FY2006 Interim Consolidated Financial Results
(Prepared in accordance with U.S. GAAP)
(Six months ended September 30, 2006)
October 27, 2006
Company name : Advantest Corporation
(URL http://www.advantest.co.jp/investors/)
Stock exchanges on which shares are listed : Tokyo Stock Exchange
Stock code number : 6857
Location of head office : Tokyo Prefecture
Company representative : Toshio Maruyama, Representative Board Director, President and CEO
Contact person : Hiroshi Nakamura, Executive Officer,
Vice President of the Corporate Affairs Group
(03) 3214-7500
Date of Board meeting to approve the interim
financial results : October 27, 2006
Adoption of U.S. GAAP : Yes
1. Consolidated Results of FY2006 Interim (April 1, 2006 through September 30, 2006)
(1) Consolidated Financial Results
- -----------------------------------------------------------------------------------------------------------------------
Net sales Operating income Income before income taxes
- -----------------------------------------------------------------------------------------------------------------------
Million yen Million yen Million yen
FY2006 interim 120,492 12.5% 32,199 42.1% 33,951 38.6%
FY2005 interim 107,099 (26.9%) 22,660 (49.3%) 24,502 (46.8%)
- -----------------------------------------------------------------------------------------------------------------------
FY2005 253,922 64,458 67,454
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Net income Net income per share (basic) Net income per share
(diluted)
- -----------------------------------------------------------------------------------------------------------------------
Million yen Yen Yen
FY2006 interim 22,204 51.9% 118.79 118.03
FY2005 interim 14,614 (47.5%) 79.03 78.75
- -----------------------------------------------------------------------------------------------------------------------
FY2005 41,374 223.17 221.98
- -----------------------------------------------------------------------------------------------------------------------
Note 1: There were no investments in affiliates that have been accounted for under the equity method in FY2006 interim,
FY2005 interim and FY2005, respectively.
Note 2: Average number of shares outstanding on a consolidated basis was 186,911,714 shares during FY2006 interim,
184,916,458 shares during FY2005 interim and 185,389,026 shares during FY2005, respectively (converted following
the stock split with respect to each fiscal period indicated above).
Note 3: No change in accounting policies during FY2006 interim.
Note 4: The percentages shown in the above items including net sales and operating income are changes in comparison to
the corresponding period of the previous fiscal year.
Note 5: On October 1, 2006, a one to two stock split was made to shares of the common stock in respect of shareholders
recorded in the register as of September 30, 2006. Basic net income per share and net income per share (diluted)
for all periods presented were calculated based on the number of issued and outstanding shares after such stock
split.
(2) Consolidated Financial Position
- -----------------------------------------------------------------------------------------------------------------------
Total assets Net assets Equity-to- Net Assets
assets ratio per share
- -----------------------------------------------------------------------------------------------------------------------
Million yen Million yen % Yen
FY2006 interim 347,089 278,673 80.3 1,489.45
FY2005 interim 320,069 222,602 69.5 1,202.81
- -----------------------------------------------------------------------------------------------------------------------
FY2005 350,776 257,927 73.5 1,381.85
- -----------------------------------------------------------------------------------------------------------------------
Note 1: Outstanding number of shares on a consolidated basis at the end of each period was 187,097,962 in FY2006 interim,
185,068,164 in FY2005 interim and 186,653,298 shares in FY2005, respectively.
Note 2: On October 1, 2006, a one to two stock split was made to shares of the common stock in respect of shareholders
recorded in the register as of September 30, 2006. Net assets per share for each period end date was calculated
based on the number of issued and outstanding shares after such stock split.
(3) Consolidated Cash Flows
- -----------------------------------------------------------------------------------------------------------------------
Cash flows from Cash flows from Cash flows from Cash and cash
operating activities investing activities financing activities equivalents at end of
period
- -----------------------------------------------------------------------------------------------------------------------
Million yen Million yen Million yen Million yen
FY2006 interim 12,191 (4,524) (2,542) 163,635
FY2005 interim 16,798 (2,818) (1,531) 135,226
- -----------------------------------------------------------------------------------------------------------------------
FY2005 59,480 (8,542) (18,336) 157,925
- -----------------------------------------------------------------------------------------------------------------------
-1-
(4) Scope of Consolidation and Equity Method
Number of consolidated subsidiaries: 40 companies
Number of unconsolidated subsidiaries: none
Number of affiliates accounted for under the equity method: none
(5) Changes in Scope of Consolidation and Equity Method
Consolidated subsidiaries
(Newly included) none
(Excluded) none
Affiliates accounted for under the equity method
(Newly included) none
(Excluded) none
2. Projected Results for FY2006 (April 1, 2006 through March 31, 2007)
- --------------------------------------------------------------------------------
Net sales Income before income Net income
taxes
- --------------------------------------------------------------------------------
Million yen Million yen Million yen
FY2006 255,000 68,000 43,000
- --------------------------------------------------------------------------------
(Reference) Projected net income per share for the fiscal year: (Y)229.83
Figures presented in this Earning Digest have been rounded to the nearest
million yen.
For a discussion of the assumptions and other factors upon which these
projections are based, please refer to "Prospects for the Fiscal Year" appearing
elsewhere in the document.
Cautionary Statement with Respect to Forward-Looking Statements
This document contains "forward-looking statements" that are based on
Advantest's current expectations, estimates and projections. These
forward-looking statements are subject to known and unknown risks, uncertainties
and other factors that may cause Advantest's actual results, levels of activity,
performance or achievements to be materially different from those expressed or
implied by such forward-looking statements. These factors include: (i) changes
in demand for the products and services produced and offered by Advantest's
customers, including semiconductors, communications services and electronic
goods; (ii) circumstances relating to Advantest's investment in technology,
including its ability to timely develop products that meet the changing needs of
semiconductor manufacturers and communications network equipment and components
makers and service providers; (iii) significant changes in the competitive
environment in the major markets where Advantest purchases materials, components
and supplies for the production of its products or where its products are
produced, distributed or sold; and (iv) changes in economic conditions, currency
exchange rates or political stability in the major markets where Advantest
procures materials, components and supplies for the production of its principal
products or where its products are produced, distributed or sold. A discussion
of these and other factors which may affect Advantest's actual results, levels
of activity, performance or achievements is contained in the "Operating and
Financial Review and Prospects", "Key Information - Risk Factors" and
"Information on the Company" sections and elsewhere in Advantest's annual report
on Form 20-F, which is on file with the United States Securities and Exchange
Commission.
-2-
1. Management Policy
Advantest's Basic Management Policy
- -----------------------------------
Advantest believes that its philosophy of management is to support
leading-edge technology at its forefront. Its basic management policy consists
of the following elements: increasing corporate value, improving shareholder and
customer satisfaction and achieving excellence.
Business Strategy
- -----------------
While maintaining "Measurements" as our core competence, Advantest
intends to improve its corporate value by establishing an operation and finance
structure that responds timely to changes in the global market, and also aims to
further increase market share by introducing fine products that will inspire the
market demands of the next generation. To achieve these objectives, Advantest is
driven to further strengthen its product development operations and improve
production efficiency by selectively focusing on certain businesses, while
strengthening its overseas operations and support system in the U.S., Europe and
Asia.
Further, Advantest seeks to increase the level of customer
satisfaction by maximizing the functions of our test systems by providing them
with a solution for businesses to improve business efficiency.
With respect to a company-wide initiative called "Activate 21" which
Advantest launched on October 1, 2005, Advantest has implemented further reforms
that emphasize cost and efficiency from a global perspective with the target of
fiscal year 2008 for completion.
Target Financial Index
- ----------------------
Advantest applies the "AVA" (Advantest Value Added), a financial index
incorporating the concept of EVA(R)(Economic Value Added) *(1), as a significant
performance indicator, along with profit margin, ROE and cash flows, to measure
its business performance. Specifically, Advantest will continue to set the
minimum return-on-investment ratio ("hurdle rate") for evaluating AVA at 8% and
a mid-term target at 12% or more with an aim to further increase corporate value
and shareholder value.
*(1)"EVA(R)" is a registered trademark of Stern Stewart & Co.
Basic Policy on Distribution of Profits
- ---------------------------------------
Advantest believes that shareholder value is premised on the
realization of long-term and continued growth in corporate value.
