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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 October 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

(Address of principal executive office)

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

(Signature)

Shoichi Aoki

Director,

Managing Executive Officer and

General Manager of

Corporate Financial and Accounting Group

Date: October 30, 2017


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, 2017

2.

  Notice relating to Revision of Consolidated Financial Forecasts for the Year Ending March  31, 2018 (“fiscal 2018”), Distribution of Interim Dividend for fiscal 2018 and Revision of Year-end Dividend Forecast for fiscal 2018


Table of Contents

LOGO

Exhibit 1. Consolidated Financial Results of Kyocera Corporation and its Subsidiaries

for the Six Months Ended September 30, 2017

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

1. Consolidated Financial Results for the Six Months Ended September 30, 2017

 

(1) Consolidated results of operations

          (% of change from previous period)  
      Net sales     Profit from operations     Income before income taxes     Net income attributable
to Kyocera Corporation’s
shareholders
 
     Million yen      %     Million yen      %     Million yen      %         Million yen          %  

Six months ended September 30, 2017

     738,345        13.0       69,505        105.7       87,840        80.8       61,387        69.8  

Six months ended September 30, 2016

     653,243        (9.6     33,785        (45.5     48,578        (37.7     36,153        (28.8

(Note) Comprehensive income:

 99,760 million yen for the six months ended September 30, 2017

(3,717) million yen for the six months ended September 30, 2016

 

      Net income
attributable to
Kyocera Corporation’s

shareholders
per share - Basic
     Net income
attributable to
Kyocera Corporation’s

shareholders
per share - Diluted
 
     Yen      Yen  

Six months ended September 30, 2017

     166.94        166.94  

Six months ended September 30, 2016

     98.47        98.47  

(2) Consolidated financial condition

 

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

September 30, 2017

     3,202,996        2,495,139        2,406,432        75.1  

March 31, 2017

     3,110,470        2,418,909        2,334,219        75.1  

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, 2017

          50             60       110  

Year ending March 31, 2018

          60             60       120  

Note:

Please refer to “(3) Interim Dividend for the year ending March 31, 2018” for the detail of dividends information for the year ending March 31, 2018 on page 7.

 

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3. Consolidated Financial Forecasts for the Year Ending March 31, 2018

 

              (% of change from previous year)  
      Net sales      Profit from
operations
     Income before
income taxes
     Net income
attributable to
Kyocera Corporation’s
shareholders
     Net income
attributable to

Kyocera Corporation’s
shareholders

per share
 
     Million yen      %      Million yen      %      Million yen      %      Million yen      %      Yen  

Year ending March 31, 2018

     1,560,000        9.6        135,000        29.1        170,000        23.3        119,000        14.6        323.62  

Note:

Forecast of earnings per share attributable to Kyocera Corporation’s shareholders is calculated based on the diluted average number of shares outstanding during the six months ended September 30, 2017.

Notes:

(1) Increase or decrease in significant subsidiaries during the six months ended September 30, 2017: Yes

New companies : Not applicable

Removal companies : 1 (Kyocera Crystal Device Corporation)

Please refer to “(3) Notes to the consolidated financial statements” on page 13.

(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 “(3) Notes to the consolidated financial statements” on page 13.

(4) Number of shares (common stock):

(i) Number of shares issued:

 

377,618,580 shares at September 30, 2017

   377,618,580 shares at March 31, 2017

(ii) Number of treasury stock:

 

9,909,072 shares at September 30, 2017

   9,906,197 shares at March 31, 2017

(iii) Average number of shares outstanding:

 

367,710,762 shares for the six months ended September 30, 2017    367,143,045 shares for the six months ended September 30, 2016

Presentation of Situation of Review Procedure

The consolidated financial information included in this Form 6-K is out of scope of audit procedure.

 

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Table of Contents

Instruction for Forecasts and Other Notes

Cautionary Statement for Forecasts:

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.

