Interim Results
Maruwa Co Ld
9 November 2001
Contract: Shiro Baba, Kyoko Isomura
Management And Planning Office
Tel: +81-561-51-0839 / Fax: +81-561-51-0893
INTERIM RESUTS - SUMMARY OF CONSOLIDATED FINANCIAL RESULTS OF MARUWA CO., LTD.
FOR THE FIRST HALF OF THE FISCAL YEAR ENDING SEPTEMBER 30, 2001.
- The Company's fiscal year end is March 31st. Beginning from this material,
reference to a fiscal year will follow the style commonly seen in the overseas
disclosure documents. Specifically, 'fiscal 2001' and 'fiscal 2002' refer to
the Company's fiscal year ended March 31st, 2001, and other fiscal years are
referred to in a corresponding manner.
Fiscal 2001: April 1, 2000 - March 31, 2001
Fiscal 2002: April 1, 2001 - March 31, 2002
- The consolidated financial statements of MARUWA CO., LTD. are prepared in
conformity with the accounting principles generally accepted in Japan.
- US dollar amounts are translated from yen, for convenience only, at the rate
of US$1=119.4
1. Summary of Consolidated Results
(1) Summary of Consolidated Statement of Income
Yen (Millions) U.S. dollars
(Thousands)
Six month Six month Six month
period ended period ended Change period ended
Sept. 30, Sept. 30, % Sept. 30,
2001 2000 2001
Net Sales Y5,370 Y7,996 -32.8 $44,979
Operating Income (46) 1,861 - 389
Income Before Income Taxes 55 1,875 -97.1 464
Net Income 24 1,284 -98.1 198
Net income Per Share of
Common Stock Y 2.15 Y127.72 -98.3 $ 0.02
(2) Summary of Consolidated Financial Condition
Yen (millions) U.S. dollars
(Thousands)
Sept. 30, March 31, Sept. 30, Sept. 30,
2000 2001 2001 2001
Total Assets Y 26,525 Y30,943 Y28,341 $237,362
Shareholder's Equity 21,068 24,797 24,790 207,621
Shareholder's Equity
Ratio 79.4% 80.1% 87.5%
Shareholders Equity
Per Share Y 2,096.33 Y 2,255.73 Y 2,254.98 $ 18.89
(3) Summary of Consolidated Statements of Cash Flows
Yen (Millions) U.S. dollars
(Thousands)
Six month Six month Six month
period ended period ended Change period ended
Sept. 30, Sept. 30, % Sept. 30,
2001 2000 2001
Cash Flows from
Operating Activities Cash Y311 Y 621 -49.9 $2,606
Cash Flows from Investing
Activities (2,795) (1,115) +150.7 (23,413)
Cash Flows from Financing
Activities (167) 721 - (1,394)
Cash and Cash Equivalents
at Year End Y6,583 Y8,240 -20.1 $55,137
Consolidated 4 companies
Subsidiaries
2. Projections
(1) Consolidated Earnings Forecast for FY2002
Yen
(Millions)
Net Sales Y10,692
Net Income Y340
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.
3. Management Policies
(1) Basic Management Policy
It is the corporate vision of MARUWA CO., LTD. and its consolidated subsidiaries
(together with the Company, 'MARUWA') to become known as 'MARUWA of Ceramic
Material and Technology'. In order to achieve this goal, we strive to increase
corporate value by placing most importance on 'Quality Number One' policy,
followed by constant technology innovation, and responding to the expectation of
all the stakeholders including shareholders, customers, and employees.
Under this corporate vision, the company will continue to reinforce its core
businesses through selection and concentration to construct high profit making
structure. Furthermore, it is the company's administration policy to remain as
a winning company through development of products with number 1 share in the
global market.
(2) Dividend Policy
The basic principle in MARUWA'S dividend policy is to maintain stable dividend
payments to the shareholders. As indicated in the Management Policy, the amount
of dividend will be determined based on the comprehensive scrutinization of
financial conditions, operation results, and earnings dividend ratio, as we
conduct aggressive capital expenditures on R&D and production equipment to
continually develop and implement technology in response to the market demand.
As for this interim dividend, from a perspective of sharing profit with the
shareholders, dividend payment will be increased by 1 yen to 7 yen per share in
comparison to the previous 6 yen per share.
