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ANNUAL REPORT 2003
A CLEAR VISION FOR THE FUTURE
olympus ar03 for PDF 03.8.1 11:22 AM ページ 51

Table of contents

  • Page 1
    A N N UA L R E P O R T 2 0 0 3 A CLEAR VISION FOR THE FUTURE

  • Page 2
    ... reader, at the rate of ¥120=US$1. 3. T he above figures are based on accounting principles generally accepted in Japan. 4. D iluted net income per share is not presented due to the fact that there were no potentially dilutive common shares. E AR N I N GS P E R SH A R E eBA SI...

  • Page 3
    ...N O LO GY¢ O L YM P U S CR E AT E S SU CH GR O U N D BR E AKI N G P R O D U CT S AS D I GI T AL CAM § E R A S T H R O U GH O P T O § D I GI T A L T E CH N O L O GY¡ A F U SI O N O F O P T I CA L AN D A D VA N CE D D I GI T AL T E CH N O L O GI E S ¢ O L YM P U S M A I N T A I N S E XCE LLE N CE...

  • Page 4
    ...production costs over the past year. As a result, the Imaging Systems G roup returned to profitability. Performance in the M edical Systems G roup also improved steadily, supported by its approximately % share of the world market for endoscopes. In the Industrial Systems G roup, however, sales...

  • Page 5
    ... the Company expects to realize benefits in its M edical Systems G roup, Life Science G roup and Industrial Systems G roup similar to those achieved in the Imaging Systems G roup. Q3: The Medical Systems Group is an exceptionally stable earnings foundation. What is your vision for this product group...

  • Page 6
    ... includes funds for increasing personnel. W e aim to acquire a top market share in each field over the medium to long term. Q4: The Industrial Systems Group has fallen on hard times. What do you propose to do to turn this product group around and improve profitability? Q6: Olympus has taken...

  • Page 7
    ... brand image, O lympus formulated the global corporate slogan "Your Vision, O ur Future" this year. O lympus has created new value that has met the expectations of society through its advanced optical and manufacturing technologies, as demonstrated by the development of the world's first endoscope...

  • Page 8
    ... by refortifying the endoscope business, which boasts an overwhelming market share. SA L E S I N C L I N I C A L A N A L YZ E R B U SI N E S S UP uu ! W ith annual sales of nearly billion, the clinical analyzer business is second only to digital cameras in terms of growth.  OLYMPUS 2003...

  • Page 9
    ... on how much the customer uses the product. T his difference is what makes the clinical analyzer business unique, and is its secret to future growth. O lympus's technological background is deeply rooted to the microscope business. In addition, backed by its number one market share, O lympus is the...

  • Page 10
    ...in optical technology, a forte of O lympus. O ur analyzers were natural primary candidates for genome applications, and our first commercial products for the genome medical L I F E SC I E N C E G R O U P CO M P R I SE S T H R E E C O R E B U S I N E SS E S W hile clinical analyzers and microscopes...

  • Page 11
    ... step is the application in clinical testing equipment. T his final stage is where we believe O lympus will really be able to leverage its strengths. Q4: How do you view the future potential of the genome market? Q5: In what direction do you plan to lead the Life Science Group? W hile the th...

  • Page 12
    ... Systems G roup handles digital cameras, film cameras, IC recorders, tape recorders, binoculars and magneto-optical (M O ) drives. Sales during fiscal rose from the previous fiscal year to million (US million), continuing substantial growth in line with expansion in the digital camera market...

  • Page 13
    .... Film Cameras ness meetings pushed up sales volume for the Voice-T rek D S, which uses the industry's first high-quality audio compression standard W M A, and the Voice- T rek W -  (D igital Voice Recorder W -  in the U.S. and E urope), an IC recorder with a built-in digital camera...

  • Page 14
    ... G roup handles products used by medical institutions and research centers, mainly endoscopes, clinical analyzers and biological microscopes. W ith an % share of the world market, O lympus's gastroenterological endoscopes provide a solid earnings foundation. Although medical spending is being...

  • Page 15
    ... demand by developing highly functional endoscopes that fulfill customer needs. Clinical Analyzers and Biological Microscopes Sales of clinical analyzers grew to million (US$ million). D espite a decline in shipments of inspection equipment to customers in Japan, sales increased owing...

  • Page 16
    ... Systems G roup handles industrial microscopes, industrial endoscopes, printers, barcode scanners and measuring equipment. D uring fiscal the primary business of semiconductor inspection equipment was adversely affected by a slump in the semiconductor market. As a result, sales of the product...

  • Page 17
    ... technologies. T he company has also developed confocal scanning laser microscopes that can provide three-dimensional measurements of semiconductor and materials surfaces without coming into contact. Industrial endoscopes are used for the non-destructive inspection of jet engines, distribution pipes...

