Matsushita Reports Fiscal 1999 Annual Results; Sales

Matsushita Electric Industrial Co., Ltd. (NYSE: MC; PX) today reported its consolidated results and parent company alone results for fiscal 1999, ended March 31, 1999. Consolidated Results Consolidated group sales for the fiscal year decreased 3 percent, to 7,640.1 billion yen (U.S.$63.67 billion), from 7,890.7 billion yen in the previous year. The decrease primarily reflected lower Japanese demand and declines in product prices due to the prolonged recession in that country and worsened economic conditions overseas, especially in Southeast Asia and the CIS during the period. The Company's annual domestic sales were 3,752.1 billion yen ($31.27 billion), down 4 percent from the previous year, while overseas sales decreased 3 percent to 3,888.0 billion yen ($32.40 billion). Consolidated earnings declined mainly because of decreased sales and price declines due to intensified worldwide competition, particularly in the industrial products and components areas. Operating profit for the year decreased 43 percent to 193.7 billion yen ($1.61 billion), from 337.6 billion yen a year ago, while income before income taxes also decreased 43 percent to 202.3 billion yen ($1.69 billion), from the year- earlier 355.6 billion yen. Net income from normal operations, excluding the effects of re-evaluations of net deferred tax assets to reflect reductions in Japan's corporate income tax rate, amounted to 66.3 billion yen ($553 million), down 48 percent from the prior year. After subtracting the tax effects, net income totaled 13.5 billion ($113 million), down 86 percent from 93.6 billion yen a year ago. Matsushita said that its efforts to lower manufacturing costs and improve overall management efficiency could not offset the aforementioned negative effects. The Company's consolidated annual net income per common share after the tax effects was 6.48 yen ($0.54 per American Depositary Share (ADS), each representing 10 shares of common stock), compared with net income per common share of 41.53 yen a year ago, both on a diluted basis. Consolidated Sales Breakdown by Product Category The Company's annual consolidated sales by major product categories are summarized as follows: Consumer Products Sales of Consumer products, consisting of video and audio equipment and home appliances and household equipment, decreased 2 percent to 3,289.1 billion yen ($27.41 billion). In this category, sales of video and audio equipment increased 1 percent. Favorable sales growth recorded in VCRs and DVD players in Japan and North America, led by digital products, more than offset declines in such regions as Southeast Asia and the CIS. Sales of home appliances and household equipment decreased 5 percent, due to generally slow demand, despite the marketing success of Matsushita's new, industry-leading products, such as centrifugal force washing machines in the domestic market, and an increase in overseas sales of air conditioners. Industrial Products Sales of Industrial products decreased 3 percent, to 2,866.6 billion yen ($23.89 billion). Within this product category, sales of information and communications equipment decreased 5 percent, due primarily to price declines in computer peripherals, such as PC displays and hard disk drives. Steady growth was, however, achieved mainly in overseas sales of mobile communications equipment, including cellular phones, broadcast- and business- use video systems, and printers. Industrial equipment sales increased 2 percent, as strong growth of car audiovisual equipment sales in both domestic and overseas markets more than offset negative effects of cuts in capital spending for factory automation and other industrial equipment. Components Sales of Components decreased 5 percent to 1,484.4 billion yen ($12.37 billion), reflecting continued slow demand for semiconductors and general electronic components. However, sales of high-energy-density rechargeable batteries and overseas sales of compressors for air conditioners and electric motors advanced. Non-Consolidated (Parent Company Alone) Results On a parent company alone basis, annual sales and earnings both decreased. Sales decreased 6 percent to 4,597.5 billion yen, from the previous year's 4,874.5 billion yen. Steady sales growth of digital video