THK Company Limited
11 February 2005
February 8 , 2005
Consolidated Financial Review for the Third Quarter
Ended December 31, 2004
Company Name: THK CO., LTD.
Head Office: Tokyo, Japan (Tel: +81-3-5434-0300)
URL: http://www.thk.co.jp/en/
Stock exchange listing: Tokyo Stock Exchange 1ST Section
Code number: 6481
President and CEO: Akihiro Teramachi
Director/General Manger of Corporate Strategy Department: Kotaro Yoshihara
Application of U.S. GAAP: None
1.Matters relating to prepare quarterly consolidated financial statements
a) Adoption of simplified accounting method: Yes
The company applied the simplified methods to the following points for
this reporting:
- calculating the income and business taxes
- calculating and recognizing standard for allowance items
b) Changes in the accounting method from the most recent fiscal year: None
c) Changes in scope of consolidation and application of the equity method: Yes
New consolidated companies:1
Consolidated companies removed:1
New companies accounted for by the equity method: -
Companies accounted for by the equity method removed:1
d) No comparison with the 3rd quarter of FY03(ended March 31, 2003) are available
2.Consolidated Financial Highlights (Unaudited)
Note: All figures are rounded down to the nearest million yen.
(1) Consolidated Operating results of operation
Net sales Operating income Ordinary income Net income
Millions of yen Millions of yen Millions of yen Millions of yen
% % % %
Third quarter ended December 31, 04 112,146 30.5 21,285 85.5 22,561 100.3 13,700 125.8
Third quarter ended December 31, 03 85,933 - 11,473 - 11,263 - 6,067 -
Year ended March 31, 04 119,253 16,231 15,892 8,583
Net income per Fully diluted net
share income per share
Yen Yen
Third quarter ended December 31, 04 115.56 103.42
Third quarter ended December 31, 03 51.35 45.38
Year ended March 31, 04 72.27 63.69
Note: Percentages for net sales, operating income, ordinary income and net
income indicated changes from the third quarter of the previous term.
(2) Consolidated financial positions
Total assets Shareholders' Equity ratio Shareholders'
equity equity
per share
Millions of yen Millions of yen % Yen
As of December 31, 04 216,959 123,905 57.1 1,034.59
As of December 31, 03 183,398 106,255 57.9 900.34
As of March 31, 04 191,105 109,181 57.1 923.35
(Consolidated statements of cash flows)
Net cash provided Net cash used in Net cash used in Cash and cash
by operating investing financing equivalents at
activities activities activities end of period
Millions of yen Millions of yen Millions of yen Millions of yen
As of December 31, 04 14,605 (5,794) (1,761) 68,996
As of December 31, 03 11,961 (3,654) (26,945) 53,638
As of March 31, 04 15,735 (3,681) (27,132) 57,037
(Reference)
Forecasted results for the fiscal year ending March 31, 2005 (April 1, 2004 to March 31, 2005)
Net sales Operating income Ordinary income Net income
Millions of yen Millions of yen Millions of yen Millions of yen
Year ending March 31, 05 143,000 25,400 26,700 16,500
For reference: Forecasted net income per share for the year ending March 31,
2005: 137.77 yen (calculated based on average number of common stock outstanding
during the period)
Note:
The company has not changed the forecasted figures which were announced on
November 18, 2004. However, this release contains forward-looking statements
that are based on available data at the time of release. Some factors could
cause actual results to differ from expectations.
Business Performance for the Third Quarter (Ending December 31, 2004)
Consolidated sales increased 30.5 percent for the third quarter, which ended
December 31, 2004, over the corresponding quarter of the previous year. Domestic
sales to the machine tool and general machinery industries rose due to increased
demand of machineries in China, and to large capital investments by the
automobile industry. Domestic sales to the electronics industry also gained,
driven by increased sales to the flat-panel and semiconductor industries. Sales
in the US increased as well, with rapid turnover to the electronics and
transportation equipment industries, despite the adverse effects of the strong
yen against dollars. Sales in Europe increased, due to gains mainstay machine
tool and general machinery industries. Sales in Asia increased, helped by strong
sales to the machine tool and electronics industries. As a result, this company
marked sales increases all over the world.
