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Kyocera 6-K 2017

Documents found in this filing:

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

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 6-K

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 2017

Commission File Number: 1-07952

KYOCERA CORPORATION

(Translation of registrant’s name into English)

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  ☒        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

(Registrant)

/s/ SHOICHI AOKI

Shoichi Aoki
Director,
Managing Executive Officer and
General Manager of
Corporate Financial and Accounting Group

Date: January 31, 2017


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, 2016


Table of Contents

LOGO

Consolidated Financial Results of Kyocera Corporation and its Subsidiaries

for the Nine Months Ended December 31, 2016

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, 2016

 

(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, 2016

     1,014,628         (7.2     67,102         1.6        98,706         1.4        70,852         19.1   

Nine months ended December 31, 2015

     1,093,030         (0.8     66,020         (26.8     97,390         (15.1     59,504         (19.6

(Note) Comprehensive income:

  66,794 million yen for the nine months ended December 31, 2016, (58.2)% of change from previous period

159,836 million yen for the nine months ended December 31, 2015, (43.8)% 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, 2016

           192.88         192.88   

Nine months ended December 31, 2015

           162.20         162.20   

 

(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, 2016

     3,092,949         2,400,558         2,315,061         74.8   

March 31, 2016

     3,095,049         2,373,762         2,284,264         73.8   

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, 2016

           50.00               50.00        100.00   

Year ending March 31, 2017

           50.00               50.00        100.00   

Note:

Year-end and annual dividends per share for the year ending March 31, 2017 are the forecasts at the date of the submission of this report.

 

1


Table of Contents

3. Consolidated Financial Forecasts for the Year Ending March 31, 2017

 

              (% 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, 2017

     1,410,000         (4.7)         95,000         2.5         130,000         (10.7)         90,000         (17.5)         245.01   

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 nine months ended December 31, 2016.

Notes:

(1) Increase or decrease in significant subsidiaries during the nine months ended December 31, 2016: Not applicable

(2) Adoption of concise quarterly accounting method or procedure: Not applicable

(3) Changes in accounting policies:

(i) Changes due to adoption of new accounting standards: Yes

(ii) Changes due to other than adoption of new accounting standards: Not applicable

Please refer to the accompanying “2. OTHER INFORMATION” on page 10.

(4) Number of shares (common stock):

(i) Number of shares issued:

 

377,618,580 shares at December 31, 2016

   377,618,580 shares at March 31, 2016

(ii) Number of treasury stock:

 

9,904,600 shares at December 31, 2016

   10,761,503 shares at March 31, 2016

(iii) Average number of shares outstanding:

 

367,333,543 shares for the nine months ended
December 31, 2016

  

366,859,651 shares for the nine months ended
December 31, 2015

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.

Other Note:

This is an English translation of the Japanese original of the Consolidated Financial Results of Kyocera Corporation and its Subsidiaries for the Nine Months Ended December 31, 2016. The translation is prepared solely for the reference and convenience of foreigners. In the event of any discrepancy between this translation and the Japanese original, the latter shall prevail.

 

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Table of Contents

Accompanying Information

1. BUSINESS RESULTS, FINANCIAL CONDITION AND PROSPECTS

(1) Business Results for the Nine Months Ended December 31, 2016

Economic Situation and Business Environment

During the nine months ended December 31, 2016 (“the nine months”), the Japanese economy recovered moderately, driven by improvement in exports and growing private-sector capital investment. Overseas, the U.S. economy expanded due mainly to an increase in personal consumption, while the European economy was sluggish. The growth rate in the Chinese economy continued to weaken despite an increase in sales of automobiles and houses. As for exchange rates for the nine months, the yen appreciated compared with the nine months ended December 31, 2015 (“the previous nine months”) despite sudden depreciation of the yen after the U.S. presidential election in November 2016.

With regard to the principal markets for Kyocera Corporation and its subsidiaries (“Kyocera”), the automotive market remained firm on the back of increased sales in China and Europe. In the information and communications markets, demand for miniaturized highly functional components increased, while stagnation in the growth rate of smartphone shipment volume continued. In the solar energy market, product prices continued to erode worldwide and demand in Japan decreased due to the impact of reduction in purchase price under feed-in tariff in Japan.

