FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of October, 2003
Commission File Number 1-7616
PIONEER CORPORATION
-------------------
(Translation of registrant's name into English)
4-1, MEGURO 1-CHOME, MEGURO-KU, TOKYO 153-8654, JAPAN
-----------------------------------------------------
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F:
Form 20-F X Form 40-F
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Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1):_________
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7):_________
Indicate by check mark whether by furnishing the information contained in this
Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
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If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-__________
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PIONEER CORPORATION
-------------------
(Registrant)
Date: October 31, 2003
By /s/ Kaneo Ito
--------------------------------
Kaneo Ito
President and Representative Director
This report on Form 6-K contains the following:
1. The announcement released by the Company to the press in Japan dated
October 30, 2003, concerning its consolidated second-quarter and semiannual
business results, and parent-only semiannual results, for the period ended
September 30, 2003.
FOR IMMEDIATE RELEASE
OCTOBER 30, 2003
PIONEER ANNOUNCES SECOND-QUARTER AND SEMIANNUAL RESULTS FOR FISCAL 2004
TOKYO -- Pioneer Corporation today announced its consolidated second-quarter and
semiannual business results, and parent-only semiannual results, for the period
ended September 30, 2003.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(In millions of yen except per share information)
Second quarter ended Six months ended
September 30 September 30
---------------------------- -----------------------------
% to % to
prior prior
2003 2002 year 2003 2002 year
------- ------- ----- ------- ------- -----
Operating revenue 168,012 159,083 105.6 321,090 319,511 100.5
Operating income 9,866 5,551 177.7 17,591 13,175 133.5
Income from continuing operations
before income taxes 9,176 5,661 162.1 16,592 11,555 143.6
Income from continuing operations 4,790 2,962 161.7 7,835 6,304 124.3
Net income 9,536 2,970 321.1 12,475 5,664 220.3
Basic earnings per share (in yen):
Income from continuing
operations 27.30 16.52 44.66 35.09
Income (loss) from discontinued
operations, net of taxes 27.06 0.05 26.45 (3.56)
Net income 54.36 16.57 71.11 31.53
Diluted earnings per share (in yen):
Income from continuing
operations 27.29 16.52 44.65 35.09
Income (loss) from discontinued
operations, net of taxes 27.05 0.05 26.44 (3.56)
Net income 54.34 16.57 71.09 31.53
Notes:
1. Effective from the fiscal 2003 year-end presentation, the Company
classified gains and losses on sale and disposal of fixed assets,
which were previously included in "Others, net" in "Other income
(expenses)," into "Selling, general and administrative expenses."
Previously reported amounts have been reclassified accordingly.
2. As a result of the sale of subsidiaries in audio/video software
business in the second quarter of the fiscal 2004, the gain on such
sale, as well as the business results of discontinued operations, are
presented as a separate line item in the consolidated statements of
income in accordance with Statement of Financial Accounting Standards
No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets." Previously reported amounts have been reclassified
accordingly.
- 1 -
CONSOLIDATED BUSINESS RESULTS
The second quarter of fiscal 2004, ended September 30, 2003, resulted in
operating revenue at 168,012 million yen (US$1,513.6 million), a 5.6% increase
from the corresponding period in the previous year. Operating income was 9,866
million yen (US$88.9 million), a 77.7% increase, and net income increased more
than threefold to 9,536 million yen (US$85.9 million). The average value of the
yen was up 1.4% against the U.S. dollar and down 11.3% against the euro from the
corresponding period in the previous year.
HOME ELECTRONICS sales decreased 17.8% to 42,160 million yen (US$379.8 million)
from the corresponding period last year. In Japan, sales were almost the same as
in the corresponding period last year at 14,104 million yen (US$127.1 million)
primarily due to significant sales increase of DVD recorders, and despite
decreased sales of plasma displays for home use and DVD players. Overseas, sales
decreased 24.6% to 28,056 million yen (US$252.8 million), mainly due to a
decrease in sales of DVD players worldwide; digital cable-TV set-top boxes and
audio products in North America; and digital broadcast set-top boxes and
home-use plasma displays in Europe, despite the increase in sales of plasma
displays for home use in North America.
CAR ELECTRONICS sales decreased 2.1% to 67,102 million yen (US$604.5 million)
from the corresponding period last year. In Japan, sales rose 4.4% to 25,766
million yen (US$232.1 million) due to an increase in sales of car audio products
to automobile manufacturers. Overseas, sales decreased 5.7% to 41,336 million
yen (US$372.4 million) primarily due to a decrease in sales in North America of
car audio products to consumer markets and automobile manufacturers, despite the
increase in sales of car audio products to consumer markets in Asia,
particularly China.
Royalty revenue from PATENT LICENSING increased 70.4% to 4,986 million yen
(US$44.9 million) from the corresponding period last year, due to a revenue from
a renewed contract with a licensee, and despite the expiration of the Company's
optical disc-related patents in certain regions.
