Oki 2009 Annual Report Download - page 27

Annual Report 2009 25
cial Accounting Standard for Inventory Valuation; a ¥5.2 billion loss on
the transfer of the semiconductor business; and a ¥7.4 billion reversal of
translation adjustments, in addition to worsened operating income. As
a result, OKI recorded a net loss of ¥45.0 billion, a negative turnaround
of ¥45.6 billion from the net income of ¥0.6 in the previous fiscal year.
Against this backdrop, net income per share of ¥0.83 in the previous
fiscal year deteriorated into a net loss per share of ¥65.90.
FINANCIAL POSITION
ASSETS AND LIABILITIES
Total assets decreased ¥173.8 billion year on year to ¥397.0 billion. The
impact from the share transfer of the semiconductor business subsidiary
is anticipated to be a negative ¥135.4 billion. Shareholders’ equity fell
¥42.9 billion from the previous fiscal year-end to ¥51.7 billion due to the
net loss. As a result, the shareholders’ equity ratio declined to 13.0%.
Major components of the decline in assets included decreases of
¥49.2 billion in notes and accounts receivable, ¥58.6 billion in invento-
ries, and ¥64.6 billion in property, plant and equipment.
Total liabilities declined ¥131.1 billion compared with March 31,
2008. Interest-bearing debt decreased ¥63.6 billion from ¥267.4 billion
of the previous fiscal year to ¥203.8 billion, reflecting the allocation
of a part of proceeds from the transfer of the semiconductor business
subsidiary’s shares to redeem corporate bonds and repay debt. Other
factors contributing to the decrease in liabilities were declines of ¥34.4
billion in notes and accounts payable, ¥22.8 billion in other accrued
expenses and ¥5.7 billion in retirement benefits.
CASH FLOWS
Net cash provided by operating activities fell ¥23.6 billion from ¥42.5
billion in the previous fiscal year to ¥18.9 billion. This was attributable
to the decrease in accounts receivables and inventories despite net loss
before income taxes.
Net cash provided by investing activities amounted to ¥57.5 billion
an ¥80.4 billion turnaround from net cash used in investing activities
of ¥22.9 billion in the previous fiscal year, owing to the transfer of the
semiconductor business subsidiary’s shares.
Free cash flows, which are the sum of cash from operating activities
and investing activities, improved to ¥76.4 billion, up ¥56.7 billion from
¥19.7 billion in the previous fiscal year.
Net cash used in financing activities amounted to ¥59.5 billion,
up from ¥19.4 billion in the previous fiscal year. This was due to the
redemption of corporate bonds and repayment of long-term debt.
As a result, cash and cash equivalents as of the fiscal year-end stood
at ¥64.4 billion, up from ¥49.8 billion from the previous fiscal year-end.
CAPITAL EXPENDITURES, DEPRECIATION AND RESEARCH
AND DEVELOPMENT EXPENSES
Capital expenditures, depreciation and R&D expenses all decreased due
to the share transfer of the semiconductor business subsidiary. Capital
expenditures declined ¥9.5 billion year on year to ¥15.9 billion, reflect-
ing the cutbacks in the planned investment due to the deteriorated
economic environment. Depreciation declined ¥8.0 billion year on year
to ¥18.8 billion, reflecting decreased capital expenditures. R&D expenses
totaled ¥16.8 billion, down ¥1.4 billion from the previous fiscal year.
OUTLOOK FOR THE FISCAL YEAR ENDING MARCH 31, 2010
In the fiscal year ending March 31, 2010, some companies showed a
sign of recovery on the back of government policies to boost economy
and support corporate activities around the world. However, future
economic prospects remain uncertain. The business environment sur-
rounding the OKI Group is expected to remain harsh, particularly in the
first half of the year ending March 31, 2010.
In Info-Telecom Systems segment, OKI anticipates ¥280.0 billion in
sales, down ¥22.3 billion year on year, while expecting a ¥5.0 billion
increase in operating income to ¥12.0 billion. In the financial systems
business, ATM shipments to China are expected to grow while in the
domestic market, replacement demand from the retail market and new
demand due to the development of branch systems are both antici-
pated to bottom out. The telecom system business is expected to record
decreased sales reflecting steps aimed at revamping of the business struc-
ture in line with the measure to “accelerate business selection and con-
centration.” In the information systems business, public-sector demand
will remain almost on par with that of the fiscal year under review. How-
ever, sales to the corporate sector are expected to decrease, reflecting the
deteriorating economic environment.
In Printers segment, OKI is anticipating an increase in shipments
thanks to its efforts to introduce higher-speed, eco-friendly and low-
cost products leveraging its LED technology. However, a strong yen
could have a significant impact on the business, resulting in decreased
earnings. Thus we anticipate ¥150.0 billion in segment sales, down
¥10.7 billion from the fiscal year under review, while operating income
is expected to grow ¥1.2 billion to ¥9.0 billion.
In Other segment, sales are forecasted to increase ¥1.4 billion to
¥30.0 billion, and operating income is expected to recover ¥1.4 billion
bringing this segment to a breakeven position.
The OKI Group’s consolidated net sales for the fiscal year ending
March 31, 2010 are projected to be ¥460.0 billion, down ¥85.7 billion
from the fiscal year under review, reflecting the impact of the ¥54.1 bil-
lion loss due to the semiconductor business subsidiary transfer. On the
other hand, despite the ¥5.1 billion operating loss recorded in Semi-
conductors segment in the fiscal year under review, operating income
0
10
20
30
40
Capital Expenditures / Depreciation
Billions of yen
Capital Expenditures
Years ended March 31
Depreciation
2007 2008 2009
26.8
25.4
15.9
27.3
37.7
18.8
0
10
20
30
R&D Expenses / R&D Expenses to Net Sales
Billions of yen
R&D Expenses
Years ended March 31
R&D Expenses to Net Sales (%)
2007 2008 2009
21.3
16.8
18.2
3.0%
2.5%
3.1%