|
Financial Reports for the Six Months Ended
September 30, 2004 (Consolidated) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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November
10, 2004 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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1.
Consolidated Financial Highlights (April 1, 2004 through September 30,
2004)
2.
Consolidated Financial Forecast (April 1, 2004 through March 31,
2005)
Notes: Net income per
share (Diluted): 71.89yen Caution: The above forecasts have been made based
on information available as of the release date of this material, and
actual business results may vary from forecasted figures due to a number
of subsequent factors. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Our group of Companies is comprised of 34 subsidiaries and 7 affiliates as at September 30, 2004. The Group is primarily engaged in the manufacture and sales of automotive components, communication media components and technical ceramics. Outline of the position concerning business is as following:
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NGK Spark Plug Co.,
Ltd. | |||||||||||||||||||||||||||||||||||||||||||||
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Customers |
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NGK Spark Plug Co.,
Ltd. |
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Other Subsidiaries and
Affiliates: |
|
|
NGK Spark Plugs (U.S.A.) Holding, Inc. |
(U.S.A.) |
|
Nittoku Unyu Co., Ltd. |
(Japan) |
|
Nittoku Alpha Service Co., Ltd. |
(Japan) |
|
Tokai Taima Kogu Co., Ltd. |
(Japan) |
|
Other three companies |
|
As a technology-driven company that preempts market needs, NGK Spark Plug aims to be a leading company that is highly trusted by customers and the society, by adding new values and providing excellent product quality requested by the epoch. It is NGK Spark Plug’s fundamental policy to maximize corporate value and meet the shareholders’ expectations. To this end, NGK Spark Plug devotes every effort in offering working environment in which each employee can make full use of his/her personality and capability, and strives to move forward constantly in a swift manner.
Our basic dividend policy is to maintain stable payouts and meet shareholders’ expectations, while, at the same time, ensure that dividends are in line with business performance, payout ratio, and outlook of future business. It is also our recognition that aggressive investment in R&D and capital equipment in the growing area of business is indispensable in order to maintain and enhance competitive market advantage that ensures shareholders’ value for the future. To this end, we plan to retain earnings as well.
We, as the NGK Spark Plug Group, have been striving to bring up our business performance through aggressive marketing activities enhanced by manufacturing and sales synergies, leveraging its global production and distribution network as well as competitive product lines.
As a result, the Company’s posted record-high consolidated results during six months ended September 30,2004 as follows:
|
|
|
|
% Change
from the previous year | |
|
Net Sales |
122,306 |
million yen |
Up |
8.3% |
|
Operating Income |
14,097 |
million yen |
Up |
37.7% |
|
Ordinary Income |
15,822 |
million yen |
Up |
54.3% |
|
Net Income |
9,439 |
million yen |
Up |
49.9% |
Regarding Spark Plugs, oversea business resulted strong in North America and Europe. Shipment quantity for factory installation in new cars, especially precious-metal plugs, increased due to strong vehicle production at domestic manufactures. Regarding automotive sensors such as the oxygen sensors, total shipment quantity declined slightly, dragged down by reduced production at U.S. automakers who are our major customers despite steady demands from the domestic and European markets where the number of vehicle application increased. Affected by exchange rates shifted to weaker U.S. dollar, Automotive Components Business posted net sales of 76,316 million yen, up 1.2% over the corresponding period of the previous year, and operating income of 13,362 million yen (down 4.6%).
As a result of the expansion of digital consumer electronics market as well as strong demand for PC’s and mobile phones, shipments of MPU packages and communication media device packages increased significantly. Sales of cutting tools increased as well, mainly for the uses of metal processing in the automotive components and precision machinery industries. In the area of fine ceramics, orders received for capital investment related uses increased in line with the economic recovery, and sales for medical uses resulted strong as well. As a result, Communication Media Components and Technical Ceramics Businesses posted net sales of 44,737 million yen, up 23.1% over the corresponding period of the previous year. Regarding profitability, an improvement of capacity utilization due to strong demand for ceramic IC packages and an improvement of process yield for organic IC packages supported favorable outcome, resulting operating income of 734 million yen.
Net sales in other businesses totaled 1,286 million yen, up 4.4% over the corresponding period of the previous year, while operating income was 0 million yen (down 71.4%).
In Japan, net sales were 105,277 million yen, up 9.6% over the corresponding period of the previous year, and operating income was 10,858 million yen (up 59.8%). The detail of each business is as following:
In the Automotive Components Business, shipment quantity increased. However net sales decreased slightly due to the weak U.S. dollar. The Communication Media Components Business took an upturn toward strong recovery.
In North America, net sales were 37,440 million yen, up 4.0% over the corresponding period of the previous year, and operating income was 1,059 million yen (up 0.8%). The detail of each business is as following:
In the Automotive Components Business, shipment quantity declined slightly due to the slump at major U.S. automakers. The Communication Media Components Business improved due to an increase in shipment quantity of IC packages for MPU.
In Europe, net sales were 24,774 million yen, up 8.8% over the corresponding period of the previous year, and operating income was 1,200 million yen (up 3.4%). This result was due to solid performance in each business.
In other regions, net sales were 10,890 million yen, up 28.6% over the corresponding period of the previous year, and operating income was 856 million yen (up 3.2%). This result was due to strong performance in Latin America and Oceania, partially offset by some initial cost of NGK Spark Plug (Shanghai) Co., Ltd.