OTHERS sales increased by 48.0% to 53,764 million yen (US$484.4 million) from
the corresponding period last year. In Japan, sales increased 3.4% to 17,739
million yen (US$159.8 million), reflecting increased sales of cellular
phone-related devices such as organic electroluminescent (OEL) display panels,
as well as factory automation systems, despite the decrease in sales of
commercial karaoke products as a result of the sale of the Company's karaoke
business subsidiaries. Overseas sales increased 87.9% to 36,025 million yen
(US$324.5 million), due to a large increase in sales of recordable DVD drives
for personal computer (PC) use, as well as increased sales of plasma displays
for business use in Europe and optical disc-manufacturing systems in Asia.
Operating income increased 77.7% from the corresponding period of the previous
year to 9,866 million yen (US$88.9 million). This mainly reflected increased
sales and improved gross profit margin, as well as increased profit from the
patent licensing segment. Net income increased to 9,536 million yen (US$85.9
million) from 2,970 million yen posted in the corresponding period of last year.
In addition to an increase in operating income, net income increased as a result
of a decrease in equity in losses of affiliated companies and income from
discontinued operations recorded in connection with the sale of subsidiaries in
audio/video software business.
- 2 -
Basic net income per share of common stock was 54.36 yen (US$0.49),
compared with 16.57 yen for the corresponding period in the previous year.
Diluted net income per share of common stock was 54.34 yen (US$0.49), compared
with 16.57 yen for the corresponding period in the previous year.
Semiannual results - Consolidated operating revenue for the six-month period
ended September 30, 2003, was 321,090 million yen (US$2,892.7 million), almost
the same as in the corresponding period last year. Net income for the period
increased to 12,475 million yen (US$112.4 million) from 5,664 million yen for
the corresponding period last year.
Basic net income per share of common stock was 71.11 yen (US$0.64),
compared with 31.53 yen for the corresponding period in the previous year.
Diluted net income per share of common stock was 71.09 yen (US$0.64), compared
with 31.53 yen for the corresponding period in the previous year.
CASH FLOWS
Net cash provided by operating activities was 16,875 million yen (US$152.0
million), a decrease of 3,236 million yen from 20,111 million yen in the
corresponding period of the previous year. The decrease is mainly attributable
to increases in operating capital requirement, which resulted from increases in
inventories and accounts receivable. Net cash used in investing activities was
13,929 million yen (US$125.5 million), an increase of 3,866 million yen compared
with 10,063 million yen used in the corresponding period last year, mainly due
to increased capital expenditures.
DIVIDEND POLICY AND INTERIM DIVIDEND
The Company's policy on dividends allows for continued and stable dividend
payment. The Company determines the appropriate dividend amount, taking into
consideration its financial condition, consolidated business results and other
factors.
In line with the Company's policy, the Board of Directors has determined an
interim dividend of 12.5 yen (US$0.11) per share of common stock, a 5.0 yen
increase over that of the previous year, for shareholders of record as of
September 30, 2003 (Japan time).
ADDRESSING CURRENT CHALLENGES
The business environment remains severe, characterized by uncertain economic
conditions in our major markets, Japan, North America and Europe, intensifying
price competition in our major product categories, and the yen's appreciation
against the U.S. dollar. Thus, the Company is concentrating management resources
on strategic businesses to achieve the targets set forth in the medium-term
management plan. For example, we are currently converting production lines of
optical discs to plasma displays, and we sold to a third party two of our
audio/video software business subsidiaries in Japan and the United States. We
will continue our efforts to raise profits and improve management efficiency
through our "select and focus" policy.
In our plasma display business, we are working to build a more efficient
production system to meet fast-growing demand. Pioneer Display Products
Corporation, our subsidiary dedicated to plasma display production, is expanding
its capacity to more than 500,000 units per year by spring 2005. We also
continue to differentiate our products from those of
- 3 -
our competitors by developing new display panels with higher picture quality and
energy efficiency, while further lowering production costs.
In our DVD business, demand for recordable DVD drives for PCs is rising
sharply. To expand this business, Pioneer is strengthening its production
capacity in China. DVD recorders for home use, especially those offering the
added value of hard disk drives (HDD), have been well received in the market,
and we are expanding this line. With these products, Pioneer aims to bolster
sales both in PC and home audio/video markets.
In our car electronics business, we continue striving to strengthen our
market leadership. In the car navigation system field, our HDD models with
advanced functions, and affordable, easy-to-operate DVD models enjoy excellent
reputations. In the car audio business, Pioneer plans to fortify its already
strong market position with such new products and innovations as car CD players
with OEL displays, to satisfy diversifying consumer demand.
We continue our efforts to minimize operating costs and expenses worldwide. To
improve manufacturing efficiency, we are expanding production in China. Also, we
are implementing an expense supervision system to lower the ratio of our
selling, general and administrative expenses to consolidated operating revenue.
To optimize efficiency of inventory control worldwide, departments within the
group have been applying supply chain management since April 2003. We believe
that such initiatives help Pioneer improve cash flows and profitability.
