Results for FY2000-Unaudited
Konami Corporation
10 May 2001
PART 1
Summary of Consolidated Financial Results
for the Year Ended March 31, 2001
May 10, 2001
KONAMI CORPORATION
Address: 3-1, Toranomon 4-chome, Minato-ku, Tokyo, Japan
Stock Code Number: 9766
Shares Listed: Tokyo Stock Exchange (First Section), Osaka Securities Exchange
(First Section),
London Stock Exchange, and Singapore Exchange (Main Board)
Contact: Mr. Noriaki Yamaguchi, Director
Phone: 03 (3578) 0573
Date of Board Meeting on financial results for the fiscal year: May 10, 2001
1. Financial Results for the Year Ended March 31, 2001
(1) Results of Operation
(Figures truncated)
Year-on-year Operating Year-on-year Ordinary Year-on-year
Net Sales Change Income Change Income Change
(Y (%) (Y (%) (Y (%)
million) million) million)
Year ended 171,480 16.9 38,645 24.9 36,427 17.1
March 31, 2001
Year ended 146,666 29.3 30,938 84.9 31,103 92.3
March 31, 2000
Diluted Ordinary Ordinary
Net Year-on-year Net Net Return Income to Income to
Income Income Income on
Change Assets Sales
per per Equity Ratio Ratio
Share Share
(Y (%) (Y) (Y) (%) (%) (%)
million)
Year ended 21,781 18.7 190.91 - 19.7 18.9 21.2
March 31, 2001
Year ended 18,344 259.4 328.52 326.66 31.2 24.5 21.2
March 31, 2000
Notes:
1. Equity losses
Year ended March 31, 2001: Y583 million
Year ended March 31, 2000: Y44 million
2. Average number of shares issued and outstanding
Year ended March 31, 2001: 114,093,518 shares
Year ended March 31, 2000: 55,841,529 shares
3. There is no change in accounting policies.
4. Change (%) of net sales, operating income, ordinary income and net income
represents the increase or decrease ratio in relation with the same period of
the previous year.
(2) Financial Position
Total Shareholders' Equity-Assets Total Shareholders'
Total Equity Ratio Equity per Share
Assets
(Y million) (Y million) (%) (Y)
March 31, 250,023 149,875 59.9 1,164.19
2001
March 31, 136,080 70,844 52.1 1,246.08
2000
Notes:
Number of shares issued and outstanding at year-end
March 31, 2001: 128,737,538 shares
March 31, 2000: 56,853,702 shares
(3) Cash Flows
Net cash provided by (used in) Cash and
Operating Investing Financing Cash Equivalents
Activities Activities Activities at Year-end
(Y million) (Y million) (Y million) (Y million)
Year ended 21,116 (72,686) 60,440 66,812
March 31, 2001
Year ended 31,365 12,880 (10,015) 57,365
March 31, 2000
(4) Consolidation Scope and Application of Equity Method
Consolidated subsidiaries: 31 companies
Affiliated companies applicable under equity method: 2 companies
(5) Changes in Consolidation Scope and Application of Equity Method
Increase in consolidated subsidiaries: 5 companies
Decrease in consolidated subsidiaries: 5 companies
Increase in affiliates under equity method: 1 company
2. Financial Forecast for the Year Ended March 31, 2002
Ordinary Net
Net Sales Income Income
(Y million) (Y million) (Y million)
Six months ended 100,000 11,000 9,500
September 30, 2001
Year ended 250,000 40,000 24,000
March 31, 2002
Notes:
1. Estimated net income per share for the year ended March 31, 2002 is
Y186.43.
2. These estimates are forward-looking statements based on a number of
assumptions and beliefs in light of the information currently available
to management and subject to significant risks and uncertainties. Actual
financial results may differ materially depending on a number of factors
including, without limitation: general economic conditions in world
markets; exchange rates between the yen and other currencies in which
Konami Group makes significant sales and Konami Group's ability to
continue to win acceptance of its products, which are offered in highly
competitive markets characterized by continual new product introductions.
