Kobayashi Pharmaceutical Reports Financial Results for the Year Ended March 31, 2007.Tokyo, Japan, May 14, 2007 - (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 full fiscal year ended March 31, 2007. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight , 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. and net income were all higher year-on-year, as the Kobayashi Group continued to unleash the spirit expressed in its management philosophy of "Creativity and Innovation." The Group cultivated latent Hidden; concealed; that which does not appear upon the face of an item. For example, a latent defect in the title to a parcel of real property is one that is not discoverable by an inspection of the title made with ordinary care. customer needs by introducing new products and services and seeding new markets while 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 Group invested extensively in advertising to build up its brands, but this was offset by sales growth in product categories with high profit margins, in addition to cost cutting accomplished with far-reaching reductions in the cost of production and an overhaul of sales promotion costs. As a result, operating income rose 1,149 million yen (6.8 %) over the previous year to 18,029 million yen. Equity in earnings of affiliates fell, however, while losses on the revaluation Revaluation A calculated adjustment to a country's official exchange rate relative to a chosen baseline. The baseline can be anything from wage rates to the price of gold to a foreign currency. In a fixed exchange rate regime, only a decision by a country's government (i.e. and retirement of inventory valuation due to product returns and product upgrades increased. As a result, ordinary income dropped 138 million yen (-0.9 %) to 15,012 million yen. Net income was 8,297 million yen, up 822 million yen or 11.0% higher than the previous period. This sharp rise can be attributed to 1,655 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 period. I. Consolidated Financial Summary for the Full Year Ended March 31, 2007
(Millions of Yen)
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Full Year Ended Full Year Ended YoY Change
March 31, 2007 March 31, 2006 Percent
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Operating Results
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Net Sales 257,022 246,852 4.1
Operating Income 18,029 16,879 6.8
Ordinary Income 15,012 15,151 (0.9)
Net Income 8,297 7,474 11.0
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Net Income per Share (Yen) 200.77 179.17 12.1
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Financial Position
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Total Assets 164,555 151,945 12,610
Total Sh'holders Equity 77,236 66,811 10,424
Sh'holders Equity Ratio 45.2% 44.0% 1.2%
Shareholders EPS (Yen) 1,799.87 1,617.10 182.77
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Cash Flows
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Net Cash from
Operating Activities 8,833 13,159 (4,325)
Net Cash from
Investing Activities (11,803) (6,414) (5,388)
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Free Cash Flow (2,969) 6,744 (9,713)
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Net Cash from
Financing Activities (2,433) (1,419) (1,013)
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Cash and Cash Equivalents
at End of Period 19,090 24,436 (5,346)
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II. Performance by Business Segment Consumer Products The Kobayashi Pharmaceutical Group launched 35 new products, excluding nutritional supplement food products, creating new markets and expanding existing markets in this business segment. 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 fat, 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, and Shoshu Shabon, a deodorizing air freshener that gives rooms a refreshing clean scent made particular contributions to sales growth. Sales of body warmers body warmer Noun a sleeveless quilted jerkin, worn as an outer garment slackened this year due to the record-breaking warm winter, but the body warmer business is gaining ground overseas and sales improved for the "amazing a·maze v. a·mazed, a·maz·ing, a·maz·es v.tr. 1. To affect with great wonder; astonish. See Synonyms at surprise. 2. Obsolete To bewilder; perplex. v.intr. socks that keep feet warm." As a result, sales in the Consumer Products division improved 8.2% to 102,503 million yen, an increase of 7,726 million yen over the previous period. Sales growth in product categories with high profit margins as well as cost-cutting achieved by drastic reductions in the cost of production cost succeeded in boosting operating income to 16,560 million yen up 1,113 million yen or 7.2 % higher than the previous fiscal period. Wholesale Operations Wholesale Operations were marked by disappointing sales of seasonal products to drugstores, our principal customers, and a slump in the market for health foods, due to 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. Nevertheless, the Company acquired all outstanding shares in KS Tohoku Co., Ltd. (the former Sowa Co., Ltd.), on April 1, 2006, and sales rose 5.0% to 164,840 million yen, an increase of 7,905 million yen on the previous term. 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 112 million yen, or 25.8% compared to the previous fiscal period, to 323 million yen. Medical Devices Operations The Kobayashi Medical Division faced a difficult environment due to the reduction in NHI NHI abbr. National Health Insurance reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. prices, but 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 in surgical products, such as electronic scalpels. Sales were strong for proprietary brand products that have been actively promoted. The three Shield Healthcare Centers in the US succeeded in raising profit margins by introducing new customer management systems and reducing back-office costs. However, we do not anticipate synergies with existing businesses, so in November 2006 we transferred our shareholdings in these three companies to Dharma dharma (där`mə). In Hinduism, dharma is the doctrine of the religious and moral rights and duties of each individual; it generally refers to religious duty, but may also mean social order, right conduct, or simply virtue. Ventures Group, Inc., a special purposes company established by the Shield management team. Accordingly, Sales for Medical Devices Operations fell 630 million yen, or 3.7%, to 16,496 million yen, while operating income declined by 21 million yen, or 3.6%, to 561 million yen. Equity in earnings of Medicon, Inc., an equity-method affiliate, declined 57.8% to 110 million yen. 