Hitachi Koki Releases Summary of Financial Results for the Half Year ended September 30, 2002
October 29, 2002
Company name: Hitachi Koki Co., Ltd.
Securities code: 6581
Stock market listings: Tokyo Stock Exchange, Osaka Securities Exchange
Headquarters: Tokyo
1. Consolidated results for the interim fiscal period ended September 30, 2002 (April 1, 2002-September 30, 2002)
(1) Consolidated business results (Amounts less than ¥ 1 million have been omitted.)
In millions of yen, except per share data
| Sales | Operating income | Ordinary income | ||||
| Fiscal 2003 interim period | 63,275 | -1.5% | 2,440 | 6.8% | 2,156 | 31.2% |
|---|---|---|---|---|---|---|
| Fiscal 2002 interim period | 64,226 | -2.6% | 2,284 | 59.7% | 1,643 | 264.2% |
| Fiscal 2002 | 127,166 | 3,733 | 3,102 | |||
| Interim net income (Period under review) |
Interim net income per share (Period under review) |
Interim net income per share (Period under review) after adjustment for latent shares | ||||
| Fiscal 2003 interim period | 964 millions of yen |
177.9% | 7.92 yen |
- | ||
|---|---|---|---|---|---|---|
| Fiscal 2002 interim period | 347 millions of yen |
-85.4% | 2.82 yen |
- | ||
| Fiscal 2002 | 1,007 millions of yen |
8.19 yen |
- | |||
Notes:
1) Investment income and losses resulting from the application of the equity method:
Fiscal 2003 interim period: - ¥ 56 million
Fiscal 2002 interim period: - ¥ 8 million
Fiscal 2002: - ¥ 78 million
2) Average number of shares during period: (Consolidated)
Fiscal 2003 interim period: 121,885,532 shares
Fiscal 2002 interim period: 123,070,105 shares
Fiscal 2002: 123,068,219 shares
3) Changes in accounting procedures: None
4) Percentages for net sales, operating income, ordinary income, and interim net income (period under review) are changes from the interim period in the previous fiscal year.
(2) Consolidated Financial Condition
| Total assets | Shareholders' equity | Shareholders' equity ratio | Shareholders' equity per share | |
| Fiscal 2003 interim period | 129,804 millions of yen |
90,186 millions of yen |
69.5% | 748.59 yen |
|---|---|---|---|---|
| Fiscal 2002 interim period | 138,454 millions of yen |
90,629 millions of yen |
65.5% | 736.39 yen |
| Fiscal 2002 | 137,432 millions of yen |
92,074 millions of yen |
67.0% | 748.21 yen |
Notes:
Number of shares issued at end of period: (Consolidated)
Fiscal 2003 interim period: 120,475,919 shares
Fiscal 2002 interim period: 123,072,475 shares
Fiscal 2002: 123,059,684 shares
(3) Consolidated Cash Flows
In millions of yen
| Cash flows from operating activities | Cash flows from investing activities | Cash flows from financing activities | Cash and cash equivalents at end of period | |
| Fiscal 2003 interim period | 4,002 | -2,225 | -4,711 | 19,906 |
|---|---|---|---|---|
| Fiscal 2002 interim period | 974 | -1,091 | -8,104 | 20,631 |
| Fiscal 2002 | 7,909 | -848 | -13,117 | -23,000 |
(4) Matters related to the scope of consolidation and the application of equity method
Number of consolidated subsidiaries: 27
Number of non-consolidated subsidiaries accounted for by the equity method: 1
Number of affiliated companies accounted for by the equity method: 1
(5) Changes in the scope of consolidation and the application of equity method
Newly consolidated companies: 0
Companies removed from consolidation: 1
Companies newly accounted for by the equity method: 1
Companies no longer accounted for by the equity method: 0
2. Forecast for Consolidated Results for Fiscal 2003 (April 1, 2002 - March 31, 2003)
In millions of yen
| Sales | Ordinary income | Net income | |
| Fiscal year | 106,500 | 3,450 | 1,500 |
|---|
Reference: Forecasted net income per share for entire fiscal year: ¥12.56
* Hitachi Koki's printer business was split off and sold on October 1, 2002.
Management Policies
1. Basic Management Policy
In line with its basic management policy, the Hitachi Koki Group is using its world-class technologies to deliver high-quality power tools and life science instruments to markets worldwide, thereby contributing to the global community. As part of this effort, we are consolidating our management on a global basis to enhance cooperation across the Group, while rapidly developing and marketing attractive new products in advance of customer needs.