1. Organization Structure of Konami Group
Konami group specifies its business domain as the digital entertainment industry
by providing a wide range of entertainment via computers, and is structured by
KONAMI CORPORATION (the 'Company'), 31 consolidated subsidiaries and 2
affiliated companies applicable under equity method.
The Company, the subsidiaries and the affiliated companies are categorized into
each business segment according to their operations as follows:
Business Segments Major Companies
Amusement Machines Domestic The Company, Konami Marketing, Inc.
(Note 1), 1 other company
Konami of America, Inc. (Note 2)
Overseas Konami Amusement of Europe Ltd., Konami
(Hong Kong) Ltd.
2 other companies
Consumer-use Software Domestic The Company
Konami Marketing, Inc. (Note 1)
KCEO Inc. (Note 3)
KCE Tokyo, Inc. (Note 4)
Konami Computer Entertainment Japan, Inc.
Konami Computer Entertainment Studios,
Inc. (Note 5)
Konami Computer Entertainment School, Inc.
Mobile21 Co., Ltd., Konami Style.com
Japan, Inc.
3 other companies
Overseas Konami of America, Inc. (Note 2),
Konami of Europe GmbH.
Konami (Hong Kong) Ltd., Konami
Software Shanghai, Inc. (Note 6)
3 other companies
Pachinko Systems Domestic The Company, Konami Parlor
Entertainment, Inc.
Gaming Machines Domestic The Company, Konami Marketing, Inc.
(Note 1)
Overseas Konami Gaming, Inc., Konami (Hong Kong) Ltd.
4 other companies
Creative Products Domestic The Company, Konami Marketing, Inc.
(Note 1)
Konami Music Entertainment, Inc.,
Konami Style.com Japan, Inc.
Overseas Konami (Hong Kong) Ltd., 2 other
companies
Health Entertainment Domestic PEOPLE CO., LTD. (Notes 8), Naps
Corporation (Note 9), 1 other company
Amusement Operations Domestic Konami Amusement Operation, Inc.
Finance Domestic Konami Capital, Inc. (Note 7)
Others Domestic Konami Capital, Inc. (Note 7) , Konami
Service, Inc., TAKARA Co., Ltd.
1 other company
Overseas 3 other companies
The primary products of each business segment are stated in the Note 1 of
'Segment Information, (1) Operations by Business Segment'.
The companies that are running multiple businesses are included in each segment
respectively.
Notes:
1. Konami Marketing, Inc. was established on October 1, 2000.
2. Konami Amusement of America, Inc. was merged into Konami of America, Inc.
on September 29, 2000.
3. KCEO Inc. will change its company name to Konami Computer Entertainment
Osaka, Inc. on June 28, 2001.
4. KCE Tokyo, Inc. will change its company name to Konami Computer
Entertainment Tokyo, Inc. on August 1, 2001.
5. Konami Computer Entertainment Yokohama, Inc. merged with Konami Computer
Entertainment of Sapporo, Inc. on August 1, 2000, and changed its company
name to Konami Computer Entertainment Studios, Inc.
6. Konami Software Shanghai, Inc. was established on June 29, 2000.
7. Konami Kosan, Inc. merged with former Konami Capital, Inc. on August 1,
2000, and changed its company name to Konami Capital, Inc.
8. PEOPLE CO., LTD., the largest fitness facility operating company in
Japan, has been a consolidated subsidiary since February 23, 2001. It
will change its company name to Konami Sports Corporation on June 1,
2001.
9. Naps Corporation, which used to be a consolidated subsidiary of PEOPLE
CO., LTD., has been the Company’s wholly owned subsidiary since
March 30, 2001. The company name will be changed to Konami Sports Life
Corporation on June 1, 2001.
LCD unit manufacturing operations in Amusement Machines Division and pachinko
slot machine manufacturing operations in Gaming Machines Division have been
classified to Pachinko Systems since October 1, 2000, as they were considered
significant.
Health Entertainment Division was newly established on August 24, 2000.
2. Management Policy
1. Basic Policy
Konami carries out its operations based on the primary keywords of 'Global
standards, Competitiveness and High profits'. With these in mind, we are
aggressively promoting management evolution, closely observing the trend of the
era.