This company posted an 85.5-percent year-on-year increase in consolidated
operating income for the third quarter, and the operating income margin
increased by 5.6 percent, to 18.9 percent. The cost-to-sales ratio improved by
2.4 percent, helped by productivity enhancements that resulted in the improved
profitability of overseas plants and shortened lead times at domestic plants.
The ratio of sales and general administrative expenses to sales also improved by
3.2 percentage points, as a result of efforts to reduce them.
Consolidated Financial Standing
(1)Analysis of Balance Sheets
Total assets as of December 31, 2004, were AY216,959 million, an increase by
AY25,854 million from the previous consolidated fiscal year-end. This is mainly
because of increases in notes and accounts receivable, and of increases cash and
cash equivalents gained by making Daito Seiki Company Limited a wholly-owned
subsidiary. Shareholders' equity to total assets was about the same level
as the previous fiscal year-end, at 57.1 percent, because liabilities gained due
to increased notes and accounts payable caused by increased materials
procurement, even though retained earnings showed an increase helped by a growth
in net income.
(2)Analysis of Statements of Cash Flows
Cash Flows from Operating Activities:
Accounts receivable increased by AY6,843 million, due to increased sales, and
AY10,016 million in corporate income tax was paid. Net cash provided by
operating activities was AY14,605 million, however, because income before taxes
was AY21,994 and depreciation expenses were AY4,130 million for the three months
ending December 31, 2004, and accounts payable rose by AY7,254 million due to an
increase in sales.
Cash Flows from Investing Activities: Net cash used in investing activities was
AY5,794 million, mainly because AY5,531 million was spent for capital
investments to improve the efficiency of domestic plants.
Cash Flows from Financial Activities: Net cash used in financial activities
amounted to AY1,761 million, due mainly to dividend payments of AY1,733 million.
As a result, the outstanding balance of cash and cash equivalents as of December
31, 2004, increased over that of the previous fiscal year-end by AY11,959
million, to AY68,996 million.
(Reference)
1.Non Consolidated Financial Highlights (Unaudited)
Note: All figures are rounded down to nearest million yen.
(1) Operating results
Net sales Operating income Ordinary income Net income
Millions of yen Millions of yen Millions of yen Millions of yen
% % % %
Third quarter ended 92,093 32.2 18,732 61.2 19,701 68.8 11,597 72.2
December 31, 04
Third quarter ended 69,642 - 11,624 - 11,668 - 6,736 -
December 31, 03
Year ended March 31, 04 97,740 16,186 16,099 8,831
Net income per Fully diluted net
share income per share
Yen Yen
Third quarter ended December 31, 04 97.71 87.46
Third quarter ended December 31, 03 56.89 50.22
Year ended March 31, 04 74.18 65.39
Note: Percentages for net sales, operating income, ordinary income and net income indicated changes from the
third quarter of the previous term.
(2) Financial position
Total assets Shareholders' Equity ratio Shareholders'
equity equity
per share
Millions of yen Millions of yen % Yen
As of December 31, 04 204,570 121,534 59.4 1,013.66
As of December 31, 03 175,060 103,391 59.1 873.63
As of March 31, 04 181,983 105,760 58.1 893.23
2. Forecasted result for the fiscal year ending March 31, 2005 (April 1, 2004 to March 31, 2005)
Net sales Operating income Ordinary income Net income
Millions of yen Millions of yen Millions of yen Millions of yen
Year ending March 31, 05 117,000 22,700 23,600 14,000
For reference: Forecasted of net income per share for the year ending March 31, 2005: 116.77Yen
(calculated based on average number of common stock outstanding during the period)
Note:
The company has not changed the forecasted figures which were announced on November 18, 2004.