  • Page 18
    ...O lympus' s research activities in fiscal resulted in the world's first successful observance of a living cell with an atomic force microscope (AFM ). W hen the field of life sciences begins to manipulate biological cells on the D NA level, observation equipment will be needed with precision on the...

  • Page 19
    ... by serious price competition, sales revenue from digital cameras continued to grow substantially due to the contribution of new products in the C AM E D IA series. By contrast, sales of film cameras continued to decrease due to shrinking market volume in Japan and overseas. In the M edical Systems...

  • Page 20
    ...). Sales of the core videoscope system IPLE X increased. Sales of handheld data processing equipment fell despite efforts to stimulate demand. Although sales of industrial microscopes increased to Asia, demand plummeted in Japan due to the weak semiconductor market In the O thers segment, sales...

  • Page 21
    ... subsidiaries continued their research and development. O PT O -D igital T echnology was given first priority because of the expansion of the digital field. T otal R&D expenditures were million (US$ million), and accounted for .% of net sales. Capital Expenditures T otal capital...

  • Page 22
    ...Working capital...N umber of shares outstanding (in thousands) ...N umber of employees ...Notes: 1. See Note 1 (n) of Notes to the C onsolidated Financial Statements in respect to the calculation of amounts per share. 2. T hese figures are based on accounting principles generally accepted in Japan...

  • Page 23
    ... L L I O N S O F YE N 4E XC E P T P E R SH AR E AM OU N T S 5 1996 1995 1994 20 0 1 20 0 0 1999 1998 ... 573 186,117 35.7 211,144 264,473 17,098 510,123 0.61 329,413 528 180,182 35.3 193,282 264,279 16,426 487,549 0.53 305,723 463 181,363...,039 42.1 202,070 264,186 12,405 OLYMPUS 2003 

  • Page 24
    ... L C O M AR CH AN D AB9 CEEA F9 L T D F CEEC A N D C O N S O L I D AT E D SU BS I D I A R I E S M I L L I O N S O F YE N T H OU SAN D S OF U S D OLLARS 6 6 20 0 3 20 0 2 20 0 3 ASSE T S CUR RE N T ASSE T S: C ash and time deposits ...M arketable securities ...Notes and accounts receivable...

  • Page 25
    ... F YE N T H OU SAN D S OF U S D OLLARS G G LI ABI LI T I E S AN D SH ARE H OLD E R SH E Q U I T Y CUR RE N T LI ABI LI T I E SI 20 0 3 20 0 2 20 0 3 Short-term borrowings...C urrent maturities of long-term debt ...Notes and accounts payable ...Accrued expenses ...Income taxes payable...O ther...

  • Page 26
    ...SAN D S OF U S D OLLARS Q Q 20 0 3 20 0 2 20 0 1 20 0 3 Net sales ...C ost of sales ...G ross profit... on marketable and ...,283 Total ...Income before provision for income taxes...P R O VI S I O N ...OU N T S P E R SH ARE OF COM M ON ST O CKT E arnings per share-Basic net income ...C A S H ...

  • Page 27
    ...(3,536) 212 ¥ (3,324) ¥ (96) (931) $ (29,467) 1,767 $ (27,700) $ (800) (7,758) ¥ (6,220) ¥ ¥ (6) 1 (5) Balance at beginning of year ...Net increase (decrease) ...Balance at end of year ...See accompanying notes to consolidated financial statements. ¥ (1,027) $ (8,558) OLYMPUS 2003 

  • Page 28
    ... of loans (mainly certificates of deposit) ...Purchases of property, plant and equipment ...Purchases of investment securities ...Sales of investment securities...Payments for acquisition of new subsidiaries ...Payments for additional stock investment in subsidiaries...O ther ...Net cash used in...

  • Page 29
    ... at moving-average cost. Funds in trust represented short-term funds deposited with and managed by trust banks and securities companies. Funds consisted mainly of marketable equity securities and interest-bearing bonds and each individual fund was stated at its acquisition cost. OLYMPUS 2003 

  • Page 30
    ... income before income taxes decreased by million thousand), respectively, compared with what would have been recorded under the previous accounting standard. Allowance for employees' severance and retirement benefits included in the liability section of the consolidated balance sheet together with...

  • Page 31
    ... Board of Japan on February T he adoption of the new accounting standard had no impact on the financial statements. As a result of adopting this new accounting standard and application of the related revised disclosure requirements, shareholders' equity accounts in the accompanying balance sheet as...

  • Page 32
    ... ¥ 7,805 3,500 5 ¥11,310 $ 63,150 55,675 83,375 $202,200 Note: T he preferred securities million thousand) issued by specific purpose company which is based on the scheme for securitization of real estate own the risk of fluctuations for redemption price caused by future changing utilization...

