PIONEER CORPORATION
 

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934

For the month of October, 2004

Commission File Number 1-7616

PIONEER CORPORATION

(Translation of registrant’s name into English)

4-1, MEGURO 1-CHOME, MEGURO-KU, TOKYO 153-8654, JAPAN

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F:

Form 20-F  þ                    Form 40-F  o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):                               

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):                               

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  o                    No  þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-

 


 

TABLE OF CONTENTS

SIGNATURES
Pioneer Announces Second-Quarter and Semiannual Results for Fiscal 2005
CONSOLIDATED FINANCIAL STATEMENTS
NON-CONSOLIDATED FINANCIAL STATEMENTS

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

         
    PIONEER CORPORATION
(Registrant)
Date: October 28, 2004   By   /s/ Kaneo Ito

Kaneo Ito
President and Representative Director

This report on Form 6-K contains the following:

1.   The announcement released by the Company to the press in Japan dated October 28, 2004, concerning its consolidated second-quarter and semiannual business results, and non-consolidated semiannual business results, for the period ended September 30, 2004.

 


 

For Immediate Release
October 28, 2004

Pioneer Announces Second-Quarter and Semiannual Results for Fiscal 2005

TOKYO — Pioneer Corporation today announced its consolidated second-quarter and semiannual business results, and non-consolidated semiannual business results, for the period ended September 30, 2004.

Consolidated Financial Highlights

                                                 
    (In millions of yen except per share information)
    Three months   Six months
    ended September 30
  ended September 30
                    % to                   % to
                    prior                   prior
    2004
  2003
  year
  2004
  2003
  year
Operating revenue
  ¥ 181,560     ¥ 167,513       108.4 %   ¥ 345,047     ¥ 319,982       107.8 %
Operating income
    8,269       9,879       83.7       13,273       17,558       75.6  
Income from continuing operations before income taxes
    8,199       9,205       89.1       12,438       16,585       75.0  
Income from continuing operations
    3,312       4,807       68.9       4,809       7,836       61.4  
Net income
  ¥ 3,312     ¥ 9,536       34.7 %   ¥ 4,809     ¥ 12,475       38.5 %
Basic earnings per share:
                                               
Income from continuing operations
  ¥ 18.88     ¥ 27.40             ¥ 27.41     ¥ 44.67          
Income from discontinued operations, net of tax
          26.96                     26.44          
Net income
  ¥ 18.88     ¥ 54.36             ¥ 27.41     ¥ 71.11          
Diluted earnings per share:
                                               
Income from continuing operations
  ¥ 16.99     ¥ 27.39             ¥ 24.45     ¥ 44.66          
Income from discontinued operations, net of tax
          26.95                     26.43          
Net income
  ¥ 16.99     ¥ 54.34             ¥ 24.45     ¥ 71.09          


Note:   As a result of the sales of subsidiaries in the audio/video software business in fiscal 2004, the gain on such sales, as well as the operating results of the discontinued operations, are presented as a separate line item in consolidated statements of income in accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” Previously reported amounts have been reclassified accordingly.

- 1 -


 

Consolidated Business Results
The second quarter of fiscal 2005, ended September 30, 2004, resulted in consolidated operating revenue of ¥181,560 million (US$1,635.7 million), an 8.4% increase from the corresponding period in the previous year. Operating income was ¥8,269 million (US$74.5 million), a 16.3% decrease, and net income was ¥3,312 million (US$29.8 million), a 65.3% decrease. The average value of the yen was up 6.9% against the U.S. dollar and down 1.6% against the euro from the corresponding period in the previous year.

Home Electronics sales increased 6.7% to ¥71,717 million (US$646.1 million) from the corresponding period last year. In Japan, sales rose 29.6% to ¥21,809 million (US$196.5 million) primarily due to a large increase in sales of home-use plasma displays and DVD recorders, despite the decreased sales of recordable DVD drives for personal computers (PCs). Overseas sales were substantially the same as in the corresponding period last year at ¥49,908 million (US$449.6 million), reflecting a decline in sales of recordable DVD drives and audio products worldwide, as well as contraction of our digital cable TV set-top box business in North America, which offset an increase in sales of home-use plasma displays and DVD recorders worldwide.

Car Electronics sales amounted to ¥74,770 million (US$673.6 million), up 11.4% over the corresponding period in the previous year. In Japan, sales increased 14.3% to ¥29,453 million (US$265.3 million), reflecting increased car navigation system sales to automobile manufacturers, despite decreased sales of such systems to the consumer market. Overseas sales increased 9.6% to ¥45,317 million (US$408.3 million), primarily due to higher sales of car navigation systems in North America and Europe, audio products to automobile manufacturers in North America and car audio products in Asia and Central and South America.