Other Note:

This is an English translation of the Japanese original of the Consolidated Financial Results of Kyocera Corporation and its Subsidiaries for the Six Months Ended September 30, 2017. 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

1. BUSINESS RESULTS, FINANCIAL CONDITION AND PROSPECTS

(1) Business Results for the Six Months Ended September 30, 2017

Consolidated Financial Results

During the six months ended September 30, 2017 (“the first half”), sales in the Industrial & Automotive Components Group and the Electronic Devices Group increased significantly reflecting strong demand for components used in information and communications markets, automotive-related markets and industrial machinery markets. Sales also expanded in the Document Solutions Group due to launching of new products and aggressive sales promotion activities. As a result, consolidated net sales for the first half increased by ¥85,102 million, or 13.0%, to ¥738,345 million, compared with the six months ended September 30, 2016 (“the previous first half”). This represented a record high in terms of first half results.

Profit in both of the Components Business and the Equipment & Systems Business increased compared with the previous first half due to increased sales and cost reductions, as well as enhanced productivity achieved through implementation of structural reforms in the previous fiscal year ended March 31, 2017. Profit from operations increased by ¥35,720 million, or 105.7%, to ¥69,505 million, income before income taxes increased by ¥39,262 million, or 80.8%, to ¥87,840 million, and net income attributable to Kyocera Corporation’s shareholders increased by ¥25,234 million, or 69.8%, to ¥61,387 million, compared with the previous first half.

Average exchange rates for the first half were ¥111 to the U.S. dollar, marking depreciation by ¥6 (5.7%), and ¥126 to the Euro, marking depreciation by ¥8 (6.8%), compared with the previous first half. As a result, net sales and income before income taxes after translation into yen for the first half were pushed up by approximately ¥24 billion and ¥7 billion, respectively, compared with the previous first half.

 

     Six months ended September 30,      Increase
(Decrease)
 
     2016      2017     
     Amount      %      Amount      %      Amount      %  
     (Yen in millions, except exchange rates)  

Net sales

   ¥ 653,243        100.0      ¥ 738,345        100.0      ¥ 85,102        13.0  

Profit from operations

     33,785        5.2        69,505        9.4        35,720        105.7  

Income before income taxes

     48,578        7.4        87,840        11.9        39,262        80.8  

Net income attributable to Kyocera Corporation’s shareholders

     36,153        5.5        61,387        8.3        25,234        69.8  

Average US$ exchange rate

     105               111                       

Average Euro exchange rate

     118               126                       

 

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Consolidated Results by Reporting Segment

1) Industrial & Automotive Components Group

Sales in this reporting segment increased compared with the previous first half due to an increase in sales of industrial tools reflecting growing demand and sales contributions resulting from merger and acquisition activity, coupled with an increase in sales of automotive displays and fine ceramic parts for semiconductor processing equipment. Operating profit increased significantly due to the increase in sales and cost reductions. The operating profit ratio improved to the double-digit level.

2) Semiconductor Components Group

Sales in this reporting segment increased compared with the previous first half due primarily to an increase in sales of ceramic packages for smartphones and organic packages for telecommunications infrastructure. Operating profit increased substantially due to the increase in sales and cost reductions. The operating profit ratio improved to the double-digit level.

3) Electronic Devices Group

Sales of capacitors, crystal components and connectors increased due to expansion of production capacity on the back of solid demand for smartphone parts. Demand for printing devices for industrial equipment was also strong. As a result, sales in this reporting segment increased compared with the previous first half. Operating profit increased due to the increase in sales and cost reductions, and the operating profit ratio also improved.

4) Communications Group

Sales in this reporting segment increased compared with the previous first half due to an increase in sales in the information and communications services business, which provides ICT solutions, etc., and sales of mobile phones for the Japanese market in the telecommunications equipment business. A return to operating profit resulted from the increase in sales and efforts to reduce fixed costs.