BUSINESS FORECASTS FOR FISCAL 2004
Assuming that the yen-U.S. dollar and the yen-euro exchange rates average 110
yen and 125 yen, respectively, until the end of fiscal 2004, ending March 31,
2004, we have revised our consolidated business forecasts for fiscal 2004, from
those announced in April 2003, as follows:
(In yen)
Revised projections Previous projections Results
for fiscal 2004 for fiscal 2004 for fiscal 2003
------------------- -------------------- ----------------
Operating revenue 730,000 million 760,000 million 679,784 million
Operating income 44,000 million 41,000 million 31,090 million
Income before
income taxes 41,000 million 37,000 million 28,383 million
Net income 25,000 million 20,000 million 16,078 million
Net income per share 142.50 114.00 90.24
=================== ==================== ================
Note: As a result of the sale of the audio/video software business
subsidiaries in the second quarter of the fiscal 2004, presentation
for fiscal 2003 has been reclassified.
Pioneer has revised its operating revenue figure downward from its initial
forecast in April this year, due to the sale of audio/video software business
subsidiaries. Otherwise, sales of the Company's main lines of products such as
plasma displays and car navigation systems are currently fairly good; sales of
DVD recorders and recordable DVD drives and the revenue from PATENT LICENSING
have surpassed initial forecasts; all of this is expected to compensate for the
decrease in revenue caused by the yen's appreciation against the U.S. dollar.
- 4 -
As for operating income, Pioneer made an upward revision, because the
Company expects strong sales from CAR ELECTRONICS business and increased profits
from OTHERS business, particularly in recordable DVD drives, as well as those
from PATENT LICENSING, despite the impact of the yen's appreciation.
Net income for fiscal year 2004 shall increase, reflecting the
above-mentioned increase in operating income, and income from discontinued
operations recorded in connection with the sale of audio/video software
subsidiaries, which was not included in the initial forecast in April 2003.
CAUTIONARY STATEMENT WITH RESPECT TO FORWARD-LOOKING STATEMENTS
Statements made in this release with respect to our current plans, estimates,
strategies and beliefs, and other statements that are not historical facts are
forward-looking statements about our future performance. These statements are
based on management's assumptions and beliefs in light of the information
currently available to it. We caution that a number of important risks and
uncertainties could cause actual results to differ materially from those
discussed in the forward-looking statements, and therefore you should not place
undue reliance on them. You also should not rely on the belief that it is our
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. We disclaim any such
obligation. Risks and uncertainties that might affect us include, but are not
limited to, (i) general economic conditions in our markets, particularly levels
of consumer spending; (ii) exchange rates, particularly between the yen and the
U.S. dollar, euro, and other currencies in which we make significant sales or in
which our assets and liabilities are denominated; (iii) our ability to continue
to design and develop and win acceptance of our products and services, which are
offered in highly competitive markets characterized by continual new product
introductions, rapid developments in technology and subjective and changing
consumer preferences; (iv) our ability to successfully implement our business
strategies; (v) our ability to compete and develop and implement successful
sales and distribution strategies in light of technological developments in and
affecting our businesses; (vi) our continued ability to devote sufficient
resources to research and development, and capital expenditure; (vii) our
ability to continuously enhance our brand image; (viii) the success of our joint
ventures and alliances; and (ix) the outcome of contingencies.
CORPORATE POLICY
It is our corporate policy to make customer satisfaction our highest priority.
We strive to develop and provide advanced, high-quality, value-added electronics
products that deliver satisfaction, comfort and convenience. This keeps us
faithful to Pioneer group's philosophy to "Move the Heart and Touch the Soul."
In accordance with these values, we aim to achieve the following medium-term
objectives.
Business targets:
o No.1 in DVD worldwide
o Establishing a business foundation for plasma displays and OEL
displays
o From stand-alone to network
o Towards the key-device, key-technology business
Financial targets for fiscal year ending March 2006:
o 1.2 trillion yen of consolidated operating revenue
o ROE (Return on Equity) in excess of 10%
Today, DVD-related products and plasma displays have grown to become our core
businesses. To realize these goals, we will continue implementing a range of
measures in every field of our business.
- 5 -
CORPORATE GOVERNANCE
I. Basic Principles
In order to clarify management responsibilities, speed up business operation,
improve transparency of decision-making and strengthen legal and regulatory
compliance, Pioneer introduced an "Internal Companies System" in 1997, a
"Corporate Executive Officer System" in 1999 and "Management Committee Meeting"
and "Rules of the Pioneer Group" in 2002. Also, in 2001, we adopted the "Pioneer
Group Charter for Corporate Operations" and "Code of Conduct for Business
Practices." Through these new rules, Pioneer has been establishing a set of
shared values for all group companies and employees; promoting and enforcing
high ethical standards; and strengthening its role as a trusted and respected
company in every aspect of its activities.
Under the Commercial Code of Japan, the Board of Directors is a
decision-making and supervisory body, Representative Directors are responsible
for business operations, and the Board of Corporate Auditors is an auditing
organ of corporate accounting and the directors' performance regarding corporate
affairs. In addition, we believe that the "Management Committee Meeting" and
"Corporate Executive Officer System" have strengthened implementation of
Pioneer's decision-making and business operation functions, respectively.