Regarding the fiscal year ending March 31,2005, while domestic automobile production is expected to continue to grow firmly, slowdown of the digital home electronics, mobile phone, and PC markets, all of which supported favorable semiconductor production, and influence in manufacturing and logistic cost increases due to a steep rise of raw material prices particularly crude oil, remain as uncertainty. In addition, the exchange rate that is shifting to weaker U.S. dollar does not allow optimism, as the NGK Spark Plug Group has a large portion of export sales.
Under these circumstances, we forecast consolidated net sales of 240,000 million yen, up 4.9% over the corresponding period of the previous year, ordinary income of 26,500 million yen (up 38.3%), net income of 16,000 million yen (up 43.9%). These forecasts assume exchange rates of 105 yen=US$1, and 130 yen=1 euro for the second half of fiscal year ending March 31,2005.
In light of the results in the interim period, NGK Spark Plug has decided to pay the interim cash dividends of 6 yen per share, adding a special dividend of 0.5 yen per share to the ordinary dividend of 5.5 yen, and projects that year-end cash dividends will also be 6 yen per share, increased by 0.5 yen from the previous announcement. Accordingly, total cash dividends applicable to the fiscal year ending March 31,2005 will be 12 yen per share (ordinary dividend of 11 yen, plus special dividend of 1 yen per share).
|
Disclaimer regarding Forward-Looking
Statements. This document contains forward-looking statements. These statements are based on internal projections and estimates and should not be interpreted as representation that quantitative or qualitative objectives therein will be fulfilled. |
Cash and cash equivalents decreased 12,522 million yen (down 26.0%) compared with the previous fiscal year-end, to 35,699 million yen at September 30,2004. This is mainly due to an increase of net cash used for investing activities such as placements on fixed-term deposit and purchases of securities, which exceeded increases of net cash provided from operating activities that generated a net income increase and from financing activities in which we raised funds by issuing the Euro-Yen convertible bonds.
Net cash provided by operating activities increased 7,080 million yen compared with the corresponding period of the previous year (up 62.5%) to 18,400 million yen primarily due to an increase of net interim income amounted to 14,953 million yen and to a decrease in payment of income tax of 1,320 million yen.
Net cash used in investing activities increased 23,272 million yen (up 139.7%) to 39,930 million yen primarily due to an increase in placements on fixed-term deposit of 16,929 million yen and purchases of investment securities of 3,405 million yen.
Net cash provided by financial activities amounted to 9,110 million yen. This is mainly due to an increase in proceeds of 17,000 million yen from the issuance of the Euro-Yen convertible bond partially offset by a decrease in net proceeds from short- term borrowings of 4,691 million yen.
Supplemental information for cash
flows
|
|
March 31, 2003 |
|
September 30, 2003 |
|
March 31, 2004 |
|
September 30, 2004 |
|
Equity Ratio: |
63.4% |
|
64.4% |
|
69.1% |
|
66.6% |
|
Equity ratio based on market price ratio: |
60.4% |
|
68.8% |
|
72.5% |
|
79.7% |
|
Repayment period: |
1.6year |
|
- |
|
1.4year |
|
- |
|
Interest coverage ratio: |
29.8times |
|
22.5times |
|
23.7times |
|
62.6times |
Notes: 1. Equity ratio:
shareholders’ equity / total assets
Equity market price ratio:
issued common stock stated at market price / total
assets
Repayment period: interest
bearing debt / cash flows from operating activities
Interest coverage ratio:
(cash flows from operating activities + interest paid) / interest
paid.
2. Each ratio is calculated
based on the figures in the consolidated financial statements.
3. Market price is calculated
based on closing price at the end of period multiplied by the number of shares
outstanding at the end of period, excluding treasury
stock.
4. Cash flows provided by
operating activities are the amount of operating cash flows in the consolidated
statements of cash flows. Interest-bearing debt includes short-term borrowings,
current portion of long-term debt, and long-term debt in the consolidated
balance sheets. Additionally, interest paid is the amount of interest paid in
the consolidated statements of cash flows.