5) Document Solutions Group

Sales in this reporting segment increased compared with the previous first half due to an increase in sales volume as a result of launching new products and aggressive sales promotion activities coupled with the contribution of sales resulting from merger and acquisition activity. Operating profit increased significantly due to the increase in sales, cost reductions and the impact of foreign exchange rate fluctuations. The operating profit ratio improved to the double-digit level.

6) Life & Environment Group

Sales in this reporting segment decreased compared with the previous first half due to downsizing of the solar energy business in the United States. Operating loss was recorded due mainly to the sales decline and an increase in R&D expenses despite a decline in operating loss through efforts to reduce costs.

 

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Table of Contents

Net Sales by Reporting Segment

 

     Six months ended September 30,     Increase
(Decrease)
 
     2016     2017    
     Amount     %     Amount     %     Amount     %  
     (Yen in millions)  

Industrial & Automotive Components Group

   ¥ 107,749       16.5     ¥ 131,010       17.7     ¥ 23,261       21.6  

Semiconductor Components Group

     117,316       17.9       126,881       17.2       9,565       8.2  

Electronic Devices Group

     114,165       17.5       137,253       18.6       23,088       20.2  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     339,230       51.9       395,144       53.5       55,914       16.5  

Communications Group

     114,059       17.4       123,937       16.8       9,878       8.7  

Document Solutions Group

     147,435       22.6       172,020       23.3       24,585       16.7  

Life & Environment Group

     61,830       9.5       52,813       7.1       (9,017     (14.6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment & Systems Business

     323,324       49.5       348,770       47.2       25,446       7.9  

Others

     10,735       1.7       9,319       1.3       (1,416     (13.2

Adjustments and eliminations

     (20,046     (3.1     (14,888     (2.0     5,158        
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net sales

   ¥ 653,243       100.0     ¥ 738,345       100.0     ¥ 85,102       13.0  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Operating Profit (Loss) by Reporting Segment             
     Six months ended September 30,     Increase
(Decrease)
 
     2016     2017    
     Amount     %*     Amount     %*     Amount     %  
     (Yen in millions)  

Industrial & Automotive Components Group

   ¥ 6,395       5.9     ¥ 14,752       11.3     ¥ 8,357       130.7  

Semiconductor Components Group

     9,764       8.3       17,937       14.1       8,173       83.7  

Electronic Devices Group

     13,029       11.4       21,880       15.9       8,851       67.9  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     29,188       8.6       54,569       13.8       25,381       87.0  

Communications Group

     (4,830           2,230       1.8       7,060        

Document Solutions Group

     12,867       8.7       20,090       11.7       7,223       56.1  

Life & Environment Group

     (740           (373           367        
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment & Systems Business

     7,297       2.3       21,947       6.3       14,650       200.8  

Others

     (1,414           430       4.6       1,844        
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit

     35,071       5.4       76,946       10.4       41,875       119.4  

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

     14,284             11,582             (2,702     (18.9

Adjustments and eliminations

     (777           (688           89        
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

   ¥ 48,578       7.4     ¥ 87,840       11.9     ¥ 39,262       80.8  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
* % to net sales of each corresponding segment

Note: Kyocera has changed the classification of its reporting segments from the year ending March 31, 2018. Business results for the six months ended September 30, 2016 have been reclassified in line with the change to reporting segment classifications.

 

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Table of Contents

(2) Financial Condition

Consolidated Cash Flows

Cash and cash equivalents at September 30, 2017 increased by ¥16,464 million to ¥392,659 million from ¥376,195 million at March 31, 2017.

1) Cash flows from operating activities

Net cash provided by operating activities for the first half increased by ¥18,059 million to ¥91,093 million from ¥73,034 million for the previous first half. This was due mainly to an increase in net income.

2) Cash flows from investing activities

Net cash used in investing activities for the first half decreased by ¥31,387 million to ¥51,297 million from ¥82,684 million for the previous first half. This was due mainly to a decrease in payments for purchase of securities, which was partly offset by an increase in payments for acquisitions of businesses.

