Maruwa Regulatory News (MAW)

11 May 2007 07:38

Maruwa Co Ld11 May 2007 11 May 2007MARUWA CO., LTD.3-83, Minamihonjigahara-cho, Owariasahi-city, Aichi-pref., 488-0044 JAPAN Final Results for Fiscal 2007 MARUWA CO., LTD. today announced its consolidated business results for the full fiscal year ended 31stMarch, 2007 as follows;\* The financial statements are unaudited and prepared in conformity with the accounting principles generallyaccepted in Japan.*US dollar amounts are converted for convenience only at the rate of US$1 = 118.05yen.*Consolidated subsidiaries: 8 companies (Maruwa (Malaysia) Sdn. Bhd., Taiwan Maruwa Co., Ltd., MARUWAElectronics (Taiwan) Co., Ltd., Maruwa Europe Ltd., Maruwa America Corp., MARUWA QUARTZ Co., Ltd., MARUWASHOMEI Co., Ltd., and Hokko Denshi Co., Ltd.) I. Summary of Consolidated Results(1) Summary of consolidated statement of income JPY million USD thousand For year ended For year ended Change % For year ended 31st March 31st March 31st March 2007 2006 2007Net sales 21,062 20,278 3.9% 178,419Operating income 1,924 1,693 13.6% 16,297Income before income taxes 1,912 1,669 14.6% 16,200Net income 1,334 1,135 17.5% 11,302 JPY USDNet income per share 122.04 103.82 17.5% 1.03Return on equity (ROE) (%) 4.9% 4.5%*Average number of issued shares 10,932,798 10,880,952 (2) Summary of consolidated financial condition JPY million USD thousand As of 31st March As of 31st March Change % As of 31st March 2007 2006 2007Total Assets 33,872 33,044 2.5% 286,928Shareholders' equity 27,907 26,557 5.1% 236,396Shareholders' equity ratio 82.4% 80.4% 2.0% JPY USDShareholders' equity per share 2,572.66 2,423.40 6.2% 21.79*Number of issued shares at the 10,847,360 10,956,360year end (3) Summary of consolidated statement of cash flows JPY million USD thousand For year ended For year ended Change % For year ended 31st March 31st March 31st March 2007 2006 2007Net cash provided by operating 1,422 2,036 -30.2% 12,043activitiesNet cash used in investing (3,029) (1,234) 145.5% (25,660)activitiesNet cash used in financing (700) 51 1472.5% (5,926)activitiesCash and cash equivalents at end of 5,939 7,899 -24.8% 50,310term II. Outlook for the fiscal 2008 JPY million Interim Full yearNet sales 10,200 22,600Operating income 940 2,400Net income 660 1,560Net income per share 60.84 143.81 *Cautionary statements: the above forecasts are forward-looking statements involving risks anduncertainties. Due to a number of factors, actual results may differ significantly from these estimates. Review of Operations and Financial Condition I. Operating ResultsQuarterly JPY million Fiscal 2006 Fiscal 2007 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4QNet sales 4,481 4,524 5,082 6,191 4,878 4,885 5,644 5,655Operating income 398 321 522 452 420 402 489 613Net income 51 231 399 454 357 274 331 372 Full year JPY million Previous Current For year ended For year ended 31st March 2006 31st March 2007Net sales 20,278 21,062Operating income 1,693 1,924Net income 1,135 1,334 (1) Review of operations Japanese economy in this year moved steadily in spite of slow growth inprivate consumption, supported by a revenue increase in the corporate businesssector in a continuing business sentiment improvement trend and increases incapital expenditures. The global economy continued to expand in general,showing high growth of Chinese economy and underlying strength of the U.S.economy for which slowdown had been concerned. Under these circumstances, MARUWA's business situation in this fiscal yeargenerally moved favorably, influenced by a positive production increase trend inIT related industries while raw materials prices sharply increased and productprice competition was severe. Therefore, consolidated net sales of this fiscal year were 21,062 million yen,up 3.9% compared to the previous fiscal year. As for profits, operating income increased 13.6% to 1,924 million yen comparedto the previous fiscal year. This increase was due to a revenue increase inCircuit Ceramics division and the contribution of Machinery Ceramics divisionwhich was enhanced in a profitable structure throughout the last year, whilethere