Last checked at 5 Feb 2009 08:16
5 February 2009
MARUWA CO., LTD.
3-83, Minamihonjigahara-cho, Owariasahi-city, Aichi-pref., 488-0044 JAPAN
Consolidated financial results for the third quarter of Fiscal 2009
MARUWA CO., LTD. today announced its consolidated financial results for the third quarter of Fiscal 2009 8 - 31 December 2008> as follows;
I. Summary of Consolidated Financial Results
(1) Summary of consolidated operating results
| JPY million | |||
| 3rd Quarter | 3rd Quarter | ||
| 1 April - 31 Dec. | 1 April - 31 Dec. | Change % | |
| 2007 | 2008 | ||
| Net sales | 15,102 | 13,493 | -10.7% |
| Operating income | 1,227 | 617 | -49.7% |
| Income before income taxes | 1,342 | 863 | -35.7% |
| Net income | 896 | 476 | -46.9% |
| Net income per share: | JPY | ||
| Basic | 82.87 | 44.28 | -46.6% |
| Diluted | 82.62 | -- | -- |
(2) Summary of consolidated financial condition
| JPY million | ||
| As of 31 Dec. | (Reference) | |
| 2008 | As of 31 March 2008 | |
| Total net assets | 26,369 | 27,774 |
| Total assets | 29,971 | 32,850 |
| Equity ratio | 88.0% | 84.5% |
| JPY | ||
| Shareholders' equity per share | 2,459.72 | 2,571.59 |
II. Dividends
| JPY per share | ||
| Fiscal 2008 | Fiscal 2009 | |
| (*forecast) | ||
| Interim | 12 | 14 |
| Year-end | 12 | 14* |
| Annual | 24 | 28* |
III. Outlook for the fiscal 2009 8 - 31 March 2009>
| JPY million | |||
| Fiscal 2008 | Fiscal 2009 Forecast | Change (%) | |
| Net sales | 20,635 | 17,200 | -16.6% |
| Operating income | 1,576 | 622 | -60.5% |
| Net income | 1,100 | 479 | -56.5% |
| JPY | |||
| Net income per share | 101.80 | 44.68 |
*Cautionary statements: the above forecasts are forward-looking statements involving risks and uncertainties. Due to a number of factors, actual results may differ significantly from these estimates. I. Review of Operations
(1) Review of Operations
Japanese economy in this third quarter sharply slowed down, showing weak consumer spending and a cut in capital investment along with decreasing corporate revenues, influenced by soaring oil prices, the U.S. economy downturn started from the sub-prime loan issue, and the appreciation of the yen.
Looking at the global economy, amid the turmoil in the financial markets, real economy plunged into its worst recession of the century with a sharp decline in the U.S and Europe's automobile markets and the shrinkage of the housing markets in addition to continuously, significantly decreasing exports in China, which had enjoyed high economic growth.
Our electronic components industry had rather solid demands except for the semiconductor equipment-related products; however, we are now in the growing influence of recession both in the world and in Japan.
Under these circumstances, we have actively expanded our sales operations for our existing products in addition to focusing on commencing mass-production of new products in which we have invested up-front. Also, we have promptly taken appropriate countermeasures against changing market conditions.
However, we could hardly avoid the impact of drastic changes in the economic environment; our consolidated net sales for this third quarter (9-month period) were 13,493 million yen, down 10.7% from the third quarter last year. Operating income was 617 million yen, down 49.7% from the same period last year. Net income was 476 million yen, down 46.9%.
(2) Operating results by business segment
Ceramic Components segment
Total sales of this business segment were 12,730 million yen, down 9.8% from the same period last year, and operating income was 1,125 million yen, down 36.7%. Although sales increased due to new products, a sharp decline in demands from the third quarter adversely affected our sales and profits.
Circuit Ceramics
Total sales of the Circuit Ceramics division for this quarter decreased 8.8% to 5,013 million yen from the same quarter of the previous year.
While new mass-produced Aluminum Nitride substrates for automotive use and glazed substrates had an increase in demand, our mainstay Alumina substrates for chip resistors greatly declined particularly in the markets of China and East Asia.
