Omron 1999 Annual Report Download - page 23

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In addition, interest expenses, net, increased to ¥862 million ($7 million) mainly because of higher
debt. Foreign exchange loss—net, totaled ¥2,766 million ($23 million). Income before income taxes and
minority interests plunged 80.5%, to ¥8,249 million ($68 million) from the previous fiscal year, leading
to a decrease in income taxes. Minority interests fell to ¥31 million ($0.3 million).
Net income plummeted 88.4%, to ¥2,174 million ($18 million), from the previous fiscal year, resulting
in a reduction in basic net income per share amounts, from ¥71.4 in fiscal 1998 to ¥8.3 ($0.07) in the
fiscal year under review, and a fall in diluted net income per share, from ¥69.8 to ¥8.3 ($0.07). Neverthe-
less, cash dividends per share applicable to the period were maintained at ¥13.0 ($0.11). ROA and
ROE in fiscal 1999 were 1.4% and 0.7%, respectively, compared with 7.0% and 5.5% in the previous
fiscal year.
FINANCIAL POSITION
Total current assets in fiscal 1999 decreased 2.0%, to ¥322,263 million ($2,663 million), from the previ-
ous fiscal year-end, largely because of declines in inventories and short-term investments. The inventory
turnover rate decreased to 4.2 from 4.3. Total current liabilities, dropped 10.9%, to ¥157,653 million
($1,303 million), due mainly to decreases in notes and accounts payable—trade, accrued liabilities,
income taxes payable, and the current portion of long-term debt. As a result, working capital increased
¥12,811 million, to ¥164,610 million ($1,360 million). The current ratio was 2.04, compared with 1.86 at
the previous fiscal year-end.
Cash and cash equivalents at the beginning of the year were ¥68,365 million ($565 million). Net cash
provided by operating activities declined to ¥29,583 million ($244 million). Depreciation and amortiza-
tion, the main component of cash flows from operating activities, edged up 0.9%, to ¥31,396 million
($259 million), from the previous fiscal year. Net cash used in investing activities climbed to ¥29,011
million ($240 million) and included capital expenditures of ¥36,696 million ($303 million), a rise of 2.2%.
Net cash provided by financing activities was ¥21,629 million ($179 million), mainly reflecting proceeds
from issuance of long-term debt of ¥25,413 million ($210 million). Repayments of long-term debt were
down, at ¥8,956 million ($74 million).
Reflecting the above cash outflows and inflows, cash and cash equivalents at the end of the year
were ¥88,900 million ($735 million). Total indebtedness—bank loans, current portion of long-term debt,
and long-term debt—increased 59.0% to ¥86,723 million ($717 million). Long-term debt increased to
¥56,610 million ($468 million).
Total shareholders’ equity decreased 6.4%, to ¥321,258 million ($2,655 million), from the previous
fiscal year due mainly to climbs in certain elements of accumulated other comprehensive income (loss),
such as cumulative translation adjustments and minimum pension liability adjustments. Total sharehold-
ers’ equity as a percentage of total assets fell to 55.3%, compared with 57.8% at the previous fiscal
year-end. ROE was 0.7%, compared with 5.5% at the previous fiscal year-end.
MEASURES TO ACCOMODATE THE EURO
OMRON has started shifting the currency for most of its business transactions with its subsidiaries in
Europe to the euro since April 1999. Group subsidiaries’ sales in countries that use the euro account
for approximately 10% of consolidated net sales and are expected to be greatly impacted by the intro-
duction of the euro in settling their transactions. We are aware that the impact could be fierce price