Financial Report for the 9-month Period Ended September 30, 2011 (Consolidated - Japanese Standards)

Transcription

1 November 4, 2011 Financial Report for the 9-month Period Ended September 30, 2011 (Consolidated - Japanese Standards) Company name: DAITO ELECTRON CO., LTD. Stock exchange listing: 1st Sections of the Tokyo Stock Exchange and the Osaka Securities Exchange Code number: 7609 URL: Representative: Isayuki Mae, President Contact: Tomio Nishida, Managing Director +81 (6) Scheduled date of submitting quarterly statement: November 11, 2011 Scheduled date of starting dividend payment: - Support explanatory material for quarterly settlement: Not prepared Explanatory meeting for quarterly settlement: Not held (Figures less than a million yen are rounded down.) 1. Financial results for 9-month period ended September 30, 2011 (Consolidated) (1) Operating results (Accumulated) (Figures shown in percentages indicate the year-on-year rates of increase/decrease.) Net sales Operating income Ordinary income Million yen % Million yen % Million yen % 3Q/ , Q/ , Quarterly net income Quarterly net income Diluted quarterly net income per share per share Million yen % Yen Yen 3Q/ (35.8) Q/ (Note) Diluted quarterly net income per share is not shown because there existed no potential common stocks. (2) Financial standing Total assets Net assets Shareholders equity ratio Net assets per share Million yen Million yen % Yen 3Q/ ,906 11, , FY ,302 10, (Reference) Shareholders equity 3Q/2011: 11,188 million yen FY2010: 10,759 million yen 2. Dividend Payments Annual dividend (Yen) (Record Date) 1Q end 2Q end 3Q end fiscal end FY FY FY FY2011 (forecast) (Note) Revision of the dividend payment forecast during the current quarter: None 3. Consolidated operating estimates for fiscal 2011 ending December 31, 2011 (Figures shown in percentages indicate the year-on-year rates of increase/decrease.) Net sales Operating income Ordinary income Net income Net income per share Mil.yen % Mil.yen % Mil.yen % Mil.yen % Yen Full-year 41, ,000 (11.1) 950 (8.6) 810 (46.5) (Note) Revision of the consolidated operating estimates during the current quarter: Revised 1

2 4. Other (For details please refer to p.4 Other Information of Appendix.) (1) Change in important subsidiaries (specific subsidiaries that entail a change in the scope of consolidation) during the quarter: None (2) Simplified accounting procedures and special accounting procedures (specially applicable to preparation of quarterly consolidated financial statements: Applied (3) Change in accounting principles and procedures, representation method, etc., pertaining to preparation of quarterly consolidated financial statements (those to be stated in the Change in Significant Matters Fundamental to Prepare Quarterly Consolidated Financial Statements ): 1 Change associated with revisions in accounting standards, etc: Changed 2 Other change: None Note) Change in accounting principles and procedures, representation method, etc. pertaining to preparation of quarterly consolidated financial statements to be stated in the Change in Significant Matters Fundamental to Prepare Quarterly Consolidated Financial Statements. (4) Number of outstanding shares (common shares) 1 number of outstanding shares at period-end (including treasury stock) 3Q 2011 : 11,155,979 shares FY 2010 : 11,155,979 shares 2 number of treasury shares at period -end 3Q 2011 : 189,897 shares FY 2110 : 264,397 shares 3 average number of shares during period (accumulated) 3Q 2011 : 10,927,077 shares 3Q 2010 : 10,854,908 shares * Representation on implementation status of the quarterly review procedures This Quarterly Financial Report is not subject to the quarterly review procedures under the Financial Instruments and Exchange Act, and the review procedures for quarterly financial statements has not been completed at the time of disclosure of this Report. * Explanations on appropriate use of the earnings forecasts and other special comments Please note that all the estimates and statements with respect to the earnings forecasts above are forward-looking statements that reflect our views based on currently available information and that actual results may differ depending on various factors that may arise in the future. For the prepositions regarding the above forecasts, please refer to 3. Qualitative information on forecasted consolidated operating results on page 3. 2

