-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NxcQju8AZ1ZMMM3+b6s+MTkftB/+otINcx+NbNqOT3wBW58+pegWPke9O3wNOPkO qt+OgdpJ3dninEkhl2tLzA== 0000317891-06-000014.txt : 20060727 0000317891-06-000014.hdr.sgml : 20060727 20060727060119 ACCESSION NUMBER: 0000317891-06-000014 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20060727 FILED AS OF DATE: 20060727 DATE AS OF CHANGE: 20060727 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RICOH CO LTD CENTRAL INDEX KEY: 0000317891 STANDARD INDUSTRIAL CLASSIFICATION: PHOTOGRAPHIC EQUIPMENT & SUPPLIES [3861] IRS NUMBER: 000000000 STATE OF INCORPORATION: M0 FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 002-68279 FILM NUMBER: 06982824 BUSINESS ADDRESS: STREET 1: 13-1, GINZA 8-CHOME STREET 2: CHUO-KU CITY: TOKYO 104-8222 JAPAN STATE: M0 ZIP: 00000 BUSINESS PHONE: 81-3-6278-5241 MAIL ADDRESS: STREET 1: 13-1, GINZA 8-CHOME STREET 2: CHUO-KU CITY: TOKYO 104-8222 JAPAN STATE: M0 ZIP: 00000 6-K 1 r6k072706.txt FLASH REPORT 6-30-2006 FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 REPORT OF FOREIGN PRIVATE ISSUER Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 For the month of July 2006 Commission File Number 2 - 68279 RICOH COMPANY, LTD. ----------------------------------------------- (Translation of Registrant's name into English) 13-1, Ginza 8-Chome, Chuo-ku, Tokyo 104-8222, Japan --------------------------------------------------- (Address of Principal Executive Offices) (Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.) Form 20-F X Form 40-F __ (Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): __ ) (Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): __ ) (Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.) Yes __ No X (If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-__ ) - -------------------------------------------------------------------------------- SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Ricoh Company, Ltd. ------------------------------ (Registrant) By: /S/ Zenji Miura ------------------------------ Zenji Miura Director, Chief Financial Officer Corporate Executive Vice President July 27, 2006 - -------------------------------------------------------------------------------- [LOGO OF RICOH] July 27, 2006 QUARTERLY REPORT First Quarter ended June 30, 2006 (Results for the Period from April 1, 2006 to June 30, 2006) PERFORMANCE OUTLINE (CONSOLIDATED)
(Billions of yen) - --------------------------------------------------------------------------------------- --------------------- Three months ended Three months ended Year ending June 30, 2006 June 30, 2005 March 31, 2007 Results Results Change Forecast Change - --------------------------------------------------------------------------------------- --------------------- Domestic sales 240.4 232.4 3.4% 1,003.0 3.8% Overseas sales 244.1 218.9 11.5% 1,057.0 12.1% Net sales 484.5 451.4 7.3% 2,060.0 7.9% Gross profit 202.5 193.5 4.7% 850.0 6.9% Operating income 40.6 36.3 11.7% 170.0 14.4% Income from continuing operations before income taxes 38.7 37.1 4.0% 168.0 10.0% Net income 29.1 23.7 22.8% 106.5 9.7% - --------------------------------------------------------------------------------------- --------------------- Exchange rate (Yen/US$) 114.53 107.60 6.93 114.88 1.62 Exchange rate (Yen/EURO) 143.78 135.55 8.23 140.94 3.08 - --------------------------------------------------------------------------------------- --------------------- Net income per share (yen) 39.92 32.32 7.60 145.99 13.66 - --------------------------------------------------------------------------------------- --------------------- Cash flows from operating activities 26.3 47.5 -21.1 - - Cash flows from investing activities -5.0 -36.1 31.1 - - Cash flows from financing activities -17.4 -52.4 34.9 - - Cash and cash equivalents at end of period 189.1 144.6 44.5 - - - --------------------------------------------------------------------------------------- --------------------- Capital expenditures 15.9 34.7 -18.7 85.0 -17.0 Depreciation for tangible fixed assets 15.9 15.6 0.3 69.0 1.5 R&D expenditures 25.3 25.5 -0.1 120.0 9.6 - --------------------------------------------------------------------------------------- --------------------- - --------------------------------------------------------------------------------------- June 30, 2006 March 31, 2006 Change - --------------------------------------------------------------------------------------- Total assets 2,055.1 2,041.1 13.9 Shareholders' equity 980.2 960.2 19.9 Interest-bearing debt 372.4 381.2 -8.7 - --------------------------------------------------------------------------------------- Equity ratio (%) 47.7 47.0 0.7 - --------------------------------------------------------------------------------------- Shareholders' equity per share (yen) 1,343.70 1,316.21 27.49 - ---------------------------------------------------------------------------------------
