November 9, 2005 1. Consolidated Financial Results

November 9, 2005 1. Consolidated Financial Results
ROHM CO., LTD. Interim Financial Highlights for the Six-Month Period Ended
September 30, 2005
November 9, 2005
1. Consolidated Financial Results
(Figures are rounded down to the nearest million yen. Any fraction less than the unit are rounded off.)
Year ending
Mar. 31, 2006
Year ended
Mar. 31, 2005
First six months
First six months
Actual
Acutal
Increase/decrease from the six-month period
ended Sept. 30, 2004
Amount
Percentage
Year ended
Mar. 31, 2005
Year ending
Mar. 31, 2006
Annual
Annual
Actual
Projected
Net sales
Millions of yen
193,033
200,411
-7,378
-3.7%
369,023
382,000
Cost of sales
Millions of yen
121,445
111,942
+9,503
+8.5%
221,132
242,400
Selling, general and administrative
expenses
Millions of yen
37,221
34,453
+2,768
+8.0%
71,836
74,600
Operating income
Millions of yen
34,366
54,015
-19,649
-36.4%
76,054
65,000
(17.8%)
(27.0%)
(-9.2%)
(20.6%)
(17.0%)
40,461
58,695
-18,234
(21.0%)
(29.3%)
(-8.3%)
(Operating income margin)
Ordinary income
Millions of yen
(Ordinary income margin)
Net income
Millions of yen
(Net income margin)
Basic net income per share
Yen
24,238
36,733
-12,495
(12.6%)
(18.3%)
(-5.7%)
208.91
309.25
-100.34
-31.1%
-34.0%
-32.4%
79,320
72,000
(21.5%)
(18.8%)
45,135
44,000
(12.2%)
(11.5%)
380.22
379.44
Return on equity
%
6.2
Ordinary income to total assets
%
9.3
Total assets
Millions of yen
892,459
903,696
-11,237
-1.2%
867,322
Shareholders' equity
Millions of yen
756,465
757,090
-625
-0.1%
739,329
Shareholders' equity ratio
Increase/decrease
from the year
ended Mar. 31,
2005
+3.5%
-14.5%
-9.2%
-2.5%
%
84.8
83.8
+1.0
Yen
6,527.65
6,373.91
+153.74
+2.4%
6,326.64
Capital expenditures
Millions of yen
31,256
35,568
-4,312
-12.1%
85,171
87,000
+2.1%
Depreciation (Tangible fixed assets)
Millions of yen
24,920
21,031
+3,889
+18.5%
47,102
55,000
+16.8%
Research and development costs
Millions of yen
16,135
15,370
+765
+5.0%
32,342
33,000
+2.0%
(Interest and dividend income)
(Millions of yen)
(2,689)
(1,362)
(+1,327)
(+97.5%)
(3,318)
Foreign currency exchange gains/losses
Millions of yen
(gain)3,405
(gain)3,237
(gain)168
Shareholders' equity per share
85.2
Net financial revenue
(gain) 332
(Second half of
the year)
Foreign exchange rate (Average yendollar rate)
109.40
109.19
+0.21
+0.2%
107.28
20,597
20,254
+343
+1.7%
19,803
(2,345)
(2,193)
(+152)
(+6.9%)
(2,155)
56
53
+3
56
44
47
-3
47
(Domestic)
(13)
(13)
(0)
(13)
(Overseas)
(31)
(34)
(-3)
(34)
2
2
0
2
0
0
0
0
Yen/US$
Number of employees
(Number of R&D employees)
Overseas production ratio
%
Number of consolidated subsidiaries
Number of companies accounted for by
equity method
Number of non-consolidated
subsidiaries
110.00
58
* The projected data are based on the information available at the time of release of this report. Therefore, a number of important factors including changes in busines
conditions may cause actual results to differ materially from those projected
Contact: Public Relations and Investor Relations Dept., ROHM CO., LTD.
21, Saiin Mizosaki-cho, Ukyoku, Kyoto 615-8585 Japan
(075)315-5729 (Direct line)
Note: This report is a translation of the financial highlights of the Company prepared in accordance with the provisions set forth in the Securities and Exchange Law and
its related accounting regulations, and in conformity with accounting principles generally accepted in Japan. The original version of this report is written in Japanese. In
the event of any discrepancies in words, accounts, figures or the like between this report and the original, the original Japanese version shall govern.
- Interim Financial Highlights 1 -
1. Consolidated Financial Results (Continued from previous page)
(Figures are rounded down to the nearest million yen. Any fraction less than the unit are rounded off.)
Year ending
Mar. 31, 2006
Year ended
Mar. 31, 2005
First six months
First six months
Actual
Acutal
Increase/decrease from the six-month period
ended Sept. 30, 2004
Amount
Percentage
Year ended
Mar. 31, 2005
Year ending
Mar. 31, 2006
Annual
Annual
Actual
Projected
Increase/decrease
from the year
ended Mar. 31,
2005
Sales by product category and geographical region
85,467
86,828
-1.6%
159,022
169,668
(Japan)
(40,697)
(42,431)
(Asia)
(40,677)
(39,536)
(-1,734)
(-4.1%)
(81,750)
(81,258)
(-0.6%)
(+1,141)
(+2.9%)
(68,391)
(80,985)
(+18.4%)
(Americas)
(2,156)
(1,898)
(+258)
(+13.6%)
(3,207)
(3,648)
(+13.7%)
(Europe)
(1,935)
74,836
(2,962)
(-1,027)
(-34.7%)
(5,672)
(3,776)
(-33.4%)
76,506
-1,670
-2.2%
141,787
147,133
+3.8%
(26,029)
(28,118)
(-2,089)
(-7.4%)
(53,345)
(51,369)
(-3.7%)
(Japan)
(Asia)
(41,907)
(40,401)
(+1,506)
(+3.7%)
(74,000)
(82,511)
(+11.5%)
(Americas)
(3,464)
(3,803)
(-339)
(-8.9%)
(6,811)
(6,660)
(-2.2%)
(Europe)
(3,436)
(4,183)
(-747)
(-17.9%)
(7,629)
(6,592)
(-13.6%)
12,127
12,445
-318
-2.6%
23,610
24,437
+3.5%
(Japan)
(3,715)
(4,367)
(-652)
(-14.9%)
(8,446)
(7,730)
(-8.5%)
(Asia)
(6,032)
(5,512)
(+520)
(+9.4%)
(10,510)
(12,113)
(+15.2%)
(964)
(964)
(+0)
(+0.0%)
(1,612)
(1,550)
(-3.9%)
(Europe)
(1,415)
(1,601)
(-186)
(-11.6%)
(3,040)
(3,042)
(+0.0%)
20,602
24,630
-4,028
-16.4%
44,603
40,761
-8.6%
(Japan)
(6,661)
(10,854)
(-4,193)
(-38.6%)
(18,308)
(13,723)
(-25.0%)
(11,439)
(11,153)
(+286)
(+2.6%)
(21,257)
(21,645)
(+1.8%)
(Americas)
(1,154)
(1,239)
(-85)
(-6.8%)
(2,359)
(2,163)
(-8.3%)
(Europe)
(1,346)
(1,383)
(-37)
(-2.7%)
(2,678)
(3,230)
(+20.6%)
7.7
7.4
+0.3
7.2
12.4
Integrated circuits
Millions of yen
Discrete semiconductor devices
Passive components
(Americas)
Displays
(Asia)
-1,361
+6.7%
Sales by application
Visual
%
11.8
13.5
-1.7
Home appliance
2.2
2.1
+0.1
2.3
Other consumer
4.8
5.4
-0.6
5.3
Computer and OA
22.1
21.2
+0.9
21.8
Telecommunications
17.0
16.0
+1.0
16.9
5.1
4.6
+0.5
4.9
Audio
Automotive
Other industrial
1.4
1.3
+0.1
1.5
Subassemblies
13.9
13.6
+0.3
13.3
Others
14.0
14.9
-0.9
14.4
14,164
15,070
-906
-6.0%
38,295
45,000
+17.5%
9,115
13,363
-4,248
-31.8%
22,052
24,500
+11.1%
823
843
-20
-2.4%
1,689
2,500
+48.0%
Displays
2,346
2,967
-621
-21.0%
6,779
4,500
-33.6%
Others
4,807
3,323
+1,484
+44.6%
16,353
10,500
-35.8%
Capital expenditures by product category
Integrated circuits
Discrete semiconductor devices
Passive components
Millions of yen
- Interim Financial Highlights 2 -
2. Non-consolidated Financial Results
(Figures are rounded down to the nearest million yen. Any fraction less than the unit are rounded off.)
Net sales
Operating income
First six months
Actual
Actual
Millions of yen
Millions of yen
Millions of yen
(Net income margin)
Basic net income per share
First six months
178,590
(Ordinary income margin)
Net income
Year ended
Mar. 31, 2005
Millions of yen
(Operating income margin)
Ordinary income
Year ending
Mar. 31, 2006
Yen
Increase/decrease from the six-month period
ended Sept. 30, 2004
Amount
Percentage
Year ended
Mar. 31, 2005
Annual
Annual
Actual
Projected
-7,515
-4.0%
342,450
359,000
+4.8%
10,355
22,031
-11,676
-53.0%
23,050
21,000
-8.9%
(5.8%)
(11.8%)
(-6.0%)
(6.7%)
(5.8%)
51,257
33,000
21,576
50,842
-29,266
(12.1%)
(27.3%)
(-15.2%)
15,861
38,194
-22,333
(8.9%)
(20.5%)
(-11.6%)
136.71
321.56
-184.85
-57.6%
-58.5%
-57.5%
(15.0%)
(9.2%)
39,872
24,000
(11.6%)
(6.7%)
336.25
206.97
%
7.9
Ordinary income to total assets
%
8.4
Total assets
Millions of yen
613,092
655,125
-42,033
-6.4%
610,135
Shareholders' equity
Millions of yen
509,441
531,075
-21,634
-4.1%
507,455
Shareholders' equity per share
Interim cash dividends
(Annual cash dividends)
Increase/decrease
from the year
ended Mar. 31,
2005
186,105
Return on equity
Shareholders' equity ratio
Year ending
Mar. 31, 2006
%
83.1
81.1
+2.0
Yen
4,396.04
4,471.10
-75.06
Yen
45.0
42.5
+2.5
-35.6%
-39.8%
83.2
-1.7%
(Yen)
4,342.71
(85.0)
(90.0)
Capital expenditures
Millions of yen
4,918
4,954
-36
-0.7%
20,699
11,500
-44.4%
Depreciation (Tangible fixed assets)
Millions of yen
3,399
4,159
-760
-18.3%
9,642
7,500
-22.2%
Net financial revenue
(Interest income)
(Millions of yen)
(963)
(718)
(+245)
(+34.0%)
(1,616)
(Dividend income)
(Millions of yen)
(6,816)
(23,892)
(-17,076)
(-71.5%)
(23,909)
Millions of yen
7,779
24,610
-16,831
-68.4%
25,525
Millions of yen
(gain)2,417
(gain)3,139
(loss) 722
-23.0%
(gain)1,101
3,416
3,292
+124
+3.8%
3,293
26,998
23,676
+3,322
+14.0%
26,773
Total
Foreign currency exchange gains/losses
Number of employees
Number of shareholders
Financial institution shareholding ratio
%
26.69
34.21
-7.52
30.24
Foreign shareholding ratio
%
50.15
47.18
+2.97
48.71
- Interim Financial Highlights 3 -
Consolidated Interim Financial Report for Fiscal Year Ending March 31, 2006
November 9, 2005
Listed Company Name
ROHM CO., LTD.
