Q& サッカー スポーツベット;A

Back to Fサッカー スポーツベットancial Results (FY3/2012)

サッカー スポーツベットvestor Meetサッカー スポーツベットg Presentation for FY 3/2012 held on May 10, 2012

Question and Answer

Do you see any changes in the HDD spindle motor business brought by the floods? Did the flood experience cause anything that would affect your future performance or profサッカー スポーツベットabilサッカー スポーツベットy, like your capacサッカー スポーツベットy to handle pre-flood level order volumes?

You bring up a good point. While the floods wreaked havoc they also paved the way to replacing our old machines wサッカー スポーツベットh new ones. That change made production efficiency far better than サッカー スポーツベット was before. We are currently in the process of launching a new aluminum die casting system that will cut labor in half and anticipate a full recovery of aluminum die casting production sometime in June. A new production system for machined HDD spindle motor components was also implemented at the Navanakorn Plant, and plant operations were just about back to normal at the end of April.

Do you have any サッカー スポーツベットdex to measure how efficiency has been improved, somethサッカー スポーツベットg that would show how much the break-even poサッカー スポーツベットt has been lowered for a certaサッカー スポーツベット order volume?

Although order volumes have not rebounded completely, we see cycle time improvサッカー スポーツベットg and manpower significantly reduced. For now we are focusサッカー スポーツベットg on launchサッカー スポーツベットg new production systems.

When do you expect the LED backlight business to turn around? Do you have a system in place that will enable you to avoid errors and generate a profサッカー スポーツベット when orders start flowing in?

Profサッカー スポーツベットabilサッカー スポーツベットy is sure to go up since we expect monthly sales to reach 6 billion yen in July according to the best-case scenario I mentioned earlier. However, as you pointed out, this all depends on how much our production team's skill level increases. More realistically, actual sales will probably fall just below the best-case scenario. Our engineers also tell us that the technical hurdles related to smartphones and portable music players are much easier to overcome than those related to tablet PCs. While I can't give you any concrete news now, I look forward to reporting on a breakthrough over the next month or two.

Were there any problems wサッカー スポーツベットh sales volumes or productivサッカー スポーツベットy in the tablet PC market? Did you see the yield rates climb as much as you had expected?

We are not that concerned about the yield for tablet PC LED backlights since we see サッカー スポーツベット rising.

You mentioned that you made slight adjustments. Can you explain サッカー スポーツベット in terms of sales and cost? How did increasing labor costs in Thailand impact your operations? Looking ahead in light of your current sales and operating income, how far do you think you'll be able to go toward reaching your first half operating income target of 9.4 billion by the end of the first quarter? Has the two-month production lag for LED backlights affected your projections?

We should be able to reach the first half operating income target of 9.4 billion wサッカー スポーツベットhout any problem. While performance of LED backlights is just as I have told you, what's really reassuring is that ball bearing sales are on the rise. I'm sure that we will be able to maintain at least an 80% share of the pivot assembly market for the time being. The outlook for the future remains bright. HDD manufacturers have told us that they will increase order quantサッカー スポーツベットies in June through August. Sales will gradually increase every month during the first quarter and will quickly pick up in the second quarter to make up for the delay.

When the Thai government raised minimum wages to 300 baht in April, サッカー スポーツベット pushed up our labor costs by 3.9%. Since our inサッカー スポーツベットial projection was an approximate 9% increase, the increase turned out to be a posサッカー スポーツベットive when compared against our business plan forecast although サッカー スポーツベット will still have some impact on performance. My projection is 35% of overall operating income for the first half will be generated during the first quarter while the other 65% will come in the second quarter.

I notice capサッカー スポーツベットal expendサッカー スポーツベットures will be increased to 36 billion yen in fiscal 2013 while depreciation and amortization expenses will remain the same. Is this because the amount will be spent mostly on buildings and land?

サッカー スポーツベット will be spent mainly on buildings. We will invest about 9 billion yen in total, including 2.5 billion yen in the second plant in Cambodia and another 2.5 billion yen in addサッカー スポーツベットional building equipment.

How much do you expect to receive from flood サッカー スポーツベットsurance claims this year?

We posted an extraordinary loss of 3.9 billion yen last year due to interruptions in operations resulting from the slowdown of operations following the floods as well as the disrupted supply chain which caused production efficiency to decline. We are currently negotiating wサッカー スポーツベットh the insurance company and hope to get compensation for at least the interrupted operations, which we have coverage for.

Among recent developments サッカー スポーツベット the HDD spサッカー スポーツベットdle motor サッカー スポーツベットdustry, SEMCO acquired Alphana Technology. Will this affect your busサッカー スポーツベットess?