RICOH COMPANY, LTD. Notes: * As a result of the sale of a business, the operating results and cash flows from the discontinued operation have been reclassified in accordance with Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". * The Company bases the forecast estimates for the fiscal year ending March 31, 2007 above upon information currently available to management, which involves risks and uncertainties that could cause actual results to differ materially from those projected. 1 PERFORMANCE *Overview Consolidated net sales for the first quarter of fiscal year 2007 (the three months period from April 1, 2006 to June 30, 2006) increased by 7.3% as compared to the previous corresponding period, to Yen 484.5 billion. During this quarter, the average yen exchange rates were Yen 114.53 against the U.S. dollar (down Yen 6.93) and Yen 143.78 against the Euro (down Yen 8.23). Net sales would have increased by 4.2% excluding impact of such foreign currency exchange fluctuation. As for Japan, sales of product categories such as digital PPCs (plain paper copiers), MFPs (multifunctional printers) and laser printers, especially color models, and sales in the solutions business, such as support and services relating to Ricoh's imaging solutions products, increased. Sales in the Industrial Products and Other segments also increased. Consequently, overall domestic sales increased by 3.4% as compared to the previous corresponding period. As for overseas, sales of product categories such as MFPs and laser printers increased in each geographic area. Sales in the Americas, Europe and Other, which includes China, Asia and Oceania, increased by 15.5% (8.5% excluding exchange fluctuation impact), 8.6% (2.5%) and 9.7% (3.9%), as compared to the previous corresponding period, respectively. As a result, overall overseas sales increased by 11.5% as compared to the previous corresponding period. Had the foreign currency exchange rates remained the same as during the prior period, its sales would have increased by 5.0%. Gross profit increased by 4.7% as compared to the previous corresponding period, to Yen 202.5 billion. This increase primarily reflects an increase in sales of value-added high-margin products in the Office Solutions segment, the recovery in demand for the Industrial Products segment, and the continuous cost reduction activities at all the stages such as product development, manufacturing and logistics. Selling, general and administrative expenses increased by 3.0% as compared to the previous corresponding period, to Yen 161.9 billion. This increase was due primarily to the research and development expenses (Yen 25.3 billion, 5.2% of net sales) for developing new products and expenses for the enhancement of sales forces, especially overseas. As a result, operating income increased by 11.7% as compared to the previous corresponding period, to Yen 40.6 billion. With respect to other (income) expenses, the increase in interest expense was due to an increase in market interest rates, and a foreign currency exchange loss was incurred during the period. On May 31, 2006, San-Ai Co., Ltd., a domestic subsidiary, completed the sale of its content distribution business. The sales price was Yen 12.0 billion. Ricoh recognized income from the discontinued operation of its component on this sale equal to Yen 5.5 billion, net of tax. As a result, net income increased by 22.8% as compared to the previous corresponding period, to Yen 29.1 billion. 2 *Conditions by Product Line Office Solutions (Sales up 6.1% to Yen 411.8 billion) - ------------------------------------------------------- Imaging Solutions (Sales up 6.7% to Yen 372.7 billion) -------------------------------------------------------- - Sales of digital PPCs and MFPs increased as compared to the previous corresponding period. This was mainly due to the increase in sales of color products both in Japan and overseas, resulting from launch of new products in response to customers' demand for high-speed, networking, and colorization. MFPs: Imagio Neo 250/300 series, Imagio MP6000/7500 series in Japan Aficio 3035/3045 series, Aficio 2020/2000 series overseas Color MFPs: Imagio MP C2500/C3000 series, Imagio MP C3500/4000 series in Japan Aficio 3260C, Aficio 3235C/3245C series overseas
- Sales of laser printers continued to increase in Japan and overseas. The sales of after-sales business such as services and supplies also increased. - As a result, sales in this category increased by 6.7%. Network System Solutions (Sales up 1.2% to Yen 39.0 billion) -------------------------------------------------------------- - Sales in this category increased as compared to the previous corresponding period, due to the increase in sales of solution business products, offsetting the decrease in sales of personal computers and servers. As a result, sales in the Office Solutions segment increased by 6.1% as compared to the previous corresponding period, to Yen 411.8 billion. Net operating income in this segment increased by 5.5% as compared to the previous corresponding period, to Yen 51.3 billion. This was due to the effect of the sales increase and the launch of new products, and the continuous cost reduction activities at all the stages such as product development, manufacturing and logistics. Industrial Products (Sales up 33.1% to Yen 34.7 billion) - ---------------------------------------------------------- Sales in the Industrial Products segment increased by 33.1% as compared to the previous corresponding period, to Yen 34.7 billion. This was due primarily to the recovery in demand for semiconductor devices and increase in the sales resulting from thermal media, measuring equipment and electronic components businesses. As a result, net operating income in this segment was Yen 1.2 billion (net operating loss of Yen 0.5 billion for the previous corresponding period). Other (Sales up 2.0% to Yen 38.0 billion) - ------------------------------------------- Sales in the Other segment increased by 2.0% as compared to the previous corresponding period, to Yen 38.0 billion. Though the sales of optical discs business decreased in the overseas market, the sales of financing services and logistics services continued well. As a result, net operating income in this segment increased as compared to the previous corresponding period, to Yen 0.6 billion. *Cash Flows (Three months from April 1, 2006 to June 30, 2006) Net cash provided by operating activities decreased