Kenwood 2003 Annual Report Download - page 13

Total assets
Shareholders' equity
Equity ratio
142.1 billion yen
13.7 billion yen
9.6%
• The home electronics business effectively moved into the black,
despite a temporary loss attributable to restructuring overseas,
as the overall effects of restructuring began contributing to its
earnings in the latter half of the fiscal year under review.
• The car electronics business earned a large income, supported
by strong demand in the Americas and Europe.
• The wireless radio business registered steady earnings results
again just as for the preceding year.
• Some other businesses sustained losses. One is the cellular
phone business, whose production was phased out at the end
of October 2002. We think the loss from these businesses was
a one time phenomenon for the fiscal year ended March 2003.
Non-consolidated results
In the fiscal year ended March 2003, non-consolidated net sales
followed almost the same path as consolidated net sales. While
domestic sales fell due to Japan's stagnant economy and
withdrawal from the production of cell phone terminals, sales
overseas declined below the previous year's levels, due mainly to
the withdrawal from the home electronics business in Asia. As a
result, non-consolidated net sales at home and abroad dropped
by 65.2 billion yen, year on year, to 157.8 billion yen.
On the other hand, the Company improved operating balance
by a remarkable 5.7 billion yen from the previous fiscal year,
posting a net income of 5.3 billion yen, thanks to: strong demand
overseas for car electronics/wireless radio equipment, the effects
of restructuring of the home electronics business, and company-
wide reduction in fixed costs.
Ordinary balance improved by 6 billion yen, year on year, to
register an income of 4.7 billion yen, a turnaround from the loss in
the previous fiscal year, after non-operating loss, such as interest
expense, was deducted from operating income.
Although the Company booked evaluation loss on its
investment securities, it posted an extraordinary income related to
the return of provisions for losses on investments in sales units
overseas, whose earnings picked up. As a result, net balance
achieved a "V-shaped" recovery, with an income of 4.2 billion
yen, an improvement of 32.8 billion yen from a year earlier,
significantly exceeding the Company's earlier forecast.
Assets, liabilities, and shareholders' equity at the end of
fiscal year ended March 2003
At the end of March 2003, total assets of the Kenwood Group
decreased 40.8 billion yen from the previous fiscal year. Cash
and deposits increased by 6.5 billion yen. Meanwhile, trade notes
and accounts receivable were 23 billion yen lower and inventories
dropped by 11 billion yen, while tangible fixed assets were down
by 5.3 billion yen, due to restructuring of the home electronics
business and reduction in inventories at sales firms. Intangible
fixed assets were also 2.9 billion yen down, affected by the
withdrawal from the cellular phone business.
Total liabilities decreased by 71.4 billion yen. Trade notes and
accounts payable were 27.2 billion yen less, due to the overhaul
of the business structure and the fact that the final day of the
previous fiscal year fell on a Sunday. Short-term and long-term
debts reduced by 20.1 billion yen and 9.2 billion yen, respectively,
as a result of a debt-for-equity swap worth 25 billion yen.
Provision for losses on business restructuring worth 10 billion yen
was removed, in the wake of the completion of this restructuring.
Of the total proceeds from a debt-for-equity swap and third-
party allotment of shares, 13.5 billion yen was credited each to
common stock and additional paid-in capital. Retained earnings
increased by 4.3 billion yen, reflecting a net income of 4.2 billion
yen and others. As a result, retained earnings were in the red by
34.2 billion, compared with the negative 38.6 billion yen at the
end of the previous fiscal year, thus the undisposed losses
decreased.
Consequently, total shareholders' equity increased 30.7 billion
yen, while negative net worth totaling 17 billion yen was erased.
Consolidated Financial Position
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KENWOOD Corporation Annual Report 2003