Panasonic Electric Works Information Systems Co., Ltd.

Transcription

1 January 27, 2010 Panasonic Electric Works Information Systems Co., Ltd. Consolidated Financial Statements for the Third Quarter Ended December 31, 2009 Name of the Company: Panasonic Electric Works Information Systems Co., Ltd. Registered Stock Ex: First Section, Tokyo Stock Ex Code No.: 4283 URL: Representative: Takeyoshi Kawamura, Representative Director and President Contact: Hiroyuki Maruoka, Director and Account Manager Telephone: Planned Submission Date of the Quarterly Security Report: February 5, 2010 Planned Dividend Payment Date: (Amounts less than one million yen have been omitted.) 1. Business Results and Financial Position for the Third Quarter of 2010 (April 1, 2009 December 31, 2009) (1) Results of operations (Accumulated Total) (% shows the from the previous third quarter) Net sales Operating Ordinary ( million) (%) ( million) (%) ( million) (%) Third quarter of ,669 (0.1) 3,175 (4.9) 3,209 (6.4) Third quarter of ,698 3,338 3,427 Net Net per share Diluted net per share ( million) (%) ( ) ( ) Third quarter of ,885 (6.7) Third quarter of , (2) Financial positions Total assets Net assets Ratio of shareholders' equity to total assets Net assets per share ( million) ( million) (%) ( ) Third quarter of ,502 18, , Year ended March 31, ,211 17, , Reference: Shareholders equity: The third quarter of 2010: 18,703 million, Year ended March 2009: 17,573 million 2. Dividends Dividend per share Record date 1Q ( ) 2Q ( ) 3Q ( ) Year end( ) Annual( ) Year ended March 31, Year ending March 31, Year ending March 31, 2010 (Forecast) Note: Changes in forecasts of dividends in the third quarter of 2010: None 1

2 3. Forecast of Business Results for the Year Ending March 31, 2010 (April 1, 2009 March 31, 2010) Net sales Operating (% shows the from the previous year) Ordinary ( million) (%) ( million) (%) ( million) (%) Year ending March 31, , , , Net Net per share ( million) (%) ( ) Year ending March 31, , Note: Changes in forecasts of consolidated earnings in the third quarter of 2010: None 4. Others (1) Significant s in subsidiaries during the period (transfer of specified subsidiaries resulting in a in the scope of consolidation): None (2) Application of the simplified accounting method and/or the special accounting method for quarterly consolidated financial statements: None (3) Changes in accounting principles and procedures or format of quarterly consolidated financial statements (those listed in s to important items forming the basis for preparation of quarterly consolidated financial statements) (a) Changes accompanying revisions to items such as accounting standards: Yes (b) Other s: None Note: For details, please refer to Page 6, 4. Others of Qualitative Information and Financial Statements. (4) Number of shares issued (common shares) (a) Number of shares issued at the end of the period (including treasury shares) The third quarter of 2010: 10,656,000 shares Fiscal year ended March 2009: 10,656,000 shares (b) Number of treasury shares at the end of the period The third quarter of 2010: 127 shares Fiscal year ended March 2009: 63 shares (c) Average number of shares during the period (quarterly consolidated cumulative period) The first three quarters of 2010: 10,655,921 shares The first three quarters of 2009: 10,655,937 shares * Explanation of the proper use of earnings projections and other notes Forecasts described above have been made based on information available as of the date of announcement. Actual results may differ from these forecasts due to various unpredictable factors and the conditional s of the future business operation because of the internal and external causes. 2