and audio equipment and mobile communications equipment could not offset the decline of sales in other product lines. Domestic sales decreased due mainly to setbacks in housing- related consumption and in demand from business and industrial corporations, while export sales decreased largely because of aggravated market conditions in several emerging nations and worldwide price declines. Operating profit decreased 35 percent to 80.5 billion yen, from 123.4 billion yen in fiscal 1998, and recurring profit decreased 21 percent to 122.7 billion yen, from 156.4 billion yen. Net income decreased 32 percent to 62.0 billion yen, versus 91.2 billion yen a year ago. Parent company net income per common share (basic) was 29.67 yen, compared with 43.18 yen a year ago. Proposed Year-end Dividend Matsushita today proposed a year-end cash dividend of 7.75 yen per common share, comprising an ordinary year-end dividend of 6.25 yen, plus a 1.50 yen commemorative dividend marking the Company's 80th anniversary, subject to approval at the annual general meeting of shareholders on June 29, 1999. If approved, total dividends for fiscal 1999, including an interim dividend of 6.25 yen per common share paid in December 1998, will be 14.00 yen per common share, compared with 12.50 yen for the previous fiscal year. Outlook for Fiscal Year 2000 Matsushita expects difficult business conditions to persist in the new fiscal year. The Japanese economy has yet to see clear signs of recovery, and uncertainty also exists in North American and European markets. To counter these adverse circumstances, Matsushita plans to concentrate its efforts on the development and introduction of innovative, value-added products companywide. It will also strive to reinforce its corporate structure and to create new businesses, with emphasis on promoting its five priority business areas to achieve greater progress in the approaching millennium. For fiscal 2000, ending March 31, 2000, the Company forecasts a 3 percent decrease in consolidated sales to approximately 7,400 billion yen, while operating profit is expected to increase 7 percent to approximately 208 billion yen, and pre-tax income to rise 9 percent to approximately 220 billion yen. Net income is anticipated to total about 92 billion yen, up 39 percent when compared with fiscal 1999 net income excluding the tax effects. On a parent company alone basis, sales for fiscal 2000 are expected to stay at approximately 4,600 billion yen, nearly level with fiscal 1999, while operating profit is forecast to rise 5 percent to approximately 84.5 billion yen. Recurring profit is projected to increase 2 percent to approximately 125 billion yen, and net income is estimated to increase 34 percent to approximately 83 billion yen. Statements made in the Outlook for Fiscal Year 2000 section and other statements herein that are not historical facts are forward-looking statements about the future performance of Matsushita and its group companies which are based on management's assumptions and beliefs in light of information currently available to it and involve risks and uncertainties. Actual results may differ materially from these forecasts. Potential risks and uncertainties include, but are not limited to: general economic conditions in Matsushita's major markets, particularly Japan and elsewhere in Asia, the United States and Europe; general consumer spending; rapid exchange rate fluctuations, particularly between the yen and U.S. dollar, euro and other currencies in which Matsushita makes significant sales or in which Matsushita's assets and liabilities are denominated; direct and indirect restriction by other countries of imports, or exchange or other limitations imposed by other countries in which Matsushita conducts significant production and marketing operations; and fluctuation in market prices of securities of which Matsushita has substantial holdings. Matsushita Electric Industrial Co., Ltd. is one of the world's leading producers of electronic and electric products for consumer, business and industrial use, which it markets around the world under the "Panasonic," "National," "Technics" and "Quasar" brand names. Matsushita's shares are listed outside Japan on the Amsterdam, Dusseldorf, Frankfurt, New York, Pacific and Paris stock exchanges.