(3) Business Strategy and Management Issues
In the midst of the rapidly changing information technology and expectation
towards innovation and continual growth, MARUWA aims to increase corporate value
by increasing profitability and securing growth. In order to achieve this goal,
basic technologies such as ceramic material technology, electronic circuit
design technology, and multi layer technology acquired in the past are being
utilized in the area of telecommunication. In regards to profitability, we
implement management indices such as return on equity (ROE). In order to
realize MARUWA's growth strategy, innovation is being promoted in the current
management to create a horizontal structure that will allow us to operate with
speed and resilience.
4. Summary of the Interim Business Environment
The US market that was the growth momentum in the recovery of the world economy
showed rapid slowdown during the interim period. This impacted the Asian region
and also the European region, which was comparatively stable. The stagnation in
the global IT industry progressed, and excess inventory of cellular phones and
computer related parts remained for a length of time in the industry, leading to
an extensive setback in the market.
In this difficult situation, MARUWA group endeavored to strengthen its technical
expertise as a 'material' manufacturer positioned in the up-stream of the
electronic component industry by continually providing internationally
competitive products out into the market. The company has also promoted
construction of a management structure that could respond with resilience under
a harsh business environment, but the company was directly affected by lagging
sales and severe inventory adjustments in the IT related sector. As a result,
net sales for this interim period was 5,370 million yen (-32.8% from the
previous interim). Operating income was -46 million yen, ordinary profit was 75
million yen (-96.1% from the previous interim), and net profit was 24 million
yen (-98.1% from the previous interim), despite the company's aggressive
engagement to decrease fixed costs, promote cuts in costs, and reform corporate
structure beyond divisional borders.
Net sales for the circuit ceramic products were 2,206 million yen (-40.8% from
the previous interim). Inventory adjustments among the Taiwanese manufacturer
were very severe, and the slowdown in the optical communication market also
resulted in lower-than-expected shipping quantity.
Machinery ceramic products experienced a large plunge in Europe and Taiwanese
market, but net sales amounted to 565 million yen (-25.8% from the previous
interim), because of a comparatively stable domestic market.
High frequency products experienced much difficulty during the first quarter.
However, they are indicating favorable results from the second quarter with the
recovery of orders from manufacturers completing inventory adjustments of
cellular phone related components. Furthermore, cellular phones and PHS related
components for Chinese market are showing some increase in demand. Influenced
by this, the resulting net sales were 536 million yen (-27.4% from the previous
interim).
Net sales for capacitor components were 2,063 million yen (-25.6% from the
previous interim). The result was mainly due to a continuing order decrease in
the battery industry and the severe price cutting pressure from the Taiwanese
market.
5. Outlook of the Full Fiscal Year 2002
Regarding the outlook of the future economic environment, it is expected that
the political and economical climate will be significantly influenced by the
incident of the US terrorist attach, and there are concerns that the economic
slum at global level will lengthen. There is a strong sense of uncertainty, it
is expected that the economic condition will be very severe.
The forecast of the consolidated annual business results for the fiscal year
2002 ending in March 31st are as indicated below.
Net Sales 10,692 million yen
Current Profit 511 million yen
Net Income 340 million yen
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.
6. Consolidated Balance Sheet
Yen (millions, except for percents)
Six Six
month month
period period Change
ended ended %
Sept. Sept.
30,2001 30, 2000
ASSETS
Current assets:
Cash and deposits Y 1,364 Y 2,318 - 41.2
Marketable Securities 5,219 5,922 - 11.9
Notes and accounts receivable,
trade 2,998 4,499 - 33.4
Allowance for doubtful accounts (42) (63) - 33.5
Inventories 4,156 2,579 + 61.2
Deferred income taxes 25 61 - 59.2
Other current assets 396 427 - 7.3
Total currents assets Y14,116 Y15,743 - 10.3
Property, plant and equipment:
Land Y 2,474 Y 2,246 + 10.1
Building and structures 4,518 2,961 + 52.6
Machinery and equipment 10,733 7,988 + 34.4
Construction in progress 740 931 - 20.5
Total 18,465 14,126 + 30.7
Less -
Accumulated depreciation (6,238) (5,294) + 17.8
Net property, plant and
equipment Y 12,227 Y 8,832 + 38.4
U.S. dollars
(thousands)
Year ended Change % Six month period
March 31,2001 ended Sept. 30, 2001
ASSETS
Current assets:
Cash and deposits Y 1,567 - 13.0 $11,423
Marketable Securities 7,687 - 32.1 43,712
Notes and accounts receivable,
trade 3,946 - 24.0 25,113
Allowance for doubtful accounts (58) - 27.6 (351)
Inventories 3,850 + 7.9 34,810
Deferred income taxes 69 - 63.8 209
Other current assets 503 - 21.3 3,312
Total currents assets Y17,564 - 19.6 $ 118,228
Property, plant and equipment:
Land Y 2,409 + 2.7 $ 20,716
Building and structures 4,392 + 2.9 37,839
Machinery and equipment 9,796 + 9.6 89,893
Construction in progress 399 + 85.5 6,199
Total 16,996 + 8.6 154,647
Less -
Accumulated depreciation (5,615) + 11.1 (52,247)
Net property, plant and
equipment Y 11,381 + 7.4 $ 102,400
Yen (millions, except for percents)
Six Six
month month
period period Change
ended ended %
Sept. Sept.