However, this release contains forward-looking statements that are based on available data at the time of
release.
Some factors could cause actual results to differ from expectations.
Consolidated Balance Sheets (Unaudited)
(Millions of yen)
As of As of Increase/ As of
December 31, 2004 December 31, 2003 (Decrease) March 31, 2004
Amount % Amount % Amount % Amount %
Assets
Current assets:
Cash on hand and in bank 68,644 53,387 15,257 56,550
Notes and accounts receivable-trade 53,675 42,800 10,875 46,285
Short-term investments in securities 351 280 70 516
Inventories 24,471 23,084 1,387 23,108
Other 5,683 4,137 1,546 4,246
Total current assets 152,827 70.4 123,690 67.4 29,136 23.6 130,706 68.4
Fixed assets:
Tangible fixed assets 47,606 22.0 42,695 23.3 4,910 11.5 42,982 22.5
Intangible fixed assets 1,126 0.5 1,579 0.9 (453) (28.7) 1,482 0.8
Investments and other 15,399 7.1 15,432 8.4 (33) (0.2) 15,933 8.3
Total Fixed assets 64,132 29.6 59,707 32.6 4,424 7.4 60,398 31.6
Total assets 216,959 100.0 183,398 100.0 33,561 18.3 191,105 100.0
Liabilities
Current liabilities:
Notes and accounts payable-trade 29,481 22,946 6,535 24,219
Other 18,167 12,679 5,488 16,098
Total current liabilities 47,649 22.0 35,625 19.4 12,023 33.8 40,318 21.1
Long-term liabilities:
Bonds 38,000 38,000 - 38,000
Other 6,997 3,172 3,824 3,247
Total long-term liabilities 44,997 20.7 41,172 22.5 3,824 9.3 41,247 21.6
Total liabilities 92,646 42.7 76,798 41.9 15,848 20.6 81,565 42.7
Minority interest
Minority interest 407 0.2 345 0.2 62 18.1 357 0.2
Shareholders' equity
Common stock 23,106 10.7 23,106 12.6 - - 23,106 12.0
Capital surplus 32,651 15.0 30,962 16.8 1,689 5.5 30,962 16.2
Earned surplus 67,711 31.2 53,320 29.0 14,391 27.0 55,836 29.2
Valuation adjustment for marketable 607 0.3 464 0.3 142 30.7 721 0.4
securities
Foreign currency translation 432 0.2 (47) (0.0) 479 (1,018.2) (120) (0.0)
adjustment
Treasury stock (603) (0.3) (1,551) (0.8) 948 (61.1) (1,324) (0.7)
Total shareholders' equity 123,905 57.1 106,255 57.9 17,650 16.6 109,181 57.1
Total liabilities, minority interests 216,959 100.0 183,398 100.0 33,561 18.3 191,105 100.0
and Shareholders' equity
Note: All figures are rounded down to nearest million yen.