|
|
(Yen in
millions) | |||||||
|
|
September
30 |
|
March
31 | |||||
|
|
2004 |
|
2003 |
|
2004 | |||
|
Assets |
|
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
|
Cash and Time
deposit |
63,024 |
|
|
54,168 |
|
|
47,579 |
|
|
Notes and accounts
receivable, trade |
43,210 |
|
|
43,173 |
|
|
41,054 |
|
|
Securities |
12,563 |
|
|
10,271 |
|
|
11,670 |
|
|
Inventories |
41,317 |
|
|
43,710 |
|
|
42,223 |
|
|
Deferred tax
assets |
7,125 |
|
|
7,726 |
|
|
7,035 |
|
|
Other current
assets |
6,726 |
|
|
6,255 |
|
|
6,033 |
|
|
Allowance for doubtful
accounts |
(281) |
|
|
(440) |
|
|
(290) |
|
|
Total current assets |
173,685 |
54.4% |
|
164,866 |
52.7% |
|
155,306 |
52.1% |
|
|
|
|
|
|
|
|
|
|
|
Fixed
assets: |
|
|
|
|
|
|
|
|
|
Tangible assets: |
|
|
|
|
|
|
|
|
|
Building and
structures |
37,274 |
|
|
40,114 |
|
|
38,464 |
|
|
Machinery and
equipment |
31,935 |
|
|
34,783 |
|
|
32,890 |
|
|
Other tangible
assets |
19,712 |
|
|
19,042 |
|
|
19,320 |
|
|
Total tangible assets |
88,921 |
27.9% |
|
93,939 |
30.1% |
|
90,674 |
30.4% |
|
|
|
|
|
|
|
|
|
|
|
Intangible
assets: |
|
|
|
|
|
|
|
|
|
Software |
146 |
|
|
125 |
|
|
154 |
|
|
Consolidated
goodwill |
- |
|
|
20 |
|
|
3 |
|
|
Total intangible assets |
146 |
0.0% |
|
146 |
0.0% |
|
157 |
0.1% |
|
|
|
|
|
|
|
|
|
|
|
Investment
and other assets: |
|
|
|
|
|
|
|
|
|
Investments
securities |
53,605 |
|
|
49,633 |
|
|
49,044 |
|
|
Other
assets |
2,902 |
|
|
4,149 |
|
|
2,923 |
|
|
Allowance for doubtful
accounts |
(81) |
|
|
(129) |
|
|
(112) |
|
|
Total investment and other assets |
56,426 |
17.7% |
|
53,653 |
17.2% |
|
51,855 |
17.4% |
|
|
|
|
|
|
|
|
|
|
|
Total fixed assets |
145,494 |
45.6% |
|
147,739 |
47.3% |
|
142,688 |
47.9% |
|
|
|
|
|
|
|
|
|
|
|
Total
assets |
319,180 |
100.0% |
|
312,606 |
100.0% |
|
297,994 |
100.0% |
|
|
|
|
|
|
|
|
|
|
|
(Yen in
millions) | ||||||||
|
|
September
30 |
|
March
31 | |||||
|
|
2004 |
|
2003 |
|
2004 | |||
|
Liabilities |
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
|
Accounts payable,
trade |
18,944 |
|
|
20,384 |
|
|
17,183 |
|
|
Short-term
borrowing |
8,329 |
|
|
11,997 |
|
|
14,458 |
|
|
Bonds due within one
year |
10,000 |
|
|
- |
|
|
10,000 |
|
|
Convertible bonds due
within one year |
- |
|
|
19,930 |
|
|
- |
|
|
Income taxes
payable |
6,139 |
|
|
4,402 |
|
|
3,432 |
|
|
Other Current
liabilities |
17,485 |
|
|
16,484 |
|
|
17,842 |
|
|
Total current liabilities |
60,898 |
19.1% |
|
73,199 |
23.4% |
|
62,917 |
21.1% |
|
|
|
|
|
|
|
|
|
|
|
Fixed
Liabilities: |
|
|
|
|
|
|
|
|
|
Bonds |
27,000 |
|
|
20,000 |
|
|
10,000 |
|
|
Employee retirement
benefit liability |
13,295 |
|
|
12,704 |
|
|
13,033 |
|
|
Provisions for
severance indemnities |
991 |
|
|
798 |
|
|
893 |
|
|
Other fixed
liabilities |
3,784 |
|
|
3,809 |
|
|
4,517 |
|
|
Total fixed liabilities |
45,070 |
14.1% |
|
37,311 |
12.0% |
|
28,444 |
9.6% |
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
105,969 |
33.2% |
|
110,510 |
35.4% |
|
91,361 |
30.7% |
|
|
|
|
|
|
|
|
|
|
|
Minority
interests in consolidated subsidiaries |
512 |
0.2% |
|
692 |
0.2% |
|
668 |
0.2% |
|
|
|
|
|
|
|
|
|
|
|
Shareholders’
equity: |
|
|
|
|
|
|
|
|
|
Common
stock |
47,869 |
15.0% |
|
47,869 |
15.3% |
|
47,869 |
16.1% |
|
Capital
surplus |
54,825 |
17.2% |
|
54,824 |
17.5% |
|
54,825 |
18.4% |
|
Retained
earnings |
111,016 |
34.8% |
|
99,266 |
31.7% |
|
102,868 |
34.5% |
|
Net unrealized gains
on available-for-sale securities |
15,072 |
4.7% |
|
11,818 |
3.8% |
|
15,628 |
5.2% |
|
Foreign currency
translation adjustment |
(9,338) |
(3.0%) |
|
(5,682) |
(1.8%) |
|
(8,516) |
(2.9%) |
|
Less, treasury stock
at cost |
(6,747) |