Matsushita Electric Industrial Co., Ltd.

and Consolidated Subsidiaries

Financial Summary *

(Year ended March 31)

U.S. Dollars

Yen (billions) Percentage (millions)

1999 1998 1999/1998 1999 Net sales Y7,640.1 Y7,890.7 97% $63,668 Operating profit 193.7 337.6 57% 1,614 Income before income taxes 202.3 355.6 57% 1,686 Net income 13.5 93.6 14% 113 Net income excluding re-evaluation of net deferred tax assets 66.3 126.9 52% 553 Net income per share, basic per common share 6.48 yen 44.32 yen 5 cents per American Depositary Share (ADS) 65 yen 443 yen 54 cents Net income per share, diluted per common share 6.48 yen 41.53 yen 5 cents per ADS 65 yen 415 yen 54 cents

U.S. Dollars

Yen (billions) (millions)

1999 1998 1999 Capital investment Y352.4 Y473.6 $2,937 Depreciation Y366.0 Y360.0 $3,050 R&D expenditures Y500.0 Y480.5 $4,167 Total assets (at year-end) Y7,938.2 Y8,563.5 $66,152 Total employees (at year-end) 282,153 275,962 * See notes to consolidated financial statements. Notes to consolidated financial statements: 1. The Company's consolidated financial statements are prepared in conformity with the United States generally accepted accounting principles. 2. Fiscal 1999 and 1998 net income figures are after subtracting impacts of approximately 52.8 billion yen ($440 million) and approximately 33.3 billion yen in the respective periods, attributable to re-evaluations of net deferred tax assets reflecting reductions in Japan's corporate income tax rate. 3. The Company has adopted SFAS No. 130, "Reporting Comprehensive Income," from the fiscal year beginning April 1, 1998. In calculating comprehensive income (loss), the Company has not applied SFAS No.115 in accounting for certain investments in debt and equity securities. Comprehensive income (loss) includes net income (loss) and increases (decreases) in cumulative translation adjustments. For the fiscal year ended March 31, 1999, comprehensive loss totaled 108.7 billion yen ($906 million), compared with comprehensive income of 104.1 billion yen a year ago. 4. The Company has not applied SFAS No.115. If SFAS No.115 had been adopted as of March 31, 1999 and March 31, 1998, the carrying amounts of marketable securities and investments and advances in the aggregate would increase by 197.6 billion yen ($1,647 million) and 173.8 billion yen, and stockholders' equity would increase by 109.1 billion yen ($909 million) and 83.6 billion yen, on the respective dates, on the Company's balance sheet. If SFAS No.115 had been adopted for the fiscal year ended March 31, 1999, comprehensive loss would amount to 83.2 billion yen ($693 million), compared with comprehensive income of 41.6 billion yen a year ago. In this case, comprehensive income (loss) includes net income (loss), increases (decreases) in cumulative translation adjustments and unrealized holding gains (loss) of available-for-sale securities. 5. Number of consolidated companies: 326 6. Number of companies reflected by the equity method: 59 7. United States dollar amounts are translated for convenience at th rate of U.S. $1.00 = 120 yen, the approximate rate on the Tokyo Foreign Exchange Market on March 31, 1999.

Matsushita Electric Industrial Co., Ltd.

Consolidated Statement of Income *

(Year ended March 31)

U.S. Dollars

Yen (millions) (millions)

1999 1998 1999 Net sales Y7,640,119 Y7,890,662 $63,668 Cost of sales (5,346,914) (5,494,746) (44,558) Selling, general and administrative expenses (2,099,521) (2,058,358) (17,496) Operating profit 193,684 337,558 1,614 Other income (deductions): Interest and dividend income 64,295 68,164 536 Interest expense (62,083) (61,573) (517) Other income (loss), net 6,397 11,475 53 Income before income taxes 202,293 355,624 1,686 Provision for income taxes (175,450) (234,849) (1,462) Minority interests (7,632) (25,777) (64) Equity in earnings of associated companies (5,670) (1,394) (47) Net income Y13,541 Y93,604 $113 (Parentheses indicate expenses or deductions.)

Consolidated Quarterly Sales and Net Income (Loss) *

Yen U.S. Dollars Sales: (millions) (millions) 1st quarter ended June 30, 1998 Y1,875,846 $15,632 2nd quarter ended Sept. 30, 1998 2,015,996 16,800 3rd quarter ended Dec. 31, 1998 1,938,354 16,153 4th quarter ended March 31, 1999 1,809,923 15,083 Year total Y7,640,119 $63,668 Net income (loss): 1st quarter ended June 30, 1998 Y11,116 $93 2nd quarter ended Sept. 30, 1998 (1,608) (13) 3rd quarter ended Dec. 31, 1998 20,295 169 4th quarter ended March 31, 1999 (16,262) (136) Year total Y13,541 $113 * See notes to consolidated financial statements.

Matsushita Electric Industrial Co., Ltd.

Consolidated Balance Sheet *

(As of March 31)

U.S. Dollars

Yen (millions) (millions) Assets 1999 1998 1999 Current assets: Cash Y1,529,584 Y1,906,226 $12,746 Marketable securities 128,328 130,204 1,069 Trade receivables (notes and accounts) 1,321,303 1,349,520 11,011 Inventories 1,018,663 1,101,613 8,489 Other current assets 411,428 437,006 3,429 Total current assets 4,409,306 4,924,569 36,744 Noncurrent receivables 276,311 282,838 2,303 Investments and advances 1,279,828 1,329,180 10,665 Property, plant and equipment, net of accumulated depreciation 1,493,551 1,521,867 12,446 Other assets 479,252 505,058 3,994 Total assets Y7,938,248 Y8,563,512 $66,152 Liabilities and Stockholders' Equity Current liabilities: Short-term borrowings Y650,147 Y1,026,301 $5,418 Trade payables (notes and accounts) 635,351 679,499 5,294 Other current liabilities 1,305,441 1,324,418 10,879 Total current liabilities 2,590,939 3,030,218 21,591 Long-term liabilities 1,205,174 1,145,546 10,043 Minority interests 609,080 617,634 5,076 Common stock 209,444 209,416 1,745 Capital surplus 567,696 570,628 4,731 Retained earnings 2,910,932 3,022,578 24,258 Cumulative translation adjustments (154,765) (32,508) (1,290) Treasury stock (252) -- (2) Total liabilities and stockholders' equity Y7,938,248 Y8,563,512 $66,152 * See notes to consolidated financial statements.

