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Annual Report 2008
For the year ended March 31, 2008

Table of contents

  • Page 1
    Annual Report 2008 For the year ended March 31, 2008

  • Page 2
    ...the Fiscal Year Consolidated fiscal year ended March 31, 2008, featured a slowdown in the North American economy and a shift of demand to small and medium-size cars for new vehicles. In addition, Alpine's major customers implemented model changes. As a result, Alpine posted decline in sales and pro...

  • Page 3
    ... and communication equipment for cars including integrated mobile media products. At Alpine, we are well aware that such situation provides great opportunities for business expansion. In response to such environment, Alpine has developed its 11th Medium-Term Plan, "CHALLENGE 30," for the term to...

  • Page 4
    ... means and opportunities for growth, and encouraging relationships built on mutual trust. 2. Creating Value Alpine eagerly takes up the challenge of maintaining technical leadership in creating new values that will enhance the quality of human life. 3. Contribution to Society Alpine is committed...

  • Page 5
    ALPINE ELECTRONICS, INC. Consolidated Financial Highlights Years ended March 31, 2006, 2007 and 2008 millions of yen thousands of U.S.Dollars 2006 For the year Net Sales Overseas Sales Operating Income Net Income Cash ï¬,ows from operating activities Free cash ï¬,ow Capital expenditures R&D ...

  • Page 6
    ... a European Imaging and Sound Association award. However, intensified price competition and market contraction led to an overall 2005 2006 2007 2008 reduction in sales. Business for automobile manufacturers benefited from increased installation in SUVs of new media DVD audio systems in North America...

  • Page 7
    ... to offset shifts in new car demand toward smaller models, leading to an overall decline in sales. Accordingly, sales for the Information and Communication Products Segment decreased 4.9% from the previous year, to ¥129.0 billion. X075 Mobile Media Station The first navigation system in Japan to...

  • Page 8
    ... We also participated in the North American International Auto Show, one of the world's three largest motor shows, where we showcased OEM products as well as our own branded models. We introduced our IMPRINT sound concept audio technology and saw it win high marks from major automobile manufacturers...

  • Page 9
    ... to reduce the depth of our speakers by 13% with no loss in sound quality. We were also able to improve the way the speakers are mounted in the car. Philanthropic Activities: Educational Support for Students At Alpine we have set up a fellowship fund for students at China's Neusoft Institute...

  • Page 10
    ... and Auditors Hitoshi Kajiwara Managing Director Takumi Sato Managing Director Motoshi Nishinakagawa Managing Director Seizo Ishiguro President & CEO Toru Usami Managing Director Toji Tanaka Managing Director (As of June 25, 2008) President & CEO Managing Directors Seizo Ishiguro Hitoshi...

  • Page 11
    Financial Section Financial Highlights Consolidated Financial Review Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Stockholders' Equity Consolidated Statements of Changes in Net Assets Consolidated Statements of Cash Flows Notes to Consolidated Financial ...

  • Page 12
    ...56.40 54.60 10.00 1,106.38 64.49 - 12.50 1,194.19 �t year-end: Current assets Property, plant and equipment, net Current liabilities Long-term liabilities Common stock Retained earnings Total stockholders' equity Total net assets Total assets Equity ratio (%) 74,879 24,348 49,668 10,436 16,900 15...

  • Page 13
    ...the year ended March 31, 2008, in accordance with the amendment to the Corporate Tax Law, the Company and its consolidated subsidiaries changed their depreciation method for tangible fixed assets acquired on or after April 1, 2007 to a method based on the amended Corporate Tax Law. In comparison to...

  • Page 14
    ... functions compatible with real-time information and communication systems. In this environment, the Alpine Group prepared the mid-term business plan, "CHALLENGE 30," aimed for reforming its earnings, cost and development structure. We also exhibited our products at motor shows in Japan and overseas...

  • Page 15
    ... income per share was ¥50.95 (US$0.51). The number of consolidated subsidiaries changed to 27 companies, with 8 companies in Japan and 19 overseas. The number of companies accounted for by the equity method at the end of the fiscal year remained 1. �ash �lo�s (Millions of yen) 16,399 12,472...