30,2001 30, 2000
Investments and other assets:
Investment securities Y 441 Y 596 - 26.0
Deferred income taxes 22 - -
Property and equipment for
investments 1,080 1,080 0.0
Other 455 274 + 65.8
Total investments and other
assets 1,988 1,950 + 2.4
Total assets Y 28,341 Y 26,525 + 6.8
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term
debt Y 199 Y 199 0.0
Notes and accounts payable,
trade 889 1,385 - 35.8
Accrued income taxes 12 593 - 98.0
Other current liabilities 1,580 2,124 - 25.6
Total current liabilities Y 2,680 Y 4,301 - 37.7
Long-term liabilities:
Long-term debt Y 763 Y 963 - 20.7
Deferred tax liabilities 2 107 - 98.1
Accrued pension and severance
costs 29 7 + 334.7
Other 77 79 -2.5
Long-term liabilities Y 871 Y 1,156 -24.7
U.S. dollars
(thousands)
Year ended Change % Six month period
March 31,2001 ended Sept. 30, 2001
Investments and other assets:
Investment securities Y 503 - 12.3 $ 3,694
Deferred income taxes 9 +144.4 187
Property and equipment for
investments 1,094 - 1.3 9,048
Other 392 +16.1 3,805
Total investments and other
assets 1,988 0.0 16,734
Total assets Y 30,943 - 8.4 $ 237,362
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term
debt Y 199 0.0 $ 1,668
Notes and accounts payable,
trade 1,357 - 34.5 7,444
Accrued income taxes 667 - 98.2 100
Other current liabilities 2,911 - 45.7 13,237
Total current liabilities Y 5,134 - 47.8 $ 22,449
Long-term liabilities:
Long-term debt Y 863 - 11.6 $ 6,393
Deferred tax liabilities - - 18
Accrued pension and severance
costs 25 + 8.0 247
Other 124 - 36.3 633
Long-term liabilities Y 1,012 - 13.9 $ 7,291
Yen (millions, except for percents)
Six Six
month month
period period Change
ended ended %
Sept. Sept.
30,2001 30, 2000
Shareholders' equity:
Common stock, Y50 par value,
26,000,000 shares;
Authorized, issued and
outstanding: Y 6,683 Y 5,656 + 18.2
Additional paid-in capital 9,710 8,683 + 11.8
Retained earnings 9,137 7,897 + 15.7
Translation adjustments 20 147 - 86.4
Cumulative translation
adjustment (559) (1,112) - 49.7
Treasury stock, at cost (201) (203) - 1.0
Total shareholders' equity 24,790 21,068 + 17.7
Total liabilities and
shareholders' equity Y 28,341 Y26,525 + 6.8
U.S. dollars
(thousands)
Year ended Change % Six month period
March 31,2001 ended Sept. 30, 2001
Shareholders' equity:
Common stock, Y50 par value,
26,000,000 shares;
Authorized, issued and
outstanding: Y 6,683 0.0 $ 55,976
Additional paid-in capital 9,710 0.0 81,326
Retained earnings 9,186 -0.5 76,522
Translation adjustments 79 -74.7 171
Cumulative translation
adjustment (659) -15.2 (4,688)
Treasury stock, at cost (202) -0.5 (1,685)
Total shareholders' equity 24,797 +0.0 207,622
Total liabilities and
shareholders' equity Y 30,943 -8.4 $ 237,362
7. Consolidated Statement of Income
Yen (Millions) U.S. dollars
(thousands)
Six months Six month Six month
period ended period ended Change % period ended
Sept. 30, Sept 30, Sept.30,
2001 2000 2001
Net sales Y 5,370 Y 7,996 -32.8 $ 44,979
Cost of sales 4,328 5,283 -18.1 36,256
Gross profit 1,042 2,713 -61.6 8,723
Selling, general and
administrative expenses 1,088 852 +27.7 9,112
Operating income Y (46) Y 1,861 -102.5 $ (389)
Yen (Millions) U.S. Dollars
(Thousands)
Six month Six month Six month
period period Change period ended
ended ended (%) Sept. 30,
Sept. 30, Sept. 30, 2001
2001 2000
Other income (expense):
Interest and dividend Y97 Y17 +481.8 $816
income
Interest expense (9) (4) +125.6 (74)
Foreign exchange gain (17) (18) -3.8 (144)
(loss), net
Other, net 30 19 +59.7 255
Other income, net 101 14 +621.4 853
Income before income Y55 Y1,875 -97.1 $464
taxes
Income taxes:
Current 12 604 98.0 97
Deferred 19 (13) - 169
Net income Y24 Y1,284 -98.1 $198
8. Consolidated Statement of Cash Flows
Yen (Millions, except for percents) U.S.
