Ricoh 2002 Annual Report Download

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RICOH COMPANY, LTD. Annual Repor t 2 0 0 2
ANNUAL REPORT 2 0 0 2
CREATING VALUE THROUGH TECHNOLOGY

Table of contents

  • Page 1
    CREATING VALUE THROUGH TECHNOLOGY ANNUAL R EPORT 2 0 0 2

  • Page 2
    ..., printers, fax mac hines, personal c omputers, CD-Rec ordable, CD-ReWritable, and DVD+ ReWritable drives and media, and related supplies and servic es. We are also prominent in digital and c onventional c ameras and advanc ed elec tronic devic es. We are rapidly building a solid presenc e worldwide...

  • Page 3

  • Page 4
    ... factoring out foreign exchange fluctuations, which underscores the inherent strength of our perform ance. Such high-valueadded digital im aging solutions as m onochrom e and color digital plain-paper copiers ( PPCs) and printing system s, notably m ultifunctional printers ( MFPs) , continued to...

  • Page 5
    Hiroshi Hamada (left ), Chairman and Chief Execut ive Officer, and M asamit su Sakurai, President and Chief Operat ing Officer 2

  • Page 6
    ... activities increased 2.3%, to ¥105.1 billion ( $790 m illion) . Net cash used in investing activities decreased 4.9%, to ¥65.7 billion ( $494 m illion) . This was m ainly because of spending to set up new m anufacturing lines and develop new products. Consequently, the free cash flow generated by...

  • Page 7
    ... that delivered new levels of productivity. We continued to expand and solidify in our five key operating regions of Japan, the Am ericas, Europe, Asia and Oceania, and China. Our key priority here was to harness our direct sales channels to generate m ore orders from large corporations. Through our...

  • Page 8
    ... cash flow. We are confident that we can again deliver record net sales and net incom e, and will keep you posted on progress through quarterly reports on our website. June 27, 2002 Sincerely, Hiroshi Ham ada Chairm an and Chief Executive Officer Masam itsu Sakurai President and Chief Operating...

  • Page 9
    ... software and thereby provide simpler, more efficient systems, such as the Ridoc Document Server. COM PACT AND QUICK One of t he secret s of t he compact ness of t he ult rafast Aficio AP3800C full-color net work workgroup print er is a diagonal drum print ing syst em t hat also enhances speed...

  • Page 10
    ... AP3800C (IPSiO Color 8100) (above) part ly owes it s compact ness t o a polygon mirror set up (above right ) t hat not only shrinks t he mirror rot or but also enhances reliabilit y. The Aficio 1105 (right ) is a st at e-oft he-art monochrome copier whose engine can rip t hrough copy and print jobs...

  • Page 11
    ... of photonics technologies is enorm ous, and it is worth noting that while there are num erous electronics com panies worldwide, only a handful of players, Ricoh included, are equipped to open new horizons in the photonics field. In optical m em ory m edia, we have already helped standardize...

  • Page 12
    ...DVD discs t hat use near-field opt ics t o increase read speeds up t o 40x and which could event ually st ore t erabyt es of dat a, hundreds of t imes more t han t oday's maximum of 4.7 gigabyt es for st andard plat t ers. A single disc would be able t o play days of high-resolut ion video. R icoh...

  • Page 13
    ... with a larger m arketing, support, and service infrastructure around the globe. For exam ple, Lanier Worldwide, Inc., which we acquired in early 2001, has been able to take full advantage of our product range to better serve its custom ers in the United States and Europe. As a result, that...

  • Page 14
    ...o enjoy print on demand, high qualit y, flexibilit y, and improved product ivit y. B on Secours Healt h Syst em of t he Unit ed St at es, which operat es 24 acut e care hospit als and several hundred nursing homes and clinics, uses 154 Ricoh digit al monochrome and color copiers supplied by Lanier...

  • Page 15
    ...energy-saving m achines with m any easily reusable or recyclable parts. Innovest Strategic Value Advisors, an environm ental rating investm ent research com pany based in New York, awarded Ricoh an AAA, the highest score possible, in the photo and office equipm ent sector. This was the highest score...

  • Page 16
    ...manufact ures PPCs, recent ly reached it s zero-wast e goals, separat ing it s roughly 2,000 met ric t ons of wast e annually int o 14 cat egories and shipping t he mat erial t o eight facilit ies for recycling. This subsidiary is one of 26 Ricoh bases worldwide t o have achieved zero-wast e t arget...

  • Page 17
    ... erials for it s numerous client s. Basler GmbH, a well known fashion company headquart ered in Goldbach, Germany, uses t he Aficio Color 6 513, which can copy or print 13 full-color pages per minut e, and has also inst alled t wo dozen monochrome Aficio syst ems. SALES OF I M AGING SOLUTIONS 1000...