(2.1%) |
|
(6,693) |
(2.1%) |
|
(6,710) |
(2.2%) |
|
Total shareholder’s equity |
212,698 |
66.6% |
|
201,403 |
64.4% |
|
205,963 |
69.1% |
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities, minority interests and shareholders'
equity |
|
|
|
|
|
|
|
|
|
319,180 |
100.0% |
|
312,606 |
100.0% |
|
297,994 |
100.0% | |
|
|
|
|
|
|
|
|
|
|
|
|
(Yen in
millions) | |||||||
|
|
Six months
ended September
30 |
|
Fiscal year
ended March
31 | |||||
|
|
2004 |
|
2003 |
|
2004 | |||
|
Net
Sales |
122,306 |
100.0% |
|
112,906 |
100.0% |
|
228,776 |
100.0% |
|
Cost
of goods sold |
89,385 |
73.1% |
|
84,221 |
74.6% |
|
171,481 |
75.0% |
|
Gross
profit on sales |
32,920 |
26.9% |
|
28,685 |
25.4% |
|
57,294 |
25.0% |
|
Selling,
general and administrative expenses |
18,823 |
15.4% |
|
18,447 |
16.3% |
|
36,549 |
15.9% |
|
Operating
income |
14,097 |
11.5% |
|
10,237 |
9.1% |
|
20,745 |
9.1% |
|
|
|
|
|
|
|
|
|
|
|
Other
income: |
|
|
|
|
|
|
|
|
|
Interest
income |
238 |
|
|
282 |
|
|
571 |
|
|
Dividend
income |
237 |
|
|
191 |
|
|
342 |
|
|
Amortization of
consolidated goodwill |
0 |
|
|
- |
|
|
- |
|
|
Income of rentals on
fixed assets |
390 |
|
|
415 |
|
|
854 |
|
|
Investment profit in
equity method |
300 |
|
|
289 |
|
|
453 |
|
|
Foreign exchange
gain |
877 |
|
|
- |
|
|
- |
|
|
Miscellaneous
income |
749 |
|
|
778 |
|
|
1,126 |
|
|
Total
other income |
2,795 |
2.3% |
|
1,957 |
1.7% |
|
3,349 |
1.5% |
|
|
|
|
|
|
|
|
|
|
|
Other
expenses: |
|
|
|
|
|
|
|
|
|
Interest
expenses |
301 |
|
|
503 |
|
|
1,026 |
|
|
Depreciation of
rentals on fixed assets |
316 |
|
|
337 |
|
|
699 |
|
|
Loss on disposal of
inventory |
142 |
|
|
333 |
|
|
609 |
|
|
Foreign exchange
loss |
- |
|
|
201 |
|
|
644 |
|
|
Miscellaneous
loss |
309 |
|
|
566 |
|
|
1,951 |
|
|
Total
other expenses |
1,069 |
0.9% |
|
1,941 |
1.7% |
|
4,931 |
2.2% |
|
|
|
|
|
|
|
|
|
|
|
Ordinary
income |
15,822 |
12.9% |
|
10,253 |
9.1% |
|
19,163 |
8.4% |
|
|
|
|
|
|
|
|
|
|
|
Extraordinary
profit: |
|
|
|
|
|
|
|
|
|
Gain on sales of fixed
assets |
6 |
|
|
9 |
|
|
57 |
|
|
Gain on sales of
investment securities |
2 |
|
|
26 |
|
|
47 |
|
|
Total
extraordinary profit |
9 |
0.0% |
|
35 |
0.0% |
|
105 |
0.1% |
|
|
|
|
|
|
|
|
|
|
|
Extraordinary
losses: |
|
|
|
|
|
|
|
|
|
Loss on sale or
disposal of fixed assets |
735 |
|
|
316 |
|
|
854 |
|
|
Loss on write-down of
investment securities |
143 |
|
|
- |
|
|
- |
|
|
Total
extraordinary losses |
878 |
0.7% |
|
316 |
0.3% |
|
854 |
0.4% |
|
|
|
|
|
|
|
|
|
|
|
Income
before income taxes and minority
interests |
|
|
|
|
|
|
|
|
|
14,953 |
12.2% |
|
9,973 |
8.8% |
|
18,414 |
8.1% | |
|
|
|
|
|
|
|
|
|
|
|
Income
taxes |
|
|
|
|
|
|
|
|
|
Current |
6,063 |
|
|
4,594 |
|
|
8,235 |
|
|
Deferred |
(578) |
|
|
(936) |
|
|
(974) |
|
|
Total
income taxes |
5,485 |
4.5% |
|
3,657 |
3.2% |
|
7,261 |
3.2% |
|
|
|
|
|
|
|
|
|
|
|
Minority
interest of consolidated subsidiaries |
28 |
0.0% |
|
19 |
0.0% |
|
35 |
0.0% |
|
|
|
|
|
|
|
|
|
|
|
Net
income |
9,439 |
7.7% |
|
6,296 |
5.6% |
|
11,117 |
4.9% |
|
|
|
|
|
|
|
|
|
|
|
|
(Yen in
millions) | ||||
|
|
Six months
ended September
30 |
|
Fiscal year
ended March
31 | ||
|
|
2004 |
|
2003 |
|
2004 |
|
|
|
|
|
|
|
|
Capital
surplus: |
|
|
|
|
|
|
Balance
at the beginning of the period |
54,825 |
|
54,824 |
|
54,824 |
|
Increases due
to: |
|
|
|
|
|
|
Profit from treasury
stock disposition |
0 |
|
0 |
|
0 |
|
Balance
at the end of the period |
54,825 |
|
54,824 |
|
54,825 |
|
|
|
|
|
|
|
|
Retained
Earnings: |
|
|
|
|
|
|
Balance
at the beginning of the period |
102,868 |
|
94,260 |
|
94,260 |
|
Increases due
to: |
|
|
|
|
|
|
Net
Income |
9,439 |
|
6,296 |