Royalty revenue from Patent Licensing decreased 22.5% from the corresponding period in the previous year to ¥3,864 million (US$34.8 million). This was due to a decline in royalty revenue resulting from the expiration of the Company’s optical disc-related patents in certain areas.

Others sales increased 10.6% from the corresponding period in the previous year to ¥31,209 million (US$281.2 million). In Japan, sales were lower by 4.4%, at ¥13,882 million (US$125.1 million) primarily due to a decrease in sales of organic light-emitting diode (OLED) display panels and a sales shift from Japan to China of semiconductors related to laser pickups, despite the increase in sales of factory-automation (FA) systems. Overseas, sales were up 26.5% over the previous year to ¥17,327 million (US$156.1 million), primarily due to increased sales of devices for cellular phones and semiconductors related to laser pickups in China, as well as FA systems in Asia, despite decreased sales in North America and Europe of business-use plasma displays.

- 2 -


 

Operating income decreased 16.3% from the corresponding period of the previous year to ¥8,269 million (US$74.5 million). This decrease occurred despite increased net sales, and reflected decreased gross profit margin due to intensified price competition for our major products and decreased profit from patent licensing as a result of a decline in royalty revenue. Net income came to ¥3,312 million (US$29.8 million), a 65.3% decrease, due to decrease in operating income as well as absence of the ¥4,729 million income from discontinued operations recorded in the corresponding period of last year as a result of the sale of subsidiaries in the audio/video software business.

Semiannual results — Consolidated operating revenue for the six-month period ended September 30, 2004, was ¥345,047 million (US$3,108.5 million), a 7.8% increase compared with the corresponding period last year. Net income for the period decreased by 61.5% to ¥4,809 million (US$43.3 million).

Cash Flows
Net cash provided by operating activities for the second quarter ended September 30, 2004 was ¥1,645 million (US$14.8 million), a decrease of ¥15,161 million from ¥16,806 million for the corresponding period of last year. In investing activities, ¥49,278 million was used mainly for the acquisition of a plasma display production subsidiary from NEC Corporation and purchase of fixed assets.

Dividend Policy and Interim Dividend
The Company’s policy on dividends allows for continued and stable dividend payment. The Company determines the appropriate dividend amount, taking into consideration its financial condition, business results, internal reserves and other factors, all on a consolidated basis.

In line with this policy, an interim dividend of ¥12.5 (US$0.11) per share of common stock, the same amount as in the corresponding period last year, will be paid to the shareholders of record as of September 30, 2004 (Japan time).

Addressing Current Challenges
The business environment remains severe, characterized by uncertain economic conditions in our major markets, Japan, North America and Europe, price competition beyond our projections in our major product categories, and exchange rate fluctuations. In order to achieve the medium-term management plan, the Company is concentrating resources on strategic businesses as described below to recover profits and improve efficiency.

In our plasma display business, we are working to build up capacity of the production system to meet fast-growing demand, thereby increasing profitability of the business. Our recently added fourth line has expanded our production capacity to approximately 600,000 units a year. Our new plant acquired from NEC Corporation in September 2004 further increased Pioneer’s plasma display production capacity,

- 3 -


 

bringing it to a total of approximately 1,100,000 units a year.

In the DVD business, markets for DVD recorders, especially those with large-capacity hard disk drives (HDDs), and recordable DVD drives for PCs, are rapidly growing. On the other hand, price competition is getting harsher. To cope with the situation, we are advancing cost cutting, for example, by carrying out integrated production from laser pickups to finished products in China. We are also expanding sales of drive units of DVD recorders to other manufacturers.

In our car electronics business, we continue our efforts to strengthen our leadership in the consumer and OEM (original equipment manufacturing) markets. Our car navigation systems enjoy an excellent reputation in Japan, and we intend to expand this business in Europe and North America. In the car audio business, we plan to fortify our strong position with distinctive new products, and maintain earnest sales efforts in such growing markets as China and Central and South America.

Our drive to minimize operating costs and expenses worldwide continues. We are expanding production in China to reduce overall manufacturing costs; implementing an expense supervision system to lower the ratio of our selling, general and administrative expenses to consolidated operating revenue; and applying supply chain management to review and optimize inventory control worldwide, for everything from parts procurement to retailer supply, on a weekly basis. We believe that such initiatives help us return to growth in profitability and improve cash flows.

