Nov. 14, 2007President & COO: Yutaka KOBAYASHI
(Code No. 4967 The First Section of TSE/OSE)
| Kobayashi Pharmaceutical Reports Financial Results for the First Half Ended Sept. 30, 2007 |
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(Millions of Yen)
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April 1 - Sept. 30, FY ended
2007 % 2006 % 3/31/07
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Net Sales 130,470 (0.2) 130,721 4.5 257,022
Operating Income 9,144 0.1 9,133 5.4 18,029
Ordinary Income 7,994 (0.8) 8,006 13.2 15,012
Net Income 4,668 (4.4) 4,881 37.2 8,297
Net Income per Share (Yen) 112.90 118.16 200.77
Net Income per Share,
diluted (Yen) 112.77 117.98 200.47
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(2) Consolidated Financial Position
(Millions of Yen)
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As of Sept. 30, As of
2007 2006 3/31/07
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Total Assets 171,048 166,269 164,555
Shareholders' Equity 80,013 73,480 77,236
Shareholders' Equity Ratio 45.0% 42.4% 45.2%
Shareholders' Equity
per Share (Yen) 1,862.33 1,705.79 1,799.87
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(3) Consolidated Cash Flows
(Millions of Yen)
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April 1 - Sept. 30, FY ended
2007 2006 3/31/07
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Cash Flows from
Operating Activities 2,452 1,723 8,833
Cash Flows from
Investing Activities (2,415) 999 (11,803)
Cash Flows from
Financing Activities (4,554) (3,911) (2,433)
Cash and Cash Equivalents,
End of Term 14,633 23,235 19,090
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Please download the full Financial Results for the First Half Ended September 30, 2007, at http://kobayashi.corpnet.jp/pdf/Kobayashi1HNov2007EN.pdf , or via Bloomberg, MultexNet, Reuters Research or Thomson One Analytics.Summary of Performance by Business Segment Consumer Products Operations: The Consumer Products segment launched "Keshimin Pen" medicated fleck treatment applicator and "Sarasaty Saralie" napkin, among other products, contributing to the creation of new markets and growth in existing markets. Sales of mainstay deodorizing air fresheners Bluelet and Shoshu Gen were firm, and efforts to nurture existing brands such as "Naisitoru 85," a product which helps the body to break down and burn intra-abdominal fat, "Inochi no Haha A," a health supplement for women, and "Shoyo," which prevents gumboils, also made contributions, boosting sales to 53,495 million yen, up 3,994 million yen, or 8.1%, on the same interim period in the previous year ("previous term".) In addition to sales gains, cost-cutting achieved by drastic reductions in the cost of production and other measures succeeded in boosting operating income to 9,326 million yen, an increase of 887 million yen, or 10.5%, on the previous term. Wholesale Operations: The Wholesale Operation segment saw poor market conditions for contact lens care products, one of the company's major categories, but steady performance from kampo and other herbal medicines, insect repellents, insecticides, and other summer seasonal products pushed sales by 2,242 million yen to 88,261 million yen, an increase of 2.6%. Price competition in the segment, however, decreased operating income to 12 million yen, less 185 million yen compared with the previous term. Medical Devices Operations: Kobayashi Medical Division concentrated sales efforts on mainstay products, including electronic scalpels and other operating room equipment, and orthopedic products, a market that is expected to grow. The business results of artificial respirator maker eVent Medical, whose shares were acquired in November 2006, was included in the consolidated annual accounts from this period, but as all shares in the three Shield Healthcare Center home medical care companies were sold in November 2006, sales fell to 5,064 million yen, less 3,640 million yen, or 41.8%, compared with the previous term. Aggressive investment in the growth businesses of eVent Medical led to operating losses of 316 million yen, a 634 million yen swing compared with the previous term. 