|
11,117 |
|
Decreases due
to: |
|
|
|
|
|
|
Dividends |
(1,218) |
|
(1,218) |
|
(2,437) |
|
Bonuses to directors
and corporate auditors |
(72) |
|
(72) |
|
(72) |
|
Balance
at the end of the period |
111,016 |
|
99,266 |
|
102,868 |
|
|
|
|
|
|
|
|
|
(Yen in
millions) | ||||
|
|
Six months
ended September
30 |
|
Fiscal year
ended March
31 | ||
|
|
2004 |
|
2003 |
|
2004 |
|
Cash
flow operating activities: |
|
|
|
|
|
|
Income before taxes
and minority interests |
14,953 |
|
9,973 |
|
18,414 |
|
Depreciation |
6,971 |
|
7,745 |
|
15,942 |
|
Amortization of
consolidated goodwill |
(0) |
|
17 |
|
34 |
|
Increase in allowance
for retirement benefit for employees |
265 |
|
266 |
|
601 |
|
Interest and dividend
income |
(476) |
|
(473) |
|
(914) |
|
Investment profit in
equity method |
(300) |
|
(289) |
|
(453) |
|
Interest
expenses |
301 |
|
503 |
|
1,026 |
|
Gain on sales of
investment securities |
(2) |
|
(26) |
|
(47) |
|
Loss on write-down of
investment securities |
143 |
|
- |
|
- |
|
Gain on sales of fixed
assets |
(6) |
|
(9) |
|
(57) |
|
Loss on sale or
disposal of fixed assets |
735 |
|
316 |
|
854 |
|
Minority interest of
consolidated subsidiaries |
(28) |
|
(19) |
|
(35) |
|
Net increase in
accounts receivables, trade |
(2,302) |
|
(4,752) |
|
(4,181) |
|
Net decrease in
inventory |
794 |
|
3,666 |
|
3,006 |
|
Net
increase/(decrease) in account payable,
trade |
1,383 |
|
(784) |
|
(1,727) |
|
Other,
net |
(742) |
|
13 |
|
1,232 |
|
Subtotal |
21,687 |
|
16,144 |
|
33,694 |
|
|
|
|
|
|
|
|
Interest and dividend
received |
575 |
|
569 |
|
1,039 |
|
Interest
paid |
(294) |
|
(504) |
|
(1,025) |
|
Income taxes
paid |
(3,569) |
|
(4,889) |
|
(9,450) |
|
Net
cash provided by operating activities |
18,400 |
|
11,320 |
|
24,258 |
|
|
|
|
|
|
|
|
Cash
flow investing activities: |
|
|
|
|
|
|
Net
decrease/(increase) in fixed-term deposit |
(26,012) |
|
(9,082) |
|
20,487 |
|
Purchase of
securities |
(5,257) |
|
(6,008) |
|
(9,696) |
|
Sales of
securities |
3,477 |
|
5,998 |
|
14,124 |
|
Purchase of investment
securities |
(6,417) |
|
(3,011) |
|
(3,020) |
|
Sales of investment
securities |
33 |
|
72 |
|
3,157 |
|
Purchase of shares of
subsidiaries |
(70) |
|
(156) |
|
(156) |
|
Purchase of tangible
fixed assets |
(5,783) |
|
(4,489) |
|
(10,310) |
|
Sales of tangible
fixed assets |
117 |
|
55 |
|
243 |
|
Net
decrease/(increase) in loans |
3 |
|
(5) |
|
8 |
|
Other,
net |
(20) |
|
(29) |
|
(52) |
|
Net
cash provided by (used in) investing
activities |
(39,930) |
|
(16,657) |
|
14,784 |
|
|
|
|
|
|
|
|
Cash
flow from financing activities: |
|
|
|
|
|
|
Net
increase/(decrease) in short-term
borrowing |
(6,549) |
|
(1,858) |
|
630 |
|
Repayment of long-term
debt |
- |
|
- |
|
(19,930) |
|
Proceeds from issuance
of long-term debt |
16,929 |
|
- |
|
- |
|
Purchase of treasury
stock and fractional shares |
(37) |
|
(18) |
|
(38) |
|
Sales of treasury
stock and fractional shares |
0 |
|
1 |
|
4 |
|
Dividends
paid |
(1,219) |
|
(1,219) |
|
(2,437) |
|
Other,
net |
(13) |
|
(20) |
|
(20) |
|
Net
cash provided by (used in) investing
activities |
9,110 |
|
(3,114) |
|
(21,792) |
|
|
|
|
|
|
|
|
Effect
of exchange rate changes on cash and cash
equivalents |
(103) |
|
346 |
|
(236) |
|
Net
increase/(decrease) in cash and cash
equivalents |
(12,522) |
|
(8,105) |
|
17,015 |
|
Cash
and cash equivalents at beginning of the
period |
48,222 |
|
31,207 |
|
31,207 |
|
Cash
and cash equivalents at end of the
period |
35,699 |
|
23,101 |
|
48,222 |
|
(1) Consolidated
subsidiaries: |
30 |
|
|
Overseas |
20 |
NGK Spark Plugs
(U.S.A.), Inc., NGK Spark Plug
GmbH, NTK Technologies,
Inc., NGK Spark Plugs (U.K.)
