Kobayashi Pharmaceutical, Ltd. (TSE: 4967), a pioneer in new markets through its consumer products operation, and leading importer and distributor of medical equipment, today announced consolidated financial results for the first quarter ended June 30, 2008.
Kobashou Co., Ltd., which was responsible for wholesale operations, became 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 the affiliated companies doing wholesale operations starting in the fourth quarter ended in March 2008. As a result, sales figures for the first quarter ended June 30, 2008, likewise, fell 34,288 million yen (-54.6%) year on year to 28,488 million yen, operating income fell 15 million yen (-0.4%) year on year to 3,767 million yen.
Ordinary income, however, increased 525 million yen (16.7%) year on year to 3,673 million yen, and net income expanded 224 million yen (9.4%) year on year to 2,603 million yen.
Operating income fell year on year because of factors that impacted the cost of sales and changes to the accounting treatment of inventory valuations and losses on the valuation and disposal of inventories following the application of the Accounting for Inventory Valuations accounting standard starting this fiscal year.
I. First Quarter Financial Summary (April 1, 2008 - June 30, 2008)
(1) Consolidated Operating Results
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(Millions of Yen)
April 1 - June 30, 2008 % 2007 %
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Net Sales 28,488 - 62,777 0.2
Operating Income 3,767 - 3,783 4.8
Ordinary Income 3,673 - 3,148 1.3
Net Income 2,603 - 2,378 (2.1)
Net Income per Share (Yen) 63.20 57.53
Net Income per Share, diluted (Yen) 63.18 57.45
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(2) Consolidated Financial Position
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(Millions of Yen)
As of June 30, 2008 2007
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Total Assets 121,495 122,409
Shareholders' Equity 76,742 77,182
Shareholders' Equity Ratio 63.1% 63.0%
Shareholders' Equity per Share (Yen) 1,871.70 1,863.24
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Please download the full FY2009 First Quarter financial statement [305Kb],
http://kobayashi.corpnet.jp/pdf/KobayashiQ1FY09.pdf
II. Performance by Business Segment
Consumer Products Operation
Six new products were introduced and contributed to sales expansion in this segment, including Doruchitoru, a medicine to reduce excessive cholesterol in the blood, Inochi No Haha White, an OCT medicine to reduce menstrual discomfort, and Bluelet Hyouhakudama Plus, a toilet tank cleaner that maintains whiteness and shininess through the combined cleaning strength of Hyouhakudama and a concentrated cleaning liquid.
In addition, although sales of OTC pharmaceutical products for summer were flat as a result of unseasonable weather, the overseas body warmer business and business related to existing products, such as OTC pharmaceutical product Nicitol 85, which promotes the breakdown and consumption of abdominal fat, mouth freshener Breath Care, and the toilet cleaner Bluelet, were firm, which led to sales growing 1.4% (351 million yen) year on year to 25,574 million yen.
Operating income fell 73 million yen (-1.9%) year on year to 3,818 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.
(Sales include sales and transfers between segments, which amounted to 8,089 million yen for the first quarter a year ago and 1 million yen for the current quarter.)
Medical Devices Operation
Focus in the Medical Devices Operation segment was in the fields of orthopedic surgery and operating room related products, the domestic market for which is expected to grow, and sales were firm. However, sales for the eVent Company declined because of delays in the redesign of artificial ventilators that they sell.
As a result, sales rose 37 million yen (1.5%) year on year to 2,490 million yen. The Group also recorded an operating loss of 172 million yen since aggressive investments were continuously made to grow the eVent Company's artificial ventilator business.
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 34 million yen (-1.7%) year on year to 1,924 million yen, but operating income rose 24 million yen (25.0%) year on year to 123 million yen. However, sales include sales and transfers between segments, which totaled 1,511 million yen during the first quarter a year ago and 1,499 million for current quarter.
III. Financial Position and Cash Flows as of June 30, 2008
- Cash Flows from Operating Activities
Net cash used in operating activities increased by 528.2% compared to the previous first quarter to 1,604 million yen. This was due to income before provision for income taxes of 4,670 million yen, an increase in inventories of 2,625 million yen, and corporate tax paid of 3,221 million yen.
- Cash Flows from Investing Activities
Net cash provided by investing activities totaled 302 million yen. This was mainly due to purchases of securities of 6,493 million yen, proceeds from redemption of securities of 6,800 million yen, purchases of property, plants and equipment of 184 million yen, purchase of intangible assets of 278 million yen, purchases of investment securities of 514 million yen, and proceeds from sale of goodwill of 1,102 million yen.
- Cash Flows from Financing Activities
Net cash used in financing activities totaled 2,474 million yen, a decrease of 47.3% compared to the first quarter a year ago. This was mainly due to proceeds from long-term debt of 210 million yen, payment for purchase of treasury stock of 1,672 million yen, and dividends paid of 1,100 million yen.
IV. Forecast for the Fiscal Year Ending March 31, 2009
At the present time, earnings are not expected to change dramatically, and there were no changes in the earnings forecast for the first half and full fiscal year, which were released on May 8, 2008.
(Millions of Yen)
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H1 Sept 30, 2008 (%) FY March 31, 2009 (%)
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Net Sales 61,500 (52.9) 129,000 (43.6)
Operating Income 7,900 (13.6) 15,600 (16.0)
Ordinary Income 7,700 (3.1) 15,400 (1.8)
Net Income 4,900 5.0 8,800 3.5
Net Income per Share (yen) 118.41 212.66
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Note: The above forecasts are based on information available at the time of publication of the documents, and actual future business performance may differ from the forecasts due to unpredictable factors.
V. Dividend
The Kobayashi Group anticipates a 29 yen dividend at the end of the interim and a 29 yen dividend at the end of the year for a total dividend of 58 yen for the fiscal year.
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, 2007, Kobayashi achieved increases in sales and profits for the ninth 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
August 08, 2008