Epson 2013 Annual Report Download - page 22

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Devices and Precision Products Segment
Net sales in the devices business declined.
Crystal device net sales declined. Tuning-fork crystal net sales fell due to falls in unit shipments and
average selling prices. AT-cut crystal unit sales also declined despite unit shipment growth, as unit prices
plummeted.
Semiconductor net sales decreased. While silicon foundry order volume increased, net sales were heavily
impacted by a decline in unit shipments of LCD controllers and LCD drivers for automotive applications.
Net sales in the precision products business declined.
The watch business reported an increase in net sales. This revenue growth was primarily the result of
increases in unit shipments of solar GPS watches, solar radio-controlled watches, and high-end models, as
well as a jump in average selling prices. In factory automation systems, sales of robots increased on a jump
in orders from China and other regions in Asia. On the other hand, sales of IC handlers decreased due to
sluggish demand from semiconductor manufacturers serving the PC and mobile phone markets.
Segment income in the devices and precision products segment increased thanks to a rebound in crystal
device profit and increased watch profits.
As a result of the foregoing factors, net sales in the devices and precision products segment were ¥156,872
million ($1,667,963 thousand), down 10.3% year over year, while segment income was ¥7,658 million
($81,424 thousand), up 65.4% year over year.
Other
Net sales from other operations in the year under review were ¥1,273 million ($13,535 thousand), down
92.6% year over year. Segment loss was ¥1,191 million ($12,663 thousand), compared to a ¥1,545 million
segment loss recorded in the same period last year. The decrease in net sales is a result of the termination of
the small- and medium-sized display business.
Adjustments
Adjustments to the total income of reporting segments amounted to -¥37,883 million (-$402,797 thousand),
compared to -¥43,345 million recorded in the same period last year. Adjustments were mainly due to the
recording of income related to patents and to selling, general and administrative expenses for areas that do
not correspond to the reporting segments, such as research and development expenses for new businesses
and basic technology, and general corporate expenses.
(2) Cash Flow Performance
Net cash provided by operating activities during the year was ¥42,992 million ($457,118 thousand),
compared to ¥26,678 million in the previous fiscal year. Although certain factors such as a ¥3,479 million
loss before income taxes and minority interests and a payment of ¥10,692 million in income taxes had a
negative effect, cash flows from operating activities increased on the whole because of factors such as the
recording of ¥39,320 million in depreciation and amortization expenses and a ¥18,588 million decrease in
inventory.
Net cash used in investing activities was ¥39,511 million ($420,106 thousand), up from ¥31,528 million in
the previous fiscal year. Although the company recorded ¥3,147 million in income associated with a
business transfer, it also recorded ¥43,846 million for the purchase of property, plant and equipment and
the purchase of intangible assets.
Net cash from financing activities was ¥21,298 million ($226,454 thousand), compared to a negative cash
flow of ¥57,406 million in the previous fiscal year. While there was a ¥10,000 million net decrease in
bonds and a ¥4,651 million payment of dividends, net cash from financing activities increased mainly due
to a ¥36,462 million net increase in short-term and long-term loans payable.
As a result, cash and cash equivalents at the end of the fiscal year totaled ¥184,639 million ($1,963,200
thousand) compared to ¥150,029 million at the end of the previous fiscal year.
* Please refer to the following for historical information about Epson’s financial results:
http://global.epson.com/IR/