3 Contents of Appendix 1. Qualitative information on consolidated operating results for the quarter (1) Qualitative information on consolidated business results (2) Qualitative information on consolidated financial conditions (3) Qualitative information on forecasted consolidated operating results 2. Other Information (1) Outline of change in significant subsidiaries (2) Outline of simplified accounting procedures and special accounting procedures (3) Outline of change in accounting principles and procedures, representation method, etc. 3. Quarterly Consolidated Financial Statements (1) Consolidated Balance Sheet (2) Consolidated Statement of Income (accumulated) (3) Consolidated Statement of Cash Flows (4) Notes regarding the premise of a going concern (5) Segment Information (6) Notes for cases of significant change in the amount of shareholders equity 3

4 1. Qualitative information on consolidated operating results for the quarter (1) Qualitative information on consolidated business results The Japanese economy during these three quarters, with all the serious impacts of the Great Eastern Japan Earthquake on corporate production and logistics networks, etc. in the former half, showed a recovery at a faster pace than expected, and remained strong on the whole particularly in the export industry boosted by the emerging national markets enjoying ongoing economic growth. In the latter half, however, with domestic and overseas businesses showing a tendency to curtail capital spending or adjust production and inventory affected by the slowdown of the European and the US economies as well as the rapid appreciation of the yen, the business environment drastically changed, which cast a shadow of uncertainty about the future outlook. Under these circumstances, the Group, having performed well until the second quarter, made a disappointing result in this third quarter, greatly affected by a sudden turn in the business environment as stated above. Consequently, the Group obtained the following results in these three quarters: net sales 31,617 million yen (up 9.6% over the same term last year); operating income 957 million yen (up 3.5%); ordinary income 893 million yen (up 2.1%); and quarterly net income 601 million yen (down 35.8%). The outline of segmental performance is as follows. As the Group changed its segment classification this year, no year-on-year comparisons of the segmental results are shown. For details of the segment classification, please refer to (5) Segment Information under 3. Quarterly Consolidated Financial Statements. - Electronic Equipment and Components As for this segment, connectors and harnesses of the Electronic Components & Assembly Products, which are the Company s major products, Power Supply Equipment, which is a focus line, embedded board computers of the Embedded Systems, and videoconferencing systems and contactless IC card systems of the Information Systems posted good results. On the other hand, CCD cameras, lens/lights, etc. of the Image-Related Equipment & Parts and product lines of Semiconductors remained sluggish affected by stagnant corporate production after the Great Eastern Japan Earthquake as well as a slowdown of overseas economies and the rapidly rising yen. Consequently, net sales of this segment totaled 18,040 million yen with a segmental (operating) income of 867 million yen. - Manufacturing Equipment In this segment, in addition to solar cell manufacturing equipment of the Energy Device Manufacturing Equipment, which is among the focus area worked on since the previous year, silicon wafer manufacturing equipment of the Electronic Material Manufacturing Equipment also made good sales and led the performance of this segment. However, flat panel display manufacturing equipment of FPD Manufacturing Equipment and the Optical Device Manufacturing Equipment products remained slow affected by restrained corporate capital spending. Consequently, net sales of this segment totaled 9,010 million yen with a segmental (operating) income of 337 million yen. - Domestic Subsidiaries In this segment, though Daito Denso Co., Ltd., which is engaged in the electronic equipment and component business, stayed firm, the performance of Daitron Technology Co., Ltd., which is engaged mainly in the manufacturing equipment business, remained poor, affected by restrained corporate capital spending. 4