3) Cash flows from financing activities

Net cash used in financing activities for the first half increased by ¥697 million to ¥28,550 million from ¥27,853 million for the previous first half. This was due to an increase in year-end dividends paid which exceeded decreases in payments of short-term and long-term debts.

 

     Six months ended September 30,     Increase
(Decrease)
 
     2016     2017    
     (Yen in millions)  

Cash flows from operating activities

   ¥ 73,034     ¥ 91,093     ¥ 18,059  

Cash flows from investing activities

     (82,684     (51,297     31,387  

Cash flows from financing activities

     (27,853     (28,550     (697

Effect of exchange rate changes on cash and cash equivalents

     (18,747     5,218       23,965  

Net increase (decrease) in cash and cash equivalents

     (56,250     16,464       72,714  

Cash and cash equivalents at beginning of period

     374,020       376,195       2,175  

Cash and cash equivalents at end of period

   ¥ 317,770     ¥ 392,659     ¥ 74,889  

(3) Interim dividend for the year ending March 31, 2018

Kyocera Corporation has adopted the principal guideline that dividend amounts be within a range based on net income attributable to Kyocera Corporation’s shareholders on a consolidated basis, and has set its dividend policy to maintain a payout ratio of around 40% of consolidated net income attributable to Kyocera Corporation’s shareholders. In addition, Kyocera Corporation determines dividend amounts based on an overall assessment, taking into account various factors including the amount of capital expenditures necessary for the medium to long-term corporate growth.

Kyocera Corporation has adopted resolutions in respect of distribution of interim dividend for the year ending March 31, 2018 and revision of year-end dividends forecast for the year ending March 31, 2018 based on the principal guideline. Please refer to the release of “Exhibit 2. Notice relating to Revision of Consolidated Financial Forecasts for the Year Ending March 31, 2018 (“fiscal 2018”), Distribution of Interim Dividend for fiscal 2018 and Revision of Year-end Dividend Forecast for fiscal 2018” in this Form 6-K.

 

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(4) Consolidated Financial Forecasts for the Year Ending March 31, 2018

Performance in the first half exceeded expectations, especially in the Components Business, reflecting a favorable business environment. Increased demand is forecast to continue for the third quarter (October 1 to December 31, 2017) and fourth quarter (January 1 to March 31, 2018), especially for parts used in industrial machinery and automotive-related markets. In addition, depreciation of the yen is now forecast to exceed the original forecast, also contributing to anticipated sales and profit exceeding those forecasts in May 2017. In line with this, forecasts for each reporting segment have been revised as shown on the following page.

Kyocera has revised its forecast of average exchange rates for the third quarter and fourth quarter from the forecast in May, from ¥108 to ¥110 against the U.S. dollar and from ¥115 to ¥130 against the Euro. As a result, full-year forecasts of average exchange rates for the fiscal year are ¥111 to the U.S. dollar and ¥128 to the Euro.

Kyocera will strive to further expand sales by continuing to actively secure orders and enhance production capacity, and to reduce costs and improve productivity with the aim of attaining its full-year financial forecasts.

Please refer to “Cautionary Statement for Forecasts” in “Instruction for Forecasts and Other Notes” on page 3.

 

     Results for
the year ended
March 31, 2017
     Forecasts for the year ending
March 31, 2018 announced on
     Increase
(Decrease)
to Results
 
        May 1, 2017
(Previous)
     October 30, 2017
(Revised)
    
     Amount      %      Amount      %      Amount      %      %  
     (Yen in millions, except exchange rates)  

Net sales

   ¥ 1,422,754        100.0      ¥ 1,500,000        100.0      ¥ 1,560,000        100.0        9.6  

Profit from operations

     104,542        7.3        120,000        8.0        135,000        8.7        29.1  

Income before income taxes

     137,849        9.7        150,000        10.0        170,000        10.9        23.3  

Net income attributable to Kyocera Corporation’s shareholders

     103,843        7.3        105,000        7.0        119,000        7.6        14.6  

Average US$ exchange rate

     108               108               111                

Average Euro exchange rate

     119               115               128                

 