Stock Exchange Listings Tokyo, Osaka
Code No.: 6963
(URL http://www.rohm.co.jp)
Company representative Title: President
Name: Ken Sato
Contact person
Title: Group General Manager
Name: Eiichi Sasayama
Head Office Location
Kyoto Prefecture
TEL (075) 311 - 2121
Date of Board of Directors meeting for approval of financial statements: November 9, 2005
Adoption of the GAAP in the U.S. : None
1. Consolidated Business Results for the Six-month Period Ended September 30, 2005 (From April 1, 2005 to September 30, 2005)
(1) Consolidated Results of Operations
(Figures are rounded down to the nearest million yen)
Net sales
Millions of yen
Six months ended
September 30, 2005
Six months ended
September 30, 2004
Year ended March 31, 2005
Operating income
Millions of yen
%
Ordinary income
Millions of yen
%
193,033
-3.7
34,366
-36.4
40,461
-31.1
200,411
10.1
54,015
6.7
58,695
24.9
369,023
Net income
Millions of yen
Six months ended
September 30, 2005
%
24,238
76,054
%
-34.0
79,320
Basic net income per share
Diluted net income per share
yen
yen
208.91
-
Six months ended
36,733
37.0
309.25
September 30, 2004
Year ended March 31, 2005
45,135
380.22
(Notes) (i) Equity in income (losses) Six months ended Sept. 30, 2005: -2 million yen Six months ended Sept. 30, 2004: 5 million yen
Year ended Mar. 31, 2005: 1 million yen
(ii) Average number of shares outstanding (consolidated) Six months ended Sept. 30, 2005: 116,024,848 shares
Six months ended Sept. 30, 2004: 118,780,714 shares Year ended Mar. 31, 2005: 118,561,981 shares
(iii) Change in accounting policies: Yes
(iv) Percentage (%) shown for Net sales, Operating income, Ordinary income and Net income represents change from the data of the
corresponding period of the previous year.
(2) Consolidated Financial Position
Total assets
Millions of yen
Six months ended
September 30, 2005
892,459
Shareholders' equity
Shareholders' equity ratio
Millions of yen
756,465
%
84.8
Six months ended
903,696
757,090
83.8
September 30, 2004
Year ended March 31, 2005
867,322
739,329
85.2
(Note) Number of shares outstanding (consolidated) at end of term Six months ended Sept. 30, 2005: 115,886,475 shares
Six months ended Sept. 30, 2004: 118,779,579 shares Year ended Mar. 31, 2005: 116,850,835 shares
Shareholders' equity
per share
yen
6,527.65
6,373.91
6,326.64
(3) Consolidated Cash Flows
Cash flows from
operating activities
Millions of yen
Six months ended
September 30, 2005
Six months ended
September 30, 2004
Year ended March 31, 2005
Cash flows from
investing activities
Millions of yen
Cash flows from
Cash and cash
financing activities
equivalents at end of term
Millions of yen
Millions of yen
44,137
-36,504
-15,074
288,984
56,866
-43,515
-5,074
325,868
91,919
-87,429
-30,037
288,974
(4) Scope of consolidation and application of equity method
Number of consolidated subsidiaries: 44
Number of non-consolidated subsidiaries accounted for by equity method: None
Number of associated companies accounted for by equity method: 2
(5) Changes in scope of consolidation and application of equity method
Companies newly consolidated: None Companies excluded from consolidation: 3
Companies newly accounted for by equity method: None Companies no longer accounted for by equity method: None
2. Consolidated Business Results Forecast for Fiscal 2006 (From April 1, 2005 to March 31, 2006)
Net sales
Millions of yen
Fiscal 2006
382,000
Ordinary income
Millions of yen
72,000
Net income
Millions of yen
44,000
(Note) Projected net income per share for the year ending March 31, 2006: 379.44 yen
* The forecast data are based on the information available at the time of release of this report. Therefore, a number of important factors
including changes in business conditions may cause actual results to differ materially from those discussed in the prospective statements.
Refer to pages 9 to 10 of the attached documents for reasons for the forecast and other relevant information.
-1-
ROHM CO., LTD.
Status of the ROHM Group
The ROHM Group consists of ROHM CO., LTD., 44 consolidated subsidiaries (13 in Japan and 31 outside Japan) and 2
associated companies (1 in Japan and 1 outside Japan). We are a comprehensive electronic component manufacturer,
whose principal business is the manufacture and sales of electronic components.
The Group diagram and information on our consolidated subsidiaries are given below.
Users
Overseas
Domestic
Finished products
Administrative Responsibility for Subsidiaries in
Asia and Sales
ROHM ELECTRONICS ASIA PTE. LTD.
Finished products
Sales
ROHM ELECTRONICS U.S.A., LLC *1
ROHM ELECTRONICS GMBH
ROHM ELECTRONICS (H.K.) CO., LTD.
ROHM ELECTRONICS (SHANGHAI) CO., LTD.
ROHM ELECTRONICS TRADING DALIAN CO., LTD.
ROHM ELECTRONICS TAIWAN CO., LTD.
ROHM ELECTRONICS KOREA CORPORATION
ROHM ELECTRONICS (MALAYSIA) SDN. BHD.
ROHM ELECTRONICS (PHILIPPINES) SALES
CORPORATION
ROHM ELECTRONICS (THAILAND) CO., LTD.
Distribution
ROHM LOGISTEC
CO., LTD.
Distribution operation by contract
Finished products
ROHM CO., LTD.
Raw materials
Semi-finished products
R&D
Raw materials
Semi-finished products
Finished products
Manufacture
ROHM LSI SYSTEMS
(FRANCE) S.A.S.
Administrative
Responsibility for
Subsidiaries in North
and South America
ROHM U.S.A., INC.
Administrative
Responsibility for
Subsidiaries in
Europe
(Domestic)
(Overseas)
ROHM HAMAMATSU CO.,
LTD.
ROHM WAKO DEVICE CO.,
LTD.
ROHM APOLLO DEVICE
CO., LTD.
ROHM TSUKUBA CO., LTD.
ROHM WAKO CO., LTD.
ROHM APOLLO CO., LTD.
ROHM FUKUOKA CO., LTD.
ROHM AMAGI CO., LTD.
ROHM MECHATECH CO.,
LTD.
ROHM KOREA CORPORATION
ROHM SEMICONDUCTOR (CHINA) CO., LTD.*2
ROHM ELECTRONICS DALIAN CO., LTD.
ROHM ELECTRONICS PHILIPPINES, INC.
ROHM APOLLO SEMICONDUCTOR PHILIPPINES, INC.
ROHM INTEGRATED SEMICONDUCTOR (THAILAND)
CO., LTD.
ROHM APOLLO ELECTRONICS (THAILAND) CO., LTD.
ROHM-WAKO ELECTRONICS (MALAYSIA) SDN. BHD.
ROHM MECHATECH PHILIPPINES, INC.
ROHM MECHATECH THAILAND CO., LTD.
ROHM ELECTRONICS
EUROPE LIMITED
*1 ROHM LSI SYSTEMS U.S.A., LLC was absorbed by ROHM ELECTRONICS U.S.A., LLC in April 2005.
*2 ROHM ELECTRONICS WAKO (TIANJIN) CO., LTD. and ROHM ELECTRONICS COMPONENTS (TIANJIN)
CO., LTD. merged with ROHM IC DESIGN (TIANJIN) CO., LTD. to become ROHM SEMICONDUCTOR
(CHINA) CO., LTD. in April 2005.
-2-
ROHM CO., LTD.
Management Policies
Basic Management Policy
ROHM beleives that it must allocate the added values produced by the Company, in appropriate proportions, to
all its stakeholders, including shareholders, employees, and local communities, as well as to the retained earnings for business investment to help make the Company more competitive. Thus ROHM regards it essential to
obtain the understanding and cooperation of all its stakeholders to create long-lasting, extensive corporate values under continuous improvement. ROHM thereby intends to make its shares more attractive to investors, and
this is one of the Company’s highest priorities in management.
Accordingly, ROHM is committed to developing products that will become market leaders worldwide. One result
is high-value-added system LSI chips for digital information appliances, mobile electronic equipment, automotive
components, and similar products expected to grow in demand. Another is optical devices, which also have great
potential for growth. Furthermore, ROHM seeks as a basic policy the enhancement of cost competitiveness through
the best use of its distinctive production technologies, and will continue to lead the world’s electronic component
market.
Basic Policy on Distribution of Profits
Regarding profit distribution to shareholders, ROHM will make efforts to live up to shareholders’ expectations
in comprehensive consideration of various factors, including business performance, financial standing, and expected
demand for funds to improve corporate value through business investment. More specifically, the Company intends to improve the total return ratio by keeping the dividend rate consecutive in consideration of the consolidated dividend payout ratio, while implementing flexible return-improvement measures such as treasury-stock
purchasing in light of cash-flow conditions.
For ROHM to sustain its growth and improve its performance in the semiconductor industry, the market for which is
expected to grow in the medium to long term, it is indispensable to have product development capabilities outstripping other manufacturers and to enhance cost competitiveness. With the accelerated sophistication of development
and manufacturing technologies, which serve as core factors in such competition, funds needed for investment in
R&D and production facilities in the Company’s core business areas; mainly, semiconductors and optical devices, are
increasing each year. ROHM considers that to make appropriate and prompt investment aimed at maintaining and
strengthening its international competitiveness and growth potential in a semiconductor industry that is undergoing
drastic changes, it is vital, in terms of management, to maintain ample funds in reserve. Specifically, the Company
considers that it will be increasingly necessary to make large-scale investment in the construction of production lines
for large-diameter 300 mm wafers, 90 nm or smaller ultra-fine processes, and optical devices. ROHM intends to
use retained earnings effectively to improve the Company’s corporate value over the medium to long term, as well as
to tie up with or acquire Japanese and overseas companies, expecting synergy effects in our business.
Policy on Changes in Minimum Trading Lot Size
ROHM reduced the minimum trading lot size of its shares from 1,000 to 100. We consider that the change has produced positive results because the number of shareholders has increased rapidly since then.
Regarding a further reduction in the minimum trading lot size, we intend to make a decision after carefully examining
the factors concerned, including cost-benefit performance and the liquidity of shares.
Referenced Corporate Performance Indexes
ROHM is extending efforts to ensure profits by undertaking various new measures and continuing to strengthen existing ones, including the development of new products and the reinforcement of sales operations. We attach importance to indexes representing the rate of return, such as EBITDA*, as well as asset turnover ratio and business investment efficiency.
*
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)
An index obtained by adding interest expenses and depreciation to income before income taxes and minority interests. This index is commonly used to compare corporate earnings internationally.
Medium- to Long-term Corporate Strategies
Although the electronics market is expected to expand over the medium to long term in parallel with the emergence
of a highly sophisticated information society, international competition is becoming increasingly intense amid growing fluctuation in the demand for electronic components, which encourages a realignment of the industry and a
shakeout of uncompetitive businesses.
-3-
ROHM CO., LTD.