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 three 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, Distribution was split off into Aoitori Distribution and Kobayashi Pharmaceutical Distribution in January 2007. Subsequently, Aoitori Distribution merged with Kobasyo in April 2007. As a result, sales of Other Operations fell 2,581 million yen, or 38.8%, to 4,066 million yen. However, operating income rose by 22 million yen, or 13.2%, to 189 million yen. Segment sales include internal sales and transfers between segments, the value of which totaled 4,628 million yen in the previous interim period and 3,114 million yen in the current interim period. II. Financial Position Total assets increased 6,492 million yen compared with the end of the previous fiscal year, primarily due to an increase of 6,760 million yen in notes receivable and accounts receivable among current assets resulting from the formation of new parent-subsidiary consolidations, and an increase of 2,002 million yen in inventories. Under current liabilities, notes payable and accounts payable increased by 7,253 million yen. Net assets, including minority stockholders' interest, increased 2,777 million yen compared to the end of the previous fiscal year. As a result, the shareholders' equity ratio fell by 0.2 points. Cash flows from operating activities: Net cash provided by total operating activities increased 729 million yen to 2,452 million yen compared to the previous interim period. This was primarily attributable to a 1,195 million yen decrease in net income before taxes and other adjustments. An improvement in the balance of operating capital and other factors reduced accounts receivable by 1,584 million yen. Cash flows from investing activities: Net cash used in investing activities totaled 2,415 million yen, an increase of 3,414 million yen over the previous interim period. This was due to the generation of 1,108 million yen in revenues from the sale of tangible fixed assets and a net increase in marketable securities acquisitions of 1,501 million yen in the year-earlier interim period. Cash flows from financing operations: Net cash resulting from financing operations totaled 4,554 million yen, an increase of 642 million yen compared to the previous interim period, owing to increased dividends paid. Accordingly, the term-end balance of cash and cash equivalents decreased 8,602 million yen from the previous interim period to 14,633 million yen. Cash flow from financing activities is forecast to remain level with the previous fiscal year. Cash Flow Indicator Trends
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As of March 31, Sept. 30,
2004 2005 2006 2007 2007
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Equity ratio (%) 42.4 44.7 44.0 42.4 45.0
Equity ratio at
market value basis (%) 91.8 90.5 113.9 112.1 98.6
Debt repayment period
(years) 0.8 0.3 0.1 0.4 --
Interest coverage ratio
(times) 90.5 96.7 140.6 125.1 64.6
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III. Consolidated Projections for the Fiscal Year Ending March 31, 2008Despite uncertainties, such as concerns about a slowdown in the US economy, the Japanese economy continues to improve, supported by improved corporate profitability and increased consumer spending. Against this, the Kobayashi Group will continue to strive towards achieving the strongest position in each of its business segments through strengthening the foundations of existing businesses and existing brands along with pursuing new strategies for expanding business. Kobasyo, which operates the wholesale segment, will become a wholly owned subsidiary of Mediceo Paltac Holdings in January 2008 via a stock swap. The wholesale segment is therefore expected to be removed from consolidated accounts from the fourth quarter of the current fiscal year. As a result, Kobayashi is forecasting sales of 229,000 million yen for the fisal year through March 2008, an expected decrease of 10.9%. In terms of profits, the Group will continue with cost reduction measures, and is forecasting operating income of 18,500 million yen, an increase of 471 million yen, or 2.6%, ordinary income of 16,000 million yen, an increase of 988 million yen, or 6.6%, and net income of 8,750 million yen, with 453 million yen, 5.5%, expected growth.
(Millions of Yen)
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FY ended 3/31/08 %
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Net Sales 229,000 (10.9)
Operating Income 18,500 2.6
Ordinary Income 16,000 6.6
Net Income 8,750 5.5
Net Income/Share (yen) 211.57
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IV. In line with our basic policy to continue providing stable dividends, the dividend for this fiscal year is expected to be 54.00 yen per share as an ordinary allotment, payable 27.00 yen at the interim and 27.00 yen at the end of the fiscal year.
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