Therefore, Pioneer's corporate governance is comprised of the "Corporate
Auditors System," which ensures compliance by Pioneer with all its applicable
laws and regulations, and the "Internal Companies System" along with the
"Corporate Executive Officer System," which ensure swift and effective business
operations. Also, at the "Management Committee Meeting," most important business
issues are decided through thorough discussion, while the "Board of Directors"
focuses on its performance of its supervisory functions. Our management believes
that this current corporate governance system is efficient and functioning
effectively.
II. Governance in Effect
o We have adopted the "Corporate Auditors System."
o For fiscal 2004, we have 13 directors on the board including one
independent director and five corporate auditors including three
independent auditors. None of our independent directors or corporate
auditors are, or have been, employed by Pioneer or its subsidiaries, nor do
they have any personal, capital, business or other particular interests in
Pioneer or its subsidiaries, or with their respective directors or
corporate auditors. Two of the three independent corporate auditors joined
in June 2003, and are expected to apply their respective expertise in
finance and law to guide management.
Independent director: Mr. Tatsuhiro Ishikawa
(Attorney-at-Law and Professor at
Asia University)
Independent corporate auditors: Mr. Terumichi Tsuchida
(Advisor of Meiji Life Insurance Company)
Mr. Isao Moriya
(Certified Public Accountant)
Mr. Keiichi Nishikido
(Attorney-at-Law)
o We consult with outside legal counsel in Japan and the United States
regarding legal compliance of our management decisions and information
disclosures. We also request independent certified public accountants to
audit or review our financial statements to ascertain fairness of our
financial reporting in conformity with generally accepted accounting
principles.
-6-
o In July 2003, we shortened the term of office of directors from two years
to one year, which gives shareholders more frequent opportunities to review
and appoint directors, so that we can focus on directors' responsibilities
and respond to the changing business environment promptly.
o Pioneer is listed on the New York Stock Exchange, and as a result, it is
subject to various U.S. laws and regulations, including the Sarbanes Oxley
Act of 2002. Pioneer is constantly improving its corporate governance
system, including for example, establishment in 2003 of the "Disclosure
Committee" to ensure complete and timely disclosure of company information.
Pioneer Corporation is one of the leading manufacturers of consumer- and
business-use electronics products such as audio, video and car electronics on a
global scale. Its shares are traded on the New York Stock Exchange (ticker
symbol PIO), Euronext Amsterdam, Tokyo Stock Exchange, and Osaka Securities
Exchange.
# # # # # #
The U.S. dollar amounts in this release represent translation of Japanese yen,
for convenience only, at the rate of 111 yen=US$1.00, the approximate rate
prevailing on September 30, 2003.
Attached are I. consolidated financial statements for the second quarter and the
six months ended September 30, 2003, and II. financial statements of the parent
company for the six months ended September 30, 2003.
For further information, please contact:
Investor Relations Department, Corporate Communications Division
Pioneer Corporation, Tokyo
Phone: +81-3-3495-6774 / Fax: +81-3-3495-4301
E-mail: pioneer_ir@post.pioneer.co.jp
Website: http://www.pioneer.co.jp/
- 7 -
Pioneer Corporation and Subsidiaries
I. CONSOLIDATED FINANCIAL STATEMENTS OF PIONEER CORPORATION
FOR THE SECOND QUARTER AND THE SIX MONTHS ENDED SEPTEMBER 30, 2003
(1) OPERATING REVENUE BY SEGMENT
(In millions of yen)
Second quarter ended September 30
----------------------------------------------
2003 2002
----------------- ----------------- % to
% to % to prior
Amount Total Amount Total year
------- ----- ------- ----- -----
Domestic.................... 14,104 8.4 14,062 8.8 100.3
Overseas.................... 28,056 16.7 37,226 23.4 75.4
------- ---- ------- ----- -----
Home Electronics............... 42,160 25.1 51,288 32.2 82.2
------- ---- ------- ----- -----
Domestic.................... 25,766 15.3 24,682 15.5 104.4
Overseas.................... 41,336 24.6 43,848 27.6 94.3
------- ---- ------- ----- -----
Car Electronics................ 67,102 39.9 68,530 43.1 97.9
------- ---- ------- ----- -----
Domestic.................... -- -- -- -- --
Overseas.................... 4,986 3.0 2,926 1.8 170.4
------- ---- ------- ----- -----
Patent Licensing............... 4,986 3.0 2,926 1.8 170.4
------- ---- ------- ----- -----
Domestic.................... 17,739 10.6 17,162 10.8 103.4
Overseas.................... 36,025 21.4 19,177 12.1 187.9
------- ---- ------- ----- -----
Others......................... 53,764 32.0 36,339 22.9 148.0
------- ---- ------- ----- -----
Domestic.................... 57,609 34.3 55,906 35.1 103.0
Overseas....................110,403 65.7 103,177 64.9 107.0