Ltd., Cerâmica e Velas de
Ignição NGK do Brasil Ltda., Other |
|
Domestic |
10 |
Iijima Ceramic Co.,
Ltd., Nakatsugawa Ceramic
Co., Ltd., Nittoku Seisakusyo
Co., Ltd., Kamioka Ceramic Co.,
Ltd., Other |
|
(2) Change in scope of
consolidation: |
Not
applicable | |
|
(3) Unconsolidated
subsidiaries |
4 |
|
|
Overseas |
4 |
Bujías NGK del Ecuador
Cia. Ltda., Other |
|
Note: These 4
unconsolidated subsidiaries are small in terms of their total assets,
total sales, total net income or loss and total retained earnings and
others, and do not have a significant effect on the semiannual
consolidated financial
statements. | ||
|
(1) Equity
method-applied Companies: |
5 |
|
|
Overseas |
3 |
NGK Spark Plugs
Malaysia Berhad., Siam NGK Spark Plug
Co., Ltd., Woo Jin Industry Co.,
Ltd. |
|
Domestic |
2 |
Ceramic Sensor Co.,
Ltd., Tokai Taima Kogu Co.,
Ltd. |
|
(2) Change in equity
method-applied: |
Not
applicable | |
|
(3) Companies not
accounted for by the equity method: |
6 |
|
|
Overseas |
5 |
Bujías NGK del Ecuador
Cia. Ltda., Other |
|
Domestic |
1 |
Hayakawa Seiki Kogyo
Co., Ltd. |
|
Note: These 6 companies
are not accounted for by the equity method as their impact is not
significant on consolidated net income or loss for the period or on
consolidated retained earnings or other
results. | ||
All of overseas consolidated subsidiaries and affiliates close their books at June 30 every year, three months earlier than consolidated balance sheet date (September 30). Significant transactions for the period between their closing date and the consolidated balance sheet date are adjusted on consolidation.
Marketable securities for available-for-sale securities:
Marketable securities with market quotations stated at fair value. Net unrealized gains and losses are reported as a separate component of shareholders’ equity, net of applicable income taxes. Gain and losses on disposition are computed by moving average.
Non-marketable securities for available-for-sale securities:
Non-marketable securities without available
market quotations for available-for-sale securities are carried at cost
determined by moving average method
Inventories are principally stated at moving average cost.
Fair value method
Tangible assets have been principally depreciated by the decline-balance method for the Company and its domestic consolidated subsidiaries and by the straight-line method for overseas consolidated subsidiaries.
Software is being amortized on a straight-line basis over an estimated useful life of five years
Allowance for doubtful accounts has been provided for at the aggregate amount of estimated credit loss based on the individual financial review approach for doubtful or troubled receivables and a general reserve for other receivables calculated based on the historical loss experience for a certain past period.
In accordance with the accounting standard for employee retirement benefits, the NGK Group has principally recognized the retirement benefits including pension cost and related liability based on actuarial present value of projected benefit obligation using actuarial appraisal approach and the pension plan assets available for benefits at the respective fiscal year-ends. Unrecognized actuarial differences as changes in the projected benefit obligation or pension plan assets resulting from the experience different from that assumed and from changes in assumptions are amortized on a straight-line basis over ten years as a certain period within remaining service lives of employees from the next year in which they arise.
The liabilities of directors’ and corporate auditors’ severance indemnities are provided for the full amount estimated at the period-end based on the internal regulations of the Company.
Receivables, payables and securities, other than stocks of subsidiaries and certain other securities, are translated into Japanese Yen at the exchange rates at the period-end. Transactions in foreign currencies are recorded based on the prevailing exchange rates on the transaction dates. Resulting translation gains or losses are included in the current earnings.
In respect of the financial statement items of overseas consolidated subsidiaries, all asset and liability accounts are translated into Japanese Yen by applying the exchange rates in effect at the respective period-ends. All income and expense accounts are translated at the average rates of exchange prevailing during each period. Translation differences, after allocating to minority interests portions attributable to minority interests, are reported as foreign currency translation adjustment in a separate component of shareholders’ equity in the accompanying consolidated balance sheets.
Lease transactions except for the finance leases are accounted by the method equivalent to rental transactions.
Tax-excluding method
Cash and cash equivalents consist of cash on hand, bank deposits that can be readily withdrawn, and short-term, highly liquid investments with an original maturity of three months or less and little risk of changes in value.