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 rose 1.0%, or 136 million yen, to 13,112 million yen. Operating income declined slightly to 390 million yen, by 12 million yen, or 3.0% less than the previous fiscal period. Segment sales, including internal sales and transfers between segments, rose to 9,142 million yen in the term from 9,053 million yen in the previous period. III. Financial Position and Cash Flows as of March 31, 2007 Total assets increased 12,610 million yen compared with the end of the previous fiscal year. This was primarily due to an increase of 3,637 million yen in trade notes 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 and 2,323 million yen in inventories as current assets Current Assets Appearing on a company's balance sheet, it represents cash, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted to cash within one year. . In terms of 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. , trade notes and accounts payable increased 2,138 million yen. In addition, retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. as a part of net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. increased 6,689 million yen. - Cash Flow from Operating Activities Net cash provided by total operating activities decreased 4,325 million yen to 8,833 million yen compared to the previous fiscal period. This was primarily because net income before taxes and other adjustments increased 2,028 million yen, but business tax payments increased 1,376 million yen and trade payable fell 4,996 million yen. - Cash Flow from Investing Activities Cash Flow From Investing Activities An item on the cash flow statement that reports the aggregate change in a company's cash position resulting from any gains (or losses) from investments in the financial markets and operating subsidiaries, and changes resulting from amounts spent Net cash used in investing activities totaled 11,803 million yen, an increase of 5,388 million yen over the previous fiscal period. This was mainly due to 9,062 million yen in payments to acquire shares in an overseas subsidiary. - 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. Net cash used in financing operations totaled 2,433 million yen, an increase of 1,013 million yen compared to the previous fiscal period. This was mainly due to an increase in the payment of dividends in this fiscal period. Accordingly, the term-end balance of cash and cash equivalents decreased 5,346 million yen over the previous fiscal period to 19,090 million yen * The following formula was used to calculate free cash flow: Free cash flow = Cash flow from operating activities + cash flow from investing activities Cash Flow Forecast for Fiscal 2008 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, but we will strive to reduce inventories and accounts receivable so as to improve efficiency of the investment capital. Stable investments in plants and equipment for product development are expected to average those of the previous fiscal year. We do not anticipate any large investments 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. , and as a result, we expect cash flows from investing activities to decrease compared to the previous fiscal year. Cash flow from financing activities is forecast to remain level with the previous fiscal year. Trend of Cash Flow Indices
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March/03 March/04 March/05 March/06 March/07
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Equity Ratio 39.2% 42.4% 44.7% 44.0% 45.2%
Equity Ratio on Value 82.9% 91.8% 90.5% 113.9% 112.3%
Debt Redumption
Schedule (year) 0.7 0.8 0.3 0.1 0.4
Interest Coverage
Ratio 87.9 90.5 96.7 140.6 125.1
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* Equity Ratio = Net Asset / Gross Asset
Equity Ratio on Value = Gross Aggregate Market Price / Gross Asset
Debut Redumption Schedule = Debt with Interest / Operating Cash Flow
Interest Coverage Ratio = Operating Cash Flow / Interest Payment
IV. Forecast for the Fiscal Year Ending March 31, 2008 The Japanese economy is expected to continue to recover, supported by sustained improvements in corporate earnings and firm personal spending. Under such conditions, 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. For the following fiscal year, the Company forecasts sales of 265,000 million yen, an increase of 7,978 million yen or 3.1%, compared to the previous fiscal year. Due to additional major cost-cutting in unit costs and other costs, we forecast operating income of 18,500 million yen, an increase of 471 million yen or 2.6%; ordinary income of 16,000 million yen, an increase of 988 million yen or 6.6%, and net income of 8,750 million yen, an increase of 453 million yen or 5.5%, compared with the previous fiscal year. In line with our basic policy to continue providing stable dividends, the annual dividend for the following fiscal year is expected to be 54 yen per share (an interim dividend of 27 yen and a year-end dividend Year-end dividend A special dividend declared at the end of a fiscal year that usually represents distribution of higher-than-expected company profits. year-end dividend See final dividend. of 27 yen) 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. . V. Profit Distribution and Fiscal 2007 and 2008 Dividends Kobayashi Pharmaceutical regards the distribution of profits to shareholders as one of the Company's most important management policies, and will continue to focus on strengthening this area. For this reason, we ensure that adequate internal reserves for high-growth-oriented business development and strengthening the corporate structure are preserved. At the same time, the Company intends to promote a dividend policy that will reflect consolidated results while maintaining a basic policy of providing stable dividend payments. Internal reserves will be utilized for M&A to grow the consumer products and the medical devices operations and for vigorous investment in expansion overseas. Based on this policy, the common dividend is expected to be 50.00 yen per share in the fiscal year ended March 2007 and 54.00 yen per share in the fiscal year ending March 2008 (an interim dividend of 27 yen and a year-end dividend of 27 yen per share). 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 https://hint.kobayashi.co.jp/inq/inq0109.html Japan Corporate News Network. All rights reserved. |
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