Briefing on items on the agenda
Latest Update : July 15, 2014
Back to Shareholders' Meetings (Year 2014)
The 68th Ordinary General Meeting of Shareholders
Business Report
We now report Minebea's business results for its 68th fiscal year, together with consolidated and non-consolidated financial statements.
More information is provided on pages 4 through 50 of the Notice of the 68th Ordinary General Meeting of Shareholders.
Brief Explanation of the Current Business Environment
The Japanese economy during the fiscal year that ended on March 31, 2014 remained upbeat as government initiatives and the Bank of Japan's monetary easing policy coupled with the weak yen in the foreign exchange market boosted corporate earnings, capital expenditures, and employment while consumer spending remained steady.
In the U.S., the economy remained on a steady recovery track fueled by strong domestic demand while new construction picked up and unemployment improved due to its monetary easing policy.
Despite the prolonged sovereign debt crisis and unemployment rates that remained high in Greece, Spain and other European countries, the economy in the eurozone, especially Germany and the U.K., saw a gradual comeback. However, the Ukrainian political crisis that erupted in February has cast a dark shadow over the economic horizon.
In Asia, although China lost momentum in the first quarter due to declining exports and investments, the economy gradually picked up steam again and exports increased during the rest of the fiscal year. While ASEAN economies were affected by weak currencies as well as low stock and bond prices during the second quarter, they eventually got back on track towards gradual recovery.
Working against this backdrop, the Minebea Group has been moving ahead to cut costs, create high-value-added products, develop new technologies, and enhance its marketing efforts with an eye to boosting profitability.
Current Fiscal Year Results on Consolidated Basis
As a result, net sales increased 89,134 million yen year on year to reach a record high of 371,543 million yen while operating income jumped 22,030 million yen year on year to total 32,199 million yen.
Ordinary income increased a whopping 20,392 million yen year on year to reach 28,065 million yen.
Extraordinary income totaling 1,675 million yen was posted from the sale of shares in subsidiaries and affiliates, etc. while extraordinary losses totaling 2,928 million yen included losses due to business restructuring, impairment, etc.
Net income for the fiscal year under review increased 19,074 million yen year on year to reach 20,878 million yen for a new record high.
Business Results by Segment
Now we review the business results by segment.
Starting with the fiscal year under review, we have changed the classifications of the business segments in our financial reports. Figures for the previous fiscal year were recalculated for the new segment classifications in the following year-on-year comparisons.
Machined Components Business
Our products in the Machined components business segment include our mainstay product, ball bearings, in addition to mechanical components such as rod-end bearings primarily used in aircraft, hard disk drive pivot assemblies, etc., as well as fasteners for automobiles and aircraft.
Sales of our anchor product, ball bearings, were strong across our major markets including the automobile and information-related device markets, with monthly sales volumes repeatedly hitting all-time highs. Production also remained up, which brought production costs down and led to a substantial year-on-year profit hike.
Increased orders for rod-end bearings fueled sales and profits thanks to soaring demand in the civil aviation market as airline companies replaced their aging fleets with newer aircraft models.
Sales and profits of pivot assemblies were up thanks to an increased share of the market for high-end products used in data centers, etc. although the hard disk drive market remained flat.
As a result, net sales increased 26,459 million yen year on year to reach 140,032 million yen while operating income was up 8,091 million yen year on year to total 33,550 million yen.
Electronic Devices and Components Business
The core products of our Electronic devices and components business include electronic devices (liquid crystal display backlights and measuring components, etc.), hard disk drive spindle motors, information motors, precision motors, and special devices.
The liquid crystal display (LCD) backlight business enjoyed substantial year-on-year gains in both sales and profits. Growing demand in the smartphone market buoyed sales of our technologically unparalleled ultra-thin light guide plates for high-end product applications as our customer base and market share expanded.
Hard disk drive spindle motors and information motors saw increases in sales while the structural reforms implemented toward the end of previous fiscal year boosted profitability.
The information motor business' performance, in particular, steadily improved after it returned to profitability in the second quarter as a result of our efforts to enhance production efficiency as well as cost competitiveness by transferring manufacturing operations to our Cambodian plant on top of the growing demand driven by the global economic recovery.
Performance of measuring components was also upbeat thanks to increasing sales to the automobile sector along with the ongoing recovery of demand for test equipment.
All these factors combined brought net sales for the fiscal year under review up a significant 62,603 million yen year on year to total 230,514 million yen. Operating income also jumped 12,033 million yen year on year to total 9,581 million yen.
Other Business
Net sales for the fiscal year under review in our Other business segment, which includes dies and parts produced in-house increased 72 million yen year on year to total 996 million yen. Operating income was up 699 million yen year on year to reach 866 million yen.
