Ricoh 2003 Annual Report Download - page 21

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Income before Income Taxes
Interest and dividend income decreased primarily because of sluggish financial
markets. At the same time, foreign exchange losses declined, while Ricoh con-
strained interest-bearing debt by reinforcing cash m anagem ent system s in Japan,
the United States, and Europe. Ricoh valued its holding m arketable securities in
accordance with generally accepted accounting principles. As a result, incom e
before income taxes, m inority interests and equity in earnings of affiliates
increased 8.4%, to ¥123.4 billion ( $1,046 million) .
Net Income
Net incom e surged 17.7%, to ¥72.5 billion ( $615 million) , the 11th consecutive
gain and the ninth consecutive record high. Ricoh remeasured its deferred tax
assets and liabilities in response to the introduction of a corporate enterprise tax
system and other changes in tax laws. Ricoh posted losses on minority holdings
in m easuring equipment affiliates. Subject to approval at the ordinary general
meeting of shareholders on June 26, 2003, management plans to m ake cash divi-
dends for fiscal 2003 of ¥14.00 ( $0.12) . This is in keeping with management’s
com m itm ent to ensuring solid shareholder returns.
Segment Information
CONSOLIDATED SALES BY PRODUCT LINE
1 . Office Equipment
To help custom ers m ore efficiently manage their total document volum e, the
Ricoh Group proposes solutions that optim ize total printing costs. Ricoh is thus
shifting away from standalone analog equipment toward digital, networking, and
color and high-speed technologies.
These efforts allowed Ricoh to greatly expand sales of MFPs, laser printers,
and other printing systems during the year while increasing revenues from use-
ware, software, and other solutions businesses.
In Japan, sales of personal computer and servers declined, prim arily because
of poor econom ic conditions and sluggish demand for inform ation technology.
Overseas sales increased, particularly in Europe and other regions. Demand
was slow in the United States, owing largely to an economic slowdown in that
nation and turmoil in the Middle East, while the yen’s rise against the dollar also
affected operations.
Nonetheless, Ricoh perform ed solidly because of its strengthened sales net-
works in the United States. Sales of office equipment thus advanced 2.4%, to
¥1,520.5 billion ( $12,886 million) .
Im a ging So lutio ns
In digital im aging system s, Ricoh strengthened its lineup with new digital
plain-paper copiers ( PPCs) , which cover everything from such low-end models
as the Aficio 1013/1015 ( Imagio MF 1340/1540 in Japan) series to high-speed
models, notably the Aficio 2105 ( Im agio Neo 1050 Pro) . Dom estic sales of digi-
tal im aging systems were down because of the depressed econom y and the shift
toward printing systems. Overseas, sales decreased for fax machines and other
imaging solutions, although digital PPC sales improved in Europe and other
regions. As a result of these factors, overall sales of digital imaging system s
dropped 4.2%. In other imaging system s, sales fell 16.8%, reflecting the trend
away from analog to MFPs and other digital equipment. Sales of im aging
solutions decreased 8.0%, to ¥859.7 billion ( $7,285 million) , reflecting Ricoh’s
strategies. Imaging solutions accounted for 49.5% of consolidated net sales,
down 6.3 percentage points.
Ne two rk Input/Output System s
Here, Ricoh released fast, more networkable, and color offerings and further
expanded sales of printing equipment to m eet custom er needs.
In MFPs, the Aficio 1075/1060 ( Im agio Neo 750/600) series and Aficio 1050
( Imagio Neo 105 Pro) contributed to sales growth.
In laser printers, sales rose for the AP 3800C ( IPSiO Color 6000/7100) . Over-
all sales of printing systems thus increased 36.6%. Sales of other input/output sys-
tem s gained 21.2%. Although up a year earlier, domestic sales of CD-R/RW drives
and m edia decreased due to a trend toward DVDs based on new standards. In
contrast, sales im proved for DVD drives and media in the United States and for