  • Page 18
    ...ch newspaper publisher, uses more t han 300 Ricoh machines in Amst erdam, including t he Aficio 1013, a highly versat ile small workgroup copier t hat incorporat es Super G3 faxing capabilit ies and can also be upgraded t o funct ion addit ionally as a net work print er. Outlook Ricoh will continue...

  • Page 19
    ... ented a very popular fast, high-resolution color printer with m odels that centralize the m anagem ent of color docum ents, and with an affordable color laser printer. These new The Vienna Cit y Council bought 600 unit s of t he net workconnect ive Aficio AP1600 office print er, capable of 16 ppm...

  • Page 20
    ... speed, high volum es, and durability. They enhance efficiency in several other ways. They function as network scanners that can quickly read in two sides of a page in one pass. These m odels can also store docum ents electronically and directly scan docum ents to e-m ail. In color printers, our new...

  • Page 21
    ... of Employment and W orkplace Relat ions chose Ricoh as sole copier supplier for it s more t han 30 0 sit es nat ionwide, wit h it s purchases including t he Aficio 1045, a complet e workgroup solut ion for copying, faxing, LAN-faxing, and scanning. provide m ore color platform s to accom m odate...

  • Page 22
    ... Ricoh Solution Group Office, based on Lotus Notes Groupware that we originally m odified and deployed to stream line internal operations. response to a shift in custom er dem and away 2 0 9 .5 200 1 8 1 .9 1 6 8 .2 2 0 6 .9 from standalone m odels toward networked hardware, software, and services...

  • Page 23
    ...or upload them directly to websites. Outlook In electronic devices, we will seek faster growth by developing key com ponents for SALES OF OTHER BUSINESSES power ICs that conserve electricity, second- 250 our digital products. For external custom ers, we will focus on Power ICs and LSIs for 200...

  • Page 24
    ...a t e m e n t s o f C a s h F lo w s 32 N o t e s t o C o n s o lid a t e d F in a n c ia l S t a t e m e n t s 33 R e p o r t o f I n d e p e n d e n t P u b lic A c c o u n t a n t s 53 R ic o h 's G lo b a l N e t w o r k 54 S e n io r M a n a g e m e n t 55 C or por at e D at a 56 21

  • Page 25
    ..., foreign currency exchange loss, and an increase in net other expenses. SALES BY PRODUCT LINE 2001 Percentage of Millions of yen net sales Millions of yen 2002 Percentage of net sales Thousands of U.S. dollars Office Equipment: Copiers and related supplies Communications and information...

  • Page 26
    ...ent m arkets. SALES BY GEOGRAPHIC AREA Japan accounted for 54.0% of net sales. The Am ericas and Europe accounted for 20.4% and 18.6%, respectively, and other areas 7.0%. Segment Infor mation SALES BY PRODUCT LINE 1 . Office Equipment Copier s and Related Supplies Segm ent sales advanced 13.5%, to...

  • Page 27
    LONG-TERM INDEBTEDNESS ( Excluding capital lease obligations and SFAS No. 133 fair value adjustment) Average pay rate Total 2003 2004 Millions of yen Expected maturity date 2008 and 2005 2006 2007 thereafter Convertible Bonds Bonds Medium-Term Notes Loans Total 0.36% 1.40 0.40 2.41 ¥ 3 4 ,0 4 9...

  • Page 28
    ... establishing new m anufacturing lines and research and developm ent facilities. Spending on sem iconductor production declined. change rates. These notional am ounts generally are used to calculate the contractual paym ents to be exchanged under the contracts. FOREIGN EXCHANGE FORWARD CONTRACTS...

  • Page 29
    ... t a Ricoh Company, Ltd. and Consolidated Subsidiaries For the Years Ended March 31 1993 1994 For the Year: Net sales Cost of sales Selling, general and administrative expenses Income before income taxes, minority interests and equity in earnings of affiliates Provision for income taxes Net income...

  • Page 30
    Thousands of Millions of yen 1995 1996 1997 1998 1999 2000 2001 U.S. dollars 2002 2002 ¥1,020,296 628,071 339,891 41,674 24,931 18,593 ¥1,113,030 683,406 374,246 51,020 28,251 21,869 ¥1,316,...

  • Page 31
    ... Current Assets: Cash and cash equivalents Time deposits Marketable securities Trade receivables- Notes Accounts Less- Allowance for doubtful receivables Inventories- Finished goods Work in process and raw materials Deferred income taxes Total current assets ¥ 2001 2002 2002 64,457 11,187 62...

