Presentation Transcripts

Third quarter net sales for the Machined Components Business dropped 9.9% from the previous quarter to total 24.4 billion yen. Operating income was 5.7 billion yen, down 19.6% from the previous quarter. The operating margin was 23.3%, down 2.8 percentage points from the previous quarter.

Flooding in Thailand, which disrupted the supply chains for HDDs, motors and more, caused demand for our miniature and small-sized ball bearings to go down. Shipment volume declined 12% below the record high for the previous quarter, dipping to 189 million units per month. Third quarter sales of ball bearings decreased by 9.2% from the previous quarter to hit 13.8 billion yen. While decreased capacity utilization was reflected in our lower earnings, the floods have subsided and we expect shipment volume to be back on track in the fourth quarter.

While the outlook for the future looks bright as the rising demand for aircraft continues to fuel orders, third quarter sales of rod-ends and fasteners fell 3.8% quarter on quarter to hit 5.1 billion yen as the strong yen hurt currency translation. Profits were also down below what they were in the previous quarter.

Although the floods in Thailand did not in any way affect our pivot assembly production capacity, third quarter shipment volume dropped 18% below the record high of the previous quarter due to the broken HDD supply chain. Sales of pivot assemblies declined by 15.2% from the previous quarter to hit 5.6 billion yen. While quarter on quarter profits also declined, the impact of the flooding on the HDD industry has subsided and production is rebounding. We expect that shipment volume and sales figures for our pivot assemblies will jump back up in the fourth quarter to reach their new record high.