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Table of Contents

Net Sales by Reporting Segment

 

                 Forecasts for the year ending
March 31, 2018 announced on
    Increase
(Decrease)
to Results
 
     Results for
the year ended
March 31, 2017
    May 1, 2017
(Previous)
    October 30, 2017
(Revised)
   
     Amount     %     Amount     %     Amount     %     %  
     (Yen in millions)  

Industrial & Automotive Components Group

   ¥ 230,229       16.2     ¥ 246,000       16.4     ¥ 280,000       18.0       21.6  

Semiconductor Components Group

     245,727       17.3       248,000       16.5       256,000       16.4       4.2  

Electronic Devices Group

     240,798       16.9       254,000       17.0       289,000       18.5       20.0  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     716,754       50.4       748,000       49.9       825,000       52.9       15.1  

Communications Group

     252,641       17.7       269,000       17.9       255,000       16.4       0.9  

Document Solutions Group

     324,012       22.8       350,000       23.4       350,000       22.4       8.0  

Life & Environment Group

     149,207       10.5       153,000       10.2       139,000       8.9       (6.8
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment & Systems Business

     725,860       51.0       772,000       51.5       744,000       47.7       2.5  

Others

     22,066       1.5       16,000       1.0       17,000       1.1       (23.0

Adjustments and eliminations

     (41,926     (2.9     (36,000     (2.4     (26,000     (1.7      
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net sales

   ¥ 1,422,754       100.0     ¥ 1,500,000       100.0     ¥ 1,560,000       100.0       9.6  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Operating Profit (Loss) by Reporting Segment                         
                 Forecasts for the year ending
March 31, 2018 announced on
    Increase
(Decrease)
to Results
 
     Results for
the year ended
March 31, 2017
    May 1, 2017
(Previous)
    October 30, 2017
(Revised)
   
     Amount     %*     Amount     %*     Amount     %*     %  
     (Yen in millions)  

Industrial & Automotive Components Group

   ¥ 22,442       9.7     ¥ 26,000       10.6     ¥ 30,000       10.7       33.7  

Semiconductor Components Group

     25,310       10.3       26,000       10.5       35,000       13.7       38.3  

Electronic Devices Group

     30,558       12.7       33,000       13.0       40,000       13.8       30.9  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     78,310       10.9       85,000       11.4       105,000       12.7       34.1  

Communications Group

     8,528       3.4       13,000       4.8       1,000       0.4       (88.3

Document Solutions Group

     28,080       8.7       35,000       10.0       40,000       11.4       42.5  

Life & Environment Group

     1,345       0.9       3,000       2.0       1,000       0.7       (25.7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment & Systems Business

     37,953       5.2       51,000       6.6       42,000       5.6       10.7  

Others

     (1,759           (3,000           (1,000            
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit

     114,504       8.0       133,000       8.9       146,000       9.4       27.5  

Corporate and others

     23,345             17,000             24,000             2.8  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

   ¥ 137,849       9.7     ¥ 150,000       10.0     ¥ 170,000       10.9       23.3  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
* % to net sales of each corresponding segment

Note: Kyocera has changed the classification of its reporting segments from the year ending March 31, 2018. Business results for the year ended March 31, 2017 have been reclassified in line with the change to reporting segment classifications.

 

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2. CONSOLIDATED FINANCIAL STATEMENTS

(1) Consolidated Balance Sheets (Unaudited)

 

     March 31, 2017     September 30, 2017     Increase
(Decrease)
 
     Amount     %     Amount     %    
     (Yen in millions)  
ASSETS           

Current assets:

  

Cash and cash equivalents

   ¥ 376,195       ¥ 392,659       ¥ 16,464  

Short-term investments in debt securities

     84,703         69,025         (15,678

Other short-term investments

     212,668         205,898         (6,770

Trade notes receivables

     28,370         22,840         (5,530

Trade accounts receivables

     291,485         300,544         9,059  

Less allowances for doubtful accounts and sales returns

     (5,593       (5,258       335  

Inventories

     331,155         357,237         26,082  

Other current assets

     119,714         128,406         8,692  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current assets

