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VICTOR COMPANY OF JAPAN, LIMITED
Annual Report 1998

Table of contents

  • Page 1
    VI C T O R C O M PAN Y O F J APAN , LI M I T ED Annual Report 1998

  • Page 2
    Financial Highlights Victor Company of Japan, Limited Millions of yen Thousands of U.S. dollars (Note A) 1996 1998 1997 1998 Net sales...Overseas ...Domestic ...Net income (loss)... ¥916,306 526,285 390,021 (4,703) ¥890,373 484,394 405,979 4,586 Yen ¥806,551 409,358 397,...

  • Page 3
    ... of growth in the multimedia age. Contents To Our Stockholders and Friends 2 Consumer Electronics 6 Professional Electronics 10 Components & Devices 12 Entertainment 13 Overseas Operations 14 Financial Information 15 Directory 31 Directors and Corporate Auditors 34 Corporate Data 35 JVC 1998 1

  • Page 4
    ...fiscal year. Orders have expanded substantially in strategic businesses, which are predicted to grow sharply, for such Professional Electronics products as the direct-drive image light amplifier (D-ILA) multimedia projector and the Digital-S video system as well as such Components & Devices products...

  • Page 5
    ...-bridges the gaps among various media, merging the fields of information, telecommunications and broadcasting. JVC possesses the most advanced digital technology in the world, including high-precision imaging technology, software control technology and highly effective coding technology JVC 1998 3

  • Page 6
    ... as a new standard video format for home use in digital broadcasting. In Professional Electronics, market share of the Digital-S professional video system, developed on the VHS format, is dramatically expanding in broadcasting, as exemplified by its use at Fox Television in the United States...

  • Page 7
    ...April 1998, we established JVC Europe Ltd. in London as headquarters for European operations, joining JVC Americas Corp., JVC ASIA Pte. Ltd. and JVC (China) Investment Co., Ltd. in the creation of a locally managed business structure of four overseas regional headquarters. JVC promotes production in...

  • Page 8
    ... o multimedia. Through the promotion of the " Victor Vision" mid-term plan, New AV, the Company's line of strategic high-value-added digital products, has accounted for a rising portion of Consumer Electronics sales-16% in fiscal 1998 compared with 4% in fiscal 1996. Portable video printer The VHS...

  • Page 9
    ... VCRs. As satellite and terrestrial broadcasting in North America, Europe, Japan and Asia gradually become digitized, JVC will introduce its D-VHS VCRs in line with each market's progress toward digital broadcasting. JVC continues to add value to the S-VHS format. In April 1998, S-VHS ET technology...

  • Page 10
    ... software, including DVD, and satellite and terrestrial digital broadcasting. JVC's technological prowess in wide-screen TVs has garnered widespread approval in Japan and overseas, as demonstrated by the AV-32WP model that received the European Television of the Year award in 1997. In 1998, a flat...

  • Page 11
    ...MD products ranging from portable models and radio cassette decks to Audio JVC products received the top recommendation in 10 categories of the summer 1998 " Best Buy" issue of HiVi, Japan's leading audio-video magazine. The advanced technologies that give JVC products the edge over other companies...

  • Page 12
    ...Digital-S video system, the ILA projector system and the wireless optical LAN system. throughout the world now use the format, including Fox Television in the United States and the British Broadcasting Corporation Digital-S System With the advent of digital broadcasting, JVC's professional DigitalS...

  • Page 13
    ... companies. In January 1998, JVC established a High- Speed Infrared Transmission System (HITS) research center with government and private sector cooperation to promote system development of a wireless network for home use based on JVC' s optical LAN technology. The new ILA projector...

  • Page 14
    ... communications devices, which require more compactness and density. In response to this demand, JVC established an advanced production line in July 1997. Components for high-capacity random access memory mediums, including CD-ROM and DVD-ROM drive mechanisms, optical pick-ups and motors for data...

  • Page 15
    ... New multimedia-related businesses focus on sales of CD-ROM and DVDROM packaged media and non-packaged content creation for distribution over communications lines. JVC plans to construct a content library complete with such entertainment as video, music, karaoke and games, as w ell as suc h non- ent...

  • Page 16
    ... to optimize JVC's world production structure for audio products. In November 1997, we completed a new VCR and camcorder factory in China for JVC Beijing Electronic Industries Co., Ltd. With the completion of this factory, production capability of the company expanded to one million units annually...

  • Page 17
    Five- Year Summary Victor Company of Japan, Limited Years ended March 31 Overseas Operations/ Financial Section Millions of yen Thousands of U.S. dollars (Note A) 1995 1994 1998 1997 1996 1998 For the year Net sales...Â¥916,306 Overseas ...526,285 Domestic ...390,021 Cost of sales ...629,859...

  • Page 18
    ...VHS home-use digital VCR, which was launched first in the United States, will further enhance JVC's lineup of New AV products. Professional Electronics The Professional Electronics business provides professional-use AV systems, information communication systems and security systems to broadcasting...

  • Page 19
    ...strategic products as build-up multilayer boards for the multimedia market, leading to predictions of a recovery in sales in the next fiscal year. Entertainment The Entertainment business offers such audio and visual software as CDs and videotapes, and engages in film distribution and game software...

  • Page 20
    ... were also made to promote the construction of an optimal worldwide production network, enhanced by the establishment of P.T. JVC Electronics Indonesia, to raise production capacity in audiovisual equipment and in components and devices, and to upgrade JVC's global information and distribution...