was the burden of expenses for the reorganization of manufacturingequipment. Net income was 1,334 million yen, up 17.5% compared to the lastfiscal year. (2) Review of operating results by segment JPY million Previous Current For year ended For year ended 31st March 2006 31st March 2007Ceramic Components:Net sales 16,628 18,341Operating income 2,234 2,576 Lighting Equipment:Net sales 3,650 2,721Operating income (27) (73) Total:Net sales 20,278 21,062Operating income 2,207 2,503 Elimination:Net sales - --Operating income (514) (579) Consolidated:Net sales 20,278 21,062Operating income 1,693 1,924 Quarterly sales results of Ceramic Components segment by product division JPY million Fiscal 2006 Fiscal 2007 1Q 2Q 3Q 1Q 1Q 2Q 3Q 4QCircuit Ceramics 1,649 1,576 1,519 1,601 1,778 1,908 2,227 1,690Machinery Ceramics 1,129 1,117 1,135 1,063 1,148 1,189 1,354 1,255RF Products* 344 364 417 464 407 354 504 370EMC Components 1,096 1,024 1,075 1,055 1,046 1,013 1,069 1,029Total 4,218 4,081 4,146 4,183 4,379 4,464 5,154 4,344 *RF=Radio Frequency JPY million Fiscal 2006 Fiscal 2007Circuit Ceramics 6,345 7,603Machinery Ceramics 4,444 4,946RF Products 1,589 1,635EMC Components 4,250 4,157Total 16,628 18,341 Circuit Ceramics Circuit Ceramics include ceramic substrates for chip resistors which areessential for a wide range of electronic appliances, glazed ceramic substratesfor thermal printer head (TPH) for FAX or barcode label printers, large ceramicsubstrates for hybrid ICs, and Aluminum Nitride (AlN) for power modules andautomobiles. Total sales of this division were 7,603 million yen, up 19.8% compared to theprevious year, reflected solid orders in information communication devices suchas digital home appliances and PCs and industrial machineries markets. Ceramic substrates for chip resistors continuously enjoyed high demands,gradually showing positive effects from preparation for a production increase.Also, a sharp increase of demand for large substrates for power modules andAluminum Nitride substrates contributed to the increase in revenue. Machinery Ceramics Machinery Ceramics include quarts glass products mainly for semiconductorequipment, magnetic head-supporting blocks for PCs, and ceramic facet valves.The products in this division require high precision process techniques. In this division, quartz glass products saw a sales increase due to favorableorders for semiconductor equipment-related; on the other hand, sales of someproducts for which demand comes to an end decreased. Therefore, total sales inthis year were 4,946 million yen, up 11.3% compared to the last year. Radio Frequency Products Radio Frequency Products include device products such as band pass filters forwireless communication appliances such as mobile phones and base stations,dielectric ceramics for filters used in mobile communications, and thin filmsubstrates for optical information and communications. Total sales of this division were 1,635 million yen, up 2.9% compared to thelast term. Sales of dielectric ceramics and device products increased thanks to productsfor base stations and wireless communications for commercial-use. Thin-filmproducts were affected from inventory adjustments by customers. EMC Components EMC Components include multi-layer ceramic capacitors of high-voltage/high-capacitance mainly for digital cameras, LCD backlights, and power supply ofelectronic devices, and components as a countermeasure against noise/surge,including EMI filters, chip varistors, chip beads, and inductors. Suchcomponents against noise/surge are expected to be more required in the futurefor various electronic appliances such as information communication toolsincluding mobile phones and PCs, digital home appliances, amusement equipment,and automotive electronics. Total sales were 4,157million yen, down 2.2% compared to the previous fiscalyear. EMI filters and chip varistors increased in sales, but a part of lineups wereinfluenced by inventory adjustments at customers. Lighting Equipment This segment includes lighting equipment for public works such as roads andbridges, and sales tend to be largely concentrated