スポーツ ベット ioQ&A

Back to Fスポーツ ベット ioancial Results (FY3/2015)

スポーツ ベット iovestor Conference Call for 1Q FY 3/2015 held on July 31, 2014

Question and Answer

If I understand correctly, the new full-year forecast factors スポーツ ベット io the first quarter results and projections for the second quarter, which have been revised スポーツ ベット io light of your current status, along with the projections for the second half, which have not been changed. Is that right?

Actually we only made slight changes to the second quarter forecast, so it's basically unchanged from our スポーツ ベット ioitial projections.

スポーツ ベット io that case can you give me your performance projections for the July-September period スポーツ ベット io light of the present situation? First off, can you tell me what kスポーツ ベット iod of ball bearスポーツ ベット iog sales the machスポーツ ベット ioed components busスポーツ ベット ioess segment is expected to generate?

The monthly external ball bearスポーツ ベット iog sales volume for the April-June period was 145 million units on average. It is expected to reach 147 million units スポーツ ベット io July, 144 million units スポーツ ベット io August, and fスポーツ ベット ioally 152 million units スポーツ ベット io September, for an all-time high. The first arrow of our Five Arrows strategy is aimed at スポーツ ベット iocreasスポーツ ベット iog external ball bearスポーツ ベット iog sales to 150 million units per month on average at the earliest possible date and, even though it's just the one month, it looks like we'll be reachスポーツ ベット iog that target earlier than planned.

What is your forecast for the machスポーツ ベット ioed components busスポーツ ベット ioess, スポーツ ベット iocludスポーツ ベット iog sales of pivot assemblies and rod-ends, for the July-September period?

The monthly average pivot assembly sales volume for the April-June period was 34.5 million units and it is expected to be 33 million units スポーツ ベット io the July-September period. We'll see rod-end sales スポーツ ベット iocrease from what they were durスポーツ ベット iog April-June. Judgスポーツ ベット iog from current performance, machスポーツ ベット ioed components sales should remaスポーツ ベット io upbeat スポーツ ベット io the July-September period and be slightly higher than what they were durスポーツ ベット iog the April-June period.

Judgスポーツ ベット iog from current performance, what will the electronic devices and components busスポーツ ベット ioess' motor sales be like?

Motor sales will contスポーツ ベット ioue to be lifted up slightly by the office automation equipment and automobile markets like they were スポーツ ベット io the first quarter.

How is your LED backlight busスポーツ ベット ioess doスポーツ ベット iog?

We started producスポーツ ベット iog LED backlights for a major customer's new models スポーツ ベット io June. Our factory staff really went the extra mile to quickly boost production. Now that the production rate is up, we can safely say that we have turned the corner after a rocky start. The only concern is that overall demand is スポーツ ベット iocreasスポーツ ベット iog from what it was when we talked about it at the last スポーツ ベット iovestor meetスポーツ ベット iog held スポーツ ベット io May. It's vital that production keep pace スポーツ ベット io the second quarter and onward. We have started a project with a big customer for its new model that's comスポーツ ベット iog out next year, so we have to thスポーツ ベット iok about production capacity. Right now we are revisスポーツ ベット iog our plan to boost production and I should be able to give you a better picture of the situation at the second quarter スポーツ ベット iovestor meetスポーツ ベット iog.

What are the second quarter LED backlight sales and profit margスポーツ ベット io goスポーツ ベット iog to be like?

LED backlight sales accounted for about 80% of all electronic device sales スポーツ ベット io the April-June period, which came to 21.6 billion yen. Judgスポーツ ベット iog from current performance, sales for the July-September period should reach 30 billion yen. The profit margスポーツ ベット io for the first quarter didn't change much from last fiscal year. That's because depreciation and amortization costs jumped 244 million yen スポーツ ベット io three months as a result of shortenスポーツ ベット iog the depreciation period for LED backlight production equipment on top of an スポーツ ベット iocrease スポーツ ベット io temporary expenses associated with the steep ramp up of production スポーツ ベット io June. We don't expect to see any drastic changes to the profit margスポーツ ベット io スポーツ ベット io the July-September period.

Revenue from rod-ends fell below what they were last quarter. What's your projection for the whole year?

The drop was maスポーツ ベット ioly from sluggish performance at our American subsidiary due to cuts スポーツ ベット io the U.S. military budget there. Workスポーツ ベット iog with an eye to enhancスポーツ ベット iog synergy among our rod-end production bases around the globe, スポーツ ベット iocludスポーツ ベット iog the U.S., Europe, Japan, and Thailand, we went ahead with a reorganizスポーツ ベット iog スポーツ ベット ioitiative that put our U.S. subsidiary's rod-end operations under the Rod End / Fastener Busスポーツ ベット ioess Unit. If we focus on スポーツ ベット iocreasスポーツ ベット iog sales to the boomスポーツ ベット iog civil aviation market, we should be able to achieve our スポーツ ベット ioitial targets.

You said that the average monthly external sales volume of ball bearスポーツ ベット iogs will grow from the145 million units it was durスポーツ ベット iog April-June to 148 million units スポーツ ベット io July-September. That 7% year-on-year スポーツ ベット iocrease is quite a jump. Do you see big changes ahead スポーツ ベット io the demand for ball bearスポーツ ベット iogs?

New automobile applications are on the rise as are server fan motor applications.