Business Forecasts for Fiscal 2005
Assuming that the yen-U.S. dollar and the yen-euro exchange rates average ¥105 and ¥130, respectively, through the end of fiscal 2005, ending March 31, 2005, we have revised our consolidated business forecasts for fiscal 2005, from those announced in July 2004, as follows:

(In millions of yen)

                         
    Revised projections   Previous projections   Results
    for fiscal 2005
  for fiscal 2005
  for fiscal 2004
Operating revenue
  ¥ 800,000     ¥ 800,000     ¥ 700,885  
Operating income
    27,000       50,000       43,719  
Income before income taxes
    25,000       48,000       41,848  
Net income
  ¥ 10,000     ¥ 25,000     ¥ 24,838  
 
   
 
     
 
     
 
 

The projection of operating revenue for fiscal 2005 stays unchanged. The acquisition of a plasma display production subsidiary from NEC Corporation in September 2004 is expected to increase operating revenue. However, reflecting intensified competition and falling prices in the markets, sales of DVD recorders and recordable DVD drives are not growing as previously projected, and in addition, the scheduled shipment to a new customer of OLED display panels is to be delayed until the next fiscal year.

- 4 -


 

The projections of operating income, income before income taxes and net income are revised downward, due to the decreased profit margins caused by the harsher competition and downward pressures on prices with the Company’s major lines of products, despite the efforts to lower costs in parts purchases and product manufacturing.

Corporate Policy
Customer satisfaction is our highest priority. In keeping with Pioneer group’s philosophy to “Move the Heart and Touch the Soul,” we strive to develop and provide advanced, high-quality, value-added electronics products that deliver satisfaction, comfort and convenience, and create new forms of entertainment.

Accordingly, in August 1998 we devised a medium-term management plan, and set the following four business targets and two financial targets to be achieved by March 2006.

Business targets:

•     No. 1 in DVD worldwide
•     Establishing a business foundation for plasma displays and OLED displays
•     From stand-alone to network
•     Towards the key-device, key-technology business

Financial targets for fiscal year ending March 2006:

•     1.2 trillion yen of consolidated operating revenue
•     ROE (Return on Equity) in excess of 10%

Cautionary Statement with Respect to Forward-Looking Statements
Statements made in this release with respect to our current plans, estimates, strategies and beliefs, and other statements that are not historical facts are forward-looking statements about our future performance. These statements are based on management’s assumptions and beliefs in light of the information currently available to it. We caution that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, and therefore you should not place undue reliance on them. You also should not believe that it is our obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We disclaim any such obligation. Risks and uncertainties that might affect us include, but are not limited to, (i) general economic conditions in our markets, particularly levels of consumer spending; (ii) exchange rates, particularly between the yen and the U.S. dollar, euro, and other currencies in which we make significant sales or in which our assets and liabilities are denominated; (iii) our ability to continue to design and develop and win acceptance of our products and services, which are offered in highly competitive markets characterized by continual new product introductions, rapid developments in technology and subjective and changing consumer preferences; (iv) our ability to successfully implement our business strategies; (v) our ability to compete, and develop and implement successful sales and distribution strategies in light of technological developments in and affecting our businesses; (vi) our continued ability to devote sufficient resources to research and development, and capital expenditure; (vii) our ability to continuously enhance our brand image; (viii) the success of our joint ventures and alliances; and (ix) the outcome of contingencies.

- 5 -


 

Pioneer Corporation is one of the leading manufacturers of consumer- and business-use electronics products such as audio, video and car electronics on a global scale. Its shares are traded on the New York Stock Exchange (ticker symbol PIO), Euronext Amsterdam, Tokyo Stock Exchange, and Osaka Securities Exchange.

# # # # # #

The U.S. dollar amounts in this release represent translation of Japanese yen, for convenience only, at the rate of ¥111=US$1.00, the approximate rate prevailing on September 30, 2004.

Attachments:

  I.   Consolidated financial statements for the three months and the six months ended September 30, 2004
  II.   Non-consolidated financial statements for the six months ended September 30, 2004

For further information, please contact:
Investor Relations Department, Corporate Communications Division
Pioneer Corporation, Tokyo
Phone: +81-3-3495-6774 / Fax: +81-3-3495-4301
E-mail: pioneer_ir@post.pioneer.co.jp
Website: http://www.pioneer.co.jp/corp/ir/index-e.html

- 6 -


 

Pioneer Corporation and Subsidiaries

I.   CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND THE SIX MONTHS ENDED SEPTEMBER 30, 2004
 
(1)   OPERATING REVENUE BY SEGMENT

(In millions of yen)

                                         
    Three months ended September 30
    2004
  2003
  % to
            % to           % to   prior
    Amount
  total
  Amount
  total
  year
Domestic
  ¥ 21,809       12.0 %   ¥ 16,829       10.0 %     129.6 %
Overseas
    49,908       27.5       50,379       30.1       99.1  
 
   
 
     
 
     
 
     
 
     
 
 
Home Electronics
    71,717       39.5       67,208       40.1       106.7  
 
   
 
     
 
     
 
     
 
     
 
 
Domestic
    29,453       16.2       25,766       15.4       114.3  
Overseas
    45,317       25.0       41,336       24.7       109.6  
 
