiconductor Parts Group increased.

2) Asia

Sales in Asia increased compared with the previous first half due primarily to an increase in sales in the cutting tool business, the Electronic Device Group and the Semiconductor Parts Group.

3) Europe

Sales in Europe increased compared with the previous first half due primarily to an increase in sales in the Information Equipment Group supported by growth in sales volume of multifunctional products and the Electronic Device Group.

4) United States of America

Sales in the United States of America increased compared with the previous first half due mainly to increased sales in the Information Equipment Group.

5) Others

Sales in Others decreased slightly compared with the previous first half due to a decrease in sales in the Semiconductor Parts Group and the Telecommunications Equipment Group despite increased sales in the Information Equipment Group.

 

     Six months ended September 30,      Increase
(Decrease)
 
     2013      2014     
     Amount      %      Amount      %      Amount     %  
     (Yen in millions)  

Japan

   ¥ 299,430         42.8       ¥ 295,404         41.4       ¥ (4,026     (1.3

Asia

     139,201         19.9         142,288         19.9         3,087        2.2   

Europe

     114,119         16.3         129,071         18.1         14,952        13.1   

United States of America

     113,870         16.3         115,056         16.1         1,186        1.0   

Others

     33,043         4.7         32,510         4.5         (533     (1.6
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Net sales

   ¥ 699,663         100.0       ¥ 714,329         100.0       ¥ 14,666        2.1   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

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Table of Contents

(2) Consolidated Financial Condition

Consolidated Cash Flows

Cash and cash equivalents at September 30, 2014 decreased by ¥37,374 million to ¥297,800 million from ¥335,174 million at March 31, 2014.

1) Cash flows from operating activities

Net cash provided by operating activities for the first half decreased by ¥10,550 million to ¥63,915 million from ¥74,465 million for the previous first half. This was mainly because cash flow adjustments related to deferred income taxes and receivables exceeded cash flow adjustment related to other current liabilities.

2) Cash flows from investing activities

Net cash used in investing activities for the first half increased by ¥33,283 million to ¥87,050 million from ¥53,767 million for the previous first half. This was due mainly to an increase in payments for purchases of held-to-maturity securities and a decrease in withdrawal of time deposits and certificate of deposits, which were partly offset by increases in proceeds from sales and maturities of held-to-maturity and available-for-sale securities and a decrease in acquisition of time deposits and certificate of deposits.

3) Cash flows from financing activities

Net cash used in financing activities for the first half increased by ¥7,668 million to ¥22,037 million from ¥14,369 million for the previous first half. This was due mainly to an increase in dividends paid and purchases of noncontrolling interests.

 

     Six months ended September 30,  
     2013     2014  
     (Yen in millions)  

Cash flows from operating activities

   ¥ 74,465      ¥ 63,915   

Cash flows from investing activities

     (53,767     (87,050

Cash flows from financing activities

     (14,369     (22,037

Effect of exchange rate changes on cash and cash equivalents

     5,160        7,798   

Net increase (decrease) in cash and cash equivalents

     11,489        (37,374

Cash and cash equivalents at beginning of period

     305,454        335,174   

Cash and cash equivalents at end of period

   ¥ 316,943      ¥ 297,800   

(3)  Interim dividend for the year ending March 31, 2015

Kyocera Corporation (the “Company”) has adopted a basic guideline to the effect that dividend amounts will in principle be within the amount of net income attributable to shareholders of the Company on a consolidated basis, and subject to this guideline has set its consolidated dividend policy to maintain a consolidated payout ratio of 30% or more. The Company has fixed the amount of its interim dividend for the year ending March 31, 2015 (“fiscal 2015”) at 40 yen per share, in accordance with this basic profit allocation policy.

The Company undertook a stock split at the ratio of two-for-one of all common stock on October 1, 2013, and there is no effective change in interim dividends in fiscal 2015, as compared with its interim dividends of 80 yen per share in the year ended March 31, 2014, which based on the number of shares prior to the stock split.

The Company forecasts payment of its year-end dividend for fiscal 2015 in the amount of 40 yen per share, and has not changed its previously published annual dividend forecast of 80 yen per share.

 

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(4)  Consolidated Financial Forecasts for the Year Ending March 31, 2015

From the three months ending December 31, 2014 (“the third quarter”) onward, Kyocera expects component demand to increase on the back of increased production of digital consumer equipment, particularly smartphones, and steady growth in the industrial machinery market and automotive related markets. Kyocera also expects sales to increase due to active new product introductions of mobile phone handsets and multifunctional products and to market cultivation.

In light of this outlook, sales and profit from the third quarter onward are projected to exceed the first half as originally forecasted, and as a result, Kyocera has not revised its consolidated financial forecasts for the year ending March 31, 2015 as announced in April 2014. Forecasts for operating profit in each of the reporting segments have been revised as shown on the following page, based on results in the first half and the outlook for the third quarter onward.

