Tokyo, May 8, 2009 - (JCN Newswire) - Kobayashi Pharmaceutical (TSE: 4956) has reported results for the year ended March 31, 2009. Sales fell 103,133 million yen (-45.1%) year on year to 125,693 million yen, operating income fell 2,758 million yen (-14.8%) year on year to 15,818 million yen, ordinary income decreased 354 million yen (-2.3%) year on year to 15,333 million yen, and net income expanded 348 million yen (4.1%) year on year to 8,853 million yen.
Throughout the term, the Kobayashi Group sought to fully cultivate the spirit of the Group philosophy of "Creation and Innovation", and the development of customer needs by providing products and services to create new markets while offering new value products and services in existing markets. Kobashou Co., Ltd., which was responsible for wholesale operations, was turned into a wholly-owned subsidiary of Mediceo Paltac Holdings through a stock swap on January 2008. Kobashou's earnings were not included in consolidated figures for wholesale operations starting in the fourth quarter ended December 31, 2008.
I. Consolidated Operating Results
(Millions of Yen)
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Full Year Ended Full Year Ended YoY Change
March 31, 2009 March 31, 2008 Percent
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Operating Results
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Net Sales 125,693 228,826 (45.1)
Operating Income 15,818 18,576 (14.8)
Ordinary Income 15,333 15,687 (2.3)
Net Income 8,853 8,504 4.1
Net Income/Share (Y) 215.89 205.62
Net Income/Share, Diluted (Y) 215.80 205.42
Return on Equity (ROE) 11.5 11.2
Return on Assets (ROA) 12.4 10.9
Ordinary Income to
Operating Revenues Ratio 12.6 8.1
------------------------------------------------------------------------
Financial Position
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Total Assets 125,210 122,409
Total Sh'holders Equity 76,364 77,182
Sh'holders Equity Ratio 60.9% 63.0%
Shareholders EPS (Yen) 1,861.14 1,863.24
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Cash Flows
------------------------------------------------------------------------
Net Cash from
Operating Activities 12,849 12,192
Net Cash from
Investing Activities (1,381) (6,424)
Net Cash from
Financing Activities (4,445) (5,310)
Cash and Cash Equivalents
at End of Period 23,813 17,164
------------------------------------------------------------------------
Please download the full Kobayashi Pharmaceutical FY2009 Financial Statement [184Kb], http://www.japancorp.net/clientreports/3231/Kobayashi-FY2009-Revised.pdf
II. By sector
(1) Consumer Products Operation
As for consumer products operations, the Group introduced 13 new products (excluding nutritional supplements) in an attempt to create new markets and expand existing ones, and several of these new products contributed to earnings - OTC medical product Chikunain, which is effective for chronic inflammation of nasal passages, the medicated cosmetic water Keshimin Eki, which helps prevent blemish and freckles, the taped sock Aruku Tasuke, which reduces the burden when walking and prevents the feet from getting tired, and Nodo nu-ru nure masuku Hana ni Sutto, which opens up the nasal passage and moisturizes the throat. As for existing products, the toilet bowl cleaner Bluelet, the breath freshener Breath Care, the medicated toothpaste Shoyo, which prevents periodontal disease, and nutritional supplements sold through mail order made major contributions to sales and income.
Therefore, sales increased 1,700 million yen (1.5%) year on year to 112,620 million yen.
Operating income fell 2,095 million yen (-11.6%) year on year to 15,910 million yen. This followed factors that impacted the cost of sales, changes in the accounting treatment of inventory valuations and losses on the valuation and disposal of inventories following application of the Accounting for Inventory Valuations accounting standard starting this fiscal year.
(2) Medical Devices Operation
Within the medical devices operations, efforts were made to raise brand awareness and expand the company's market share in the fields of orthopedic and operating room related products, the domestic market for which is expected to grow.
As a result, sales rose 596 million yen (5.6%) year on year to 11,325 million yen. The Group also recorded an operating loss of 544 million yen, since aggressive investments were continuously made in the eVent Medical Inc.'s artificial ventilator business.
(3) Other Operations
Other Operations (transportation, sales promotion, market research, etc.) are conducted on a financially independent basis by Kobayashi Pharmaceutical's subsidiaries in support of the Company's two principal businesses and to contribute to the profits of those businesses. The Group reviewed the transfer values of the materials and services these operations provide.
Therefore, sales fell 812 million yen (-10.0%) year on year to 7,281 million yen, but operating income rose 41 million yen (9.6%) year on year to 473 million yen. However, sales include internal sales or transfers between segments, which totaled 6,306 million yen for the previous fiscal year and 5,507 million for current fiscal year.
III. Forecast for Fiscal Year Ending March 31, 2010
As for the outlook for the Japanese economy, consumers are expected to become more defensive in their purchasing behavior for various reasons including employment instability and stagnant growth in incomes as the weak economy is likely to persist for some time, and business conditions are projected to remain harsh.
Under these conditions, the Group must implement both strategies to further expand the scope of business and to promote growth and strategies to further strengthen leading existing businesses and brands in order to increase the Group's ability to become number one in fields related to consumer products and medical devices that the Group has expanded into.
Within the consumer product segment, the Group is working to develop both existing brands and new products that provide satisfaction that consumers have not experienced before. In addition, management resources will be invested in overseas business in order to further expand the business.
Within the medical device business, the Group will strengthen its abilities as a manufacturer and develop and sell its own products while also further promoting the introduction of new products in specified fields the Group has entered.