Dollars
(Thousands)
Six month Six month Year Six month
period period Change Ended Change period
ended ended (%) March % ended
Sept. 30, Sept. 30, 31,2001 Sept.30
2001 2000 2001
Operating activities:
Income before Y55 Y1,875 -97.1 Y3,572 -98.5 $464
income taxes
Adjustments for:
Depreciation 719 455 +58.0 1,133 -36.5 6,021
Provision for
allowance for (9) 13 -169.2 11 - (76)
doubtful accounts
Decrease in
accrued pension 5 (40) - (22) - 40
and severance cost
Yen (Millions, except for percents) U.S.
Dollars
(Thousands)
Six month Six month Year Six month
period period Change Ended Change period
ended ended (%) March % ended
Sept. 30, Sept. 30, 31,2001 Sept.30
2001 2000 2001
Gains on disposal
of securities to
establish - (72) -100.0 (72) -100.0 -
retirement
benefit trust
Retirement - 101 - 101 - -
benefit trust
Interest and (97) (18) -438.9 (45) +115.6 (816)
dividend income
Foreign exchange 6 13 -53.8 5 +20.0 47
loss
Loss on disposal
of property, plant 31 16 +93.8 136 -77.9 251
and equipment
Increase in notes
and account 982 (1,020) - (347) - 8,221
receivable.
(Increase)
decrease in (287) (3 88) -26.0 (1,611) -82.2 (2,406)
inventories
Write-down of
investment 15 - - - - 127
securities
Decrease in (476) 314 - 433 - (3,973)
accounts payable
Other (45) (154) -70.8 7 - (370)
Sub total 899 1,095 -17.9 3,301 -72.9 7,530
Interest and
dividend income 97 18 +438.9 45 +115.6 812
received
Interest expenses (8) (4) +100.0 (13) -66.7 (69)
paid
Income taxes paid (677) (488) +38.7 (790) -14.3 (5,667)
Net cash
provided by 311 621 -49.9 2,543 -87.8 2,606
operating
activities
Yen (Millions, except for percents) U.S.
Dollars
(Thousands)
Six month Six month Year Six month
period period Change Ended Change period
ended ended (%) March % ended
Sept. 30, Sept. 30, 31,2001 Sept.30
2001 2000 2001
Investing activities:
Payment for
purchase of (2,719) (1,137) +139.1 (3,820) -28.8 (22,770)
property, plant
and equipment
Proceeds from
sales of property, 24 57 -57.9 122 -80.3 203
plant and
equipment
Payments for
purchase of (1) (1) 0.0 (25) -96.0 (11)
investment
securities
Loan (60) - - (2) - (503)
Collection from 2 0 - 1 +100.0 15
loan receivables
Increase in
intangible fixed - - - - -73.4
assets
Other (41) (34) +20.6 (158) - (347)
Net cash used
in investing (2,795) (1,115) +150.7 (3,882) -28.0 (23,413)
activities
Financing activities;
Issuance of (100) 1,000 - 1,000 - (834)
long-term debt
Payments of 0 (52) - (152) - 0
long-term debt
Proceeds from
issuance of new - - - 2,054 - -
shares
Sales of treasury 1 24 -95.8 25 -96.0 7
stock
Purchase of (1) (191) -99.5 (195) -99.5 (3)
treasury stock
Cash dividends (67) (60) +11.7 (120) -44.2 (564)
paid
Net cash
provided by
(used in) (167) 721 - 2,612 - (1,394)
financing
activities
Yen (Millions, except for percents) U.S.
