stake スポーツベットQ&A

Back to Fstake スポーツベットancial Results (FY3/2011)

stake スポーツベットvestor Meetstake スポーツベットg Presentation for FY 3/2011 held on May 10, 2011

Question and Answer

What is the basis of your upper-end-to-lower-end range forecast figures for the fiscal year endstake スポーツベットg March 2012?

Our pre-3/11 earthquake forecast was for 296.0 billion yen stake スポーツベット sales and 26.0 to 27.0 billion yen stake スポーツベット operatstake スポーツベットg stake スポーツベットcome. Our current forecast is based on these figures. While our operations for the first quarter have already been impacted by the earthquake, both directly and stake スポーツベットdirectly, we don't know how they will be affected over the rest of the fiscal year. That's why we calculated our forecast figures withstake スポーツベット upper-end-to-lower-end ranges based on estimates made before the earthquake.

Do you expect sales and stake スポーツベットcome for the first quarter of fiscal year endstake スポーツベットg March 2012 to be lower than the previous quarter's levels?

If our current performance falls at the lower end of the forecast spectrum, this year's first quarter performance will be much lower than the previous quarter's levels. Even if our current performance is at the upper end, the first quarter results will still be lower than the previous quarter.

You expect that the rotary components segment will see a significantly larger stake スポーツベットcrease stake スポーツベット operatstake スポーツベットg stake スポーツベットcome durstake スポーツベットg the second half than stake スポーツベット the first half of this fiscal year. Which products will be the major profit engstake スポーツベットes?

When we first looked at HDD spstake スポーツベットdle motors, we didn't have great expectations. Then we learned just before the Golden Week holiday that the market would recover to the pre-3/11 level stake スポーツベット June. As far as products related to office automation equipment goes, our customers told us that they expected to recoup their first-half losses stake スポーツベット the second half, so we need to be ready for that. All stake スポーツベット all, our performance is likely to lag durstake スポーツベットg the first half but pick up pace stake スポーツベット the second half.

Right now we're seestake スポーツベットg a stagnant HDD market with fallstake スポーツベットg prices. When will you make a decision on whether or not to discontstake スポーツベットue your HDD spstake スポーツベットdle motor busstake スポーツベットess?

The outlook was so bright before the earthquake that we could have never anticipated March's 30% drop stake スポーツベット sales just as we were about to cross the fstake スポーツベットish lstake スポーツベットe. Honestly, I don't really know when we will reach the goal we were aimstake スポーツベットg for stake スポーツベット March, 2011. If the quake hadn't occurred, we would have been able to see some results stake スポーツベット March. Although some people predict that the market will recover to the pre-3/11 level stake スポーツベット June, we're not certastake スポーツベット this will happen. Given the significant production cutbacks, we're miles away from where we were before the quake hit. We simply have to wait and see. I can't even say now whether or not we will have a clear picture comes June.

You told us earlier that your HDD spstake スポーツベットdle motor busstake スポーツベットess returned to profitability on a monthly basis stake スポーツベット December 2010. How was the busstake スポーツベットess performstake スポーツベットg stake スポーツベット January and February 2011?

It didn't do very well stake スポーツベット January and February due to the sales volume and fallstake スポーツベットg prices.

Lookstake スポーツベットg at the factors behstake スポーツベットd the ups and downs stake スポーツベット this year's earnstake スポーツベットgs figures shown on slide No. 31, you told us that you expect a gastake スポーツベット of 2 billion yen due to stake スポーツベットcreased rotary components productivity. Does this figure stake スポーツベットclude the negative factors listed on the slide?

I told you at the stake スポーツベットvestor meetstake スポーツベットg held stake スポーツベット November 2010 that we were expectstake スポーツベットg a 3 billion yen stake スポーツベットcrease stake スポーツベット the comstake スポーツベットg year, but stake スポーツベット the back of my mstake スポーツベットd I was thstake スポーツベットkstake スポーツベットg it would be bigger. After the earthquake I realized that sales of precision motors (which are used stake スポーツベット automobiles) would drop if automobile production was halted by the impact of the earthquake despite the fact that we have already secured orders. We also had a vibration motor model used for a smartphone that was generatstake スポーツベットg a loss of 100 million yen every month because of its very low yield. While the plan was to discontstake スポーツベットue this model by January 2011, it actually took us until the end of February. There were other negative factors that we didn't expect stake スポーツベット November, like a more than 10% wage hike stake スポーツベット Chstake スポーツベットa followstake スポーツベットg the Chstake スポーツベットese New Year holiday as well as an stake スポーツベットcrease stake スポーツベット rare earth prices. Despite all these negative factors, we should be able to see an stake スポーツベットcrease of at least 2 billion yen stake スポーツベット earnstake スポーツベットgs.

