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Annual Report 2010-2011
For the year ended March 31, 2010

Table of contents

  • Page 1
    Annual Report 2010-2011 For the year ended March 31, 2010

  • Page 2
    ... sales. As Alpine Electronics set its sights on even greater growth and development, we will be implementing a business model in which our goal is delivering not just products but mobile media solutions, which include technologies and services. Towards that end, Chairman Ishiguro and I will work...

  • Page 3
    ... Net sales Overseas sales Operating income Net income Cash ï¬,ows from operating activities Free cash ï¬,ow Capital expenditures R&D expenses ROA (Return on assets) (%) ROE (Return on equity) (%) Amounts per share of common stock Net income (Â¥) Cash dividends applicable to the year (Â¥) At year-end...

  • Page 4
    .... Since Alpine's founding in 1967, we have steadfastly developed new products that embody the highest quality and state-ofthe-art technology. Starting as a manufacturer of car audio systems, we have become a mobile multimedia company whose primary focus is car navigation systems with audio, visual...

  • Page 5
    ...all of the emerging countries. In the car electronics sector, there are signs of a turnaround, but with automotive demand shifting to low-end compact cars, which have lower rates of navigation system installation, and weakness in personal spending, both OEM and aftermarket product sales remain weak...

  • Page 6
    ..." Product Creation 3 Link Strategy 4 Green Strategy + and other emerging countries * AVNCD: Audio, Visual, Navigation, Communication, Drive assist 5 Growth strategy in the Chinese market Current forecasts project growing demand for both environment-friendly electric and hybrid cars and highly...

  • Page 7
    ...visionary products. 3 Link strategy Alpine is developing new solutions to answer growing demand for user-friendly interaction between cars and mobile devices. In the USA, we have pioneered the development and introduction of head units linked to an iPhone application. As a leading system integrator...

  • Page 8
    ...a personal radio station. From the names of artists and titles of songs input to the app, it analyzes the user's musical tastes and tailors broadcasts to them. This free music distribution service has become a favorite with iPhone users in America, and the iDA-X305S, which brings this service to car...

  • Page 9
    ...region, Alpine is supplying ITS units for a "Future Driving Tourism System," for electronic distribution of local travel information. The car electronics devices supplied by Alpine will include next-generation online payment as well as information service features and are scheduled for delivery this...

  • Page 10
    ... and Auditors Seizo Ishiguro Chairman Toru Usami President & CEO Hitoshi Kajiwara Managing Director Kazuo Nakamura Managing Director Hirofumi Morioka Managing Director (As of July 2010) Chairman President & CEO Managing Directors Directors Seizo Ishiguro Toru Usami Hitoshi Kajiwara Hirofumi...

  • Page 11
    ... Section Financial Highlights Consolidated Financial Review Consolidated Balance Sheets Consolidated Statements of Operations Consolidated Statements of Changes in Net Assets Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements Independent Auditors' Report 12 14 16 18 19...

  • Page 12
    ... 222,779 180,828 10,148 7,932 12,472 3,229 7,332 10,402 22,438 5.3 9.4 At year-end: Current assets Property, plant and equipment Current liabilities Noncurrent liabilities Capital stock Retained earnings Total shareholders' equity Total net assets Total assets Equity ratio (%) 81,400 22,810 56,092...

  • Page 13
    Thousands of U.S Dollars 2006 2007 2008 2009 2010 2010 For the year: Net sales (Overseas Sales) Operating income(loss) Net income(loss) Net cash provided by operating activities Free cash flow Depreciation Capital expenditures R&D expenses ROA (Return on assets) (%) ROE (Return on equity) (%)...

  • Page 14
    ...-end speakers and amplifiers for minivans with clear cabin audio reproduction, leading to an expanded market share. However, intensified price competition over head units contributed to harsh operating conditions. In the European and U.S. aftermarkets, sound system products with upgraded cabin audio...

  • Page 15
    ... devices (PNDs) and smart phones equipped with navigation functions. Brand-name products for automobile manufacturers evidenced initial signs of recovery, despite moderate sales of luxury and larger cars with high factory installation rates for navigation systems in the North American and Chinese...

  • Page 16
    ... of U.S. Dollars (Note 1) ASSETS Current assets: Cash and cash equivalents Notes and accounts receivable-trade: Unconsolidated subsidiaries and affiliates Trade Allowance for doubtful accounts Inventories (Note 4) Deferred tax assets (Note 9) Other Total current assets 2010 2009 2010 ¥ 39...

  • Page 17
    ... liabilities: Short-term loans payable (Note 5) Notes and accounts payable-trade: Unconsolidated subsidiaries and affiliates Trade Income taxes payable (Note 9) Accrued expenses Deferred tax liabilities (Note 9) Provision for product warranties Other Total current liabilities ¥ 2010 43 ¥ 2009...

  • Page 18
    ...Dollars (Note 1) 2010 Net sales (Note 12) Costs and expenses (Note 12): Cost of sales Selling, general and administrative expenses Operating income(loss) (Note 12) Other income (expenses): Interest and dividend income Interest expense Foreign exchange gains (losses) Equity in earnings of affiliates...

  • Page 19
    ALPINE ELECTRONICS, INC. Consolidated Statements of Changes in Net Assets Years ended March 31, 2010, 2009 and 2008 Millions of Yen Valuation difference on Revaluation available-for-sale reserve for securities land Capital stock Capital surplus Retained earnings Treasury stock Foreign currency...