With respect to the distribution of profits, Advantest has adopted a
policy of maintaining consistent dividend payouts after taking into
consideration of business performance and financial condition.
Retained profits will be utilized for research and development,
streamlining efforts, overseas expansion and investing in new businesses to
enable the strengthening of its business position and creation of corporate
value.
Advantest's Views and Policies on Lowering its Investment Unit
- --------------------------------------------------------------
As part of its capital policy, Advantest has long recognized the
importance of increasing the market liquidity of its shares, promoting long-term
and stable holding of its shares among investors and expanding its investor
base. Accordingly, Advantest already reduced the minimum investment unit from
1,000 shares to 100 shares in August, 1995. Furthermore, consistent with recent
share prices, Advantest aims to further expand the investor base by establishing
an environment that will make Advantest's shares more accessible to a broader
range of potential shareholders by reducing the investment amount for one
(trading) unit. Accordingly, Advantest implemented, on October 1, 2006, a one to
two stock split for its shareholders listed or recorded in the final
shareholders' register and beneficial shareholders' register as of September 30,
2006.
Matters Relating to Parent Companies
- ------------------------------------
Advantest does not have a parent company as of the end of this fiscal
year.
-3-
2. Business Results and Financial Condition
(1) Business Results
Interim Fiscal Period Results
- -----------------------------
During this interim fiscal period, Advantest's operating environment
was overall favorable, as stimulated by continuing steady sales of consumer
digital products (such as portable audio players and flat-panel televisions)
from the previous period. Partly due to a trend of inventory adjustment of
liquid crystal panels and a reduction in capital expenditures by some
semiconductor manufacturers, we did not achieve the interim results forecasted
in our previous forecast. However, mainly due to increases in demand for
semiconductors and increases in capital expenditures by semiconductor
manufacturers for new production lines, our sales remained steady.
Under this environment, Advantest made efforts to increase orders
input received and expand sales by introducing products that meet customers'
demand and providing test solutions that are targeted at its customers.
Advantest also continued to make efforts to improve productivity and cost
reduction.
Accordingly, as compared to the previous interim fiscal period, orders
input received decreased by 5.2 % to (Y) 115.2 billion, net sales increased by
12.5 % to (Y) 120.5 billion, net income before income taxes increased by 38.6 %
to (Y) 34.0 billion, and net income for the interim fiscal period increased by
51.9 % to (Y) 22.2 billion. Overseas sales as a percentage of total sales were
60.0 %, as compared with 67.7 % in the previous interim fiscal period.
[Condition of Business by Segment]
(Semiconductor and Component Test System Segment)
In this segment, overall sales was positive despite a trend of
inventory adjustment of the liquid crystal panels used for personal computers
and a reduction in capital expenditures by some semiconductor manufacturers.
Such positive sales was primarily due to increased demand for new test systems
resulting from a growth in sales of consumer digital products, among other
things.
In the memory semiconductor test system market, because the price of
DRAM semiconductors remained stable and manufacturers of DRAM semiconductors
promoted capital expenditure for mass production of DDR2-DRAM semiconductors,
demand for front-end test systems for DRAM semiconductors was overall positive
in Japan, Taiwan and Korea, among other countries. However, the results of
back-end test systems for DRAM semiconductors did not achieve our previous
forecasts. In addition, sales of test systems for flash memory semiconductors
remained steady, due to stable demand for portable audio players and digital
cameras, among other things.
In the market of non-memory semiconductor test system, sales of SoC
semiconductor test systems for devices used in consumer digital products and
car-related products was primarily favorable in Japan. However, sales of test
systems for non-memory semiconductors used in LCD driver IC was weak in the
latter half of this interim fiscal period as a result of inventory adjustment of
liquid crystal panels in Japan and in Taiwan. Furthermore, demand for the T2000,
a test system compatible with OPENSTAR(R)*(2), which was very favorable in the
previous fiscal year, was low due to slowdown in the demand.
As a result of the above, orders input received was (Y) 82.0 billion
(12.5 % decrease in comparison to the previous interim fiscal period), sales was
(Y) 86.0 billion (6.4 % increase) and operating income was (Y) 26.5 billion
(26.3 % increase).
(Mechatronics System Segment)
Sales of memory semiconductor test handlers was favorable, primarily
due to positive sales of test handlers for flash memory semiconductors. Sales of
non-memory semiconductor test handlers remained steady in connection with test
handlers for SoC semiconductors used for consumer digital product devices. Sales
of device interface products was also steady, due to an increase in demand for
flash memory semiconductors and semiconductors for SoC.
As a result, orders input received was (Y) 25.5 billion (17.6 %
increase in comparison with the previous interim fiscal period), sales was (Y)
26.7 billion (30.1 % increase) and operating income was (Y) 7.6 billion (64.5 %
increase).
-4-
(Services, Support and Others Segment)
In this segment, orders input received was (Y) 9.4 billion (4.0 %
increase in comparison with the previous interim fiscal period), sales was (Y)
9.7 billion (13.2 % increase) and operating income was (Y) 1.4 billion (27.6 %
decrease).
*(2)OPENSTAR(R): The name of an open architecture standard published
by the STC (Semiconductor Test Consortium, Inc.). OPENSTAR(R) is a registered
trademark or a trademark of STC in the United States, Japan and other countries.
[Distribution of Profits]
As described above, sales in this interim fiscal period remained
overall steady. Although there are potential uncertainties affecting its
operating environment, Advantest decided, pursuant to its profit distribution
policy described above, to distribute dividends for this interim fiscal period
of (Y) 35 per share consistent with the previous forecast in respect of shares
prior to the stock split.
(2) Financial Condition
Cash and cash equivalents held at September 30, 2006 were (Y) 163.6
billion, an increase of (Y) 5.7 billion from March 31, 2006.
Significant cash flows during this interim fiscal period and their
causes are described below.
Net cash provided by operating activities was (Y) 12.2 billion. The
main sources of cash were net income of (Y) 22.2 billion, depreciation and
amortization of (Y) 3.8 billion, a decrease in trade accounts receivable of (Y)
2.2 billion and a decrease in inventories of (Y) 2.8 billion, which were
partially offset by a decrease in trade accounts payable of (Y) 9.4 billion and
a decrease in income taxes payable by (Y) 9.2 billion.
Net cash used in investing activities was an outflow of (Y) 4.5
billion. This amount was primarily attributable to capital expenditures of (Y)
4.1 billion, including capital expenditures related to equipment for leasing.
Net cash used in financing activities was an outflow of (Y) 2.5
billion. This amount was primarily attributable to dividend payments in the
amount of (Y)4.2 billion offset by proceeds from sale of treasury stock in the
amount of (Y) 1.7 billion.
-5-
(3) Prospects for the Fiscal Year
With respect to its operating environment in the fiscal year,
Advantest expects a rapid increase in demand for DDR2-DRAM used in personal
computers resulting from, among other things, the planned launch of a new
operating system for personal computers in January 2007. Advantest also expects
to see expanded volume and application of flash memory semiconductors used for
mobile telephones, portable audio players and digital cameras. Furthermore, a
continuous increase in demand is anticipated for semiconductors used for
car-related products and digital consumer products (due to wider acceptance of
flat-panel televisions by consumers). With such increase in demand, Advantest
expects that demand for semiconductor manufacturing equipments will continue to
increase going forward.
On the other hand, Advantest is concerned that restrained capital
expenditures as a result of poor supply and demand balance, an issue unique to
the semiconductor market, increased prices of raw materials such as oil, risks
relating to exchange rates, and strengthened downward pressure on prices as a
result of the above-mentioned factors may affect our results.
In order to respond to these conditions, Advantest plans to continue
its efforts to increase orders input received and expand sales through the
timely introduction of new products that meet customers' needs by strengthening
marketing and development structure. To further strengthen its cost
competitiveness, Advantest will make continued efforts to further improve
profitability by reviewing its operational process company wide and improving
manufacturing efficiency.
As described above, Advantest expects a growth in the scond half of
the fiscal year. However, because sales in respect of the semiconductor and
component test system segment fell below our previous forecasts and we foresee
that it would be difficult to recover such decrease in the second half of the
fiscal year, we revised the business outlook described below.