Kyocera has revised its forecasts of average exchange rates for the second half from the projections made in April 2014, from ¥100 to ¥105 against the U.S. dollar and from ¥137 to ¥135 against the Euro. As a result, full-year forecasts of average exchange rates for the year ending March 31, 2015 have been revised to ¥104 to the U.S. dollar and ¥137 to the Euro.

Kyocera aims to achieve its full-year financial forecasts by continuing to leverage the collective capabilities of the Kyocera Group in order to secure orders, strengthen new product development and cultivate new markets, as well as through comprehensive cost reductions.

 

     Results for
the year ended
March 31, 2014
     Forecasts for
the year ending
March 31, 2015
     Increase
(Decrease)
 
     Amount      %      Amount      %      Amount      %  
     (Yen in millions, except exchange rates)  

Net sales

   ¥ 1,447,369         100.0       ¥ 1,580,000         100.0         132,631         9.2   

Profit from operations

     120,582         8.3         135,000         8.5         14,418         12.0   

Income before income taxes

     146,268         10.1         158,000         10.0         11,732         8.0   

Net income attributable to shareholders of Kyocera Corporation

     88,756         6.1         97,000         6.1         8,244         9.3   

Average US$ exchange rate

     100                 104                           

Average Euro exchange rate

     134                 137                           

 

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Table of Contents

Net Sales by Reporting Segment

 

     Results for
the year ended
March 31, 2014
    Forecasts for the year ending
March 31, 2015 announced on
    Increase
(Decrease)
to Results
 
     April 28, 2014
(Previous)
    October 30, 2014
(Revised)
   
   Amount     %     Amount     %     Amount     %     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 80,020        5.5      ¥ 91,000        5.7      ¥ 91,000        5.7        13.7   

Semiconductor Parts Group

     187,891        13.0        224,000        14.2        224,000        14.2        19.2   

Applied Ceramic Products Group

     272,795        18.9        303,000        19.2        303,000        19.2        11.1   

Electronic Device Group

     284,322        19.6        291,000        18.4        291,000        18.4        2.3   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     825,028        57.0        909,000        57.5        909,000        57.5        10.2   

Telecommunications Equipment Group

     186,749        12.9        205,000        13.0        205,000        13.0        9.8   

Information Equipment Group

     307,848        21.3        335,000        21.2        335,000        21.2        8.8   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     494,597        34.2        540,000        34.2        540,000        34.2        9.2   

Others

     173,137        11.9        178,000        11.3        178,000        11.3        2.8   

Adjustments and eliminations

     (45,393     (3.1     (47,000     (3.0     (47,000     (3.0       
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net sales

   ¥ 1,447,369        100.0      ¥ 1,580,000        100.0      ¥ 1,580,000        100.0        9.2   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Operating Profit by Reporting Segment               
     Results for
the year ended
March 31, 2014
    Forecasts for the year ending
March 31, 2015 announced on
    Increase
(Decrease)
to Results
 
     April 28, 2014
(Previous)
    October 30, 2014
(Revised)
   
   Amount     %*     Amount     %*     Amount     %*     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 11,836        14.8      ¥ 13,700        15.1      ¥ 15,000        16.5        26.7   

Semiconductor Parts Group

     31,889        17.0        33,600        15.0        33,600        15.0        5.4   

Applied Ceramic Products Group

     33,501        12.3        30,300        10.0        15,000        5.0        (55.2

Electronic Device Group

     21,160        7.4        28,900        9.9        35,900        12.3        69.7   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     98,386        11.9        106,500        11.7        99,500        10.9        1.1   

Telecommunications Equipment Group

     1,437        0.8        8,300        4.0        8,300        4.0        477.6   

Information Equipment Group

     28,193        9.2        33,500        10.0        33,500        10.0        18.8   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     29,630        6.0        41,800        7.7        41,800        7.7        41.1   

Others

     6,276        3.6        6,400        3.6        6,400        3.6        2.0   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit

     134,292        9.3        154,700        9.8        147,700        9.3        10.0   

Corporate and others

     11,976               3,300               10,300               (14.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

   ¥ 146,268        10.1      ¥ 158,000        10.0      ¥ 158,000        10.0        8.0   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
* % to net sales of each corresponding segment

 

9


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) Decline in demand for our products due to sluggish economic conditions in Japan and worldwide;

 

(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 our business activities;

 

(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 amendments to laws and regulations or newly enacted laws and regulations may limit our business operations;

 

(15) Events that may negatively impact our markets or supply chain, including plague, terrorist acts, international disputes and conflicts, etc. 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.