3 Qualitative Information and Financial Statements 1. Qualitative Information on Consolidated Operating Results During the first three quarters ended December 31, 2009 (April 1, 2009 December 31, 2009), Japan s economy saw continued signs of a pickup on the back of factors such as recovery in exports, progress being made in inventory adjustments, and stimulus measures put into effect by the previous administration. However, given that excess of employment and equipment, a further sharp appreciation of the yen, and deflation remain a worry, there were concerns that this recovery may not be sustainable. Conditions also continue to be very challenging in the information services industry as more business enterprises place tighter controls on capital investment, often resulting in a deferment of IT investment. In line with the Return to Starting Point management policy that the Group adopted for the fiscal year ending March 2010, we are working to expand sales to companies outside of the Panasonic Electric Works Group by focusing on system operation services, which are relatively immune to shifts in economic conditions, and providing products, services, and other solutions made possible thanks only to our unique on-site experience and understanding. In addition, we are also undertaking improvements in management constitution and reinforcement of our management foundations based on our four management initiatives namely, thorough rationalization, building quality-first mindset, initiatives in new technologies and nurturing human resources. (1) Consolidated financial results for the first three quarters of 2010 First three quarters of 2009 First three quarters of 2010 Change ( million) ( million) (%) Net sales 26,698 26,669 (0.1) Operating 3,338 3,175 (4.9) Ordinary 3,427 3,209 (6.4) Net 2,021 1,885 (6.7) Formulated based on our proprietary know-how, the operation and server integration projects for companies aiming to streamline system operations performed well, as did our workflow packages, and this led to growth in sales to companies outside of the Panasonic Electric Works Group in the first three quarters of the year ending March However, sales for the first three quarters were down slightly year-on-year because the long-term infrastructure system rebuild project for Panasonic Electric Works was largely completed in the third quarter and sales to the Panasonic Electric Works Group remained sluggish through the quarter. Efforts to realize a more transparent cost structure made it possible for outsourcing expenses to be reduced; meanwhile, other action taken in line with the thorough-rationalization initiative also led to improvements in management constitution. However, profit declined because prices of services we offer declined under the challenging economic conditions and intensified competition, and sufficient sales could not be achieved to compensate for costs associated with the opening of a data center, and upgrading servers and other facilities. 3

4 (Reference) Consolidated financial results for the third quarter of 2010 (October 1, 2009 to December 31, 2009) Third quarter of 2009 Third quarter of 2010 Change ( million) ( million) (%) Net sales 8,270 8, Operating 1, (26.4) Ordinary 1, (26.7) Net (27.2) (2) Business results by product segment for the first three quarters of 2010 Net sales by product segment First three quarters of 2009 First three quarters of 2010 Change ( million) ( million) System Services 17,829 17,348 (2.7) System Solutions 4,781 5, System and Communications Equipment (%) 4,087 4, (a) System Services Net sales decreased by 2.7% year-on-year to 17,348 million yen, and the ratio of gross profits to net sales rose to 21.0% (19.7% in the previous first three quarters). Net sales dropped year on year because challenging economic conditions put downward pressure on the prices of services we offer. However, efforts to cut costs were effective in improving the ratio of gross profits to net sales. In the third quarter of the fiscal year, net sales decreased by 5.2% year-on-year to 5,575 million yen, and the ratio of gross profits to net sales declined to 17.3% (19.1% in the previous third quarter). (b) System Solutions Net sales rose by 6.9% year-on-year to 5,110 million yen, and the ratio of gross profits to net sales declined to 18.0% (25.3% in the previous first three quarters). Sales were boosted by the data search tool and sales management software developed in-house, together with the workflow packages Soujiro and MajorFlow developed and marketed by Panasonic Electric Works Net Solutions, and the development of web system for a major communications company. However, sales to the Panasonic Electric Works Group remained sluggish through the period. As in the previous fiscal year, proactive efforts were made in the development of new products, culminating in the release of enhanced versions of e-learning systems, adaptors for integrating Google s web application services with existing systems, and a new version call center package. However, the long-term infrastructure system rebuild project for Panasonic Electric Works was largely completed in the third quarter. 4

5 Ongoing efforts are being made to improve profitability through, for example, boosting the efficiency of system development and reducing outsourcing expenses by making the cost structure more transparent. However, the ratio of gross profits to net sales declined heavily year-on-year because intensified competition for orders depressed profitability. In the third quarter of the fiscal year, net sales increased by 16.4% year-on-year to 1,386 million yen, and the ratio of gross profits to net sales declined to 19.6% (34.7% in the previous third quarter). (c) System and Communications Equipment Business Net sales increased by 3.0% year-on-year to 4,210 million yen, and the ratio of gross profits to net sales rose to 18.0% (15.0% in the previous first three quarters). Postponement of device upgrades and other purchases greatly continued to affect the overall segment sales. However, sales of video conferencing systems and Egenera BladeFrame a system developed to satisfy customers' streamlining needs and proactively promoted to sales since the previous fiscal year were strong. In addition, sales increased in the third quarter mainly due to the start of a large thin-client computing project. The ratio of gross profits to net sales remained high. In the challenging economic environment, companies continue to place tougher restrictions on capital investment, but demand for efficiency-enhancing, streamlining solutions are rising. We intend to make use of our own experience as an end user in order to respond to demand of this type of company and thus further boost sales. In the third quarter of the fiscal year, net sales increased by 17.2% year-on-year to 1,402 million yen, and the ratio of gross profits to net sales rose to 15.9% (15.0% in the previous third quarter). 2. Qualitative Information on Consolidated Financial Position (1) Assets, liabilities and net assets As of the end of the third quarter of the fiscal year ending March 31, 2010, total assets decreased by 3.1% to 22,502 million yen from the previous year end. This was mainly due to the following: in current assets, 2,483 million yen decreased in notes and accounts receivable-trade, 563 million yen increased in accounts receivable from construction contracts, 538 million yen increased in cash and deposits, and 311 million yen increased in money deposited. With regard to investments and other assets, 183 million yen increased in prepaid pension cost. Liabilities decreased by 32.8% to 3,765 million yen from the previous year end. This was mainly due to the following: in current liabilities, 687 million yen decreased in accounts payable, 587 million yen decreased in taxes payable, 387 million yen decreased in notes and accounts payable-trade, and 211 million yen decreased in accrued expenses. Net assets increased by 6.4% to 18,737 million yen. This was mainly due to a 1,086 million yen increase in retained earnings. 5

