Latest Update : Mar.12, 2014
Overview for the 3Q of FY 3/2014 (From April 1, 2013 to December 31, 2013)
The Japanese economy continued on an upward trajectory during the first nine months of the fiscal year (April 1, 2013 to December 31, 2013) as government initiatives coupled with the weak yen boosted corporate earnings, capital expenditures, and employment, while consumer spending remained steady. Fueled by strong domestic demand, the U.S. economy remained on a gradual recovery track as new construction picked up and unemployment declined due to its monetary easing policy. There were signs of bottoming out in the Eurozone as the economies of Germany and the U.K. started picking up despite the lagging sovereign debt crisis which kept unemployment rates high. In Asia, the Chinese economy enjoyed steady growth along with increasing exports while ASEAN countries generally saw a gradual economic recovery despite large variances among countries.
Working against this backdrop, the Minebea Group has been focusing on cutting costs, creating high-value-added products, developing new technologies, and honing its marketing approach in order to boost profitability further.
As a result, net sales increased substantially by 67,127 million yen (31.8%) year on year to reach 277,934 million yen due partly to strong demand and the yen's depreciation.
Operating income rose 12,672 million yen (119.1%) year on year to total 23,316 million yen, and ordinary income was up 10,860 million yen (117.3%) year on year at 20,121 million yen. Net income for the quarter also increased 11,084 million yen (231.1%) year on year to reach 15,880 million yen.
Performance by Segment for the 3Q of FY 3/2014 (From April 1, 2013 to December 31, 2013)
We have changed the classification of the business segments in our financial reports starting with the consolidated first quarter. Figures for the first three quarters of last year were recalculated for the new segment classification in the following year-on-year comparisons.
Machined Components Business Segment
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 (HDD) pivot assemblies, etc., as well as fasteners for automobiles and aircraft. Sales of our anchor product, ball bearings, soared. This was due to increasing demand mainly in the Chinese automobile market, information-related device market as well as other markets, which drove production up. Both sales and profits for rod-end bearings increased due partly to the weak yen as well as steady orders from the aircraft industry as commercial airline companies switched to new aircraft models, etc.
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., despite a sluggish personal computer market.
As a result, net sales for the first nine-month period were up 20,403 million yen (24.6%) year on year to total 103,485 million yen. Operating income increased 3,832 million yen (19.0%) year on year to total 24,049 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), HDD spindle motors, information motors (stepping motors, brushless motors, DC brush motors, and fan motors), precision motors, and special devices. Our liquid crystal display (LCD) backlight business improved significantly thanks to a huge jump in sales. The increase was largely due to a technological edge that enables us to produce ultra-thin light guide plates and more for the market. The business was also buoyed by increased sales in the automobile market as well as a growing customer base that expanded with the smartphone market. HDD spindle motors and information motors saw increases in both sales and profits as the structural reforms implemented toward the end of last fiscal year had a positive impact on both businesses. Performance for the information motor business, in particular, continued to improve during the third quarter. We worked to enhance production efficiency as well as cost competitiveness by transferring manufacturing operations to our Cambodian plant. Thanks to the growing demand, driven by the global economic recovery, all our efforts paid off and the business returned to profitability in the second quarter.
All these factors combined brought net sales for the first nine-month period up a whopping 46,665 million yen (36.7%) year on year to total 173,701 million yen. Operating income also jumped 7,435 million yen year on year to total 7,329 million yen.
Other Business Segment
Net sales for the first nine months in our Other business segment, which includes dies and parts produced in-house, were up 60 million yen (8.7%) year-on-year to total 748 million yen. Operating income also increased 600 million yen (239.0%) year on year to total 850 million yen.
In addition to the figures noted above, 8,912 million yen in corporate expenses, etc. not belonging to any particular segment has been recorded as adjustments. Adjustments for the first nine-month period of last fiscal year amounted to 9,717 million yen.
Analysis of Financial Position for the 3Q of FY 3/2014 (From April 1, 2013 to December 31, 2013)
Assets, Liabilities, and Net Assets
The Minebea Group sees "strengthening its financial standing" as a top priority and is taking various steps, such as reducing total assets and liabilities, to bolster its financial foundation.
Total assets at the end of the current third quarter amounted to 390,577 million yen, up 27,772 million yen compared to the end of the previous fiscal year. The main reasons for this uptick include increases in notes and accounts receivable, inventories, as well as investment securities. Total liabilities amounted to 225,962 million yen, up 1,015 million yen over what it was at the end of the previous fiscal year. This jump was primarily due to increases in notes and accounts payable and a decrease in short-term loans. Net assets totaled 164,615 million yen, up 26,757 million yen over what it was at the end of the previous fiscal year. Equity ratio rose 4.6 percentage points above what it was at the end of the last fiscal year to reach 40.8%.
Condition of Cash Flows
The balance of cash and cash equivalents at the end of the current third quarter was 25,551 million yen, down 2,672 million yen from what it was at the end of the previous fiscal year but up 1,405 million yen on a year-on-year basis.
Cash flows from various business activities for the first three quarters and other relevant factors are as follows:
Net cash provided by operating activities amounted to 31,948 million yen, up 23,066 million yen year on year due to increases in income before income taxes and minority interests, notes and accounts receivable, as well as notes and accounts payable along with depreciation and amortization costs, etc. Net cash used for investment activities decreased 18,148 million yen year on year, to total 19,928 million yen due primarily to the acquisition of tangible fixed assets and shares in subsidiaries. Net cash from financing activities declined 45,848 million yen year on year due to a cash outflow of 16,598 million yen for the repayment of short-term loans as well as a dividend payment, etc.
The content of this page is based on information included in the "Consolidated Financial Information for the Third Quarter of Fiscal Year Ending March 2014 (From April 1, 2013 to December 31, 2013)" announced on February 4, 2014.