by Yen 21.1 billion as compared to the previous corresponding period, to Yen 26.3 billion. Inventories increased due primarily to the launch of new products, though net income and depreciation increased as compared to the previous corresponding period and trade receivables decreased. Net cash used in investing activities decreased by Yen 31.1 billion as compared to the previous corresponding period, to Yen 5.0 billion, due primarily to the decrease in capital expenditures and the sale of a discontinued operation. As a result, free cash flow generated by operating and investing activities increased by Yen 9.9 billion as compared to the previous corresponding period, to Yen 21.2 billion. Net cash used in financing activities amounted to Yen 17.4 billion due primarily to the repayment of interest-bearing debt and the dividend payment. As a result, cash and cash equivalents at the end of this first quarter increased by Yen 2.1 billion as compared to the end of the preceding fiscal year, to Yen 189.1 billion. 3 *Forecast for the entire fiscal year Ricoh assumes exchange rates of Yen 115.00 against the U.S. dollar and of Yen 140.00 against the Euro in and after the second quarter, the same as announced in April 2006. Having results of the first quarter's performance, sales forecast for fiscal year 2007 revised upward. Ricoh intends to achieve growth by implementing the business strategies such as continuous and effective launch of new products, responding the change of customers' demand and absorbing the fluctuation of currency rates. Income for the first quarter of fiscal year 2006 was almost same as announced in April 2006. Operating income and income from continuing operations before income tax for fiscal year 2006 are forecasted same as announced in April 2006. Ricoh continues to focus on the improvement of its profitability. Our performance forecast for fiscal year 2007 is as follows: Exchange Rate Assumptions for the full year ending March 31, 2007 US$ 1 = Yen 114.88 (Yen 113.26 in previous fiscal year) EURO 1 = Yen 140.94 (Yen 137.86 in previous fiscal year)
(Billions of yen) - ------------------------------------------------------------------------------------------ Year ending Year ended March 31, 2007 March 31, 2006 (Forecast) (Results) Change - ------------------------------------------------------------------------------------------ Domestic sales 1,003.0 966.2 3.8% Overseas sales 1,057.0 943.0 12.1% Net sales 2,060.0 1,909.2 7.9% Gross profit 850.0 795.0 6.9% Operating income 170.0 148.5 14.4% Income from continuing operations before income taxes 168.0 152.7 10.0% Net income 106.5 97.0 9.7% - ------------------------------------------------------------------------------------------
Notes: * As a result of the sale of a business, the operating results from the discontinued operation have been reclassified in accordance with Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". * Ricoh bases the forecast estimates for the year ending March 31, 2007 above upon information currently available to management, which involves risks and uncertainties that could cause actual results to differ materially from those projected. 4 RICOH COMPANY, LTD. AND CONSOLIDATED SUBSIDIARIES FINANCIAL HIGHLIGHTS FOR THE FIRST QUARTER ENDED JUNE 30, 2006 (U.S. GAAP FINANCIAL INFORMATION) 1. ITEMS RELATING TO FIRST QUARTER FINANCIAL STATEMENTS (1) No change in accounting method has been made. (2) Change relating to the scale of consolidation and the application of the equity method: Consolidated subsidiaries: No addition; 4 removals Companies accounted for by the equity method: No addition; 2 removals 2. RESULTS FOR THE PERIOD FROM APRIL 1, 2006 TO JUNE 30, 2006 (1) Operating Results
(Millions of yen) - ---------------------------------------------------------------------------------------------------------- Three months ended Three months ended Year ended June 30, 2006 June 30, 2005 March 31, 2006 - ---------------------------------------------------------------------------------------------------------- Net sales 484,576 451,465 1,909,238 (% change from the previous corresponding period) 7.3 3.8 5.6 Operating income 40,647 36,389 148,584 (% change from the previous corresponding period) 11.7 -5.0 13.3 Income from continuing operations before income taxes 38,704 37,198 152,766 (% change from the previous corresponding period) 4.0 -7.5 16.6 Net income 29,125 23,723 97,057 (% change from the previous corresponding period) 22.8 -4.7 16.7 Net income per share-basic (yen) 39.92 32.32 132.33 Net income per share-diluted (yen) - - - - ---------------------------------------------------------------------------------------------------------- (2) Financial Position (Millions of yen) - ---------------------------------------------------------------------------------------------------------- June 30, 2006 June 30, 2005 March 31, 2006 - ---------------------------------------------------------------------------------------------------------- Total assets 2,055,138 1,899,986 2,041,183 Shareholders' equity 980,225 879,665 960,245 Equity ratio (%) 47.7 46.3 47.0 Equity per share (yen) 1,343.70 1,198.48 1,316.21 - ---------------------------------------------------------------------------------------------------------- Cash Flows (Millions of yen) - ---------------------------------------------------------------------------------------------------------- Three months ended Three months ended Year ended June 30, 2006 June 30, 2005 March 31, 2006 - ---------------------------------------------------------------------------------------------------------- Cash flows from operating activities 26,345 47,502 173,479 Cash flows from