On the other hand, to build good relationship with 'stakeholders' such as end
users, shareholders, investors, customers and community, as a public company, we
put the highest priority on ethic and compliance and implement active disclosure
of information to further enhance corporate transparency. Also as 'a good
corporate citizen', we promote various activities of social contribution to
support sports, art and education.
In line with the rapid advancement of IT technology, 'mobile' and 'network' are
becoming to be the trend setting factors in recent entertainment industry.
Started as amusement machine maker, we have achieved steady growth expanding
business areas. However the media or platforms may change, we are to continue to
be an entertainment company providing 'refreshment, dream and enjoyment of life'
to all the people regardless of generation and gender.
2. Profit Appropriation Policy
Konami regards the provision of stable dividends and improving corporate value -
or shareholders' value - as important means of returning profits to
shareholders.
Our policy is to set the target for total dividends at 30% of consolidated net
income and strive toward continuous increase in dividend per share.
Our target for consolidated Return on Equity is 15% or more and cash flow will
be reinvested for future improvement of corporate value such as development of
new business area or retirement of treasury stocks reviewing from a long-term
point of view.
3. Mid to Long-term Strategies
Entertainment industry has evolved to the era of fusion of games, movies, music,
sports, toys, publishing and communication. To be always ahead of others and in
a leading position, setting up alliances and outsourcing agreements with
dominant companies in each field are essential for us to maintain speedy
management.
We acquired majority share of the largest sports club operator in Japan, PEOPLE
CO., LTD. (as of June 1st 2001, Konami Sports Corporation) by TOB in February
2001 and positioned it as one of the key strategic companies in our group. We
are firmly convinced to create new business area of Health Entertainment with
the maximum synergistic effect of combining fitness know-how of PEOPLE CO., LTD.
and entertainment expertise of Konami.
Under the theme of 'Fun and Active, Fun and Healthy', we are to design and
produce innovative game and equipment with element of entertainment and good for
fitness and health. They are for sure to appeal to all the people regardless of
generation and gender and to provide support for healthy aging society.
Our plan to obtain licenses from all the states in the U.S. with authorized
casino is proceeding smoothly. Based on our abundant experience of producing
amusement machines, we build and expand the sales of gaming machines to casino
market to our new pillar of business.
We recognize the importance of 'Brand image', 'Production capability',
'Marketing strength' and 'Financial resources' to maintain our continuous
growth. We are making the most of our management resources to further strengthen
them. A part of this strategy is reinforcing financial and management
independence of our group companies and as a result Konami Computer
Entertainment Japan, Inc. is scheduled to go public this year.
We are also planning to list our shares on New York Stock Exchange to further
solidify our business foundation and promote globalization. By adapting
ourselves to the strictest accounting standard and improving corporate
transparency, we work on to obtain trust and confidence from worldwide
investors.
4. Company Priorities
Konami has so far successfully achieved diversification and establishing of
system making each business area to be independent and profitable. But now
entertainment industry is going through rapid changes such as further
advancement of Internet and wireless, transition to broadband and coming of the
next generation game platforms. To maintain and improve company strength and
profitability more than ever, we are making ourselves well prepared to be able
to provide attractive entertainment contents to whatsoever media or platforms by
strenuously refining and advancing our technology and skill. Also in aging
Japanese market, not only appealing to existing users but we recognize it is
imperative to develop new business area with innovative products to capture
wider range of users.
In line with operational evolution, our cross-organizational body, 'Risk
Management Committee' will strictly supervise sensible and ethical manufacturing
of products and thorough compliance to all the laws, regulations and rules.
3. Business Performance
1. Overview
Performance
The economy of our country, showed slight expansion led by private sector
capital expenditures centering IT related investment in the first half of the
year. However, in the second half, due to decreasing growth rate in the U.S. and
Asian countries, export started declining. Individual consumption has leveled
off so far, but if general economy further weakened its contribution to domestic
demand growth will be reduced.
Entertainment industry to which Konami belongs, showed flash of excitement with
the release of high-function 'PlayStation 2' in March last year but except some
branded big titles, generally market was sluggish. It is said tremendous
popularity of mobile phone service such as 'i-mode', expansion of communication
means like high speed Internet and boom of reasonably priced branded clothing
took lion’s share of dispensable income of youngsters. Also transition of
game hardware to the next generation consoles made the market at a standstill.