(Consolidated)
- ------------------------------ --------------------------- --------------------------- ----------------------------
Net Sales Income before income taxes Net Income
- ------------------------------ --------------------------- --------------------------- ----------------------------
Previous forecast (A) 265,000 72,000 44,000
(As of April 26, 2006)
- ------------------------------ --------------------------- --------------------------- ----------------------------
Revised forecast (B) 255,000 68,000 43,000
- ------------------------------ --------------------------- --------------------------- ----------------------------
Difference (B-A) (10,000) (4,000) (1,000)
- ------------------------------ --------------------------- --------------------------- ----------------------------
(Non-consolidated)
- ------------------------------ --------------------------- --------------------------- ----------------------------
Net Sales Ordinary Income Net Income
- ------------------------------ --------------------------- --------------------------- ----------------------------
Previous forecast (A) 230,000 56,000 36,000
(As of April 26, 2006)
- ------------------------------ --------------------------- --------------------------- ----------------------------
Revised forecast (B) 215,000 49,000 33,000
- ------------------------------ --------------------------- --------------------------- ----------------------------
Difference (B-A) (15,000) (7,000) (3,000)
- ------------------------------ --------------------------- --------------------------- ----------------------------
[Profit Distribution Forecast]
Based on the prospects for the fiscal year and the profit distribution
policy described above, Advantest expects to distribute an annual dividend of
(Y) 17.5 per share, taking into account the stock split based on the record date
of September 30, 2006. This amount is equivalent to an interim dividend of (Y)
35.0 per share that was referred to in our previous forecast.
-6-
(4) Risk Factors
Advantest considers the factors below, including, but not limited to, to be our
business risks as of the date hereof, and such business risks are also referred
to in our annual report filed with the Kanto Local Finance Bureau on June 28,
2006.
o Negative consequences resulting from the cyclicality of demand-supply
balance in the semiconductor industry.
o Failure to meet our clients' technical requirements.
o Failure to compete effectively in our business operations.
o Enhanced price pressure in the market.
o Possibility of losing one or more of our largest customers that
currently account for a significant portion of our net sales.
o Fluctuations in foreign exchange rates.
o Failure to respond to business opportunities due to our inability to
increase production upon a sudden increase in demand for our products.
o Substantial dependence on a limited number of subcontractors.
o Catastrophic loss to our and our subcontractors' and suppliers'
facilities and operations.
o Economic, political and other risks associated with international
operations and sales.
o Cost increases due to more stringent regulatory requirements for
chemicals.
o Unknowing infringement by us of the intellectual property rights of
third parties and infringement by third parties of our intellectual
property rights.
o Inability to hire key personnel.
o Decline by our independent registered public accounting firm to
provide adequate attestation as required by Section 404 of the
Sarbanes-Oxley Act.
-7-
Advantest Corporation - Consolidated (FY2006 Interim)
Interim Consolidated Financial Statements and other information
Interim Consolidated Balance Sheets
- -------------------------------------------------------------------------------------------------------------------------------
FY2005 interim FY2006 interim Summarized balance
sheet of FY2005
(As of September 30, 2005) (As of September 30, 2006) (As of March 31, 2006)
- -------------------------------------------------------------------------------------------------------------------------------
Amount Amount Amount
(in million Percentage (in million Percentage (in million Percentage
Notes yen) (%) yen) (%) yen) (%)
- -------------------------------------------------------------------------------------------------------------------------------
(Assets)
Cash and cash equivalents 135,226 163,635 157,925
Trade accounts receivable, less *1 59,038 67,336 69,567
allowance for doubtful accounts
Inventories 34,471 27,040 29,911
Deferred tax assets 15,329 12,471 13,708
Other current assets 4,156 2,626 4,522
------------ ------------ ------------
Total current assets 248,220 77.6 273,108 78.7 275,633 78.6
Investment securities 7,687 2.4 11,423 3.3 12,273 3.5
Property, plant and equipment, net *2 *3 51,423 16.1 50,002 14.4 50,793 14.5
Deferred tax assets 7,629 2.4 7,783 2.2 7,378 2.1
Intangible assets, at cost, less 2,930 0.9 2,973 0.9 2,858 0.8
accumulated amortization
Other assets 2,180 0.6 1,800 0.5 1,841 0.5
------------ ------------ ------------
Total assets 320,069 100.0 347,089 100.0 350,776 100.0
------------ ------------ ------------
- -------------------------------------------------------------------------------------------------------------------------------
-8-
Advantest Corporation - Consolidated (FY2006 Interim)
- -------------------------------------------------------------------------------------------------------------------------------
FY2005 interim FY2006 interim Summarized balance
sheet of FY2005
(As of September 30, 2005) (As of September 30, 2006) (As of March 31, 2006)
- -------------------------------------------------------------------------------------------------------------------------------
Amount Amount Amount
(in million Percentage (in million Percentage (in million Percentage
Notes yen) (%) yen) (%) yen) (%)
- -------------------------------------------------------------------------------------------------------------------------------
(Liabilities)
Current portion of long-term debt 20,047 10 30
Trade accounts payable 29,577 22,915 32,584
Income taxes payable 9,110 10,831 19,970
Accrued expenses 11,039 11,780 12,781
Accrued warranty expenses 4,180 4,373 4,776
Deferred revenue 4,654 620 2,979
Other current liabilities 2,923 2,912 3,625
------------ ------------ -------------
Total current liabilities 81,530 25.5 53,441 15.4 76,745 21.9
Long-term debt, excluding current
portion *3 15 0.0 5 0.0 10 0.0
Accrued pension and severance cost 12,361 3.9 11,420 3.3 12,292 3.5
Other liabilities 3,561 1.1 3.550 1.0 3,802 1.1
------------ ------------ -------------
Total liabilities 97,467 30.5 68,416 19.7 92,849 26.5
------------ ------------ -------------
(Stockholders' equity)
Common stock 32,363 10.1 32,363 9.3 32,363 9.2
Capital surplus 36,018 11.3 37,702 10.9 37,147 10.6
Retained earnings 222,213 69.4 262,875 75.7 245,090 69.9
Accumulated other comprehensive
income (loss) *4 (2,865) (0.9) 1,757 0.5 1,344 0.3
Treasury stock (65,127) (20.4) (56,024) (16.1) (58,017) (16.5)
------------ ------------ -------------
Total stockholders' equity 222,602 69.5 278,673 80.3 257,927 73.5
------------ ------------ -------------
Total liabilities and
stockholders' equity 320,069 100.0 347,089 100.0 350,776 100.0
------------ ------------ -------------
- -----------------------------------------------------------------------------------------------------------------------
-9-
Advantest Corporation - Consolidated (FY2006 Interim)
(Notes)
- ------------------------------------------------------------------------------------------------------------------
FY2005 interim FY2006 interim FY2005
(As of September 30, (As of September 30, (As of March 31, 2006)
2005) 2006)
- ------------------------------------------------------------------------------------------------------------------
Amount Amount Amount
(in million yen) (in million yen) (in million yen)
- ------------------------------------------------------------------------------------------------------------------
*1. Allowance for doubtful accounts 2,164 2,055 2,117
- ------------------------------------------------------------------------------------------------------------------
*2. Accumulated depreciation on property,
plant and equipment 71,264 73,803 72,131
- ------------------------------------------------------------------------------------------------------------------
*3. Collateralized assets and secured
obligations
Property, plant and equipment 388 - -
Obligations secured by the above 17 - -
- ------------------------------------------------------------------------------------------------------------------
*4. Accumulated other comprehensive
income (loss)
Foreign currency translation
adjustments (4,393) (565) (1,378)
Net unrealized gain (loss) on
available-for-sale securities 1,528 2,322 2,722
- ------------------------------------------------------------------------------------------------------------------
5. Net assets per share (in yen) 1,202.81 1,489.45 1,381.85
- ------------------------------------------------------------------------------------------------------------------
-10-
Advantest Corporation - Consolidated (FY2006 Interim)
Interim Consolidated Statements of Income