Consolidated Financial Results

Consolidated net sales for the nine months decreased by ¥78,402 million, or 7.2%, compared with the previous nine months to ¥1,014,628 million due mainly to the negative impact of the yen’s appreciation.

Profit from operations increased by ¥1,082 million, or 1.6%, to ¥67,102 million, compared with the previous nine months. Income before income taxes increased by ¥1,316 million, or 1.4%, to ¥98,706 million, and net income attributable to shareholders of Kyocera Corporation for the nine months increased by ¥11,348 million, or 19.1%, to ¥70,852 million, compared with the previous nine months.

Average exchange rates for the nine months were ¥107 to the U.S. dollar, marking appreciation of ¥15 (12.3%) and ¥118 to the Euro, marking appreciation of ¥16 (11.9%), from the previous nine months. As a result, net sales and income before income taxes after translation into yen for the nine months were pushed down by approximately ¥90 billion and approximately ¥23 billion, respectively, compared with the previous nine months.

 

     Nine months ended December 31,      Increase
(Decrease)
 
     2015      2016     
     Amount      %      Amount      %      Amount     %  
     (Yen in millions, except exchange rates)  

Net sales

   ¥ 1,093,030         100.0       ¥ 1,014,628         100.0         ¥(78,402     (7.2

Profit from operations

     66,020         6.0         67,102         6.6         1,082        1.6   

Income before income taxes

     97,390         8.9         98,706         9.7         1,316        1.4   

Net income attributable to shareholders of Kyocera Corporation

     59,504         5.4         70,852         7.0         11,348        19.1   

Average US$ exchange rate

     122                 107                 (15     (12.3

Average Euro exchange rate

     134                 118                 (16     (11.9

The negative impacts due to changes in foreign currency exchange rates for the nine months compared with the previous nine months

 

Net sales:

   approximately ¥90 billion   

Income before income taxes:

   approximately ¥23 billion   

 

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Table of Contents

Consolidated Results by Reporting Segment

1) Fine Ceramic Parts Group

Sales in this reporting segment slightly increased compared with the previous nine months due to an increase in sales of automotive components and components for semiconductor processing equipment, despite an inventory adjustment of components for smartphones such as inductor cores. Operating profit decreased compared with the previous nine months due mainly to the negative impact from the yen’s appreciation and higher R&D expenses.

2) Semiconductor Parts Group

Sales in this reporting segment slightly increased compared with the previous nine months because a substantial increase in sales of ceramic packages for optical communications, etc. was offset by sluggish demand in printed wiring boards for communications infrastructure. Operating profit decreased due to the absence of approximately ¥12 billion of a gain on the sale of assets recorded in the previous nine months, as well as to the negative impact of the yen’s appreciation and a decline in profit from the organic materials business.

3) Applied Ceramic Products Group

Sales in this reporting segment decreased compared with the previous nine months due to a decline in the sales of the solar energy business owing to sales price erosion and a decline in demand. Operating profit decreased due mainly to a decline in profit from the cutting tool business because of the negative impact of the yen’s appreciation.

4) Electronic Device Group

Sales in this reporting segment decreased compared with the previous nine months due to sales price erosion and the negative impact of the yen’s appreciation, despite increased demand for small-sized capacitors and crystal components. Operating profit increased, despite the decline in sales, due to the absence of approximately ¥18 billion of impairment losses on goodwill and other assets in the display business recorded in the previous nine months.

5) Telecommunications Equipment Group

Sales in this reporting segment decreased compared with the previous nine months due to a decline in sales volume resulting from a reduction in the production ratio of low-end mobile phones for the overseas market, which was based on Kyocera’s product strategy specialized in distinctive mobile phones with high durability and other unique features. Although it was insufficient to offset accumulated loss for the six months up to September 30, 2016, operating profit was recorded in the three months ended December 31, 2016 as a result of product strategy and structural reforms.

