Pioneer Announces Business Results for 2Q Fiscal 2007.Tokyo, Japan, Oct 31, 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) - Pioneer Corporation (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). : 6773) today announced its consolidated second-quarter and semiannual Semiannual An event that occurs twice in a calendar year. Notes: A bond with semiannual coupons would issue payment once every six months. See also: Annual, Bond, Coupon Bond business results, and non-consolidated semiannual business results, for the periods ended September 30, 2006. For the second quarter of fiscal 2007, the three months ended September 30, 2006, consolidated operating revenue operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. increased 4.9% from the second quarter of fiscal 2006 to JPY JPY In currencies, this is the abbreviation for the Japanese Yen. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 188,643 million (US$1,598.7 million), mainly due to higher sales of plasma displays Also called "gas discharge display," a flat-screen technology that uses tiny cells lined with phosphor that are full of inert ionized gas (typically a mix of xenon and neon). Three cells make up one pixel (one cell has red phosphor, one green, one blue). and car navigation See GPS. systems, and the weaker yen, despite lower sales of DVD recorders (1) A recordable or rewritable DVD drive that is connected to the computer. It may be an internal or external device. See DVD drives, DVD-R, DVD-RW, DVD+R and DVD+RW. (2) . 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. was JPY 4,614 million (US$39.1 million), compared with an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of JPY 7,733 million in the corresponding period a year earlier. This reflected higher sales, as well as an improved gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. and lower selling, general and administrative expenses due to the benefits of business restructuring measures started in the previous fiscal year and the weaker yen. Net income totaled JPY 3,546 million (US$30.1 million), compared with a net loss of JPY 52,701 million in the same period in fiscal 2006. This was due to the absence of 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 on property, plant and equipment, equity in losses of affiliated companies Affiliated Companies A situation that occurs when one company owns a minority interest (less than 50%) in another company. Also refers to companies that are related to each other in some way. Notes: An affiliated company is sometimes referred to as a subsidiary. and valuation allowances for deferred tax assets, which we recorded in connection with business restructuring in the corresponding period of the previous year, as well as a gain on sale of subsidiaries involved in the electronic components business in the period under review. During the second quarter of fiscal 2007, the average value of the Japanese yen “Yen” redirects here. For the other use, see Yen (disambiguation). “JPY” redirects here. For the Australian singer with the same moniker, see John Paul Young. was weaker against the U.S. dollar and the euro by 4.3% and 8.4%, respectively, compared with the second quarter of fiscal 2006. Home Electronics Home Electronics sales increased 6.8% year on year to JPY 87,301 million (US$739.8 million). Plasma display sales rose due to strong performance by our own-brand models in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and Europe, despite a drop in OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and (original equipment manufacturing) sales. Sales of plasma displays accounted for approximately 46% of total Home Electronics sales. In addition, sales of DVD drives DVD drives come in a variety of speeds and options. The original drive (1x) transferred data at 1.35MB per second. By doubling the spindle speed (RPMs) for 2x drives, the transfer rate increased to 2.7MB/sec and has been increasing ever since. rose, while there was a large drop in sales of DVD recorders from the same period a year ago. In terms of geographic sales, sales in Japan declined 15.1% to JPY 16,152 million (US$136.9 million), while overseas sales climbed 13.4% to JPY 71,149 million (US$603.0 million). The operating loss in this segment was JPY 3,848 million (US$32.6 million), showing an improvement compared with an operating loss of JPY 13,140 million in the corresponding period of the previous fiscal year. In addition to growth in sales, this improvement principally reflected an increased gross profit margin mainly in the plasma display field, largely due to the benefits of business restructuring measures and efforts to strictly control costs and improve manufacturing efficiency. Car Electronics Car Electronics sales increased 7.0% to JPY 83,634 million (US$708.8 million), mainly due to increased sales of car navigation systems, despite slightly lower sales of car audio products. In car navigation systems, consumer-market sales increased in Japan and elsewhere, while OEM sales rose in North America. In car audio products, consumermarket sales rose in Central and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. , but fell in Japan and North America. Total OEM