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Wacoal Corp. of Kyoto, Japan, the World's Largest Manufacturer of Intimate Apparel Reported Its Year-End Results for the Fiscal Year Ended March 31, 2002.

Business Editors


Net sales for the year increased 0.5 percent on a yen basis to 162.8 billion yen ($1,227.0 million), against 162.0 billion yen a year ago.

Operating income decreased to 7.2 billion yen ($54.2 million) compared with 9.6 billion yen in 2001. Net income decreased 54.2 percent on a yen basis to 5.0 billion yen ($37.6 million) against 10.9 billion yen. Earnings per American Depositary Shares (5 shares of common stock) were 166.1 yen ($1.25) on 29,997,000 average ADS shares outstanding compared to 355.9 yen on 30,598,000 of the prior year. Wacoal declared cash dividends of 13.5 yen per share.

IT services and related businesses have seen a drastic reduction in export and manufacturing, which has affected the entire business sector. On top of that, the rising unemployment rate and a diminishing personal consumption rate, continue to weaken the Japanese economy. Several large distributors and retail chain stores have been forced to file for bankruptcy protection as well as numerous closing, which has also directly affected Wacoal's business. Global events such as the terrorist strikes in the United States have also affected the export reliant Asian economies, with the evident decrease in personal consumption in the United States and in Japan.

In this environment, Wacoal strove to improve its product strengths in its core intimate apparel businesses in the domestic Japanese market by improving and expanding its merchandising expertise. The Spring-Summer marketing campaign for the "KIME Bra" produced better than anticipated results. Products for Mature consumer such as "La Vie Aisee" and "Gra.P" have continued to show steady growth. In the Wing brand, "Secret Hips" specifically tailored to address the hip hugging pant trend, and the "Lesiage" brand were also well received by consumers. The expansion of direct retail stores has expanded to a total of 56 as of the end of March 2002, which includes 17 of The "Dubleve" brand, which offers bras to consumers on a semi order-made basis. Nanasai Co., Ltd. a subsidiary of Wacoal, which manufactures, leases and sells display fixtures, has posted a loss due to fierce price competition and the sales of non-performing real estate assets.

In overseas operations, domestic sales of affiliates in the Asian region generally showed steady results. Although the terrorist attacks have made an impact in the U. S. market, Wacoal America, Inc. and the "Wacoal" brands have continued to show steady growth in an uncertain world. In particular, "DKNY" have shown significant growth, easily exceeding the previous year's results.

Consequently, net sales of Wacoal for this fiscal year increased by 0.5 percent compared with the previous year to 162.0 billion yen.

On the profit side, although the Company had striven for cost cutting through structural changes by streamlining the distribution systems, concentration of sourcing raw materials, and expanding overseas production, its operating profit for this fiscal year fell to 7.186 billion yen, which is 25.3 percent less than last year. This decrease was caused mainly by stagnant sales, the increased cost of sales floor renovation, retirement payments, and the loss from sales of a real estate property owned by Nanasai Co., Ltd.

Moreover, in the last fiscal year, there were large "Other Income" items, such as a gain of 6.581 billion yen from the establishment of the Retirement Payment Trust, and an additional gain of 4.076 billion yen from the exchange of stocks between Wacoal-owned "AU Corporation" and KDDI Corporation. Without these items, the net income before taxes for this fiscal year fell by 62.2 percent to 7.613 billion yen, and the net profit by 54.2 percent to 4.983 billion yen.

For the fiscal year of 2003, Wacoal Corp. projects net income of 5.2 billion yen on net sales of 165.0 billion yen.

Wacoal's American Depositary shares trade at the Nasdaq SmallCap market under the ticker symbol "WACLY". The company's common stock is listed on the Tokyo stock exchange as well as on the Osaka stock exchanges.

 Billion of Yen Million of US$
 2002 2001 2002
Net Sales 162.8 162.0 1,227.0

By Product Category
Foundation garments
 and lingerie 116.1 115.1 874.9
Sleepwear 12.7 12.6 95.8
Children's underwear 2.5 2.8 18.6
Outerwear and sportswear 9.6 9.3 72.3
Hosiery 1.8 1.6 13.4
Other textiles and
 related products 3.8 4.3 28.6
Housing, Interior development
 and others 16.4 16.3 123.5

Cost of Sales 86.6 87.5 652.4
Selling, general and
 administrative expenses 69.1 64.9 520.5
Operating income 7.2 9.6 54.2
% of net sales 4.4% 5.9%
Other income and expenses 0.4 10.5 3.2
Income before income taxes,
 Equity in net income
 of affiliated companies,
 minority interests and
 cumulative effect of
 accounting change 7.6 20.1 57.4
Income taxes and
 minority interests 2.6 8.0 19.8
Income before Cumulative
 Effect of Accounting Change 5.0 12.2 37.6
Cumulative Effect of
 Accounting Change 1.3 -
Net Income 5.0 10.9 37.6

Note: The US dollar amounts in this statement for fiscal year 2002 represent transaction of the Japanese yen for convenience only at the actual approximate exchange rate on March 29,2002 of 132.70 equals $1.00.
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Publication:Business Wire
Geographic Code:1USA
Date:May 14, 2002
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