6) Information Equipment Group

Sales in this reporting segment decreased compared with the previous nine months due to the negative impact of the yen’s appreciation even though the sales volume for equipment was solid on the back of aggressive sales activities for new products. Operating profit increased compared with the previous nine months, however, due to the effect of launch of new products and cost reductions resulting from, among others, an improvement in productivity.

 

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Table of Contents

Net Sales by Reporting Segment

 

     Nine months ended December 31,     Increase
(Decrease)
 
     2015     2016    
     Amount     %     Amount     %     Amount     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 70,342        6.4      ¥ 71,027        7.0      ¥ 685        1.0   

Semiconductor Parts Group

     180,125        16.5        181,309        17.8        1,184        0.7   

Applied Ceramic Products Group

     177,763        16.3        159,166        15.7        (18,597     (10.5

Electronic Device Group

     219,780        20.1        209,799        20.7        (9,981     (4.5
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     648,010        59.3        621,301        61.2        (26,709     (4.1

Telecommunications Equipment Group

     124,178        11.4        99,018        9.8        (25,160     (20.3

Information Equipment Group

     245,375        22.4        227,750        22.4        (17,625     (7.2
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     369,553        33.8        326,768        32.2        (42,785     (11.6

Others

     106,855        9.8        96,446        9.5        (10,409     (9.7

Adjustments and eliminations

     (31,388     (2.9     (29,887     (2.9     1,501          
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net sales

   ¥ 1,093,030        100.0      ¥ 1,014,628        100.0      ¥ (78,402     (7.2
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating Profit (Loss) by Reporting Segment

 

            
     Nine months ended December 31,     Increase
(Decrease)
 
     2015     2016    
     Amount     %*     Amount     %*     Amount     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 11,860        16.9      ¥ 9,678        13.6      ¥ (2,182     (18.4

Semiconductor Parts Group

     37,435        20.8        19,389        10.7        (18,046     (48.2

Applied Ceramic Products Group

     12,498        7.0        9,258        5.8        (3,240     (25.9

Electronic Device Group

     3,784        1.7        21,376        10.2        17,592        464.9   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     65,577        10.1        59,701        9.6        (5,876     (9.0

Telecommunications Equipment Group

     (3,945            (4,246            (301       

Information Equipment Group

     17,484        7.1        20,041        8.8        2,557        14.6   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     13,539        3.7        15,795        4.8        2,256        16.7   

Others

     (1,988            (2,708            (720       
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit

     77,128        7.1        72,788        7.2        (4,340     (5.6

Corporate gains and equity in earnings (losses) of affiliates and an unconsolidated subsidiary

     20,250               26,995               6,745        33.3   

Adjustments and eliminations

     12               (1,077            (1,089       
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

   ¥ 97,390        8.9      ¥ 98,706        9.7      ¥ 1,316        1.4   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
* % to net sales of each corresponding segment

Note:

Kyocera Chemical Group, formerly included in “Others” until the year ended March 31, 2016, has been reclassified and included in the “Semiconductor Parts Group” commencing from the year ending March 31, 2017. Due to this change, results for the previous nine months have been reclassified to conform to the current presentation. As a result of this reclassification, a gain of approximately ¥12 billion from the sale of assets was included in the operating profit of the “Semiconductor Parts Group” for the previous nine months.

 

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Table of Contents

Net Sales by Geographic Area

1) Japan

Sales in Japan decreased compared with the previous nine months due mainly to a decline in sales in the Telecommunications Equipment Group.

2) Asia

Sales in Asia decreased compared with the previous nine months due primarily to a decline in sales in the Semiconductor Parts Group and the Fine Ceramic Parts Group which were affected by the negative impact of the yen’s appreciation.

3) United States of America

Sales in the United States of America decreased compared with the previous nine months due mainly to the negative impact of the yen’s appreciation as well as to a decline in sales in the solar energy business.

4) Europe

Sales in Europe decreased compared with the previous nine months due mainly to a decline in sales in the Information Equipment Group and the Electronic Device Group which were affected by the negative impact of the yen’s appreciation.