Consolidated Operating Income for this Fiscal Year
In addition to the figures stated above, operating income on the consolidated statement of income for the fiscal year includes 11,799 million yen in corporate expenses, etc., which do not belong to any particular segment, as adjustments.
Adjustments for this fiscal year amounted to 13,004 million yen on a consolidated basis.
Capital Expenditures
Now let's move on to capital expenditures made during the fiscal year.
In the year under review capital expenditures totaled 20,679 million yen. This amount includes 3,866 million yen for the machined components business, 8,646 million yen for the electronic devices and components business, 1,392 million yen for our other business segment, and 6,773 million yen for overall Minebea operations. Investments in the machined components segment were designed to production facilities for bearings, HDD pivot assemblies, etc. in Thailand.
Investments in the Electronic devices and components segment mainly consisted of equipment related to HDD spindle motors in Thailand, equipment for making LCD backlights and components in Thailand, Cambodia and China, and special devices related facilities in Japan.
Capital expenditures include purchases of intangible fixed assets totaling 860 million yen and assets acquired through new finance lease contracts amounting to 307 million yen.
Consolidated Financial Statements
Now we review the consolidated financial statements.
Consolidated Balance Sheet
Let's start off with the consolidated balance sheet.
Looking at the assets section, we see that total assets increased 18,473 million yen from the previous consolidated fiscal year end to total 381,278 million yen.
Major factors behind this include an increase in notes and accounts receivable as a result of sales increase, and an increase in inventory due to the weaker Japanese yen and production volume increase.
Moving on to the liabilities and net assets section, we see that liabilities totaled 217,814 million yen, down 7,133 million yen from the previous consolidated fiscal year end.
This is due mainly to a reduction in short- term and long-term borrowings as a result of higher profits.
Net assets rose 25,650 million yen to total 163,463 million yen from the previous consolidated fiscal year end.
This is due mainly to an increase in net income.
These results all add up to liabilities and net assets totaling 381,278 million yen, an 18,473 million yen increase over what they were at the end of previous consolidated fiscal year.
Consolidated Statement of Income
Now let's look at the consolidated statement of income.
Net sales were up 89,134 million yen year on year to total 371,543 million yen.
Operating income rose 22,030 million yen year on year to total 32,199 million yen. Since we already went over net sales and operating income, I won't go into it again here.
Ordinary income rose 20,392 million yen year on year to total 28,065 million yen. This uptick was due to a gain in operating income despite an increase in other expenses mainly caused by equity loss in affiliates.
Net income hit a record high at 20,878 million yen, an increase of 19,074 from the previous fiscal year, as ordinary income jumped up and extraordinary losses such as business restructuring losses and impairment loss shrunk.
Consolidated Statement of Changes in Net Assets and Notes
We'll skip the consolidated statement of changes in net assets and notes, which are provided on pages 23 of the Notice of the 68th Ordinary General Meeting of Shareholders.
Non-Consolidated Financial Statements
Next is an overview of our non-consolidated financial statements.
Non-Consolidated Balance Sheet
Now let's look at the non-consolidated balance sheet.
The balance sheet shows an 11,263 million yen increase in assets over the figure at the end of the previous fiscal year, bringing total assets to 366,852 million yen.
This is due mainly to increases in accounts receivable caused by sales increase, tangible fixed assets by construction of a new special device factory in Matsuida and other factors.
Looking at the liabilities and net assets section, we see that liabilities totaled 185,941 million yen, up 5,667 million yen from the previous fiscal year end.
This is due mainly to an increase in accounts payable as a result of increased production and sales.
Net assets totaled 180,911 million yen, up by 5,595 million yen over the previous fiscal year end.
This is due mainly to an increase in net income.
These results all add up to total liabilities and net assets of 366,852 million yen, an 11,262 million yen increase over the previous fiscal year end.
Non-Consolidated Statement of Income
Now let's look at the non-consolidated statement of income.
Net sales were up 43,593 million yen to reach 247,885 million yen year on year. This is due mainly to a surge in sales growth brought by expanded sales of LCD backlights, ball bearings, information motors and other products.
Operating income rose 7,011 million yen from the previous fiscal year to total 10,446 million yen. The increase was due mainly to higher sales.
Ordinary income rose 5,045 million yen year on year to total 13,470 million yen. This uptick was due to a gain in operating income despite a decrease in other income mainly caused by a decrease in dividends income.
As a result, net income increased 5,125 million yen to total 8,005 million yen.
Non-Consolidated Statement of Changes in Net Assets and Notes
You will find the non-consolidated statement of changes in net assets and notes on pages 41 of the Notice of the 68th Ordinary General Meeting of Shareholders.