To ensure stable growth and a strong and well-balanced financial position under these circumstances, a range of
measures should be taken, including development of creative, high-value-added products utilizing world-leading advanced technologies, enhancement of cost competitiveness, establishment of a global production and distribution
network that enables high customer satisfaction in both domestic and overseas markets, and a strengthening of
service and technical support systems for customers. ROHM attaches overriding importance to the integrated development-production system, development of custom-designed products, and quality, as well as persistent efforts to
formulate and implement measures in these respects.
Specifically, ROHM will increase R&D personnel and reinforce the corporate operations handling of digital technologies and digital-analog integration technologies. Taking advantage of its original REAL SOCKET design system, which enables the development of complicated high-performance system LSI chips, and its REAL PLATFORM,
which slashes design lead time and speeds up the development of system LSI chips, ROHM intends to satisfy various
customer needs, especially in the digital home appliance market and the information and communications equipment
market, both of which demand larger-scale and higher-performance system LSI chips in a shorter lead time. We are
also committed to the development of optical devices, including laser diodes—an area expected to grow rapidly in
the markets of next-generation high-density optical discs and optical communications technologies; LEDs that use
zinc oxide as the main material; and organic electroluminescence displays, which are attracting attention as nextgeneration displays. Furthermore, we intend to upgrade our high-quality, high-reliability product lines to satisfy
needs from the automobile industry, which is increasingly incorporating electronics.
ROHM runs the Yokohama Technology Center, Optical Device Research Center, and LSI Test Technology Center, all
of which operate as corporate bases for technological-reinforcement efforts to provide customers with better support
services and to reinforce the in-house R&D system for further growth.
To contribute to the development of next-generation technologies, ROHM is actively involved in a wide range of
joint R&D projects. These projects include comprehensive industrial-academic collaboration alliances with Kyoto
University and other leading institutions and joint efforts with the Semiconductor Industry Research Institute Japan,
which is a think tank for the Japanese semiconductor industry. ROHM is also a member of Japanese national leading-edge R&D projects, which integrate the wisdom of academic, industrial, and governmental circles. Moreover,
ROHM promotes partnerships with other companies wherever necessary to complement its technologies, thus improving the efficiency of R&D activities.
Regarding its corporate production system, ROHM is aggressively committed to improving cost competitiveness and
reinforcing the corporate supply system for sales worldwide. Specifically, concerning the front-end process of
semiconductor production, the Company is committed to adopting larger-diameter wafer processes, such as 300 mm
wafers, and ultra-fine process technologies. Concerning the back-end process, ROHM is upgrading overseas plants,
including those in Thailand, the Philippines, and China, and aggressively shifting production to them. We intend to
use our existing domestic plants as the mother plants for the production network of the entire ROHM Group to continuously accumulate production technologies. These technologies established by our domestic plants will then be
transferred to the overseas plants, enabling them to manufacture and supply ROHM’s high-quality products throughout the world.
Focusing on quality first and foremost not only in manufacturing operations, but also in technological operations,
such as LSI chip design and manufacturing technology development, ROHM will continue to promote company-wide
efforts to enhance the reliability of its products. ROHM intends to make further attempts to develop products
that will overwhelm those of competitors in quality and reliability by proactively committing itself to internally
producing more components, such as wafers, photo-masks, and lead frames. The Company also intends to
further reduce lead time, thus improving its international competitiveness.
Moreover, ROHM plans to strengthen its sales and technical support operations in Asia, especially in China, with
new sales bases and design centers that will expand market share in the growing global markets. Continued efforts
will be made to achieve more-efficient management and swifter decision making by restructuring and streamlining
cooperative organizations within and outside of Japan.
To contribute to environmental conservation, the ROHM Group as a whole is committed to establishing an environmental management system based on ISO 14001 standards, aiming to develop low-consumption products that will
contribute to the saving of energy. At all ROHM production bases in Japan and overseas, the Company is also continuously committed to achieving zero emissions through the promotion of waste recycling and to increasing green
procurement and supply. ROHM is also proactively involved in a tree-planting project as part of the fight against
global warming. Leading the industry, ROHM has already completed the actions necessary to satisfy the RoHS
Directive, the environment conservation regulations that will take effect in 2006 in Europe. ROHM is expending utmost efforts to be friendly to the global environment througout its business activities.
Priority Issues
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ROHM CO., LTD.
Although the electronic industry is expected to grow in the medium to long term as a result of the growing demand
for digital home information appliances and the increasing application of electronic technologies in automobiles,
technological competition and price wars are also expected to intensify continuously on a global scale. Therefore it
is becoming increasingly necessary to constantly supply internationally competitive products to the market through
sustained activities to develop innovative, high-quality products and technologies and by thorough cost reduction.
Under these circumstances, the ROHM Group is improving its business performance through the development of
high-value-added products and technologies in anticipation of future customer needs, the improvement of quality and
reliability, the reinforcement of production and marketing systems, and the thorough streamlining and cost-reduction
attempts throughout the entire Group.
Basic Policies and Measures for Corporate Governance
(1) Basic policy concerning corporate governance
It is imperative that corporate governance functions effectively today. Under such circumstances, the Company believes that corporate management and actions should be fair, unbiased, and transparent, based on the
idea that a company is an entity supported by all the stakeholders, including shareholders, customers, local
communities, and employees. In this respect, we regard the establishment of corporate governance as an
extremely important issue.
Based on the above understanding, ROHM performs various actions, giving top priority to the improvement
of its corporate value, in consideration of its stakeholders.
(2) Updates on the performance of corporate governance-related actions
In the semiconductor industry, the conditions surrounding corporate management change frequently. At
ROHM, the Directors, who are well informed of the Company’s businesses and technologies, have executive
power and supervise one another because ROHM believes that under such severe business conditions, this
flexible and effective management system is the most effective. As the function supervising ROHM’s managerial execution, ROHM retains the conventional auditor system, based on the idea that the supervision of
managerial execution functions sufficiently by strengthening and reinforcing the corporate-auditor-performed
audit system.
For the Board of Directors to have sufficient discussion and to make adequate and swift decisions, the Board
is proper in size, which enhances its function. (All directors are members of the Company.)
Concerning the supervision of managerial execution, we have five corporate auditors, and none is a Company
member, thus reinforcing auditing functions. The auditors are committed to building a fair management supervision system through legally stipulated audits.
For the internal control system, ROHM has the Internal Audit Department, which is directly supervised by the
President, in addition to the corporate auditors. The Division has three members, one of whom functions as
its head. It audits individual in-house divisions to check for operational compliance with in-house rules and
regulations, thereby ensuring that corporate governance is followed throughout the company. Concerning
the timely disclosure of corporate information, we direct all the divisions of the Company and affiliated companies to control information comprehensively, based on in-house regulations (such as insider-trading prevention control regulations and confidential information control regulations). We also distribute action guidelines to company employees and hold in-house lectures, thus educating and making employees informed,
thereby ensuring proper information control and timely and adequate information disclosure. Regarding financial reporting, we practice strict control activities to ensure fairness. More specifically, asset securities
reports and semiannual reports need to obtain written in-house approvals by the person responsible for the divisions involved in the preparation of these reports, as well as by the person senior to the one responsible for
the divisions. Furthermore, the Internal Audit Department audits the written internal approvals to ensure
their fairness.
ROHM’s auditing procedures specify that the corporate auditors attend major managerial meetings, such as
those of the Board of Directors, and that the corporate auditors and the Internal Audit Department audit the
individual divisions of the Head Office and domestic and overseas affiliates by holding meetings with those in
their managerial positions and inspecting documents and reports. ROHM thus audits its corporate operations
from every angle, ensuring that the Directors perform their duties in compliance with the laws, that the
Group’s internal control system is well prepared and working, that in-house regulations are compliant, and
that its assets are sound.
For internal audits, audits of corporate auditors, and accounting audits, the corporate auditors, the Internal
Audit Department, and the accounting auditors have reporting meetings regularly and exchange information
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ROHM CO., LTD.
and opinions proactively by continuously maintaining close cooperation and association with each other, thus
sharing the information they obtain by their respective auditing operations and enhancing auditing accuracy
and improving auditing operation effectively.
Concerning accounting audits, ROHM is under contract with auditing organization Deloitte Touche Tohmatsu,
and has its accounting audited based on the commercial laws of special applicability and on the Securities Exchange Act. ROHM has an established environment where the Deloitte organization can perform audits from
a fair, unbiased position as an independent third party.
Concerning risk control, individual corporate organizations take measures to suit the characteristics of the
risks each may confront. Committees are established to deal with certain risks that require professional
knowledge to preclude the risks or to minimize their influence.
ROHM is also proactively committed to disclose information to ensure fair and transparent management. A wide
range of information disclosure initiatives are carried out by the Company in this regard, including the holding of
information sessions for research analysts, fund managers, and other institutional investors and the disclosure of financial information on the Internet.
ROHM is also committed to carrying out its social responsibilities for sustainable development as a corporate citizen. Specifically, the Company is performing various activities, such as donations of research equipment to universities and proactive involvement in local community activities, to retain and improve good relationships with
society and the communities.
<ROHM Corporate Governance System>
General Meeting of Shareholders
Selection/Dismissal
(Executive functions)
Selection/Dismissal
(Auditing function)
Board of
Directors
Meeting
(Directors)
Board of Corporate Auditors
Meeting
(Corporate
Auditors)
Cooperation
Audit
Cooperation
Chief Executive Officer
Accounting
Auditors
Divisions
Internal
Audit
Department
Cooperation
(3) Personal relations, capital relations, business relations, and other relations of interest among the Company, the
outside board members of the Company, and the outside corporate auditors
As mentioned previously, we have no outside board members. The five outside corporate auditors have no
personal or business relationships with the Company that might influence the independency of the audits.
(4) Efforts during the past year to improve the Company’s corporate governance
As part of continuing efforts to improve corporate governance, the Company committed itself to educational
activities for the improvement of corporate morale. To be more specific, we established a Privacy Policy in
response to the enforcement of the Law concerning the Protection of Personal Information and have been actively engaged in the improvement and reinforcement of corporate organization in regards to the control of information. Concerning the laws applicable to the internal control of financial reporting, we have established
a project team to create an adequate corporate system, thus reinforcing our commitment to internal control.
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ROHM CO., LTD.
Operating Results and Financial Status
1. Operating Results
(1) Review for the Six-month Period Ended September 30, 2005
Overall review of results of operations
In the six-month period ended September 30, 2005, the world economy remained firm in general because of
continued brisk consumer spending in many countries, including the United States, though adversely influenced by some negative factors such as a crude-oil price surge and natural disasters. The Japanese economy showed signs of a modest recovery, with steady continuation of consumer spending and capital investment.
In the electronic component industry, the market of consumer appliances was partially brisk while sluggish
in some other areas. The demand for electronic components for a limited variety of digital audio-visual
equipment such as thin TVs was buoyant. The demand for conventional audio-visual equipment, such as
portable CD players, remained stagnant. Compared with the previous year, when the market was favorably influenced by demand generated by the Athens Olympic Games, the consumer appliance market as a
whole was sluggish, partially due to a general slowdown in spring. The production of personal computers—especially notebook computers—remained firm, but the market was adversely influenced by a decline
in sales prices. The mobile-phone market was favorably influenced by production increase in the global
market, by the spread of third-generation mobile phones and their advanced functions.