5) Others

Sales in Others decreased compared with the previous nine months due mainly to a decline in sales in the Information Equipment Group and the Semiconductor Parts Group which were affected by the negative impact of the yen’s appreciation.

 

     Nine months ended December 31,      Increase
(Decrease)
 
     2015      2016     
     Amount      %      Amount      %      Amount     %  
     (Yen in millions)  

Japan

   ¥ 432,440         39.6       ¥ 417,735         41.2         ¥(14,705     (3.4

Asia

     237,453         21.7         223,516         22.0         (13,937     (5.9

United States of America

     191,704         17.5         169,137         16.7         (22,567     (11.8

Europe

     185,550         17.0         163,275         16.1         (22,275     (12.0

Others

     45,883         4.2         40,965         4.0         (4,918     (10.7
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Net sales

   ¥ 1,093,030         100.0       ¥ 1,014,628         100.0         ¥(78,402     (7.2
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

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Table of Contents

(2) Financial Condition

Consolidated Cash Flows

Cash and cash equivalents at December 31, 2016 decreased by ¥43,294 million to ¥330,726 million from ¥374,020 million at March 31, 2016.

1) Cash flows from operating activities

Net cash provided by operating activities for the nine months decreased by ¥20,480 million to ¥95,214 million from ¥115,694 million for the previous nine months. This was due mainly to that cash flow adjustments related to receivables and inventories exceeded an increase in net income.

2) Cash flows from investing activities

Net cash used in investing activities for the nine months increased by ¥32,969 million to ¥98,732 million from ¥65,763 million for the previous nine months. This mainly reflected that proceeds from sales of property, plant and equipment decreased and acquisition of time deposit exceeded its withdrawal although proceeds from sales and maturities of securities increased.

3) Cash flows from financing activities

Net cash used in financing activities for the nine months decreased by ¥854 million to ¥46,790 million from ¥47,644 million for the previous nine months. This was due mainly to a decrease in year-end dividends paid.

 

     Nine months ended December 31,     Increase
(Decrease)
 
     2015     2016    
     (Yen in millions)  

Cash flows from operating activities

   ¥ 115,694      ¥ 95,214      ¥ (20,480

Cash flows from investing activities

     (65,763     (98,732     (32,969

Cash flows from financing activities

     (47,644     (46,790     854   

Effect of exchange rate changes on cash and cash equivalents

     (2,185     7,014        9,199   

Net increase (decrease) in cash and cash equivalents

     102        (43,294     (43,396

Cash and cash equivalents at beginning of period

     351,363        374,020        22,657   

Cash and cash equivalents at end of period

   ¥ 351,465      ¥ 330,726      ¥ (20,739

 

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Table of Contents

(3) Consolidated Financial Forecasts for the Year Ending March 31, 2017

Based on the current business environment, the forecast of consolidated performance for the year ending March 31, 2017 (“fiscal 2017”) has been revised as set forth in the table below. Sales in the solar energy business and the Electronic Device Group are expected to be lower than previous forecast due respectively to changes in the business environment in the North American market and slow demand in the Japanese market, and to an inventory adjustment in respect of print heads for industrial equipment, among others. Delays from the original plan in the launch of new products also affected performance of the Information Equipment Group. Due to such changes in business situation, consolidated net sales forecast for fiscal 2017 are expected to be lower than previous forecast. Therefore, profit from operation has also been revised along with sales forecast revision.

Taking into account performance for the nine months, Kyocera maintains its previous forecast of income before income taxes, while it has revised upward its forecast of net income attributable to shareholders of Kyocera Corporation for fiscal 2017. Forecast performance of each business segment has also been revised as set forth on the following page.

Kyocera will make efforts to increase sales and to achieve comprehensive cost reductions in order to achieve the forecast performance for fiscal 2017.