   
 
     
 
     
 
     
 
     
 
 
Car Electronics
    74,770       41.2       67,102       40.1       111.4  
 
   
 
     
 
     
 
     
 
     
 
 
Domestic
                             
Overseas
    3,864       2.1       4,986       3.0       77.5  
 
   
 
     
 
     
 
     
 
     
 
 
Patent Licensing
    3,864       2.1       4,986       3.0       77.5  
 
   
 
     
 
     
 
     
 
     
 
 
Domestic
    13,882       7.7       14,515       8.7       95.6  
Overseas
    17,327       9.5       13,702       8.1       126.5  
 
   
 
     
 
     
 
     
 
     
 
 
Others
    31,209       17.2       28,217       16.8       110.6  
 
   
 
     
 
     
 
     
 
     
 
 
Domestic
    65,144       35.9       57,110       34.1       114.1  
Overseas
    116,416       64.1       110,403       65.9       105.4  
 
   
 
     
 
     
 
     
 
     
 
 
Total
  ¥ 181,560       100.0 %   ¥ 167,513       100.0 %     108.4 %
 
   
 
     
 
     
 
     
 
     
 
 

(In millions of yen)

                                         
    Six months ended September 30
    2004
  2003
  % to
            % to           % to   prior
    Amount
  total
  Amount
  total
  year
Domestic
  ¥ 35,664       10.3 %   ¥ 32,686       10.2 %     109.1 %
Overseas
    88,020       25.5       85,597       26.8       102.8  
 
   
 
     
 
     
 
     
 
     
 
 
Home Electronics
    123,684       35.8       118,283       37.0       104.6  
 
   
 
     
 
     
 
     
 
     
 
 
Domestic
    61,784       17.9       57,110       17.8       108.2  
Overseas
    92,541       26.8       84,730       26.5       109.2  
 
   
 
     
 
     
 
     
 
     
 
 
Car Electronics
    154,325       44.7       141,840       44.3       108.8  
 
   
 
     
 
     
 
     
 
     
 
 
Domestic
                             
Overseas
    6,739       2.0       8,404       2.6       80.2  
 
   
 
     
 
     
 
     
 
     
 
 
Patent Licensing
    6,739       2.0       8,404       2.6       80.2  
 
   
 
     
 
     
 
     
 
     
 
 
Domestic
    26,535       7.7       27,494       8.7       96.5  
Overseas
    33,764       9.8       23,961       7.4       140.9  
 
   
 
     
 
     
 
     
 
     
 
 
Others
    60,299       17.5       51,455       16.1       117.2  
 
   
 
     
 
     
 
     
 
     
 
 
Domestic
    123,983       35.9       117,290       36.7       105.7  
Overseas
    221,064       64.1       202,692       63.3       109.1  
 
   
 
     
 
     
 
     
 
     
 
 
Total
  ¥ 345,047       100.0 %   ¥ 319,982       100.0 %     107.8 %
 
   
 
     
 
     
 
     
 
     
 
 

 


 

Pioneer Corporation and Subsidiaries

(2)   CONSOLIDATED STATEMENTS OF INCOME

(In millions of yen)

                         
    Three months ended September 30
                    % to
    2004
  2003
  prior year
Operating revenue:
                       
Net sales
  ¥ 177,696     ¥ 162,527       109.3 %
Royalty revenue
    3,864       4,986       77.5  
 
   
 
     
 
     
 
 
Total operating revenue
    181,560       167,513       108.4  
 
   
 
     
 
     
 
 
Operating costs and expenses:
                       
Cost of sales
    133,601       115,455       115.7  
Selling, general and administrative
    39,690       42,179       94.1  
 
   
 
     
 
     
 
 
Total operating costs and expenses
    173,291       157,634       109.9  
 
   
 
     
 
     
 
 
Operating income from continuing operations
    8,269       9,879       83.7  
Other income (expenses):
                       
Interest income
    432       319       135.4  
Foreign exchange loss
    (228 )     (489 )     46.6  
Interest expense
    (315 )     (746 )     42.2  
Other—net
    41       242       16.9  
 
   
 
     
 
     
 
 
Total other income (expenses)
    (70 )     (674 )     10.4  
 
   
 
     
 
     
 
 
Income from continuing operations before income taxes
    8,199       9,205       89.1  
Income taxes
    3,937       3,832       102.7  
Minority interest in earnings of subsidiaries
    (270 )     (282 )     95.7  
Equity in losses of affiliated companies
    (680 )     (284 )     239.4  
 
   
 
     
 
     
 
 
Income from continuing operations
    3,312       4,807       68.9  
Income from discontinued operations, net of tax
          4,729        
 
   
 
     
 
     
 
 
Net income
  ¥ 3,312     ¥ 9,536       34.7 %
 
   
 