- ------------------------------------------------------------------------------------------------------------------
FY2005 interim FY2006 interim Summarized statement of
income of FY2005
(April 1, 2005 through (April 1, 2006 through (April 1, 2005 through
September 30, 2005) September 30, 2006) March 31, 2006)
- --------------------------------------------------------------------------------------------------------------------
Amount Percentage Amount Percentage Amount Percentage
(in million yen) (%) (in million yen) (%) (in million yen) (%)
- --------------------------------------------------------------------------------------------------------------------
Net sales 107,099 100.0 120,492 100.0 253,922 100.0
Cost of sales 51,714 48.3 55,493 46.1 121,429 47.8
---------- --------- ---------
Gross profit 55,385 51.7 64,999 53.9 132,493 52.2
Research and development
expenses 12,877 12.0 14,121 11.7 26,927 10.6
Selling, general and
administrative expenses 19,848 18.5 18,679 15.5 41,108 16.2
---------- --------- ---------
Operating income (loss) 22,660 21.2 32,199 26.7 64,458 25.4
Other income (expense):
Interest and dividend
income 715 1,384 1,760
Interest expense (205) (8) (290)
Other 1,332 1,842 1.7 376 1,752 1.5 1,526 2,996 1.2
----------------- ------------------ ------------------
Income (loss) before
income taxes 24,502 22.9 33,951 28.2 67,454 26.6
Income taxes 9,888 9.3 11,747 9.8 26,080 10.3
---------- --------- ---------
Net income (loss) 14,614 13.6 22,204 18.4 41,374 16.3
---------- --------- ---------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
FY2005 interim FY2006 interim FY2005
(April 1, 2005 through (April 1, 2006 through (April 1, 2005 through
September 30, 2005) September 30, 2006) March 31, 2006)
- --------------------------------------------------------------------------------------------------------------------
Amount Amount Amount
(in yen) (in yen) (in yen)
- --------------------------------------------------------------------------------------------------------------------
Net income per share
Basic 79.03 118.79 223.17
Diluted 78.75 118.03 221.98
- --------------------------------------------------------------------------------------------------------------------
-11-
Advantest Corporation - Consolidated (FY2006 Interim)
Interim Consolidated Statements of Stockholders' Equity
- --------------------------------------------------------------------------------------------------------------
FY2005 interim FY2006 interim Statement of stockholders'
equity of FY2005
(April 1, 2005 through (April 1, 2006 through (April 1, 2005 through
September 30, 2005) September 30, 2006) March 31, 2006)
- --------------------------------------------------------------------------------------------------------------
Amount Amount Amount
(in million yen) (in million yen) (in million yen)
- --------------------------------------------------------------------------------------------------------------
Common stock :
Balance at beginning of period 32,363 32,363 32,363
------------------------------------------------------------------------
Balance at end of period 32,363 32,363 32,363
------------------------------------------------------------------------
Capital surplus :
Balance at beginning of period 35,263 37,147 35,263
Stock option compensation expense 755 648 1,884
Other decrease - (93) -
------------------------------------------------------------------------
Balance at end of period 36,018 37,702 37,147
------------------------------------------------------------------------
Retained earnings :
Balance at beginning of period 210,121 245,090 210,121
Net income (loss) 14,614 22,204 41,374
Cash dividends (2,311) (4,200) (4,625)
Loss on disposal of treasury
stock (211) (219) (1,780)
------------------------------------------------------------------------
Balance at end of period 222,213 262,875 245,090
------------------------------------------------------------------------
Accumulated other comprehensive
income (loss) :
Balance at beginning of period (4,878) 1,344 (4,878)
Other comprehensive income
(loss), net of tax 2,013 413 6,222
------------------------------------------------------------------------
Balance at end of period (2,865) 1,757 1,344
------------------------------------------------------------------------
Treasury stock :
Balance at beginning of period (66,120) (58,017) (66,120)
Treasury stock purchased (14) (18) (55)
Exercise of stock options 1,006 2,004 8,157
Treasury stock sold 1 7 1
------------------------------------------------------------------------
Balance at end of period (65,127) (56,024) (58,017)
------------------------------------------------------------------------
Total stockholders' equity 222,602 278,673 257,927
- --------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
Disclosure of comprehensive
income (loss):
Net income (loss) 14,614 22,204 41,374
Other comprehensive income
(loss), net of tax 2,013 413 6,222
------------------------------------------------------------------------
Total comprehensive income
(loss) 16,627 22,617 47,596
- -------------------------------------------------------------------------------------------------------------
-12-
Advantest Corporation - Consolidated (FY2006 Interim)
Interim Consolidated Statements of Cash Flows
- --------------------------------------------------------------------------------------------------------------------
FY2005 interim FY2006 interim Summarized statement of
(April 1, 2005 (April 1, 2006 cash flows of FY2005
through through (April 1, 2005through
September 30, 2005) September 30, 2006) March 31, 2006)
- --------------------------------------------------------------------------------------------------------------------
Amount Amount Amount
(in million yen) (in million yen) (in million yen)
- --------------------------------------------------------------------------------------------------------------------
I Cash flows from operating activities:
Net income (loss) 14,614 22,204 41,374
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 3,962 3,810 8,275
Deferred income taxes (679) 915 1,005
Stock option compensation expense 755 648 1,884
Changes in assets and liabilities:
Trade accounts receivable (1,826) 2,180 (11,072)
Inventories (4,670) 2,835 108
Trade accounts payable 5,805 (9,390) 7,627
Income taxes payable 1,792 (9,156) 12,506
Accrued expenses (2,864) (1,013) (1,261)
Accrued warranty expenses 50 (403) 610
Deferred revenue 2,268 (2,329) 548
Accrued pension and severance cost (243) (873) (329)
Other (2,166) 2,763 (1,795)
----------------------------------------------------------------
Net cash provided by operating activities 16,798 12,191 59,480
----------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
-13-
Advantest Corporation - Consolidated (FY2006 Interim)
- --------------------------------------------------------------------------------------------------------------------
FY2005 interim FY2006 interim Summarized statement of
(April 1, 2005 (April 1, 2006 cash flows of FY2005
through through (April 1, 2005 through
September 30, 2005) September 30, 2006) March 31, 2006)
- --------------------------------------------------------------------------------------------------------------------
Amount Amount Amount
(in million yen) (in million yen) (in million yen)
- --------------------------------------------------------------------------------------------------------------------
II Cash flows from investing activities:
Proceeds from sale of available-for-sale
marketable securities 2,964 - 2,977
Purchase of marketable securities - - (2,256)
Purchases of non-marketable securities (1,900) - (1,900)
Proceeds from sale of property, plant and
equipment 190 63 258
Purchases of intangible assets (238) (449) (523)
Purchases of property, plant and equipment (3,776) (4,105) (7,071)
Other (58) (33) (27)
----------------------------------------------------------------
Net cash used in investing activities (2,818) (4,524) (8,542)
----------------------------------------------------------------
III Cash flows from financing activities:
Principal payments on long-term debt (21) (25) (20,043)
Proceeds from sale of treasury stock 796 1,698 6,378
Payments to acquire treasury stock (12) (18) (57)
Dividends paid (2,307) (4,193) (4,622)
Other 13 (4) 8
----------------------------------------------------------------
Net cash used in financing activities (1,531) (2,542) (18,336)
----------------------------------------------------------------
IV Net effect of exchange rate changes on cash 1,791 585 4,337
and cash equivalents
----------------------------------------------------------------
V Net change in cash and cash equivalents 14,240 5,710 36,939
VI Cash and cash equivalents at beginning of 120,986 157,925 120,986
period
----------------------------------------------------------------
VII Cash and cash equivalents at end of period 135,226 163,635 157,925
- --------------------------------------------------------------------------------------------------------------------
-14-
Advantest Corporation - Consolidated (FY2006 Interim)
Organization of the Advantest Group
The following diagram shows the business relationships among the major
affiliated companies of the Advantest Group.