 

     Results for
the  year ended
March 31, 2016
     Forecasts for the year ending
March 31, 2017 announced on
     Increase
(Decrease)
to Results
 
        October 31,  2016
(Previous)
     January 31,  2017
(Revised)
    
     Amount      %      Amount      %      Amount      %      %  
     (Yen in millions, except exchange rates)  

Net sales

   ¥ 1,479,627         100.0       ¥ 1,520,000         100.0       ¥ 1,410,000         100.0         (4.7

Profit from operations

     92,656         6.3         110,000         7.2         95,000         6.7         2.5   

Income before income taxes

     145,583         9.8         130,000         8.6         130,000         9.2         (10.7

Net income attributable to shareholders of Kyocera Corporation

     109,047         7.4         85,000         5.6         90,000         6.4         (17.5

Average US$ exchange rate

     120                 104                 108                   

Average Euro exchange rate

     133                 115                 119                   

 

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Table of Contents

Net Sales by Reporting Segment

 

     Results for
the  year ended
March 31, 2016
    Forecasts for the year ending
March 31, 2017 announced on
    Increase
(Decrease)
to Results
 
       October 31,  2016
(Previous)
    January 31,  2017
(Revised)
   
     Amount     %     Amount     %     Amount     %     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 95,092        6.4      ¥ 101,000        6.7      ¥ 96,000        6.8        1.0   

Semiconductor Parts Group

     236,265        16.0        237,000        15.6        240,000        17.0        1.6   

Applied Ceramic Products Group

     247,516        16.7        263,000        17.3        224,000        15.9        (9.5

Electronic Device Group

     290,902        19.7        304,000        20.0        286,000        20.3        (1.7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     869,775        58.8        905,000        59.6        846,000        60.0        (2.7

Telecommunications Equipment Group

     170,983        11.6        152,000        10.0        142,000        10.1        (17.0

Information Equipment Group

     336,308        22.7        344,000        22.6        325,000        23.0        (3.4
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     507,291        34.3        496,000        32.6        467,000        33.1        (7.9

Others

     146,897        9.9        154,000        10.1        136,000        9.7        (7.4

Adjustments and eliminations

     (44,336     (3.0     (35,000     (2.3     (39,000     (2.8       
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net sales

   ¥ 1,479,627        100.0      ¥ 1,520,000        100.0      ¥ 1,410,000        100.0        (4.7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Operating Profit (Loss) by Reporting Segment                   
     Results for
the  year ended
March 31, 2016
    Forecasts for the year ending
March 31, 2017 announced on
    Increase
(Decrease)
to Results
 
       October 31,  2016
(Previous)
    January 31,  2017
(Revised)
   
     Amount     %*     Amount     %*     Amount     %*     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 15,745        16.6      ¥ 15,000        14.9      ¥ 13,500        14.1        (14.3

Semiconductor Parts Group

     42,232        17.9        26,000        11.0        25,200        10.5        (40.3

Applied Ceramic Products Group

     16,386        6.6        20,000        7.6        14,100        6.3        (14.0

Electronic Device Group

     10,974        3.8        38,000        12.5        29,000        10.1        164.3   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     85,337        9.8        99,000        10.9        81,800        9.7        (4.1

Telecommunications Equipment Group

     (4,558            4,200        2.8        1,000        0.7          

Information Equipment Group

     27,106        8.1        23,000        6.7        26,100        8.0        (3.7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     22,548        4.4        27,200        5.5        27,100        5.8        20.2   

Others

     (1,722            (6,000            (2,700              
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit

     106,163        7.2        120,200        7.9        106,200        7.5        0.0   

Corporate and others

     39,420               9,800               23,800               (39.6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

   ¥ 145,583        9.8      ¥ 130,000        8.6      ¥ 130,000        9.2        (10.7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
* % to net sales of each corresponding segment

Note:

Kyocera Chemical Group, formerly included in “Others” until the year ended March 31, 2016, has been reclassified and included in the “Semiconductor Parts Group” commencing from the year ending March 31, 2017. Due to this change, results for the year ended March 31, 2016 have been reclassified to conform to the current presentation. As a result of this reclassification, a gain of approximately ¥12 billion from the sale of assets was included in the operating profit of the “Semiconductor Parts Group” for the year ended March 31, 2016.

 

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) 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 Kyocera’s 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. OTHER INFORMATION

Changes in accounting policies

Recently Adopted Accounting Standards

The accounting standards which Kyocera adopted on or after April 1, 2016 did not have material impacts on Kyocera’s consolidated results of operations, financial condition and cash flows.