5 Consequently, net sales of this segment totaled 1,719 million yen with a segmental (operating) income of 152 million yen. - Overseas Subsidiaries In this segment, Daitron (Shanghai) Co., Ltd., which operates for the Chinese market, driven by the continuously growing economy there, remained strong. However, with great influences of the stagnation of the European and the US economies and the resultant slowing growth of emerging national markets in addition to the lowered profit margins due to the exchange rate and increased competition, the segment as a whole was in a severe situation, especially in terms of profit. Consequently, net sales of this segment totaled 2,847 million yen with a segmental (operating) loss of 152 million yen. (2) Qualitative information on consolidated financial conditions a) Assets, liabilities, and net assets Total assets at the end of this quarter amounted to 27,906 million yen (up 604 million yen over the previous fiscal-end) mainly due to the increased inventories. Liabilities stood at 16,715 million yen (up 176 million yen) mainly due to the increases in allowances for bonuses and advance received. Net assets totaled 11,191 million yen (up 428 million yen) as a result of increased retained earnings, etc. Consequently, the shareholders equity ratio stood at 40.1%, up 0.7 point over the end of the previous fiscal year. b) Cash Flow The balance of cash and cash equivalents at the end of the current quarter (hereinafter called Fund ) stood at 6,884 million yen, up 925 million yen over the previous fiscal-end. Below is the status of each cash flow during these three quarters and the factors. (Cash flows from operating activities) Net income before taxes and adjustments stood at 897 million yen (929 million yen profit in the same term last year). The Fund increased 1, 047 million yen (1,630 million yen increase in the same term last year) mainly as a result of the decreases in accounts receivable and advance payments as well as increases in advance received and allowances, despite the increase in inventories and the decrease in trade notes and accounts payable. (Cash flows from investing activities) The Fund decreased 83 million yen (59million yen decrease in the same term last year) as a result of the acquisition of tangible fixed assets. (Cash flows from financing activities) The Fund decreased 1 million yen (323 million yen decrease in the same term last year) as a result of dividend payments, etc. despite the funding mainly by loans from banks. (3) Qualitative information on forecasted consolidated operating results In the business environment around the Group, a sense of uncertainty about the future is increasing with a number of causes for concern coming to light such as the influences of the stagnant European economy starting to extend to Asian and other emerging national markets, the continuous high-yen trend in the exchange market, and the effect on corporate production of the immense flood in Thailand, which damage is still spreading. Based on such business circumstances, the Group carefully examined the future prospects for the fourth 5

6 quarter of the current accounting year, and also considering the results in both sales and profits for these three quarters falling below the original forecasts, revised its operating estimates contained in the Financial Report for the 6-month period ended June 30, 2011, the Japanese edition of which was announced on August 3, Other Information (1) Outline of change in significant subsidiaries: N.A. (2) Outline of simplified accounting procedures and special accounting procedures a) Simplified accounting procedures - Evaluation method for inventories: Inventories are calculated in a reasonable manner based on the physical inventory at the previous period-end without implementing the physical inventory. As for inventory write-down, exclusively those whose profitability is obviously declining are written down with the net sales price estimated. - Calculation method for Depreciation on fixed assets: The depreciation of assets to which the declining-balance method is applicable is calculated by proportionally apportioning the amount pertaining to the relevant fiscal year to each quarter. - Calculation method for income tax, etc., deferred tax assets, and deferred tax liabilities: In calculating the amounts of payment for income tax, etc., deferred tax assets, and deferred tax liabilities, only significant taxable/deductible items and tax credit items are taken into account. As for the possibility of realization of deferred tax assets, in case there was no remarkable change in business environments or temporary differences after the previous fiscal-end, it is decided based on the forecast of future performance and the tax planning as used in the settlement of accounts for the previous year, while in case there was any remarkable change in business environments or temporary differences after the previous fiscal-end, it is decided based on the forecast of future performance and the tax planning as used in the settlement of accounts for the previous year with the effects of the relevant remarkable change taken into consideration. b) Accounting procedures specially applicable to preparation of quarterly consolidated financial statements: N.A. (3) Outline of change in accounting principles and procedures, representation method, etc.: Application of the accounting standards for asset retirement obligations As from the current quarter, the Company has applied the Accounting Standards regarding Asset Retirement Obligations (Corporate Accounting Standards No.18: March 31, 2008) and the Application Guidelines for the Accounting Standards regarding Asset Retirement Obligations (Corporate Accounting Standards Application Guidelines No.21: March 31, 2008). After such application, both operating income and ordinary income in these three quarters decreased by 4,883 thousand yen respectively, and net income before taxes and adjustments by 42,215 thousand yen. The change in asset retirement obligations after these accounting standards, etc. are applied is 43,842 thousand yen. 6