     1,438,697       46.3        1,471,351       45.9        32,654  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-current assets:

          

Investments and advances:

          

Long-term investments in debt and equity securities

     1,130,756         1,146,260         15,504  

Other long-term investments

     22,246         24,984         2,738  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total investments and advances

     1,153,002       37.0       1,171,244             36.6       18,242  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Property, plant and equipment:

          

Land

     59,963         60,048         85  

Buildings

     351,431         356,622         5,191  

Machinery and equipment

     841,973         855,766         13,793  

Construction in progress

     14,097         16,880         2,783  

Less accumulated depreciation

     (1,000,860       (1,012,867       (12,007
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total property, plant and equipment

     266,604       8.6       276,449       8.6        9,845  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Goodwill

     110,470       3.5       141,130       4.4       30,660  

Intangible assets

     61,235       2.0       65,976       2.1       4,741  

Other assets

     80,462       2.6        76,846       2.4       (3,616
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-current assets

     1,671,773       53.7       1,731,645       54.1       59,872  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   ¥  3,110,470               100.0     ¥      3,202,996             100.0     ¥ 92,526  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

10


Table of Contents
     March 31, 2017     September 30, 2017     Increase
(Decrease)
 
     Amount     %     Amount     %    
     (Yen in millions)  

LIABILITIES AND EQUITY

          

Current liabilities:

          

Short-term borrowings

   ¥ 191       ¥ 142       ¥ (49

Current portion of long-term debt

     8,235         8,789         554  

Trade notes and accounts payable

     129,460         140,295         10,835  

Other notes and accounts payable

     60,881         59,247         (1,634

Accrued payroll and bonus

     62,868         66,325         3,457  

Accrued income taxes

     15,707         14,537         (1,170

Other accrued liabilities

     51,062         53,376         2,314  

Other current liabilities

     36,257         36,922         665  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current liabilities

     364,661       11.7       379,633       11.9        14,972  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-current liabilities:

          

Long-term debt

     16,409         17,953         1,544  

Accrued pension and severance liabilities

     31,720         32,630         910  

Deferred income taxes

     258,859         257,381         (1,478

Other non-current liabilities

     19,912         20,260         348  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-current liabilities

     326,900       10.5       328,224       10.2       1,324  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     691,561       22.2       707,857       22.1       16,296  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Equity:

Kyocera Corporation’s shareholders’ equity:

          

Common stock

     115,703         115,703          

Additional paid-in capital

     165,230         164,969         (261

Retained earnings

     1,638,116         1,677,440         39,324  

Accumulated other comprehensive income

     447,479         480,648         33,169  

Common stock in treasury, at cost

     (32,309       (32,328       (19
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Kyocera Corporation’s shareholders’ equity

     2,334,219       75.1       2,406,432       75.1       72,213  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Noncontrolling interests

     84,690       2.7        88,707       2.8       4,017  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total equity

     2,418,909       77.8       2,495,139       77.9       76,230  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and equity

   ¥   3,110,470              100.0     ¥  3,202,996              100.0     ¥ 92,526  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Note: Accumulated other comprehensive income is as follows:          
     March 31, 2017           September 30, 2017           Increase
(Decrease)
 
     (Yen in millions)  

Net unrealized gains on securities

   ¥ 499,650       ¥  515,650       ¥ 16,000  

Net unrealized losses on derivative financial instruments

     (449       (428       21  

Pension liability adjustment

     (35,362       (36,453       (1,091

Foreign currency translation adjustments

     (16,360       1,879         18,239  
  

 

 

     

 

 

     

 

 

 

Total

   ¥ 447,479       ¥ 480,648       ¥  33,169  
  

 

 

     

 

 

     

 

 

 

 

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Table of Contents

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

Consolidated Statements of Income

 

    Six months ended September 30,     Increase
(Decrease)
 