Matsushita Electric Industrial Co., Ltd.

Consolidated Sales Breakdown * **

(Year ended March 31)

U.S. Dollars

Yen (billions) Percentage (millions)

1999 1998 1999/1998 1999 Consumer products Video and audio equipment Y1,894.8 Y1,885.3 101% $15,791 Home appliances and household equipment 1,394.3 1,473.8 95% 11,619 Subtotal 3,289.1 3,359.1 98% 27,410 Industrial products Information and communications equipment 2,149.8 2,264.4 95% 17,915 Industrial equipment 716.8 700.8 102% 5,973 Subtotal 2,866.6 2,965.2 97% 23,888 Components 1,484.4 1,566.4 95% 12,370 Total Y7,640.1 Y7,890.7 97% $63,668 Domestic sales 3,752.1 3,891.0 96% 31,268 Overseas sales 3,888.0 3,999.7 97% 32,400 [Domestic/Overseas Sales Breakdown] (in yen only)

Yen (billions) Yen (billions)

Domestic Sales Percentage Overseas Sales Percentage

1999 1999/1998 1999 1999/1998 Consumer products Video and audio equipment Y693.9 104% Y1,200.9 98% Home appliances and household equipment 1,040.9 96% 353.4 92% Subtotal 1,734.8 99% 1,554.3 97% Industrial products Information and communications equipment 885.1 97% 1,264.7 94% Industrial equipment 475.0 97% 241.8 114% Subtotal 1,360.1 97% 1,506.5 96% Components 657.2 89% 827.2 100% Total Y3,752.1 96% Y3,888.0 97% * See Details of Product Categories. ** See notes to consolidated financial statements. Details of Product Categories Consumer Products Video and audio equipment:

(video cassette recorders, video camcorders, TVs, TV/VCR combination units, DVD players, satellite broadcast receivers, radios, radio/cassette stereos, portable headphone players, CD and MD players, stereo hi-fi equipment, electronic musical instruments, prerecorded video and audio tapes and discs, etc.) Home appliances and household equipment:

(refrigerators, air conditioners, home laundry equipment, vacuum cleaners, microwave ovens, other cooking appliances, kitchen fixture systems, electric, gas and kerosene hot-water supply systems, heating appliances, bath and sanitary equipment, electric lamps, cameras and flash units, bicycles, etc.) Industrial Products Information and communications equipment: (facsimiles, telephones, mobile communications equipment, personal computers, printers and peripherals, copiers, CRT and LCD displays, hard disk drives, CD-ROM, DVD-ROM/RAM and other optical disk drives, CATV systems, AV systems for commercial and industrial use, communication network equipment, etc.) Industrial equipment:

(electronic-parts-mounting machines, industrial robots, welding machines, air-conditioning equipment, vending machines, electronic measuring instruments, medical equipment, car audio and car navigation equipment, etc.) Components (semiconductors, cathode-ray tubes, printed circuit boards, PDP and LCD devices, tuners, capacitors, other general components, speakers, magnetic recording heads, electric motors, compressors, dry batteries, storage batteries, etc.)

Matsushita Electric Industrial Co., Ltd.

Consolidated Information by Segments *

(Year ended March 31) By Business Segment:

U.S. Dollars

Yen (billions) Percentage (millions) [Sales] 1999 1998 1999/1998 1999 Consumer products Y3,296.0 Y3,365.7 98% $27,467 Industrial products 2,874.8 2,970.6 97% 23,957 Components 2,245.7 2,334.5 96% 18,714 Subtotal 8,416.5 8,670.8 97% 70,138 Corporate and elimination (776.4) (780.1) -- (6,470) Consolidated total Y7,640.1 Y7,890.7 97% $63,668 [Operating Profit] Consumer products Y90.7 Y99.6 91% $756 Industrial products 153.5 222.4 69% 1,279 Components 18.3 85.9 21% 152 Subtotal 262.5 407.9 64% 2,187 Corporate and elimination (68.8) (70.3) -- (573) Consolidated total Y193.7 Y337.6 57% $1,614 By Domestic and Overseas Company Location:

U.S. Dollars

Yen (billions) Percentage (millions) [Sales] 1999 1998 1999/1998 1999 Japan Y5,966.0 Y6,256.2 95% $49,717 Americas 1,160.3 1,100.0 105% 9,669 Europe 767.2 641.7 120% 6,393 Asia and others 1,333.0 1,382.1 96% 11,109 Subtotal 9,226.5 9,380.0 98% 76,888 Corporate and elimination(1,586.4) (1,489.3) -- (13,220) Consolidated total Y7,640.1 Y7,890.7 97% $63,668 [Operating Profit] Japan Y194.0 Y325.6 60% $1,617 Americas 6.7 11.2 60% 56 Europe 11.1 14.7 76% 92 Asia and others 51.4 51.6 100% 428 Subtotal 263.2 403.1 65% 2,193 Corporate and elimination (69.5) (65.5) -- (579) Consolidated total Y193.7 Y337.6 57% $1,614 * See notes to consolidated financial statements. Please Note: The following are financial statements on a parent company alone basis, and should not be confused with consolidated results.