investing activities -5,086 -36,186 -120,051 Cash flows from financing activities -17,482 -52,430 -59,989 Cash and cash equivalents at end of period 189,173 144,617 187,055 - ---------------------------------------------------------------------------------------------------------- 3. FORECAST OF OPERATING RESULTS FROM APRIL 1, 2006 TO MARCH 31, 2007 (Millions of yen) - ---------------------------------------------------------------------------------------------------------- Half year ending Year ending September 30, 2006 March 31, 2007 - ---------------------------------------------------------------------------------------------------------- Net sales 987,000 2,060,000 Operating income 73,000 170,000 Income from continuing operations before income taxes 72,000 168,000 Net income 48,300 106,500 - ---------------------------------------------------------------------------------------------------------- Net income per share (Consolidated) Yen 145.99
Notes: * As a result of the sale of a business, the operating results and cash flows from the discontinued operation have been reclassified in accordance with Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". * In accordance with Japanese regulations, Ricoh has issued forecast for its financial results for the fiscal year ending March 31, 2007. These forecast are forward-looking statements based on a number of assumptions and beliefs in light of the information. 5 CONSOLIDATED PERFORMANCE 1. CONSOLIDATED STATEMENTS OF INCOME
(Millions of yen) - ------------------------------------------------------------------------------------------------------------ Three months ended Three months ended June 30, 2006 June 30, 2005 Change % - ------------------------------------------------------------------------------------------------------------ Net sales 484,576 451,465 33,111 7.3 Cost of sales 282,011 257,948 24,063 9.3 Percentage of net sales (%) 58.2 57.1 Gross Profit 202,565 193,517 9,048 4.7 Percentage of net sales (%) 41.8 42.9 Selling, general and administrative expenses 161,918 157,128 4,790 3.0 Percentage of net sales (%) 33.4 34.8 Operating income 40,647 36,389 4,258 11.7 Percentage of net sales (%) 8.4 8.1 Other (income) expense Interest and dividend income 1,097 685 412 60.1 Percentage of net sales (%) 0.2 0.2 Interest expense 1,584 1,009 575 57.0 Percentage of net sales (%) 0.3 0.2 Other, net 1,456 -1,133 2,589 - Percentage of net sales (%) 0.3 -0.1 Income from continuing operations before income taxes, equity income and minority interests 38,704 37,198 1,506 4.0 Percentage of net sales (%) 8.0 8.2 Provision for income taxes 14,226 13,144 1,082 8.2 Percentage of net sales (%) 2.9 2.9 Minority interests in earnings of subsidiaries 1,339 1,226 113 9.2 Percentage of net sales (%) 0.3 0.3 Equity in earnings of affiliates 486 363 123 33.9 Percentage of net sales (%) 0.1 0.1 Income from continuing operations 23,625 23,191 434 1.9 Percentage of net sales (%) 4.9 5.1 Income from discontinued operation, net of tax 5,500 532 4,968 933.8 Percentage of net sales (%) 1.1 0.2 Net Income 29,125 23,723 5,402 22.8 Percentage of net sales (%) 6.0 5.3 - ------------------------------------------------------------------------------------------------------------ Note: *As a result of the sale of a business, the operating results from the discontinued operation have been reclassified in accordance with Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". Reference : Exchange rate US$ 1 Yen 114.53 Yen 107.60 EURO 1 Yen 143.78 Yen 135.55 2-1. CONSOLIDATED SALES BY PRODUCT CATEGORY (Millions of yen) - ------------------------------------------------------------------------------------------------------------ Three months ended Three months ended June 30, 2006 June 30, 2005 Change % - ------------------------------------------------------------------------------------------------------------ [Office Solutions] Imaging Solutions 372,755 349,487 23,268 6.7 Percentage of net sales (%) 76.9 77.4 Network System Solutions 39,047 38,586 461 1.2 Percentage of net sales (%) 8.1 8.6 Office Solutions Total 411,802 388,073 23,729 6.1 Percentage of net sales (%) 85.0 86.0 - ------------------------------------------------------------------------------------------------------------ [Industrial Products] Industrial Products 34,709 26,078 8,631 33.1 Percentage of net sales (%) 7.2 5.8 - ------------------------------------------------------------------------------------------------------------ [Other] Other 38,065 37,314 751 2.0 Percentage of net sales (%) 7.8 8.2 - ------------------------------------------------------------------------------------------------------------ Grand Total 484,576 451,465 33,111 7.3 Percentage of net sales (%) 100.0 100.0 - ------------------------------------------------------------------------------------------------------------ 2-2. CONSOLIDATED SALES BY GEOGRAPHIC AREA (Millions of yen) - ------------------------------------------------------------------------------------------------------------ Three months ended Three months ended June 30, 2006 June 30, 2005 Change % - ------------------------------------------------------------------------------------------------------------ [Domestic] 240,431 232,474 7,957 3.4 Percentage of net sales (%) 49.6 51.5 [Overseas] 244,145 218,991 25,154 11.5 Percentage of net sales (%) 50.4 48.5 The Americas 100,635 87,156 13,479 15.5 Percentage of net sales (%) 20.8 19.3 Europe 113,510 104,479 9,031 8.6 Percentage of net sales (%) 23.4 23.1 Other 30,000 27,356 2,644 9.7 Percentage of net sales (%) 6.2 6.1 Grand Total 484,576 451,465 33,111 7.3 Percentage of net sales (%) 100.0 100.0 - ------------------------------------------------------------------------------------------------------------