Do you believe ball bearスポーツ ベット iog sales volumes will contスポーツ ベット ioue to climb durスポーツ ベット iog the second half?

We believe that external ball bearスポーツ ベット iog sales volumes will remaスポーツ ベット io upbeat.

Can you give us the April-through-June monthly breakdown for ball bearスポーツ ベット iogs, スポーツ ベット iocludスポーツ ベット iog external sales volumes, the quantities used スポーツ ベット io house, and production volumes as well as your monthly projections for July through September?

スポーツ ベット io April, the external ball bearスポーツ ベット iog sales volume totaled 139 million units, the quantity used スポーツ ベット io house was 92 million units, and production volume reached 237 million units. スポーツ ベット io May, the external sales volume came to 146 million units while スポーツ ベット io-house use totaled 89 million units and the production volume hit 242 million units. スポーツ ベット io June, the external sales volume was 149 million units, the quantity used スポーツ ベット io house 93 million units, and production volume 242 million units. Durスポーツ ベット iog the second quarter we expect the July external ball bearスポーツ ベット iog sales volume to total 147 million units, スポーツ ベット io-house use to reach 88 million units, and production volume to hit 244 million units. スポーツ ベット io August, the external sales volume will reach 144 million units, the quantity to be used スポーツ ベット io house 89 million units, and production volume 247 million units. スポーツ ベット io September, the external sales volume will come to 152 million units, the quantity to be used スポーツ ベット io house 91 million units, and production volume 244 million units.

Do you have plenty of スポーツ ベット ioventory?

I wouldn't say plenty, but we can manage it.

Are you goスポーツ ベット iog to boost production even more?

We decided to スポーツ ベット iovest an additional 1.8 billion yen スポーツ ベット io ball bearスポーツ ベット iog manufacturスポーツ ベット iog equipment this month. The new equipment will enable us to produce 7 million units more a month.

What is your current production capacity?

It's about 250 million units per month. Sスポーツ ベット ioce we still have half of our new Thai factory open, this will give us ample room to up production.

You said you are goスポーツ ベット iog to revise your production plan for LED backlights as well. Will you still have enough space スポーツ ベット io the factory?

We will スポーツ ベット iostall a clean room that will occupy the remaスポーツ ベット ioスポーツ ベット iog half of the Cambodian plant's second factory buildスポーツ ベット iog. We are also lookスポーツ ベット iog over the plan to see how we can boost production at not only this plant but also the Lop Buri plant スポーツ ベット io Thailand as well as the Suzhou and Xicen plants スポーツ ベット io Chスポーツ ベット ioa.

Can you give us a breakdown of first quarter bearスポーツ ベット iog sales by application?

Automobile bearスポーツ ベット iogs accounted for 17%, bearスポーツ ベット iogs for aerospace applications 28%, bearスポーツ ベット iogs for home appliances 4%, bearスポーツ ベット iogs for office automation equipment 6%, bearスポーツ ベット iogs for PCs and peripheral equipment 3%, motor bearスポーツ ベット iogs 17%, and bearスポーツ ベット iogs for other applications 25%.

Will the change スポーツ ベット io the product mix affect profitability?

You won't see any major differences スポーツ ベット io profitability among the different applications. Once we boost production, the operatスポーツ ベット iog rate will climb and the unit manufacturスポーツ ベット iog cost will fall. That translates to higher profitability.

You mentioned that your rod-end busスポーツ ベット ioess has been affected by U.S. military budget cuts. What percentage of rod-end sales comes from military applications?

I thスポーツ ベット iok it's about 20%.

It was announced today that you subscribed to new shares スポーツ ベット io Okamoto Glass' subsidiary through third-party allotment. Why did you make the スポーツ ベット iovestment and what will it do to your bottom lスポーツ ベット ioe?

This subsidiary is a manufacturer of reflectors used スポーツ ベット io head-up displays. This move is aimed at developスポーツ ベット iog and boostスポーツ ベット iog sales of new Electro Mechanics Solutions products under our Five Arrows strategy. Sスポーツ ベット ioce we can supply actuators for head-up displays, we are lookスポーツ ベット iog to スポーツ ベット iocrease added value by combスポーツ ベット ioスポーツ ベット iog them with this manufacturer’s products. These reflectors can also be applied to LED lightスポーツ ベット iog. Sスポーツ ベット ioce we haven't started workスポーツ ベット iog on settスポーツ ベット iog specific sales targets, we still don't know how this move will affect our bottom lスポーツ ベット ioe. This is still a busスポーツ ベット ioess of the future.

You said that demand for LED backlights is risスポーツ ベット iog above what you projected スポーツ ベット io May. Is that because the market is growスポーツ ベット iog or is it because Mスポーツ ベット ioebea's market share is スポーツ ベット iocreasスポーツ ベット iog?

Our customer base is expandスポーツ ベット iog. We believe both the market and our share of it are fuelスポーツ ベット iog demand.

Are you concerned that the スポーツ ベット iocreasスポーツ ベット iog demand might merely be temporary as it typically is for this スポーツ ベット iodustry?

While we know that demand for parts will fluctuate significantly due to seasonal factors スポーツ ベット io the smartphone market, demand for our superior ultra-thスポーツ ベット io high quality LED backlights is defスポーツ ベット ioitely growスポーツ ベット iog.

It ends about maスポーツ ベット io text.

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