    2016     2017    
    Amount     %     Amount     %     Amount     %  
    (Yen in millions and shares in thousands, except per share amounts)  

Net sales

  ¥ 653,243       100.0     ¥ 738,345       100.0     ¥ 85,102       13.0  

Cost of sales

    488,049       74.7       533,191       72.2       45,142       9.2  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

    165,194       25.3       205,154       27.8       39,960       24.2  

Selling, general and administrative expenses

    131,409       20.1       135,649       18.4       4,240       3.2  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit from operations

    33,785       5.2       69,505       9.4       35,720       105.7  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other income (expenses):

           

Interest and dividend income

    15,903       2.4       20,831       2.8       4,928       31.0  

Interest expense

    (1,385     (0.2     (656     (0.1     729        

Foreign currency transaction gains (losses), net

    (238     (0.0     150       0.0       388        

Gains on sales of securities, net

    103       0.0       389       0.1       286       277.7  

Other, net

    410       0.0       (2,379     (0.3     (2,789      
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expenses)

    14,793       2.2       18,335       2.5       3,542       23.9  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

    48,578       7.4       87,840       11.9       39,262       80.8  

Income taxes

    10,302       1.5       23,043       3.1       12,741       123.7  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

    38,276       5.9       64,797       8.8       26,521       69.3  

Net income attributable to noncontrolling interests

    (2,123     (0.4     (3,410     (0.5     (1,287      
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Kyocera Corporation’s shareholders

  ¥ 36,153       5.5     ¥ 61,387       8.3     ¥ 25,234       69.8  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Per share information:

           

Net income attributable to Kyocera Corporation’s shareholders:

           

Basic

  ¥ 98.47       ¥ 166.94        

Diluted

    98.47         166.94        

Average number of shares of common stock outstanding:

           

Basic

    367,143         367,711        

Diluted

    367,143         367,711        

Note:

Basic earnings per share attributable to Kyocera Corporation’s shareholders is calculated based on the average number of shares of common stock outstanding during each period, and diluted earnings per share attributable to Kyocera Corporation’s shareholders is calculated based on the diluted average number of shares of stock outstanding during each period.

 

12


Table of Contents

Consolidated Statements of Comprehensive Income

 

     Six months ended September 30,     Increase
(Decrease)
 
     2016     2017    
     Amount     Amount     Amount  
     (Yen in millions)  

Net income

   ¥ 38,276     ¥ 64,797     ¥ 26,521  
  

 

 

   

 

 

   

 

 

 

Other comprehensive income—net of taxes

      

Net unrealized gains on securities

     19,660       16,006       (3,654

Net unrealized gains on derivative financial instruments

     28       8       (20

Pension liability adjustment

     1,395       (1,118     (2,513

Foreign currency translation adjustments

     (63,076     20,067       83,143  
  

 

 

   

 

 

   

 

 

 

Total other comprehensive income

     (41,993     34,963       76,956  
  

 

 

   

 

 

   

 

 

 

Comprehensive income

     (3,717     99,760       103,477  

Comprehensive income attributable to noncontrolling interests

     5,644       (5,228     (10,872
  

 

 

   

 

 

   

 

 

 

Comprehensive income attributable to Kyocera Corporation’s shareholders

   ¥ 1,927     ¥ 94,532     ¥ 92,605  
  

 

 

   

 

 

   

 

 

 

(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.

Increase or Decrease in Significant Subsidiaries during the six months ended September 30, 2017

For the six months ended September 30, 2017, Kyocera Crystal Device Corporation which was Kyocera Corporation’s significant subsidiary was excluded from consolidation of Kyocera Corporation due to dissolution of Kyocera Crystal Device Corporation resulted from absorption-type merger with Kyocera Corporation as the surviving company on April 1, 2017.

Changes in Accounting Policies

Recently Adopted Accounting Standards

The accounting standards which Kyocera adopted on or after April 1, 2017 did not have material impacts on Kyocera’s consolidated results of operations, financial condition and cash flows.