Machinery Ceramics
Total sales of the Machinery Ceramics division were 3,145 million yen, down 19.6% from the same period last year.
The slowdown of the semiconductor equipment market influenced the sales of quartz glass products.
Radio Frequency Products
Total sales from the Radio Frequency Products division increased 3.8% to 1,522 million yen compared to the same period last year due mainly to a sales increase of thin-film products and the mass production of multi-layer ceramic substrates for automobiles from this year.
EMC Components
Total sales of the EMC Components division were 3,050 million yen, down 6.0% from the third quarter of the previous year. Since the third quarter, demands greatly declined in every market including PCs, LCD televisions or automotive components due to inventory adjustments, significantly influencing the revenue of this division.
Lighting Equipment segment
Total sales from the Lighting Equipment segment decreased 22.5% to 763 million yen compared to the third quarter last year, and operating loss was 127 million yen.
LED lighting devices have been growing due to our efforts to enhance new product-lineups and expand sales while the market of conventional lighting fixtures is continuously in a decreasing trend.
Operating results by business segment
| JPY million | ||||
| 3rd Quarter | 3rd Quarter | |||
| 1 April - 31 Dec. | 1 April - 31 Dec. | |||
| 2007 | 2008 | |||
| Ceramic Components: | ||||
| Net sales | 14,118 | 12,730 | ||
| Operating income | 1,777 | 1,125 | ||
| Lighting Equipment: | ||||
| Net sales | 984 | 763 | ||
| Operating income | (148) | (127) | ||
| Total: | ||||
| Net sales | 15,102 | 13,493 | ||
| Operating income | 1,629 | 998 | ||
| Elimination: | ||||
| Net sales | -- | -- | ||
| Operating income | (402) | (381) | ||
| Consolidated: | ||||
| Net sales | 15,102 | 13,493 | ||
| Operating income | 1,227 | 617 | ||
Quarterly sales results of Ceramic Components segment by product division
| JPY million | |||||||
| For year ended 31 March | |||||||
| 2008 | 2009 | ||||||
| 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | |
| Circuit Ceramics | 1,692 | 1,868 | 1,936 | 1,673 | 1,869 | 1,906 | 1,238 |
| Machinery Ceramics | 1,325 | 1,330 | 1,258 | 1,186 | 1,164 | 1,116 | 865 |
| RF* Products | 474 | 492 | 500 | 456 | 487 | 529 | 506 |
| EMC Components | 1,041 | 1,064 | 1,138 | 1,046 | 1,087 | 1,254 | 709 |
| Total | 4,532 | 4,754 | 4,832 | 4,361 | 4,607 | 4,805 | 3,318 |
*Radio Frequency
II. Financial Condition
Total assets as of the end of this third quarter were 29,971 million yen, down 2,879 million yen from the end of last fiscal year due especially to a decrease in trade notes and accounts receivable. Also, this reflected that sales from the Lighting Equipment segment tend to be posted at fiscal year-end. Total liabilities decreased 1,474 million yen to 3,602 million yen from the previous year-end. Total net assets decreased 1,405 million yen to 26,369 million yen due mainly to a decrease in foreign currency translation adjustments.
Capital expenditure in this quarter amounted to 1,166 million yen. Depreciation costs were 1,469 million yen.
Cash and cash equivalents at the end of this third quarter were 5,861 million yen.
Net income before income taxes was 863 million yen, and depreciation was 1,469 million yen. As a result, net cash provided from operating activities was 2,238 million yen.
Net cash used in investing activities was 1,762 million yen due especially to payments for purchase of property, plant and equipment, 1,545 million yen.
Net cash used in financing activities was 361 million yen, mainly used for cash dividends paid, 255 million yen.