     
 
     
 
 

(In millions of yen)

                         
    Six months ended September 30
                    % to
    2004
  2003
  prior year
Operating revenue:
                       
Net sales
  ¥ 338,308     ¥ 311,578       108.6 %
Royalty revenue
    6,739       8,404       80.2  
Total operating revenue
    345,047       319,982       107.8  
 
   
 
     
 
     
 
 
Operating costs and expenses:
                       
Cost of sales
    250,878       219,328       114.4  
Selling, general and administrative
    80,896       83,096       97.4  
 
   
 
     
 
     
 
 
Total operating costs and expenses
    331,774       302,424       109.7  
 
   
 
     
 
     
 
 
Operating income from continuing operations
    13,273       17,558       75.6  
Other income (expenses):
                       
Interest income
    790       730       108.2  
Foreign exchange loss
    (1,161 )     (1,005 )     115.5  
Interest expense
    (689 )     (1,186 )     58.1  
Other—net
    225       488       46.1  
 
   
 
     
 
     
 
 
Total other income (expenses)
    (835 )     (973 )     85.8  
 
   
 
     
 
     
 
 
Income from continuing operations before income taxes
    12,438       16,585       75.0  
Income taxes
    5,544       6,820       81.3  
Minority interest in earnings of subsidiaries
    (560 )     (168 )     333.3  
Equity in losses of affiliated companies
    (1,525 )     (1,761 )     86.6  
 
   
 
     
 
     
 
 
Income from continuing operations
    4,809       7,836       61.4  
Income from discontinued operations, net of tax
          4,639        
 
   
 
     
 
     
 
 
Net income
  ¥ 4,809     ¥ 12,475       38.5 %
 
   
 
     
 
     
 
 

 


 

Pioneer Corporation and Subsidiaries

(3)   CONSOLIDATED BALANCE SHEETS

(In millions of yen)

                                         
    September 30
  March 31
                    Increase/           Increase/
    2004
  2003
  (Decrease)
  2004
  (Decrease)
ASSETS
                                       
Current assets:
                                       
Cash and cash equivalents
  ¥ 123,936     ¥ 137,936     ¥ (14,000 )   ¥ 192,419     ¥ (68,483 )
Trade receivables, less allowance
    119,863       102,912       16,951       112,055       7,808  
Inventories
    135,504       110,316       25,188       107,806       27,698  
Others
    74,711       65,763       8,948       67,508       7,203  
 
   
 
     
 
     
 
     
 
     
 
 
Total current assets
    454,014       416,927       37,087       479,788       (25,774 )
 
   
 
     
 
     
 
     
 
     
 
 
Investments and long-term receivables
    29,553       28,360       1,193       33,725       (4,172 )
Property, plant and equipment, less depreciation
    208,964       154,319       54,645       156,201       52,763  
Intangible assets
    25,590       17,403       8,187       18,966       6,624  
Other assets
    39,015       42,817       (3,802 )     33,862       5,153  
 
   
 
     
 
     
 
     
 
     
 
 
Total assets
  ¥ 757,136     ¥ 659,826     ¥ 97,310     ¥ 722,542     ¥ 34,594  
 
   
 
     
 
     
 
     
 
     
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
                                       
Current liabilities:
                                       
Short-term borrowings and current portion of long-term debt
  ¥ 40,615     ¥ 35,594     ¥ 5,021     ¥ 27,837     ¥ 12,778  
Trade payables
    103,031       78,526       24,505       79,439       23,592  
Others
    104,554       108,607       (4,053 )     116,022       (11,468 )
 
   
 
     
 
     
 
     
 
     
 
 
Total current liabilities
    248,200       222,727       25,473       223,298       24,902  
 
   
 
     
 
     
 
     
 
     
 
 
Long-term debt
    87,397       28,528       58,869       89,691       (2,294 )
Other long-term liabilities
    58,909       71,944       (13,035 )     58,771       138  
Minority interests
    18,281       17,728       553       17,844       437  
Shareholders’ equity:
                                       
Common stock
    49,049       49,049             49,049        
Capital surplus
    82,612       82,294       318       82,464       148  
Retained earnings
    276,334       263,548       12,786       273,718       2,616  
Accumulated other comprehensive loss
    (53,185 )     (65,535 )     12,350       (61,829 )     8,644  
Treasury stock
    (10,461 )     (10,457 )     (4 )     (10,464 )     3  
 
   
 
     
 
     
 
     
 
     
 
 
Total shareholders’ equity
    344,349       318,899       25,450       332,938       11,411  
 
   
 
     
 
     
 
     
 
     
 
 
Total liabilities and shareholders’ equity
  ¥ 757,136     ¥ 659,826     ¥ 97,310     ¥ 722,542     ¥ 34,594  
 