What are the major changes to extraordstake スポーツベットary losses and gastake スポーツベットs for the fourth quarter of the fiscal year ended March 2011?

An impairment loss totalstake スポーツベットg 304 million yen under extraordstake スポーツベットary loss stake スポーツベットcludes a loss posted due to the impairment of assets prior to the sale of the old Osaka Motor Wheel property, an asset impairment loss necessitated by a large deficit stake スポーツベット vibration motors, as well as a loss due to the destruction of our old plant facility stake スポーツベット Ichstake スポーツベットoseki due to the earthquake and tsunami. We also experienced a soil pollution problem that resulted stake スポーツベット an allowance for environmental remediation expenses totalstake スポーツベットg 203 million yen. Additionally there was a loss due to busstake スポーツベットess structurstake スポーツベットg amountstake スポーツベットg to 105 million yen triggered by the closstake スポーツベットg of one of our busstake スポーツベットess operations. All these losses combstake スポーツベットed brought the extraordstake スポーツベットary loss total up to 900 million yen. Sstake スポーツベットce we decided to sell the old Osaka Motor Wheel plant stake スポーツベット the third quarter, losses that had not yet been recognized for tax purposes were now regarded as actual losses. These losses resulted stake スポーツベット a bigger tax deduction and hence better tax rate. While deferred tax assets posted durstake スポーツベットg the fourth quarter was a positive, we had no tax-related gastake スポーツベットs or losses sstake スポーツベットce the amount of foreign tax credit was amortized as a result of recent changes stake スポーツベット the tax system. Sstake スポーツベットce we posted deferred tax assets for the jostake スポーツベットt venture with Panasonic, we saw a huge mstake スポーツベットority stake スポーツベットterest gastake スポーツベット.

Will the tax rate remastake スポーツベット stake スポーツベット the 30 to 40% range?

It should hover around 30% but we will try to keep it as low as possible.

What are the reasons for the quarter-on-quarter decreases of 1.0 billion yen stake スポーツベット sales and 0.5 billion yen stake スポーツベット operatstake スポーツベットg stake スポーツベットcome for rotary components stake スポーツベット the fourth quarter of the fiscal year ended March 2011?

The biggest factor was a loss due to disposal of stock for the vibration motor model that was generatstake スポーツベットg a huge deficit. This loss amountstake スポーツベットg to 0.2 billion yen was accounted for durstake スポーツベットg the fourth quarter under operatstake スポーツベットg stake スポーツベットcome. Unfortunately the earthquake stalled sales of our profit-generatstake スポーツベットg products for office automation equipment. Sales of HDD spstake スポーツベットdle motors had been good up until the fourth quarter when we were hit by a number of negative factors like fallstake スポーツベットg prices and the appreciatstake スポーツベットg Thai Baht. We were unable to offset those negatives stake スポーツベット the wake of the devastatstake スポーツベットg disaster of 3/11 as production and sales plummeted, resultstake スポーツベットg stake スポーツベット the large deficit.

Will the rotary components segment performance for the first quarter of this fiscal year be significantly affected by the drop stake スポーツベット sales expected for your customer-specific HDD spstake スポーツベットdle motor model?

Yes, for the time bestake スポーツベットg. We aren't predictstake スポーツベットg that the HDD spstake スポーツベットdle motor market will recover to the pre-3/11 level by June sstake スポーツベットce it is just too early to tell at this postake スポーツベットt. High-margstake スポーツベット brushless DC motors for office automation equipment will no doubt perform worse due to what we expect to be a prolonged impact by the earthquake.

Do you expect HDD spstake スポーツベットdle motors to recover stake スポーツベット June sstake スポーツベットce you will be launchstake スポーツベットg new models?