------- ----- ------- ----- -----
Total..........................168,012 100.0 159,083 100.0 105.6
======= ===== ======= ===== =====
(In millions of yen)
Six months ended September 30
----------------------------------------------
2003 2002
----------------- ----------------- % to
% to % to prior
Amount Total Amount Total year
------- ----- ------- ----- -----
Domestic.................... 27,025 8.4 29,472 9.2 91.7
Overseas.................... 53,124 16.6 67,303 21.1 78.9
------- ----- ------- ----- -----
Home Electronics............... 80,149 25.0 96,775 30.3 82.8
------- ----- ------- ----- -----
Domestic.................... 57,110 17.8 52,785 16.5 108.2
Overseas.................... 84,730 26.4 91,977 28.8 92.1
------- ----- ------- ----- -----
Car Electronics................141,840 44.2 144,762 45.3 98.0
------- ----- ------- ----- -----
Domestic.................... -- -- -- -- --
Overseas.................... 8,404 2.6 6,044 1.9 139.0
------- ----- ------- ----- -----
Patent Licensing............... 8,404 2.6 6,044 1.9 139.0
------- ----- ------- ----- -----
Domestic.................... 34,263 10.7 35,785 11.2 95.7
Overseas.................... 56,434 17.5 36,145 11.3 156.1
------- ----- ------- ----- -----
Others......................... 90,697 28.2 71,930 22.5 126.1
------- ----- ------- ----- -----
Domestic....................118,398 36.9 118,042 36.9 100.3
Overseas....................202,692 63.1 201,469 63.1 100.6
------- ----- ------- ----- -----
Total..........................321,090 100.0 319,511 100.0 100.5
======= ===== ======= ===== =====
Pioneer Corporation and Subsidiaries
(2) CONSOLIDATED STATEMENTS OF INCOME
(In millions of yen)
Second quarter ended Six months ended
September 30 September 30
------------------- -------------------
2003 2002 2003 2002
------- ------- ------- -------
Operating revenue:
Net sales...................................163,026 156,157 312,686 313,467
Royalty revenue............................. 4,986 2,926 8,404 6,044
------- ------- ------- -------
168,012 159,083 321,090 319,511
------- ------- ------- -------
Operating costs and expenses:
Cost of sales...............................115,799 112,506 220,052 222,028
Selling, general and administrative......... 42,347 41,026 83,447 84,308
------- ------- ------- -------
158,146 153,532 303,499 306,336
------- ------- ------- -------
Operating income............................... 9,866 5,551 17,591 13,175
Other income (expenses):
Interest income............................. 319 481 730 986
Foreign exchange gain (loss)................ (489) 391 (1,005) (1,459)
Interest expense............................ (746) (815) (1,186) (1,338)
Others, net................................. 226 53 462 191
------- ------- ------- -------
(690) 110 (999) (1,620)
------- ------- ------- -------
Income from continuing operations
before income taxes.......................... 9,176 5,661 16,592 11,555
Income taxes................................... 3,820 1,426 6,828 3,360
Minority interest in income of subsidiaries.... (282) 90 (168) 867
Equity in losses of affiliated companies....... (284) (1,363) (1,761) (2,758)
------- ------- ------- -------
Income from continuing operations.............. 4,790 2,962 7,835 6,304
Income (loss) from discontinued
operations, net of taxes..................... 4,746 8 4,640 (640)
------- ------- ------- -------
Net income 9,536 2,970 12,475 5,664
======= ======= ======= =======
Pioneer Corporation and Subsidiaries
(3) CONSOLIDATED BALANCE SHEETS
(In millions of yen)
September 30
------------------- March 31
2003 2002 2003
------- ------- -------
ASSETS
Current assets:
Cash and cash equivalents...............................137,936 140,412 142,480
Available-for-sale securities........................... -- 7 --
Trade receivables, less allowance.......................102,912 105,610 113,868
Inventories.............................................110,316 106,801 93,620
Others.................................................. 65,763 60,936 66,014
------- ------- -------
Total current assets............................416,927 413,766 415,982
Investments and long-term receivables......................... 28,360 30,269 25,871
Property, plant and equipment, less depreciation..............154,319 149,870 145,699
Intangible assets............................................. 17,403 14,023 15,619
Other assets.................................................. 42,817 33,673 43,858
------- ------- -------
659,826 641,601 647,029
======= ======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings and current portion
of long-term debt.................................... 35,594 45,500 30,867
Trade payables.......................................... 78,526 70,060 67,173
Others..................................................108,607 90,776 108,490
------- ------- -------
Total current liabilities.......................222,727 206,336 206,530
Long-term debt................................................ 28,528 35,112 32,196
Other long-term liabilities................................... 71,944 48,567 71,631