 

10


Table of Contents

3. CONSOLIDATED FINANCIAL STATEMENTS

(1) Consolidated Balance Sheets (Unaudited)

 

                                                                          
     March 31, 2016     December 31, 2016     Increase
(Decrease)
 
     Amount     %     Amount     %    
     (Yen in millions)  

Current assets:

          

Cash and cash equivalents

   ¥ 374,020        ¥ 330,726        ¥ (43,294

Short-term investments in debt securities

     101,566          81,867          (19,699

Other short-term investments

     213,613          240,702          27,089   

Trade notes receivables

     22,832          27,265          4,433   

Trade accounts receivables

     266,462          272,583          6,121   

Less allowances for doubtful accounts and sales returns

     (5,278       (6,129       (851

Inventories

     327,875          356,547          28,672   

Other current assets

     133,671          120,815          (12,856
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current assets

     1,434,761        46.4        1,424,376        46.1        (10,385
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-current assets:

          

Investments and advances:

          

Long-term investments in debt and equity securities

     1,131,403          1,124,154          (7,249

Other long-term investments

     20,130          23,364          3,234   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total investments and advances

     1,151,533        37.2        1,147,518        37.1        (4,015
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Property, plant and equipment:

          

Land

     59,914          60,094          180   

Buildings

     344,087          347,626          3,539   

Machinery and equipment

     841,895          857,789          15,894   

Construction in progress

     18,314          15,912          (2,402

Less accumulated depreciation

     (999,723       (1,012,337       (12,614
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total property, plant and equipment

     264,487        8.5        269,084        8.7        4,597   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Goodwill

     102,599        3.3        116,583        3.8        13,984   

Intangible assets

     59,106        1.9        56,126        1.8        (2,980

Other assets

     82,563        2.7        79,262        2.5        (3,301
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-current assets

     1,660,288        53.6        1,668,573        53.9        8,285   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   ¥ 3,095,049        100.0      ¥ 3,092,949        100.0      ¥ (2,100
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

11


Table of Contents
                                                                          
     March 31, 2016     December 31, 2016     Increase
(Decrease)
 
     Amount     %     Amount     %    
     (Yen in millions)  

Current liabilities:

          

Short-term borrowings

   ¥ 5,119        ¥ 207        ¥ (4,912

Current portion of long-term debt

     9,516          8,507          (1,009

Trade notes and accounts payable

     115,644          122,843          7,199   

Other notes and accounts payable

     82,758          56,108          (26,650

Accrued payroll and bonus

     59,959          51,302          (8,657

Accrued income taxes

     22,847          11,507          (11,340

Other accrued liabilities

     43,525          49,982          6,457   

Other current liabilities

     28,464          50,805          22,341   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current liabilities

     367,832        11.9        351,261        11.4        (16,571
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-current liabilities:

          

Long-term debt

     18,115          16,656          (1,459

Accrued pension and severance liabilities

     46,101          43,488          (2,613

Deferred income taxes

     271,220          261,921          (9,299

Other non-current liabilities

     18,019          19,065          1,046   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-current liabilities

     353,455        11.4        341,130        11.0        (12,325
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     721,287        23.3        692,391        22.4        (28,896
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Kyocera Corporation shareholders’ equity:

          

Common stock

     115,703          115,703            

Additional paid-in capital

     162,844          165,210          2,366   

Retained earnings

     1,571,002          1,605,125          34,123   

Accumulated other comprehensive income

     469,803          461,322          (8,481

Common stock in treasury, at cost

     (35,088       (32,299       2,789   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Kyocera Corporation shareholders’ equity

     2,284,264        73.8        2,315,061        74.8        30,797   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Noncontrolling interests

     89,498        2.9        85,497        2.8        (4,001
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total equity

     2,373,762        76.7        2,400,558        77.6        26,796   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and equity

   ¥ 3,095,049        100.0      ¥ 3,092,949        100.0      ¥ (2,100
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

    

Note: Accumulated other comprehensive income is as follows:

 

  

  