Already released Nintendo 'GameBoy Advance'(March, 2001) and coming
'GameCube'(Nintendo) and 'Xbox'(Microsoft) are going to change game environment
with advanced functions like data exchange on network.
In such circumstance, card game of CP Div. enjoyed continued boom and branded
titles of CS Div. like 'YU-GI-OH' and 'POWERFUL PRO BASEBALL' series marked
strong sales in Christmas season
Recently cross-industrial alliances and licensing agreements have become more
and more important to reinforce the competitiveness in entertainment industry.
We set up financial alliance by holding equity in TAKARA Co., Ltd. toy maker to
enable bartering use of each other ’s contents in July 2000. Also in
February 2001, we obtained majority shares of PEOPLE CO., LTD. (as of June 1st
2001, Konami Sports Corporation), leading fitness club operator by
TOB. Combining their know-how of fitness and our entertainment expertise we are
pursuing synergistic effect in boosting up our new Health Entertainment business
under the theme of 'Fun and Active, Fun and Healthy'. In March 2001, we develop
innovative physical exercise system of earning mileage according to the amount
of exercise done at home named 'Healthy with Mileage' based on business alliance
with Japan Airlines.
In gaming business of GM Div., we were granted with licenses for gaming machine
production from the State of Mississippi, California and New Mexico following
the State of Nevada (January 2000). The long awaited first shipment of gaming
machines to the U.S. casino market was made in December after receiving product
license from Nevada in October.
In pachinko slot business, our group company, Konami Parlor Entertainment, Inc.
passed product type test in November 2000 and Zama office was recognized as
approved manufacturer in March 2001. Full-fledged entry into pachinko slot
machine market will be started soon.
The other topic making issue of the year was raising fund for game production
and sales by new type of financial product 'Game Fund: Tokimeki Memorial' in
November 2000. This was the first case of small size securitization for
individual investors in Japan and regarded as useful means for diversification
of raising fund.
In consumer-use software business, wholly owned subsidiary, Konami Software
Shanghai, Inc., was established in China, June 2000. With strategic
complementary relationship, the company will undertake partial or whole
production of game software from other group companies. It is expected the
company will contribute in reduction of software production cost.
As for the domestic marketing system, to strengthen and centralize marketing
function to make timely response to expanding business, Konami Marketing, Inc.,
was established in October 2000 and started its operation.
In the rapidly changing environment and increasing competition of entertainment
industry, we have deployed aggressive management strategy to further expand
existing business and develop new business both in domestic and overseas
markets. Even though the industry in general was at a standstill, our branded
consumer-use software titles appealing to users generated strong
sales. Music game software, 'BEAMANI' series made more than 7 million units
accumulated sales since its release in fall of 1999 and domestic sales of
software marked more than 10 million units sales for 3 consecutive years. We
also came up with the maximum synergistic effects among business divisions like
the case of 'YU-GI-OH' series to increase total sales and as a
result, consolidated net sales of the term reached record high Y171,480 million.
(116.9 %)
Performance by Division
AM Div. (Amusement Machines) made a big hit of 'The Keisatsukan : Shinjuku 24
hours' not only in Japan but also in Europe, the U.S. and Asia. This is a
completely new type of gun shooting game featuring policeman that the player can
maneuver the game with his body action. Boxing simulation game 'Mocap Boxing'
with application of motion capture technique refined in 'The Keisatsukan:
Shinjuku 24 hours' also sold well.
As for music simulation game, 'BEAMANI' series, 'Dance Dance Revolution' with
its new variation kit and new type of dance simulation game 'PARA PARA
PARADISE' gained high acclaim and reputation of 'Konami of music game' further
strengthened.
'PUNCH MANIA', lively fighting game 'SILENT SCOPE', a worldwide hit and 'GUN
MANIA', realistic shooting game using BB shots made considerable contribution to
sales.