  • Page 21
    Financial Section Consolidated Statements of Operations Victor Company of Japan, Limited Years ended March 31, 1998, 1997 and 1996 Millions of yen Thousands of U.S. dollars (Note 1) 1996 1998 1997 1998 Net sales ...Costs and expenses: Cost of sales ...Selling, general and administrative ...

  • Page 22
    ... and affiliated companies ...Other (Notes 6 and 9) ...Total investments and advances...Property, plant and equipment: Land ...Buildings ...Machinery and equipment (Note 9)...Construction in progress...Less accumulated depreciation ...Net property, plant and equipment ...Deferred income taxes...

  • Page 23
    ... 1) 1997 Liabilities and stockholders' equity Current liabilities: Bank loans (Note 8) ...Current portion of long-term debt (Note 8)...Notes and accounts payable: Trade ...Construction ...Unconsolidated subsidiaries and affiliated companies ...Accrued income taxes (Note 7)...Accrued expenses (Note...

  • Page 24
    Consolidated Statements of Stockholders' Equity Victor Company of Japan, Limited Years ended March 31, 1998, 1997 and 1996 Millions of yen Additional paid-in Legal capital reserve Shares of common stock (thousands) Common stock Retained earnings Balance at March 31, 1995 ...Net income ......

  • Page 25
    Financial Section Consolidated Statements of Cash Flows Victor Company of Japan, Limited Years ended March 31, 1998, 1997 and 1996 Millions of yen Thousands of U.S. dollars (Note 1) 1996 1998 1997 1998 Cash flows from operating activities: Net income (loss) ...Adjustments to reconcile net ...

  • Page 26
    ... Statements Victor Company of Japan, Limited Years ended March 31, 1998, 1997 and 1996 1. BASIS OF FINANCIAL STATEMENTS The accompanying consolidated financial statements have been translated into English from those in Japanese which have been filed with the Ministry of Finance and the Tokyo Stock...

  • Page 27
    ...based on the weighted average number of shares of common stock outstanding during each year. Diluted net income per share of the common stock for the year ended March 31, 1996 was not shown since the outstanding convertible bonds had no dilutive effect on the net income per share data for 1996. Cash...

  • Page 28
    ... ... 8. SHORT-TERM BANK LOANS AND LONG-TERM DEBT Short-term bank loans of certain of the Company's consolidated subsidiaries consist of notes maturing generally in three months. The applicable annual interest rates on short-term bank loans outstanding at March 31, 1998 and 1997, ranged from 1.2% to...

  • Page 29
    ... year ended March 31, 1996. 11. CONTINGENT LIABILITIES The contingent liabilities of the Company and its consolidated subsidiaries at March 31, 1998, were as follows: Thousands of U.S. dollars Millions of yen As endorser of export bills discounted with banks...As guarantor for loans of employees...

  • Page 30
    ...years ended March 31, 1998, 1997 and 1996 is shown in the tables below. 1) Business segment information is as follows: Millions of yen Audiovisual and informationrelated business Eliminations and unallocation Entertainment business Total Consolidated total 1998: Sales External sales... 28 JVC 1998

  • Page 31
    Financial Section 2) Geographical segment information is as follows: Millions of yen Elimination and unallocation Consolidated total Japan Americas Europe Asia Total 1998: Sales External sales ...Intersegment sales ...Total sales...Operating expenses...Operating income (loss) ...Identifiable ...

  • Page 32
    ...balance sheets of Victor Company of Japan, Limited (a Japanese corporation) and subsidiaries as of March 31, 1998 and 1997, and the related consolidated statements of operations, stockholders' equity and cash flows for each of the three years in the period ended March 31, 1998, expressed in Japanese...

  • Page 33
    ...-7111 JVC Industrial America, Inc. 2320 Paseo De Las Americas, Suite 205, San Diego, California 92173, U.S.A. Telephone: 619-661-5300 JVC Entertainment, Inc. 2029 Century Park East, Suite 970, Los Angeles, California 90067, U.S.A. Telephone: 310-286-7212 Hughes-JVC Technology Corporation 2310 Camino...

  • Page 34
    ...Republic of Singapore Telephone: 255-8728 JVC Procurement Asia 71, Ayer Rajah Crescent, #02-05 Singapore 139951 Telephone: 775-0292 JVC Electronics Singapore Pte. Ltd. 79, Ayer Rajah Industrial Estate, Singapore 0513, Republic of Singapore Telephone: 776-4711 JVC Sales & Services (Malaysia) Sdn. Bhd...

  • Page 35
    ... of JVC America, Inc.) Hughes-JVC Technology Corporation JVC Industrial de Mexico, S.A. de C.V. JVC Manufacturing U.K. Ltd. JVC Video Manufacturing Europe GmbH JVC Electronics Singapore Pte. Ltd. JVC Electronics Malaysia Sdn. Bhd. Philips and JVC Video Malaysia Sdn. Bhd. JVC Manufacturing (Thailand...

  • Page 36
    ... Kishi General Manager, TV Division of AV & Multimedia Sector, Display Business Promotion Office of Multimedia Business Division Itaru Ozaki Asia, the Middle East and China; General Manager, Corporate Management Division for China, JVC Beijing Liaison Office; President, JVC (China) Investment Co...

  • Page 37
    ... Video Manufacturing Europe GmbH JVC Electronics Singapore Pte. Ltd. JVC Electronics Malaysia Sdn. Bhd. JVC Manufacturing (Thailand) Co., Ltd. JVC Components (Thailand) Co., Ltd. JVC Finance B.V. JVC Entertainment, Inc. JVC (China) Investment Co., Ltd. Note: JVC's fiscal 1998 consolidated financial...

  • Page 38
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