Matsushita Electric Industrial Co., Ltd.

(Parent Alone)

Statement of Income

(Year ended March 31)

Yen (millions) Percentage

1999 1998 1999/1998 Net sales Y4,597,561 Y4,874,526 94% Cost of sales (3,816,977) (4,015,887) Selling, general and administrative expenses (700,047) (735,225) Operating profit 80,536 123,413 65% Interest and dividend income 75,586 72,916 Other income 25,359 23,671 Interest expense (27,503) (27,211) Other expenses (31,232) (36,438) Recurring profit 122,746 156,350 79% Non-recurring profit (loss) (3,526) (3,647) Income before taxes 119,219 152,703 78% Provision for income taxes (57,200) (61,500) Net income Y62,019 Y91,203 68% Unappropriated retained earnings at beginning of period 40,852 40,577 Reversal of reserve for purchase of own shares 98,883 -- Purchase of own shares (98,883) -- Interim dividend (13,102) (13,201) Appropriation of legal reserve (1) (229) Unappropriated retained earnings at end of period 89,767 118,350 Notes: 1. In accordance with the Regulations concerning Corporate Financial Statements under the Japanese Commercial Code, amounts less than 1 million yen have been omitted. 2. From fiscal 1999, the local enterprise tax previously included in selling, general and administrative expenses has been transferred to provision for income taxes, without retroactive restatement for the prior year, to conform to a revision in Japanese corporate accounting standards. In fiscal 1999, the local enterprise tax totaled 14.1 billion yen, as compared with 17.2 billion yen a year ago. 3. Net income per common share: 1999 1998

Basic 29.67 yen 43.18 yen

Diluted 28.24 yen 40.49 yen

Matsushita Electric Industrial Co., Ltd.

(Parent Alone)

Balance Sheet

(As of March 31)

Yen (millions)

1999 1998 Assets Current assets: Cash Y633,932 Y951,209 Trade receivables (notes and accounts) 651,676 663,638 Inventories 210,786 231,487 Other current assets 110,184 119,498 Total current assets 1,606,579 1,965,834 Fixed assets: Tangible fixed assets 343,808 332,934 Intangibles 12,046 14,581 Investments and advances 2,203,426 2,115,523 Total fixed assets 2,559,281 2,463,039 Total assets Y4,165,861 Y4,428,873 Liabilities and Shareholders' Equity Current liabilities: Trade payables (notes and accounts) Y574,640 Y608,415 Accrued income taxes 38,190 32,896 Other current liabilities 645,514 831,072 Total current liabilities 1,258,345 1,472,385 Long-term debt and employee retirement and severance benefits 531,101 516,672 Total liabilities 1,789,447 1,989,057 Shareholders' equity: Capital 209,444 209,416 Statutory reserves 292,085 292,049 Retained earnings 1,874,884 1,938,350 Total shareholders' equity 2,376,413 2,439,815 Total liabilities and shareholders' equity Y4,165,861 Y4,428,873

Matsushita Electric Industrial Co., Ltd.

(Parent Alone)

Proposed Allocation of Income

(Year ended March 31)

Yen (millions)

1999 1998 Unappropriated retained earnings at end of period Y89,767 Y118,350 Reversal of reserve for purchase of own shares 1,116 -- Reversal of contingency reserve -- 36,000 Total 90,884 154,350 To be allocated as follows: Statutory reserve 5 6 Year-end dividend 15,982 13,201 (per common share) (7.75 yen) (6.25yen) Directors' bonuses 240 270 Corporate auditors' bonuses 18 20 Reserve for purchase of own shares -- 100,000 Contingency reserve 34,000 -- Unappropriated retained earnings carried forward to next period 40,639 40,852

ots Original Text Service: Matsushita Electric Industrial Co., Ltd. Internet: http://www.newsaktuell.de Contact: Akihiro Takei Panasonic Finance (America), Inc. Tel.: (in the USA) 212- 371-5447

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