Epson 2010 Annual Report Download - page 23

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22
adjustments that began as the recession took hold from the second half of the previous fiscal year.
The semiconductor business posted sharply lower net sales. Although a round of industry inventory adjustments
came to an end in the second half and demand for electronic devices in general rebounded, the recovery was not
enough to make up for the first-half decline in unit shipments.
Operating loss in the electronic devices segment contracted due to a combination of factors: a reduction in
depreciation expenses associated with business structure improvement expenses and an impairment loss recorded
in the previous fiscal year; the effect of human resources reassignments and other fixed cost reductions; and an
increase in capacity utilization rates as the inventory correction cycle neared its end.
As a result of the foregoing factors, full-year net sales in the electronic device segment were ¥248,001 million,
down 20.4% year-over-year, while operating loss was ¥9,266 million versus an operating loss of ¥18,249 million
in the year ago. The reallocation of operating expenses had a ¥1,105 million effect on this segment.
Precision products
The precision products segment as a whole saw a sharp decline in net sales and, along with this, a wider
operating loss. Unit shipments of watches and plastic eyeglass lenses declined, as the impact of economic
stimulus measures failed to reach these products. Sales of industrial inkjet systems were also hurt by cutbacks in
corporate capital spending.
As a result of the foregoing factors, full-year net sales in the precision products segment were ¥57,746 million,
down 20.6% year-over-year, while operating loss was ¥4,111 million versus an operating loss of ¥1,907 million
in the year ago period. The reallocation of operating expenses had a ¥292 million effect on this segment.
The operating results by geographic segment are summarized below.
Japan
Net income from sales of small- and medium-sized displays, inkjet printers, semiconductors and watches
declined. As a result, net sales were ¥868,495 million, down 13.0% year-over-year, while operating loss was
¥25,193 million, compared to an operating loss of ¥44,478 million last year.
The Americas
Small- and medium-sized displays net sales grew. Meanwhile, net sales from inkjet printers, POS systems
products, SIDM printers, crystal devices, and 3LCD projectors declined. As a result, net sales were ¥229,328
million, down 5.6% from the prior year, while operating income was ¥8,472 million, up 75.9% year-over-year.
Europe
Net sales from inkjet printers, SIDM printers, page printers, scanners, and POS systems products declined.
As a result, net sales were ¥214,224 million, down 12.2% from the prior year, while operating income was
¥6,751 million, down 33.6% from last year.
Asia / Oceania
Crystal device and SIDM printer net sales increased, while net sales from small- and medium-sized displays,
watches, and semiconductors declined. As a result, net sales were ¥555,434 million, down 8.9% from the prior
year, while operating income was ¥27,261 million, up 60.5% from last year.
(2) Cash Flow Performance
Cash flows from operating activities during the year were ¥56,542 million. They consisted primarily of a loss
before income taxes and minority interests of ¥799 million, ¥47,395 million in depreciation and amortization,
and a ¥17,646 million increase in accounts payable. Cash flows from investing activities were ¥43,203 million in
outflows, primarily due to ¥31,836 million in capital expenditures mainly in the information-related equipment
and electronic devices segments, and to purchase of investments in subsidiaries of ¥13,405 million.
Cash flows from financing activities were negative ¥41,087 million, due to a net decrease caused by repayment
of loans totaling ¥39,580 million.
As a result, cash and cash equivalents at the end of the fiscal year totaled ¥254,590 million.
* Please refer to the following for historical information about Epson’ s financial results:
http://global.epson.com/IR/investor relations fr archive.htm