Kyocera 6-K 2015
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 2015
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:
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: October 29, 2015
Information furnished on this form:
for the Six Months Ended September 30, 2015
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, 2015
(1) Consolidated results of operations
(% of change from previous period)
(Note) Comprehensive income:
34,304 million yen for the six months ended September 30, 2015, (71.6)% of change from previous period
120,677 million yen for the six months ended September 30, 2014, (24.2)% of change from previous period
(2) Consolidated financial condition
(Note) Kyocera Corporation has adopted a resolution at the meeting of its Board of Directors held on October 29, 2015 to pay End of second quarter dividends (or interim dividends) per share of 50.00 yen for the year ending March 31, 2016.
3. Consolidated Financial Forecasts for the Year Ending March 31, 2016
(% of change from previous year)
(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, 2015.
(1) Increase or decrease in significant subsidiaries during the six months ended September 30, 2015: 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):
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.
1. BUSINESS RESULTS, FINANCIAL CONDITION AND PROSPECTS
(1) Business Results for the Six Months Ended September 30, 2015
Economic Situation and Business Environment
During the six months ended September 30, 2015 (the first half), the Japanese economy showed a moderate recovery trend due to an improvement in corporate earnings and an increase in capital investment. Overseas, the U.S. economy expanded primarily on the back of an increase in personal consumption, while in contrast growth in the Chinese economy weakened and the European economy, despite signs of a recovery trend, posted only a low growth rate.
With regard to the principal markets for Kyocera Corporation and its subsidiaries (Kyocera Group or Kyocera), demand for smartphones grew in the digital consumer equipment market, and demand expanded in the automotive market mainly in the United States and Europe.
Consolidated Financial Results
Despite a decline in sales in the Telecommunications Equipment Group and the Applied Ceramic Products Group including the solar energy business, sales increased due mainly to growth in sales in the Semiconductor Parts Group, the Electronic Device Group and the Fine Ceramic Parts Group for communications and automotive-related markets as well as to an increase in sales in the Information Equipment Group in the United States. As a result, consolidated net sales for the first half increased by ¥8,248 million, or 1.2%, to ¥722,577 million compared with ¥714,329 million for the six months ended September 30, 2014 (the previous first half).
Profits for the first half increased compared with the previous first half, reflecting increased profits in all reporting segments in the Components Business, together with recording of profit from a sale of assets in the Others reporting segment, which more than offset a decline in profits in the Equipment Business. Profit from operations increased by ¥7,198 million, or 13.1%, to ¥61,949 million, compared with ¥54,751 million for the previous first half. Income before income taxes increased by ¥9,882 million, or 14.5%, to ¥78,000 million, compared with ¥68,118 million for the previous first half. Net income attributable to shareholders of Kyocera Corporation for the first half increased by ¥7,143 million, or 16.4%, to ¥50,792 million, compared with ¥43,649 million for the previous first half.
Average exchange rates for the first half were ¥122 to the U.S. dollar, marking depreciation of ¥19 (approximately 18%) from ¥103 for the previous first half, and ¥135 to the Euro, marking appreciation of ¥4 (approximately 3%) from ¥139 for the previous first half.
Consolidated Results by Reporting Segment
1) Fine Ceramic Parts Group
Sales and operating profit in this reporting segment increased compared with the previous first half due primarily to growth in sales of components for industrial machinery such as semiconductor processing equipment as well as in sales of automotive components such as camera modules.
2) Semiconductor Parts Group
Sales of packages and substrates for the communications market increased, particularly for communications infrastructure and smartphones, and sales of packages for LEDs also increased in automotive-related markets. As a result, sales and operating profit in this reporting segment increased compared with the previous first half.
3) Applied Ceramic Products Group
Sales in this reporting segment decreased compared with the previous first half due to a decline in sales in the solar energy business, which more than offset growth in sales in the cutting tool business, primarily for automotive-related markets. Operating profit, however, increased significantly compared with the previous first half due to efforts to reduce costs.
4) Electronic Device Group
Sales and operating profit in this reporting segment increased compared with the previous first half as a result of growth in sales of electronic components such as capacitors for smartphones and printing devices for industrial equipment.
5) Telecommunications Equipment Group
Sales of handsets featuring exceptional damage and water resistance grew steadily due to new customer cultivation and new product introductions, while sales of PHS-related products and low-end handsets decreased. As a result, sales and operating profit in this reporting segment decreased compared with the previous first half.
6) Information Equipment Group
Sales in this reporting segment increased compared with the previous first half due to growth in sales volume of equipment as result of active efforts to increase sales. On the other hand, operating profit decreased compared with the previous first half due to increased raw material costs reflecting the impact of foreign currency rate fluctuations.
Sales in this reporting segment increased compared with the previous first half due primarily to a sales increase at Kyocera Communication Systems Co., Ltd. Operating profit increased substantially compared with the previous first half due mainly to recording of profit from a sale of assets.
Net Sales by Reporting Segment
Operating Profit (Loss) by Reporting Segment
* % to net sales of each corresponding segment
Net Sales by Geographic Area
Sales in Japan decreased compared with the previous first half due mainly to a decline in sales in the solar energy business.
Sales in Asia increased compared with the previous first half due mainly to an increase in sales of the Components Business such as the Semiconductor Parts Group and the Electronic Device Group used for smartphones.