6 (2) Cash flows Cash and cash equivalents (hereinafter referred to as funds ) at the end of the third quarter of the fiscal year decreased by 153 million yen from the end of the previous third quarter to 3,955 million yen. (a) Cash flows from operating activities Funds generated from operating activities increased 40 million yen year-on-year to 3,041 million yen. This was mainly due to factors including a 3,209 million yen of before taxes and minority interests, a 901 million yen of depreciation and amortization, a 1,920 million yen decrease in accounts receivable, and a 1,697 million yen of payment for taxes. (b) Cash flows from investing activities Funds used in investing activities decreased by 670 million yen to 2,240 million yen. This was mainly due to factors including increases in deposits paid totaling 800 million yen, and purchases of property and equipment totaling 1,159 million yen, and purchases of software totaling 228 million yen. (c) Cash flows from financing activities Funds used in financing activities decreased by 153 million yen to 812 million yen owing to the dividend payment which amounted to 766 million yen. (d) Free cash flows Due to the aforementioned operating and investing activities, free cash flows amounted to a cash inflow of 800 million yen. 3. Qualitative Information on Forecast of the Consolidated Financial Results While the economy appears to be heading towards recovery, it remains to be seen whether this will lead to sustainable growth. As a result, the effect that economic conditions will have on the Group s performance going forward is almost impossible to predict, and therefore, we make no s to our business results forecast announced on April 23, Others (1) Significant s in subsidiaries during the period (transfer of specified subsidiaries resulting in a in the scope of consolidation) There is no related information. (2) Application of the simplified accounting method and/or the special accounting method for quarterly consolidated financial statements There is no related information. 6

7 (3) Changes in accounting principles and procedures or format of quarterly consolidated financial statements (a) Changes to accounting methods for completed contract sales and completed contract costs We modified our accounting method from the first quarter, moved away from the booking of sales using the completed contract method and instead adopted the Accounting Standard for Construction Contracts (ASBJ Statement No.15, released on December 27, 2007) and the Guidance on Accounting Standard for Construction Contracts (ASBJ Guidance No.18, released on December 27, 2007). In line with this, the percentage of completion method (on a cost-ratio basis) was applied in the projects commenced in the first quarter and thereafter and for which the certainty of results of activity prior to the end of the third quarter was critical, and the completed contract method was applied in other projects. As a result thereof, net sales for the first three quarters of the year ending March 2010 increased by 563 million yen, and operating, ordinary, and before taxes and minority interests each increased by 81 million yen. (b) Changes in format (Net sales and cost of sales) In the previous first three quarters ended December 31, 2008, net sales and cost of sales were each presented as totals; however, in the interests of providing more useful information, each is broken down into three values namely, for System Services, System Solutions, and System and Communications Equipment Business from the first three quarters ended December 31, In System Services, System Solutions, and System and Communications Equipment Business, net sales (cost of sales) amounted to 17,829 million yen (14,317 million yen), 4,781 million yen (3,573 million yen), and 4,087 million yen (3,475 million yen), respectively in the previous first three quarters ended December 31, In System Services, System Solutions and System and Communications Equipment Business, net sales (cost of sales) amounted to 5,882 million yen (4,760 million yen), 1,191 million yen (778 million yen) and 1,196 million yen (1,016 million yen) respectively in the previous third quarter ended December 31, (Dividends ) In the previous first three quarters ended December 31, 2008, Dividends was included within Other of non-operating ; however, given the increasing significance thereof, it has been classified separately from the first quarter of the year ending March It should be noted that the Dividends included within Other of non-operating in the previous first three quarters ended December 31, 2008 was 2 million yen. Matters other than the above that do not differ from those disclosed in the most recent Securities Report (June 18, 2009) are omitted here. 7