Oki 2010 Annual Report Download - page 31

Annual Report 2010 27
FINANCIAL POSITION
ASSETS AND LIABILITIES
At fiscal year-end, total assets decreased ¥13.4 billion year on year
to ¥383.6 billion. By contrast, shareholders’ equity rose ¥6.0 billion
from the previous fiscal year-end, to ¥57.7 billion due to net
income of ¥3.6 billion and an increase in valuation, translation
adjustments, and other. As a result, the shareholders’ equity ratio
increased to 15.0%.
Major components of the increase and decrease in assets
included a decrease of ¥17.5 billion in inventories, and an increase
of ¥14.6 billion in marketable securities among current assets, and
a decrease of ¥6.2 billion in non-current assets, centering on prop-
erty, plant, and equipment.
Total liabilities declined ¥19.5 billion. Interest-bearing debt
decreased ¥31.3 billion from ¥203.8 billion of the previous fiscal
year to ¥172.5 billion, due mainly to repayment of long-term debt
and pre-maturity redemption of corporate bonds. Notes and
accounts payable increased ¥2.4 billion, and allowance for retire-
ment benefits rose ¥5.2 billion.
CASH FLOWS
Net cash provided by operating activities amounted to ¥51.3 bil-
lion, up ¥32.4 billion from the previous year. This was attributable
mainly to income before income taxes and improved working
capital.
Net cash used in investing activities totaled ¥13.0 billion, due
largely to purchases of property, plant, and equipment. This com-
pares with ¥57.5 billion in net cash provided by investing activities
in the previous fiscal year, due to the transfer of the semiconduc-
tor business subsidiary’s shares.
Free cash flows, which are the sum of cash from operating
activities and investing activities, saw a net inflow of ¥38.3 billion,
down ¥38.1 billion from the previous year.
Net cash used in financing activities was ¥31.3 billion, down
¥28.2 billion from the previous year. This was due mainly to repay-
ment of long-term debt and pre-maturity redemption of bonds.
The net inflow from operating, investing, and financing activi-
ties was ¥7.0 billion, down ¥9.9 billion from the previous year. As a
result, cash and cash equivalents at fiscal year-end stood at ¥71.2
billion, up from ¥64.4 billion a year earlier.
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 busi-
ness subsidiary. Excluding the effects of the transfer, capital
expenditures declined ¥1.7 billion year on year to ¥8.6 billion,
reflecting cutbacks in the planned investment due to sales decline
caused by the deteriorated economic environment. Depreciation
declined ¥2.5 billion year on year to ¥10.5 billion, reflecting
decreased capital expenditures. R&D expenses totaled ¥14.6 bil-
lion, down ¥1.1 billion from the previous year.
OUTLOOK FOR FISCAL YEAR ENDING MARCH 31, 2011
In the fiscal year ending March 31, 2011, economic conditions in
Japan and overseas are expected to maintain a recovery tone,
especially in newly emerging nations. Due to instability in the euro-
currency economic block sparked by fiscal problems in Greece,
however, foreign exchange and stock markets are fluctuating dra-
matically, and there are concerns that such factors could impact
the general economy.
Under these circumstances, the OKI Group announced its new
mid-term business plan up to FY ending March 31, 2013 in
February 2010. The basic strategy of the plan is to “establish a
business structure which is capable of generating profit stably
without depending on sales expansion even under the severe busi-
ness environment.” In the year ending March 31, 2011, the first
year of the plan, the Group forecasts consolidated net sales of
¥450 billion, up ¥6.1 billion from the previous fiscal year. Factors
boosting sales include an expected increase in sales volume due
to the launch of new models of LED printers, expansion of the
EMS and services businesses, and increased sales of ATMs in
China, where conditions remain favorable. By contrast, we expect
sales to be negatively affected by the strong yen and lower sales
to government agencies.
Despite ongoing business structural reforms aimed at generat-
ing stable profit, the Group forecasts a ¥2.0 billion decline in
operating income to ¥12.0 billion, due to the strong yen and falling
sales prices, as well as partial optimization of its treatment plans.
Although operating income is expected to decline, we forecast a
¥0.9 billion increase in net income, to ¥4.5 billion, owing to
improvements in non-operating income/expenses stemming from
reductions in interest-bearing debt, as well as improvements in
extraordinary income/loss due to such factors as amortization of
negative goodwill in Oki Wintech Co., Ltd., which became a wholly
owned subsidiary.
Forecast for the fiscal year ending March 31, 2011, calculations
were based on the assumption of foreign exchange rates of ¥90
per U.S. dollar and ¥120 per euro.
Performance Forecasts for the Fiscal Year Ending March 31, 2011
(Billions of yen unless otherwise stated)
Operating Net Income
Net Sales Income Net Income per Share (Yen)
¥450.0 ¥12.0 ¥4.5 ¥6.22
20
(Billions of yen) (%)
(Ended March 31)
R&D Expenses/
R&D Expenses to Net Sales
10
15
5
0
4
2
3
1
0
2008 2009 2010
18.2
16.8
14.6
2.5%
3.1%
3.3%
R&D Expenses (left scale)
R&D Expenses to Net Sales (right scale)