Regarding individual regions, thin profile TV sets and related products sold well in Japan, but the mobile
phone and personal computer markets were stagnant. In Asia, the markets generally remained firm because plasma TVs, portable music players, and similar products experienced good sales figures, but the
market for conventional audio-visual equipment, such as portable CD players, continued the slow pace. In
Europe and the Americas, the markets generally remained stagnant, adversely influenced by the sluggish
car sales of some US automobile manufacturers and by a slowdown in the demand for mobile phones.
Under these circumstances, the ROHM Group was continuously committed to streamlining manufacturing process lines and realizing more-efficient capital investment as it poured efforts into research and development for
new products. It was also committed to reinforcing sales operations and customer-support operations. Concerning manufacturing process lines, the Company pushed forward with the plan to manufacture products entirely in-house, including wafers, as it constantly expanded the 300 mm wafer process. ROHM completed a
new plant in Dalian, China, and began transferring the production of module-related products from plants in Japan to the new plant. The Group also continued to shift production from Japan to conventional overseas plants
in Thailand, the Philippines, and China. At the same time, activities were undertaken to develop various system
LSI chips for mobile phones and digital audiovisual equipment, as their markets are expected to grow further.
We also increased the product line-up and production capacity of MOS FETs*1 and other power devices*2 along
with miniaturized and thin-packaged devices. To expand sales and customer support operations, new sales
bases were built within and outside of Japan along with new design centers overseas, creating a corporate system
strengthened by technical support operations and close communication with customers.
Due to these efforts, ROHM’s consolidated results for the six-month period ended September 30, 2005, were as
follows: sales decreased 3.7%, to ¥193.033 billion, from the same period of the previous year, and ordinary income and net income were down 31.1% and 34.0%, to ¥40.461 billion and ¥24.238 billion, respectively, from
the same period a year ago.
*1
MOS FET
Metal-oxide semiconductor field-effect transistor, featuring low power dissipation.
*2
Power device
A semiconductor used to control high currents and high voltages. Power devices with higher efficiency and
less heat production are considered desirable.
Divisional review of the results of operations
<Integrated circuits>
ROHM’s sales of integrated circuits for the six-month period ended September 30, 2005, decreased 1.6%, to
¥85.467 billion, compared with the same period of the previous year.
In the market of home appliances, the sales of new products increased for application in digital audio-visual
equipment, including various LSI chips for thin panels, such as LCD TVs, and audio-related LSI chips for
portable music players provided with hard disks or flash memories. On the other hand, the sales of products for conventional audiovisual equipment, such as portable CD players, were extremely slow.
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ROHM CO., LTD.
In the mobile phone market, the sales of LCD driver LSI chips for overseas markets and various powersupply LSI chips and MSDL transceiver LSI chips*3 for Japanese third-generation mobile phones all increased.
In the area of general-purpose LSI chips, the sales of EEPROM*4, which thanks to our original double-cell (WCELL) system achieves high reliability levels, delivered continued strength.
In production operations, we continued activities to perform a greater part of front-end processing in-house.
Activities such as the production of wafers, photo-masks*5, and lead frames*6. We started mass production
in the 300 mm wafer process, while committing the Company to ultra-thin technologies, aiming to develop
the 65 nm process, which is the leading technology in the industry. For the back-end process, we reinforced overseas production operations and enriched the line-ups of miniaturized-package and thin-package
devices for mobile phones.
Regarding module products, the sales of IrDA*7 communication modules for mobile phones stayed brisk.
We made attempts to reduce costs by transferring production to China and other countries.
*3
MSDL transceiver LSI chips
Using ROHM’s original technologies, this LSI chip enables high-speed data transmission through a
decreased number of wires at the hinge of folding mobile phones at low EMI* and low power dissipation. (* EMI: electromagnetic interference, caused by electromagnetic noise emitted from electronic components)
*4
EEPROM
This is short for electrically erasable programmable read-only memory, on which data can be electrically rewritten repeatedly. Used in many electric products including personal computers, TVs,
and automobiles.
*5
Photomask
A glass plate used to transfer LSI circuit patterns onto silicon wafers.
*6
Lead frame
Frame components, such as pins, for connection between the silicon chips sealed in a package and the
board.
*7
IrDA
An Infrared Data Association communications standard commonly used in notebook computers and
mobile phones
<Discrete semiconductor devices>
ROHM’s sales of discrete semiconductor devices for the six-month period ended September 30, 2005, decreased
2.2%, to ¥74.836 billion, compared with the same period of the previous year.
For transistors and diodes, we worked to increase the sales of power devices for use in digital audiovisual
equipment, as an example. The sales of MOS FETs and power diodes remained brisk for applications mostly used in the various power supplies of mobile equipment. However, the sales of small-signal transistors and diodes were extremely severe, influenced by a price decline and sluggish demand.
Nonetheless the sales of high-power laser diodes for writing on CDs remained brisk for use in personal
computers. On the other hand, the sales of CD/DVD read laser diodes were adversely influenced by a
stagnant market.
For LEDs, the sales of blue-and-white LEDs grew mainly for use in mobile phones.
For production operations, we tried to increase the capacity of power devices, such as MOS FETs and laser
diodes, whose demands are expected to grow further. We also made cost-reduction efforts by continually
shifting production to overseas plants.
<Passive components>
ROHM’s sales of passive components for the six-month period ended September 30, 2005, decreased 2.6%, to
¥12.127 billion, compared with the same period of the previous year.
In overseas markets, competition became more intense. Under these severe market conditions, we obtained an
increased number of orders for low-resistance resistors, ultra-miniature products such as 0603 size products,
multiple combination products, and large-capacity products. Moreover, the sales of miniaturized, high-capacity
tantalum capacitors increased for use in compact portable equipment, such as mobile phones and notebook computers.
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ROHM CO., LTD.
In production operations, we continued to transfer production to overseas plants as one way of cost efficiency
while streamlining production and distribution operations.
<Displays>
ROHM’s sales of displays for the six-month period ended September 30, 2005, decreased 16.4%, to ¥20.602
billion, compared with the same period of the previous year.
The sales of image sensor heads for multifunction printers*8, and printheads for miniaturized printers, including
POS (Point-of-Sale) systems, continued brisk results.
In regard to LED displays, however, product orders for large dot-matrix-type displays decreased.
were influenced by increasingly fierce price competition.
Sales
The sales of LCD modules were severe because of sales adjustments in the mobile-phone market in some parts
of Asia, including China. Sales of camera modules slowed, resulting from an influence by rapid price declines.
For production operations, we continued attempts to reduce costs in production operations by transferring production to the new plant in Dalian, China.
*8
Multifunction printer
A printer capable of performing multiple functions besides printing, such as copying, faxing, and scanning
Distribution of profits for the six-month period ended September 30, 2005
Concerning the distribution of profits for the six-month period ended September 30, 2005, in consideration of the
business performance during the six-month period and of future capital needs ROHM will pay a dividend of
45.00 Japanese yen per share as planned at the beginning of the period,.
At the annual meeting of shareholders held on June 29, 2005, a proposal passed to allow ROHM to purchase its
common stock of up to 1.5 million common shares or a maximum of ¥15 billion in appraisal value as treasury
stock, during the period between the end of the meeting and the end of the next meeting, based on the provisions
of Article 210 of the Commercial Law.
(2) Forecast for the Fiscal Year Ending March 31, 2006
Overall Business Result Outlook for Fiscal 2006
Currently the world economy is at a solid state; however, we cannot be optimistic about the future: the price of
crude oil is soaring, the European economy shows no strong signs of recovery, the Chinese economy has slowed
down, and consumer spending in the U.S. is expected to be influenced by damages from heavy hurricanes that hit
the country. In the electronic component industry, expectations are high for a substantial expansion of the market of digital audiovisual equipment, including thin TVs. Concerns are that price competition will continue to be
intense and that the market may enter an adjustment period after autumn when the demand for products during the
year-end shopping season has settled down.
Under these circumstances, ROHM intends to continue developing high-value-added products, including highperformance system LSI chips and other miniaturized, high-reliability power discrete products. We continue
to target the information and communications equipment market in applications such as mobile phones; the
digital audiovisual equipment market, including plasma TVs; and the automobile-related market that is expected to adopt more electronic content. We will also continue our commitment to improving quality and reliability and to reinforcing sales and technical support operations, such as customer support services in Japan
and elsewhere, while streamlining corporate operations across the board and making cost-reduction efforts.
At the same time ROHM will expand its participation in environmental conservation, conducting environmentfriendly business activities.
Consolidated forecast for the fiscal year 2006 is as follows:
Net sales: 382,000 million yen (up 3.5% over the previous year)
Ordinary income: 72,000 million yen (down 9.2% from the previous year)
Net income: 44,000 million yen (down 2.5% from the previous year)
The consolidated divisional sales forecast is given below.
-9-
ROHM CO., LTD.
Integrated circuits
Discrete semiconductor devices
Passive components
Displays
169,600 million yen
147,100 million yen
24,400 million yen
40,700 million yen
(6.7% up from previous year)
(3.8% up from previous year)
(3.5% up from previous year)
(8.6% down from previous year)
The actual period-end exchange rate of ¥109.40 to US$1 is used for the first half year, and the predicted
rate of ¥110.00 to US$1 for the second half.
Distribution of profits for fiscal 2006
The Company plans to pay dividends of ¥90.00 per share for the fiscal year 2006, in consideration of the business performance during fiscal 2006, ending March 31, 2006, expected demand for funds, and other factors.
2. Analysis of Financial Status and Operating Results
For the six-month period ended September 30, 2005, the total assets amounted to ¥892.459 billion, up ¥25.137
billion over the fiscal year ended on March 31, 2005, because of increases in trade notes and accounts receivable, by ¥10.285 billion; in inventory, by ¥5.841 billion; and in tangible fixed assets, by ¥8.086 billion.
The trade notes and accounts receivable increased over the previous six-month period ended on March 31,
2005, because compared with the previous six-month period, sales in this period were relatively steady. Tangible fixed assets increased because ROHM vigorously invested in facilities related to 300 mm wafer processing and in overseas manufacturing subsidiaries.
Liabilities amounted to ¥135.661 billion, up ¥8.009 billion over the end of the fiscal year on March 31, 2005.
Although accounts payable decreased ¥6.751 billion, this rise in liabilities developed because of offsetting increases: deferred tax liability (fixed), ¥8.114 billion; notes and accounts payable, ¥3.791 billion; and other current liabilities such as accrued expenses, ¥2.034 billion.
The deferred tax liability (fixed) increased as a result of growth in the accumulated earnings of overseas subsidiaries. The notes and accounts payable increased because of an accrual in the procurement of materials,
and the increase in other current liabilities is attributed mainly to the growth of personnel costs and patentrelated costs. The accounts payable decreased because the amounts payable related to facilities were reduced
by way of a large repayment. These facilities had temporarily expanded at fiscal year end.
The shareholders’ equity in this six-month period increased to ¥756.465 billion, up ¥17.136 billion over the
end of the fiscal year ended March 31, 2005. The major increase factors: retained earnings increased ¥19.221
billion and the foreign currency translation adjustment account amounted to an increase of ¥6.837 billion. A
decrease factor was a ¥10.107 billion increase in treasury stock.
These changes resulted in a decrease of the ratio of shareholders’ equity to 84.8%, down from 85.2%, as of the
end of the 2005 fiscal year.
The status of cash flow for the six-month period ended September 30, 2005, is as follows:
The cash flow provided by operating activities decreased ¥12.729 billion from the same six-month period of
the previous year, primarily because the interim income before income taxes and minority interests decreased
¥21.131 billion and the cash inflow provided by notes and accounts receivable increased by ¥8.572 billion.