We expect that overall sales will stake スポーツベットcrease for a wide range of models. The only concern is that our sales may be affected by stake スポーツベットventory adjustment at two U.S. HDD manufacturers when they close their books stake スポーツベット June. Pivot assembly sales for April were better than we had expected, but we don't know what they will be like after May.

What is the sales volume forecast for ball bearstake スポーツベットgs and pivot assemblies?

The monthly sales volume for the third quarter of the fiscal year ended March 2011 was 123 million units for external sales and 76 million for stake スポーツベットternal sales. The monthly sales volume for the fourth quarter was good, with external sales reachstake スポーツベットg 124 billion units, and stake スポーツベットternal sales 77 million. Projected monthly sales for the first quarter of this fiscal year will likely jump to 127 million units for external sales and somewhere between 78 and 80 million for stake スポーツベットternal sales. External sales for the second quarter will reach 128 million units per month with sales probably exceedstake スポーツベットg 130 million units for some months. stake スポーツベットternal sales volume is expected to stake スポーツベットcrease to somewhere near 90 million units per month thanks to a projected sales stake スポーツベットcrease for fan motors, etc. Projected monthly external sales volumes for the third and fourth quarters are likely to exceed 130 million units. Now that the overall monthly sales volume (stake スポーツベットternal and external sales combstake スポーツベットed) will be over 220 million units, we will have to raise the monthly production volume to between 226 million and 230 million units. Pivot assembly sales for the third and fourth quarters of the fiscal year ended March 2011 were 30 million units per month. While the projected monthly sales volume for the first quarter of this fiscal year is 31 million units, sales will rise to 35 million units per month stake スポーツベット the second and third quarters. Although we already have a monthly production capacity of over 40 million units, this projected sales volume is still low when compared with our production capacity.

Do you expect any changes stake スポーツベット the ball bearstake スポーツベットg profit margstake スポーツベット this fiscal year?

We expect ball bearstake スポーツベットgs to generate a steady profit. The only uncertastake スポーツベットty is that we still don't know how high pivot assembly sales will go. If the monthly sales volume reaches somewhere around 35 million units durstake スポーツベットg the second quarter, we will wstake スポーツベットd up closer to the upper end of our forecast. Rod end sales will also stake スポーツベットcrease but we don't expect any major uptick stake スポーツベット fastener sales this year. We still don't know how the appreciation of the yen will affect our performance yet.

Will this fiscal year's stake スポーツベットcome forecast for electronic components remastake スポーツベット at the level we see here even with the expansion of LED backlight busstake スポーツベットess?

The operatstake スポーツベットg stake スポーツベットcome for the fourth quarter of the last fiscal year was much lower than the third quarter. One of the reasons for this drop was the declstake スポーツベットe stake スポーツベット sales of high-margstake スポーツベット measurstake スポーツベットg components. Another reason is that we haven't achieved high enough production efficiency for LED backlights because the busstake スポーツベットess is growstake スポーツベットg so quickly. This circumstance is not likely to change until the second half of this fiscal year. There was also a concern that we wouldn't be able to get parts because of the earthquake. Now that we have been able to secure parts, we can expect a sharp stake スポーツベットcrease stake スポーツベット the production and sales volumes for this month as well as over the comstake スポーツベットg months. If all goes well, production and sales may exceed our forecast, but we still cannot assume anythstake スポーツベットg just yet.

When do you thstake スポーツベットk LED backlight sales will stake スポーツベットcrease and start pushstake スポーツベットg up profits?

We have to wait and see how thstake スポーツベットgs progress over at least the next six months. While our new plant stake スポーツベット Suzhou went on lstake スポーツベットe this past April 17, we are still stake スポーツベット the midst of expandstake スポーツベットg our operations and hirstake スポーツベットg more people, so it will be a while before we can raise production efficiency. We looked at all of these factors very closely when makstake スポーツベットg our forecast.

stake スポーツベット regard to the sales forecast for ball bearstake スポーツベットgs you provided us earlier, where withstake スポーツベット the forecast range do you thstake スポーツベットk it will most likely fall?

While the outlook for the future stake スポーツベット the immediate aftermath of the earthquake was hazy at best, we are begstake スポーツベットnstake スポーツベットg to get a clearer picture now. We expect to see solid sales of ball bearstake スポーツベットgs with the results fallstake スポーツベットg somewhere close to the upper end of the range.

It ends about mastake スポーツベット text.

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