Fiscal 2010 sales are expected to increase 4,307 million yen (3.4%) year on year to 130,000 million yen. Furthermore, operating income is projected to increase 782 million yen (4.9%) to 16,600 million yen and ordinary income is forecast to increase 1,267 million yen (8.3%) year on year to 16,600 million yen. Fiscal 2010 net income is projected to increase 447 million yen (5.0%) year on year to 9,300 million yen.
(1) Consumer Products Operation
As consumers became more hesitant to spend and demanded lower prices, the Group introduced nine new products that meet the potential needs of consumers in order to generate demand through new high-added-value products. These products included the anti-obesity medication Bisuratto Gold, which reduces access body fat by improving the body's metabolizing of fats, the room deodorizer Shoshu Suikomu, which eliminates odors as air passes through a porous gel, the pleasant-feeling ear brush Tenshi-no-mimigaki, which provides an appropriate level of stimulation to the ear, and the specialized eye glass cleaner Megane-kurina-awa-shanpu, which makes it possible to wash a whole pair of glasses. In addition, the Group will actively work to sell existing brands using marketing plans tailored to each brand and strive to expand overseas market, particularly for the body warmers.
Fiscal 2010 sales are expected to increase 3,380 million yen (3.0%) year on year to 116,000 million yen. Furthermore, operating income is projected to increase 490 million yen (3.1%) to 16,400 million yen.
(2) Medical Devices Operation
Within the Kobayashi Medical Company, aggressive efforts were made to develop the company's own brand of products while further expanding its lineup of products in fields that the company has already entered such as surgery room related products, respirator products, and orthopedic products. As for eVent Medical Ltd., the company worked to strengthen the sales of artificial respirators through the world, particularly in the U.S.
Fiscal 2010 sales are expected to increase 675 million yen year on year to 120,000 million yen. Furthermore, operating loss is projected to improve 454 million yen to 100 million yen.
IV. Financial Position
Total assets increased 2,800 million yen compared with the end of the previous fiscal year.
As for current assets, cash and time deposits rose 5,649 million yen, and trade notes and accounts receivable grew 1,208 million yen. As for fixed assets, investments in securities declined 6,350 million yen but deferred income taxes rose 2,264 million yen. Within the net asset section, the capital surplus rose 6,548 million yen, treasury stock increased 1,476 million yen, and unrealized holding gains on securities declined 3,297 million yen.
Cash flows from operating activities:
Net cash provided by operating activities increased totaled 12,849 million yen. This was mainly due to 16,270 million yen in income before income taxes and minority interests, 2,873 million yen in depreciation and amortization, and 6,829 million yen in income taxes paid.
Cash flows from investing activities:
Net cash used in investing activities totaled 1,381 million yen. This was primarily the result of 18,482 million yen for the purchase of securities, 20,303 million from the sale or redemption of short-term securities, 2,208 million yen for the purchase of tangible fixed assets, and 1,630 million yen for the purchase investment securities.
Cash flow from financing activities:
Net cash used in financing operations totaled 4,445 million yen. This was chiefly the result of 1,675 million yen used for the purchase of treasury stock and 2,303 million yen for the payment of dividends.
Therefore, the term-end balance of cash and cash equivalents increased 6,649 million yen over the previous fiscal period to 23,813 million yen.
V. Outlook for Fiscal Year Ending March 31, 2010
Business conditions will remain harsh, but the Group will strive to further improve its working capital such as reducing inventories and account receivables based on management that is aware of the efficiency of invested capital.
Stable investments in plants and equipment for product development are expected to average those of the previous fiscal year. We do not anticipate any large investments other than capital spending, and as a result, we expect cash flows from investing activities to remain level with the previous fiscal year.
VI. Profit Distribution and Fiscal 2009 and 2010 Dividends
Kobayashi Pharmaceutical regards the distribution of profits to shareholders as one of the Company's most important management policies, and will continue to focus on strengthening this area. For this reason, we ensure that adequate internal reserves for high-growth-oriented business development and strengthening the corporate structure are preserved. At the same time, the Company intends to promote a dividend policy that will reflect consolidated results while maintaining a basic policy of providing stable dividend payments. Internal reserves will be utilized for M&A to grow the consumer products and the medical devices operations and for
vigorous investment in expansion overseas.
The basic policy of the company is to pay dividends twice a year - interim dividends and the year-end dividends.
Based on above policy, an annual dividend of 58 yen per share (interim dividend of 29 yen per share and year-end dividend of 29 yen per share) will be paid for the fiscal year ending March 31, 2009, and an annual dividend of 58 yen per share (interim dividend of 29 yen per share and year-end dividend of 29 yen per share) is expected to paid for the fiscal year ending March 31, 2010.
About Kobayashi Pharmaceutical
Kobayashi Pharmaceutical (TSE: 4967; OTC: KBYPF) first opened for business in 1919, and its management policy has always been to provide people and society with wonderful comfort through "Creativity and Innovation". Over the years the Company has expanded its scope, developing into a cluster of enterprises with two principal businesses: Consumer Products Operation and Medical Devices Operation. In the fiscal year ended March 31, 2008, Kobayashi achieved increases in profits for the eleventh consecutive year since the introduction of consolidated accounting. For more information, please visit www.kobayashi.co.jp .
Contact:
Kobayashi Pharmaceutical Online
http://www.kobayashi.co.jp/english/contact/index.html?lid=1
May 8, 2009
Source: Kobayashi Pharmaceutical
Kobayashi Pharmaceutical (TSE: 4967) (U.S: KBYPF)
From the Japan Corporate News Network
http://www.japancorp.net
Topic: Press release summary
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