  • Page 32
    ...Trade payables- Notes Accounts Accrued income taxes Accrued expenses and other Total current liabilities 2001 2002 2002...shares in 2002 Additional paid-in capital Legal reserve Retained earnings Accumulated other comprehensive income ( loss) Treasury stock at cost; 191,518 shares in 2002 Total ...

  • Page 33
    ... o lid a t e d S t a t e m e n t s o f I n c o m e Ricoh Company, Ltd. and Consolidated Subsidiaries For the Years Ended March 31, 2000, 2001 and 2002 2000 Millions of yen 2001 Thousands of U.S. dollars 2002 2002 Net Sales Cost of Sales Gross profit ¥1,447,157 867,148 580,009 ¥1,538,262 924...

  • Page 34
    ... stock Sales of treasury stock Ending balance ¥ - ( 1 ,0 8 3 ) 649 $ - ( 8 ,1 4 3 ) 4 ,8 8 0 ¥ (434) $ ( 3 ,2 6 3 ) Comprehensive Income: Net income for the year Other comprehensive income ( loss) for the year, net of tax Total comprehensive income for the year The accompanying notes...

  • Page 35
    ... for acquisition of Lanier Worldwide, Inc., net of cash acquired Other, net Net cash used in investing activities 2,989 ( 56,930) ( 54,194) 24,534 4,254 ( 1,571) 50,000 - 2,428 ( 28,490) 1,120 ( 73,040) ( 52,853) 93,705 51 6,797 - ( 28,103) ( 10,405) ( 62,728) Cash Flows from Financing Activities...

  • Page 36
    ... is a worldwide supplier 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 devices, digital photographic equipment and others. Ricoh distributes its products prim...

  • Page 37
    ... from shares issued at a price in excess of par value. The Japanese Com m ercial Code, am ended effective on October 1, 2001, no longer requires a transfer from additional paid-in capital to com m on stock in such cases ( see Note 12) . In the United States, distributions of shares in com parable...

  • Page 38
    ...that distributes Lanier brand nam e office equipm ent products in the global m arketplace. The acquisition was accounted for as a purchase transaction. The excess of purchase price over the estim ated fair value of the net assets acquired is being am ortized over 20 years. As of April 1, 2002, Ricoh...

  • Page 39
    ... initiated were not recorded, because the servicing fees adequately com pensate Ricoh. Ricoh's retained interests are subordinate to the investor's interests. Their value is subject to credit and interest rate risk on the 2002 2002 Proceeds from new securitization Servicing fees received...

  • Page 40
    ... types of available-for-sale securities, and the respective cost, gross unrealized holding gains, gross unrealized holding losses and fair value as of March 31, 2001 and 2002 are as follows: 2002 2002 Marketable securities: A vailable-for-sale securities Investment securities: A vailable-for-sale...

  • Page 41
    .... 125 and accordingly the recorded pension liability was reduced by the fair m arket value am ount of the transferred securities. The fair value of these securities at the tim e of contribution was ¥20,760 m illion. The net unrealized gains on these available-for-sale securities am ounting to ¥13...

  • Page 42
    ...-COLA WEST JAPAN COMPANY, LIMITED, a 20.8% owned m ajor affiliate. The com m on stock of this com pany is publicly traded. The carrying value of the investm ent in this com pany was equal to its underlying book value and am ounted to ¥37,196 m illion ( $279,669 thousand) as of March 31, 2002. The...

  • Page 43
    ...Reconciliations of the norm al tax rates in Japan with the effective tax rates for the years ended March 31, 2000, 2001 and 2002, are as follows: ...tax assets and liabilities as of March 31, 2001 and 2002 are as follows: Normal tax rate Permanently nondeductible expenses, net of nontaxable income Tax...

  • Page 44
    ... rates on these trade notes receivable discounted were 4.8% as of March 31, 2001 and 2.8% as of March 31, 2002, respectively. The Com pany and certain of its subsidiaries enter into the contracts with fi- nancial institutions regarding line of credit and overdrawing, and hold the issuing program...

  • Page 45
    ... loans are collateralized by land, buildings and lease receivables with a book value of ¥8,728 m illion ( $65,624 thousand) as of March 31, 2002. The convertible bonds are convertible into com m on stock at the option of the holders, currently at applicable conversion prices per share as listed in...

  • Page 46
    ... on plan assets Acquisition Employer contribution Plan participants' contributions Settlement Benefits paid Foreign exchange impact Fair value of plan assets at end of year Funded status Unrecognized net actuarial loss Unrecognized net asset at transition, net of amortization Net amount recognized...

