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 | |  January 22, 2007 | Corporate name: Kobayashi Pharmaceutical Co., Ltd.
President & COO: Yutaka KOBAYASHI
(Code No. 4967 The First Section of TSE/OSE) | |  | |
Kobayashi Pharmaceutical Announces Results for the Third Quarter Ended December 31, 2006 | |
Kobayashi Pharmaceutical, Ltd. (TSE: 4967), a leading importer and distributor of medical equipment and pharmaceutical and consumer goods wholesaler, today announced consolidated financial results for the third quarter ended December 31, 2006. Net sales and operating, ordinary and net income all demonstrated strong improvement on the previous year.
Net sales amounted to 202,442 million yen, an increase of 5.3% from the previous fiscal year, while operating income was 16,031 million yen, an increase of 12.5%. Ordinary income was 14,076 million yen, an increase of 6.4%, and net income for the quarter was 8,470 million yen, an increase of 22.1%. The sharp increase in third-quarter net income is attributable to the 1,632 million yen impairment charge posted a year earlier.
Despite the unstable trend in oil prices, the Japanese economy remained on a recovery track during the third quarter under review thanks to improved corporate earnings and the improved employment situation. But while consumer spending continued to rebound, the outlook for the future remained unclear.
In these circumstances, the Company Group sought to further demonstrate its dedication to the "creativity and innovation" that is its management philosophy, uncovering unmet needs among its customers by providing products and services that build new markets while at the same time working to provide products and service that add new value in markets where it already has a presence.
(1) Consolidated Operating Results
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(Millions of Yen)
April 1 - Dec. 31, FY 3/31,
2006 % 2005 % 2006
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Operating Revenues 202,442 5.3 192,315 16.6 246,852
Operating Income 16,031 12.5 14,251 8.4 16,879
Ordinary Income 14,076 6.4 13,225 9.1 15,151
Net Income 8,470 22.1 6,939 10.8 7,474
Net Income per Share (yen) 204.98 166.96 179.17
Net Income per Share,
diluted (yen) 204.67 166.91 179.01
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(2) Consolidated Financial Position
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(Millions of Yen)
As of December 31, As of March 31,
2006 2005 2006
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Total Assets 171,050 161,353 151,945
Shareholders' Equity 77,592 65,533 66,811
Shareholders' Equity Ratio 43.6% 40.6% 44.0%
Shareholders' Equity
per Share (Yen) 1,803.96 1,587.87 1,617.10
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(3) Consolidated Cash Flows
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(Millions of Yen)
As of December 31, As of March 31,
2006 2005 2005
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Cash Flows from
Operating Activities 6,768 9,705 13,159
Cash Flows from
Investing Activities (9,821) (4,940) (6,414)
Cash Flows from
Financing Activities (4,328) (923) (1,419)
Cash and Cash Equivalents,
End of term 16,989 22,950 24,436
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Please download the Financial Results for the Third Quarter Ended December 31, 2006 here , or via Bloomberg, MultexNet, Reuters Research or Thomson One Analytics. Summary of Performance by Business Segment
Summary of Performance by Business Segment
Consumer Products Operation
In addition to the deodorizing air fresheners that are the leading product category in this segment, Nicitol 85 (a diet pill for breaking up and burning abdominal fat) and Shoyo (a toothpaste product for preventing periodontal disease) also contributed greatly to increased sales. As a result, sales grew 6,832 million yen (9.1 %) from a year earlier to 81,981 million yen. While sales were growing, the Company also enforced cost-cutting measures in areas such as manufacturing costs, and as a result operating income rose 1,564 million yen (11.6%) from a year earlier to 15,006 million yen.
Wholesale Operation
The business environment for this segment was difficult due to lackluster sales of seasonal products at the drugstores that are its primary customers because of unseasonable weather and also due to a sluggish health food market. However, sales rose 6,026 million yen (4.9%) from a year earlier to 127,906 million yen thanks to its acquisition of KS Tohoku Co., Ltd. (formerly Sowa Co., Ltd.) on April 1, 2006. However, the improvement in profit margins that was the objective behind business expansion materialized more slowly than expected, and as result operating income fell 75 million yen (31.2 %) from a year earlier to 165 million yen.
Medical Devices Operation
Sales grew steadily in this segment. In Japan, the Company began marketing products that it developed itself, and it also focused its sales efforts on operating room products such as electronic scalpels and on orthopedic products, a market that is expected to grow. In the U.S., the company expanded profit margins by cutting costs in indirect areas through the introduction of a new customer management system. As a result, sales grew 1,222 million yen (9.8%) from a year earlier to 13,724 million yen and operating income increased 347 million yen (120.5%) from a year earlier to 636 million yen.
Changes in Financial Position
Total assets increased 19,105 million yen from the end of the previous fiscal year. The change is mainly attributable to a 12,432 million yen increase in notes receivable and accounts receivable and a 3,135 million yen increase in inventory assets, both of which fall under current assets, as a result of the new application of consolidating accounting to a subsidiary. At the same time, under current liabilities, notes payable and accounts payable also increased 10,971 million yen.
Shareholders' equity, including minority interests, increased 7,863 million yen from the end of the previous fiscal year. As a result the shareholders' equity ratio declined 0.4 point from the end of the previous fiscal year.
Cash flows from operating activities
Cash flow from operating activities amounted to 6,768 million yen. Third-quarter net income before taxes and other adjustments was 15,710 million yen, but the Company made a corporate income tax payment of 7,401 million yen.
Cash flows from investing activities
Cash flow used in investing activities totaled 9,821 million yen. The Company acquired 990 million yen in tangible fixed assets for new product development and it acquired 10,635 million yen in stock in an M&A transaction.
Cash flows from financing activities
Cash flow used in financing activities amounted to 4,398 million yen. The Company made dividend payments totaling 1,569 million yen and repaid 2,550 million yen in short-term borrowing by a subsidiary.
(4) Consolidated Projections for the FY ending March 31, 2007
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(Millions of Yen)
Net Sales 260,000
Ordinary Income 15,000
Net Income 8,200
Net Income per Share (yen) 198.35
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Not only was the business climate difficult due to unseasonable weather, but the progress at the Company's new investments also fell short of objectives, and as a result the Company has revised its full-year earnings guidance announced on May 15, 2006.
*The projections shown above are prepared based on information available as of the issuing date of this report, and therefore the actual results may differ from the projected figures due to various unknown factors.
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 three principal businesses: Consumer Products Operation, Wholesale Operation and Medical Devices Operation. In the fiscal year ended March 31, 2006, Kobayashi achieved increases in sales and profits for the eighth consecutive year since the introduction of consolidated accounting.
Contact:
Kobayashi Pharmaceutical Online
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