The Division transferred its headquarters function and expanded production base
to Shinjuku in March 2000. Now located in the center of trend setting city of
amusement machine, vigorous production activities are carried out absorbing the
latest information of market. Consolidated sales of the division was Y17,128
million. (67.6 %)
CS Div. (Consumer-use Software) released wide range of titles both in domestic
and overseas markets. 'YU-GI-OH DUELMONSTERS 4' and 'YU-GI-OH DUELMONSTERS III'
for Game Boy Color made large contribution to sales, owing to media-mix strategy
combined with tremendously popular card game and TV animation. Branded sports
title 'JIKKYO POWERFUL PRO BASEBALL' series marked strong sales regardless of
the platform. Among the numerous soccer titles 'WORLD SOCCER WINNING ELEVEN
5'(PS2) and 'WORLD SOCCER JIKKYO WINNING ELEVEN 2000: U-23'(PS) showed the
established popularity. 'Dance Dance Revolution 3rd MIX' (PS) with calorie
counting function and 'SILENT SCOPE' (PS2), conversion from popular amusement
machine, also made solid sales. Consolidated sales of the division was Y59,175
million. (96.6 %)
PS Div. (Pachinko Systems) increased sales of LCD units for pachinko machine
with enhanced playability. Consolidated sales of the division was record high
Y14,665 million. (111.3 %)
GM Div. (Gaming Machines) enjoyed continued hit of large size token-operated
machine 'G1-LEADING SIRE' with simulation function of training racing horse.
'G-1 LEADING SIRE Ver. 2/Ver. 3' with more sophisticated function also received
high acclaim. Middle size token-operated machine 'CYCLONFEVER' with multiple
stage effects posted remarkable sales. Variation kits for 'DRAGON PALACE'
series and large and middle size token-operated machine 'BINGO BOOMER' and
'TWINKLEDOME' made solid sales. In December long-awaited shipment of
video-slot machine (intermediate type) for the U.S. gaming market started.
For the future evolution of gaming business, we established development and
production facility in Las Vegas, U.S. and started operation smoothly. Research
and development work is also conducted at Zama plant in Japan as before.
Consolidated sales of the division was Y8,510 million. (65.5 %)
CP Div. (Creative Products) caused social phenomenal boom with 'YU-GI-OH!
OFFICIAL CARD GAME DUELMONSTERS' since last year. Owing to the repeating of TV
animation program since April and release of new title in Christmas season,
popularity soared higher than ever and sales surpassed that of last year.
Another card game 'FIELD OF NINE' designed with the actual data
of professional baseball players also made contribution to sales increase and
card game business further expanded.
Recently the U.S. media is paying keen attention to Japanese characters and
their expectation for 'YU-GH-OH', making a tremendous boom in Japan, is
increasing as a potential second 'Pokemon'. We feel now the time is ripe for us
to challenge overseas deployment of 'YU-GI-OH' card game. Consolidated sales of
the division was Y60,525 million. (217.6 %)
Acquisition of PEOPLE CO., LTD through TOB, the largest fitness facility
operating company in Japan, resulted in an increase of the scope of
consolidation for March. As a result, the consolidated sales of HE Div. (Health
Entertainment) was Y4,732 million.
AO Div. (Amusement Operations) marked very good performance with new Kohoku
store opened at the end of previous term and other outlets in multi-use
facilities. However arcade business as a whole suffered from recessed economy
and youngsters’expenditure on mobile phone. Rental business started this
term succeeded in installation of popular machine 'The Keisatsukan : Shinjuku 24
hours'. Consolidated sales of the division was Y4,810 million. (106.8 %)
Consolidated sales of Finance and other divisions was Y1,931 million.
Owing to the increase of net sales, especially to the increased sales of card
game with higher profit margin, consolidated ordinary income posted 3 years
consecutive record high Y36,427 million. In addition, extraordinary income of
Y3,944 million was recognized as increase in equity holdings of KCE Tokyo Inc.,
consumer-use software production subsidiary, which increased capital along with
initial public offering. Consolidated net income was 2 years consecutive record
high Y21,781 million.
The dividend of the term will be Y54 per share (consolidated payout ratio 30%:
Y26 interim dividend, Y28 end of term dividend) reflecting the good performance
of the term and as means to return profit to shareholders.