Minority interests............................................ 17,728 18,079 18,279
Shareholders' equity:
Common stock............................................ 49,049 49,049 49,049
Capital surplus......................................... 82,294 82,060 82,159
Retained earnings.......................................263,548 245,018 253,266
Accumulated other comprehensive income (loss)...........(65,535) (39,101) (55,629)
Treasury stock..........................................(10,457) (3,519) (10,452)
------- ------- -------
Total shareholders' equity......................318,899 333,507 318,393
------- ------- -------
659,826 641,601 647,029
======= ======= =======
Breakdown of accumulated other comprehensive income (loss)
Minimum pension liability adjustments...................(31,578) (20,015) (32,675)
Net unrealized holding gain on securities............... 5,715 4,677 3,348
Cumulative foreign currency translation adjustments.....(39,672) (23,763) (26,302)
------- ------- -------
Total accumulated other comprehensive income (loss).....(65,535) (39,101) (55,629)
======= ======= =======
Pioneer Corporation and Subsidiaries
(4) CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In millions of yen)
Accumulated
Other Total
Common Capital Retained Comprehensive Treasury Shareholders'
Stock Surplus Earnings Income (Loss) Stock Equity
------ ------- -------- ------------- -------- -------------
Balance at March 31, 2002 49,049 82,010 240,692 (24,736) (12) 347,003
Net income 16,078 16,078
Other comprehensive
income (loss) (30,893) (30,893)
Value ascribed to stock options 149 149
Cash dividends (3,092) (3,092)
(17.50 yen per share)
Purchase and sales
of treasury stock, net (412) (10,440) (10,852)
------ ------- -------- ------------- -------- -------------
Balance at March 31, 2003 49,049 82,159 253,266 (55,629) (10,452) 318,393
====== ======= ======== ============= ======== =============
Net income 12,475 12,475
Other comprehensive
income (loss) (9,906) (9,906)
Value ascribed to stock options 135 135
Cash dividends (2,193) (2,193)
(12.50 yen per share)
Purchase of treasury stock (5) (5)
------ ------- -------- ------------- -------- -------------
Balance at September 30, 2003 49,049 82,294 263,548 (65,535) (10,457) 318,899
====== ======= ======== ============= ======== =============
(5) CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of yen)
Second quarter Six months
ended ended
September 30 September 30
------------------- -------------------
2003 2002 2003 2002
------- ------- ------- -------
I. Operating activities:
Net income............................................... 9,536 2,970 12,475 5,664
(Income) loss from discontinued
operations, net of taxes............................... (4,746) (8) (4,640) 640
Depreciation and amortization............................ 9,850 8,382 18,891 16,781
(Increase) decrease in trade receivables................. (8,021) 6,276 1,022 14,893
Increase in inventories.................................. (6,104) (677) (21,013) (12,474)
Increase (decrease) in trade payables.................... 6,041 (1,443) 15,209 14,452
Increase in other accrued liabilities.................... 10,917 7,621 4,632 3,623
Other.................................................... (598) (3,010) (3,355) (1,444)
------- ------- ------- -------
Net cash provided by operating activities.............. 16,875 20,111 23,221 42,135
------- ------- ------- -------
II. Investing activities:
Payment for purchase of fixed assets.....................(17,238) (11,981) (28,239) (20,375)
Other.................................................... 3,309 1,918 3,631 4,948
------- ------- ------- -------
Net cash used in investing activities..................(13,929) (10,063) (24,608) (15,427)
------- ------- ------- -------
III. Financing activities:
Increase (decrease) in short-term borrowings
and long-term debt..................................... 3,976 10,007 4,610 (3,205)
Dividends paid........................................... -- (156) (1,754) (1,350)
Purchase of treasury stock............................... (5) (3,503) (5) (3,507)
Other.................................................... 3 20 (186) (171)
------- ------- ------- -------
Net cash provided by (used in) financing activities.... 3,974 6,368 2,665 (8,233)
------- ------- ------- -------
Effect of exchange rate changes on cash and cash equivalents. (5,784) 1,450 (5,822) (5,176)
------- ------- ------- -------
Net increase (decrease) in cash and cash equivalents......... 1,136 17,866 (4,544) 13,299
Cash and cash equivalents at beginning of period.............136,800 122,546 142,480 127,113
------- ------- ------- -------
Cash and cash equivalents at end of period...................137,936 140,412 137,936 140,412
======= ======= ======= =======
------- ------- ------- -------
I + II Free cash flow........................................ 2,946 10,048 (1,387) 26,708
------- ------- ------- -------
Pioneer Corporation and Subsidiaries
(6) SEGMENT INFORMATION
The following segment information is prepared pursuant to the regulations under
the Securities and Exchange Law of Japan.
