Oki 2002 Annual Report Download - page 20

Oki Electric Industry Co., Ltd. Annual Report 200218
Capital Investment
Capital investment fell 39.0%, or ¥17,709 million, to ¥27,752 mil-
lion. The provision for depreciation of property, plant and equipment
included within cost of sales and SG&A expenses dropped 3.7%, or
¥1,447 million, to ¥37,593 million.
R&D Expenses
R&D expenses fell 24.4%, or ¥7,271 million, to ¥22,571 million, and
the ratio of R&D expenses to net sales dropped from 4.0% to 3.7%.
Oki is narrowing its R&D focus to increase the efficiency of R&D
expenses, concentrating development investments in such prioritized
sectors as broadband IP networks and system LSI.
Cash Flows
Net cash provided by operating activities plummeted 72.9%, or ¥45,478
million, to ¥16,927 million. This was despite improvements in working
capital, and can be attributed to lower income caused primarily by a
steep drop in net sales.
Net cash used in investing activities rose 85.4%, or ¥11,910 million,
to ¥25,848 million. Although cash used in capital investment fell, pro-
ceeds from sales of marketable securities decreased compared with the
previous period.
Net cash provided by financing activities amounted to ¥320 million,
compared with net cash used in financing activities of ¥63,557 million
in the previous period. This was due to cuts in interest-bearing debt lim-
ited to ¥1,570 million, compared with ¥63,517 million in fiscal 2001.
As a result of the above factors, cash and cash equivalents at end of the
year fell 14.1%, or ¥7,440 million, to ¥45,445 million.
Outlook
The domestic economy is showing signs of bottoming out, inventory
consolidation in the global IT industry is proceeding smoothly, the
U.S. economy appears more solid and recovery centered on elec-
tronic devices is thought likely. For these reasons, Oki anticipates
higher sales and dramatically improved revenue, despite the harsh
Japanese economy, reduced capital investment and a worsening
employment situation.
Fiscal 2003 is the run-up year for Phoenix 21 Sky-High. During
this period, Oki aims to reorganize its business framework to yield
profits, even if these levels do not improve on the fiscal 2002 net
sales, which were affected by the unexpectedly rapid changes in the
market environment. In fiscal 2003, Oki predicts net sales totaling
¥640,000 million and operating income of ¥8,000 million. We also
expect to break even.
Capital Investment and Depreciation and Amortization
(Millions of yen)
R&D Expenses and R&D Expenses to Net Sales
(Millions of yen) (%)
Cash Flows
(Millions of yen)
31,254
45,461
27,752
47,854 49,251 48,053 29,509 29,842
22,571
4.4% 4.0% 3.7%
55,919 62,405
16,927
–54,508 –63,557
320
–43,463
–13,938
–25,848
R&D Expenses
R&D Expenses to Net Sales
Cash Flows from Operating Activities
Cash Flows from Investing Activities
Cash Flows from Financing Activities
Capital Investment
Depreciation and Amoritization
0
10,000
20,000
30,000
40,000
50,000
0
6,000
12,000
18,000
24,000
30,000
0
2
4
6
8
10
–80,000
–48,000
–16,000
16,000
0
48,000
80,000
2001 20022000 2001 20022000 2001 20022000