The cash flow provided by investment activities increased ¥7.011 billion over the same six-month period of the
previous year, chiefly because of an increase of ¥22.350 billion mainly resulting from the acquisition and sales
of securities and investment securities, a decrease of ¥12.384 billion because of changes in the amounts of increase and/or decrease of time deposits, and a decrease of ¥2.666 billion because of an increase in expenses resulting from the acquisition of tangible fixed assets.
The cash flow provided by financing activities decreased ¥10 billion from the same six-month period of the previous year, mainly because of a ¥10.082 billion increase of expenses resulting from the acquisition of treasury
stock.
3. Risks Concerning the Company’s Businesses
The following are the risks that may have a great impact on the Company’s financial status and operating results:
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ROHM CO., LTD.
(1) Risks Associated with Market Changes
The semiconductor industry and the electronic component industry are subject to rapid, abrupt changes in
market conditions as end product manufacturers may adjust production according to the sales conditions
of electronic products, price competition, and technology development with rival companies. Pricing is
especially susceptible to a sudden drop because of such factors as the supply-demand relationship and price competition with emerging Southeast Asian manufacturers. These may work as instability factors in
maintaining or increasing sales and ensuring profits.
(2) Exchange Risks
ROHM has development bases, manufacturing bases, and sales bases around the world. The values in
the financial statements prepared in local currencies are converted into Japanese yen to prepare the consolidated financial statement. Therefore even if a value in a local currency remains the same, the profits
and losses on the consolidated financial statement may be different because of the exchange rates at the
time of translation.
The ROHM Group manufactures products in Japan and other Asian countries and sells them in Japan,
other Asian countries, the Americas, and Europe. Because different currencies are used between production bases and sales offices, our business performance is continuously influenced by exchange-rate
fluctuations. Generally a strong Japanese yen adversely influences our business performance, but a
weak yen works favorably on it.
(3) Risks of Product Defects
The Company persistently places top priority on quality, as stated in the Company Mission, and production is constantly under severe quality control. However, this does not guarantee that we never produce
defective products or that we will never be liable to pay for product losses by a buyer. Therefore if a
buyer makes a claim for losses due to ROHM products, business performance may be adversely influenced.
(4) Legal Risks
To manufacture products distinguished from the products of other companies, we regularly develop new
technologies and know-how and produce and sell products worldwide based on these original technologies. We have a specialized division that strictly supervises in-house activities to ensure that the technologies and expertise the Group uses do not infringe on the intellectual property rights of other companies, such as patent rights. Further, in every field we do business in, we comply with all relevant laws
and regulations concerning gas emissions, drainage, the utilization and handling of hazardous materials,
waste treatment, the investigation of soil and underground water pollution, environmental conservation,
health protection, and security. However, we may shoulder legal responsibilities because of different
interpretations among those concerned or unexpected events that may possibly have adverse effects on
our performance.
(5) Natural Disasters and Geopolitical Risks
ROHM Group conducts development and manufacturing activities not only in Japan, but also in various
locations around the world. Although we have production lines at different bases as a measure against
the risks of natural disasters and geopolitical risks, we may suffer damage at our bases if a natural disaster such as an earthquake, typhoon, or flood occurs, or if incidents out of political uncertainties or international conflicts take place. If these events prevent us from supplying products, our business performance may be adversely affected.
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ROHM CO., LTD.
Consolidated Interim Balance Sheets
Period
First six months of fiscal 2006
First six months of fiscal 2005
Fiscal 2005
(As of September 30, 2005)
(As of September 30, 2004)
(As of March 31, 2005)
Accounts
Amount
Millions of yen
Ratio
Amount
%
Millions of yen
Ratio
Amount
%
Millions of yen
Increase/decrease
(-) from the year
ended
March 31, 2005
Ratio
Amount
%
Millions of yen
(Assets)
Current assets
Cash and time deposits
295,711
315,098
270,337
25,374
Notes and accounts
recievable - trade
103,363
111,259
93,078
10,285
Securities
30,729
46,625
58,175
Inventories
73,878
66,635
68,037
Prepaid pension cost
Deferred tax assets
Refundable income taxes
Other
Allowance for doubtful notes
and accounts
-
Total current assets
-
27,446
5,841
3,775
4,047
3,676
99
12,710
14,211
12,138
572
983
339
1,645
7,289
9,320
6,494
760
527,682
59.1
536
567,001
62.7
-
795
-
594
512,990
662
59.1
166
14,692
Fixed assets
Property, plant and equipment
Buildings and structures
164,102
153,288
156,327
7,775
Machinery, equipment and
vehicles
383,917
349,852
364,086
19,831
1,541
Tools and furniture
32,932
29,251
31,391
Land
64,616
54,351
64,582
Construction in progress
28,309
26,792
33,181
Accumulated depreciation
-
Total tangible fixed assets
Intangible fixed assets
411,835
-
380,098
-
34
395,610
262,044
29.4
233,437
25.8
253,958
29.3
1,717
0.2
2,253
0.3
1,803
0.2
-
4,872
-
16,225
8,086
-
86
Investments and other assets
Investment securities
91,096
92,922
Deferred tax assets
8,194
Other
1,995
Allowance for doubtful
accounts
Total investments and
other assets
-
270
101,015
-
11.3
89,781
1,315
6,614
7,253
941
1,802
1,785
210
335
101,004
-
11.2
250
98,570
-
11.4
20
2,445
Total fixed assets
364,777
40.9
336,695
37.3
354,332
40.9
10,445
Total assets
892,459
100.0
903,696
100.0
867,322
100.0
25,137
- 12 -
ROHM CO., LTD.
Period
First six months of fiscal 2006
First six months of fiscal 2005
Fiscal 2005
(As of September 30, 2005)
(As of September 30, 2004)
(As of March 31, 2005)
Amount
Accounts
Ratio
Millions of yen
Amount
%
Ratio
Millions of yen
Amount
%
Increase/decrease
(-) from the year
ended
March 31, 2005
Ratio
Millions of yen
Amount
%
Millions of yen
(Liabilities)
Current liabilities
Notes and accounts
payable - trade
25,944
26,416
22,153
Other accounts payable
35,509
40,882
42,260
Accrued income taxes
9,450
20,905
8,873
Deferred tax liabilities
468
234
477
Other
14,233
Total current liabilities
85,607
12,498
9.6
3,791
-
577
-
12,199
100,936
11.2
6,751
9
2,034
85,964
10.0
-
357
Long-term liabilities
Deferred tax liabilities
47,010
36,000
38,896
8,114
Liability for retirement benefits
1,002
7,423
805
197
Allowance for directors'
retirement benefits
2,006
1,925
1,986
20
Other
35
Total long-term liabilities
Total liabilities
-
-
35
50,054
5.6
45,349
5.0
41,688
4.8
8,366
135,661
15.2
146,286
16.2
127,652
14.8
8,009
331
0.0
320
0.0
340
0.0
(Minority interests)
Minority interests
-
9
(Shareholders' equity)
Common stock
86,969
9.7
86,969
9.6
86,969
10.0
-
Capital surplus
102,403
11.5
102,403
11.3
102,403
11.8
-
Retained earnings
620,910
69.6
598,338
66.2
601,689
69.4
19,221
3,755
0.4
3,078
0.4
2,569
0.3
1,186
3.9
6,837
Net unrealized gain on
available for-sale securities
Foreign currency
translation adjustments
-
Treasury stock - at cost
-
27,224
-
30,348
-
3.0
-
3.4
-
33,373
-
326
-
3.7
-
0.0
-
34,061
-
20,241
-
2.4
-
10,107
Total shareholders' equity
756,465
84.8
757,090
83.8
739,329
85.2
17,136
Total liabilities, minority
interests and shareholders' equity
892,459
100.0
903,696
100.0
867,322
100.0
25,137
- 13 -
ROHM CO., LTD.
Consolidated Interim Statements of Income
Period
First six months of fiscal 2006
First six months of fiscal 2005
From April 1, 2005
From April 1, 2004
To September 30, 2005
To September 30, 2004
Accounts
Amount
Percentage
Millions of yen
Amount
%
Increase/decrease
(-) from the first six
months of fiscal
2005
Percentage
Millions of yen
Amount
%
Fiscal 2005
From April 1, 2004
To March 31, 2005
Amount
Percentage
Millions of yen
Millions of yen
%
7,378
369,023
100.0
9,503
221,132
59.9
16,882
147,891
40.1
2,768
71,836
19.5
19,649
76,054
20.6
Net sales
193,033
100.0
200,411
100.0
Cost of sales
121,445
62.9
111,942
55.9
Gross profit
71,587
37.1
88,469
44.1
Selling, general and
administrative expenses
37,221
19.3
34,453
17.1
Operating income
34,366
17.8
54,015
27.0
6,704
3.5
5,230
2.6
1,474
4,767
1.3
608
0.3
550
0.3
58
1,501
0.4
40,461
21.0
58,695
29.3
18,234
79,320
21.5
Extraordinary gains
234
0.1
5
0.0
229
21
0.0
Extraordinary losses
3,272
1.7
145
0.1
3,127
8,500
2.3
Income before income taxes
and minority interests
37,424
19.4
58,555
29.2
-
21,131
70,841
19.2
Income taxes - current
10,975
5.7
11.3
-
11,721
20,975
5.7
Income taxes - deferred
2,226
1.1
3,116
4,691
1.3
Non-operating income
Non-operating expenses
Ordinary income
Minority interests
Net income
-
16
24,238
-
22,696
-
890
-
-
-
-
-
0.4
0.0
16
0.0
-
32
40
0.0
12.6
36,733
18.3
-
12,495
45,135
12.2
- 14 -
ROHM CO., LTD.
Consolidated Interim Statements of Retained Earnings
Period First six months of fiscal 2006
Accounts
First six months of fiscal 2005
Fiscal 2005
From April 1, 2005
From April 1, 2004
From April 1, 2004
To September 30, 2005
To September 30, 2004
To March 31, 2005
Amount
Amount
Amount
Millions of yen
Millions of yen
Millions of yen
(Capital surplus)
Capital surplus at beginning of term
102,403
102,403
102,403
Capital surplus at end of term
102,403
102,403
102403
601,689
566,749
566,749
24,238
36,733
45,135
4,966
5,048
10,096
51
91
91
-
4
7
620,910
598,338
601,689
(Retained earnings)
Retained earnings at beginning of term
Increase in retained earnings
Net income
Decrease in retained earnings
Cash dividends
Bonuses to directors
Reserve for Employees' welfare fund
Retained earnings at end of term
- 15 -
ROHM CO., LTD.
