JVC 2006 Annual Report Download - page 41

Victor Company of Japan, Limited 39
the fiscal 2005 level. In Asia excluding Japan, the Company
recorded higher sales of car AV systems and LCD TVs. In
the United States, higher sales of HD-ILA hybrid projection
TVs, video cameras, and LCD TVs offset a fall in sales of
CRT TVs and the reduction to the number of DVD recorders
in the marketing lineup, keeping overall segment sales in the
United States to approximately the same level in local cur-
rency as in the previous fiscal year. In Europe, increases
were achieved in sales of LCD TVs, video cameras, as well
as car AV systems and other products. However, losses
associated with the loss of marketing opportunities due to
the delay in developing LCD TVs during the interim period,
the sales decrease due to the lower number of DVD
recorder models, and a large drop in sales of CRT TVs
caused a fall in total segment sales in Europe.
Professional Electronics
Sales decreased 1.1%, to ¥67.6 billion, but operating
income increased ¥0.4 billion, to ¥0.7 billion. Overseas
sales of professional HDV camera recorders and security
products were robust, but segment sales declined due to
drops in domestic sales of surveillance camera systems and
other security products.
Components & Devices
Segment sales dropped 29.9%, to ¥30.2 billion; however,
due to a major improvement in the structure and efficiency
of operations, operating income totaled ¥0.1 billion, com-
pared with the operating loss of ¥1.7 billion in the previous
fiscal year. Although sales of hard disk drive motors were
robust, segment sales decreased due to the rapid shrink-
age of the deflection yoke market and to efforts to restruc-
ture and more-tightly focus its operations by concentrating
them in strategic areas.
that caused a rapid drop in selling prices. The negative
impact of such factors was greater than expected. The
Company implemented such countermeasures as those
aimed at cutting variable and fixed costs, but these mea-
sures were not sufficient to offset the profitability drop in the
Consumer Electronics segment. Consequently, operating
income decreased by a margin of ¥17.3 billion, to an oper-
ating loss of ¥6.9 billion.
As for other income (expenses), the Company posted
¥6.5 billion in special retirement payments associated with
structural reforms, ¥2.5 billion in restructuring charges
associated with overseas subsidiaries, and ¥3.0 billion in
interest expense. Income before income taxes and minority
interests decreased ¥26.8 billion, to a loss of ¥22.1 billion.
Reflecting the reevaluation of deferred tax assets and
other factors, income taxes amounted to ¥9.1 billion, and
the Company recorded a net loss of ¥30.6 billion for the fis-
cal year under review, compared with a net loss of ¥1.9 bil-
lion in fiscal 2005.
In view of this weak performance in fiscal 2006, the
Company has regretfully decided to temporarily suspend
the distribution of cash dividends.
SEGMENT INFORMATION
Consumer Electronics
Sales in this segment declined 4.3%, to ¥600.4 billion, and
operating income fell ¥19.9 billion, to an operating loss of
¥9.6 billion. In Japan, the Company launched HD-ILA
hybrid projection TVs and strengthened its lines of LCD TVs
and HDD camcorders, but the DVD recorder quality prob-
lems, the resulting decreases in the number of DVD
recorder models marketed and in net sales of DVD
recorders, and a drop in sales of MD-related audio prod-
ucts caused total domestic segment sales to drop below