- ------------------------------------------------------------------------------------------------------------------------------------
| ============================================================================================================================== |
| | Customer and Distributors | |
| ============================================================================================================================== |
| ^ ^ ^ ^ ^ |
| | | | | | |
| ------------------------------------------------------------------------------------------------------------------|---------|--- |
| || | . | . | | | |
| || | . | . | | | |
| || | Sales and Support Companies | . | | | |
| || | ------------------------------------------------------------------------ | | | |
| || | |Advantest America, Inc. Advantest Taiwan Inc. | | | | |
| || |------>|Advantest (Europe) GmbH Advantest Korea Co., Ltd. |<------------| | | |
| || | |Advantest (Singapore) Pte. Ltd. Advantest (Suzhou) Co., Ltd. | | | | |
| || | ------------------------------------------------------------------------ | | | |
| || | . ^ ^ . | | | |
| || | . | | . | | | |
| || | . | | . | | | |
| || | . | | . | | | |
| || Development manufacturing and sales . | | . | | | |
| || companies . | Manufacturing Company . Service Companies | | | |
| || | . | | . | | | |
| || ------------------------------------- . | -------------------------- . ----------------------------------- | | |
| || | Japan Engineering Co., Ltd | . | | Advantest Engineering | . | Advantest Customer Support | | | |
| || | Advantest Kyushu Systems Co., Ltd.| . | | (M)Sdn. Bhd. | . | Corporation | | | |
| || ------------------------------------- . | -------------------------- . | Advantest Finance Inc. | | | |
| || | . | . | Electronic Retrofit Corporation.| | | |
| || | . | . | Advantest Logistics Co., Ltd. | | | |
| || | . | . | Advanfacilities Co., Ltd. | | | |
| || | . | . | Advantest Technical Information | | | |
| || | . | . | Service Corporation | | | |
| || | . | . | Advantest Analysis Laboratories | | | |
| || | . | . | Co., Ltd. | | | |
| || | . | . | Advantest Staff Resource | | | |
| || | . | . | Corporation | | | |
| || | . | . | Advantest Media Service | | | |
| || | . | . | Corporation | | | |
| || | . | . | Advantest Information Systems, | | | |
| || | . | . | Inc. | | | |
| || | . | . ----------------------------------- | | |
| || | . | . ^ | | |
| || | . | . | | | |
| || v . v . v | | |
| || ================================================================================================================== | | |
| ||----| Advantest Corporation |----- | |
| | ================================================================================================================== | |
| | ^ . . | |
| | | . . | |
| | | . . | |
| | | . . | |
| | | . . | |
| | Manufacturing Company | . Manufacturing Companies . Reserach and Development Companies | |
| | | . . | |
| | ---------------------------------- | . ------------------------------ . -------------------------------------- | |
| | | Advantest Manufacturing, Inc. |---| . | Advanmechatec Co., Ltd. | . | Advantest Laboratories Co., Ltd. | | |
| | ---------------------------------- | . | Advantest DI Corporation | . | Advantest Europe R&D S.A.R.L. | | |
| | | . ------------------------------ . -------------------------------------- | |
| | | . . | |
| | Development companies | . . | |
| | | . . | |
| | -------------------------------------- | . . | |
| | | Advansoft Development | | . . | |
| | | Corporation | | . . | |
| | | Advantest Tokyo Systems Co., Ltd. |-- . . | |
| | | Advantest Tohoku Systems Co., Ltd. | . . | |
| | | Advantest Kansai Systems Co., Ltd. | . . | |
| | | Advantest America R&D Center, Inc. | . . | |
| | -------------------------------------- . . | |
| | . . | |
| |------------------------------------------------------------------------------------------------------------------------------| |
| |
| =============================================================================================================================== |
| | Semiconductor and Component Test System | Mechatronics System | Services, Support and Others | |
| =============================================================================================================================== |
| |
| |
| |
- ------------------------------------------------------------------------------------------------------------------------------------
There are 11 other consolidated subsidiaries in addition to those mentioned in
the above diagram.
Consolidated subsidiaries (23 domestic; 17 overseas; 40 total)
<--- : Main flow of products and services
-15-
Notes to the Interim Consolidated Financial Statements
(Note 1) Accounting Principles, Procedures and the Presentation of the
Interim Consolidated Financial Statements
(a) Terminology, Form and Method of Preparation of the Interim Consolidated
Financial Statements
Advantest prepares these interim consolidated financial statements in
accordance with the accounting principles, procedures, terminology, form and
mode of preparation required in the United States of America in connection with
its issuance of American Depository Shares as established under Accounting
Research Bulletins ("ARB"), Accounting Principles Board ("APB") statements,
Statements of Financial Accounting Standards ("SFAS") and other relevant sources
(collectively "U.S. GAAP"). However, Advantest Corporation and its consolidated
subsidiaries prepare their unconsolidated financial statements in accordance
with accounting principles generally accepted in the country of their domicile.
Certain adjustments and reclassifications have been incorporated in the
accompanying consolidated financial statements to present them in conformity
with accounting principles generally accepted in the United States of America.
(b) The Preparation of Consolidated Financial Statements and Registration with
the U.S. Securities and Exchange Commission
Advantest Corporation began listing on the New York Stock Exchange on
September 17, 2001 (local time) by means of an issuance of American Depository
Shares, and is registered with the U.S. Securities and Exchange Commission on
Form 20-F (equivalent to the Annual Securities Report in Japan) since FY2001. In
connection with the registration on Form 20-F, Advantest prepares its
consolidated financial statements in accordance with U.S. GAAP.
(c) Scope of Consolidation and Application of the Equity Method
Advantest's interim consolidated financial statements include
financial statements of Advantest Corporation and its majority-owned
subsidiaries. Advantest does not have any variable interest entities as provided
in the U.S. Financial Accounting Standards Board's Interpretation No. 46
(Revised December 2003)- "Consolidation of Variable Interest Entities". Thus,
Advantest does not include any such entity in its consolidated financial
statements. All significant intercompany balances and transactions have been
eliminated in consolidation.
The following table sets forth the number of consolidated subsidiaries
and equity method affiliates of Advantest:
- -------------------------------------------------------------------------------------------------------
FY 2006 Interim FY 2005
(As of September 30, 2006) (As of March 31, 2006) Increase (decrease)
- -------------------------------------------------------------------------------------------------------
Domestic 23 23 0
-------------------------------------------------------------------------------------------
Overseas 17 17 0
-------------------------------------------------------------------------------------------
Consolidated subsidiaries 40 40 0
- -------------------------------------------------------------------------------------------------------
Equity method affiliates - - -
- -------------------------------------------------------------------------------------------------------
Total 40 40 0
- -------------------------------------------------------------------------------------------------------
-16-
(Note 2) Summary of Significant Accounting Policies and Practices
There was no change in accounting policies and practices.
(Note 3) Investment Securities
Investment securities at September 30, 2005, September 30, 2006 and
March 31, 2006 consist of marketable and non-marketable equity securities.
Advantest classifies its marketable equity securities as available-for-sale. The
acquisition cost, gross unrealized gains, gross unrealized losses and fair value
at September 30, 2005, September 30, 2006 and March 31, 2006 were as follows:
Million Yen
-----------
September 30, 2005
------------------
Gross Gross
----- -----
Acquisition unrealized unrealized
----------- ---------- ----------
cost Gains Losses Fair value
---- ----- ------ ----------
Noncurrent:
Available-for-sale:
Equity securities 1,784 2,560 - 4,344
Million Yen
-----------
September 30, 2006
------------------
Gross Gross
----- -----
Acquisition unrealized unrealized
----------- ---------- ----------
cost Gains Losses Fair value
---- ----- ------ ----------
Noncurrent:
Available-for-sale:
Equity securities 4,315 3,885 5 8,195
Million Yen
-----------
March 31, 2006
--------------
Gross Gross
----- -----
Acquisition unrealized unrealized
----------- ---------- ----------
cost Gains Losses Fair value
---- ----- ------ ----------
Noncurrent:
Available-for-sale:
Equity securities 4,424 4,559 8 8,975
Gross realized gains and losses on available-for-sales equity
securities for the six months ended September 30, 2005, September 30, 2006 and
for the year ended March 31, 2006 were as follows:
Million Yen
-----------
September 30, 2005 September 30, 2006 March 31, 2006
------------------ ------------------ --------------
Gross Gross Gross Gross Gross Gross
----- ----- ----- ----- ----- -----
realized realized realized realized realized realized
-------- -------- -------- -------- -------- --------
Gains Losses Gains Losses Gains Losses
----- ------ ----- ------ ----- ------
Noncurrent:
Available-for-sale:
Equity securities 934 - - - 1,040 -
Gross realized gains and losses based on the averaged cost method are
included in "other income (expense)" in the interim consolidated statements of
income and consolidated statements of income and "other" in net cash provided by
operating activities in the interim consolidated statements of cash flows and
the consolidated statements of cash flows.
-17-
Non-marketable investment securities are carried at cost. On a periodic
basis, Advantest evaluates the investments for the possible impairment. If the
fair value of the investment securities is estimated to have declined and such
decline is judged to be other than temporary, Advantest recognizes the
impairment of the investment and the carrying value is reduced to its fair
value. The impairment is charged to earnings and a new cost basis for the
security is established.
