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AMWAY JAPAN ANNOUNCES STRONG FISCAL 1993 PERFORMANCE

 TOKYO, Oct. 29 /PRNewswire/ -- Amway Japan Limited (OTC: AWJNY) today announced the company's financial results for fiscal 1993, ended Aug. 31, 1993.
 Highlights
 -- Net sales exceeded original projections, rising 5.5 percent to 130.0 billion yen ($1.25 billion).
 -- Operating income increased 5.4 percent to 31.4 billion yen ($301.9 million).
 -- Net income declined 4.1 percent, to 15.9 billion yen ($152.9 million), as a result of higher income taxes, yielding a 12.2 percent return on sales.
 -- Shareholders' equity totaled 72.3 billion yen ($695.2 million), 11.8 percent higher than a year earlier, with shareholders' equity per share rising to 483.19 yen from 432.33 yen.
 -- Cash dividends per share were 60 yen, compared with 50 yen for fiscal 1992, and represented a payout ratio of 56.6 percent.
 Summary
 Amway Japan Limited
 (Yen in billions except per share data)
 Percent
 For the years ended Aug. 31, 1993 1992 Change
 Net Sales 130.0 yen 123.3 yen + 5.5
 Operating Income 31.4 29.7 + 5.4
 Ordinary Income 32.2 31.6 + 1.9
 Net Income 15.9 16.5 - 4.1
 Adjusted Earnings per Share 105.94 110.49 - 4.1
 Shareholders' Equity 72.3 64.7 +11.8
 Dividends per Share 60.00 50.00 +20.0
 Dividend Payout Ratio 56.6 pct. 45.3 pct.
 Note: Exchange rate at Aug. 31, 1993: $ equals 104 yen.
 FISCAL 1993 RESULTS
 Amway Japan Limited today announced the company's financial results for fiscal 1993, ended Aug. 31, 1993, as prepared in accordance with the Japanese Commercial Code. Amway Japan faced a difficult operating environment during the year but nevertheless recorded another solid performance: sales and ordinary income increased and the company's financial position was further enhanced. Higher taxes, however, led to a decline in net income. The company also registered increases in the number of distributors and the distributor renewal ratio.
 The president of Amway Japan, Richard S. Johnson, commented: "Amway Japan's good fiscal 1993 performance reflects the efforts of both the company and our distributors, working together, to identify and capitalize on opportunities in the Japanese market for high quality, competitively priced consumer products."
 Operating Results
 Net sales in fiscal 1993 totaled 130.0 billion yen, 5.5 percent higher than in fiscal 1992 and slightly above the projections made by management at the beginning of the fiscal year. Items that made an especially significant contribution to this sales growth included Artistry skin care products, Calcium Fiber drink, and the company's new water treatment system.
 Net sales by product group were as follows:
 Net Percent Percent of
 Sales Change Total
 (billions)
 Home Care 20.9 yen -2.1 16.1
 Housewares 26.6 +5.0 20.5
 Personal Care 39.0 +8.8 29.9
 Nutrition 31.0 +6.2 23.9
 Other 12.5 +8.7 9.6
 Total 130.0 +5.5 100.0
 Costs of goods sold was 35.7 billion yen, up 3.5 percent. As a result, the gross margin (i.e., net sales minus cost of goods sold) was 72.5 percent, an improvement on the 72.0 percent registered in fiscal 1992.
 Operating expenses amounted to 63.0 billion yen, a rise of 6.7 percent. The principal reasons for this increase were management's decision to increase distributor incentives, higher seminar costs, growth in the number of employees, and a rise in total office rent.
 Operating income increased 5.4 percent to 31.4 billion yen. After adjusting for non-operating income of 3.1 billion yen and non-operating expenses of 2.2 billion yen, ordinary income for fiscal 1993 was 32.2 billion yen, a gain of 1.9 percent.
 Income taxes increased 7.3 percent as a result of higher expenses that are not tax deductible, including non-accruable seminar expenses, the reserve for slow-moving inventory, and a valuation loss on investments. This rise in income taxes resulted in a 4.1 percent decline in net income to 15.9 billion yen.
 Financial Position
 The financial position of Amway Japan was further strengthened in fiscal 1993.
 Cash, including cash equivalents, time deposits, marketable securities, and mortgage instruments, totaled 77.3 billion yen at fiscal year-end, an increase of 10.6 percent from a year earlier. This represented over 100 percent of total shareholders' equity and more than 75 percent of total assets.
 Total shareholders' equity at year-end stood at 72.3 billion yen, a gain of 11.8 percent. Shareholders' equity per share rose to 483.19 yen from 432.33 yen.
 Key Ratios
 Management uses a variety of ratios to monitor the company's performance. Following is a summary of how the company performed in fiscal 1993 according to the most important of these ratios.
 1993 1992
 Return on sales (percent) 12.2 13.4
 Return on equity (percent) 23.1 27.2
 Return on assets (percent) 16.3 18.4
 Inventory turnover (times) 3.5 2.5
 Current ratio (percent) 309.9 301.4
 Note: Inventory turnover equals cost of goods sold divided by average inventory.
 The company's 12.2 percent fiscal 1993 return on sales, while lower than in the previous year, is considered a reasonable margin and is in line with management's objective of maintaining at least an 11 percent return on sales. Although return on equity and return on assets declined during the year, the company's performance according to these two measures is above average for its industry. The improvement in the company's inventory turnover indicates greater operational efficiency, and management is committed to making further progress in this area. The increase in an already-high current ratio illustrates the company's strong financial position.
 Dividends