3) United States of America
Sales in the United States of America increased compared with the previous first half due to increased sales in the solar energy business and the Information Equipment Group as well as to the effect of the yens depreciation against the U.S. dollar.
Sales in Europe decreased compared with the previous first half due to a decline in sales in the Information Equipment Group as well as to the effect of the yens appreciation against the Euro.
Sales in Others decreased compared with the previous first half due mainly to a decrease in sales in the solar energy business and the Information Equipment Group.
(2) Financial Condition
Consolidated Cash Flows
Cash and cash equivalents at September 30, 2015 decreased by ¥20,254 million to ¥331,109 million from ¥351,363 million at March 31, 2015.
1) Cash flows from operating activities
Net cash provided by operating activities for the first half increased by ¥23,393 million to ¥87,308 million from ¥63,915 million for the previous first half. This mainly reflected that cash flow adjustments related to receivables and inventories exceeded cash flow adjustment related to other current liabilities including accrued expenses.
2) Cash flows from investing activities
Net cash used in investing activities for the first half decreased by ¥9,844 million to ¥77,206 million from ¥87,050 million for the previous first half. This mainly reflected that a decrease in purchase of securities and an increase in proceeds from withdrawal of time deposits exceeded a decrease in maturities of securities and an increase in acquisition of time deposits.
3) Cash flows from financing activities
Net cash used in financing activities for the first half increased by ¥6,478 million to ¥28,515 million from ¥22,037 million for the previous first half. This was due mainly to an increase in dividends paid.
(3) Acquisition of Shares of Common Stock, etc. of Nihon Inter Electronics Corporation
Kyocera Corporation completed a tender offer to acquire shares of common stock, etc. of Nihon Inter Electronics Corporation (herein NIEC), a company engaged in the development, manufacture and sale of power semiconductors, and NIEC became a consolidated subsidiary of Kyocera in September 2015.
Kyocera Corporation aims to achieve further corporate growth by pursuing synergies with NIEC in each business domain through sharing of their respective management resources, such as technologies and sales channels, and expanding into new business fields through combination of their respective products.
(4) Consolidated Financial Forecasts for the Year Ending March 31, 2016
From the three months ending December 31, 2015 onward, the economic environment will encompass concern regarding the slowing of the Chinese economy. At the same time, uncertainty is growing with respect to the economies of Europe and emerging countries. Consequently manufacturing volume of digital consumer equipment is expected to be below the projection made at the beginning of the year ending March 31, 2016 (fiscal 2016), and expansion of manufacturing activities in the automotive-related market and the industrial equipment market is also expected to slow.
Under these business circumstances, Kyocera will strive to continue securing orders from principal markets. However, it expects that demand in the Components and the Equipment Businesses will be below the projections made at the beginning of fiscal 2016. Therefore, Kyocera has revised its consolidated forecasts as announced in April 2015 as set forth below.
Kyocera has revised its forecasts of average exchange rates for the second half from the projections made in April 2015, from ¥115 to ¥117 against the U.S. dollar and from ¥125 to ¥130 against the Euro. As a result, full-year forecasts of average exchange rates for the fiscal 2016 have been revised to ¥120 to the U.S. dollar and ¥133 to the Euro.
Net Sales by Reporting Segment
Operating Profit (Loss) by Reporting Segment
* % to net sales of each corresponding segment
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 conditions in the Japanese or global economy;
(2) Unexpected changes in economic, political and legal conditions in countries where we operate;
(3) Various export risks which may affect the significant percentage of our revenues derived from overseas sales;
(4) The effect of foreign exchange fluctuations on our results of operations;
(5) Intense competitive pressures to which our products are subject;
(6) Fluctuations in the price and ability of suppliers to provide the required quantity of raw materials for use in Kyoceras production activities;
(7) Manufacturing delays or defects resulting from outsourcing or internal manufacturing processes;
(8) Shortages and rising costs of electricity affecting our production and sales activities;
(9) The possibility that future initiatives and in-process research and development may not produce the desired results;
(10) Companies or assets acquired by us not produce the returns or benefits, or bring in business opportunities;
(11) Inability to secure skilled employees, particularly engineering and technical personnel;
(12) Insufficient protection of our trade secrets and intellectual property rights including patents;
(13) Expenses associated with licenses we require to continue to manufacture and sell products;
(14) Environmental liability and compliance obligations by tightening of environmental laws and regulations;
(15) Unintentional conflict with laws and regulations or newly enacted laws and regulations;
(16) Our market or supply chains being affected by terrorism, plague, wars or similar events;
(17) Earthquakes and other natural disasters affecting our headquarters and major facilities as well as our suppliers and customers;
(18) Credit risk on trade receivables;
(19) Fluctuations in the value of, and impairment losses on, securities and other assets held by us;
(20) Impairment losses on long-lived assets, goodwill and intangible assets;
(21) Unrealized deferred tax assets and additional liabilities for unrecognized tax benefits; and
(22) 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.
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 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.
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, 2015, Kyocera adopted Accounting Standards Update (ASU) No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This accounting standard changes the requirements for reporting discontinued operations in ASC 205-20, Presentation of Financial StatementsDiscontinued Operations. A disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entitys operations and financial results. This accounting standard also requires an entity to provide disclosures about a disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements. The adoption of this accounting standard did not have a material impact on Kyoceras consolidated results of operations, financial condition and cash flows.