2. Outlook for Fiscal Year Ended March 31, 2002
For the year ended March 31, 2002, CS Div. is launching global release of
popular titles such as 'METALGEAR SOLID 2' and 'SILENT HILL 2'. We also plan the
U.S. deployment of 'YU-GI-OH!' series including software for GameBoy and card
game starting Christmas season with synergistic sales promotional effect of
combining TV program and various types of merchandise.
We have achieved steady growth to be leading company in entertainment industry.
Now we are going to maximize the profitability by making the most of various
business alliances we have actively set up with strong counterparts.
Particularly with the synergistic effect with PEOPLE CO., LTD. (as of June 1st
2001, Konami Sports Corporation), products appealing to wider range
of users will be released. They are designed with the concept of 'enjoyable
physical exercise'. The product lineup includes 'Martial Beat', music fitness
game, 'Fitness Revolution' and 'Health Orchestra' series, exercise equipment
incorporating elements of game and music.
As for the gaming business overseas, design, production and marketing system in
the U.S. will be reinforced to expand our market share. We aim to obtain
licenses from all the states in the U.S. with authorized casino.
Responding to advanced network environment, our total entertainment Web site,
'KONAMI Online.com' started operation in April 2001. In addition, we are to
expand our on-line game business with attractive contents.
Consolidate annual sales for the next term is expected to be Y250 billion,
consolidated ordinary income and net income will be Y40 billion and Y24 billion
respectively.
4. Consolidated Financial Statements
(1) Consolidated Balance Sheets (Millions of yen)
March 31, 2000 March 31, 2001
Share of Share of Year-on-year
total assets total assets Change
ASSETS:
I Current Assets Y102,952 75.7% Y125,278 50.1% Y22,325
Cash and cash
equivalents 58,780 66,812 8,031
Trade notes and accounts 27,203 33,870 6,667
receivable
Marketable securities 0 - (0)
Inventories 11,393 13,997 2,603
Prepaid expenses 1,635 3,257 1,621
Deferred tax assets 2,206 6,421 4,214
Other 2,223 1,448 (774)
Allowance for bad debts (491) (528) (37)
II Fixed Assets 32,666 24.0 124,744 49.9 92,077
1.Tangible fixed assets 22,865 16.8 31,865 12.7 8,999
Buildings and structures 11,305 19,137 7,832
Machinery and transportation
equipment 252 316 63
Tools and fixtures 2,818 3,975 1,156
Land 8,488 8,225 (263)
Construction in progress 0 211 210
2. Intangible fixed assets 1,572 1.2 62,736 25.1 61,163
Leaseholds - 2,100 2,100
In-house software 1,485 2,267 781
Goodwill - 57,857 57,857
Other 86 510 424
3. Investments and
other assets 8,228 6.0 30,143 12.1 21,914
Investment securities 986 4,949 3,962
Lease deposits 4,703 21,696 16,992
Deferred tax assets 2,064 2,881 817
Allowance for bad debts (0) - 0
Other 474 615 140
III Translation Adjustments 461 0.3 - - (461)
TOTAL ASSETS Y136,080 100.0% Y250,023 100.0% Y113,942
(Millions of Yen)
March 31, 2000 March 31, 2001
Share of total Share of total Year-on-year
liabilities, liabilities, Change
minority interest minority interest
and shareholders' and shareholders'
equity equity
LIABILITIES:
I Current Liabilities Y46,646 34.3% Y77,570 31.0% Y30,923
Trade notes and 19,364 24,651 5,287
accounts payable
Short-term loans 2,774 5,686 2,911
payable
Current portion of 1,751 2,001 249
long-term loans
payable
Current portion of - 10,000 10,000
straight bonds
Other accounts - 8,646 8,646