  • Page 16
    ... ASSETS Current assets: Cash and cash equivalents Notes and accounts receivable: Unconsolidated subsidiaries and affiliated companies Trade Allowance for doubtful accounts Inventories (Note 4) Deferred tax assets (Note 10 ) Other current assets Total current assets 2008 ¥ 30,159 2007 ¥ 37,507...

  • Page 17
    ... liabilities: Bank loans (Note 5) Notes and accounts payable: Unconsolidated subsidiaries and affiliated companies Trade Income taxes payable (Note 10) Accrued expenses Deferred tax liabilities (Note 10) Warranty reserve Other current liabilities Total current liabilities 2008 ¥ 216 2007 ¥ 174...

  • Page 18
    ... of affiliated companies Loss on sale and disposal of fixed assets Gain on sale of investments in securities Loss on valuation of investments in securities Prior compensation expense for products Provision for warranty reserve Gain on return of the substitutional portion of Welfare Pension Insurance...

  • Page 19
    ...124 ¥2,040 ¥(27) Notes: 1. Cash dividends paid per share is calculated based on actual payment of dividends during the period. ALPINE ELECTRONICS, INC. Consolidated Statements of Changes in Net Assets Years ended March 31, 2008 and 2007 Common stock Capital surplus Retained earnings Treasury...

  • Page 20
    ...of investments in affiliated companies Payments for loans Collection of loans receivable Other-net Net cash used in investing activities Cash flows from financing activities: Increase (Decrease) in short-term borrowings Repayments of long-term debt Cash dividends paid Cash dividends paid to minority...

  • Page 21
    ... Property, plant and equipment are stated at cost except for certain land. The Companies compute depreciation of property, plant and equipment, except for certain buildings, using the declining-balance method at rates based on the useful lives prescribed by Japanese tax regulations, while overseas...

  • Page 22
    ... taxes and minority interests for the fiscal year ended March 31, 2007 decreased by ¥63 million. (12) Employees' severance and retirement benefits The Company and its five domestic subsidiaries have unfunded lump-sum benefit and funded pension plans covering all employees. Under the terms...

  • Page 23
    ... in Net Assets Effective from the year ended March 31, 2007, the Company and its consolidated subsidiaries adopted the new accounting standard, "Accounting Standard for Statements of Changes in Net Assets" (Statement No.6 issued by the Accounting Standards Board of Japan on December 27, 2005), and...

  • Page 24
    ... and affiliated companies not consolidated or accounted for using the equity method Other securities: Non-listed equity securities Total ¥8,042 76 ¥8,118 2007 ¥942 214 ¥1,156 2008 $80,267 759 $81,026 The total sales amount of available-for-sale securities sold in the year ended March...

  • Page 25
    ... 2008 Finished products Work in process Raw materials and supplies Total ¥20,253 1,739 6,475 ¥28,467 2007 ¥20,937 1,425 6,471 ¥28,833 2008 $202,146 17,357 64,627 $284,130 5. Bank Loans and Long-Term Debt Bank loans generally consisted of overdrafts from banks with interest rates ranging from...

  • Page 26
    ...the rate of expected return on plan assets used by the Company were 2.5% for 2008, 2007 and 2006. The estimated amount of all retirement benefits to be paid at the future retirement date was allocated equally to each service year using the estimated number of total service years. Prior service costs...

  • Page 27
    ...is generally applicable to events and transactions occurring after April 30, 2006 and for fiscal years ending after that date. Under Japanese laws and regulations, the entire amount paid for new shares is required to be designated as common stock. However, a company may, by a resolution of the Board...

  • Page 28
    ...to a number of taxes based on income, which, in the aggregate, indicate statutory rates in Japan of approximately 40% for the years ended March 31, 2008, 2007 and 2006. The following table summarizes the significant differences between the statutory tax rate and the Companies' effective tax rate for...

