KAWASAKI, Japan, Aug 6, 2010 - (ACN Newswire) - Pioneer Corporation today announced its consolidated first-quarter business results for the period ended June 30, 2010.
Consolidated Financial Highlights
(In millions of yen except per share information)
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Three months ended June 30
2010 2009 % to
prior year
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Net sales 109,848 95,757 114.7%
Operating income (loss) 2,368 (8,756)
Ordinary income (loss) 1,685 (8,941)
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Net income (loss) 598 (4,099) %
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Net income (loss) 1.86 (19.99)
per share
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Consolidated Business Results
For the first quarter of fiscal 2011, the three months ended June 30, 2010, consolidated net sales increased 14.7% from the first quarter of fiscal 2010 to 109,848 million yen (US$1,248.3 million). This was mainly the result of increased sales of Blu-ray Disc driverelated products, and higher car audio product sales in both OEM and consumer markets. This was despite decreased sales of plasma displays, from which business Pioneer withdrew in fiscal 2010, and the impact of the Japanese yen's appreciation.
Pioneer posted operating income of 2,368 million yen (US$26.9 million), compared with an operating loss of 8,756 million yen in the first quarter of fiscal 2010. This mainly reflected substantial improvement in the gross profit margin owing to the benefits of restructuring, in addition to higher gross profit in line with sales growth, despite increased selling, general and administrative (SG&A) expenses compared with the first quarter of fiscal 2010, when Pioneer recorded lump-sum income from patents. Net income was 598 million yen (US$6.8 million) compared with a net loss of 4,099 million yen, which included a gain on sale of patents, in the first quarter of fiscal 2010.
During the first quarter of fiscal 2011, the average value of the Japanese yen appreciated 5.8% against the U.S. dollar and 13.3% against the euro, compared with the first quarter of fiscal 2010.
Car Electronics sales increased 15.6% year on year to 62,698 million yen (US$712.5 million). In car navigation systems, OEM sales decreased mainly in Japan. Consumermarket sales declined, due partly to a shortage of certain components in Japan. In car audio products, consumer-market sales rose primarily in Central and South America and Europe. OEM sales increased in Japan and North America. Total OEM sales in this business segment accounted for approximately 45% of Car Electronics sales, compared with approximately 39% in the first quarter of fiscal 2010.
By geographic region, sales in Japan increased 6.6% to 26,256 million yen (US$298.4 million), and overseas sales increased 23.1% to 36,442 million yen (US$414.1 million).
This segment reported operating income of 1,987 million yen (US$22.6 million) compared with an operating loss of 8,693 million yen in the first quarter of fiscal 2010. This improvement was mainly due to a large improvement in the gross profit margin owing to restructuring benefits, in addition to higher gross profit in line with sales growth.
Home Electronics sales rose 16.2% year on year to 35,057 million yen (US$398.4 million). This mainly reflected substantial growth in sales of Blu-ray Disc drive-related products as an optical disc joint venture commenced operations in the second half of fiscal 2010, in addition to favorable sales of AV receivers, primarily in North America.
By geographic region, sales in Japan increased 83.3% to 14,858 million (US$168.8 million), while overseas sales declined 8.4% to 20,199 million yen (US$229.5 million).
Operating income in this segment was 6 million yen (US$0.1 million), compared with 972 million yen in the first quarter of fiscal 2010. This decrease mainly reflected the recording of lump-sum income from patents related to plasma displays in the first quarter of fiscal 2010, despite growth in sales of Blu-ray Disc drive-related products and restructuring benefits in the period under review.
In the Others segment, sales increased 6.5% year on year to 12,093 million yen (US$137.4 million), mainly due to increased sales of electronics devices and parts, and factory automation systems.
By geographic region, sales in Japan decreased 1.4% to 7,812 million yen (US$88.8 million), while overseas sales increased 24.7% to 4,281 million yen (US$48.6 million).
This segment reported operating income of 94 million yen (US$1.1 million) compared with an operating loss of 1,567 million yen in the first quarter of fiscal 2010. This improvement was mainly the result of increased sales and restructuring benefits.
Notes:
1. Operating income (loss) in each business segment represents operating income (loss) before elimination of intersegment transactions.
2. In the first quarter of fiscal 2011, AV accessories were reclassified from the Others segment to the Home Electronics segment. Consequently, figures for the first quarter of fiscal 2010 were also reclassified in accordance with the presentation used in the first quarter of fiscal 2011.
Consolidated Financial Position
Total assets as of June 30, 2010 were 373,986 million yen (US$4,249.8 million), a decrease of 15,733 million yen from March 31, 2010, mainly reflecting decreases in trade receivables and property, plant and equipment, despite increased inventories. Inventories increased 6,010 million yen to 61,060 million yen (US$693.9 million). This increase reflected the stockpiling of car electronics and home electronics inventories in line with sales plans for the second quarter onward. Trade receivables were 64,052 million yen (US$727.9 million), a decrease of 6,748 million yen mainly reflecting progress with the collection of trade receivables. Property, plant and equipment decreased 6,769 million yen to 83,295 million yen (US$946.5 million), mainly due to the sale of land and buildings owned by subsidiaries, in addition to curbs on capital expenditures.