Note: * As a result of the sale of a business, the operating results from the discontinued operation have been reclassified in accordance with Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". 6 3. CONSOLIDATED BALANCE SHEETS Assets
(Millions of yen) - ------------------------------------------------------------------------------------------------------- June 30, 2006 March 31, 2006 Change - ------------------------------------------------------------------------------------------------------- Current Assets Cash and time deposits 190,662 188,525 2,137 Trade receivables 631,651 630,501 1,150 Marketable securities 166 162 4 Inventories 183,719 169,245 14,474 Other current assets 58,379 55,110 3,269 Total Current Assets 1,064,577 1,043,543 21,034 Fixed Assets Tangible fixed assets 266,494 268,243 -1,749 Finance receivables 416,990 415,435 1,555 Other investments 307,077 313,962 -6,885 Total Fixed Assets 990,561 997,640 -7,079 - ------------------------------------------------------------------------------------------------------- Total Assets 2,055,138 2,041,183 13,955 - ------------------------------------------------------------------------------------------------------- Note: Contents of cash and time deposits; Cash and cash equivalents 189,173 187,055 Time deposits 1,489 1,470 Liabilities and Shareholders' Investment (Millions of yen) - ------------------------------------------------------------------------------------------------------- June 30, 2006 March 31, 2006 Change - ------------------------------------------------------------------------------------------------------- Current Liabilities Trade payables 328,434 339,152 -10,718 Short-term borrowings 171,398 185,651 -14,253 Other current liabilities 172,172 159,225 12,947 Total Current Liabilities 672,004 684,028 -12,024 Fixed Liabilities Long-term indebtedness 201,090 195,626 5,464 Accrued pension and severance costs 96,942 97,020 -78 Other fixed liabilities 50,859 51,374 -515 Total Fixed Liabilities 348,891 344,020 4,871 - ------------------------------------------------------------------------------------------------------- Total Liabilities 1,020,895 1,028,048 -7,153 - ------------------------------------------------------------------------------------------------------- Minority Interest 54,018 52,890 1,128 - ------------------------------------------------------------------------------------------------------- Shareholders' Investment Common stock 135,364 135,364 - Additional paid-in capital 186,450 186,450 0 Retained earnings 685,758 665,394 20,364 Accumulated other comprehensive income (loss) 3,836 4,099 -263 Treasury stock -31,183 -31,062 -121 Total Shareholders' Investment 980,225 960,245 19,980 - ------------------------------------------------------------------------------------------------------- Total Liabilities and Shareholders' Investment 2,055,138 2,041,183 13,955 - ------------------------------------------------------------------------------------------------------- Note: Other comprehensive income; Net unrealized holding gains on available-for-sale securities 8,124 8,928 -804 Pension liability adjustments -7,086 -7,643 557 Net unrealized gains (losses) on derivative instruments 121 157 -36 Cumulative translation adjustments 2,677 2,657 20 Reference: Exchange rate June 30, 2006 March 31, 2006 US$ 1 Yen 115.24 Yen 117.47 EURO 1 Yen 146.00 Yen 142.81
7 4. CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions of yen) - ------------------------------------------------------------------------------------------------------------- Three months ended Three months ended June 30, 2006 June 30, 2005 - ------------------------------------------------------------------------------------------------------------- I. Cash Flows from Operating Activities: Net income 29,125 23,723 Income from discontinued operation, net of tax -5,500 -532 ------------------------------ Income from continuing operations 23,625 23,191 Adjustments to reconcile net income to net cash provided by operating activities-- Depreciation and amortization 20,776 19,543 Equity in earnings of affiliates, net of dividends received 7 113 Deferred income taxes -1,232 288 Loss on disposals and sales of tangible fixed assets 116 405 Pension and severance costs, less payments 134 883 Changes in assets and liabilities-- Decrease in trade receivables 3,233 32,394 Increase in inventories -14,205 -2,209 Increase in finance receivables -7,217 -6,166 Decrease in trade payables -9,533 -32,363 Increase in accrued income taxes and accrued expenses and other 7,970 7,232 Other, net 2,671 4,191 - ------------------------------------------------------------------------------------------------------------- Net cash provided by operating activities 26,345 47,502 - ------------------------------------------------------------------------------------------------------------- II. Cash Flows from Investing Activities: Proceeds from sales of property, plant and equipment 42 21 Expenditures for tangible fixed assets -15,954 -34,718 Payments for purchases of available-for-sale securities -24,739 -36,105 Proceeds from sales of available-for-sale securities 24,019 36,542 Increase in time deposits -38 -399 Proceeds from sales of discontinued operation 12,000 - Other, net -416 -1,527 - ------------------------------------------------------------------------------------------------------------- Net cash used in investing activities -5,086 -36,186 - ------------------------------------------------------------------------------------------------------------- III. Cash Flows from Financing Activities: Proceeds from long-term indebtedness 