Ricoh 1998 Annual Report Download

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A
NNUAL
R
EPORT
1 9 9 8
Image Communication

Table of contents

  • Page 1
    Image Communication ANNUAL REPORT 1998

  • Page 2
    ... and advanced electronic devices. Through Image Communication, our corporate slogan that embodies our commitment to excellence in digital and color communication techologies, we are building the equipment and systems that are essential to the modern networked office. The Company has 128 consolidated...

  • Page 3
    ... export sales to unaffiliated foreign customers. See Note 17 to the consolidated financial statements. (2) All dollar figures above and elsewhere in this report refer to U.S. currency. Yen amounts have been translated into U.S. dollars, for the convenience of the reader, at ¥132=$1. Billion is used...

  • Page 4
    ... great strengths in image processing technologies to deliver tremendous flexibility in terms of networking and multifunctionality. The many benefits include high-resolution copying, laser printing, scanning, and a host of handy functions like electronic sorting. And throughout our Aficio range you...

  • Page 5
    ...that we must make larger investments of human and capital resources. We now maintain five headquarters to coordinate our international sales and customer support-the Americas; Europe, Africa, and the Middle East; Asia and Oceania; China; and Japan. Each region is managed autonomously and has genuine...

  • Page 6
    ... us at Ricoh, that's customer satisfaction. Complexity should not hamper results. All users need good cost-performance and the ability to enjoy all the functions their machines are capable of. Whether it be a computer, copier, fax machine, or printer, an office machine should be an appliance for the...

  • Page 7
    ... to our results this year. Together, these printers and multifunctional digital systems form part of our strategy to become a world leader in output systems. We're just as confident about CD-Recordable and CD-ReWritable drives and media and digital cameras, in which we are now seeing a mass...

  • Page 8
    ... U.S.A. Pacific Bell Pacific Bell provides a full range of telecommunications services in California. Aficio 200 The Aficio 200 delivers 20 copies per minute. It has a central output tray, which makes it incomparably compact. Just as important, it offers optional faxing and PC printing modules. 6

  • Page 9
    ... we commercialized in Japan in April 1998. This system lets you use a browser on any Internet-linked PC to access and download digitized copies, faxes, and other materials from a Ricoh-maintained server. Satisfaction Fact: In August 1997, J. D. Power Asia Pacific ranked our copiers and fax machines...

  • Page 10
    .... "We've been using Ricoh copiers in our offices throughout the United States for the past six years. The products have proven consistently reliable and operator-friendly. We're upgrading many of our older models to the new Aficio copiers." -Ollie Gilmore, BAX Global Inc., Irvine, California...

  • Page 11
    ...need to reinvent the wheel. It also arms everybody with a common tool to address problems and identify new product and service opportunities at the click of a mouse. Customer Support System Ricoh's Customer Support System is linked by telephone line to more than 260,000 machines fitted with special...

  • Page 12
    ...." FT5832 The FT5832 cuts ozone emissions, uses a nonpolluting organic photoconductor drum, reuses waste toner, has a sleep mode, and has its parts marked to simplify recycling. -Xavier Weibel, Information Systems Manager, France Telecom - Research and Development, Brisbane, California, U.S.A. 10

  • Page 13
    ... satisfaction. Our most recent effort is a new set of action guidelines on the environment. These aim to combat global warming, use precious resources more efficiently, and prevent pollution. By the end of fiscal 2001, we plan to slash the power consumption of our copiers, fax machines, and printers...

  • Page 14
    ... in digital copiers. Digital machines have become integral to customers' efforts to improve office productivity through networking. Ricoh has drawn on its digital technologies to build a solid lineup of personal computer-connective and multifunctional models. These efforts have helped the Company...

  • Page 15
    ... the desktop." David is a Corporate Communications coordinator at VIVUS, Inc. Headquartered in Mountain View, California, VIVUS is a leading developer of advanced therapeutic systems for the treatment of impotence. The networkable Aficio 401 is a 40-copy-per-minute machine, with top image quality...

  • Page 16
    ... Ricoh also makes a comprehensive range of wide-format copiers and stencil duplicators, many of which have sold well for their digital and PCconnective capabilities. LOOKING AHEAD We expect the trend toward digital networked models to continue as customers maintain their focus on office productivity...

