Presentation Transcripts

Now I will touch on each business segment.
These graphs show annual net sales and operating income for the machined components business segment.
Net sales for the fiscal year ended March 31, 2012 totaled 107.0 billion yen, down 0.7% from the previous fiscal year. Operating income also fell 8.8% to reach 25.6 billion yen while the operating margin was down 2.1 percentage points at 23.9%.
The shipment volume for our miniature and small-sized ball bearings increased by 1.3% over the previous fiscal year to hit 206 million units per month. This record high was due to increased demand for our pivot assemblies which now enjoy a bigger share of the market and the steady growth of the global economy (seen mainly in emerging markets) despite negative impacts from the Tohoku Earthquake and the Thai Floods. Sales of ball bearings, however, decreased 4.0% year on year with earnings totaling just 59.3 billion yen. While this drop was mainly due to the strong yen, temporarily production setbacks due to disruptions in the supply chain caused by the Thai Floods and higher fixed costs for new factory investments also cut into profits. We forecast increased sales and improved profits for the fiscal year ending March 31, 2013 with recovering demand for auto and office automation equipment applications in addition to an increase in HDD pivot assembly applications even though labor costs in Thailand will rise.
Sales of rod-ends and fasteners increased by 7.7% year on year to hit 21.0 billion yen as the rising demand in the aircraft industry continues to fuel orders despite the strong yen's negative impact on currency translation. While profits were up this fiscal year, we forecast lower sales and profits due to the strong yen.
The shipment volume for pivot assemblies increased by approximately 10% to total 33 million units per month. The record high came after the production capacity of one of our competitors in Thailand was hit hard by the floods. This development enabled us to increase our share of the market even though the supply chain for the entire HDD industry was severely disrupted. Sales of pivot assemblies, however, increased only slightly to 26.7 billion yen due to the poor currency translation. While profits dipped due to a temporarily lull in production caused by the impact of the Thai Floods on the supply chain, we forecast significantly higher sales and profits this year as shipment volumes increase.