sales in this segment accounted for approximately 35% of Car Electronics sales. In terms of geographic sales, sales in Japan increased 8.9% to JPY 28,564 million (US$242.1 million), and overseas sales rose 6.1% to JPY 55,070 million (US$466.7 million). Operating income in this segment increased 92.9% year on year to JPY 5,586 million (US$47.3 million) due to sales growth and cost reductions achieved by reorganizing our production sites. Patent Licensing In Patent Licensing, royalty revenue decreased 88.0% to JPY 500 million (US$4.2 million). This decrease was mainly attributable to the impact of the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of some patents licensed to the optical disc industry. Operating income in this segment declined 94.8% to JPY 187 million (US$1.6 million) compared with the same period of the previous fiscal year. Others In the Others segment, sales rose 8.7% to JPY 17,208 million (US$145.8 million), mainly reflecting higher sales of factory automation systems and organic light-emitting diode Noun 1. organic light-emitting diode - a self-luminous diode (it glows when an electrical field is applied to the electrodes) that does not require backlighting or diffusers OLED (OLED (Organic Light Emitting Device, Organic Light Emitting Diode) A thin film light-emitting technology that is expected to compete with LCD and plasma TVs as well as LCD monitors and readouts. ) displays in Japan. In terms of geographic sales, sales in Japan increased 33.2% to JPY 11,262 million (US$95.4 million), while overseas sales declined 19.4% to JPY 5,946 million (US$50.4 million). Operating income in this segment was JPY 2,566 million (US$21.7 million) compared with an operating loss of JPY 780 million in the corresponding period of the previous fiscal year. This mainly reflected improved profitability in OLED displays due to the benefits of business restructuring measures. For the first half of fiscal 2007, the six months ended September 30, 2006, consolidated operating revenue rose 12.2% from the first half of fiscal 2006 to JPY 380,319 million (US$3,223.0 million). Operating income was JPY 11,691 million (US$99.1 million), compared with an operating loss of JPY 16,664 million in the corresponding period a year earlier. Net income was JPY 9,208 million (US$78.0 million), compared with a net loss of JPY 58,044 million in the same period of fiscal 2006. (Note: Operating income (loss) in each business segment represents operating income (loss) before elimination of intersegment transactions.) Cash Flows During the first half of fiscal 2007, operating activities used net cash of JPY 9,855 million (US$83.5 million). This was mainly due to an increase in trade receivables and inventories of JPY 42,652 million (US$361.5 million), as well as a decrease in accrued liabilities Accrued liabilities are liabilities which have occurred, but have not been paid or logged under accounts payable during an accounting period; in other words, obligations for goods and services provided to a company for which invoices have not yet been received. of JPY 7,866 million (US$66.7 million), which were partially offset by net income of JPY 9,208 million (US$78.0 million) and depreciation and amortization of JPY 18,500 million (US$156.8 million) for this period. Meanwhile, investing activities used net cash of JPY 7,758 million (US$65.7 million). Although the sale of subsidiaries provided net cash of JPY 10,862 million (US$92.1 million), we used JPY 20,477 million (US$173.5 million) for capital expenditures related mainly to car electronics products and plasma displays. Financing activities provided net cash of JPY 5,035 million (US$42.7 million), mainly from an increase in short-term borrowings. Consequently, cash and cash equivalents at September 30, 2006 were JPY 109,822 million (US$930.7 million), JPY 11,858 million lower than at March 31, 2006. Dividend Policy Pioneer positions its dividend policy as one of its highest management priorities. On the basis of maintaining stable dividends, the Company sets dividend payments appropriately in light of its financial position, consolidated business results, and other factors. 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. are effectively used primarily to develop businesses, as well as reinforce competitiveness and our management base. Based on this dividend policy, Pioneer has decided to pay an interim dividend for fiscal 2007 of JPY 5.0 (US$0.04) per share of common stock. Business Forecasts for Fiscal 2007 We revised our consolidated business forecasts for fiscal 2007, ending March 31, 2007, which were announced on July 31, 2006, as follows:
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(In millions of yen)
Revised Previous
projections projections Results
fiscal 2007 fiscal 2007 Change fiscal 2006
(A) (B) (A-B)
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Operating revenue 820,000 845,000 (25,000) 754,964
Operating income (loss) 18,000 18,000 0 (16,409)
Income (loss) before
income taxes 19,000 19,000 0 71,165
Net income (loss) 10,000 7,500 2,500 (84,986)