in the end of a fiscal term,and expenses exceed sales until then. Total sales in this year were 2,721 million yen, a decrease of 25.5%, andoperating loss was 73 million yen. Although this segment has focused on the sales of LED lighting since thisyear, other lighting equipment decreased both sales and income due to theshrinking of public construction and severe price competition. II. Outlook for Full Fiscal 2008 JPY million For year ended For year ending Change 31st March 2007 31st March 2008 Amount %Net sales 21,062 22,600 1,538 7.3%Operating income 1,924 2,400 476 24.7%Net income 1,334 1,560 226 16.9% Ceramic Components segment is expected to have a good demand due to highperformance and further multi-functions of electronics and demand expansion innewly developing countries. Circuit Ceramics division had invested in plant and equipment to adapt to highdemand for Alumina substrates, and positive effect from production increase isexpected. Aluminum Nitride substrates will also reorganize the productionsystem, aiming for share growth in the market. Total sales of Circuit Ceramicsin next fiscal year, therefore, are expected to increase 9.5% to 8,325 millionyen compared to this fiscal year. In Machinery Ceramics division, some products are coming to an end, decreasingsales continuously; however, solid demand is expected for quartz glass products. Total sales of Machinery Ceramics in next year is expected to increase 10.0%to 5,440 million yen from this year. For Radio Frequency Products, it is expected that products for communicationdevices and multi-layer substrates for automobiles will contribute to revenueincrease, forecast total sales increase of 29.1% to 2,110 million yen in nextterm. For EMC Components, demand is expected to expand for digital home appliancesand automotive electronics as growth is expected for our components includingEMI filters and inductors. The forecast total sales of EMC Components in nextyear are 5,225 million yen, up 25.7% from this year. In Lighting Equipment segment, it is expected that sales of non-LED lightingwill significantly drop due to budget cuts for public works and pricecompetition following this year. MARUWA aims to accelerate the shift of abusiness model to private sector by providing our management resources into theR&D and marketing of LED lighting. Totals sales forecast of this segment forthe next fiscal term is 1,500 million yen, down 44.9% from this term. According to the above, forecast net sales for next year are 22,600 millionyen, up 7.3%, operating income 2,400 million yen, up 24.7%, and net income 1,560million yen, up 16.9% from this year. In addition, forecast net income includes the loss of 240 million yen ondisposal of facilities. *Cautionary statements: the above forecasts are based on the present businessenvironment and currently-available information, and include forward-lookingstatements involving risks and uncertainties. The reader is cautioned not toplace reliance entirely on the above forecasts for making investment decisions.Due to a number of factors such as future economic situations and marketenvironment changes, actual results may differ significantly from theseestimates. Also, please refer to Risks for business operations. III. Financial condition JPY million As of 31st March As of 31st March As of 31st March Change 2005 2006 2007 Amount %Total assets 28,465 33,044 33,872 828 2.5%Total liabilities 4,137 6,487 5,965 (522) -8.0%Total shareholders' 24,328 26,557 27,907 1,350 5.1%equityShareholders' equity 85.5% 80.4% 82.4% 2.0%ratio For year ended For year ended For year ended Change 31st March 2005 31st March 2006 31st March 2007 Amount %Net cash provided by 3,319 2,036 1,422 (614) -30.2% operating activitiesNet cash used in (2,062) (1,234) (3,029) (1,795) -145.5% investing activitiesNet cash used in (583) 51 (700) (751) 1472.5% financing activitiesCash and cash 6,935 7,899 5,939 (1,960) -24.8%equivalents at end of term Net sales 15,529 20,278 21,062 784 3.9%Capital investment 1,253 1,737 2,350 613 35.3%Depreciation 1,481 1,614 1,740 126 7.8% Total assets at the end of this fiscal year were 