(Business Segments)
(In millions of yen)
Second quarter ended September 30
----------------------------------------------
2003 2002 % to prior year
---------------------- ---------------------- ------------------------
Operating Operating Operating Operating Operating Operating
Revenue Income Revenue Income Revenue Income
--------- --------- --------- --------- --------- ---------
Home Electronics............ 42,200 (3,516) 51,640 (2,027) 81.7% --%
Car Electronics............. 67,407 6,205 68,740 8,813 98.1 70.4
Patent Licensing............ 5,520 4,930 3,698 2,588 149.3 190.5
Others...................... 63,030 5,161 45,906 (146) 137.3 --
------- ------ ------- ----- ----- -----
Total.................. 178,157 12,780 169,984 9,228 104.8 138.5
Corporate and elimination... (10,145) (2,914) (10,901) (3,677) -- --
------- ------ ------- ----- ----- -----
Consolidated total.......... 168,012 9,866 159,083 5,551 105.6 177.7
======= ====== ======= ===== ===== =====
(In millions of yen)
Six months ended September 30
----------------------------------------------
2003 2002 % to prior year
---------------------- ---------------------- ------------------------
Operating Operating Operating Operating Operating Operating
Revenue Income Revenue Income Revenue Income
--------- --------- --------- --------- --------- ---------
Home Electronics............ 80,751 (10,136) 97,282 (3,368) 83.0% --%
Car Electronics............. 142,491 14,115 145,428 16,622 98.0 84.9
Patent Licensing............ 9,373 8,219 7,031 5,418 133.3 151.7
Others..................... 108,423 6,729 91,593 (1,414) 118.4 --
------- ------ ------- ------ ----- -----
Total................. 341,038 18,927 341,334 17,258 99.9 109.7
Corporate and elimination.. (19,948) (1,336) (21,823) (4,083) -- --
------- ------ ------- ------ ----- -----
Consolidated total......... 321,090 17,591 319,511 13,175 100.5 133.5
======= ====== ======= ====== ===== =====
(Geographic Segments)
(In millions of yen)
Six months ended September 30
----------------------------------------------
2003 2002 % to prior year
---------------------- ---------------------- ------------------------
Operating Operating Operating Operating Operating Operating
Revenue Income Revenue Income Revenue Income
--------- --------- --------- --------- --------- ---------
Japan...................... 264,008 5,984 268,027 7,281 98.5% 82.2%
North America.............. 86,686 8,607 97,384 6,140 89.0 140.2
Europe..................... 62,499 (341) 58,935 (1,376) 106.0 --
Other...................... 131,635 4,393 124,180 2,568 106.0 171.1
-------- ------ -------- ------ ----- -----
Total................. 544,828 18,643 548,526 14,613 99.3 127.6
Corporate and elimination.. (233,738) (1,052) (229,015) (1,438) -- --
-------- ------ -------- ------ ----- -----
Consolidated total......... 321,090 17,591 319,511 13,175 100.5 133.5
======== ====== ======== ====== ===== =====
Pioneer Corporation and Subsidiaries
Notes:
1. The Company's consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in the United
States of America.
2. The consolidated financial statements include the accounts of the
parent company and 134 subsidiaries and the investments in 5
affiliated companies accounted for on an equity basis.
3. Effective from the fiscal 2003 year-end presentation, the Company
classified gains and losses on sale and disposal of fixed assets,
which were previously included in "Others, net" in "Other income
(expenses)," into "Selling, general and administrative expenses."
Previously reported amounts have been reclassified accordingly.
4. Effective from the fiscal 2003 year-end presentation, profit and loss
on intercompany lease, which was previously included in "Others"
segment, is included in the segment which each user of leased assets
belongs to. Previously reported amounts have been reclassified
accordingly.
5. As a result of the sale of subsidiaries in audio/video software
business in the second quarter of the fiscal 2004, the gain on such
sale, as well as the business results of discontinued operations, are
presented as a separate line item in consolidated statements of income
in accordance with Statement of Financial Accounting Standards No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets."
Reclassifications have been made to previously reported consolidated
statements of income and consolidated statements of cash flows to
conform to this presentation. Also in segment information, "Others" in
Business Segments and "Japan" and "North America" in Geographic
Segments have been reclassified accordingly.
The financial result of discontinued operations for the second quarter
and six months ended September 30, 2002 and 2003, and income (loss)
from discontinued operations presented as a line in consolidated
statements of income, is itemized as follows.
(In millions of yen)
Second quarter Six months
ended ended
September 30 September 30
----------------- -----------------
2003 2002 2003 2002
------ ----- ------ ------
Operating revenue......................... 7,706 8,267 13,855 13,783
------ ----- ------ ------
Operating income.......................... 393 51 232 (548)
------ ----- ------ ------
Income before income taxes................ 386 49 219 (547)
Gain on sale of discontinued operations... 1,804 -- 1,804 --
Income taxes (benefit).................... (2,556) 41 (2,617) 93
------ ----- ------ ------
Income (loss) from discontinued operations 4,746 8 4,640 (640)
====== ===== ====== ======
The assets and liabilities for sold subsidiaries, excluding intercompany
balance, at September 30, 2002 and March 31, 2003 are summarized as follows.