  • Page 17
    ... and information technology investments. Our networkable scanners and printers incorporate in-house-developed digital and image processing technologies. In software, we use our systems integration capabilities to customize packages. FISCAL 1998 PERFORMANCE Sales of communications and information...

  • Page 18
    ..., which use the Super G3 protocol to transmit an A4 page over regular phone lines in just three seconds. Highlights of the Year RICOH MACHINE SCORES ENVIRONMENTAL AWARD Our RIFAX BL110 Shataro2 (MV310E in the United States) digital fax-copier reduces power consumption by 95% in fax standby mode, an...

  • Page 19
    ... NX70, an A4 model for small and home offices, and the IPSiO Color 2000, our first color laser printer. Just as important, we commercialized the IPSiO JET 300 color inkjet machine and several other printers. These new printer products complement our copier and fax machine operations and place us...

  • Page 20
    ... CD-ReWritable (CD-RW) drives and media, and unit modules for personal computer parts. Our operations also extend to educational and measuring equipment, as well as leasing, finance, and logistics services that support Ricoh's overall operations. The new RDC-4300 incorporates a powerful 3X zoom lens...

  • Page 21
    ... a production network that encompasses the United States, Europe, and Japan. LOOKING AHEAD We expect digital cameras to become widely popular over the next few years. We are positioning ourselves at the high end of that market. Our first introduction in that area is the light and compact RICOH DC...

  • Page 22
    ..., ended March 31, 1998, Ricoh maintained its focus on customer satisfaction, as part of which it broadened the scope of Image Communication, its corporate slogan. These efforts translated into gains in both revenues and earnings for the fourth consecutive year. Ricoh's net sales, operating income...

  • Page 23
    .... Communications and Information Systems Here, sales grew 4.6%, to ¥322.4 billion ($2,443 million). This was because of higher domestic sales of system solution packages of computers, printers, and other equipment and software, as well as increased sales overseas of computer-connective fax machines...

  • Page 24
    ... in proceeds from long-term indebtedness. 1997 1998 Percentage of net sales Millions of yen Percentage of net sales Thousands of U.S. dollars SALES BY PRODUCT LINE Millions of yen Office Equipment: Copiers and related supplies Communications and information systems ¥ 828,387 63.0% 23.4 13.6 100...

  • Page 25
    INDUSTRY SEGMENT INFORMATION BASED ON JAPANESE DISCLOSURE STANDARDS 1997 Millions of yen Millions of yen 1998 Thousands of U.S. dollars Net Sales Office Equipment: Unaffiliated Customers Intersegment Total Other Businesses: Unaffiliated Customers Intersegment Total Eliminations Consolidated ¥ 1,...

  • Page 26
    ... Millions of yen Thousands of U.S. dollars Net Sales Japan Unaffiliated Customers Intersegment Total The Americas Unaffiliated Customers Intersegment Total Europe Unaffiliated Customers Intersegment Total Other Unaffiliated Customers Intersegment Total Eliminations Consolidated ¥ 846,018 246,961...

  • Page 27
    ...) in additions to property, plant, and equipment during the year, up 19.6%. These funds were allocated mainly to build facilities for CD-R and CD-RW drives and media and copier consumables. FOREIGN CURRENCY RISK In the ordinary course of business, Ricoh uses foreign exchange forward contracts to...

  • Page 28
    ...46 1,321 - - - 1,321 - LONG-TERM INDEBTEDNESS (Excluding Capital Lease Obligations) Average interest rate Total 1999 Thousands of U.S. dollars Expected maturity date 2000 2001 2002 2003 2004 and thereafter Convertible Bonds Bonds Medium-Term Notes Loans Total 0.90 % $ 569,530 264,576 $ 304,954...

  • Page 29
    ... contracts with a diversity of high credit rated financial institutions to minimize the concentration of credit risk. Therefore, Ricoh does not expect to incur material credit losses on its financial instruments. Asian Economic Crisis During fiscal 1998, many Asian countries experienced severe...