33,872 million yen, anincrease of 828 million yen from the end of last fiscal year as a result ofoperating activities through this year. Inventories increased 690 million yen,and net property, plant and equipment increased 639 million yen due to anincrease of machineries with capital expenditures compared to last year end,respectively. Total liabilities decreased 522 million yen to 5,965 million yen from the lastyear end due mainly to a decrease of accrued pension and severance costs. Shareholders' equity increased 1,350 million yen with an increase of retainedearnings. As a result, shareholders' equity ratio at the end of this year was 82.4%, up2.0 points from the previous year end. Net cash provided from operating activities was 1,422 million yen, down 614million yen compared to the previous year due mainly to 557 million yen ofincrease in notes and accounts receivable. Net cash used in investing activities totaled 3,029 million yen, up 1,795million yen compared to the previous year, due especially to capitalexpenditures to prepare for an increase of Ceramic Components production and2,285 million yen in payment for purchase of net property, plant and equipment. Net cash used in financing activities was 700 million yen, increasing 751million yen from the last year particularly because of 328 million yen ofpurchase of treasury stock and 263 million yen of dividends payment. Consequently, cash and cash equivalents at the end of this year were 5,939million yen, a decrease of 1,960 million yen from the previous year end sincethe sum of net cash used in investing and financing activities were larger thannet cash provided in operating activities. Trends of cash-flows indices are as follows; JPY million For year ended For year ended For year ended For year ended For year ended 31st March 2003 31st March 2004 31st March 2005 31st March 2006 31st March 2007Shareholders' equity 87.4% 87.9% 85.5% 80.4% 82.4%ratioShareholders' equity 37.1% 62.8% 80.3% 100.8% 76.2%ratio at market valueInterest-bearing debt 41.3% 29.2% 14.5% 16.4% 13.2%ratioInterest coverage 124.0 967.7 316.1 251.9 374.2ratio Note) Shareholders' equity ratio : Shareholders' equity / Total assets Shareholders' equity ratio at market value : Total market value of shares /Total assets Interest-bearing debt ratio : Interest-bearing debts / Cash flows from operatingactivities Interest coverage ratio : Cash flows from operating activities / Interestpayment *Each index is calculated with the consolidated financial figures. \* Total market value of shares is calculated by multiplying the share value as ofthe end of the fiscal year by the total number of issued shares after deductionof own shares at the end of the year. *For cash flows from operating activities, the figure in the consolidated cashflows statement is used. Interest-bearing debt includes all debts for whichinterests are paid among the liabilities booked in the consolidated balancesheet. For interest payment, the figure of interest expenses paid booked in theconsolidated cash flows statement is used. IV. Profit allocation policy and dividend payment in next term As a profit allocation policy, MARUWA considers to allocate acquiredcash-flows through operations to active investment into new growing areas,consolidated results-considered dividends, and the appropriation of retainedearnings for flexible use in response to management environment changes. We focus on profit returns to shareholders while we hold the internal reservesfor strategic investment required for the continuous expansion of our corebusiness. Meanwhile, annual dividend per share for next term will be 24.0 yen (12.0 yeneach for interim and year-end). Consolidated Balance Sheet JPY million USD thousand As of 31st March As of 31st March Change As of 31st March 2007 2006 2007ASSETSCurrent assets:Cash & deposits 6,593 7,899 (1,306) 55,850Notes and accounts receivable, 7,797 7,003 794 66,049tradeInventories 3,559 2,869 690 30,150Deferred income taxes 277 226 51 2,351Other current assets 411 608 (197) 3,481Allowance for doubtful accounts (16) (17) 1 (139)Total current assets 18,621 18,588 33 157,742 