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VICTOR COMPANY OF JAPAN, LIMITED
April 1998-March 1999
ANNUAL REPORT 1999

Table of contents

  • Page 1
    VICTOR COMPANY OF JAPAN, LIMITED ANNUAL REPORT 1999 April 1998-March 1999

  • Page 2
    ... Victor Company of Japan, Limited Millions of yen 1999 Thousands of U.S. dollars (Note A) 1997 1999 1998 Net sales ...Overseas...1999. B. Cash dividends represent amounts applicable to respective years. Net Sales (Billions of yen) Net Income (Loss) (Billions of yen) Net Income (Loss) per Share...

  • Page 3
    ... digital systems integrator. Its position as one of the innovator to few companies in the world with large-scale operations in both hardware and software, along with the innovative technology that led to the development of VHS, provides JVC with a competitive advantage in the development of digital...

  • Page 4
    ...-Value 21," a three-year plan to prepare the Company for vanishing market boundaries, increasing globalization and digitization, and expanding networks. Objectives include reevaluating the Company's market position and technological stance, clarifying core competencies, and selecting businesses and...

  • Page 5
    ... use, D-VHS tape media, video-on-demand (VOD) multimedia systems, next-generation wireless optical local area networks (LANs) and high-density build-up multilayer printed wiring boards. In building a foundation for the digital era, we are advancing the development of technology essential to product...

  • Page 6
    ...lineup of high-value-added products. In Europe, we continue to bolster the professional electronics business with our strong brand recognition. In Asia, we enhance marketing capabilities in the professional electronics and components businesses and expand sales bases in the Middle East. In China, we...

  • Page 7
    ... operations. In Japan, we have already closed components factories generating low profits. The Company continues to manufacture high-value-added products in Japan while disposing and restructuring excess domestic production capacity and expanding overseas production. As part of restructuring...

  • Page 8
    Operational Outlook INTRODUCING PRODUCTS THAT ENRICH THE DIGITA L ERA HOME THEATER: VHS/DVC DECK MICRO MD COMPONENT SYSTEM FLAT-SCREEN TV 6 JVC 1999

  • Page 9
    ...D-VHS products in Japan. D-VHS decks will go on sale this year in Europe. Further efforts are being applied to add D-VHS products with more features to the lineup with our sights set on making D-VHS a central part in the networking era. Video camcorders have already digitized and recent developments...

  • Page 10
    ... large-scale displays for home theaters. Receiving high acclaim around the world, our wide-screen televisions will be ready to meet the expected increase in market demands. Based on our professional-use highquality large-screen D-ILA multimedia projector, the Company will develop the home-use D-ILA...

  • Page 11
    DIGITAL NETWORKED PRODUCTS: DIGITAL VIDEO CAMCORDER DIGITAL BROADCASTING AND D-VHS VIDEOCASSETTE RECORDER PORTABLE VIDEO PRINTER PERSONAL DIGITAL ASSISTANT JVC 1999 9

  • Page 12
    ... systems that relate to broadcasting. In addition to the Digital S series of D-9 compliant professional cameras and studio recorders for broadcasting, which have received high acclaim internationally, JVC has entered product fields that include encoders, decoders and archives. The Company is 10 JVC...

  • Page 13
    .... Utilizing karaoke disc-changing technology, a forte of the Professional Electronics business, our archives hold up to 600 DVDs, resolving such problems as space and searching. In broadcasting-related fields, JVC is making efforts that include system engineering in satellite video-ondemand systems...

  • Page 14
    ... free inter-layer connection in PWBs, which was perfected through the development of DVC. Our highdensity build-up multilayer PWBs, well received for their performance, quality and reliability, will meet the demand for compactness and high density. World-leading notebook PC makers are employing JVC...

  • Page 15
    ...multiple-channel television in Japan. In the audiovisual field, JVC is wholeheartedly promoting the acquisition of rights to high-quality works. The Company is also aggressively investing in the creation of multimedia content, a new field. Amid a widening gap in sales between hit products and runner...

  • Page 16
    ...April 1999, JVC established the Market Creation Division to expand sales of high-value-added digital products. It proposes systems centered on these products, including packaged products ranging from digital video to personal computer software and projector presentation systems for untried corporate...

  • Page 17
    Five-Year Summary Victor Company of Japan, Limited Years ended March 31 Millions of yen 1999 1998 1997 1996 1995 Thousands of U.S. dollars (Note A) 1999 For the year Net sales...Overseas ...Domestic ...Cost of sales ...Selling, general and administrative expenses ...Income (Loss) before income ...

  • Page 18
    ..., stereo systems, car audio systems, CD radio cassette tape players and telephones 107,642 11.4% 118,783 13.0% (9.4)% Professional-use and educational-use systems, information systems, karaoke systems and projectors 73,693 7.8% 70,843 7.7% 4.0% Components for use in computer displays, video heads...

  • Page 19
    .... On a volume basis, sales surged for such core products as motors and deflection yokes. A drop in prices, however, led to sales approximately the same as the previous fiscal year. Sales in the fast-growing business for high-density build-up multilayer printed wiring boards skyrocketed almost three...