(Note 4) Basic and Diluted Net Income (loss) per Share.
Basic and diluted net income (loss) per share was computed as follows:
FY2005 Interim FY2006 Interim FY2005
---------------------- ---------------- ----------------------
Numerator:
Net income (Millon yen) 14,614 22,204 41,374
---------------------- ---------------- ----------------------
Denominator
Basic weighted average shares 184,916,458 186,911,714 185,389,026
Dilutive effect of exercise of
stock option and warrants 641,512 1,215,246 994,054
---------------------- ---------------- ----------------------
Diluted weighted average shares 185,557,970 188,126,960 186,383,080
---------------------- ---------------- ----------------------
At September 30, 2005, September 30, 2006 and March 31, 2006, stock
options and warrants representing, upon exercise, 14,000 shares, 1,582,000
shares and 4,000 shares, respectively, were outstanding but were not included in
the computation for net income per share (diluted) because the foregoing did not
have any dilutive effect.
(Note 5) Significant Event after the Balance Sheet Date
Pursuant to resolution by the Board of Directors dated July 26, 2006,
Advantest has made, on October 1, 2006, a one to two stock split per share of
the common stock applicable to shareholders recorded in the register as of
September 30, 2006.
Share numbers and per share information contained in the Interim
Consolidated Financial Statements (net assets per share, basic net income per
share for this interim fiscal period and net income per share (diluted) per
share for all fiscal periods presented) reflect such stock split.
-18-
Advantest Corporation - Consolidated (FY2006 Interim)
(Segment Information)
1. Business Segment Information
- ----------------------------------------------------------------------------------------------------------------------------------
FY2005 interim FY2006 interim FY2005
(April 1, 2005 through (April 1, 2006 through (April 1, 2005 through
September 30, 2005) September 30, 2006) March 31, 2006)
- ----------------------------------------------------------------------------------------------------------------------------------
Amount Percentage (Amount Percentage (Amount Percentage
(in million (%) (in million (%) (in million (%)
yen) yen) yen)
- ----------------------------------------------------------------------------------------------------------------------------------
Semiconductor and Component Test System
Sales to unaffiliated customers 78,244 96.8 84,305 98.1 187,136 97.8
Intersegment sales 2,588 3.2 1,669 1.9 4,279 2.2
-----------------------------------------------------------------------------------------------------------------------
Net sales 80,832 100.0 85,974 100.0 191,415 100.0
--------------------------------------------------------------------------------------------------------------------------
Operating expenses 59,829 74.0 59,438 69.1 133,898 70.0
--------------------------------------------------------------------------------------------------------------------------
Operating income (loss) 21,003 26.0 26,536 30.9 57,517 30.0
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Mechatronics System
Sales to unaffiliated customers 20,320 99.2 26,527 99.5 47,724 98.9
Intersegment sales 161 0.8 128 0.5 536 1.1
-----------------------------------------------------------------------------------------------------------------------
Net sales 20,481 100.0 26,655 100.0 48,260 100.0
--------------------------------------------------------------------------------------------------------------------------
Operating expenses 15,890 77.6 19,101 71.7 36,294 75.2
--------------------------------------------------------------------------------------------------------------------------
Operating income (loss) 4,591 22.4 7,554 28.3 11,966 24.8
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Services, Support and Others
Sales to unaffiliated customers 8,535 100.0 9,660 100.0 19,062 100.0
Intersegment sales - - - - - -
-----------------------------------------------------------------------------------------------------------------------
Net sales 8,535 100.0 9,660 100.0 19,062 100.0
--------------------------------------------------------------------------------------------------------------------------
Operating expenses 6,585 77.2 8,249 85.4 15,209 79.8
--------------------------------------------------------------------------------------------------------------------------
Operating income (loss) 1,950 22.8 1,411 14.6 3,853 20.2
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Elimination and Corporate
Sales to unaffiliated customers - - - - - -
Intersegment sales (2,749) 100.0 (1,797) 100.0 (4,815) 100.0
-----------------------------------------------------------------------------------------------------------------------
Net sales (2,749) 100.0 (1,797) 100.0 (4,815) 100.0
--------------------------------------------------------------------------------------------------------------------------
Operating expenses 1,380 - 857 - 2,179 -
--------------------------------------------------------------------------------------------------------------------------
Operating income (loss) (4,129) - (2,654) - (6,994) -
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Consolidated
Sales to unaffiliated customers 107,099 100.0 120,492 100.0 253,922 100.0
Intersegment sales - - - - - -
--------------------------------------------------------------------------------------------------------------------------
Net sales 107,099 100.0 120,492 100.0 253,922 100.0
--------------------------------------------------------------------------------------------------------------------------
Operating expenses 83,684 78.1 87,645 72.7 187,580 73.9
--------------------------------------------------------------------------------------------------------------------------
Operating income (loss) 23,415 21.9 32,847 27.3 66,342 26.1
- ----------------------------------------------------------------------------------------------------------------------------------
(Notes)
1. Adjustments to operating income (loss) included in Corporate mainly
consist of research and development expenses for basic research
activities, which are not allocated to corporate general administrative
expenses and segment by business sector.
2. Stock option compensation expense of (Y)755 million, (Y)648 million and
(Y)1,884 million in FY2005 interim, FY2006 interim and FY 2005,
respectively are not included in operating income in the business
segment information. Therefore these operating income do not match with
the operating income in the interim consolidated statements of income
and the consolidated statements of income. Such exclusion was made since
such items are not included in the performance review of each business
segment by management.
2. Geographic Segment Information (Based on Location of Customers)
Net sales to unaffiliated customers
- ----------------------------------------------------------------------------------------------------------------------------------
FY2005 interim FY2006 interim FY2005
(April 1, 2005 through (April 1, 2006 through (April 1, 2005 through
September 30, 2005) September 30, 2006) March 31, 2006)
- ----------------------------------------------------------------------------------------------------------------------------------
Amount Percentage (Amount Percentage (Amount Percentage
(in million (%) (in million (%) (in million (%)
yen) yen) yen)
- ----------------------------------------------------------------------------------------------------------------------------------
Americas 11,452 10.7 6,136 5.1 25,516 10.0
-----------------------------------------------------------------------------------------------------------------------------
Europe 7,117 6.6 4,876 4.0 14,558 5.7
-----------------------------------------------------------------------------------------------------------------------------
Asia 53,923 50.4 61,274 50.9 132,708 52.3
-----------------------------------------------------------------------------------------------------------------------------
Total Overseas 72,492 67.7 72,286 60.0 172,782 68.0
-----------------------------------------------------------------------------------------------------------------------------
Japan 34,607 32.3 48,206 40.0 81,140 32.0
-----------------------------------------------------------------------------------------------------------------------------
Consolidated 107,099 100.0 120,492 100.0 253,922 100.0
- ----------------------------------------------------------------------------------------------------------------------------------
-19-
Advantest Corporation - Supplemental Information (FY2006 Interim)
Supplemental Information to the FY2006 Interim Earnings Digest
*All consolidated figures were prepared in accordance with U.S. GAAP.
1. Summary of FY2006 Interim Results (April 1, 2006 through September 30, 2006)
(Consolidated) (Rounded to the nearest million yen)
- ----------------------------------------------------------------------------------------------------------------------------------
FY2005 interim FY2006 interim Percentage change (%) FY2005
- ----------------------------------------------------------------------------------------------------------------------------------
Net sales 107,099 120,492 12.5 253,922
- ----------------------------------------------------------------------------------------------------------------------------------
Operating income (loss) 22,660 32,199 42.1 64,458
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes 24,502 33,951 38.6 67,454
- ----------------------------------------------------------------------------------------------------------------------------------
Net income (loss) 14,614 22,204 51.9 41,374
- ----------------------------------------------------------------------------------------------------------------------------------
Total assets 320,069 347,089 8.4 350,776
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets 222,602 278,673 25.2 257,927
- ----------------------------------------------------------------------------------------------------------------------------------
Net income (loss) per share (basic) (in yen) 79.03 118.79 50.3 223.17
- ----------------------------------------------------------------------------------------------------------------------------------
Net income (loss) per share (diluted) (in yen) 78.75 118.03 49.9 221.98
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets per share (in yen) 1,202.81 1,489.45 23.8 1,381.85
- ----------------------------------------------------------------------------------------------------------------------------------
Net interest expense 510 1,376 169.5 1,470
- ----------------------------------------------------------------------------------------------------------------------------------
ROE(%) - - - 17.8
- ----------------------------------------------------------------------------------------------------------------------------------
(Note) On October 1, 2006, a one to two stock split was made to shares of the
common stock in respect of shareholders recorded in the register as of
September 30, 2006. Per share information (basic net income per share,
net income per shares (diluted) and net assets per share for all
periods presented) reflect such stock split.