Fixed assets:(Property, plant & equipment)Land 3,434 3,412 22 29,093Building & structures 4,146 3,969 177 35,123Machinery & equipments 4,300 3,949 351 36,421Construction in progress 192 152 40 1,624Other 654 605 49 5,544Net property, plant & equipment 12,726 12,087 639 107,805 (Investment & other assets)Investment securities 612 784 (172) 5,188Deferred income taxes 149 152 (3) 1,263Property & equipment for 961 960 1 8,138investmentsOther 807 478 329 6,828Allowance for doubtful accounts (4) (5) 1 (36)Total investments & other assets 2,525 2,369 156 21,381 Total fixed assets 15,251 14,456 795 129,186 Total assets 33,872 33,044 828 286,928 JPY million USD thousand As of 31st March As of 31st March Change As of 31st March 2007 2006 2007LIABILITIES AND SHAREHOLDERS' EQUITYCurrent liabilities:Notes & accounts payable, trade 2,289 2,590 (301) 19,388Current portion of long-term 53 147 (94) 446debtAccrued income taxes 256 210 46 2,171Accrued bonus 351 334 17 2,976Accrued bonus for directors 7 -- -- 55Equipment notes payable 635 532 103 5,383Other current liabilities 1,292 1,168 124 10,949Total current liabilities 4,883 4,981 (98) 41,368 Long-term liabilities:Long-term debt 135 187 (52) 1,142Accrued pension & severance -- 300 -- --costsDeferred tax liabilities 234 62 172 1,984Consolidation goodwill 315 579 (264) 2,664Other 398 378 20 3,374Total long-term liabilities 1,082 1,506 (424) 9,164 Total liabilities 5,965 6,487 (522) 50,532 Shareholders' equity:Common stock, authorized: 6,710 6,710 -- 56,839 26,000,000 shares; issued & outstanding: 11,072,000 sharesAdditional paid-in capital 9,747 9,747 -- 82,565Retained earnings 11,521 10,522 999 97,598Net unrealized gain (loss) 8 38 (30) 64 on other securitiesForeign currency translation 458 (206) 664 3,881adjustment Treasury stock, at cost (537) (254) (283) (4,551)Total shareholders' equity 27,907 26,557 1,350 236,396 Total liabilities & 33,872 33,044 828 286,928shareholders' equity Consolidated Statements of Income JPY million USD thousand For year ended For year ended Change For year ended 31st March 31st March 31st March 2007 2006 2007Net sales 21,062 20,278 784 178,419Cost of sales 15,003 14,494 509 127,090Gross profit 6,059 5,784 275 51,329Selling, general & 4,135 4,091 44 35,032 administrative expensesOperating income 1,924 1,693 231 16,297Other income (expenses):Interest & dividend income 46 35 11 390Interest expenses (5) (8) 3 (41)Foreign exchange gain (loss), (196) (158) (38) (1,660)netOther, net 143 107 36 1,214Other income, net (12) (24) 12 (97)Income before income taxes 1,912 1,669 243 16,200 Income taxes:Current 448 299 149 3,795Deferred 130 235 (105) 1,103 578 534 44 4,898 Minority interest in loss 0 -- -- 0Net income 1,334 1,135 199 11,302 Consolidated Statement of Cash Flows JPY million USD thousand For year ended For year ended Change For year ended 31st March 31st March 31st March 2007 2006 2007Operating activities:Income before income taxes 1,912 1,669 243 16,200Adjustments for:Depreciation 1,740 1,614 126 14,737Amortization of consolidation (208) (214) 6 (1,760)goodwillIncrease (decrease) in (2) 7 (9) (15) allowance for doubtful accountsIncrease(decrease) in accrued (477) (878) 401 (4,043) pension & severance costsLoss (gain) on sales of (14) (146) 132 (120) investment securitiesLoss on disposal of 108 140 (32) 917 property, plant & equipmentInterest & dividends income (52) (39) (13) (437)Foreign exchange (gain) loss (12) 159 (171) (103)(Increase) decrease in (557) (303) (254) (4,721) notes & accounts receivable(Increase) decrease in (550) (23) (527) (4,656)inventoriesIncrease (decrease) in accounts (448) (250) (198) (3,796)payableOther 338 389 (51) 2,855Sub total 1,778 2,125 (347) 15,058Interest & dividend income 52 38 14 437receivedInterest expenses paid (4) (8) 4 (32)Income taxes paid (404) (119) (285) (3,420)Net cash provided by operating 1,422 2,036 (614) 12,043activities Investment activities:Increase in time deposits (653) -- -- (5,531)Payments for purchase of (2,285) (1,452) (833) (19,357) property, plant & equipmentProceeds from sales of 349 78 271 2,955 property, plant & equipmentPayments for