payable
Income taxes 11,435 14,880 3,444
payable
Accrued expenses 3,750 3,780 30
Advances received - 2,786 2,786
Deferred tax - 339 339
liabilities
Allowance for 1,158 1,964 805
bonuses
Other 6,410 2,834 (3,576)
II Long-term 16,347 12.0 8,553 3.5 (7,793)
Liabilities
Straight bonds 10,000 - (10,000)
Long-term loans 4,788 3,262 (1,525)
payable
Allowance for - 1,818 1,818
retirement benefits
Liability for 1,486 1,738 252
directors'retirement
benefits
Other 72 1,733 1,660
TOTAL LIABILITIES 62,994 46.3 86,124 34.5 23,130
MINORITY INTEREST 2,242 1.6 14,023 5.6 11,781
SHAREHOLDERS' EQUITY:
I Common Stock 15,793 11.6 47,398 19.0 31,605
II Additional Paid-in 15,516 11.4 47,106 18.8 31,590
Capital
III Retained Earnings 39,565 29.1 55,253 22.1 15,687
IV Unrealized Holding
Gains (Losses)
on Other - - 115 0.0 115
Investment
Securities
V Translation - - 1 0.0 1
Adjustments
70,876 52.1 149,875 59.9 78,999
VI Treasury Stock (31) (0.0) (0) (0.0) 31
TOTAL 70,844 52.1 149,875 59.9 79,031
SHAREHOLDERS'EQUITY
TOTAL LIABILITIES,
MINORITY INTEREST
AND
SHAREHOLDERS' Y136,080 100% Y250,023 100% Y113,942
EQUITY
(2) Consolidated Statements of Income (Millions of yen)
Year ended Year ended
March 31 , 2000 March 31, 2001
Share of Share of Year-on-year
net sales net sales Change
I Net Sales Y146,666 100.0% Y171,480 100.0% Y24,814 16.9%
II Cost of 90,755 61.9 103,209 60.2 12,454 13.7
Sales
Gross Profit 55,911 38.1 68,270 39.8 12,359 22.1
III Selling, 24,972 17.0 29,624 17.3 4,652 18.6
General and
Administrative
Expenses
Operating 30,938 21.1 38,645 22.5 7,707 24.9
Income
IV Non-operating 1,759 1.2 897 0.5 (861) (49.0)
Income
Interest 139 468 328
income
Rental 160 20 (139)
income
Gain on sale 711 0 (711)
of marketable
securities
Gain on sale 213 16 (197)
of treasury
stock
Foreign 194 - (194)
exchange gains
Other 339 392 52
V Non-operating 1,594 1.1 3,115 1.8 1,521 95.4
Expenses
Interest 724 810 85
expenses
Foreign - 220 220
exchange
losses
Stock issue - 639 639
expenses
Commission - 302 302
for syndicate
loan
Equity 44 583 538
losses
Loss on 100 - (100)
redemption
of bonds
Other 724 558 (165)
Ordinary 31,103 21.2 36,427 21.2 5,324 17.1
Income
VI Extraordinary 8,943 6.1 4,072 2.4 (4,871) (54.4)
Income
Gain on sale 63 124 60
of fixed
assets
Gain on
reversal of 192 - (192)
allowance
for bad debts
Gain on sale
of 7,021 3 (7,018)
investments
in subsidiaries
Gain on sale 1,665 3,944 2,278
of stock by
subsidiaries
VII Extraordinary 5,636 3.8 908 0.5 (4,728) (83.9)
Losses
Loss on sale 5,612 516 (5,096)
and disposal
of fixed
assets
Loss on sale 24 7 (16)
of investment
securities
Loss on - 384 384
cancellation
of leasing
contracts
Net Income
before 34,409 23.5 39,591 23.1 5,181 15.1
Income Taxes
and Minority
Interest
Income taxes 16,433 11.2 20,902 12.2 4,468 27.2
- current
Income taxes (782) (0.5) (3,595) (2.1) 2,812 359.3
- deferred
Minority 414 0.3 503 0.3 88 21.4
interest
Net Income Y18,344 12.5% Y21,781 12.7% Y3,436 18.7%
(3) Consolidated Statements of Retained Earnings (Millions of yen)
Year ended Year ended
March 31, 2000 March 31, 2001
I Retained Earnings, Beginning of Year Y21,511 Y39,565
Prior year adjustment for deferred tax 3,447 -
II Increase in Retained Earnings 25 -
Increase by consolidating previously
unconsolidated subsidiaries 25 -
III Decrease in Retained Earnings 3,762 6,094
Cash dividends 3,560 5,913
Directors' bonuses 170 170
Decrease by consolidated subsidiary's merger -
with unconsolidated subsidiary 10
Decrease by consolidating previously 4