Total liabilities as of June 30, 2010 were 291,463 million yen (US$3,312.1 million), a decrease of 7,602 million yen from March 31, 2010. This mainly reflected a decrease in short-term borrowings due to the repayment of debt, as well as lower accrued expenses.
Total equity was 82,523 million yen (US$937.8 million), a decrease of 8,131 million yen from March 31, 2010. This chiefly reflected a deterioration of 6,169 million yen in foreign currency translation adjustments due to the yen's sharp appreciation, in addition to a decrease of 2,880 million yen in unrealized gain on available-for-sale securities due to the decline of market price of investment securities.
Cash Flows
During the first quarter of fiscal 2011, operating activities provided net cash of 6,255 million yen (US$71.1 million). The main factors providing cash were the addback of non-cash expenses, namely depreciation and amortization of 8,162 million yen (US$92.8 million), an increase in trade payables of 5,651 million yen (US$64.2 million) and a decrease in trade receivables of 4,476 million yen (US$50.9 million), despite an increase in inventories of 8,487 million yen (US$96.4 million). Investing activities used net cash of 679 million yen (US$7.7 million). This mainly reflected capital expenditures of 5,125 million yen (US$58.2 million), despite proceeds of 3,036 million yen (US$34.5 million) from the sale of property, plant and equipment, mainly land and buildings owned by subsidiaries. Financing activities used net cash of 3,485 million yen (US$39.6 million), mainly for the repayment of 2,696 million yen (US$30.6 million) in short-term borrowings. In addition, cash and cash equivalents denominated in foreign currencies declined by 2,987 million yen (US$33.9 million) upon translation into Japanese yen, due to the yen's sharp appreciation.
Consequently, cash and cash equivalents as of June 30, 2010 were 83,246 million yen (US$946.0 million), down 896 million yen from March 31, 2010.
Business Forecasts for Fiscal 2011
Consolidated business forecasts for fiscal 2011, ending March 31, 2011, have not been changed from those announced on May 13, 2010, as shown below.
In the first quarter of fiscal 2011, sales and profits were both better than initially planned, but we have conservatively estimated consumption trends and the competitive environment from the second quarter of fiscal 2011 onward. The yen-U.S. dollar and yeneuro exchange rate assumptions for these consolidated business forecasts are unchanged at 90 yen and 120 yen, respectively.
(In millions of yen)
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First half
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Forecasts for Results for Percent
fiscal 2011 fiscal 2010 changes
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Net sales 223,500 203,733 +9.7%
Operating income (loss) 6,000 (22,760)
Ordinary income (loss) 3,500 (24,270)
Net income (loss) 7,500 (40,857) %
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Full year
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Forecasts for Results for Percent
fiscal 2011 fiscal 2010 changes
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Net sales 480,000 438,998 +9.3%
Operating income (loss) 17,000 (17,514)
Ordinary income (loss) 12,500 (24,740)
Net income (loss) 11,000 (58,276) %
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Material Events Regarding Going Concern Assumption
Pioneer's financial position remained under strain in fiscal 2010, due to a sharp drop in net sales and large losses. However, Pioneer's financial position has improved substantially, mainly due to measures implemented in March 2010, including stable funding secured through the refinancing of loans from financial institutions, and capital increases through an international offering.
In the first quarter of fiscal 2011, Pioneer restored profitability at the operating income and net income levels, supported by a large increase in net sales compared with the first quarter of fiscal 2010. As in fiscal 2010, Pioneer has continued to sell assets that have a low degree of relevance to its main businesses. The sale of the Company's former head office in Meguro, Tokyo was completed on schedule at the end of July 2010. In light of the above, Pioneer plans to use its own internal funds for the redemption of 60 billion yen in the aggregate principal amount of its convertible bonds due in March 2011.
As a result of the foregoing, the Company believes that material uncertainty about Pioneer's ability to continue its business activities into the future has been largely resolved.
Cautionary Statement with Respect to Forward-Looking Statements
Statements made in this release with respect to our current plans, estimates, strategies and beliefs, and other statements that are not historical facts are forward-looking statements about our future performance. These statements are based on management's assumptions and beliefs in light of the information currently available to it. We caution that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forwardlooking statements, and therefore you should not place undue reliance on them. It is not our obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We disclaim any such obligation. Risks and uncertainties that might affect us include, but are not limited to: (i) general economic conditions in our markets, particularly levels of consumer spending, and levels of demand in the major industrial sectors which we serve; (ii) exchange rates, particularly between the Japanese yen and the euro, the U.S. dollar, and other currencies in which we make significant sales or in which our assets and liabilities are denominated; (iii) our ability to continuously design and develop and win acceptance for our products in extremely competitive markets; (iv) our ability to successfully implement our business strategies; (v) the success of our joint ventures, alliances and other business relationships with third parties; (vi) our ability to access funding; (vii) our continued
ability to devote sufficient resources to research and development, and capital expenditure; (viii) our ability to ensure the quality of our products; and (ix) the outcome of contingencies.
Contact:
Investor Relations Department, Corporate Communications Division
Pioneer Corporation, Japan
Phone: +81-44-580-1004
Fax: +81-44-580-4064
E-mail: pioneer_ir@post.pioneer.co.jp
IR Website: http://pioneer.jp/ir-e/
Topic: Press release summary
Source: Pioneer Corporation
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