7 5. Quarterly Consolidated Financial Statements (1) Consolidated Balance Sheet (Unit: thousand yen) at September 30, 2011 at December 31, 2010 Assets Current assets Cash and deposits 6,914,052 5,989,038 Notes and accounts receivable - Trade 11,031,927 11,483,201 Goods and Products 2,068,750 1,677,380 Work in process 1,236, ,223 Raw materials 191, ,706 Other current assets 1,200,888 1,460,687 Allowance for doubtful accounts (3,290) (62,089) Total current assets 22,640,222 21,680,149 Fixed assets Tangible fixed assets 3,504,623 3,553,152 Intangible fixed assets 376, ,671 Investments and other assets Other investments and other assets 1,391,995 1,596,263 Allowance for doubtful accounts (6,645) (7,074) Total investments and other assets 1,385,350 1,589,188 Total fixed assets 5,266,744 5,622,013 Total assets 27,906,967 27,302,162 7

8 at September 30, 2011 at December 31, 2010 Liabilities Current liabilities Notes and accounts payable - trade 9,990,191 10,481,375 Short-term loans payable 478, ,327 Long-term loans payable due within one year 390, ,670 Accrued Income taxes, etc. 306,392 55,528 Allowances for bonuses 349,908 - Other allowances 87,125 - Other current liabilities 1,853,201 2,011,091 Total current liabilities 13,455,680 12,968,992 Fixed liabilities Long-term loans payable 1,472,080 1,771,430 Allowance for employees retirement benefits 1,508,833 1,460,799 Asset retirement obligation 44,533 - Other fixed liabilities 234, ,627 Total fixed liabilities 3,259,541 3,569,856 Total liabilities 16,715,222 16,538,849 Net assets Shareholders equity Common stock 2,200,708 2,200,708 Capital surplus 2,482,896 2,482,896 Retained earnings 6,811,071 6,318,748 Treasury stock (96,722) (134,493) Total shareholders equity 11,397,954 10,867,860 Valuation and translation adjustments Difference from evaluation of other investment securities (777) 70,290 Deferred gains or losses on hedges 2,983 2,808 Foreign currency translation adjustments (211,781) (181,011) Total valuation and translation adjustments (209,575) (107,912) Minority interests 3,366 3,366 Total net assets 11,191,745 10,763,313 Total liabilities and net assets 27,906,967 27,302,162 8

9 (2) Consolidated Statement of Income (Unit: thousand yen) 9 months Ended September 30, months Ended September 30, 2011 Net sales 28,835,764 31,617,521 Cost of sales 22,566,321 24,844,584 Gross profit 6,269,442 6,772,936 Selling, general and administrative expenses 5,344,071 5,815,484 Operating income 925, ,451 Non-operating income Interest income 6,644 5,764 Dividend income 8,613 10,583 Equity in profit of affiliated companies carried by equity method 14,351 - Other non-operating income 29,342 30,634 Total non-operating income 58,952 46,982 Non-operating expenses Interest expense 43,868 38,492 Loss on sale of trade notes 4,243 4,838 Equity in loss of affiliated companies carried by equity method 51,027 51,908 Other non-operating losses 10,142 15,445 Total non-operating expenses 109, ,685 Ordinary income 875, ,748 Extraordinary income Gain on sale of fixed assets 2, Gain on sale of investment securities Reversal of allowance for doubtful debts 61,078 59,046 Total extraordinary income 63,239 59,414 Extraordinary losses Loss on sale and retirement of fixed assets 2,864 2,425 Valuation loss on investment securities 5,604 15,687 Effect of application of asset retirement obligation accounting standards - 37,331 Total extraordinary losses 8,468 55,444 Net income before taxes and adjustments 929, ,718 Income, inhabitants and enterprise taxes 22, ,339 Income tax and other taxes returned (15,299) - Income taxes-deferred (14,283) (3,858) Total income taxes (6,741) 296,480 Net income before minority shareholders profit and loss adjustments - 601,238 Net income 936, ,238 9