unconsolidated subsidiaries -
Decrease by revaluation of real estate owned 28
by a U.K. subsidiary -
IV Net Income 18,344 21,781
V Retained Earnings, End of Year Y39,565 Y55,253
(4) Consolidated Statements of Cash Flows (Millions of yen)
Year ended Year ended
March 31, 2000 March 31, 2001
I OPERATING ACTIVITIES:
Income before income taxes and Y34,409 Y39,591
minority interest
Depreciation and amortization 2,788 3,123
Amortization of goodwill - 274
Increase in allowance for 465 61
directors' retirement benefits
Increase in allowance for 86 374
bonuses
Decrease (increase) in (163) 35
allowance for bad debts
Interest and dividend income (152) (469)
Interest expenses 724 810
Gain on sale of marketable (711) (0)
securities
Gain on sale of treasury stock (213) (16)
Foreign exchange losses (gains) 14 (650)
Stock issue expenses - 639
Equity losses 44 583
Loss on redemption of bonds 100 -
Gain on sale of fixed assets (63) (124)
Loss on sale and disposal of 5,612 516
fixed assets
Gain on sale of investments in (8,687) (3,947)
subsidiaries
Loss on sale of investment 24 -
securities
Decrease (increase) in trade 3,133 (7,551)
receivables
Decrease (increase) in 2,470 (1,052)
inventories
Increase (decrease) in other (657) -
current assets
Increase in trade payables 3,991 6,442
Increase in other current 2,274 -
liabilities
Directors'bonuses paid (170) -
Increase (decrease) in 162 (230)
consumption taxes payable
Other - net - 1,923
Sub-total 45,487 40,334
Interests and dividends 145 435
received
Interests paid (723) (777)
Income taxes paid (13,544) (18,875)
Net cash provided by operating 31,365 21,116
activities
II INVESTING ACTIVITES:
Increase in time deposits (1,415) -
Decrease in time deposits - 1,415
Proceeds from sale of 2,274 1
marketable securities
Acquisition of fixed assets (2,188) (2,822)
Proceeds from sale of fixed 368 1,274
assets
Acquisition of intangible fixed (768) (1,488)
assets
Proceeds form sale of 6 -
intangible fixed assets
Acquisition of investment (940) (3,887)
securities
Proceeds from sale of 70 28
investment securities
Proceeds from acquisition of a 62 -
subsidiary
Acquisition of subsidiaries (60) (68,285)
Proceeds from sale of 7,525 -
investment in subsidiaries
Increase in short-term loans (12,358) -
receivable
Decrease in short-term loans 19,586 -
receivable
Increase in short-term loans - (69)
receivable - net
Repayment of deposits received (1,097) (3,054)
Increase in deposits received - 3,448
Increase in other assets (1,012) -
Decrease in other assets 2,826 -
Other - net - 753
Net cash provided by investing 12,880 (72,686)
activities
III FINANCING ACTIVITES:
Decrease in short-term loans (1,709) (1,220)
payable
Proceeds from long-term loans 412 720
Repayment of long-term loans (2,640) (1,983)
Redemption of straight bonds (5,500) -
Proceeds from stock issuance 188 62,562
Proceeds from issuance of stock 2,275 6,060
to minority shareholders
Proceeds from sale of treasury 526 62
stock
Dividends paid (3,560) (5,913)
Dividends paid to minority (6) (78)
shareholders
Other - net - 229
Net cash used in financing Y(10,015) Y60,440
activities
IV TRANSLATION ADJUSTMENTS ON Y(390) Y575
CASH AND CASH EQUIVALENTS
V NET INCREASE IN CASH AND CASH 33,839 9,446
EQUIVALENTS
VI CASH AND CASH EQUIVALENTS, 23,526 57,365
BEGINNING OF YEAR
VII INCREASE IN CASH AND CASH 0 -
EQUIVALENTS
BY NEWLY CONSOLIDATED COMPANY
VIII CASH AND CASH EQUIVALENTS, END Y57,365 Y66,812
OF YEAR
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