  • Page 33
    ...60% yen bonds, due M arch 2003 ...2.60% yen bonds, due M arch 2003 ...2.65% loans from Japanese insurance companies, due February 2004 ...2.105% loan from a Japanese bank, due M arch 2005 ...1.45% loan from a Japanese bank, due M arch 2006...0.72% loan from a Japanese bank, due M arch 2008...O thers...

  • Page 34
    ... SIG NIFICANT ACCO UNT ING PO LIC IES", effective April the C ompany and its consolidated subsidiaries adopted the accounting standard for employees' severance and retirement benefits, under which the liabilities and expenses for severance and retirement benefits are determined based on the amounts...

  • Page 35
    ..., the C ompany and its consolidated domestic subsidiaries recorded gains on the release from the substitutional portion of the government 's welfare Pension Insurance Scheme amounting to million thousand). 9. in c ome t a xe s Income taxes applicable to the C ompany and its domestic consolidated...

  • Page 36
    ...u sa n d s o f u .s. d o l l a r s 20 0 3 20 0 2 20 0 3 L ong-term debt ... ¥2,543 ¥2,637 $21,192 13. c a sh a n d c a sh eq u iva l en t s Reconciliations of cash and time deposits shown in the consolidated balance sheets and cash and cash equivalents shown in the consolidated statements...

  • Page 37
    ... certain machinery and equipment under non- cancellable finance and operating leases. Finance leases that do not transfer ownership to lessees are not capitalized and are accounted for in the same manner as operating leases. C ertain information for such non-capitalized finance leases for the years...

  • Page 38
    ... medical business etc.) and established "Life Science G roup" as a separate business segment from fiscal T he G roup also changed the category of "M edical N ew Business" from "M edical Systems G roup" to "O thers" by the reorganization in Research and D evelopment C enter.  OLYMPUS 2003

  • Page 39
    ...products: Imaging Systems G roup: Film cameras, D igital cameras, Recorders, M agneto-optical disk drives. M edical Systems G roup: M edical endoscopes. Life Science G roup: C linical analyzers, Biological microscopes, Analytical services of genomic information. Industrial Systems G roup: Industrial...

  • Page 40
    ... Film cameras, D igital cameras, Recorders, M agneto-optical disk drives. M edical Systems G roup: M edical endoscopes, C linical analyzers, Biological microscopes, Analytical services of genomic information. Industrial Systems G roup: Industrial microscopes, Industrial endoscopes, Printers, Barcode...

  • Page 41
    ...Imaging Systems G roup includes film cameras, digital cameras and recorders. T he M edical Systems G roup includes medical endoscopes, clinical analyzers and biological microscopes. T he Industrial Systems G roup includes industrial microscopes, industrial endoscopes, printers, magneto- optical disk...

  • Page 42
    ... Singapore, H ong Kong, C hina, Australia and other countries. . As mentioned in "Note . SEVERANC E AND RE T IREM ENT ALLO WANC E ", effective April the C ompany and the domestic consolidated subsidiaries changed the method of accounting standard for employees' severance and pension benefits...

  • Page 43
    ... O ptical C o., Ltd. and domestic subsidiaries prospectively adopted the new Japanese accounting standards for financial instruments and employees' retirement benefits and the revised Japanese accounting standard for foreign currency translation. () As discussed in Note , effective April...

  • Page 44
    ..., microscopes, clinical analyzers and other products O lympus A.V.S. Co., Ltd. (Tokyo) Sales of optical equipment, medical equipment and electronic products O lympus Logitex Co., Ltd. (Kanagawa) Transportation business O lympus Leasing Co., Ltd. (Tokyo) L ease of medical equipment Olympus Technical...

  • Page 45
    ... H olding company O lympus America Inc. (N ew York, U.S.A.) Sales of cameras, endoscopes, microscopes, clinical analyzers and information peripheral equipment O lympus Industrial America Inc. (N ew York, U.S.A.) Sales of industrial equipment O lympus Integrated Technologies America Inc. (San Jose...

  • Page 46
    ... P RE SI D EN T g Ken Yonekubo** M asaharu O hkubo** H ideo Yamada** H iroyuki Furihata Tatsuo Nagasaki Kazuhisa Yanagisawa M ikio Takagi Kazuo Ichikawa H aruhito M orishima M asataka Suzuki Tadao Imai Shuichi Takayama **Representative D irectors **Jointly Serving D irectors  OLYMPUS 2003

  • Page 47
    ...RS 16,062 P RI N CI P AL SH ARE H OLD E RS N UM BER OF P ERCEN T AGE OF VO T I N G RI GH T S SH ARE S H E LD Nippon Life Insurance Company ...T he M aster T rust Bank of Japan, Ltd...Sumitomo M itsui Banking Corporation ...Japan T rustee Service Bank, Ltd. (trust account)...UFJ Bank Limited...T he...

  • Page 48
    AN-0803D Printed in Japan