  • Page 29
    ...transactions are executed by the Company's accounting department solely for hedging purposes under the internal control rules and the supervision by the Board of Directors. The Companies do not anticipate any credit loss from nonperformance by the counterparties to forward exchange contracts because...

  • Page 30
    ... U.S. Dollars 2008 Current Non-current Total ¥140 83 ¥223 2007 ¥223 209 ¥432 2008 $1,397 828 $2,225 Such finance lease payments of the Companies amounted to ¥232 million (US$2,316 thousand), ¥302 million and ¥440 million for the years ended March 31, 2008, 2007 and 2006, respectively. The...

  • Page 31
    ... 2008 and 2007. Reconciliation of the difference between basic and diluted net income per share (EPS) for the years ended March 31, 2006 was as follows: Millions of yen Thousands of shares Weighted-average number of shares Yen EPS 2006 Net income Amounts not attributable to common stock (Bonuses to...

  • Page 32
    ... years ended March 31, 2008, 2007 and 2006 were as follows: Millions of yen 2008 I. Sales and operating income Net sales: Outside customers Inter-segment Total Costs and expenses Operating income II. Identifiable assets Depreciation expense Capital expenditures Audio products business Information...

  • Page 33
    ...ended March 31, 2008, 2007 and 2006 were as follows: Millions of yen 2008 I. Sales and operating income Net sales: Outside customers Inter-segment Total Costs and expenses Operating income II. Identifiable assets Japan North America Europe Asia Other areas Total Elimination and/or corporate...

  • Page 34
    Thousands of U.S. dollars 2008 I. Sales and operating income Net sales: Outside customers Inter-segment Total Costs and expenses Operating income II. Identifiable assets Japan North America Europe Asia Other areas Total Elimination and/or corporate Consolidated $397,724 1,522,128 1,919,852...

  • Page 35
    ... position of ALPINE ELECTRONICS, INC. and subsidiaries as of March 31, 2008 and 2007, and the consolidated results of their operations and their cash ï¬,ows for each of the three years in the period ended March 31, 2008, in conformity with accounting principles generally accepted in Japan. The...

  • Page 36
    ... Network â- â- â- â- â- â- â- â- â- â-â- â- â- â-â- â- â- â- Headquarters â- Regional Headquarters â- Sales Office â- Manufacturing Plant â- Development Center ALPINE ELECTRONICS, INC. Headquarters : IWAKI 20-1 Yoshima-Kogyodanchi, Iwaki, Fukushima 970-1192, Japan Phone...

  • Page 37
    ... 0907 Fax: 852 (2537) 0902 ALPINE ELECTRONICS OF ASIA PACIFIC 555 Rasa Tower I, Floor 26 Unit No. 2601-2602 Phaholyothin Rd. Chatuchak, Chatuchak, Bangkok 10900 Phone: 662-937-0505 Fax: 662-937-0569 ALPINE TECHNOLOGY MANUFACTURING (THAILAND) CO., LTD. 210 Moo 13, Suwansorn Road, Tambol Dong-Khee-Lek...

  • Page 38
    ... logistics and others. Alpine is the Alps Group's specialized supplier of quality car audio and navigation systems. Alps Group Alps Electric Group Core company Business function company Administrative function company In Japan 1 company Total 1 company In Japan 2 companies Overseas 27 companies...

  • Page 39
    ... 31, 2008) Number of Employees (Consolidated) 13,403 (As of March 31, 2008) Principal Stockholders Percentage of total stocks outstanding Alps Electric Co., Ltd. Northern Trust Company AVFC Sub Account American Client OM04 SSB Client Omnibus Japan Trustee Service Bank, Ltd. ( Trust Account) The...

  • Page 40
    ...Kogyodanchi, Iwaki, Fukushima 970-1192 Phono: +81-246-36-4111 Fax: +81-246-36-8309 Tokyo Headquarters: 1-1-8, Nishi-gotanda, Shinagawa-ku, Tokyo 141-8501 Phono: +81-3-3494-1101 Fax: +81-3-3494-1109 The paper in this publication is made of recycled paper and other environment-friendly wood products.