       
     March 31, 2016     December 31, 2016     Increase
(Decrease)
 
     (Yen in millions)  

Net unrealized gains on securities

     ¥517,190        ¥507,718      ¥ (9,472

Net unrealized losses on derivative financial instruments

       (488       (634     (146

Pension adjustments

       (42,648       (43,178     (530

Foreign currency translation adjustments

       (4,251       (2,584     1,667   
  

 

 

   

 

 

   

 

 

 

Total

     ¥469,803        ¥461,322      ¥ (8,481
  

 

 

   

 

 

   

 

 

 

 

12


Table of Contents

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

Consolidated Statements of Income

 

     Nine months ended December 31,     Increase
(Decrease)
 
     2015     2016    
     Amount     %     Amount     %     Amount     %  
     (Yen in millions and shares in thousands, except per share amounts)  

Net sales

   ¥ 1,093,030        100.0      ¥ 1,014,628        100.0      ¥ (78,402     (7.2

Cost of sales

     803,743        73.5        751,398        74.1        (52,345     (6.5
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     289,287        26.5        263,230        25.9        (26,057     (9.0

Selling, general and administrative expenses

     209,124        19.2        196,128        19.3        (12,996     (6.2

Loss on impairment of goodwill

     14,143        1.3                      (14,143       
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit from operations

     66,020        6.0        67,102        6.6        1,082        1.6   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other income (expenses) :

            

Interest and dividend income

     27,260        2.5        30,904        3.0        3,644        13.4   

Interest expense

     (1,098     (0.1     (566     (0.1     532          

Foreign currency transaction gains, net

     3,343        0.3        553        0.1        (2,790     (83.5

Gains on sales of securities

     277        0.0        103        0.0        (174     (62.8

Other, net

     1,588        0.2        610        0.1        (978     (61.6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expenses)

     31,370        2.9        31,604        3.1        234        0.7   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     97,390        8.9        98,706        9.7        1,316        1.4   

Income taxes

     34,362        3.1        24,235        2.4        (10,127     (29.5
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     63,028        5.8        74,471        7.3        11,443        18.2   

Net income attributable to noncontrolling interests

     (3,524     (0.4     (3,619     (0.3     (95       
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to shareholders of Kyocera Corporation

   ¥ 59,504        5.4      ¥ 70,852        7.0      ¥ 11,348        19.1   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Per share information:

            

Net income attributable to shareholders of
Kyocera Corporation:

            

Basic

   ¥ 162.20        ¥ 192.88         

Diluted

     162.20          192.88         

Average number of shares of common stock outstanding:

            

Basic

     366,860          367,334         

Diluted

     366,860          367,334         

Note:

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.

 

13


Table of Contents

Consolidated Statements of Comprehensive Income

 

     Nine months ended December 31,     Increase
(Decrease)
 
     2015     2016    
     Amount     Amount     Amount  
     (Yen in millions)  

Net income

   ¥ 63,028      ¥ 74,471      ¥ 11,443   
  

 

 

   

 

 

   

 

 

 

Other comprehensive income (loss)—net of taxes

      

Net unrealized gains (losses) on securities

     102,450        (9,529     (111,979

Net unrealized losses on derivative financial instruments

     (86     (207     (121

Pension adjustments

     (1,007     (597     410   

Foreign currency translation adjustments

     (4,549     2,656        7,205   
  

 

 

   

 

 

   

 

 

 

Total other comprehensive income (loss)

     96,808        (7,677     (104,485
  

 

 

   

 

 

   

 

 

 

Comprehensive income

     159,836        66,794        (93,042

Comprehensive income (loss) attributable to noncontrolling interests

     (3,677     (4,351     (674
  

 

 

   

 

 

   

 

 

 

Comprehensive income attributable to shareholders of
Kyocera Corporation

   ¥ 156,159      ¥ 62,443      ¥ (93,716
  

 

 

   

 

 

   

 

 

 

(3) Notes to the consolidated financial statements

Cautionary Statement for Premise of a Going Concern

Not applicable.

Cautionary Statement for Significant Changes in Equity

Not applicable.

 

14

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