  • Page 20
    ... (gain) on sale of property, plant and equipment Gain on exchanges of land use rights Decrease (increase) in notes and accounts receivable-trade Decrease (increase) in inventories Increase (decrease) in notes and accounts payable-trade Increase (decrease) in provision for product warranties Gain on...

  • Page 21
    ...respects as to application and disclosure requirements of International Financial Reporting Standards. The accounts of overseas subsidiaries are based on their accounting records maintained in conformity with generally accepted accounting principles prevailing in the respective countries of domicile...

  • Page 22
    ... and funded pension plans covering all employees. Under the terms of the plans, eligible employees are entitled, upon reaching mandatory retirement age or earlier voluntary severance, to severance and retirement benefit payments based on the length of their services, base salary at the time of...

  • Page 23
    (13) Provision for product warranties The Company and certain of its consolidated subsidiaries provide accrued warranty costs for goods sold based on historical experience of actual after-sales service costs. (18) Software costs The Company included software in other assets and depreciated it using...

  • Page 24
    ... were as follows: Acquisition cost Book value Difference $42,949 2,246 $45,195 $137,435 1,376 $138,811 $94,486 (870) $93,616 Millions of Yen Thousands of U.S. Dollars 2010 Equity securities issued by subsidiaries and affiliated companies not consolidated or accounted for using the equity...

  • Page 25
    ... of U.S. Dollars 2010 Finished goods Work in process Raw materials and supplies Total ¥12,833 670 4,245 ¥17,748 2009 ¥13,443 1,068 4,566 ¥19,077 2010 $137,930 7,201 45,626 $190,757 5. Short-Term and Long-Term Debt Short-term loans payable generally consisted of overdrafts from banks with...

  • Page 26
    ...The components of employee's severance and pension expenses for the years ended March31, 2010, 2009 and 2008 were as follows. Millions of Yen Thousands of U.S. Dollars 2010 Service costs - Benefits earned during the year Interest costs on projected benefit obligation Expected return on plan assets...

  • Page 27
    ...to be designated as common stock. However, a company may, by a resolution of the Board of Directors, designate an amount not exceeding one-half of the price of the new shares as additional paid-in capital, which is included in capital surplus. Under the Law, in cases where a dividend distribution of...

  • Page 28
    ... components of the Companies' deferred tax assets and liabilities as of March 31, 2010 and 2009 were as follows: Millions of Yen Thousands of U.S. Dollars 2010 Deferred tax assets: Provision for product warranties Depreciation Provision for retirement benefits Accrued expenses Elimination...

  • Page 29
    ...1,495 0 (0) (125) 2,703 ¥3,964 4,115 113 2,058 145 Thousands of U.S. dollars Contract value 2010 Currency related Forward foreign exchange contracts To sell U.S. dollars To sell Euro Currency option To sell Euro To buy Euro Total Over one year Fair value Recognized gains (losses) $33,362 51...

  • Page 30
    ... be transferred to the lessees, are accounted for in the same manner as operating leases. At March 31, 2010 and 2009, the equivalent amounts of purchase price, accumulated depreciation and book value of leased properties were as follows: Millions of Yen Thousands of U.S. Dollars 2010 Purchase price...

  • Page 31
    ...The Companies' primary business activities include (1) Audio Products business, which consists of car audio systems and audio accessories, etc., and (2) Information and Communication Equipment business, which consists of car communications and electronic components. A summary of net sales, costs and...

  • Page 32
    ...ended March 31, 2009, 2008 and 2007 were as follows: Millions of yen 2010 I. Sales and operating income Net sales: Outside customers Inter-segment Total Costs and expenses Operating income II. Identifiable assets Japan North America Europe Asia Other areas Total Elimination and/or corporate...

  • Page 33
    ...Â¥ (32,760) Thousands of U.S. dollars 2010 I. Sales and operating income Net sales: Outside customers Inter-segment Total Costs and expenses Operating income II. Identifiable assets Japan North America Europe Asia Other areas Total Elimination and/or corporate Consolidated $ 370,077 1,025...

  • Page 34
    ...2010 I. Overseas sales II. Consolidated sales III.Ratio of overseas sales (%) North America Europe Asia Other areas Total $447,077 24.7% $826,816 45.6% $192,348 10.6% $20,593 1.2 % $1,486,834 1,811,973 82.1 % Overseas sales consist of export sales by the Company and sales by the overseas...

  • Page 35
    ... and 2009, and the results of their operations and their cash flows for each of the three years in the period ended March 31, 2010, in conformity with accounting principles generally accepted in Japan. Without qualifying our opinion, we draw attention to the following: As discussed in Note 2(6) to...

  • Page 36
    ... subsidiaries, and other affiliates around the globe. The Group categorizes its operations into three product categories: electronic components; audio equipment; and logistics and others. Alpine is the Alps Group's specialized supplier of quality car audio and navigation systems. Alps Electric Co...

  • Page 37
    Global Network Headquarters Regional Headquarters Sales Office Manufacturing Plant Development Center North and Latin America Europe Asia and Oceania Japan ALPINE ELECTRONICS OF AMERICA, INC. (DETROIT) ALPINE ELECTRONICS OF AMERICA, INC. (L.A.) ALPINE ELECTRONICS (EUROPE) GMBH (MUNICH) ...

  • Page 38
    Iwaki Headquarters: 20-1, Yoshima-Kogyodanchi, Iwaki, Fukushima 970-1192 Phone: +81-246-36-4111 Fax: +81-246-36-8309 Tokyo Headquarters: 1-1-8, Nishi-gotanda, Shinagawa-ku, Tokyo 141-8501 Phone: +81-3-3494-1101 Fax: +81-3-3494-1109