36,069 13,366 Repayment of long-term indebtedness -13,845 -20,420 Increase (Decrease) in short-term borrowings, net -12,526 3,308 Repayment of long-term debt securities -18,000 -41,000 Dividend paid -8,764 -7,348 Payment for purchase of treasury stock -125 -100 Other, net -291 -236 - ------------------------------------------------------------------------------------------------------------- Net cash used in financing activities -17,482 -52,430 - ------------------------------------------------------------------------------------------------------------- IV. Net Increase in Cash and Cash Equivalents from discontinued operation 825 996 - ------------------------------------------------------------------------------------------------------------- V. Effect of Exchange Rate Changes on Cash and Cash Equivalents -2,484 -2,122 - ------------------------------------------------------------------------------------------------------------- VI. Net Increase (Decrease) in Cash and Cash Equivalents 2,118 -42,240 - ------------------------------------------------------------------------------------------------------------- VII. Cash and Cash Equivalents at Beginning of Year 187,055 186,857 - ------------------------------------------------------------------------------------------------------------- VIII. Cash and Cash Equivalents at End of Period 189,173 144,617 - -------------------------------------------------------------------------------------------------------------
Note: * As a result of the sale of a business, the operating results from the discontinued operation have been reclassified in accordance with Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". 8 5. SEGMENT INFORMATION (1) Operating Segments Information
(Millions of yen) - ----------------------------------------------------------------------------------------------------------- Three months ended Three months ended June 30, 2006 June 30, 2005 Change % - ----------------------------------------------------------------------------------------------------------- OFFICE SOLUTIONS: Net sales: Unaffiliated customers 411,802 388,073 23,729 6.1 Intersegment - - - - Total 411,802 388,073 23,729 6.1 - ----------------------------------------------------------------------------------------------------------- Operating expenses 360,458 339,394 21,064 6.2 - ----------------------------------------------------------------------------------------------------------- Operating income 51,344 48,679 2,665 5.5 Operating income on sales in Office Solutions (%) 12.5 12.5 - ----------------------------------------------------------------------------------------------------------- INDUSTRIAL PRODUCTS: Net sales: Unaffiliated customers 34,709 26,078 8,631 33.1 Intersegment 1,205 586 619 105.6 Total 35,914 26,664 9,250 34.7 - ----------------------------------------------------------------------------------------------------------- Operating expenses 34,680 27,188 7,492 27.6 - ----------------------------------------------------------------------------------------------------------- Operating income 1,234 -524 1,758 - Operating income on sales in Industrial Products (%) 3.4 -2.0 - ----------------------------------------------------------------------------------------------------------- OTHER: Net sales: Unaffiliated customers 38,065 37,314 751 2.0 Intersegment - - - - Total 38,065 37,314 751 2.0 - ----------------------------------------------------------------------------------------------------------- Operating expenses 37,382 37,249 133 0.4 - ----------------------------------------------------------------------------------------------------------- Operating income 683 65 618 950.8 Operating income on sales in Other (%) 1.8 0.2 - ----------------------------------------------------------------------------------------------------------- CORPORATE AND ELIMINATIONS: Net sales: Intersegment -1,205 -586 -619 - Total -1,205 -586 -619 - - ----------------------------------------------------------------------------------------------------------- Operating expenses: Intersegment -1,250 -594 -656 - Corporate 12,659 11,839 820 - Total 11,409 11,245 164 - - ----------------------------------------------------------------------------------------------------------- Operating income -12,614 -11,831 -783 - - ----------------------------------------------------------------------------------------------------------- CONSOLIDATED: Net sales: Unaffiliated customers 484,576 451,465 33,111 7.3 Intersegment - - - - Total 484,576 451,465 33,111 7.3 - ----------------------------------------------------------------------------------------------------------- Operating expenses 443,929 415,076 28,853 7.0 - ----------------------------------------------------------------------------------------------------------- Operating income 40,647 36,389 4,258 11.7 Operating income on consolidated net sales (%) 8.4 8.1 - -----------------------------------------------------------------------------------------------------------
Note: * As a result of the sale of a business, the operating results from the discontinued operation have been reclassified in accordance with Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". 9 (2)Geographic Segments Information