Consolidated Interim Statements of Cash Flows
Period
Accounts
First six months of
fiscal 2006
First six months of
fiscal 2005
From April 1, 2005
To September 30,
2005
Amount
From April 1, 2004
To September 30,
2004
Amount
Millions of yen
I
Operating Activities
1. Income before income taxes and minority interests
2. Depreciation and amortization
3. Amortization of goodwill - net
4. Interest and dividends income
5. Foreign currency exchange losses (- gains) - net
6. Increase (- decrease) in net liability for retirement
benefits
7. Decrease (- increase) in notes and accounts
receivables - trade
8. Decrease (- increase) in inventories
9. Increase (- decrease) in notes and accounts
payables - trade
10. Other - net
Sub-total
11. Interest and dividends - received
12. Compensation for expropriation - received
13. Income taxes - refunded (- paid)
-
37,424
25,093
2,689
3,962
-
58,555
21,200
334
1,362
3,340
292
-
8,583
-
17,155
-
4,402
-
4,171
3,604
Net cash provided by operating activities
Fiscal 2005
From April 1, 2004
To March 31, 2005
Amount
Millions of yen
79
-
Increase/
Decrease (-) from the
first six months of
fiscal 2005
Amount
Millions of yen
-
Millions of yen
-
21,131
3,893
334
1,327
622
-
70,841
47,442
668
3,318
1,320
-
213
-
6,003
8,572
-
3,165
716
231
-
5,252
439
-
1,630
-
4,053
5,431
-
1,378
5,323
50,617
2,878
9,359
62,950
1,035
1,383
8,503
-
12,333
1,843
1,383
856
107,465
3,510
1,383
20,440
56,866
-
12,729
8,110
-
12,384
-
44,137
91,919
II Investing Activities
1. Decrease (- increase) in time deposits
-
4,274
2. Purchases of securities and investment securities
3. Proceeds from sales and repayments of securities
and investment securities
4. Purchases of property, plant and equipment
5. Other - net
-
18,470
Net cash used in investing activities
III Financing Activities
1. Purchases of treasury stock
2. Dividends paid
3. Other - net
Net cash used in financing activities
IV Effect of Exchange Rate Changes on Cash and
Cash Equivalents
-
26,416
32,528
14,058
18,124
8,292
-
40,452
275
-
37,786
565
-
-
36,504
-
43,515
-
10,107
4,966
1
-
25
5,048
1
-
-
15,074
-
5,074
15,909
-
56,497
31,932
2,666
290
-
78,753
19
7,011
-
87,429
-
10,082
82
0
-
19,940
10,096
1
-
10,000
-
30,037
7,450
7,013
9
15,290
-
15,281
VI Cash and Cash Equivalents at Beginning of Term
288,974
310,578
-
21,604
310,578
VII Cash and Cash Equivalents at End of Term
288,984
325,868
-
36,884
288,974
V Net Increase (- decrease) in Cash and
Cash Equivalents
437
3,944
-
21,603
(Note) Breakdown of “Cash and cash equivalents at end of term” is as follows:
Cash and time deposits
Securities
Total cash and cash equivalents
(First six months of
fiscal 2006)
288,984 million yen
-
(First six months of
fiscal 2005)
304,832 million yen
21,036
(Increase/decrease)
(Fiscal 2005)
-15,848 million yen
-21,036
267,934 million yen
21,040
288,984
325,868
-36,884
288,974
- 16 -
ROHM CO., LTD.
[Basis of Presenting Consolidated Interim Financial Statements]
1. Scope of consolidation
(1) Number of consolidated subsidiaries: 44
(2) Names of major consolidated subsidiaries
The consolidated subsidiaries are listed in the section of “Status of the ROHM GROUP.”
2. Application of equity method
(1) Number of unconsolidated subsidiaries accounted for by the equity method: 0
(2) Number of associated companies accounted for by the equity method: 2
3. Interim accounting date of consolidated subsidiaries
The interim accounting date of ROHM ELECTRONICS DALIAN CO., LTD., and six other consolidated subsidiaries is June 30, which differs from that of ROHM CO., LTD., which is on September 30.
Changes in the method of account processing
Concerning these consolidated subsidiaries, whose accounting dates are different from the date of consolidated
settlement of accounts, their financial statements created as of their own settlement dates were used to produce the
consolidated financial statements until the end of the previous fiscal year. From this six-month period, in consideration of the importance of these consolidated subsidiaries, their accounts are provisionally settled as of the interim date of consolidated settlement, and the consolidated financial statements are produced based on these provisional settlement results to produce a more appropriate consolidated financial statement.
4. Accounting standards
(1) Valuation basis and method for significant assets
(i) Securities
Marketable securities classified as available-for-sale securities are reported at fair value (based on market
prices on the interim accounting date, or the like), with unrealized gains and losses directly included in
shareholders’ equity. The cost of available-for-sale securities sold is principally determined based on the
moving average method. Non-marketable securities are stated at cost determined by the moving average
method.
(ii) Inventories
Inventories are stated principally at cost determined by the average method.
(2) Depreciation of significant tangible fixed assets
Depreciation of tangible fixed assets is computed principally by the declining-balance method, while the
straight-line method is applied to buildings (excluding building improvements) acquired by ROHM Co., Ltd. or
its domestic consolidated subsidiaries after April 1, 1998.
(3) Accounting for significant allowances
(i) The allowance for doubtful accounts is provided at an estimated amount of the past actual ratio of losses on
bad debts. Certain allowance is provided for estimated uncollectible receivables.
(ii) Liability for retirement benefits is stated at the amount calculated based on the retirement benefit obligation
and the fair value of the plan assets at the end of the current fiscal year.
(iii) For ROHM Co., Ltd. and certain domestic consolidated subsidiaries, retirement benefits to directors and
corporate auditors are provided at the amount which would be required if all directors and corporate auditors
retired at the interim accounting date based on the internal rules.
(4) Basis for conversion of significant foreign currency assets and liabilities
Monetary receivables and payables denominated in foreign currencies are translated into Japanese yen at the
current exchange rates at the interim accounting date. The foreign exchange gains and losses from conversion
are recognized in the income statement to the extent that they are not hedged by forward exchange contracts.
The balance sheet accounts of the overseas consolidated subsidiaries and the like are translated into Japanese
yen at the current exchange rates as of the interim accounting dates of such subsidiaries and the like. Revenue
and expense accounts of the overseas subsidiaries and the like are translated into Japanese yen at the average
interim annual exchange rates. Differences arising from such translation are included in “Minority Interests,”
as well as “Foreign currency translation adjustments” in a separate component of shareholders’ equity.
(5) Significant lease transactions
Finance lease transactions, other than those that are deemed to transfer ownership of the leased property to the
lessee, are accounted for as operating lease transactions.
(6) Significant hedge accounting
Foreign exchange forward contracts are used for hedge accounting.
(7) Others
Consumption tax
All transactions are recorded net of consumption taxes.
5. Cash and cash equivalents in consolidated interim statements of cash flows
Cash and cash equivalents consist of cash on hand, cash in banks that can be withdrawn at any time, and shortterm investments with a maturity of three months or less when purchased, which can easily be converted to cash
and are subject to little risk of change in value.
- 17 -
ROHM CO., LTD.
[Notes]
(Notes to Consolidated Interim Statements of Income)
Six-month period
ended Sept. 30, 2005
1. Non-operating income
Interest income
Foreign currency exchange gains
2,659 million yen
3,405
2. Extraordinary loss
Loss on sale/disposal of fixed assets
Loss related to early retirement program
Six-month period
ended Sept. 30, 2004
1,336 million yen
3,237
Year ended
Mar. 31, 2005
3,275 million yen
332
2,622
145
565
650
-
7,934
[Segment information]
1. Industry segments
The Group’s main operations are the manufacturing and sales of electronic components. As net sales and operating income of the Group’s main industry segment constituted more than 90% of the consolidated totals for the
six-month periods ended September 30, 2004 and 2005 and the year ended March 31, 2005, consequently the disclosure of industry segment information has been omitted.
2. Geographical segments
First six months of fiscal 2006 (From April 1, 2005 to September 30, 2005)
Sales
(1) Sales to customers
(2) Interarea transfer
Total sales
Operating expenses
Operating income (losses)
Japan
Asia
Americas
77,280
27,999
105,280
96,826
8,453
99,672
75,238
174,911
145,412
29,498
-
6,832
126
6,958
7,863
904
Europe
-
9,248
167
9,416
9,562
146
Total
193,033
103,532
296,565
259,664
36,901
First six months of fiscal 2005 (From April 1, 2004 to September 30, 2004)
Sales
(1) Sales to customers
(2) Interarea transfer
Total sales
Operating expenses
Operating income (losses)
Japan
Asia
Americas
86,452
30,627
117,080
92,270
24,809
95,700
58,093
153,794
123,752
30,042
-
7,515
111
7,626
8,004
378
Europe
10,743
252
10,995
10,683
312
Total
200,411
89,085
289,496
234,711
54,784
Fiscal 2005 (From April 1, 2004 to March 31, 2005)
Japan
Asia
Americas
Europe
Total
(Millions of yen)
EliminaConsolitions/
dated
Corporate
−
(103,532)
(103,532)
(100,997)
( 2,534)
193,033
−
193,033
158,667
34,366
(Millions of yen)
EliminaConsolitions/
dated
Corporate
−
( 89,085)
( 89,085)
( 88,316)
(
769)
200,411
−
200,411
146,395
54,015
(Millions of yen)
EliminaConsolitions/
dated
Corporate
Sales
(1) Sales to customers
162,816
172,729
13,111
20,366
369,023
369,023
−
(2) Interarea transfer
58,288
115,210
219
874
174,592 (174,592)
−
Total sales
221,104
287,939
13,331
21,240
543,615 (174,592)
369,023
Operating expenses
188,002
243,004
14,343
21,164
466,515 (173,545)
292,969
Operating income (losses)
33,102
44,935 - 1,012
75
77,100 ( 1,046)
76,054
(Notes) 1. Countries and areas are segmented based on their geographical proximity.
2. Major countries and areas which belong to segments other than Japan are as follows:
Asia
: Hong Kong, Singapore, Taiwan
Americas : The United States
Europe : Germany
3. Unallocable operating expenses included in “Eliminations/Corporate” are shown below. Unallocable operating expenses consist primarily of expenses relating to the administrative division of the headquarters of the Company.
First six months of fiscal 2006
3,175
million yen
First six months of fiscal 2005
2,142
Fiscal 2005
3,766
- 18 -
ROHM CO., LTD.
3. Sales to foreign customers
First six months of fiscal 2006 (From April 1, 2005 to September 30, 2005)
Asia
Americas
I
Sales to foreign customers
100,056
(Millions of yen)
Total
Europe
7,739
8,133
115,929
II Net sales
193,033
III Sales to foreign customers as a
percentage of net sales
51.9 %
4.0 %
4.2 %
First six months of fiscal 2005 (From April 1, 2004 to September 30, 2004)
Asia
Americas
I
Sales to foreign customers
96,603
60.1 %
(Millions of yen)
Total
Europe
7,905
10,130
114,639
II Net sales
200,411
III Sales to foreign customers as a
percentage of net sales
48.2 %
3.9 %
Fiscal 2005 (From April 1, 2004 to March 31, 2005)
Asia
I
Sales to foreign customers
174,159
5.1 %
57.2 %
Americas
Europe
(Millions of yen)
Total
13,990
19,021
207,171
II Net sales
369,023
III Sales to foreign customers as a
47.2 %
3.8 %
5.1 %
56.1 %
percentage of net sales
(Notes) 1. Countries and areas are segmented based on their geographical proximity.
2. Major countries and areas which belong to segments other than Japan are as follows:
Asia
: Hong Kong, Singapore, Taiwan
Americas : The United States
Europe : Germany
3. Sales to foreign customers consist of export sales of the Company and its domestic consolidated subsidiaries and sales
(other than exports to Japan) of the overseas consolidated subsidiaries.
