Kobayashi Pharmaceutical Reports Financial Results for the First Half Ended Sept. 30, 2006.Osaka Osaka (ō`säkä), city (1990 pop. 2,623,801), capital of Osaka prefecture, S Honshu, Japan, on Osaka Bay, at the mouth of the Yodo River. , Japan, Nov 13, 2006 - (JCN JCN Japan Corporate News JCN Journal of Cognitive Neuroscience JCN Journal of Cardiovascular Nursing JCN Journal of Christian Nursing JCN Job Control Number JCN Journal of Child Neurology JCN joint communications network (US DoD) Newswire) - Kobayashi Pharmaceutical, Ltd. (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). : 4967), a leading importer and distributor of medical equipment and pharmaceutical and consumer goods consumer goods Any tangible commodity purchased by households to satisfy their wants and needs. Consumer goods may be durable or nondurable. Durable goods (e.g., autos, furniture, and appliances) have a significant life span, often defined as three years or more, and wholesaler, has announced consolidated financial results for the first half ended September 30, 2006. The Group continued aggressively with its "Creation and Innovation" management concept, invigorating in·vig·or·ate tr.v. in·vig·or·at·ed, in·vig·or·at·ing, in·vig·or·ates To impart vigor, strength, or vitality to; animate: "A few whiffs of the raw, strong scent of phlox invigorated her" existing markets by offering products and services with new added value Added value in financial analysis of shares is to be distinguished from value added. Used as a measure of shareholder value, calculated using the formula:
The Company made significant investments in advertising to build up our brand in Japan and overseas, but also cut costs by heavily reducing the cost of production and overhauling promotional costs. As a result, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. stood at 9,133 million yen, up 486 million yen, or 5.4%, over the previous interim period, while ordinary income amounted to 8,006 million yen, an increase of 28 million yen, or 0.4%, over the previous interim period. Net income was 4,881 million yen, 1,323 million yen, or 37.2%, higher than the previous interim period. This sharp rise can be attributed to 1,632 million yen in impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. losses posted in the previous interim period. I. First Half Financial Summary (April 1, 2006 - Sept. 30, 2006) (1) Consolidated Operating Results
(Millions of Yen)
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April 1 - Sept. 30, FY ended
2006 % 2005 % 3/31/06
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Net Sales 130,721 4.5 125,076 13.8 246,852
Operating Income 9,133 5.4 8,664 10.7 16,879
Ordinary Income 8,006 0.4 7,978 13.2 15,151
Net Income 4,881 37.2 3,558 (4.7) 7,474
Net Income per Share (Yen) 118.16 117.98 179.17
Net Income per Share,
diluted (Yen) 85.49 85.48 179.01
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(2) Consolidated Financial Position
(Millions of Yen)
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As of Sept. 30, As of
2006 2005 3/31/06
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Total Assets 166,269 154,453 151,945
Shareholders' Equity 73,480 63,331 66,811
Shareholders' Equity Ratio 42.4% 40.8% 44.0%
Shareholders' Equity
per Share (Yen) 1,705.79 1,521.62 1,617.10
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(3) Consolidated Cash Flows
(Millions of Yen)
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April 1 - Sept. 30, FY ended
2006 2005 3/31/06
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Cash Flows from
Operating Activities 1,723 1,127 13,159
Cash Flows from
Investing Activities 999 (4,882) (6,414)
Free Cash Flow 2,722 (3,754) 6,744
Cash Flows from
Financing Activities (3,911) 3,339 (1,419)
Cash and Cash Equivalents,
End of Term 23,235 18,645 24,436
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Summary of Performance by Business Segment Consumer Products Operations: Kobayashi Pharmaceutical Group launched 18 new products (excluding nutritional supplement food products), its most ever, in an effort to create new markets and expand existing markets in this business segment. Of these, sales of Nicitol 85, a diet pill diet pill Drug slang A euphemism for an amphetamine Vox populi An agent that either ↓ appetite or ↑ basal metabolic rate–eg, amphetamines–by prescription and OTC diet aids–eg phenylpropanolamine, ephedrine, caffeine; in high doses, DPs for reducing abdominal abdominal /ab·dom·i·nal/ (ab-dom´i-n'l) pertaining to the abdomen. ab·dom·i·nal adj. Of or relating to the abdomen. n. An abdominal muscle. fat, and Cleair, an air freshener air freshener n → ambientador m air freshener air n → désodorisant m air freshener air n → that eliminates unpleasant household odors Odors anosmia Medicine. the absence of the sense of smell; olfactory anesthesia. Also called anosphrasia. — anosmic, adj. halitosis bad breath; an unpleasant odor emanating from the mouth. by releasing ions, made particularly high contributions to sales