III. Outlook for the full fiscal 2009
We revise our business forecast from the forecast previously announced on 7 November 2008 as below, based on the operating results for this third quarter and outlook for an increasingly severe business environment.
| JPY million | JPY | |||
| Net sales | Operating income | Net income | Net income per share | |
| Previously announced forecast (A) | 19,450 | 1,490 | 946 | 88.05 |
| Revised forecast (B) | 17,200 | 622 | 479 | 44.68 |
| Change (B-A) | (2,250) | (868) | (467) | -- |
| Change (%) | -11.6% | -58.3% | -49.4% | -- |
| Previous fiscal year ended 31 March 2008 | 20,635 | 1,576 | 1,100 | 101.80 |
Consolidated Balance Sheet
| JPY million | ||
| 3rd Quarter | (Reference) | |
| As of 31 Dec. | As of 31 March | |
| 2008 | 2008 | |
| ASSETS | ||
| Current assets: | ||
| Cash and deposits | 6,242 | 6,263 |
| Trade notes and accounts receivable | 5,151 | 6,649 |
| Inventories: | ||
| Merchandise and finished goods | 1,539 | 1,354 |
| Work-in-process | 1,242 | 1,547 |
| Raw materials | 1,137 | 969 |
| Supplies | 352 | 267 |
| Total inventories | 4,270 | 4,137 |
| Other current assets | 553 | 650 |
| Allowance for doubtful accounts | (11) | (2) |
| Total current assets | 16,205 | 17,697 |
| Property, plant & equipment: | ||
| Land | 3,156 | 3,215 |
| Buildings and structures | 7,341 | 7,550 |
| Machinery and equipment | 11,757 | 11,966 |
| Other | 2,802 | 3,366 |
| Construction in progress | 403 | 423 |
| Total property, plant & equipment | 25,459 | 26,520 |
| Less, accumulated depreciation | (13,542) | (13,537) |
| Net property, plant & equipment | 11,917 | 12,983 |
| Investment and other assets: | ||
| Total investments and other assets | 1,849 | 2,170 |
| Total assets | 29,971 | 32,850 |
| 3rd Quarter | (Reference) | |
| As of 31 Dec. | As of 31 March | |
| 2008 | 2008 | |
| LIABILITIES | ||
| Current liabilities: | ||
| Trade notes & accounts payable | 1,179 | 1,708 |
| Current portion of long-term debt | 5 | 5 |
| Accrued income taxes | 64 | 110 |
| Accrued bonus | 190 | 357 |
| Accrued bonus to directors | 2 | -- |
| Other | 1,493 | 2,088 |
| Total current liabilities | 2,933 | 4,268 |
| Long-term liabilities: | ||
| Long-term debt | 127 | 130 |
| Negative goodwill | 50 | 112 |
| Other | 492 | 566 |
| Total long-term liabilities | 669 | 808 |
| Total liabilities | 3,602 | 5,076 |
| NET ASSETS | ||
| Shareholders' equity: | ||
| Common stock | 6,710 | 6,710 |
| Capital surplus | 9,747 | 9,747 |
| Retained earnings | 12,497 | 12,324 |
| Treasury stock, at cost | (742) | (639) |
| Total shareholders' equity | 28,212 | 28,142 |
| Valuation and translation adjustments: | ||
| Net unrealized gains on available-for-sale securities | (129) | (72) |
| Foreign currency translation adjustments | (1,714) | (296) |
| Total valuation and translation adjustments | (1,843) | (368) |
| Total net assets | 26,369 | 27,774 |
| Total liabilities and net assets | 29,971 | 32,850 |
Consolidated Statement of Income
| JPY million | ||
| 3rd Quarter | 3rd Quarter | |
| 1 April - 31 Dec. | 1 April - 31 Dec. | |
| 2007 | 2008 | |
| Net sales | 15,102 | 13,493 |
| Cost of sales | 10,930 | 10,265 |
| Gross profit | 4,172 | 3,228 |
| Selling, general & administrative expenses | 2,945 | 2,611 |
| Operating income | 1,227 | 617 |
| Other income (expenses): | ||
| Interest & dividend income | 59 | 50 |
| Interest expenses | (3) | (3) |
| Rent income | 79 | 86 |
| Rent expenses on real estates for investments | (41) | (45) |
| Foreign exchange gain (loss), net | (31) | 122 |
| Amortization of negative goodwill | 152 | 62 |