   
 
     
 
     
 
     
 
     
 
 
Breakdown of accumulated other comprehensive income (loss)
                                       
Minimum pension liability adjustments
  ¥ (21,714 )   ¥ (31,578 )   ¥ 9,864     ¥ (22,930 )   ¥ 1,216  
Net unrealized holding gain on securities
    7,516       5,715       1,801       9,103       (1,587 )
Cumulative foreign currency translation adjustments
    (38,987 )     (39,672 )     685       (48,002 )     9,015  
 
   
 
     
 
     
 
     
 
     
 
 
Total accumulated other comprehensive income (loss)
  ¥ (53,185 )   ¥ (65,535 )   ¥ 12,350     ¥ (61,829 )   ¥ 8,644  
 
   
 
     
 
     
 
     
 
     
 
 

 


 

Pioneer Corporation and Subsidiaries

(4)   CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In millions of yen)

                                                 
                            Accumulated            
                            Other           Total
    Common   Capital   Retained   Comprehensive   Treasury   Shareholders'
    Stock
  Surplus
  Earnings
  Loss
  Stock
  Equity
Balance at March 31, 2003
  ¥ 49,049     ¥ 82,159     ¥ 253,266     ¥ (55,629 )   ¥ (10,452 )   ¥ 318,393  
Net income
                    24,838                       24,838  
Other comprehensive loss
                            (6,200 )             (6,200 )
Value ascribed to stock options
            305                               305  
Cash dividends (¥25 per share)
                    (4,386 )                     (4,386 )
Purchase and sales of treasury stock, net
                                    (12 )     (12 )
 
   
 
     
 
     
 
     
 
     
 
     
 
 
Balance at March 31, 2004
  ¥ 49,049     ¥ 82,464     ¥ 273,718     ¥ (61,829 )   ¥ (10,464 )   ¥ 332,938  
Net income
                    4,809                       4,809  
Other comprehensive income
                            8,644               8,644  
Value ascribed to stock options
            147                               147  
Cash dividends (¥12.5 per share)
                    (2,193 )                     (2,193 )
Purchase and sales of treasury stock, net
            1                       3       4  
 
   
 
     
 
     
 
     
 
     
 
     
 
 
Balance at September 30, 2004
  ¥ 49,049     ¥ 82,612     ¥ 276,334     ¥ (53,185 )   ¥ (10,461 )   ¥ 344,349  
 
   
 
     
 
     
 
     
 
     
 
     
 
 

(5)   CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions of yen)

                                 
    Three months ended   Six months ended
    September 30
  September 30
    2004
  2003
  2004
  2003
I. Operating activities:
                               
Net income
  ¥ 3,312     ¥ 9,536     ¥ 4,809     ¥ 12,475  
Income from discontinued operations, net of tax
          (4,729 )           (4,639 )
Depreciation and amortization
    10,778       9,824       21,287       18,843  
(Increase) decrease in trade receivables
    (8,194 )     (8,000 )     415       922  
Increase in inventories
    (6 )     (6,074 )     (18,814 )     (20,984 )
Increase (decrease) in trade payables
    (76 )     5,894       7,168       15,064  
Increase (decrease) in other accrued liabilities
    1,545       13,157       (11,185 )     5,105  
Other
    (5,714 )     (2,802 )     (7,711 )     (3,675 )
 
   
 
     
 
     
 
     
 
 
Net cash provided by (used in) operating activities
    1,645       16,806       (4,031 )     23,111  
 
   
 
     
 
     
 
     
 
 
II. Investing activities:
                               
Payment for purchase of fixed assets
    (12,646 )     (17,161 )     (26,284 )     (28,121 )
Payment for purchase of subsidiary
    (36,615 )           (36,615 )      
Other
    (17 )     3,301       338       3,623  
 
   
 
     
 
     
 
     
 
 
Net cash used in investing activities
    (49,278 )     (13,860 )     (62,561 )     (24,498 )
 
   
 
     
 
     
 
     
 
 
III. Financing activities:
                               
Increase (decrease) in short-term borrowings and long-term debt
    1,035       3,976       (3,034 )     4,610  
Dividends paid
                (2,193 )     (1,754 )
Other
    (220 )     (2 )     (323 )     (191 )
 
   
 
     
 
     
 
     
 
 
Net cash provided by (used in) financing activities
    815       3,974       (5,550 )     2,665  
 
   
 
     
 
     
 
     
 
 
Effect of exchange rate changes on cash and cash equivalents
    1,792       (5,784 )     3,659       (5,822 )
Net increase (decrease) in cash and cash equivalents
    (45,026 )     1,136       (68,483 )     (4,544 )
Cash and cash equivalents, beginning of period
    168,962       136,800       192,419       142,480  
 
   
 
     
 
     
 
     
 
 
Cash and cash equivalents, end of period
  ¥ 123,936     ¥ 137,936     ¥ 123,936     ¥ 137,936  
 
   
 
     
 
     
 
     
 
 
Free cash flow (I + II)
  ¥ (47,633 )   ¥ 2,946     ¥ (66,592 )   ¥ (1,387 )
 
   
 
     
 
     
 
     
 
 

 


 

Pioneer Corporation and Subsidiaries

(6)   SEGMENT INFORMATION

The following segment information is prepared pursuant to the regulations under the Securities and Exchange Law of Japan.

