Wacoal Holdings Corp. of Kyoto, Japan, the world’s largest manufacturer of intimate apparel, reported its year-end results for the fiscal year ended March 31, 2008.
FINANCIAL HIGHLIGHTS
Net sales for the year decreased 0.4 percent on a yen basis to 165.8 billion yen ($1,660.1 million), compared to 166.4 billion yen a year ago. Operating income increased to 13.5 billion yen ($135.6 million) compared with 12.9 billion yen in 2007. Net income decreased 45 percent on a yen basis to 5.0 billion yen ($49.7 million). Earnings per American Depositary Share (5 shares of common stock) were 175.7 yen ($1.76) on 28,260,000 average ADS shares outstanding compared to 315.9 yen earnings per American Depositary Share with 28,582,000 shares outstanding in the prior year.
As previously announced, the dividend payable for the last fiscal year will be 25.00 yen per share.
BUSINESS RESULTS
Our group (primarily Wacoal Corporation, which is the core operating entity) sought to improve the strengths of its products and endeavored to develop products focused on consumer needs. Sales by business: Textiles and related products accounted for 150,710 million yen, and other products accounted for 15,051 million yen, a 0.2% increase and 6.3% decrease respectively, compared to the previous fiscal year.
Sales by region; Japan accounted for 139,618 million yen, or 84.2% of the entire group’s sales, while the rest of Asia accounted for 4.6%, and Europe and the U.S. together accounted for 11.2%.
FORECAST FOR THE NEXT FISCAL YEAR
Factors that could significantly affect the global economy during the next fiscal year, such as the sub-prime mortgage crisis and crude oil prices, have unknown consequences, making it difficult to predict what impact those factors may have on domestic and foreign consumer markets. Nevertheless, we currently anticipate that domestic personal consumer spending will remain at the same level.
Our target for the next fiscal year end is to achieve sales of 183,000 million yen, operating income of 12,500 million yen, pre-tax net income of 11,200 million yen, and net income of 7,000 million yen. These figures include the results of Peach John, which is now a wholly owned subsidiary since January 2008. The current exchange rate for the U.S. dollar is assumed to be 102 yen to the dollar. However, since the U.S. business constitutes a high proportion of the sales and income of our consolidated results, an exchange fluctuation could significantly affect our consolidated results.
Note: The US dollar amounts in this statement for fiscal year 2008 are presented for convenience only at the actual approximate exchange rate on March 31, 2008 of Yen 99.85 equals $1.00.
| Billions of Yen | Millions of US$ | ||||||||||
| 2008 | 2007 | 2008 | |||||||||
| Net Sales | 165.8 | 166.4 | 1,660.1 | ||||||||
| Cost of Sales | 83.1 | 84.7 | 832.5 | ||||||||
| Selling,general and administrative expenses | 69.1 | 68.8 | 692.0 | ||||||||
| Operating income | 13.6 | 12.9 | 135.6 | ||||||||
| % of net sales | 8.2 | % | 7.7 | % | |||||||
| Other income and expenses | 0.8 | 1.0 | 8.1 | ||||||||
Income before income taxes,Equity in net income of affiliated companies, minority interests | 14.4 | 13.9 | 143.7 | ||||||||
| Income taxes | 5.9 | 6.5 | 58.6 | ||||||||
| Equity in net income of affiliated companies | (3.4 | ) | 1.8 | (34.0 | ) | ||||||
| Minority interest | (0.1 | ) | (0.2 | ) | (1.4 | ) | |||||
| Net income | 5.0 | 9.0 | 49.7 | ||||||||
| By Product Category | |||||||||||
| Foundation garments and lingerie | 123.5 | 123.3 | 1,236.4 | ||||||||
| Sleepwear | 10.6 | 10.1 | 106.3 | ||||||||
| Children's underwear | 2.0 | 2.1 | 19.6 | ||||||||
| Outerwear and sportswear | 8.9 | 8.7 | 89.3 | ||||||||
| Hosiery | 1.8 | 2.1 | 18.1 | ||||||||
| Other textiles and related products | 4.0 | 4.0 | 39.7 | ||||||||
| Housing, Interior development and others | 15.0 | 16.1 | 150.7 | ||||||||
FORECAST FOR THE FISCAL YEAR 2009 | |||
| Billions of Yen | Millions of US$ | ||
| 2009 | 2009 | ||
| Net Sales | 183.0 | 1,832.7 | |
| Operating Income | 12.5 | ||
| Income before income taxes,Equity in net income of affiliated companies, | 125.2 | ||
| and minority interests. | 11.2 | 112.2 | |
| Net Income | 7.0 | 70.1 | |
Note: Caution on the forecast
The Companies’ forecast contains the view of the Companies’ management based on the management’s assumptions and beliefs in light of information currently available but should not be relied on solely in making investment and other decisions. Investor should be aware that a number of impact risks and uncertainties could lead to outcomes that differ materially from those presented in the forecast.
Wacoal’s American Depositary shares trade at the NASDAQ Small Cap market under the ticker symbol “WACLY”. The company’s common stock is listed on the Tokyo stock exchange as well as on the Osaka stock exchanges.