(Millions of yen) - ------------------------------------------------------------------------------------------------------ Three months ended Three months ended June 30, 2006 June 30, 2005 Change % - ------------------------------------------------------------------------------------------------------ JAPAN: Net sales: External customers 246,140 240,007 6,133 2.6 Intersegment 123,068 104,986 18,082 17.2 Total 369,208 344,993 24,215 7.0 - ------------------------------------------------------------------------------------------------------ Operating expenses 337,072 316,779 20,293 6.4 - ------------------------------------------------------------------------------------------------------ Operating income 32,136 28,214 3,922 13.9 Operating income on sales in Japan (%) 8.7 8.2 - ------------------------------------------------------------------------------------------------------ THE AMERICAS: Net sales: External customers 100,625 86,298 14,327 16.6 Intersegment 989 1,308 -319 -24.4 Total 101,614 87,606 14,008 16.0 - ------------------------------------------------------------------------------------------------------ Operating expenses 99,593 86,282 13,311 15.4 - ------------------------------------------------------------------------------------------------------ Operating income 2,021 1,324 697 52.6 Operating income on sales in the Americas (%) 2.0 1.5 - ------------------------------------------------------------------------------------------------------ EUROPE: Net sales: External customers 113,509 103,476 10,033 9.7 Intersegment 898 1,120 -222 -19.8 Total 114,407 104,596 9,811 9.4 - ------------------------------------------------------------------------------------------------------ Operating expenses 109,783 98,698 11,085 11.2 - ------------------------------------------------------------------------------------------------------ Operating income 4,624 5,898 -1,274 -21.6 Operating income on sales in Europe (%) 4.0 5.6 - ------------------------------------------------------------------------------------------------------ OTHER: Net sales: External customers 24,302 21,684 2,618 12.1 Intersegment 32,347 23,627 8,720 36.9 Total 56,649 45,311 11,338 25.0 - ------------------------------------------------------------------------------------------------------ Operating expenses 52,330 42,126 10,204 24.2 - ------------------------------------------------------------------------------------------------------ Operating income 4,319 3,185 1,134 35.6 Operating income on sales in Other (%) 7.6 7.0 - ------------------------------------------------------------------------------------------------------ CORPORATE AND ELIMINATIONS: Net sales: Intersegment -157,302 -131,041 -26,261 - Total -157,302 -131,041 -26,261 - - ------------------------------------------------------------------------------------------------------ Operating expenses -154,849 -128,809 -26,040 - - ------------------------------------------------------------------------------------------------------ Operating income -2,453 -2,232 -221 - - ------------------------------------------------------------------------------------------------------ CONSOLIDATED: Net sales: External customers 484,576 451,465 33,111 7.3 Intersegment - - - - Total 484,576 451,465 33,111 7.3 - ------------------------------------------------------------------------------------------------------ Operating expenses 443,929 415,076 28,853 7.0 - ------------------------------------------------------------------------------------------------------ Operating income 40,647 36,389 4,258 11.7 Operating income on consolidated net sales (%) 8.4 8.1 - ------------------------------------------------------------------------------------------------------
Note: * As a result of the sale of a business, the operating results from the discontinued operation have been reclassified in accordance with Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". 10 - -APPENDIX- (THREE MONTHS ENDED JUNE 30, 2006) 1. CONSOLIDATED SALES BY PRODUCT CATEGORY
(Millions of yen) - ------------------------------------------------------------------------------------------------------------------------ Three months ended Three months ended Change excluding June 30, 2006 June 30, 2005 Change % exchange impact % - ------------------------------------------------------------------------------------------------------------------------ [Office Solutions] Imaging Solutions 372,755 349,487 23,268 6.7 10,321 3.0 Percentage of net sales (%) 76.9 77.4 Domestic 151,521 149,622 1,899 1.3 1,899 1.3 Overseas 221,234 199,865 21,369 10.7 8,422 4.2 Network System Solutions 39,047 38,586 461 1.2 340 0.9 Percentage of net sales (%) 8.1 8.6 Domestic 37,242 36,599 643 1.8 643 1.8 Overseas 1,805 1,987 -182 -9.2 -303 -15.2 Office Solutions Total 411,802 388,073 23,729 6.1 10,661 2.7 Percentage of net sales (%) 85.0 86.0 Domestic 188,763 186,221 2,542 1.4 2,542 1.4 Overseas 223,039 201,852 21,187 10.5 8,119 4.0 The Americas 93,041 82,966 10,075 12.1 4,449 5.4 Europe 107,310 98,671 8,639 8.8 2,517 2.6 Other 22,688 20,215 2,473 12.2 1,153 5.7 - ------------------------------------------------------------------------------------------------------------------------ [Industrial Products] Industrial Products 34,709 26,078 8,631 33.1 7,851 30.1 Percentage of net sales (%) 7.2 5.8 Domestic 18,830 15,858 2,972 18.7 2,972 18.7 Overseas 15,879 10,220 5,659 55.4 4,879 47.7 The Americas 7,339 3,139 4,200 133.8 3,756 119.7 Europe 4,700 3,945 755 19.1 518 13.1 Other 3,840 3,136 704 22.4 605 19.3 - ------------------------------------------------------------------------------------------------------------------------ [Other] Other 38,065 37,314 751 2.0 500 1.3 Percentage of net sales (%) 7.8 8.2 Domestic 32,838 30,395 2,443 8.0 2,443 8.0 Overseas 5,227 6,919 -1,692 -24.5 -1,943 -28.1 The Americas 255 1,051 -796 -75.7 -810 -77.1 Europe 1,500 1,863 -363 -19.5 -447 -24.0 Other 3,472 4,005 -533 -13.3 -686 -17.1 - ------------------------------------------------------------------------------------------------------------------------ Grand Total 484,576 451,465 33,111 7.3 19,012 4.2 Percentage of net sales (%) 100.0 100.0 Domestic 240,431 232,474 7,957 3.4 7,957 3.4 Percentage of net sales (%) 49.6 51.5 Overseas 244,145 218,991 25,154 11.5 11,055 5.0 Percentage of net sales (%) 50.4 48.5 The Americas 100,635 87,156 13,479 15.5 7,395 8.5 Percentage of net sales (%) 20.8 19.3 Europe 113,510 104,479 9,031 8.6 2,588 2.5 Percentage of net sales (%) 23.4 23.1 Other 30,000 27,356 2,644 9.7 1,072 3.9 Percentage of net sales (%) 6.2 6.1 - ------------------------------------------------------------------------------------------------------------------------ Reference: Exchange rate US$ 1 Yen 114.53 Yen 107.60 Yen 6.93 EURO 1 Yen 143.78 Yen 135.55 Yen 8.23