growth. In addition, efforts to further promote the Shoyo brand of oral hygiene Oral Hygiene Definition Oral hygiene is the practice of keeping the mouth clean and healthy by brushing and flossing to prevent tooth decay and gum disease. products paid off, with sales totaling 49,500 million yen, up 3,637 million yen, or 7.9%, over the previous interim period. In addition to sales gains, cost-cutting achieved by drastic reductions in the cost of production and other measures succeeded in boosting operating income to 8,438 million yen, 340 million yen, or 4.2%, higher than the previous interim period. Wholesale Operations: The Wholesale Operation segment experienced a harsh business environment marked by disappointing sales of summer products in drugstores, our principal customers, due to the unseasonable un·sea·son·a·ble adj. 1. Not suitable to or appropriate for the season. 2. Not characteristic of the time of year: unseasonable weather. 3. Poorly timed; inopportune. weather, and a slump Slump A temporary fall in performance, often describing consistently falling security prices for several weeks or months. in the market for health foods. Nevertheless, the Company acquired all outstanding shares in KS Tohoku Co., Ltd. (the former Sowa Co., Ltd.), on April 1, 2006, and sales rose 3,533 million yen, or 4.3%, to 86,019 million yen. With regard to profits, while the expanded business scale did allow the Company to take advantage of the economies of scale by purchasing products in bulk from manufacturers, there were delays in improving the profit ratio due to the stock take-over. As a result, operating income declined by 9 million yen, or 4.6% compared to the previous interim period, to 197 million yen. Medical Devices Operations: Kobayashi Medical Division concentrated sales efforts in the orthopedic orthopedic /or·tho·pe·dic/ (-pe´dik) pertaining to the correction of deformities of the musculoskeletal system; pertaining to orthopedics. field, where demand is expected to increase, and surgery room products, such as electronic scalpels. Sales of a femoral femoral /fem·o·ral/ (fem´or-al) pertaining to the femur or to the thigh. fem·o·ral adj. Of or relating to the femur or thigh. head prosthesis prosthesis (prŏs`thĭsĭs): see artificial limb. prosthesis Artificial substitute for a missing part of the body, usually an arm or leg. , developed in-house In-house In the context of general equities, keeping an activity within the firm. For example, rather than go to the marketplace and sell a security for a client to anyone, an attempt is made to find a buyer to complete the transaction with the firm. and launched in January, have been strong. The three Shield Healthcare Centers in the US succeeded in raising their profit margin by introducing new customer management systems and reducing back-office costs. As a result, sales totaled 8,705 million yen, an increase of 653 million yen, or 8.1%, over the previous interim period. Operating income increased 248 million yen, or 361.4%, to 317 million yen. Equity in earnings of Medicon, Inc., an equity-method affiliate, was 115 million yen (compared to 191 million yen in the previous interim period). Other Operations: Other Operations (transportation, sales promotion, market research, etc.) are conducted on a financially independent basis by Kobayashi Pharmaceutical's subsidiaries in support of the Company's three principal businesses and to contribute to the profits of those businesses. The Group reviewed the transfer values of the materials and services these operations provide. As a result, sales of Other Operations fell 0.2%, or 10 million yen, to 6,647 million yen, and operating income stood at 167 million yen, 108 million yen, or 39.4%, lower than the previous interim period. Segment sales include internal sales and transfers between segments, the value of which totaled 4,550 million yen in the previous interim period and 4,628 million yen in the current interim period. II. Financial Position Total assets increased 14,323 million yen compared with the end of the previous fiscal year, primarily due to an increase of 11,177 million yen in notes receivable and accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying among circulating cir·cu·late v. cir·cu·lat·ed, cir·cu·lat·ing, cir·cu·lates v.intr. 1. To move in or flow through a circle or circuit: blood circulating through the body. 2. assets resulting from the formation of new parent-subsidiary consolidations, and an increase of 2,348 million yen in inventories. Under current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. , notes payable and accounts payable increased by 8,822 million yen. Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. including the minority shareholders' portion increased 3,751 million yen compared to the end of the fiscal year ended March 2006. As a result, the shareholders' equity ratio fell by 1.6 points. Cash flows from operating activities: Net cash provided by total operating activities increased 595 million yen to 1,723 million yen compared to the previous interim period. This was primarily attributable to a 2,759 million yen increase in net income before taxes and other adjustments. Cash flows from investing activities: Net cash used in investing activities totaled 999 million yen, an increase of 5,882 million yen over the previous interim period. This was mainly due to 5,267 million yen in payments to acquire investments in securities and 1,100 million yen in revenue from the sale of the Tokyo branch during this interim period. Cash flows from financing operations: Net cash resulting from financing operations totaled 3,911 million yen, an increase of 7,251 million yen compared to the previous interim period. This was mainly because, although the Company received 2,650 million yen in revenue from payments made by minority shareholders during this interim period, repayments on short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. borrowing by subsidiaries and the payment of dividends increased. Accordingly, the term-end balance of cash and cash equivalents increased 4,589 million yen over the previous interim period to 23,235 million yen. Fiscal Year Forecasts for the year ending March 2007 Although the economy continues to recover, the operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. remains severe. Accordingly, we will strive to reduce inventories and accounts receivable so as to improve the efficiency of capital into account. Stable investments in plants and equipment are expected to average those of the previous fiscal year. Expenses other than capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. are anticipated to increase over the previous year due to active corporate takeovers aimed at expanding business. As a result, we expect cash flows from investing activities to increase compared to the previous fiscal year. Cash flow from financing activities Cash Flow from Financing Activities A category in the cash flow statement that accounts for external activities such as issuing cash dividends, adding or changing loans, or issuing and selling more stock. is forecast to remain level with the previous fiscal year. Cash Flow Indicator Trends
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As of March 31, Sept. 30,
2003 2004 2005 2006 2006
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Equity ratio (%) 39.2 42.4 44.7 44.0 42.4
Equity ratio at
market value basis (%) 82.9 91.8 90.5 113.9 112.1
Debt repayment period
(years) 0.7 0.8 0.3 0.1 --
Interest coverage ratio
(times) 87.9 90.5 96.7 140.6 --
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III. Consolidated Projections for the Fiscal Year Ending March 31, 2007 The Japanese economy is expected to continue to recover, supported by sustained improvements in corporate earnings and firm personal spending. To reinforce its competitiveness so that is the leader in the fields in which it operates, Kobayashi Pharmaceutical Group will need to implement a strategy aimed at further bolstering the existing business and brands that form the foundations of the group's management, and at the same time further expand the scope of business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets and carry out a strategy to promote growth.
(Millions of Yen)
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FY ending FY ended
3/31/07 % 3/31/06 % Change %
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Net Sales 268,000 100.0 246,852 100.0 21,148 8.6
Operating Income 17,800 6.6 16,879 6.8 921 5.5
Ordinary Income 16,000 6.0 15,151 6.1 849 5.6
Net Income 8,600 3.2 7,474 3.0 1,126 15.1
Net Income/Share (yen) 208.06 179.17 28.89 16.1
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In line with our basic policy to continue providing stable dividends, the dividend for this fiscal year is expected to be 38.00 yen per share as an ordinary allotment A portion, share, or division. The proportionate distribution of shares of stock in a corporation. The partition and distribution of land. ALLOTMENT. Distribution by lot; partition. Merl. Rep. h.t. . About Kobayashi Pharmaceutical Kobayashi Pharmaceutical (TSE: 4967; OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). : KBYPF) first opened for business in 1919, and its management policy has always been to provide people and society with wonderful comfort through "Creativity and Innovation". Over the years the Company has expanded its scope, developing into a cluster of enterprises with three principal businesses: Consumer Products Operation, Wholesale Operation and Medical Devices Operation. In the fiscal year ended March 31, 2006, Kobayashi achieved increases in sales and profits for the eighth consecutive year since the introduction of consolidated accounting. Source: Kobayashi Pharmaceutical Contact: Kobayashi Pharmaceutical Online http://www.kobayashi.co.jp/english/contact/index.html?lid=1 Copyright [c] 2006 JCN Newswire. All rights reserved. A division of Japan Corporate News Network K.K. |
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