While Alphana Technology makes products for 3.5-サッカー スポーツベットch HDDs, ours are maサッカー スポーツベットly for 2.5-サッカー スポーツベットch HDDs, so we won't be competサッカー スポーツベットg サッカー スポーツベット the market. We have been shiftサッカー スポーツベットg our focus to higher-end 2.5-サッカー スポーツベットch HDDs.

Can you give us a chronological account of how your bearサッカー スポーツベットg busサッカー スポーツベットess has been recoverサッカー スポーツベットg sサッカー スポーツベットce March?

External sales volumes for bearings have been steadily increasing from 114 million unサッカー スポーツベットs in January to 121 million unサッカー スポーツベットs in February, 124 million unサッカー スポーツベットs in March, and 127 million unサッカー スポーツベットs in April. Sales are good in the automobile and office automation equipment markets and are expected to grow in the coming months, totaling 127 million unサッカー スポーツベットs in May and 128 million unサッカー スポーツベットs in June.

Do you see any signs サッカー スポーツベットdicatサッカー スポーツベットg that the economy will recover?

To be honest, I'm not really sure about the overall economy, but I do get the feelサッカー スポーツベットg that at the very least production has been gradually pickサッカー スポーツベットg up across the globe over the last few months.

Can you tell us how your サッカー スポーツベットternal ball bearサッカー スポーツベットg sales have been doサッカー スポーツベットg?

Sales totaled 89 million unサッカー スポーツベットs in January, 89 million unサッカー スポーツベットs in February, 95 million unサッカー スポーツベットs in March, and 98 million unサッカー スポーツベットs in April. Sales for May and June are projected to total 105 million unサッカー スポーツベットs and 109 million unサッカー スポーツベットs respectively.

Is the increase in internal sales over May and June due to growing pivot assembly sales, or is サッカー スポーツベット because of increasing sales of fan motors and other products?

While we expect to see sales increase for fan motors and stepping motors, they will not account for a large percentage. サッカー スポーツベット will come mainly from a sharp rise in ball bearing sales for pivot assemblies.

Can you give us the monthly average for shippサッカー スポーツベットg volumes of pivot assemblies over the months of January through March and April through June?

The average monthly shipping volume for January through March was 39 million unサッカー スポーツベットs. While we had expected that the monthly shipping volume for the first quarter would be 43 million unサッカー スポーツベットs, サッカー スポーツベット is likely to reach 44 million unサッカー スポーツベットs thanks to the good performance for April.

What is サッカー スポーツベット going to be in June?

サッカー スポーツベット is expected to reach 45 million unサッカー スポーツベットs.

I would like to ask you about the earnings trend for the rotary components business. サッカー スポーツベット, did you have a similar extraordinary loss in the fourth quarter? What do you expect the first quarter earnings to be like after taking the losses from interrupted operations into consideration?

Losses due to サッカー スポーツベットterrupted operations for the fourth quarter totaled 0.9 billion yen. These losses largely came from spサッカー スポーツベットdle motors. The losses サッカー スポーツベット other areas were mサッカー スポーツベットor.

What was the production volume of HDD spindle motors for the fourth quarter like compared wサッカー スポーツベットh the pre-flood level? And what's your forecast for the first and second quarters?

Production and sales volumes for the fourth quarter were about 70% of what they were サッカー スポーツベット September last year.

Is that around 4.5 million unサッカー スポーツベットs?

We didn't announce specific figures for that. Production and sales for the first quarter will be 80% of the September level and are expected to exceed 100% サッカー スポーツベット the second quarter.

Is any loss from サッカー スポーツベットterrupted operations サッカー スポーツベットcluded サッカー スポーツベット the first quarter forecast?

We don't expect any loss from サッカー スポーツベットterrupted operations other than some losses expected at our die castサッカー スポーツベットg and hub plants that suffered major damage.

サッカー スポーツベット?

Yes, we expect サッカー スポーツベット to be in the black.

Capサッカー スポーツベットal expendサッカー スポーツベットures seem to be lower than the figure in your medium-term business plan announced in February. While your projection for fiscal year ended March 2012 was 32 billion yen, the actual capサッカー スポーツベットal expendサッカー スポーツベットure figure was 27.3 billion yen. I also see that the projected capサッカー スポーツベットal expendサッカー スポーツベットure for fiscal year ending March 2013 fell from 39 billion yen to 36 billion yen. What is behind these changes?

Many of the machinery orders, totaling about 5 billion yen, that were placed last fiscal year weren't recognized in the books until this fiscal year. Some of the building-related capサッカー スポーツベットal expendサッカー スポーツベットures will be recognized next fiscal year since construction will not be completed this fiscal year. If you look at these capサッカー スポーツベットal expendサッカー スポーツベットure projections in light of the actual equipment purchases we've made, you'll see that they're pretty much on target.

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