10 (3) Consolidated Statement of Cash Flows (Unit: thousand Yen) 9 months Ended September 30, months Ended September 30, 2011 Cash flows from operating activities Net income before taxes and adjustments 929, ,718 Depreciation and amortization 273, ,154 Amortization of goodwill 32,031 - Interest and dividend income (15,258) (16,347) Interest expense 43,868 38,492 Equity in (profit)/loss of affiliated companies carried by equity method (14,351) - (Gain)/Loss on sale and retirement of fixed assets 810 2,056 (Gain)/Loss on sale of investment securities (106) - Valuation (gain)/loss on investment securities 5,604 15,687 Effect of application of asset retirement obligation accounting standards - 37,331 Decrease/(increase) in accounts receivable (2,853,629) 390,208 Decrease/(increase) in inventories (1,145,096) (701,996) Decrease/(increase) in advance payment 7, ,890 Increase/(decrease) in trade notes and accounts payable 3,610,952 (429,518) Increase/(decrease) in advance received 679, ,056 Increase/(decrease) in allowances 275, ,417 Others (176,416) (318,058) Sub-total 1,654,211 1,119,093 Interest and dividend received 16,079 16,475 Interest paid (43,372) (38,343) Income tax and other taxes (paid) / returned 3,241 (49,480) Net cash provided by/(used in) operating activities 1,630,160 1,047,743 Cash flows from investing activities Payment for purchase of tangible fixed assets (34,481) (74,824) Proceeds from sale of tangible fixed assets 4, Payment for purchase of intangible fixed assets (22,679) (3,256) Payment for purchase of investment securities (13,216) (15,083) Others 5,822 8,815 Net cash provided by/(used in) investing activities (59,788) (83,623) Cash flows from financing activities Net increase/(decrease) in short-term loans payable (107,700) 322,500 Repayment of long-term loans payable (78,000) (172,339) Payment for purchase of treasury stock (21) - Proceeds from disposal of treasury stock - 45,395 Dividends paid (54,274) (109,029) 10

11 Others (83,069) (87,589) Net cash provided by/(used in) financing activities (323,065) (1,062) Effect of exchange rate changes on cash and cash equivalents (37,412) (38,044) Increase/(decrease) in cash and cash equivalents 1,209, ,014 Cash and cash equivalents at beginning of period 4,277,251 5,959,038 Cash and cash equivalents at quarter end 5,487,144 6,884,052 11

