Kenwood 2000 Annual Report Download - page 16

Financial Review
Although the Japanese economy during the fiscal year
under review had seen a moderate recovery backed up
by the government's spending and financial policies,
the recession is far from over as private demands such
as personal consumption and private investments
lacked strength in rebounding. Overseas, the US
economy continued to grow while the European
market, where the euro is still weak, and the Asian
market had hit the bottom and rebounded.
Sales
Total net sales for the group during the fiscal 2000 were ¥274.5
billion, a decrease of 11.4% from the previous year. Domestic
sales were ¥123.5 billion (¥137.2 billion in the previous
year), and accounted for 45% of the total net sales (44.3% in
the previous year). On the other hand, overseas sales were
¥151.0 billion (¥172.6 billion in the previous year) and accounted
for 55.0% of the total sales (55.7% in the previous year).
Revenues from audio business including measuring
instruments declined 8.0% to ¥211.6 billion. While portable
audio with built-in MD player and car navigation systems
performed well, the price drop of component audio systems
and weakened foreign currencies had negative effects on the
outcome. In communications equipment business, sales
were affected by the delay in the introduction of new
cellular phones in Japan and remained at ¥63.0 billion, a
decrease of 21.1% from the previous year.
Expenses and Earnings
The cost to sales ratio deteriorated slightly from 73.4%
the previous year to 74.5%. Sales cost amounted to
¥ 204.5 billion ( ¥ 227.3 billion in 1999) and gross profit
declined 15.1% to ¥ 70.0 billion.
Selling, general and administrative expenses (SG&A)
decreased 5.6% from the previous year to ¥ 64.9 billion.
The decrease was mainly attributable to reduction in
payrolls and other measures taken to improve financial
status of the company. However, the reduction in gross
profit was too big to overcome and operating income was
held to ¥ 5.1 billion ( ¥ 13.7 billion in 1999).
We had a net loss of ¥ 1.2 billion before tax as opposed
to net income of ¥ 5.7 billion before tax in the previous
year. Net loss after tax was ¥ 1.0 billion (net income after
tax was ¥ 3.7 billion in 1999).
The loss translates to a loss of ¥ 6.91 per share (earnings
per share in 1999 were ¥ 25.35).
Total assets of the company, on a consolidated base, decreased
0.4% from the previous year and stood at ¥ 212.5 billion at
Net Sales by Segment
(Billions of yen)
Audio equipment Communications equipment
1996
1997
1998
1999
0100 200 300
Operating Income
(Billions of yen)
1996
1997
1998
1999
(10) (5) 0 5 10
Performance
Financial Position
2000 2000
KENWOOD Corporation Annual Report 2000
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