 For fiscal 1993, Amway Japan will pay total dividends per share of 60.00 yen, an increase from the 50.00 yen of fiscal 1992. This represents a 56.6 percent payout ratio, up from 45.3 percent. This high dividend payout ratio -- among the highest of all Japanese OTC- registered companies -- is in line with the company's commitment to ensuring that shareholders receive an above-average return on their investment.
 Operating Highlights
 Fiscal 1993 was a year of accomplishment for Amway Japan. Richard Johnson, president, noted that "in fiscal 1993 we took initiatives on a variety of fronts to strengthen the partnership with our distributors and to leverage that partnership so as to generate higher sales and earnings."
 Included in the achievements of fiscal 1993 were the following:
 -- At fiscal year-end, there were approximately 1.23 million distributors, about 95,000 more than a year earlier and more than at any other time in Amway Japan's history.
 -- The renewal ratio -- the percentage of distributors who renew their distributor contracts -- was a record-high 71.7 percent.
 -- The number of new distributor applications was over 434,000, the second highest in company history.
 -- A total of 82 new products were introduced, bringing to about 350 the number of products marketed by Amway Japan distributors, and these new products represented 13.8 percent of fiscal 1993 net sales.
 -- Advanced orders for the company's new water treatment system exceeded 2.5 billion yen. The product was officially launched on Sept. 6, 1993, and fiscal 1994 sales are projected at 13.0 billion yen.
 -- A new distribution center was opened in Sapporo to facilitate faster product delivery to customers in Hokkaido, Japan's northernmost island.
 -- The company began a comprehensive upgrade of its computer system that will greatly increase order-processing and inventory-management capabilities and provide information to support marketing activities.
 -- Amway Japan upgraded employee training activities, such as having all new line managers spend one to three days with a distributor.
 -- The company made across-the-board increases in staffing, including significantly increasing the number of employees who are responsible for maintaining close contact with distributors.
 Outlook for Fiscal 1994
 Although the Japanese economy is likely to remain weak over the next year, management is confident that growth in sales and earnings can be achieved in fiscal 1994. Specifically, management projects that the company will record increases of 7.7 percent in net sales, 6.5 percent in ordinary income, and 8.8 percent in net income.
 A major focus of fiscal 1994 will be helping distributors maximize their sales and earnings potential and thereby enhancing the productivity of Amway Japan's distributor network. To this end, the company plans to:
 -- Gather segmentation data to help determine more precisely the purchasing patterns and product preferences of distributors and their customers.
 -- Work more closely with top-performing distributors to enhance the two-way information flow between the company and the market.
 -- Further expand and upgrade distributor training programs;
 -- Add new offerings to the company's product line, especially in Home Care.
 In addition to the above activities, management is reviewing investments in the further expansion of the company's operations. Management is, for example, considering the construction of additional distribution facilities, seeking a suitable site for a permanent Tokyo headquarters office, and exploring strategic alliances with Japanese corporations.
 Management is also considering recommending payment of a special interim dividend in fiscal 1994 as a means of returning to shareholders that capital that is in excess of the funds required for the sound expansion of Amway Japan's business.
 Amway Japan Limited, established in 1977, is a direct-selling company that distributes household products through a network of more than one million independent distributors in Japan. Market capitalization is approximately $5 billion. The company established a sponsored American Depositary Receipt program with the Bank of New York in February 1993. One ADR represents one ordinary share. Amway Japan is registered on the Tokyo over-the-counter market (securities code: 9821).
 AMWAY JAPAN LIMITED
 Selected Financial Data
 (Japanese Commercial Code basis)
 (Yen in millions except per share data)
 Percent
 Years ended Aug. 31, 1993 1992 Change
 Statements of Income and
 Retained Earnings
 Net sales 130,028 yen 123,254 yen 5.5
 Total costs and expenses 98,678 93,522 5.5
 Operating income 31,350 29,732 5.4
 Other income (Net) 861 1,871 (54.0)
 Ordinary income 32,211 31,603 1.9
 Income taxes 16,360 15,240 7.3
 Net income 15,851 16,531 (4.1)
 Retained earnings, beginning of year 31,018 22,582 37.4
 Appropriations (4,938) (4,115) 20.0
 Retained earnings, end of year 41,931 yen 34,999 yen 19.8
 Amounts per share:
 Net income 105.94 yen 110.49 yen (4.1)
 Cash dividends applicable
 to the year 60.00 yen 50.00 yen 20.0
 Percent
 At Aug. 31, 1993 1992 Change
 Balance Sheets
 Assets
 Current assets 91,984 yen 85,351 yen 7.8
 Net property and equipment 2,320 2,270 2.2
 Total investments and other assets 7,672 5,388 42.4
 Total Assets 101,976 yen 93,008 yen 9.6
 Liabilities and Shareholders' Equity
 Total current liabilities 29,679 28,321 4.8
 Total shareholders' equity 72,297 64,687 11.8
 Total Liabilities and
 Shareholders' Equity 101,976 yen 93,008 yen 9.6
 Note: All figures in this release have been rounded up or down, as appropriate.
 -0- 10/29/93
 /CONTACT: Yoshiki Osako (Japan), investor relations manager of Amway Japan Limited, 011-813-5434-8478, or Cameron King (New York) of Gavin Anderson & Company, 212-921-1060/
 (AWJNY)


CO: Amway Japan Limited ST: IN: HOU SU: ERN

TW -- NY036 -- 8510 10/29/93 12:20 EDT
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Date:Oct 29, 1993
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