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Our previous operating revenue forecast has been lowered because second-half sales of plasma displays, DVD recorders and car electronics products are projected to fall below initial forecasts due to intensifying in·ten·si·fy v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies v.tr. 1. To make intense or more intense: competition, falling market prices and other factors. We have not revised our forecasts for operating income and income before income taxes mainly in consideration of the impact of the weaker yen and cost reduction benefits, despite lower operating revenue than forecast previously. Net income is expected to surpass the previous forecast because we posted a gain on sale of subsidiaries involved in the electronic components business in the second quarter of fiscal 2007. We are assuming average yen-U.S. dollar and yen-euro exchange rates of JPY 115 and JPY 145, respectively, for the revised projections. Basic Management Policies and Medium-term Business Plan Pioneer positions customer satisfaction at the core of management. We seek to offer innovative, high-quality, and value-added electronics products that create new value for customers, aiming to share the Pioneer Group's philosophy, "Move the Heart and Touch the Soul," with more people around the world. Based on this group philosophy, in April 2006 Pioneer formulated a new group vision to guide management over the medium term: "To become a company that encourages all its members to work as a team, with everyone customer-focused, integrating each one's professionalism in pursuing innovations one after another." Through this vision, we believe that we can set a process in motion where employees fulfill ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. their duties from the customer's perspective, and come up with ideas that resonate res·o·nate v. res·o·nat·ed, res·o·nat·ing, res·o·nates v.intr. 1. To exhibit or produce resonance or resonant effects. 2. with other employees around them to give rise to major innovations. This innovation will realize new lifestyle proposals and revolutionary products that change consumers' ways of life. Pioneer has also established new numerical targets for the fiscal year ending March 31, 2009, aiming for operating revenue and operating income of at least JPY 950 billion and JPY 30 billion, respectively, on a consolidated basis. More specifically, we aim to raise the operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: to at least 7% in the Car Electronics business, and to improve operating profitability in the Home Electronics business, which is still weak, to at least the break-even level. To attain these targets, we will allocate more resources to the Car Electronics business to maintain a leading position in consumer markets, while aiming to drive overall earnings growth across the entire business by further expanding OEM operations. Meanwhile, production capacity will be ramped up in Thailand and China to prepare for overall business expansion in this segment. In the Home Electronics business, we will provide new forms of value for customers, mainly through plasma displays, in terms of picture quality, product design, user-friendliness, product quality, and sound. Pioneer aims to improve the image of its brands, while improving earnings by carefully screening products based on their profitability. We remain committed to enhancing our business results by growing earnings in the Car Electronics business and improving profitability in the Home Electronics business as quickly as possible. Cautionary Statement with Respect to Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. : 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 forward-looking 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 dis·claim v. dis·claimed, dis·claim·ing, dis·claims v.tr. 1. To deny or renounce any claim to or connection with; disown. 2. To deny the validity of; repudiate. 3. any such obligation. The U.S. dollar amounts in this release represent translation of Japanese yen, for convenience only, at the rate of JPY 118=US$1.00, the approximate rate prevailing on September 30, 2006. For more information, pleae visit the Pioneer IR website at http://pioneer.jp/corp/ir/index-e.html . This is a summary of a larger financial document which can be downloaded at http://pioneer.jp/corp/ir/pdf/finance/announce/fr_2007/2nd/release_2q07e.pdf . About Pioneer Corporation Pioneer Corporation is one of the leading manufacturers of consumer and business-use electronics products such as audio, video and car electronics on a global scale. Its shares are traded on the Tokyo Stock Exchange Tokyo Stock Exchange Main stock market of Japan, located in Tokyo. It opened in 1878 to provide a market for the trading of government bonds newly issued to former samurai. . For more information , please visit http://pioener.jp. Source: Pioneer Corporation Contact: Investor Relations Department, Corporate Branding and Communications Division Pioneer Corporation, Tokyo Phone: +81-3-3495-6773 Fax: +81-3-3495-4301 E-mail: pioneer_ir@post.pioneer.co.jp IR Website: http://pioneer.jp/ir-e/ Copyright [c] 2006 JCN Newswire. All rights reserved. A division of Japan Corporate News Network K.K. |
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