(Non-Consolidated) (Parent Company only, Japanese GAAP) (Truncated after the million yen)
- ----------------------------------------------------------------------------------------------------------------------------------
FY2005 interim FY2006 interim Percentage change (%) FY2005
- ----------------------------------------------------------------------------------------------------------------------------------
Net sales 101,484 99,562 (1.9) 217,688
- ----------------------------------------------------------------------------------------------------------------------------------
Operating income (loss) 21,161 21,465 1.4 49,746
- ----------------------------------------------------------------------------------------------------------------------------------
Ordinary income (loss) 24,589 24,293 (1.2) 53,878
- ----------------------------------------------------------------------------------------------------------------------------------
Net income (loss) 16,524 16,707 1.1 35,273
- ----------------------------------------------------------------------------------------------------------------------------------
Total assets 255,783 266,206 4.1 274,538
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets 173,999 211,459 21.5 197,226
- ----------------------------------------------------------------------------------------------------------------------------------
Net income (loss) per share (in yen) 178.72 178.78 0.0 378.34
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets per share (in yen) 1,880.38 2,253.49 19.8 2,111.11
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends per share (in yen) 25.00 35.00 40.00 70.00
- ----------------------------------------------------------------------------------------------------------------------------------
2. Consolidated Net Sales by Business and Geographic Segment (Rounded to the nearest million yen)
- ----------------------------------------------------------------------------------------------------------------------------------
By Business Segment FY2005 interim FY2006 interim Percentage change (%) FY2005
- ----------------------------------------------------------------------------------------------------------------------------------
Semiconductor and Component 80,832 85,974 6.4 191,415
Test System
----------------------------------------------------------------------------------------------------------------
Mechatronics System 20,481 26,655 30.1 48,260
----------------------------------------------------------------------------------------------------------------
Services, Support and Others 8,535 9,660 13.2 19,062
----------------------------------------------------------------------------------------------------------------
Intercompany transactions elimination (2,749) (1,797) - (4,815)
----------------------------------------------------------------------------------------------------------------
Total net sales 107,099 120,492 12.5 253,922
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
By Geographic Segment FY2005 interim FY2006 interim Percentage change (%) FY2005
- ----------------------------------------------------------------------------------------------------------------------------------
Japan 34,607 48,206 39.3 81,140
- ----------------------------------------------------------------------------------------------------------------------------------
Americas 11,452 6,136 (46.4) 25,516
----------------------------------------------------------------------------------------------------------------
Europe 7,117 4,876 (31.5) 14,558
----------------------------------------------------------------------------------------------------------------
Asia 53,923 61,274 13.6 132,708
----------------------------------------------------------------------------------------------------------------
Total overseas 72,492 72,286 (0.3) 172,782
- ----------------------------------------------------------------------------------------------------------------------------------
-20-
3. Consolidated Orders input received and Orders backlog by Business Segment (Rounded to the nearest million yen)
- ------------------------------------------------------------------------------------------------------------------------------------
Orders input received FY2005 interim FY2006 interim Percentage change (%) FY2005
- ------------------------------------------------------------------------------------------------------------------------------------
Semiconductor and Component 93,732 82,048 (12.5) 195,585
Test System
------------------------------------------------------------------------------------------------------------------
Mechatronics System 21,652 25,462 17.6 49,491
------------------------------------------------------------------------------------------------------------------
Services, Support and Others 9,051 9,415 4.0 19,251
------------------------------------------------------------------------------------------------------------------
Intercompany transactions elimination (2,849) (1,707) - (4,892)
------------------------------------------------------------------------------------------------------------------
Total orders input received 121,586 115,218 (5.2) 259,435
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Orders backlog FY2005 interim FY2006 interim Percentage change (%) FY2005
- ------------------------------------------------------------------------------------------------------------------------------------
Semiconductor and Component 44,946 32,289 (28.2) 36,215
Test System
------------------------------------------------------------------------------------------------------------------
Mechatronics System 7,831 6,698 (14.5) 7,891
------------------------------------------------------------------------------------------------------------------
Services, Support and Others 1,364 794 (41.8) 1,038
------------------------------------------------------------------------------------------------------------------
Intercompany transactions elimination (116) (4) - (93)
------------------------------------------------------------------------------------------------------------------
Total orders backlog 54,025 39,777 (26.4) 45,051
- ------------------------------------------------------------------------------------------------------------------------------------
(Note) The amount of orders input received for any given period
consists of the sum of the revenues for such period and the
amount of backlog at the end of such period less the backlog
at the beginning of such period. Orders input received are
recorded upon receipt of a written customer order.
4. Consolidated Cash Flows (Rounded to the nearest million yen)
- ----------------------------------------------------------------------------------------------------------------------------------
FY2005 interim FY2006 interim Percentage change (%) FY2005
- ----------------------------------------------------------------------------------------------------------------------------------
Operating activities 16,798 12,191 (27.4) 59,480
----------------------------------------------------------------------------------------------------------------
Investing activities (2,818) (4,524) - (8,542)
----------------------------------------------------------------------------------------------------------------
(Free cash flows) 13,980 7,667 (45.2) 50,938
----------------------------------------------------------------------------------------------------------------
Financing activities (1,531) (2,542) - (18,336)
----------------------------------------------------------------------------------------------------------------
Total cash flows 12,449 5,125 (58.8) 32,602
- ----------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period 135,226 163,635 21.0 157,925
- ----------------------------------------------------------------------------------------------------------------------------------
5. Consolidated Outstanding Interest-bearing liabilities (Rounded to the nearest million yen)
- ----------------------------------------------------------------------------------------------------------------------------------
FY2005 interim FY2006 interim Percentage change (%) FY2005
----------------------------------------------------------------------------------------------------------------
Bonds and warrant bonds 20,000 - (100.0) -
----------------------------------------------------------------------------------------------------------------
Loans and lease obligations 89 35 (61.1) 64
----------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 20,089 35 (99.8) 64
- ----------------------------------------------------------------------------------------------------------------------------------
6. Consolidated Capital Expenditure, Depreciation and Amortization and Research and Development Expenses
(Rounded to the nearest million yen)
- ----------------------------------------------------------------------------------------------------------------------------------
FY2005 interim FY2006 interim Percentage change (%) FY2005
- ----------------------------------------------------------------------------------------------------------------------------------
Capital expenditures 3,701 3,709 0.2 8,323
- ----------------------------------------------------------------------------------------------------------------------------------
Depreciation and amortization 3,962 3,810 (3.8) 8,275
- ----------------------------------------------------------------------------------------------------------------------------------
Research and development expenses 12,877 14,121 9.7 26,927
- ----------------------------------------------------------------------------------------------------------------------------------
7. Number of Employees (Advantest Corporation and Consolidated Subsidiaries) (Persons)
- ----------------------------------------------------------------------------------------------------------------------------------
FY2005 interim FY2006 interim Percentage change (%) FY2005
- ----------------------------------------------------------------------------------------------------------------------------------
Non-Consolidated (Parent Company only) 1,455 1,461 0.4 1,445
- ----------------------------------------------------------------------------------------------------------------------------------
Domestic 1,347 1,378 2.3 1,355
----------------------------------------------------------------------------------------------------------------
Overseas 785 813 3.6 795
----------------------------------------------------------------------------------------------------------------
Consolidated Subsidiaries total 2,132 2,191 2.8 2,150
- ----------------------------------------------------------------------------------------------------------------------------------