  • Page 30
    ... assets Long-term indebtedness Shareholders' investment Working capital Return on sales Return on shareholders' investment ¥ 730,224 73,136 320,534 168,165 2.4% 5.8 ¥ 1,440 1,000 ¥ ¥ 831,627 86,147 347,041 183,008 1.9% `4.8 1,360 1,010 Common Stock Price Range (in yen and dollars): High Low 28

  • Page 31
    1991 1992 Millions of yen 1993 Thousands of U.S. dollars 1994 1995 1996 1997 1998 1998 ¥ 1,003,263 645,875 322,402 38,365 27,025 13,557 70,777 48,868 ¥ 1,017,417 677,674 328,522 10,869 13,...

  • Page 32
    ...Ricoh Company, Ltd. and Consolidated Subsidiaries March 31, 1997 and 1998 ASSETS Current Assets: Cash and cash equivalents Time deposits Marketable securities Trade receivables- Notes... Lease deposits and other ¥ The accompanying notes to consolidated financial statements are an integral part ...

  • Page 33
    ... (Note 15) Shareholders' Investment: Common stock, par value ¥50 per share: Authorized-1,000,000,000 shares Issued and outstanding-657,375,492 shares in 1997 and 691,546,422 shares in 1998 Additional paid-in capital Legal reserve Retained earnings Net unrealized holding gains on available-for-sale...

  • Page 34
    ...0.34 0.31 0.08 Per American Depositary Share, each representing 5 shares of common stock: Net income: Basic Diluted Cash dividends, applicable to the year The accompanying notes to consolidated financial statements are an integral part of these statements. ¥ ¥ 167.75 156.05 50.00 ¥ ¥ 220.80...

  • Page 35
    ... of foreign currency financial statements Income tax effect on undistributed earnings affected by rate changes during the year Ending balance The accompanying notes to consolidated financial statements are an integral part of these statements. ¥ (24,467) ¥ 7,373 (1,323) (18,417) ¥ (18,417...

  • Page 36
    ...increase) in time deposits Proceeds from sale of subsidiaries' common stock Other, net Net cash used in investing ...Cash Paid during the Year for- Interest Income taxes The accompanying notes to consolidated financial statements are an integral part of these statements. 88,658 (79,388) 24,301 ...

  • Page 37
    ... Company and significant subsidiaries ("Ricoh" as a consolidated group) is one of the world's leading suppliers of office automation equipment, including copiers, facsimile machines, data processing systems, printers and related supplies. Ricoh is also well known for its state-of-the-art electronic...

  • Page 38
    ...bonds ¥ 731 Capital lease obligations incurred 223 Assets and liabilities of Gestetner Holdings PLC (see Notes 4 and 7): Fair value of assets acquired 122,254 Liabilities assumed 100,211 ¥4,578 ¥41,348 $313,243 364 - - 1,760 - - 13,333 - - (o) Use of Estimates Management of the Company has made...

  • Page 39
    ..., 1998 (see Note 12). Since 1978, the Company has translated its consolidated financial statements prepared in conformity with accounting principles generally accepted in the United States of America for filing with the Ministry of Finance in Japan. 4. ACQUISITION In September 1995, Ricoh completed...

  • Page 40
    ...and 1998 are comprised of lease receivables and installment loans. The Company's products are leased to customers primarily through Ricoh Leasing Company, Ltd., a major subsidiary. These leases are accounted for as sales-type leases in conformity with SFAS No. 13. Revenues from sales-type leases are...

  • Page 41
    ... ¥ 1,608 ¥24,696 - - 1 ¥24,697 Cost Thousand of U.S. dollars 1998 Gross unre- Gross unrealized hold- alized holding gains ing losses Fair value Current: Equity securities Japanese and foreign governmental bond securities Corporate debt securities Bank debt securities Fund in trust Noncurrent...

  • Page 42
    ... major companies. Ownership interest Ricoh Elemex Corporation Kita Kyushu Coca-Cola Bottling Co., Ltd. Manufacture and sales of office equipment and precision instruments Bottling and distribution of Coca-Cola products 44.8% 34.1 The common stock of these two companies are publicly traded. The...

  • Page 43
    ...1998 Thousands of U.S. dollars 1998 Provision for income taxes Shareholders' investment: Net unrealized holding gains on available-for-sale securities Pension... Reconciliations of the normal tax rates in Japan with the effective tax rates for the three years ended March 31, 1998 are as follows: 41

  • Page 44
    ... retirement allowances Net operating losses carryforward Other Less-Valuation allowance Liabilities: Sales-type leases Undistributed earnings of foreign subsidiaries and affiliates Net unrealized holding gains on available-for-sale securities Other Net deferred tax assets ¥ 19,381 9,711 5,164 15...