disposal of -- (47) -- -- property, plant & equipmentPayments for purchase of (246) (309) 63 (2,081) investment securitiesProceeds from sales of 242 163 79 2,053 investment securitiesPayments for investments (96) (23) (73) (817) in subsidiariesProceeds from purchase of -- 358 -- -- stocks of subsidiariesIncrease in loan receivable (354) -- -- (3,002)Increase in intangible fixed 14 (29) 43 121assetsOther 0 27 (27) (1)Net cash used in investing (3,029) (1,234) (1,795) (25,660)activities JPY million USD thousand For year ended For year ended Change For year ended 31st March 31st March 31st March 2007 2006 2007Financing activities:Payments of long-term debt (147) (147) -- (1,249)Proceeds from issue of new -- 52 -- --sharesCash dividends paid (263) (180) (83) (2,227)Sales of treasury stock 38 349 (311) 321Purchase of treasury stock (328) (23) (305) (2,771)Net cash provided by (700) 51 (751) (5,926) (used in) financing activities Effect of exchange rate 253 111 142 2,142 changes on cash & cash equivalentsNet increase (decrease) in (2,054) 964 (3,018) (17,401) cash & cash equivalentsCash and cash equivalents 7,899 6,935 964 66,911 at beginning of yearIncrease in cash and cash 94 -- -- 800equivalents from new consolidationCash and cash equivalents 5,939 7,899 (1,960) 50,310 at end of year Segment Information (1) Consolidated business segment information JPY million For year ended For year ended 2007 2006Ceramic Components:Net sales 18,355 16,628Operating expenses 15,779 14,394Operating income 2,576 2,234Total assets 34,597 31,861 Lighting Equipment:Net sales 2,721 3,650Operating expenses 2,794 3,677Operating income (73) (27)Total assets 1,602 2,764 Total:Net sales 21,076 20,278Operating expenses 18,573 18,071Operating income 2,503 2,207Total assets 36,199 34,625 Elimination:Net sales (14) -Operating expenses (565) 514Operating income (579) (514)Total assets (2,327) (1,581) Consolidated:Net sales 21,062 20,278Operating expenses 19,138 18,585Operating income 1,924 1,693Total assets 33,872 33,044 (2) Consolidated geographic segment information JPY million USD thousand For year ended For year ended Change For year ended 31st March 31st March 31st March 2007 2006 2007JAPANNet sales:Unaffiliated customers 15,427 16,170 (743) 130,680Intersegment 1,536 830 706 13,015Total 16,963 17,000 (37) 143,695Operating cost 15,391 15,354 37 130,376Operating income (loss) 1,572 1,646 (74) 13,319 ASIANet sales:Unaffiliated customers 4,162 3,528 634 35,253Intersegment 1,266 1,349 (83) 10,725Total 5,428 4,877 551 45,978Operating cost 4,474 4,206 268 37,894Operating income (loss) 954 671 283 8,084 EUROPE and AMERICANet sales:Unaffiliated customers 1,474 579 895 12,487Intersegment 167 2 165 1,415Total 1,641 581 1,060 13,902Operating cost 1,571 617 954 13,310Operating income (loss) 70 (36) 106 592 TOTALNet sales:Unaffiliated customers 21,062 20,278 784 178,419Intersegment 2,969 2,181 788 25,155Total 24,031 22,459 1,572 203,574Operating cost 21,436 20,177 1,259 181,580Operating income (loss) 2,595 2,282 313 21,994 ELIMINATIONNet sales:Total (2,969) (2,181) (788) 25,155Operating cost (2,298) 1,592 (3,890) 19,458Operating income (loss) (671) (589) (82) 5,697 CONSOLIDATEDNet sales:Total 21,062 20,278 784 178,419Operating cost 19,138 18,585 553 162,122Operating income (loss) 1,924 1,693 231 16,297 (3) Net overseas sales by customer's geographic location JPY million USD thousand For year ended For year ended Change For year ended 31st March 31st March 31st March 2007 2006 2007Overseas sales:Asia 6,434 6,376 58 54,506Europe 933 375 558 7,900Others 629 495 134 5,330Total 7,996 7,246 750 67,736Consolidated net sales 21,062 20,278 784 178,419 % of consolidated net sales:Asia 30.5% 31.4%Europe 4.4% 1.8%Others 3.1% 2.4%Total 38.0% 35.7% *Countries are divided in geographicalvicinity.*Main countries included in each are as indicated below;Asia - Malaysia, Taiwan, Korea, Hong KongEurope - Germany, EnglandOthers - United States*Overseas sales indicate net sales of the Company and its subsidiaries to customers outside Japan. This information is provided by RNS The company news service from the London Stock Exchange