Consolidated Statements of Income (Unaudited)
(Millions of yen)
For the 3rd For the 3rd Increase/ For the year ended
quarter ended quarter ended (Decrease) March 31,2004
December 31,2004 December 31,2003
Amount % Amount % Amount % Amount %
Net sales 112,146 100.0 85,933 100.0 26,212 30.5 119,253 100.0
Cost of sales 70,505 62.9 56,129 65.3 14,376 25.6 77,932 65.4
Gross profit 41,640 37.1 29,804 34.7 11,836 39.7 41,321 34.6
Selling, general and administrative 20,355 18.2 18,331 21.4 2,024 11.0 25,090 21.0
expenses
Operating income 21,285 18.9 11,473 13.3 9,812 85.5 16,231 13.6
Non-operating income 1,744 1.6 679 0.8 1,065 156.8 1,070 0.9
Interest and dividend income 205 98 107 147
Other 1,538 580 958 922
Non-operating expenses 468 0.4 889 1.0 (420) (47.3) 1,409 1.2
Interest expenses 293 384 (91) 493
Other 175 504 (328) 916
Ordinary income 22,561 20.1 11,263 13.1 11,298 100.3 15,892 13.3
Extraordinary gain 155 0.1 64 0.0 91 142.2 68 0.1
Extraordinary loss 722 0.7 270 0.3 452 167.2 439 0.4
Income before income taxes 21,994 19.5 11,057 12.8 10,937 98.9 15,520 13.0
Income taxes and other 8,269 7.3 4,953 5.8 3,316 67.0 6,926 5.8
Minority interesti1/2' income of 25 0.0 36 0.0 (11) (31.3) 10 0.0
consolidated subsidiaries
Net income 13,700 12.2 6,067 7.0 7,632 125.8 8,583 7.2
Note: All figures are rounded down to nearest million yen.
Consolidated Statements of Retained Earnings(Unaudited)
(Millions of yen)
Nine months Nine months Year ended
ended ended March 31, 2004
December 31, 2004 December 31, 2003
Amount Amount Amount
Capital surplus
Capital surplus at beginning of the period 30,962 30,962 30,962
Increase in capital surplus
Gain on disposition of treasury stock 688 - -
Increase resulting from consolidation of a 1,000 - -
subsidiary
Capital surplus at end of the period 32,651 30,962 30,962
Earned surplus
Earned surplus at beginning of the period 55,836 48,686 48,686
Increase in earned surplus
Net income 13,700 6,067 8,583
Increase in earned surplus due to decrease of an - 378 378
affiliate
Decrease in earned surplus
Dividends 1,775 1,782 1,782
Bonuses to directors 50 30 30
Earned surplus at end of the period 67,711 53,320 55,836
Note: All figures are rounded down to nearest million yen.
Consolidated Statements of Cash Flows (Unaudited)
(Millions of yen)
Nine months Nine months Year ended
ended ended March 31, 2004
December 31, December 31,
2004 2003
Amount Amount Amount
Cash flows from operating activities :
Income before income taxes and minority interests 21,994 11,057 15,520
Depreciation and amortization 4,130 4,084 5,566
Increase (decrease) in notes and accounts receivable (6,843) (7,802) (11,293)
Increase (decrease) in inventories (425) 435 395
Increase (decrease) in notes and accounts payable 7,254 6,062 7,337
Other (1,488) 152 655
Subtotal 24,621 13,989 18,182
Income taxes paid (10,016) (2,028) (2,446)
Net cash provided by operating activities 14,605 11,961 15,735
Cash flows from Investing activities :
Payments for purchases of tangible fixed assets, (6,001) (3,802) (5,415)
marketable securities and investment securities
Proceeds from sales of tangible fixed assets, 157 1,223 2,782
marketable securities and investment securities
Other 49 (1,075) (1,048)
Net cash provided by investing activities (5,794) (3,654) (3,681)
Cash flows from financing activities :
Increase (decrease) in short-term debt - (3,310) (3,303)
Increase (decrease) in long-term debt (18) (20,741) (20,932)
Other (1,743) (2,893) (2,895)
Net cash provided by financing activities (1,761) (26,945) (27,132)
Effect of exchange rate changes on cash and cash 191 (256) (418)
equivalents
Net increase(decrease) in cash and cash equivalents 7,240 (18,895) (15,496)
Cash and cash equivalents at beginning of the period 57,037 72,533 72,533
Increase in cash and cash equivalents due to initial 4,734 - -
inclusion of a consolidated subsidiary
Decrease in cash and cash equivalents due to exclusion (15) - -
of a consolidated subsidiary
Cash and cash equivalents at end of the period 68,996 53,638 57,037
Note: All figures are rounded down to nearest million yen.
This information is provided by RNS
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