  • Page 45
    ... rate 1998 1997 Millions of yen 1997 1998 Thousands of U.S. dollars 1998 Borrowings, principally from banks Commercial paper and medium-term notes The Company and certain of its domestic subsidiaries regularly discount trade notes receivable on a full recourse basis with banks. These trade notes...

  • Page 46
    ... is substituted and commingled with the primary benefit provided by the plan. The amounts of lump-sum or pension payments under the plans are generally determined on the basis of length of service and remuneration at the time of termination. It is the Company's policy to fund amounts required to...

  • Page 47
    ...in the consolidated financial statements as of March 31, 1998. The Japanese Commercial Code provides that at least one-half of the proceeds from shares issued at a price in excess of par value be included in common stock. In conformity therewith, the Company has divided the principal amount of bonds...

  • Page 48
    ...293 Yen 1997 - 14 258 109 (145) ¥ 30,367 - 106 1,955 826 (1,098) $ 230,054 U.S. dollars 1998 1996 1998 Earnings per Share: Basic Diluted ¥ ...Company and certain of its subsidiaries have used interest rate swap agreements as a means of managing its interest exposure; at March 31, 1997 and 1998...

  • Page 49
    ...1998, Ricoh had outstanding contractual commitments for acquisition or construction of plant, equipment and other assets aggregating ¥6,523 million ($49,417 thousand). Ricoh is contingently liable for discounted trade notes...) Limitations Fair value estimates are made at a specific point in time, ...

  • Page 50
    ... Ricoh's industry segments are comprised of office equipment, including copiers and related supplies, communications and information systems, and others, including optical equipment and electronic devices. The office equipment segment accounted for 85% in fiscal 1996 and 86% in fiscal 1997 and 1998...

  • Page 51
    ... with accounting principles generally accepted in the United States of America (see Note 2). In our opinion, the translated amounts in the accompanying consolidated financial statements translated into U.S. dollars have been computed on the basis set forth in Note 3. Tokyo, Japan June 26, 1998 49

  • Page 52
    ... Electronics, Inc. France Ricoh Industrie France S.A. United Kingdom Ricoh UK Products Ltd. Ricoh Wellingborough Products Ltd. GR Advanced Materials Ltd. Spain RIKA Media Technologies Spain, S.A. Sales and Other Argentina Gestetner S.A.C.I. Brazil Canada Chile Colombia Mexico Peru Puerto Rico...

  • Page 53
    ... Ricoh Nederland B.V. Ricoh Finance Nederland B.V. Kulk & Kramer Kantoorsystemen BV NRG Benelux BV Ricoh Norge A.S. Ricoh Polska Sp.zo.o. Mitsui-Ricoh CIS Ltd. Gestetner (Proprietary) Limited Ricoh España S.A. NRG Comunicaciones S.A. Gestetner AB Ricoh UK Ltd. Gestetner Holdings PLC Midland Copying...

  • Page 54
    ... Ricoh Leasing Company, Ltd. Ricoh Engineering Co., Ltd. Giga Networks, Inc. Parts Components Systems Co., Ltd. Overseas Ricoh Electronics, Inc. Ricoh UK Products Ltd. GR Advanced Materials Ltd. Ricoh Industrie France S.A. Taiwan Ricoh Co., Ltd. Ricoh Asia Industry (Shenzhen) Ltd. Ricoh Corporation...

  • Page 55
    ... Transfer Agent for Common Stock The Chuo Trust and Banking Co., Ltd. 7-1, Kyobashi 1-chome, Chuo-ku, Tokyo 104-0031, Japan For further information and additional copies of our annual report and other publications, please write to the Public Relations Department at our corporate headquarters...

  • Page 56
    Image Communication Ricoh Corporation 5 Dedrick Place, West Caldwell, New Jersey 07006, U.S.A. Tel: (1) 973-882-2000 Fax: (1) 973-882-2506 Home Page: http://www.ricoh-usa.com/ Ricoh Europe B.V. Groenelaan 3, P.O. Box 114, 1186 AA Amstelveen, Netherlands Tel: (31) 20-5474111 Fax: (31) 20-5474154 ...