12 (4) Notes regarding the premise of a going concern: N.A. (5) Segment Information [Segment Information by business type] - 9 months Ended September 30, 2010 (January 1, 2010 to September 30, 2010) The Company and its consolidated subsidiaries are mainly engaged in the manufacture and sale of industrial electronic products. Net sales and operating income/loss of such industry segment respectively account for more than 90% of the totals of all the segments. Information for this industry segment, therefore, is not shown here. [Segment Information by location] - 9 months Ended September 30, 2010 (January 1, 2010 to September 30, 2010) Net sales in Japan account for more than 90% of the total of all the segments. Information for such industry segment, therefore, is not shown here. [Overseas Sales] - 9 months Ended September 30, 2010 (January 1, 2010 to September 30, 2010) (Unit: thousand yen) North America Europe Asia Total Ⅰ Overseas sales 915, ,245 5,045,242 6,175,434 Ⅱ Consolidated sales ,835,764 Ⅲ Percentage of overseas sales to consolidated sales 3.2% 0.7% 17.5% 21.4% (Notes) 1. The regional divisions are based on geographic adjacency. 2. The regional breakdown is as follows: 1 North America: The United States, etc. 2 Europe: The United Kingdom, Germany, Italy, France, etc. 3 Asia: Taiwan, China, South Korea, Hong Kong, Malaysia, Thailand, Indonesia, etc. 3. Overseas sales are the total of sales by the Company and its consolidated subsidiaries in the countries and regions outside Japan (Inter-company sales between consolidated companies are not included). [Segment Information] 1. Outline of Report Segments The Report Segments of the Group are those units composing the Group whose separate financial information is available and which are subject to regular reviews for the Board of Directors to determine the allocation of management resources and evaluate the performance. In this Group, the Company has organized departments by goods and product, each of which operates under comprehensive domestic and overseas strategies developed for the goods and products it handles, while each consolidated subsidiary is an independent management unit, whose board of director determines the allocation of its management resources and evaluates the performance. Based on such segments by goods and product for the Company and by location for overseas subsidiaries, the Group has the following four Report Segments: Electronic Equipment and Components; Manufacturing Equipment; Domestic Subsidiaries; and Overseas Subsidiaries. Below are the main goods/products and services of each Report Segment: 1 Electronic Equipment and Components: Sale of electronic components & assembly products, semiconductors, embedded systems, power supply equipment, image-related equipment & parts, information systems, and other electronic equipment & components, and manufacture of power supply equipment, etc. 2 Manufacturing Equipment: Sale of optical device manufacturing equipment, LSI manufacturing equipment, flat panel display manufacturing equipment, electronic materials manufacturing equipment, and energy device manufacturing equipment, and manufacture of electronic materials manufacturing equipment, etc. 3 Domestic Subsidiaries: Development, manufacture, and sales of semiconductor testing equipment, cable harnesses, printed-circuit boards, etc. 12

13 4 Overseas Subsidiaries: Sales and import/export of electronic equipment & components and manufacturing equipment, etc. in the North American and the Asian markets 2. Data on the amounts of net sales and profit or loss by Report Segment: - 9 months Ended September 30, 2011 (January 1, 2011 to September 30, 2011) Net sales -Sales to external customers -Intersegme ntal sales or transfer Electronic Equipment and Components 18,040, ,929 Manufacturing Equipment 9,010, ,338 Report Segment Domestic Subsidiaries 1,719,661 2,111,255 Overseas Subsidiaries 2,847, ,173 Total 31,617,521 3,594,697 (Unit: thousand yen) Adjustment (*1) - (3,594,697) Amount posted on Quarterly Consol. Financial Statements (*2) 31,617,521 Total 18,958,257 9,407,435 3,830,916 3,015,609 35,212,218 (3,594,697) 31,617,521 Segmental 867, , ,200 (43,861) 1,313,720 (356,268) 957,451 income/(loss) (Notes) 1. Adjustment of Segmental income/(loss) of (356,268) thousand yen includes the intersegmental transaction elimination of 56,673 thousand yen and Corporate allocation not allocated to each Report Segment of (412,942) thousand yen. The main portion of Corporate allocation is Selling, general and administrative expenses not attributable to Report Segments. 2. Segmental income/(loss) is adjusted to Operating income on the quarterly Consolidated Statement of Income 3. Information on Impairment loss on fixed assets or Goodwill, etc. of each Report Segment: N.A. (Additional Information) As from the first quarter, the Company has applied the Accounting Standards regarding Disclosure of Segment Information, etc. (Corporate Accounting Standards No.17: March 27, 2009) and the Application Guidelines for the Accounting Standards regarding Disclosure of Segment Information, etc. (Corporate Accounting Standards Application Guidelines No.20: March 21, 2008). (6) Notes for significant change in the amount of shareholders equity: N.A. - 13