|
|
|
(Yen in millions) | ||||
|
|
|
September 30 |
|
March 31 | ||
|
|
|
2004 |
|
2003 |
|
2004 |
|
a) Depreciation of tangible assets |
|
190,876 |
|
185,976 |
|
187,583 |
|
|
|
|
|
|
|
|
|
b) Contingent Liabilities |
|
|
|
|
|
|
|
Guarantees of indebtedness |
|
252 |
|
301 |
|
277 |
|
Notes receivable discounted |
|
357 |
|
420 |
|
344 |
|
Export bills discounted |
|
315 |
|
729 |
|
424 |
Reconciliation of cash and time deposits in the consolidated balance sheet to cash and cash equivalents in the consolidated statement of cash flows
|
|
(Yen in millions) | ||||
|
|
September 30 |
|
March 31 | ||
|
|
2004 |
|
2003 |
|
2004 |
|
Cash and Time deposits |
63,024 |
|
54,168 |
|
47,579 |
|
Securities |
12,563 |
|
10,271 |
|
11,670 |
|
Subtotal |
75,587 |
|
64,440 |
|
59,250 |
|
|
|
|
|
|
|
|
Time deposits with original maturities of three months or longer |
(27,325) |
|
(31,067) |
|
(1,357) |
|
Security other than short-term investments with an original maturity of three months or less |
(12,563) |
|
(10,271) |
|
(9,670) |
|
Cash and cash equivalents |
35,699 |
|
23,101 |
|
48,222 |
Finance lease transactions other than those with an unconditional title transfer clause to lessee
|
|
(Yen in millions) | ||||
|
|
September 30 |
|
March 31 | ||
|
|
2004 |
|
2003 |
|
2004 |
|
Machinery and equipment: |
|
|
|
|
|
|
Equivalent of acquisition costs |
119 |
|
158 |
|
164 |
|
Equivalent of accumulated depreciation |
93 |
|
121 |
|
126 |
|
Equivalent of net book value as of balance sheet date |
26 |
|
36 |
|
37 |
|
|
|
|
|
|
|
|
Tools and implements: |
|
|
|
|
|
|
Equivalent of acquisition costs |
4,517 |
|
4,759 |
|
4,761 |
|
Equivalent of accumulated depreciation |
2,453 |
|
2,462 |
|
2,465 |
|
Equivalent of net book value as of balance sheet date |
2,064 |
|
2,296 |
|
2,295 |
|
|
(Yen in millions) | ||||
|
|
September 30 |
|
March 31 | ||
|
|
2004 |
|
2003 |
|
2004 |
|
Due within one year |
836 |
|
919 |
|
915 |
|
Due over one years |
1,253 |
|
1,414 |
|
1,417 |
|
Total |
2,090 |
|
2,333 |
|
2,333 |
|
|
(Yen in millions) | ||||
|
|
Six months
ended September 30 |
|
Fiscal year
ended March 31 | ||
|
|
2004 |
|
2003 |
|
2004 |
|
Equivalent of depreciation |
500 |
|
522 |
|
1,051 |
|
Equivalent of interest |
500 |
|
522 |
|
1,051 |
Depreciation of leased assets is calculated at 100% of acquisition costs, using the straight-line method over the lease term.
|
|
(Yen in
millions) | ||||||||||
|
|
September 30 |
|
March
31 | ||||||||
|
|
2004 |
|
2003 |
|
2004 | ||||||
|
|
Cost |
Fair and Carrying Value |
Unrealized gains/ (losses) |
|
Cost |
Fair and Carrying Value |
Unrealized gains/ (losses) |
|
Cost |
Fair and Carrying Value |
Unrealized gains/ (losses) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Equity
Securities |
8,857 |
34,153 |
25,362 |
|
9,020 |
28,875 |
19,855 |
|
9,000 |
35,218 |
26,217 |
|
(2)
Bond |
22,482 |
22,546 |
64 |
|
19,109 |
19,144 |
34 |
|
11,810 |
11,884 |
73 |
|
(3)
Other |
810 |
810 |
- |
|
3,206 |
3,208 |
1 |
|
3,209 |
3,209 |
- |
|
Total |
32,150 |
57,510 |
25,426 |
|
31,337 |
51,229 |
19,891 |
|
24,020 |
50,311 |
26,291 |
|
|
(Yen in millions) | ||||
|
|
September 30 |
|
March
31 | ||
|
|
2004 |
|
2003 |
|
2004 |
|
|
Fair and Carrying Value |
|
Fair and Carrying Value |
|
Fair and Carrying Value |
|
Available-for-sale securities: |
|
|
|
|
|
|
(1) Unlisted stocks (excluding those traded over-the-counter) |
3,492 |
|
3,475 |
|
3,483 |
|
(2) Unlisted foreign bonds |
222 |
|
438 |
|
300 |
|
(3) Others |
52 |
|
61 |
|
2,049 |
Currency-related transactions:
|
|
(Yen in millions) | ||||
|
|
September 30 |
|
March
31 | ||
|
|
2004 |
|
2003 |
|
2004 |
|
|
|
|
|
|
|
|
Notional
amounts |
11,965 |
|
3,801 |
|
6,096 |
|
Fair
Value |
12,033 |
|
3,695 |
|
5,869 |
|
Unrealized
gains/(losses) |
(67) |
|
106 |
|
226 |
Note: Fair values at the end of each fiscal period are estimated based on prevailing forward exchange rates at that date.