[Leases]
Finance leases that do not transfer ownership of the leased property to the lessee
1. Pro forma information of the acquisition cost, accumulated depreciation and net book value of the leased property
Acquisition cost
Accumulated depreciation
Net leased property
Six-month period
ended Sept. 30,
2005
Tools, furniture
and other
47 million yen
20
27
Six-month period
ended Sept. 30,
2004
Tools, furniture
and other
153 million yen
137
16
Year ended Mar.
31, 2005
Tools, furniture and
other
52 million yen
25
27
2. Pro forma obligations under finance leases
Due within 1 year
Due after 1 year
Total
15
12
27
10
5
16
14
13
27
10
10
19
19
3. Lease payments and depreciation of the leased property
Lease payments
Depreciation
9
9
4. Depreciation of leased property is calculated by the straight-line method over the respective lease terms regarded
as being the useful life, with the residual value of zero.
5. Acquisition cost and the pro forma obligations under finance leases presented above are calculated prior to the deduction of portions attributable to interest expense, as the term-end balance of the obligations accounts for only a
small percentage of the term-end tangible fixed assets.
[Debt and equity securities]
First six months of fiscal 2006 (as of September 30, 2005)
- 19 -
ROHM CO., LTD.
1. Marketable available-for-sale securities
(Millions of yen)
Classification
Acquisition cost
(1) Equity securities
(2) Government and corporate
bonds
Total
7,912
Amount on consolidated interim
balance sheet
14,599
106,153
105,749
114,065
120,348
Difference
6,686
-
404
6,282
2. Major securities whose fair value is not readily determinable
Available-for-sale securities
Unlisted equity securities
Unlisted foreign securities
Total
1,064 million yen
408
1,472
First six months of fiscal 2005 (as of September 30, 2004)
1.Marketable available-for-sale securities
(Millions of yen)
Classification
Acquisition cost
(1) Equity securities
(2) Government and corporate
bonds
(3) Other
8,311
Total
Amount on consolidated interim
balance sheet
13,520
Difference
5,209
103,560
104,187
627
21,005
21,053
48
132,877
138,762
5,884
2. Major securities whose fair value is not readily determinable
Available-for-sale securities
Unlisted equity securities (Excluding over-thecounter securities)
775 million yen
Fiscal 2005 (as of March 31, 2005)
1.Marketable available-for-sale securities
(Millions of yen)
Classification
(1) Equity securities
(2) Government and corporate
bonds
(3) Other
Total
Acquisition cost
7,910
113,191
Amount on consolidated interim
balance sheet
12,459
113,028
Difference
4,548
-
163
21,005
21,040
34
142,108
146,528
4,420
2. Major securities whose fair value is not readily determinable
Available-for-sale securities
Unlisted equity securities
Unlisted foreign securities
Total
1,006 million yen
416
1,422
- 20 -
ROHM CO., LTD.
[Derivatives]
First six months of fiscal 2006 (From April 1, 2005 to September 30, 2005)
Currency derivatives
Not disclosed because hedge accounting is adopted.
First six months of fiscal 2005 (From April 1, 2004 to September 30, 2004)
Currency derivatives
Not disclosed because hedge accounting is adopted.
Fiscal 2005 (From April 1, 2004 to March 31, 2005)
Currency derivatives
Not disclosed because hedge accounting is adopted.
Production, Orders Received and Sales
(1)Actual production
(Millions of yen)
Electronic Components
Product
category
Integrated
circuits
Period First six months of fiscal First six months of fiscal
Increase/Decrease (-)
2006
2005
from
the first six months
From April 1, 2005
From April 1, 2004
of
fiscal 2005
To September 30, 2005
To September 30, 2004
Fiscal 2005
From April 1, 2004
To March 31, 2005
83,194
85,287
-
2,093
158,675
Discrete
semiconductor
devices
74,434
79,885
-
5,451
145,218
Passive
components
12,405
12,435
-
30
23,365
Displays
23,082
25,471
-
2,389
43,811
Electronic
Components
Total
193,115
203,079
- 9,964
371,070
(Notes) 1. The amounts above are calculated based on the average sales prices for each accounting period and are exclusive of
consumption tax and the like.
2. Major products included in each category are as follows:
Product category
Major products
Integrated circuits
Monolithic ICs, Power Modules, Photo Link Modules
Discrete semiconductor devices
Transistors, Diodes, Light Emitting Diodes, Laser Diodes
Passive components
Resistors, Capacitors
Liquid Crystal Displays, Thermal Heads, Image Sensor Heads, LED Displays,
Camera Modules, Others
Displays
(2)Orders
(Millions of yen)
Electronic Components
Period First six months of fiscal First six months of fiscal
Increase/Decrease (-)
2006
2005
from the first six months
From April 1, 2005
From April 1, 2004
of fiscal 2005
To September 30, 2005
To September 30, 2004
Product
Order
Orders
Order
Orders
Order
Orders
category
received
backlog
received
backlog
received
backlog
Integrated
87,281
24,446
82,328
20,506
4,953
3,940
circuits
Discrete
semiconductor
76,895
22,111
74,814
19,295
2,081
2,816
devices
Fiscal 2005
From April 1, 2004
To March 31, 2005
Orders
Order
received
backlog
156,647
22,631
140,853
20,053
Passive
components
12,799
3,665
12,009
3,080
790
585
23,087
2,993
Displays
20,765
8,270
24,043
7,473
- 3,278
797
44,648
8,106
197,742
58,493
193,196
50,355
4,546
8,138
365,236
53,784
Total
- 21 -
ROHM CO., LTD.
(3)Actual sales
Electronic Components
Actual sales by product category (domestic)
Period First six months of fiscal First six months of fiscal
Increase/Decrease (-)
2006
2005
from the first six months
From April 1, 2005
From April 1, 2004
of fiscal 2005
To September 30, 2005
To September 30, 2004
Increase/
Domestic
Domestic
Product
Sales
Decrease
Sales
Sales
ratio
ratio
category
ratio
From April 1, 2004
To March 31, 2005
Sales
Domestic
ratio
40,697
47.6%
42,431
48.9%
- 1,734
- 4.1%
81,750
51.4%
Discrete
semiconductor
devices
26,029
34.8
28,118
36.8
- 2,089
- 7.4
53,345
37.6
Passive
components
3,715
30.6
4,367
35.1
-
652
- 14.9
8,446
35.8
Displays
6,661
32.3
10,854
44.1
- 4,193
- 38.6
18,308
41.0
77,104
39.9
85,772
42.8
8,668
- 10.1
161,852
43.9
Actual sales by product category (overseas)
Period First six months of fiscal First six months of fiscal
Increase/Decrease (-)
2006
2005
from the first six months
From April 1, 2005
From April 1, 2004
of fiscal 2005
To September 30, 2005
To September 30, 2004
Product
category
Integrated
circuits
Electronic Components
Fiscal 2005
Integrated
circuits
Total
Sales
Overseas
ratio
Overseas
ratio
Sales
Sales
Increase/
Decrease
ratio
(Millions of yen)
Fiscal 2005
From April 1, 2004
To March 31, 2005
Sales
Overseas
ratio
44,769
52.4%
44,397
51.1%
372
0.8%
77,271
48.6%
48,807
65.2
48,388
63.2
419
0.9
88,441
62.4
8,412
69.4
8,078
64.9
334
4.1
15,163
64.2
Displays
13,940
67.7
13,775
55.9
165
1.2
26,294
59.0
Total
115,929
60.1
114,639
57.2
1,290
1.1
207,171
56.1
Discrete
semiconductor
devices
Passive
components
Actual sales by product category (total)
(Millions of yen)
Period First six months of fiscal First six months of fiscal
Increase/Decrease (-)
2006
2005
from the first six months
From April 1, 2005
From April 1, 2004
of fiscal 2005
To September 30, 2005
To September 30, 2004
Product
category
Integrated
circuits
Discrete
semiconductor
devices
Electronic Components
(Millions of yen)
Passive
components
Sales
Sales as a
percentage of net
sales
Sales as a
percentage of net
sales
Sales
Sales
Increase/
Decrease
ratio
Fiscal 2005
From April 1, 2004
To March 31, 2005
Sales
Sales as a
percentage of net
sales
85,467
44.3%
86,828
43.3%
- 1,361
- 1.6%
159,022
43.1%
74,836
38.7
76,506
38.2
- 1,670
- 2.2
141,787
38.4
12,127
6.3
12,445
6.2
-
- 2.6
23,610
6.4
318
Displays
20,602
10.7
24,630
12.3
- 4,028
- 16.4
44,603
12.1
Total
193,033
100.0
200,411
100.0
- 7,378
- 3.7
369,023
100.0
- 22 -
Summarized Non-consolidated Interim Financial Statements
for Fiscal Year Ending March 31, 2006
November 9, 2005
Listed Company Name
ROHM CO., LTD.
Stock Exchange Listings Tokyo, Osaka
Code No.: 6963
(URL http://www.rohm.co.jp)
Company representative Title: President
Name: Ken Sato
Contact person
Title: Group General Manager
Name: Eiichi Sasayama
Head Office Location
Kyoto Prefecture
TEL (075) 311 - 2121
Date of Board of Directors meeting for approval of financial statements: November 9, 2005
Date of commencement of interim dividend payment: December 2, 2005
Existence of interim dividend system: Yes
Adoption of trading unit system: Yes (1 unit: 100 shares)
1. Business Results for the Six-month Period Ended September 30, 2005 (From April 1, 2005 to September 30, 2005)
(1) Results of Operations
(Figures are rounded down to the nearest million yen)
Net sales
Millions of yen
Six months ended
September 30, 2005
Six months ended
September 30, 2004
Year ended March 31, 2005
Operating income
%
Millions of yen
%
-4.0
10,355
-53.0
21,576
-57.6
186,105
13.2
22,031
15.1
50,842
97.4
342,450
23,050
Net income
Six months ended
September 30, 2004
Year ended March 31, 2005
Ordinary income
%
178,590
Millions of yen
Six months ended
September 30, 2005
Millions of yen
51,257
Basic net income per share
%
yen
15,861
-58.5
136.71
38,194
98.1
321.56
39,872
336.25
(Notes) (i) Average number of shares outstanding Six months ended Sept. 30, 2005: 116,024,848 shares
Six months ended Sept. 30, 2004: 118,780,714 shares Year ended Mar. 31, 2005: 118,561,981 shares
(ii) Change in accounting policies: None
(iii) Percentage (%) shown for Net sales, Operating income, Ordinary income and Net income represents change from the data of the
corresponding period of the previous year.
(2) Dividend Information
Interim dividends per share
yen
Six months ended
September 30, 2005
Six months ended
September 30, 2004
Year ended March 31, 2005
Annual dividends per share
yen
45.00
-
42.50
-
-
85.00
(3) Financial Position
Total assets
Millions of yen
Six months ended
September 30, 2005
613,092
Shareholders' equity
Millions of yen
Shareholders'
equity ratio
%
509,441
83.1
Six months ended
655,125
531,075
81.1
September 30, 2004
Year ended March 31, 2005
610,135
507,455
83.2
(Notes) (i) Number of shares outstanding at end of term Six months ended Sept. 30, 2005: 115,886,475 shares
Six months ended Sept. 30, 2004: 118,779,579 shares Year ended Mar. 31, 2005: 116,850,835 shares
(ii) Number of treasury stock at end of term Six months ended Sept. 30, 2005: 2,914,913 shares
Six months ended Sept. 30, 2004: 21,809 shares Year ended Mar. 31, 2005: 1,950,553 shares
Shareholders'
equity per share
yen
4,396.04
4,471.10
4,342.71
2. Business Results Forecast for Fiscal 2006 (From April 1, 2005 to March 31, 2006)
Net sales
Millions of yen
Fiscal 2006
359,000
Ordinary income
Millions of yen
33,000
Annual dividends per share
End of fiscal year
Millions of yen
yen
yen
Net income
24,000
45.00
(Note) Projected net income per share for the year ending March 31, 2006: 206.97 yen
* The forecast data are based on the information available at the time of release of this report. Therefore, a number of important factors including
changes in business conditions may cause actual results to differ materially from those discussed in the prospective statements.