| Gain on sales of property, plant and equipment | 56 | 56 |
| Loss on disposal or sales of property, plant and equipment | (221) | (53) |
| Loss on valuation of investment securities | -- | (5) |
| Loss on valuation of inventories | -- | (28) |
| Extra retirement benefits | -- | (23) |
| Other, net | 65 | 27 |
| Other income (expenses), net | 115 | 246 |
| Income before income taxes | 1,342 | 863 |
| Income taxes: | ||
| Current | 293 | 169 |
| Deferred | 153 | 218 |
| Total income taxes | 446 | 387 |
| Net income | 896 | 476 |
Consolidated Statement of Cash Flows
| JPY million | |
| 3rd Quarter | |
| 1 April - 31 Dec. | |
| 2008 | |
| Cash flows from operating activities: | |
| Income before income taxes | 863 |
| Adjustments for: | |
| Depreciation | 1,469 |
| Amortization of negative goodwill | (62) |
| Decrease in allowance for doubtful accounts | 37 |
| Loss on sales of investment securities | 3 |
| Gain on disposal or sales of property, plant & equipment | (3) |
| Interest & dividend income | (50) |
| Foreign exchange loss | 111 |
| Decrease in trade notes & accounts receivable | 1,242 |
| Increase in inventories | (313) |
| Decrease in trade notes & accounts payable | (451) |
| Other | (469) |
| Sub-total | 2,377 |
| Interest & dividend income received | 52 |
| Interest expenses paid | 0 |
| Income taxes paid | (191) |
| Net cash provided by operating activities | 2,238 |
| Cash flows from investment activities: | |
| Payments into time deposits | (347) |
| Proceeds from withdrawal of time deposits | 20 |
| Payments for purchase of property, plant & equipment | (1,545) |
| Proceeds from sales of property, plant & equipment | 296 |
| Payments for purchase of investment securities | (164) |
| Proceeds from sales of investment securities | 21 |
| Purchase of investments in subsidiaries | (10) |
| Increase in intangible fixed assets | (6) |
| Other | (27) |
| Net cash used in investing activities | (1,762) |
| Cash flows from financing activities: | |
| Payments of long-term debt | (4) |
| Cash dividends paid | (255) |
| Payments for purchase of treasury stock | (102) |
| Net cash used in financing activities | (361) |
| Effect of exchange rate changes on cash & cash equivalents | (410) |
| Net increase (decrease) in cash & cash equivalents | (295) |
| Cash and cash equivalents at beginning of year | 6,146 |
| Increase in cash and cash equivalents | |
| from newly consolidated subsidiary | 10 |
| Cash and cash equivalents at end of year | 5,861 |
Segment information
(1)Business segments
| JPY million | |||||||
| 3rd Quarter | |||||||
| Ceramic Components | Lighting Equipment | Total | Eliminations or corporate | Consolidated | |||
| Net sales: | |||||||
| External customers | 12,730 | 763 | 13,493 | -- | 13,493 | ||
| Inter-segment | 20 | -- | 20 | (20) | -- | ||
| Total net sales | 12,750 | 763 | 13,513 | (20) | 13,493 | ||
| Operating income (loss) | 1,125 | (127) | 998 | (381) | 617 | ||
(2)Geographical segments
| JPY million | ||||||
| 3rd Quarter | ||||||
| Japan | Asia | Europe & America | Total | Eliminations or corporate | Consolidated | |
| Net sales: | ||||||
| External customers | 10,179 | 2,300 | 1,014 | 13,493 | -- | 13,493 |
| Inter-segment | 897 | 1,120 | 1 | 2,018 | (2,018) | -- |
| Total net sales | 11,076 | 3,420 | 1,015 | 15,511 | (2,018) | 13,493 |
| Operating income | 629 | 323 | 51 | 1,003 | (386) | 617 |
(3)Overseas sales
| ||||||||||||||||||||||||||||||
*Principal countries or jurisdictions in each geographic segment are as follows:
Asia: Malaysia, Taiwan, South Korea, and China
Europe: Germany and UK
Other: US