 

10


Table of Contents

2. CONSOLIDATED FINANCIAL STATEMENTS

(1) Consolidated Balance Sheets (Unaudited)

 

     March 31, 2014      September 30, 2014      Increase
(Decrease)
 
     Amount     %      Amount     %     
     (Yen in millions)  

Current assets:

            

Cash and cash equivalents

   ¥ 335,174         ¥ 297,800         ¥ (37,374

Short-term investments in debt and equity securities

     115,900           128,194           12,294   

Other short-term investments

     160,331           149,534           (10,797

Trade notes receivables

     22,054           19,261           (2,793

Trade accounts receivables

     257,850           266,008           8,158   

Less allowances for doubtful accounts and sales returns

     (5,062        (5,410        (348

Inventories

     335,802           360,522           24,720   

Deferred income taxes

     41,499           48,243           6,744   

Other current assets

     103,887           103,944           57   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total current assets

     1,367,435        51.9         1,368,096        49.3         661   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Non-current assets:

            

Investments and advances:

            

Long-term investments in debt and equity securities

     738,212           867,772           129,560   

Other long-term investments

     14,847           26,109           11,262   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total investments and advances

     753,059        28.6         893,881        32.2         140,822   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Property, plant and equipment:

            

Land

     63,268           62,834           (434

Buildings

     344,167           348,474           4,307   

Machinery and equipment

     826,881           832,367           5,486   

Construction in progress

     11,821           13,133           1,312   

Less accumulated depreciation

     (975,580        (985,465        (9,885
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total property, plant and equipment

     270,557        10.3         271,343        9.8         786   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Goodwill

     116,632        4.4         117,897        4.3         1,265   

Intangible assets

     59,326        2.2         58,110        2.1         (1,216

Other assets

     69,695        2.6         64,346        2.3         (5,349
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total non-current assets

     1,269,269        48.1         1,405,577        50.7         136,308   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total assets

   ¥ 2,636,704        100.0       ¥ 2,773,673        100.0       ¥ 136,969   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

 

11


Table of Contents
     March 31, 2014      September 30, 2014      Increase
(Decrease)
 
     Amount     %      Amount     %     
     (Yen in millions)  

Current liabilities:

            

Short-term borrowings

   ¥ 4,064         ¥ 4,792         ¥ 728   

Current portion of long-term debt

     12,360           10,180           (2,180

Trade notes and accounts payable

     122,424           124,776           2,352   

Other notes and accounts payable

     48,224           51,043           2,819   

Accrued payroll and bonus

     56,068           57,357           1,289   

Accrued income taxes

     23,353           17,121           (6,232

Other accrued liabilities

     31,347           54,059           22,712   

Other current liabilities

     29,611           32,594           2,983   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total current liabilities

     327,451        12.4         351,922        12.7         24,471   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Non-current liabilities:

            

Long-term debt

     19,466           19,010           (456

Accrued pension and severance liabilities

     36,812           32,919           (3,893

Deferred income taxes

     235,954           263,846           27,892   

Other non-current liabilities

     29,795           17,634           (12,161
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total non-current liabilities

     322,027        12.2         333,409        12.0         11,382   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total liabilities

     649,478        24.6         685,331        24.7         35,853   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Kyocera Corporation shareholders’ equity:

            

Common stock

     115,703           115,703             

Additional paid-in capital

     162,666           162,733           67   

Retained earnings

     1,415,784           1,444,758           28,974   

Accumulated other comprehensive income

     250,963           321,447           70,484   

Common stock in treasury, at cost

     (35,033        (35,044        (11
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total Kyocera Corporation shareholders’ equity

     1,910,083        72.5         2,009,597        72.5         99,514   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Noncontrolling interests

     77,143        2.9         78,745        2.8         1,602   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total equity

     1,987,226        75.4         2,088,342        75.3         101,116   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total liabilities and equity

   ¥ 2,636,704        100.0       ¥ 2,773,673        100.0       ¥ 136,969   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Note: Accumulated other comprehensive income is as follows:

 

     March 31, 2014     September 30, 2014     Increase
(Decrease)
 
     (Yen in millions)  

Net unrealized gains on securities

   ¥ 293,783      ¥ 344,320      ¥ 50,537   

Net unrealized losses on derivative financial instruments

     (260     (398     (138

Pension adjustments

     (21,101     (21,586     (485

Foreign currency translation adjustments

     (21,459     (889     20,570   
  

 

 

   

 

 

   

 

 

 

Total

   ¥ 250,963      ¥ 321,447      ¥ 70,484   
  

 

 

   

 

 

   

 

 

 

 

12


Table of Contents

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

Consolidated Statements of Income

 

    Six months ended September 30,     Increase
(Decrease)
 
    2013     2014    
    Amount     %     Amount     %     Amount     %  
    (Yen in millions and shares in thousands, except per share amounts)  