  • Page 47
    ...record an adjustm ent for m inim um pension liability at March 31, 2001 and 2002. This liability represents the excess of the accum ulated benefit obligations over the fair value of plan assets. This excess is prim arily attributable to a substantial re- duction in the discount rate used in pension...

  • Page 48
    ... expense Net-of-tax amount 2000: Foreign currency translation adjustments Unrealized gains ( losses) on securities: Unrealized holding gains ( losses) arising during the year Less- Reclassification adjustment for ( gains) losses realized in net income Net unrealized gains ( losses) Minimum pension...

  • Page 49
    ... losses on derivatives Minimum pension liability adjustment Accumulated other ...801) ¥ ¥ 8,944 9,355 18,299 18,845) 17,245 ( 1,600) ¥ ¥ ( 22,308) 19,206 ( 3,102) 2002: Beginning balance Cumulative effect of accounting change Change during the year Ending balance ¥ ( 2 1 ,5 4 1 ) - 6 ,5 1 6...

  • Page 50
    ... and in connection with the m anagem ent of its assets and liabilities. Ricoh conducts business on a global basis and holds assets and liabilities denom inated in foreign currencies. Ricoh enters into foreign exchange contracts and foreign currency options to hedge against the potentially adverse im...

  • Page 51
    ... institutions with high credit ratings. Ricoh utilizes num erous counterparties to m inim ize the concentration of credit risk. 1 6 . COMMITMENTS AND CONTINGENT LIABILITIES As of March 31, 2002, Ricoh had outstanding contractual com m itm ents for acquisition or construction of plant, equipm ent...

  • Page 52
    ... accounting policies, as discussed in Note 2. Ricoh's operating segm ents are com prised of office equipm ent, including copiers and related supplies, com m unications and inform ation system s, and others, including optical equipm ent and electronic devices. The following tables present certain...

  • Page 53
    ... 2001 U.S. dollars 2002 2002 Total assets- Office equipment Other Elimination Corporate assets Consolidated Expenditure for segment assets- Office equipment Other Corporate assets Consolidated Depreciation- Office equipment Other Corporate assets Consolidated Intersegm ent sales are not separated...

  • Page 54
    ... Related Inform ation," Ricoh discloses this Thousands of Millions of yen 2000 2001 U.S. dollars inform ation as supplem ental inform ation in light of the disclosure requirem ents of the Japanese Securities and Exchange Law, which a Japanese public com pany is subject to. 2002 2002 Sales- Japan...

  • Page 55
    ... consist prim arily of cash and cash equivalents and m arketable securities m aintained for general corporate purposes. Intersegm ent sales between geographic areas are m ade at cost plus profit. Operating incom e by geographic area is sales less expense related to the area's operating revenue. No...

  • Page 56
    ...Board of Directors of Ricoh Com pany, Ltd.: We have audited the accom panying consolidated balance sheets of Ricoh Com pany, Ltd. ( a Japanese corporation) and consolidated subsidiaries as of March 31, 2001 and 2002, and the related... United States of Am erica. Those standards require that we plan ...

  • Page 57
    ... Corporation Lanier Worldwide, Inc. Hu n gary Ricoh Hungary Kft. Irelan d NRG Ireland Limited Israel Gestetner ( Israel) Limited Korea Sindo Ricoh Co., Ltd. Italy Ricoh Italia S.p.A. NRG Italia S.p.A. Lanier Italia, S.p.A. Uru gu ay Gestetner Limitada Ricoh Latin America Distribution Center...

  • Page 58
    Senior Management As of June 27, 2002 Board of Directors Chairman and Chief Executive Officer Hiroshi Hamada President and Chief Operating Officer Masamitsu Sakurai Deputy Presidents Haruo Kamimoto* Tatsuo Hirakawa* Executive Managing Directors Naoto Shibata* Koichi Endo* Masami Takeiri* ...

  • Page 59
    ... France Transfer Agent for Common Stock The Chuo Mitsui Trust and Banking Co., Ltd. 33-1, Shiba 3-chome, Minato-ku, Tokyo 105-8574, Japan For further information and additional copies of our annual report and other publications, please write to the Public Relations Department at our corporate...

  • Page 60
    ... Website: http://www.ricoh.com .hk/ RICOH COMPANY, LTD. 15-5, Minam i-Aoyam a 1-chom e, Minato-ku, Tokyo 107-8544, Japan Tel: ( 81) 3-3479-3111 Fax: ( 81) 3-3403-1578 Website: http://www.ricoh.co.jp/ The covers and pages 1 to 20 of this publication were printed on 100%-recycled paper; the paper...