Dollars
(Thousands)
Six month Six month Year Six month
period period Change Ended Change period
ended ended (%) March % ended
Sept. 30, Sept. 30, 31,2001 Sept.30
2001 2000 2001
Effect of exchange
rate changes on (20) 4 - (28) -28.6 (167)
cash and cash
equivalents
Net increase
(decrease) in cash (2,671) 231 - 1,245 - (22,368)
and cash
equivalents
Cash and cash
equivalents at 9,254 8,009 +15.5 8,009 +15.5 77,505
beginning of year
Cash and cash
equivalents at end Y6,583 Y8,240 -20.1 Y9,254 -28.9 $55,137
of year
9. Segment Information
(1)Consolidated Business Segment Information MARUWA's business is
comprised of one segment. Therefore, segment breakdown is not applicable.
(2)Consolidated Geographic Segment Information
Yen (Millions) U.S. Dollars
(Thousands)
Six month Six month Six month
period period Change period ended
ended ended (%) Sept. 30,
Sept. 30, Sept. 30, 2001
2001 2000
Japan Net Sales
Unaffiliated Y3,751 Y5,547 -32.4 $31,416
Customers
Intersegment 189 524 -64.0 1,580
Total 3,940 6,071 -35.1 32,996
Operating Cost 3,656 4,460 -18.0 30,618
Operating Income Y284 Y1,611 -82.4 $2,378
(Loss)
U.S. Dollars
Yen (Millions) (Thousands)
Six month Six month Six month
period period Change period ended
ended ended (%) Sept. 30,
Sept. 30, Sept. 30, 2001
2001 2000
Asia Net Sales
Unaffiliated Y1,494 Y2,064 -27.6 $12,515
Customers
Intersegment 416 557 -25.3 3,485
Total 1,910 2,621 -27.1 16,000
operating Cost 1,853 2,100 -11.8 15,520
Operating Income Y57 Y521 -89.0 $480
(Loss)
Europe Net Sales
Unaffiliated Y125 Y385 -67.5 $1,048
Customers
Intersegment 2 4 -61.6 13
Total 127 389 -67.4 1,061
operating Cost 142 379 -62.4 1,192
Operating Income Y(15) Y10 - $(131)
(Loss)
Total Net Sales
Unaffiliated Y5,370 Y7,996 -32.8 $44,979
Customers
Intersegment 607 1,085 -44.1 5,078
Total 5,977 9,081 -34.2 50,057
Operating Cost 5,651 6,939 -18.6 47,330
Operating Income Y326 Y2,142 -84.8 $2,727
(Loss)
Elimination Net Sales
Total Y607 Y1,085 -44.1 $5,078
Operating Cost 235 804 -70.8 $1,962
Operating Income Y372 Y281 +32.2 $3,116
(Loss)
Consolidated Net Sales
Total Total Y5,370 Y7,996 -32.8 $44,979
Operating Cost 5,416 6,135 -11.7 $45,368
Operating Income Y(46) Y1,861 - $(389)
(Loss)
(3)Net Overseas Sales by Customer's Geographic Location
Yen (Millions, except for percents) U.S.
Dollars
(Thousands)
Six month Six month Year Six month
period period Change Ended period
ended ended (%) March ended
Sept. 30, Sept. 30, 31,2001 Sept.30
2001 2000 2001
Overseas Asia Y2,483 Y3,573 -30.5 Y7,385 $20,793
Sales Europe 98 424 -76.9 972 818
Others 115 234 -50.9 350 962
Total Y2,696 Y4,231 -36.3 Y8,707 $22,573
Consolidated Net Y5,370 Y7,996 -32.8 Y16,100 $44,979
Sales
% Of Asia 46.2 44.7 45.9
Consolid Europe 1.8 5.3 6.0
ated Net Others 2.1 2.9 2.2
Sales Total 50.1 52.9 54.1
- Countries are divided in geographical vicinity.
- Main countries included in each area are as indicated below;
Asia - Malaysia, Taiwan, Korea
Europe - Germany, England
Others - United States
- Overseas Sales indicate net sales of the Company and its subsidiaries to
customers outside Japan.
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