Notes: * As a result of the sale of a business, the operating results from the discontinued operation have been reclassified in accordance with Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". *Each category includes the following product line: Imaging Solutions Digital PPCs, color PPCs, digital duplicators, facsimile machines, analog PPCs, diazo copiers, scanners, MFPs (multifunctional printers), laser printers and software Network System Solutions Personal computers, servers, network systems and network related software Industrial Products Thermal media, optical equipment, semiconductor devices, electronic components and measuring equipment Other Optical discs and digital cameras
A1 2. FORECAST OF CONSOLIDATED PERFORMANCE
(Billions of yen) - -------------------------------------------------------------------------------------------------------------------------- Three months ended Three months ending Half year ending Year ending June 30, 2006 Change Sept. 30, 2006 Change Sept. 30, 2006 Change March 31, 2007 Change Results % Forecast % Forecast % Forecast % - -------------------------------------------------------------------------------------------------------------------------- Net sales 484.5 7.3 502.4 7.3 987.0 7.3 2,060.0 7.9 Gross profit 202.5 4.7 208.4 8.4 411.0 6.6 850.0 6.9 Operating income 40.6 11.7 32.3 13.0 73.0 12.3 170.0 14.4 Income from continuing operations before income taxes 38.7 4.0 33.2 9.8 72.0 6.7 168.0 10.0 Net income 29.1 22.8 19.1 0.2 48.3 12.7 106.5 9.7 - -------------------------------------------------------------------------------------------------------------------------- Net income per share (yen) 39.92 - 26.29 - 66.21 - 145.99 - - -------------------------------------------------------------------------------------------------------------------------- Capital expenditures 15.9 - 22.0 - 38.0 - 85.0 - Depreciation for tangible fixed assets 15.9 - 16.0 - 32.0 - 69.0 - R&D expenditures 25.3 - 32.6 - 58.0 - 120.0 - - -------------------------------------------------------------------------------------------------------------------------- Exchange rate (Yen/US$) 114.53 - 115.00 - 114.77 - 114.88 - Exchange rate (Yen/EURO) 143.78 - 140.00 - 141.89 - 140.94 - - -------------------------------------------------------------------------------------------------------------------------- 3. FORECAST OF CONSOLIDATED SALES BY PRODUCT CATEGORY (Billions of yen) - -------------------------------------------------------------------------------------------------------------------------- Half year ending September 30, 2006 Year ending March 31, 2007 ----------------------------------- -------------------------- Change Change Change Change Forecast % Forecast(*) % Forecast % Forecast(*) % - -------------------------------------------------------------------------------------------------------------------------- [Office Solutions] Imaging Solutions 747.5 7.8 727.6 5.0 1,574.1 8.8 1,558.3 7.7 Domestic 293.2 1.4 293.2 1.4 605.5 3.4 605.5 3.4 Overseas 454.2 12.5 434.4 7.6 968.5 12.5 952.8 10.6 Network System Solutions 94.7 1.7 94.5 1.5 197.8 3.8 197.6 3.7 Domestic 90.2 1.4 90.2 1.4 187.5 3.5 187.5 3.5 Overseas 4.5 8.1 4.2 2.8 10.3 9.1 10.0 6.8 Office Solutions Total 842.2 7.1 822.1 4.6 1,771.9 8.2 1,755.9 7.3 Domestic 383.4 1.4 383.4 1.4 793.0 3.5 793.0 3.5 Overseas 458.7 12.4 438.7 7.5 978.8 12.4 962.9 10.6 The Americas 198.4 13.8 189.3 8.6 414.6 12.6 409.6 11.3 Europe 216.2 13.2 206.7 8.2 465.9 12.9 456.6 10.7 Other 44.1 3.6 42.6 0.0 98.3 9.3 96.6 7.4 - -------------------------------------------------------------------------------------------------------------------------- [Industrial Products] Industrial Products 68.5 17.3 67.5 15.5 136.1 12.9 135.3 12.2 Domestic 40.3 12.0 40.3 12.0 80.9 11.9 80.9 11.9 Overseas 28.1 25.9 27.1 21.3 55.1 14.3 54.3 12.6 The Americas 11.4 39.1 10.8 32.5 20.5 18.1 20.1 16.1 Europe 8.6 15.1 8.2 10.6 17.3 7.8 16.9 5.7 Other 8.1 21.7 7.9 19.5 17.3 17.0 17.1 16.0 - -------------------------------------------------------------------------------------------------------------------------- [Other] Other 76.1 1.4 75.9 1.0 151.8 0.3 151.6 0.2 Domestic 66.1 4.2 66.1 4.2 128.9 1.3 128.9 1.3 Overseas 10.0 -14.1 9.7 -16.2 22.9 -4.6 22.6 -5.7 The Americas 0.6 -50.4 0.6 -51.5 1.2 -31.7 1.3 -27.0 Europe 2.7 -5.7 2.6 -8.6 6.0 -3.2 5.9 -4.6 Other 6.6 -10.8 6.5 -12.9 15.6 -2.1 15.4 -3.6 - -------------------------------------------------------------------------------------------------------------------------- Grand Total 987.0 7.3 965.6 5.0 2,060.0 7.9 2,042.9 7.0 Domestic 490.0 2.6 490.0 2.6 1,003.0 3.8 1,003.0 3.8 Overseas 497.0 12.4 475.6 7.6 1,057.0 12.1 1,039.9 10.3 The Americas 210.5 14.5 200.8 9.2 436.4 12.7 431.1 11.3 Europe 227.5 13.0 217.6 8.1 489.2 12.5 479.5 10.3 Other 58.9 3.8 57.1 0.6 131.3 8.7 129.2 7.0 - --------------------------------------------------------------------------------------------------------------------------
* Excluding foreign exchange impact A2 -----END PRIVACY-ENHANCED MESSAGE-----