Net sales

  ¥ 699,663        100.0      ¥ 714,329        100.0      ¥ 14,666        2.1   

Cost of sales

    518,916        74.2        525,286        73.5        6,370        1.2   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

    180,747        25.8        189,043        26.5        8,296        4.6   

Selling, general and administrative expenses

    122,544        17.5        134,292        18.8        11,748        9.6   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit from operations

    58,203        8.3        54,751        7.7        (3,452     (5.9

Other income (expenses) :

           

Interest and dividend income

    8,692        1.2        11,104        1.5        2,412        27.7   

Interest expense

    (1,022     (0.1     (880     (0.1     142          

Foreign currency transaction gains, net

    1,768        0.3        1,923        0.2        155        8.8   

Other, net

    1,412        0.2        1,220        0.2        (192     (13.6
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expenses)

    10,850        1.6        13,367        1.8        2,517        23.2   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

    69,053        9.9        68,118        9.5        (935     (1.4

Income taxes

    23,281        3.4        21,055        2.9        (2,226     (9.6
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

    45,772        6.5        47,063        6.6        1,291        2.8   

Net income attributable to noncontrolling interests

    (2,842     (0.4     (3,414     (0.5     (572       
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to shareholders of Kyocera Corporation

  ¥ 42,930        6.1      ¥ 43,649        6.1      ¥ 719        1.7   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Per share information:

           

Net income attributable to shareholders of Kyocera Corporation:

           

Basic

  ¥ 117.02        ¥ 118.98         

Diluted

    117.02          118.98         

Average number of shares of common stock outstanding:

           

Basic

    366,875          366,866         

Diluted

    366,875          366,866         

Notes:

(1) Basic earnings per share attributable to shareholders of Kyocera Corporation is calculated 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 is calculated based on the diluted average number of shares of stock outstanding during each period.
(2) “Per share information” during the six months ended September 30, 2013 is calculated under the assumption that the stock split at the ratio of two-for-one of all common stock, which took effect on October 1, 2013, had been undertaken at the beginning of the year ended March 31, 2014.

 

13


Table of Contents

Consolidated Statements of Comprehensive Income

 

     Six months ended September 30,     Increase
(Decrease)
 
     2013      2014    
     Amount      Amount     Amount  
     (Yen in millions)  

Net income

   ¥ 45,772       ¥ 47,063      ¥ 1,291   
  

 

 

    

 

 

   

 

 

 

Other comprehensive income (loss)—net of taxes

       

Net unrealized gains on securities

     92,150         50,531        (41,619

Net unrealized losses on derivative financial instruments

     (156      (164     (8

Pension adjustments

     (511      (355     156   

Foreign currency translation adjustments

     21,954         23,602        1,648   
  

 

 

    

 

 

   

 

 

 

Total other comprehensive income (loss)

     113,437         73,614        (39,823
  

 

 

    

 

 

   

 

 

 

Comprehensive income

     159,209         120,677        (38,532

Comprehensive income (loss) attributable to noncontrolling interests

     (5,625      (6,447     (822
  

 

 

    

 

 

   

 

 

 

Comprehensive income attributable to shareholders of Kyocera Corporation

   ¥ 153,584       ¥ 114,230      ¥ (39,354
  

 

 

    

 

 

   

 

 

 

(3) Notes to the consolidated financial statements

Cautionary Statement for Premise of a Going Concern

None.

Cautionary Statement for Significant Changes in Equity

None.

 

14


Table of Contents

3. OTHER INFORMATION

Changes in accounting policies

Recently Adopted Accounting Standards

On April 1, 2014, Kyocera adopted Accounting Standards Update (ASU) No. 2013-04, “Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date.” This accounting standard requires an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date, as the sum of the following: (a) The amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors (b) Any additional amount the reporting entity expects to pay on behalf of its co-obligors. The accounting standard also requires an entity to disclose the nature and amount of the obligation as well as other information about those obligations. The adoption of this accounting standard did not have a material impact on Kyocera’s consolidated results of operations, financial condition and cash flows.

On April 1, 2014, Kyocera adopted ASU No. 2013-05, “Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity.” This accounting standard resolves the diversity in practice about whether Accounting Standards Codification (ASC) 810-10, “Consolidation—Overall,” or ASC 830-30, “Foreign Currency Matters—Translation of Financial Statements,” applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. In addition, this accounting standard resolves the diversity in practice for the treatment of business combinations achieved in stages involving a foreign entity. The adoption of this accounting standard did not have a material impact on Kyocera’s consolidated results of operations, financial condition and cash flows.

On April 1, 2014, Kyocera adopted ASU No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” This accounting standard requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward in the financial statements. The adoption of this accounting standard did not have a material impact on Kyocera’s consolidated results of operations, financial condition and cash flows.

 

15

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