  • Page 20
    ...JVC recognizes the seriousness of the Year 2000 (Y2K) problem, and is promoting Y2K readiness primarily through the Committee for Year 2000 Problems. The Committee comprises five smaller committees representing products, information systems, production materials, production facilities and buildings...

  • Page 21
    ...16,339) 36,909 (67,248) (1,471) (68,719) ¥ $ U.S. dollars (Note 2) Amounts per share of common stock: Net income (loss) ...Diluted net income ...Cash dividends applicable to the year ...See accompanying notes. ¥ (32.7) - 5.0 ¥ (18.5) - 7.0 ¥ 18.0 17.2 7.0 $ (0.27) - 0.04 JVC 1999 19

  • Page 22
    ... subsidiaries and affiliated companies ...Other (Notes 5 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...

  • Page 23
    ... of U.S. dollars (Note 1) 1998 1999 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...

  • Page 24
    Consolidated Statements of Stockholders' Equity Victor Company of Japan, Limited Years ended March 31, 1999, 1998 and 1997 Millions of yen Additional paid-in capital Shares of common stock (thousands) Common stock Retained earnings Balance at March 31, 1996 ...Net income...Adjustment due to ...

  • Page 25
    ... and affiliated companies...Other...Net cash used in investing activities ...Cash flows from financing activities: Proceeds from long-term loans...Repayments of long-term loans ...Proceeds from issuance of bonds ...Repayments of bonds...Increase (Decrease) in short-term bank loans ...Increase...

  • Page 26
    ... Years ended March 31, 1999, 1998 and 1997 1. BASIS OF PRESENTING CONSOLIDATED FINANCIAL STATEMENTS Victor Company of Japan, Limited (the "Company") and its consolidated domestic subsidiaries maintain their accounts and records in accordance with the provisions set forth in the Japanese Commercial...

  • Page 27
    ... of "mutual development through competition." There is no relationship of financial assistance between the two companies. Each company has a right of access to the technology developed by the other. At March 31, 1999, Matsushita held 133,227 thousand shares of common stock of the Company, 52.40...

  • Page 28
    ... discounted with banks...As guarantor for loans to employees...As guarantor for loans to affiliated companies ... ¥ 9,574 17,573 759 ¥27,906 $ 79,124 145,231 6,273 $230,628 11. STOCKHOLDERS' EQUITY Under the Commercial Code of Japan (the "Code"), at least 50% of the issue price of new shares...

  • Page 29
    ...1999, the Company's stockholders authorized payment of a cash dividend to stockholders of record on March 31, 1999 of ¥1.5 ($0.01) per share, totaling ¥381 million ($3,152 thousand). Buildings and structures ...Vehicles, machinery and equipment ...Tools, furniture and fixtures ...Leasehold rights...

  • Page 30
    ...years ended March 31, 1999, 1998 and 1997 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 1999: Sales External sales... 28 JVC 1999

  • Page 31
    ...Elimination and unallocation ¥890,373 - 890,373 878,865 ¥ 11,508 ¥603,920 Japan Americas Europe Asia Total Consolidated total 1999: Sales External sales...Intersegment sales ...Total sales ...Operating expenses ...Operating income (loss)...Identifiable assets... $3,924,884 2,038,132 5,963...

  • Page 32
    ... balance sheets of Victor Company of Japan, Limited (a Japanese corporation) and subsidiaries as of March 31, 1999 and 1998 and the related consolidated statements of operations, stockholders' equity and cash flows for each of the three years in the period ended March 31, 1999, expressed in Japanese...

  • Page 33
    ...JVC House, JVC Business Park, 12 Priestley Way, London NW2 7BA, United Kingdom Telephone: 0181-208-7592 JVC Professional Products (U.K.) Ltd. Ullswater House, Kendal Avenue, London W3 0XA, United Kingdom Telephone: 0181-896-6000 JVC Manufacturing U.K. Ltd. 2, Glenburn Road, College Milton Industrial...

  • Page 34
    ...#02-05 Singapore 139951 Telephone: 775-0292 JVC Asia Logistics Centre 81, Tuas South Avenue 1, Singapore 637783 Telephone: 863-2234 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 J2T Video (Tonnerre) S.A. JVC Electronics Singapore Pte. Ltd. JVC Electronics Malaysia Sdn. Bhd. Philips and JVC Video Malaysia Sdn. Bhd. JVC...

  • Page 36
    ... and Production Engineering Division Shuji Kurita General Manager, Professional Products and Systems Marketing Division; World Cup Business Promotion Motoo Nishimura Media and Software Business; President, Victor Entertainment, Inc. Fusao Kishi General Manager, TV Division of AV & Multimedia...

  • Page 37
    ...GmbH JVC France S.A. JVC Nederland B.V. JVC Belgium S.A./N.V. JVC Italia S.p.A. JVC España S.A. JVC Asia Pte. Ltd. JVC America, Inc. JVC Manufacturing U.K. Ltd. JVC Video Manufacturing Europe GmbH JVC Electronics Singapore Pte. Ltd. JVC Electronics Malaysia Sdn. Bhd. JVC Manufacturing (Thailand) Co...

  • Page 38
    VICTOR COMPANY OF JAPAN, LIMITED