Aiming to become the number one company in the world in each of its operating domains, the Group is redoubling efforts to improve customer satisfaction and challenging itself to create novel products.
2. Medium- and Long-Term Management Strategies
The Hitachi Koki Group has sharpened its focus on core business areas in an effort to make more efficient use of its management resources. To boost its competitiveness, on October 1, 2002, we spun off our printing division, transferring our holdings to Hitachi, Ltd.
In the power tools business, we are bolstering our development capabilities, reducing development lead times, and bringing attractive new products to market by furthering such Digital Design as three-dimensional CAD. In the United States and Japan, we are strengthening our sales capabilities by expanding home center business. In addition, to expand our business globally, we are forming strategic alliances with other influential companies and promoting mergers and acquisitions (M&A) in growing areas.
Furthermore, we have shifted our focus from the scientific instrument business with centrifuges to the growing life-science business, and we will continue to exert further efforts in this field.
With business conditions expected to become further competitive and stringent, we will continue to implement aggressive policies.
3. Profit Distribution Policy
Decisions to retain earnings or distribute profits to shareholders are made only after taking full account of future business plans, past performance, current financial condition, and other factors. We retain earnings to facilitate efficient investment in core products and technologies as well as the rationalization of our facilities. After considering all relevant factors, we set the interim-term dividend at four yen per share. In addition, we are buying back Company shares to help return profits to shareholders and redoubling efforts aimed at boosting capital efficiency.
4. Basic Policy Regarding Affiliated Companies
Hitachi, Ltd. is our primary shareholder, with a stake of approximately 23%. Including these shares, members of the Hitachi Group hold a total of 32% of Hitachi Kokifs issued shares.
Business Performance and Financial Position
1. Business Performance
During the interim term, the Japanese economy continued to languish, reflecting persistent deflation, low share prices, and a further decline in capital and housing investment. There were signs of a partial recovery overseas, but, in the United States, a full recovery did not occur. Under these conditions, the Group worked to strengthen its intellectual property rights, improve the efficiency of its management, and bolster its cost-competitiveness. In addition, we accelerated the development of new products, increased the number of orders and sales, and implemented a global consolidated management system.
Due to these efforts during the term, the Group recorded consolidated net sales of ¥ 63.3 billion, consolidated ordinary income of ¥ 2.2 billion, and consolidated net income of ¥ 1.0 billion.
Performance by Business Group
Power Tools Group
The Power Tools Group continued to face harsh conditions due to cutbacks in housing investment in Japan. Overseas, sales were sluggish in Asia but steady in Europe. In the United States, however, we recorded substantial growth in sales thanks to good sales to home centers. As a result, sales in the Power Tools Group amounted to ¥ 40.0 billion.
Printing Systems Group
In Japan, sales in the Printing Systems Group were sluggish, reflecting general weakness in the economy and the consolidation now under way in the financial industry. Overseas, overall sales decreased partly influenced by the slowdown in the U.S. economy, although sales of new high-speed, continuous-form laser printers increased significantly. Due to these factors, group sales totaled ¥ 21.5 billion.
Life-Science Instruments Group
Sales of Large-Scale Continuous Flow Ultracentrifuge to be used for manufacturing vaccine showed good performance both in Japan and abroad, but sales of centrifuges to government research institutions in Japan remained sluggish. As a result, sales in the Life-Science Instruments Group totaled ¥ 1.8 billion.
Business conditions will remain difficult through the end of the fiscal year due to sluggish investment in housing and capital and lingering concern over the health of the U.S. economy. For the full fiscal year, we expect to record consolidated net sales of ¥ 106.5 billion, consolidated ordinary income of ¥ 3.5 billion, consolidated income before income taxes of ¥ 3.6 billion, and consolidated net income of ¥ 1.5 billion.
On October 1, 2002, the Hitachi Koki Group spun off its Printing Systems Group, transferring all of its shares to Hitachi, Ltd.
2. Financial Position
During the term, due to a decrease in receivables, net cash provided by operating activities increased ¥ 4.0 billion. Net cash used in investing activities decreased ¥ 2.2 billion due to the purchase of fixed assets. Net cash from financing activities decreased ¥ 4.7 billion due to a decrease in bank loans and the acquisition of treasury stock. As a result, cash and cash equivalents at the end of the term totaled ¥ 19.9 biliion.