|
|
(Yen in
millions) | |||||
|
|
Automotive
components |
Communication media
components and technical ceramics |
Other |
Total |
Elimination |
Consolidated |
|
Six months ended
September 30, 2004 |
|
|
|
|
| |
|
Operating
revenues–net
sales: |
|
|
|
|
|
|
|
Outside
customers |
76,316 |
44,737 |
1,252 |
122,306 |
- |
122,306 |
|
Inter-segment
sales |
- |
- |
34 |
34 |
(34) |
- |
|
Total net
sales |
76,316 |
44,737 |
1,286 |
122,340 |
(34) |
122,306 |
|
Operating costs and
expenses |
62,953 |
44,003 |
1,285 |
108,242 |
(34) |
108,208 |
|
Operating
Income |
13,362 |
734 |
0 |
14,097 |
- |
14,097 |
|
|
|
|
|
|
|
|
|
Six months ended
September 30, 2003 |
|
|
|
|
| |
|
Operating
revenues–net
sales: |
|
|
|
|
|
|
|
Outside
customers |
75,398 |
36,340 |
1,167 |
112,906 |
- |
112,906 |
|
Inter-segment
sales |
- |
- |
64 |
64 |
(64) |
- |
|
Total net
sales |
75,398 |
36,340 |
1,232 |
112,971 |
(64) |
112,906 |
|
Operating costs and
expenses |
61,394 |
40,109 |
1,230 |
102,734 |
(64) |
102,669 |
|
Operating Income /
(Loss) |
14,004 |
(3,769) |
2 |
10,237 |
- |
10,237 |
|
|
|
|
|
|
|
|
|
Fiscal year ended March
31, 2004 |
|
|
|
|
| |
|
Operating
revenues–net
sales: |
|
|
|
|
|
|
|
Outside
customers |
147,696 |
78,486 |
2,593 |
228,776 |
- |
228,776 |
|
Inter-segment
sales |
- |
- |
145 |
145 |
(145) |
- |
|
Total net
sales |
147,696 |
78,486 |
2,738 |
228,921 |
(145) |
228,776 |
|
Operating costs and
expenses |
121,487 |
83,980 |
2,708 |
208,176 |
(145) |
208,031 |
|
Operating Income /
(Loss) |
26,209 |
(5,494) |
30 |
20,745 |
- |
20,745 |
|
|
(Yen in
millions) | ||||||
|
|
Japan |
North
America |
Europe |
Other |
Total |
Elimination |
Consolidated |
|
Six months ended
September 30, 2004 |
|
|
|
|
|
| |
|
Operating
revenues–net
sales: |
|
|
|
|
|
|
|
|
Outside
customers |
50,298 |
37,113 |
24,473 |
10,420 |
122,306 |
- |
122,306 |
|
Inter-segment
sales |
54,979 |
326 |
301 |
470 |
56,077 |
(56,077) |
- |
|
Total net
sales |
105,277 |
37,440 |
24,774 |
10,890 |
178,383 |
(56,077) |
122,306 |
|
Operating costs and
expenses |
94,418 |
36,381 |
23,574 |
10,034 |
164,409 |
(56,200) |
108,208 |
|
Operating
Income |
10,858 |
1,059 |
1,200 |
856 |
13,974 |
122 |
14,097 |
|
|
|
|
|
|
|
|
|
|
Six months ended
September 30, 2003 |
|
|
|
|
|
| |
|
Operating
revenues–net
sales: |
|
|
|
|
|
|
|
|
Outside
customers |
46,578 |
35,593 |
22,656 |
8,078 |
112,906 |
- |
112,906 |
|
Inter-segment
sales |
49,458 |
409 |
123 |
391 |
50,383 |
(50,383) |
- |
|
Total net
sales |
96,036 |
36,002 |
22,779 |
8,470 |
163,289 |
(50,383) |
112,906 |
|
Operating costs and
expenses |
89,243 |
34,952 |
21,619 |
7,640 |
153,455 |
(50,786) |
102,669 |
|
Operating
Income |
6,793 |
1,050 |
1,160 |
829 |
9,834 |
403 |
10,237 |
|
|
|
|
|
|
|
|
|
|
Fiscal year ended
March 31, 2004 |
|
|
|
|
|
| |
|
Operating
revenues–net
sales: |
|
|
|
|
|
|
|
|
Outside
customers |
99,057 |
69,922 |
42,314 |
17,481 |
228,776 |
- |
228,776 |
|
Inter-segment
sales |
97,323 |
853 |
235 |
821 |
99,233 |
(99,233) |
- |
|
Total net
sales |
196,381 |
70,775 |
42,550 |
18,303 |
328,010 |
(99,233) |
228,776 |
|
Operating costs and
expenses |
182,104 |
69,001 |
40,194 |
16,884 |
308,185 |
(100,154) |
208,031 |
|
Operating
Income |
14,277 |
1,774 |
2,335 |
1,418 |
19,824 |
920 |
20,745 |
|
|
|
|
(Yen in
millions) | |||||
|
|
Six months ended
September 30 |
|
Fiscal year ended
March 31 | |||||
|
|
2004 |
|
2003 |
2004 | ||||
|
Overseas
sales: |
|
|
|
|
|
|
| |
|
North
America |
49,351 |
40.4% |
|
46,679 |
41.3% |
|
94,522 |
41.3% |
|
Europe |
25,429 |
20.8% |
|
23,773 |
21.1% |
|
45,066 |
19.7% |
|
Other |
21,303 |
17.4% |
|
18,358 |
16.3% |
|
39,006 |
17.1% |
|
Total overseas
sales |
96,084 |
78.6% |
|
88,811 |
78.7% |
|
178,595 |
78.1% |
|
Consolidated net
sales |
122,306 |
100.0% |
|
112,906 |
100.0% |
|
228,776 |
100.0% |
Note: Overseas sales included
export sales from Japan and net sales of overseas consolidated subsidiaries
other than Japan.