<Business Segments>

(In millions of yen)

                                                 
    Three months ended September 30
    2004
  2003
  % to prior year
    Operating   Operating   Operating   Operating   Operating   Operating
    Revenue
  Income
  Revenue
  Income
  Revenue
  Income
Home Electronics
  ¥ 72,226     ¥ 405     ¥ 67,259     ¥ 765       107.4 %     52.9 %
Car Electronics
    75,401       4,620       67,407       6,205       111.9       74.5  
Patent Licensing
    4,318       3,843       5,520       4,930       78.2       78.0  
Others
    42,970       937       37,472       893       114.7       104.9  
 
   
 
     
 
     
 
     
 
     
 
     
 
 
Total
    194,915       9,805       177,658       12,793       109.7       76.6  
Corporate and eliminations
    (13,355 )     (1,536 )     (10,145 )     (2,914 )            
 
   
 
     
 
     
 
     
 
     
 
     
 
 
Consolidated
  ¥ 181,560     ¥ 8,269     ¥ 167,513     ¥ 9,879       108.4 %     83.7 %
 
   
 
     
 
     
 
     
 
     
 
     
 
 

(In millions of yen)

                                                 
    Six months ended September 30
    2004
  2003
  % to prior year
    Operating   Operating   Operating   Operating   Operating   Operating
    Revenue
  Income
  Revenue
  Income
  Revenue
  Income
Home Electronics
  ¥ 124,722     ¥ (3,389 )   ¥ 118,920     ¥ (3,599 )     104.9 %     %
Car Electronics
    155,002       10,877       142,491       14,115       108.8       77.1  
Patent Licensing
    7,580       6,767       9,373       8,219       80.9       82.3  
Others
    80,225       1,441       69,146       159       116.0       906.3  
 
   
 
     
 
     
 
     
 
     
 
     
 
 
Total
    367,529       15,696       339,930       18,894       108.1       83.1  
Corporate and eliminations
    (22,482 )     (2,423 )     (19,948 )     (1,336 )            
 
   
 
     
 
     
 
     
 
     
 
     
 
 
Consolidated
  ¥ 345,047     ¥ 13,273     ¥ 319,982     ¥ 17,558       107.8 %     75.6 %
 
   
 
     
 
     
 
     
 
     
 
     
 
 

<Geographic Segments>

(In millions of yen)

                                                 
    Six months ended September 30
    2004
  2003
  % to prior year
    Operating   Operating   Operating   Operating   Operating   Operating
    Revenue
  Income
  Revenue
  Income
  Revenue
  Income
Japan
  ¥ 292,347     ¥ 6,553     ¥ 262,900     ¥ 6,343       111.2 %     103.3 %
North America
    84,058       3,245       86,686       8,607       97.0       37.7  
Europe
    66,208       (1,063 )     62,499       (341 )     105.9        
Other Regions
    143,206       3,842       131,635       4,393       108.8       87.5  
 
   
 
     
 
     
 
     
 
     
 
     
 
 
Total
    585,819       12,577       543,720       19,002       107.7       66.2  
Corporate and eliminations
    (240,772 )     696       (223,738 )     (1,444 )            
 
   
 
     
 
     
 
     
 
     
 
     
 
 
Consolidated
  ¥ 345,047     ¥ 13,273     ¥ 319,982     ¥ 17,558       107.8 %     75.6 %
 
   
 
     
 
     
 
     
 
     
 
     
 
 

 


 

Pioneer Corporation and Subsidiaries

Notes:

  1.   The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America.
 
  2.   The consolidated financial statements include the accounts of the parent company and 128 subsidiaries and the investments in 5 affiliated companies accounted for on an equity basis.
 
  3.   As a result of the sales of subsidiaries in the audio/video software business in fiscal 2004, the gain on such sales, as well as the operating results of the discontinued operations, are presented as a separate line item in consolidated statements of income in accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” Reclassifications have been made to consolidated statements of cash flows and segment information to conform to this presentation.
 
  4.   At the year end of fiscal 2004, the Company changed business segment classification for certain businesses. Results related to recordable DVD drives have been moved from “Others” to “Home Electronics,” and results related to plasma displays for business use have been moved from “Home Electronics” to “Others.” Corresponding figures for the previously reported operating revenue by segment and segment information have been reclassified accordingly.