(In millions of yen)
March 31 September 30
2003 2002
-------- ------------
Current assets.................................. 14,793 13,663
Property, plant and equipment, less depreciation 76 90
Other assets.................................... 289 261
------ ------
Total assets.............................. 15,158 14,014
------ ------
Current liabilities............................. 8,790 7,495
Long-term liabilities........................... 57 118
------ ------
Total liabilities......................... 8,847 7,613
------ ------
Pioneer Corporation--Parent Company Only
II. FINANCIAL STATEMENTS OF PIONEER CORPORATION
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2003
(1) SALES BY PRODUCT GROUP
(In millions of yen)
Six months ended September 30
----------------------------------------------------------------------- Year ended
2003 2002 March 31, 2003
-------------------------- -------------------------- % to --------------------------
% to % to prior % to
Amount sales Amount sales year Amount sales
--------- --------- --------- --------- --------- --------- ---------
Domestic.......... 20,805 9.6 22,679 10.2 91.7 59,955 13.3
Export............ 39,595 18.4 51,446 23.1 77.0 99,725 22.1
--------- --------- --------- --------- --------- --------- ---------
Home Electronics..... 60,400 28.0 74,126 33.3 81.5 159,681 35.4
--------- --------- --------- --------- --------- --------- ---------
Domestic.......... 55,788 25.9 52,636 23.7 106.0 105,688 23.4
Export............ 55,195 25.5 61,748 27.8 89.4 114,030 25.3
--------- --------- --------- --------- --------- --------- ---------
Car Electronics...... 110,984 51.4 114,385 51.5 97.0 219,718 48.7
--------- --------- --------- --------- --------- --------- ---------
Domestic.......... 9,121 4.2 10,542 4.7 86.5 24,140 5.4
Export............ 35,297 16.4 23,228 10.5 152.0 47,410 10.5
--------- --------- --------- --------- --------- --------- ---------
Others............... 44,418 20.6 33,770 15.2 131.5 71,550 15.9
--------- --------- --------- --------- --------- --------- ---------
Domestic.......... 85,715 39.7 85,858 38.6 99.8 189,783 42.1
Export............ 130,088 60.3 136,423 61.4 95.4 261,166 57.9
--------- --------- --------- --------- --------- --------- ---------
Total................. 215,803 100.0 222,282 100.0 97.1 450,950 100.0
========= ========= ========= ========= ========= ========= =========
(2) CONDENSED STATEMENTS OF OPERATIONS
(In millions of yen)
Six months ended September 30
-------------------------------------------------------- Year ended
2003 2002 March 31, 2003
-------------------------- -------------------------- --------------------------
% to % to % to
Amount sales Amount sales Amount sales
--------- --------- --------- --------- --------- ---------
Net sales - Domestic................. 85,715 39.7 85,858 38.6 189,783 42.1
Export................... 130,088 60.3 136,423 61.4 261,166 57.9
--------- --------- --------- --------- --------- ---------
215,803 100.0 222,282 100.0 450,950 100.0
Cost of sales........................ 168,143 77.9 179,906 80.9 358,427 79.5
Selling, general and
administrative expenses......... 44,227 20.5 40,374 18.2 87,669 19.4
--------- --------- --------- --------- --------- ---------
Operating income..................... 3,432 1.6 2,001 0.9 4,853 1.1
Non-operating
income (expenses), net.......... 132 0.1 (632) (0.3) 5,916 1.3
--------- --------- --------- --------- --------- ---------
Ordinary income...................... 3,565 1.7 1,368 0.6 10,769 2.4
Other expenses, net.................. (6,050) (2.8) (316) (0.1) 6,459 1.4
--------- --------- --------- --------- --------- ---------
Income (loss) before income taxes.... (2,485) (1.2) 1,052 0.5 4,310 1.0
Income taxes......................... (1,418) (0.7) (259) (0.1) 66 0.0
--------- --------- --------- --------- --------- ---------
Net income (loss)................... (1,066) (0.5) 1,311 0.6 4,243 0.9
========= ========= ========= ========= ========= =========
Pioneer Corporation--Parent Company Only
(3) CONDENSED BALANCE SHEETS
(In millions of yen)
September 30
------------------------ March 31
2003 2002 2003
--------- --------- ---------
ASSETS
Current assets:
Cash....................................... 29,100 24,329 19,756
Notes and accounts receivable - trade...... 37,899 39,714 42,991
Marketable securities...................... 18,782 42,350 28,784
Inventories................................ 29,874 25,629 24,300
Other current assets....................... 30,992 42,439 30,876
--------- --------- ---------
Total current assets.................... 146,650 174,464 146,710
Fixed assets:
Tangible................................... 39,443 31,282 35,368
Intangible................................. 16,769 9,458 13,303
Investments and others..................... 190,020 179,188 189,303
--------- --------- ---------
Total fixed assets...................... 246,233 219,929 237,975
--------- --------- ---------
Total assets................................... 392,883 394,394 384,685
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable - trade................... 45,533 43,016 35,552
Accrued expenses........................... 38,348 32,389 37,539
Other current liabilities.................. 10,017 14,796 11,981
--------- --------- ---------
Total current liabilities............... 93,898 90,202 85,074
Long-term liabilities.......................... 28,996 28,443 29,058
--------- --------- ---------
Total liabilities.............................. 122,895 118,645 114,133
Shareholders' equity........................... 269,988 275,748 270,552
--------- --------- ---------
Total liabilities and shareholders' equity..... 392,883 394,394 384,685
========= ========= =========
Note: In preparing the financial statements, all amounts less than one million
yen were disregarded.