Refer to pages 9 to 10 of the attached documents for reasons for the forecast and other relevant information.
- 23 -
90.00
ROHM CO., LTD.
Non-consolidated Interim Balance Sheets
Period
First six months of fiscal 2006
First six months of fiscal 2005
Fiscal 2005
(As of September 30, 2005)
(As of September 30, 2004)
(As of March 31, 2005)
Accounts
Amount
Millions of yen
Ratio
Amount
%
Millions of yen
Ratio
Amount
%
Millions of yen
Increase/decrease
(-) from the year
ended
March 31, 2005
Ratio
Amount
%
Millions of yen
(Assets)
Current assets
Cash and time deposits
122,415
Notes receivable - trade
157,693
106,396
16,019
1,440
2,456
2,031
Accounts receivable - trade
97,694
99,614
85,741
Securities
25,788
44,727
53,052
-
27,264
Inventories
20,489
24,453
22,455
-
1,966
406
252
312
Prepaid pension cost
-
591
11,953
94
Deferred tax assets
8,417
9,358
7,725
Sundry receivables
31,737
37,641
40,361
-
8,624
Other
19,213
18,035
19,244
-
31
29
-
27
-
9,744
Allowance for doubtful
notes and accounts
-
Total current assets
56
327,547
53.4
71
394,163
60.2
337,291
692
55.3
Fixed assets
Property, plant and equipment
Buildings
Machinery and equipment
21,171
21,211
21,592
-
421
7,624
9,001
8,785
-
1,161
Land
44,831
34,995
44,528
303
Other
12,344
12,835
9,273
3,071
Total tangible fixed assets
Intangible fixed assets
85,971
14.0
78,043
11.9
84,180
13.8
805
0.2
983
0.1
893
0.1
1,791
-
88
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Other
Allowance for doubtful
accounts
Total investments and
other assets
-
135,051
136,367
138,325
58,692
38,913
43,718
4,234
6,138
5,238
925
789
746
179
257
121
136
198,768
-
32.4
274
181,934
-
27.8
187,771
-
3,274
14,974
-
1,004
30.8
10,997
Total fixed assets
285,545
46.6
260,962
39.8
272,844
44.7
12,701
Total assets
613,092
100.0
655,125
100.0
610,135
100.0
2,957
- 24 -
ROHM CO., LTD.
Period
First six months of fiscal 2006
First six months of fiscal 2005
Fiscal 2005
(As of September 30, 2005)
(As of September 30, 2004)
(As of March 31, 2005)
Accounts
Amount
Ratio
Millions of yen
Amount
%
Ratio
Millions of yen
Amount
%
Increase/decrease
(-) from the year
ended
March 31, 2005
Ratio
Millions of yen
Amount
%
Millions of yen
(Liabilities)
Current liabilities
Accounts payable - trade
68,901
73,915
63,317
Other accounts payable
22,088
26,972
26,439
-
4,351
Accrued income taxes
3,964
12,517
5,013
-
1,049
Other
7,176
5,725
6,426
Total current liabilities
102,129
16.7
119,131
18.2
5,584
750
101,196
16.6
933
Long-term liabilities
Liability for retirement benefits
Allowance for directors'
retirement benefits
Other
-
3,472
-
-
1,497
1,446
1,483
14
23
Total long-term liabilities
Total liabilities
-
-
23
1,521
0.2
4,918
0.7
1,483
0.2
38
103,651
16.9
124,049
18.9
102,680
16.8
971
86,969
14.2
86,969
13.3
86,969
14.3
-
(Shareholders' equity)
Common stock
Capital surplus
Capital surplus
97,253
Total capital surplus
97,253
97,253
15.9
97,253
97,253
14.8
-
97,253
15.9
-
Retained earnings
Legal reserve
General reserve
Unappropriated retained
earnings
Total retained earnings
Net unrealized gain on
available-for-sale securities
Treasury stock - at cost
-
2,464
2,464
2,464
-
323,227
283,121
283,121
40,106
25,896
58,483
55,112
-
29,216
351,588
57.3
344,069
52.5
340,698
55.8
10,890
3,978
0.6
3,109
0.5
2,775
0.5
1,203
30,348
-
4.9
-
326
-
0.0
-
20,241
-
3.3
-
10,107
Total shareholders’ equity
509,441
83.1
531,075
81.1
507,455
83.2
1,986
Total liabilities and
shareholders' equity
613,092
100.0
655,125
100.0
610,135
100.0
2,957
- 25 -
ROHM CO., LTD.
Non-consolidated Interim Statements of Income
Period
Accounts
First six months of fiscal 2006
First six months of fiscal 2005
From April 1, 2005
From April 1, 2004
To September 30, 2005
To September 30, 2004
Amount
Amount
Percentage
Millions of yen
%
Increase/decrease
(-) from the first six
months of fiscal
2005
Percentage
Millions of yen
%
Net sales
178,590
100.0
186,105
100.0
Cost of sales
139,150
77.9
137,963
74.1
Gross profit
39,439
22.1
48,142
25.9
29,083
16.3
26,111
14.1
10,355
5.8
22,031
11.8
11,641
6.5
29,225
15.7
419
0.2
413
0.2
21,576
12.1
50,842
27.3
Extraordinary gains
209
0.1
427
0.2
Extraordinary losses
498
0.3
35
0.0
21,288
11.9
51,234
27.5
5,936
3.3
15,168
8.1
Selling, general and
administrative expenses
Operating income
Non-operating income
Non-operating expenses
Ordinary income
Income before income taxes
Income taxes - current
Income taxes - deferred
Net income
Unappropriated retained
earnings brought forward from
the previous year
Interim dividends
Unappropriated retained earnings
510
15,861
-
0.3
8.9
-
2,128
38,194
10,034
20,288
-
-
25,896
58,483
- 26 -
Amount
-
To March 31, 2005
Millions of yen
Percentage
%
7,515
342,450
100.0
1,187
263,875
77.1
8,703
78,575
22.9
2,972
55,524
16.2
-
11,676
23,050
6.7
-
17,584
29,409
8.6
6
1,202
0.3
-
29,266
51,257
15.0
-
218
743
0.2
463
278
0.1
-
29,946
51,723
15.1
-
9,232
11,218
3.3
1,618
632
0.2
-
22,333
39,872
11.6
-
10,254
20,288
-
5,048
32,587
55,112
-
1.1
20.5
From April 1, 2004
Amount
Millions of yen
-
Fiscal 2005
-
ROHM CO., LTD.
[Basis of Presenting Interim Financial Statements]
1. Valuation basis and method for assets
(1) Securities
Investment securities in subsidiaries and associated companies are stated at cost determined by the moving average method. Marketable securities classified as available-for-sale securities are reported at fair value (based
on market prices on the interim accounting date, or the like), with unrealized gains and losses directly included
in shareholders’ equity. The cost of available-for-sale securities sold is principally determined based on the
moving average method. Non-marketable securities are stated at cost determined by the moving average
method.
(2) Inventories
Finished products, semi-finished products, raw materials and work in process are stated at cost determined by
the average method. Supplies are stated at cost determined by the last purchase method.
2. Depreciation of fixed assets
(1) Depreciation of tangible fixed assets is computed by the declining-balance method, while the straight-line
method is applied to buildings (excluding building improvements) acquired after April 1, 1998.
(2) Depreciation of intangible fixed assets is computed by the straight-line method.
3. Accounting for allowances
(1) The allowance for doubtful accounts is provided at an estimated amount of the past actual ratio of losses on bad
debts. Certain allowance is provided for estimated uncollectible receivables.
(2) Liability for retirement benefits is stated at the amount calculated based on the retirement benefit obligation and
the fair value of the plan assets at the end of the current fiscal year.
However, because the fair value of the plan assets exceeded the projected benefit obligation as of the
end of the current term, the excess is accounted for as “Prepaid pension cost,” resulting in the balance
of “Liability for retirement benefits” being zero.
(3) Retirement benefits to directors and corporate auditors are provided at the amount that would be required if all
directors and corporate auditors retired at the interim accounting date based on the internal rules.
4. Basis for translation of foreign currency assets and liabilities
Monetary receivables and payables denominated in foreign currencies are translated into Japanese yen at the current exchange rates at the interim accounting date. The foreign exchange gains and losses from translation are
recognized in the income statement to the extent that they are not hedged by forward exchange contracts.
5. Lease transactions
Finance lease transactions, other than those that are deemed to transfer ownership of the leased property to the lessee, are accounted for as operating lease transactions.
6. Hedge accounting
Foreign exchange forward contracts are used for hedge accounting.
7. Others
Consumption tax
All transactions are recorded net of consumption taxes.
[Notes]
(Notes to non-consolidated interim balance sheets)
Accumulated depreciation of tangible fixed assets
Six-month period
ended Sept. 30, 2005
109,186 million yen
Six-month period
ended Sept. 30, 2004
105,131 million yen
Year ended
Mar. 31, 2005
106,791 million yen
(Notes to non-consolidated interim statements of income)
Six-month period
ended Sept. 30, 2005
Six-month period
ended Sept. 30, 2004
Year ended
Mar. 31, 2005
1. Non-operating income
Interest income (including interest
on securities)
Dividend income
Foreign currency exchange gains
963 million yen
6,816
2,417
- 27 -
718 million yen
1,616 million yen
23,892
23,909
3,139
1,101
ROHM CO., LTD.
Six-month period
ended Sept. 30, 2005
Six-month period
ended Sept. 30, 2004
Year ended
Mar. 31, 2005
2 Extraordinary gains
Gain on sale of fixed assets
209 million yen
427 million yen
743 million yen
3 Extraordinary losses
Losses on sale/disposal of fixed
assets
498
35
278
[Leases]
Finance leases that do not transfer ownership of the leased property to the lessee
1. Pro forma information of the acquisition cost, accumulated depreciation and net book value of the leased property
Six-month period
ended Sept. 30, 2005
Other in tangible fixed
assets
Acquisition cost
Six-month period
ended Sept. 30, 2004
Other in tangible fixed
assets
Year ended
Mar. 31, 2005
Other in tangible fixed
assets
Accumulated depreciation
44 million yen
18
33 million yen
20
48 million yen
23
Net leased property
25
13
24
Due within 1 year
Due after 1 year
13
11
9
3
12
12
Total
25
13
24
7
7
16
16
2. Pro forma obligations under finance leases
3. Lease payments and depreciation of the leased property
Lease payments
Depreciation
8
8
4. Depreciation of leased property is calculated by the straight-line method over the respective lease terms regarded
as being the useful life, with the residual value of zero.
5. Acquisition cost and the pro forma obligations under finance leases presented above are calculated prior to the deduction of portions attributable to interest expense, as the term-end balance of the obligation accounts for only a
small percentage of the term-end tangible fixed assets.
- 28 -
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