Omron 1999 Annual Report Download - page 22

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20
SPECIALTY PRODUCTS:
In fiscal 1999, sales by the Specialty Products Division were up a solid 8.6% from the previous fiscal
year. Despite inventory adjustments by copy machine makers, downturns in the prices of peripheral
devices for personal computers and a decline in sales of scanners for overseas markets, our compact
car related products manufactured under the new standard contributed to a rise in sales of automotive
electronic components in the domestic market. Overseas, sales of automotive electronic components
were brisk, supported by the strong automotive industry in the United States.
HEALTHCARE:
The Healthcare Division achieved 7.2% sales growth in fiscal 1999 compared with the previous fiscal
year thanks to consumers’ growing interest in self-maintenance and the improvement of health as well
as steady expansion in sales achieved by offering a wide range of products that meet consumer needs.
Overseas, sales of our mainstay digital thermometers were brisk.
OPEN SYSTEMS:
Sales by the Open Systems Division in fiscal 1999 plunged 36.4% from the previous fiscal year. The
Open Systems Division focused on supplying, introducing, and installing systems infrastructure center-
ing on personal computer servers as well as expanding the operation and maintenance services it
provides to customers. On the other hand, OMRON Microcomputer Systems Co., Ltd. (OMS), was
sold to streamline the business.
Sales by foreign subsidiaries in fiscal 1999 generated 30.2% of net sales due to sluggish domestic
sales, compared with 28.0% of net sales in fiscal 1998 and 25.6% in fiscal 1997.
COSTS, EXPENSES, AND INCOME
The ratios of costs, expenses, and income to net sales are as follows:
The cost of sales declined marginally, to ¥364,314 million ($3,011 million), during the period under
review. Despite this decline, the ratio of gross profit to net sales deteriorated to 34.4% in fiscal 1999,
down from 36.7% in fiscal 1998, due to the fall in net sales.
However, selling, general and administrative expenses dropped slightly, to ¥136,734 million ($1,130
million), from the previous fiscal year, while research and development expenses increased 6.2%, to
¥42,383 million ($350 million).
1999 1998 1997
Net sales............................................................................. 100.0% 100.0% 100.0%
Cost of sales....................................................................... 65.6 63.3 65.3
Gross profit......................................................................... 34.4 36.7 34.7
Selling, general and administrative expenses .................... 24.6 22.6 21.9
Research and development expenses ............................... 7.6 6.5 5.9
Interest expenses, net ........................................................ 0.1 0.1 0.3
Income before income taxes and minority interests ............ 1.5 6.9 6.6
Income taxes ...................................................................... 1.1 3.8 3.9
Net income ......................................................................... 0.4 3.1 2.6