Omron 2003 Annual Report Download - page 26

Costs, Expenses and Income as Percentages of Net Sales
2003 2002 2001
Net sales................................... 100.0% 100.0% 100.0%
Cost of sales............................. 61.2 66.2 63.3
Gross profit .............................. 38.8 33.8 36.7
Selling, general and
administrative expenses ........ 25.3 25.3 22.1
Research and
development expenses .......... 7.5 7.7 7.1
Interest expenses, net ............. 0.1 0.0 0.0
Income (loss) before income
taxes, minority interests and
cumulative effect of
accounting change ................. 0.9 (4.8) 6.7
Income taxes............................ 0.7 (1.8) 2.9
Income (loss) before cumulative
effect of accounting change ...... 0.1 (3.0) 3.8
Cumulative effect of
accounting change ................. —0.0 —
Net income (loss)..................... 0.1 (3.0) 3.8
Other expenses, net, decreased to ¥26,658 million from
¥27,865 million for the previous fiscal year. The primary
component of this total was a charge of ¥18,968 million in
connection with Omron’s voluntary early retirement pro-
gram, under which participating employees received a
lump sum payment in addition to the retirement benefits
they had earned. Management believes that the cost and
efficiency benefits of this program will support consis-
tently higher earnings. Loss on impairment of investment
securities and other assets decreased substantially to
¥2,269 million from ¥17,199 million for the previous fiscal
year. Loss on impairment of property, plant and equip-
ment totaled ¥4,231 million, compared to ¥6,815 million
for the previous fiscal year. The Group carried out an
assessment of impairment of certain long-lived assets at
Omron and its subsidiaries, with consideration given to
future transfer, including the possibility of disposal. As a
result, certain land and buildings, which were not expect-
ed to recover their entire carrying value through future
cash flows, were written down to fair value.
* Not calculated in 2002 due to net loss.
Despite the effect of other expenses, net, the increase in
gross profit supported income before income taxes,
minority interests and cumulative effect of accounting
change of ¥4,732 million, compared to a loss before
income taxes of ¥25,373 million for the previous fiscal
year. Net income totaled ¥511 million, compared to a net
loss of ¥15,773 million for the previous fiscal year. Basic
net income per share was ¥2.1, compared to a net loss per
share of ¥63.5 for the previous fiscal year. After consider-
ing performance and the Group’s capital requirements as
it invests to generate profitable long-term growth, Omron
paid cash dividends applicable to the fiscal year totaling
¥10.00 per share, compared to cash dividends of ¥13.00
per share applicable to the previous fiscal year.
Review of Operations by Company
Because of divisional restructuring among companies,
prior-year net sales of internal companies have been
recalculated to present a more realistic year-on-year com-
parison.
Composition of Net Sales
2003 2002 2001
Industrial Automation ............. 37.8% 34.5% 38.3%
Electronic Components ........... 25.9 24.7 21.8
Social Systems Business ........ 21.8 24.0 23.9
Healthcare ................................ 7.9 7.6 6.6
Others ....................................... 6.6 9.2 9.4
Note: The composition of net sales is based on the classifications reported in the
Six-year Summary.
1999 2000 2001 2002 2003
1,430
2,518 1,897 1,731
1,291
23.59
5.56
14.64
26.83
4.36
1.5
0.4
2.1
3.8
-3.0
1999 2000 2001 2002 2003
3.8
6.7
-4.8
0.1
0.9
1999 2000 2001 2002 2003
0.1 0.5 0.9
-0.6
0.0
1999 2000 2001 2002 2003
8.3
44.5 85.3
-63.5
2.1
175.0
64.9
900.8
23.6
Income (Loss) Before Income
Taxes, Minority Interests and
Cumulative Effect of
Accounting Change/Net
Sales and Net Income (Loss)/
Net Sales (%)
● Income (Loss) Before Income
Taxes, Minority Interests and
Cumulative Effect of
Accounting Change/Net Sales
● Net Income (Loss)/Net Sales
Interest Expenses and
Interest Coverage
(Millions of Yen/Times)
■Interest Expenses
●Interest Coverage
Earnings per Share and
Price/Earnings Ratio (Yen/Times)
■Earnings per Share
●Price/Earnings Ratio*
Net Income (Loss) per Employee
(Millions of Yen)
24 • Omron Corporation