 


 

Pioneer Corporation—Parent Company Only

II.   NON-CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2004
 
(1)   SALES BY PRODUCT GROUP

(In millions of yen)

                                         
    Six months ended September 30
    2004
  2003
   
            % to           % to   % to
    Amount
  total
  Amount
  total
  prior year
Domestic
  ¥ 30,534       13.0 %   ¥ 26,491       12.2 %     115.3 %
Export
    70,140       30.0       67,725       31.5       103.6  
 
   
 
     
 
     
 
     
 
     
 
 
Home Electronics
    100,674       43.0       94,217       43.7       106.9  
 
   
 
     
 
     
 
     
 
     
 
 
Domestic
    60,907       26.1       55,788       25.9       109.2  
Export
    62,084       26.5       55,195       25.5       112.5  
 
   
 
     
 
     
 
     
 
     
 
 
Car Electronics
    122,991       52.6       110,984       51.4       110.8  
 
   
 
     
 
     
 
     
 
     
 
 
Domestic
    2,830       1.2       3,434       1.6       82.4  
Export
    7,542       3.2       7,167       3.3       105.2  
 
   
 
     
 
     
 
     
 
     
 
 
Others
    10,373       4.4       10,601       4.9       97.8  
 
   
 
     
 
     
 
     
 
     
 
 
Domestic
    94,272       40.3       85,715       39.7       110.0  
Export
    139,767       59.7       130,088       60.3       107.4  
 
   
 
     
 
     
 
     
 
     
 
 
Total
  ¥ 234,039       100.0 %   ¥ 215,803       100.0 %     108.5 %
 
   
 
     
 
     
 
     
 
     
 
 

(2)   CONDENSED STATEMENTS OF OPERATIONS

(In millions of yen)

                                 
    Six months ended September 30
    2004
  2003
            % to           % to
    Amount
  net sales
  Amount
  net sales
Net sales
  ¥ 234,039       100.0 %   ¥ 215,803       100.0 %
Cost of sales
    191,874       82.0       168,143       77.9  
Selling, general and administrative expenses
    41,981       17.9       44,227       20.5  
 
   
 
     
 
     
 
     
 
 
Operating income
    183       0.1       3,432       1.6  
Non-operating income (expenses)—net
    2,098       0.9       132       0.1  
 
   
 
     
 
     
 
     
 
 
Ordinary income
    2,282       1.0       3,565       1.7  
Other expenses—net
    (0 )     (0.0 )     (6,050 )     (2.8 )
 
   
 
     
 
     
 
     
 
 
Income (loss) before income taxes
    2,281       1.0       (2,485 )     (1.2 )
Income taxes
    141       0.1       (1,418 )     (0.7 )
 
   
 
     
 
     
 
     
 
 
Net income (loss)
  ¥ 2,140       0.9 %   ¥ (1,066 )     (0.5 %)
 
   
 
     
 
     
 
     
 
 

 


 

Pioneer Corporation—Parent Company Only

(3)   CONDENSED BALANCE SHEETS

(In millions of yen)

                         
    September 30
  March 31
    2004
  2003
  2004
ASSETS
                       
Current assets:
                       
Cash
  ¥ 33,829     ¥ 29,100     ¥ 73,134  
Notes and accounts receivable—trade
    38,018       37,899       43,582  
Marketable securities
    18,683       18,782       32,685  
Inventories
    34,733       29,874       31,183  
Other current assets
    64,070       30,992       27,781  
 
   
 
     
 
     
 
 
Total current assets
    189,336       146,650       208,368  
Fixed assets:
                       
Tangible
    48,282       39,443       42,913  
Intangible
    21,335       16,769       20,075  
Investments and others
    204,768       190,020       190,207  
 
   
 
     
 
     
 
 
Total fixed assets
    274,386       246,233       253,196  
 
   
 
     
 
     
 
 
Total assets
  ¥ 463,722     ¥ 392,883     ¥ 461,564  
 
   
 
     
 
     
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
                       
Current liabilities:
                       
Notes and accounts payable—trade
  ¥ 50,129     ¥ 45,533     ¥ 40,987  
Accrued expenses
    34,730       38,348       40,953  
Other current liabilities
    26,766       10,017       12,123  
 
   
 
     
 
     
 
 
Total current liabilities
    111,627       93,898       94,064  
Long-term liabilities
    76,100       28,996       90,074  
 
   
 
     
 
     
 
 
Total liabilities
    187,727       122,895       184,139  
Shareholders’ equity
    275,995       269,988       277,425  
 
   
 
     
 
     
 
 
Total liabilities and shareholders’ equity
  ¥ 463,722     ¥ 392,883     ¥ 461,564