Presentation Transcripts

In the rotary component business segment, net sales for the fiscal year ended March 31, 2013 increased 11.6% from the previous fiscal year at 101.9 billion yen while year-on-year operating losses widened to 4.4 billion yen.

HDD spindle motors experienced an extraordinary loss. This was namely a loss on disaster of 1.7 billion yen due to interrupted operations at our HDD spindle motor parts factories in Thailand which were hit by the flooding there. While subtracting this loss from our nominal operating income resulted in negative profitability, the bottom line was slightly better than it was last fiscal year. This upswing was due to increased shipment volumes as the industry as a whole gradually recovered from the floods. While the HDD market shrunk from the second quarter onward due to stagnant PC sales, our market share increased mainly for Minebea's signature high-end products, including server motors and 7 mm height 2.5 inch HDDs. We expect to be back in the black with increased production volumes in the fiscal year ending March 31, 2014.

Sales in the information motor business fell off as demand for office automation products, factory automation products, automobiles, and home appliances continued to gradually shrink from the second quarter on. Lower sales widened operating losses despite further cost cuts in response to the tougher business environment.

Working against this market backdrop we moved ahead on restructuring with an eye to wiping out our losses. After terminating its joint venture motor business with Panasonic, Minebea absorbed the subsidiary company and reorganized its motor business in order to centralize operations. We exited from vibration motor business, shifted our micro actuator and DC brush motor production base to Cambodia and cut fixed costs for HDD spindle motors and fan motors. Due to these measures, we expect to see a return on our investment with much better profitability in the fiscal year ending March 31, 2014.