 

13


Table of Contents

Exhibit 2. Notice relating to Revision of Consolidated Financial Forecasts for the Year Ending March 31, 2018 (“fiscal 2018”), Distribution of Interim Dividend for fiscal 2018 and Revision of Year-end Dividend Forecast for fiscal 2018

This is to advise you that Kyocera Corporation (the “Company”) has adopted resolutions at a meeting of its Board of Directors held on October 30, 2017 in respect of revision of its consolidated financial forecasts for fiscal 2018, which were originally announced on May 1, 2017, distribution of interim dividend for fiscal 2018 and revision of its year-end dividend forecast for fiscal 2018 as set forth below, taking into consideration the performance for the six months ended September 30, 2017 (the “first six months”) and the business environment forecast for the remaining period of fiscal, 2018 (from October 1, 2017 to March 31, 2018).

1. Revision of consolidated financial forecasts

(1) Consolidated financial forecasts for fiscal 2018

 

     Net sales     Profit from
operations
    Income before
income taxes
    Net income
attributable to
Kyocera
Corporation’s
shareholders
    Earnings per
share
attributable to
Kyocera
Corporation’s
shareholders
 
     Million     Million     Million     Million     Yen  

Forecast previously published (A)
(Published on May 1, 2017)

   ¥ 1,500,000     ¥ 120,000     ¥ 150,000     ¥ 105,000     ¥ 285.55 *1 

Revision made (B)
(Published on October 30, 2017)

   ¥ 1,560,000     ¥ 135,000     ¥ 170,000     ¥ 119,000     ¥ 323.62 *2 

Amount of increase (B-A)

   ¥ 60,000     ¥ 15,000     ¥ 20,000     ¥ 14,000        

Ratio of increase (%)

     4.0     12.5     13.3     13.3      

(c.f.)

Results for previous fiscal year
(Annual period ended March 31, 2017)

   ¥ 1,422,754     ¥ 104,542     ¥ 137,849     ¥ 103,843     ¥ 282.62  
*1: Based on the diluted average number of shares outstanding during the three months ended June 30, 2017.
*2: Based on the diluted average number of shares outstanding during the first six months.

(2) Reason for revision

Performance in the first six months exceeded expectations, especially in the Components Business, reflecting a favorable business environment. Increased demand is forecast to continue for the remaining period of fiscal 2018, especially for parts used in industrial machinery and automotive-related markets. In addition, depreciation of the yen is now forecast to exceed the original forecast, also contributing to anticipated sales and profit exceeding those forecasts in May 2017.

2. Distribution of interim dividend and reason for the dividend amount

The Company determined the amount of its dividend as set forth below, pursuant to its basic profit allocation policy.

 

                                                                                                  
     Determined amount      Most recent  forecast
(Published on May 1, 2017)
     (Reference)
Interim dividend  for
previous fiscal year
 

Record date

     September 30, 2017        September 30, 2017        September 30, 2016  

Dividend per share

   ¥ 60             ¥ 50  

Total amount of dividend

   ¥ 22,063 million             ¥ 18,386 million  

Effective date

     December 5, 2017               December 5, 2016  

Source of dividend

     Retained earnings               Retained earnings  

 

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Table of Contents

3. Revision of year-end dividend forecasts for fiscal 2018 and reason for revision

The Company revised is forecast for the amount of its year-end dividend for fiscal 2018 based on consolidated performance for the first six months, consolidated financial forecasts for fiscal 2018 and pursuant to its dividend policy.

 

                                                                                                  
     Dividend per share  
   Interim dividend      Year-end dividend      Annual  

Forecast previously published (Published on May 1, 2017)

                 ¥ 110  

Revision made (Published on October 30, 2017)

          ¥ 60      ¥ 120  

Results for fiscal 2018

   ¥ 60                

Results for previous fiscal year
(Annual period ended March 31, 2017)

   ¥ 50      ¥ 60      ¥ 110  

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

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