Consolidated full-time employee total 3,587 3,652 1.8 3,595
- ----------------------------------------------------------------------------------------------------------------------------------
-21-
8. Supplemental Segment Information
Segment Information by geographic area
(Rounded to the nearest million yen)
- ------------------------------------------------------------------------------------------------------------------------------------
FY2005 interim FY2006 interim FY2005
- ------------------------------------------------------------------------------------------------------------------------------------
----------- ----------- -----------
(April 1, 2005 (April 1, 2006 (April 1, 2005
through Percentage through Percentage through Percentage
September 30, 2005) (%) September 30, 2006) (%) March 31, 2006) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
Japan
Sales to unaffiliated customers 54,121 - 69,791 - 119,996 -
Intersegment sales 53,079 - 36,606 - 111,958 -
------------------------------------------------------------------------------------------------------------------------
Net sales 107,200 100.0 106,397 100.0 231,954 100.0
---------------------------------------------------------------------------------------------------------------------------
Operating expenses 79,295 74.0 79,960 75.2 169,426 73.0
---------------------------------------------------------------------------------------------------------------------------
Operating income (loss) 27,905 26.0 26,437 24.8 62,528 27.0
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Americas
Sales to unaffiliated customers 28,257 - 12,483 - 53,834 -
Intersegment sales 1,558 - 2,395 - 3,605 -
------------------------------------------------------------------------------------------------------------------------
Net sales 29,815 100.0 14,878 100.0 57,439 100.0
---------------------------------------------------------------------------------------------------------------------------
Operating expenses 28,071 94.2 12,946 87.0 54,399 94.7
---------------------------------------------------------------------------------------------------------------------------
Operating income (loss) 1,744 5.8 1,932 13.0 3,040 5.3
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Europe
Sales to unaffiliated customers 6,982 - 6,547 - 18,505 -
Intersegment sales 665 - 641 - 1,312 -
------------------------------------------------------------------------------------------------------------------------
Net sales 7,647 100.0 7,188 100.0 19,817 100.0
---------------------------------------------------------------------------------------------------------------------------
Operating expenses 7,007 91.6 6,419 89.3 17,810 89.9
---------------------------------------------------------------------------------------------------------------------------
Operating income (loss) 640 8.4 769 10.7 2,007 10.1
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Asia
Sales to unaffiliated customers 17,739 - 31,671 - 61,587 -
Intersegment sales 3,552 - 3,466 - 7,000 -
---------------------------------------------------------------------------------------------------------------------------
Net sales 21,291 100.0 35,137 100.0 68,587 100.0
---------------------------------------------------------------------------------------------------------------------------
Operating expenses 19,402 91.1 29,559 84.1 62,691 91.4
---------------------------------------------------------------------------------------------------------------------------
Operating income (loss) 1,889 8.9 5,578 15.9 5,896 8.6
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Elimination and Corporate
Sales to unaffiliated customers - - - - - -
Intersegment sales (58,854) - (43,108) - (123,875) -
------------------------------------------------------------------------------------------------------------------------
Net sales (58,854) - (43,108) - (123,875) -
---------------------------------------------------------------------------------------------------------------------------
Operating expenses (49,336) - (40,591) - (114,862) -
---------------------------------------------------------------------------------------------------------------------------
Operating income (loss) (9,518) - (2,517) - (9,013) -
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Consolidated
Sales to unaffiliated customers 107,099 - 120,492 - 253,922 -
Intersegment sales - - - - - -
------------------------------------------------------------------------------------------------------------------------
Net sales 107,099 100.0 120,492 100.0 253,922 100.0
---------------------------------------------------------------------------------------------------------------------------
Operating expenses 84,439 78.8 88,293 73.3 189,464 74.6
---------------------------------------------------------------------------------------------------------------------------
Operating income (loss) 22,660 21.2 32,199 26.7 64,458 25.4
- -----------------------------------------------------------------------------------------------------------------------------------
(Note) Adjustments to operating income (loss) included in Corporate mainly
consist of research and development expenses for basic research
activities, which are not allocated to corporate general
administrative expenses and segment by geographic area. In addition,
stock option compensation expense of (Y)755 million, (Y)648 million
and (Y)1,884 million in FY2005 interim, FY2006 interim and FY2005,
respectively are included in Corporate operating expenses.
-22-
(All non-consolidated financial information has been
prepared in accordance with accounting principles
generally accepted in Japan.)
FY2006 Interim Selected Non-consolidated Financial Data
(Six months ended September 30, 2006)
October 27, 2006
Company name : Advantest Corporation
(URL http://www.advantest.co.jp/investors/)
Stock exchanges on which shares are listed : Tokyo Stock Exchange
Stock code number : 6857
Location of head office : Tokyo Prefecture
Company representative : Toshio Maruyama, Representative Board Director,
President and CEO
Contact person : Hiroshi Nakamura, Executive Officer,
Vice President of the Corporate Affairs Group
(03) 3214-7500
Date of Board meeting to approve the
financial results : October 27, 2006
Expected commencement date of dividend payment : December 1, 2006
Adoption of the unit share (tangenkabu) system : Yes (each unit comprises 100 shares)
1. Results of FY2006 Interim (April 1, 2006 through September 30, 2006)
(1) Financial Results
- ----------------------------------------------------------------------------------------------------------
Net sales Operating income Ordinary income
- ----------------------------------------------------------------------------------------------------------
Million yen Million yen Million yen
FY2006 interim 99,562 (1.9%) 21,465 1.4% 24,293 (1.2%)
FY2005 interim 101,484 (16.2%) 21,161 (25.3%) 24,589 (18.5%)
- ----------------------------------------------------------------------------------------------------------
FY2005 217,688 49,746 53,878
- ----------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net income
Net income per share
- --------------------------------------------------------------------------------
Million yen Yen
FY2006 interim 16,707 1.1% 178.78
FY2005 interim 16,524 (11.6%) 178.72
- --------------------------------------------------------------------------------
FY2005 35,273 378.34
- --------------------------------------------------------------------------------
Note 1: Average number of shares outstanding was 93,455,857 in FY2006
interim, 92,458,229 in FY2005 interim and 92,694,513 shares in FY2005,
respectively.
Note 2: No changes in accounting policies have been made during these periods.
Note 3: The percentages shown for net sales, operating income, ordinary
income and net income are changes in comparison to the corresponding
period of the previous fiscal year.
(2) Financial Position
- ----------------------------------------------------------------------------------------------------------
Total assets Net assets Equity-to-assets Net assets per share
ratio
- ----------------------------------------------------------------------------------------------------------
Million yen Million yen % Yen
FY2006 interim 266,206 211,459 79.2 2,253.49
FY2005 interim 255,783 173,999 68.0 1,880.38
- ----------------------------------------------------------------------------------------------------------
FY2005 274,538 197,226 71.8 2,111.11
- ----------------------------------------------------------------------------------------------------------
Note 1: Outstanding number of shares at the end of each period was
93,548,981 in FY2006 interim, 92,534,082 in FY2005 interim and
93,326,649 shares in FY2005, respectively.
Note 2: Outstanding number of shares held as treasury stock at the end of
each period was 6,234,404 in FY2006 interim, 7,249,303 in FY2005
interim and 6,456,736 shares in FY2005, respectively.
-23-
2. Projected Results for FY2006 (April 1, 2006 through March 31, 2007)
- --------------------------------------------------------------------------------
Net sales Ordinary income Net income
- --------------------------------------------------------------------------------
Million yen Million yen Million yen
FY2006 215,000 49,000 33,000
- --------------------------------------------------------------------------------
(Reference) Projected net income per share for the fiscal year: (Y) 176.38
* Net income per share (FY 2006) has been calculated based on the numbers of
issued and outstanding shares after the stock split.
3. Dividends
Cash Dividend
Dividend per share
- ---------------------------------------------------------------------
Interim Year end Annual total
- ---------------------------------------------------------------------
Yen Yen Yen
FY2005 25.00 45.00 70.00
- ---------------------------------------------------------------------
FY2006 (result) 35.00 -
- -----------------------------------------------------
FY2006 (forecast) - 17.50 52.50
- ---------------------------------------------------------------------
* As resolved at the Board of Directors' Meeting held on July 26, 2006, a one to
two stock split was made on October 1, 2006, to shares of the common stock in
respect of shareholders listed in the register as of September 30, 2006.
Dividends are attributable to a year end dividend of (Y) 35 per share and an
annual dividend of (Y) 70 per share prior to the stock split.
Figures presented in this Earning Digest have been truncated after the million
yen.
For a discussion of the assumptions and other factors upon which these
projections are based, please refer to "Prospects for the Upcoming Fiscal Year"
appearing elsewhere in this document.
-24-
[Interim Non-Consolidated Financial Statements]
Interim Balance Sheets
- -----------------------------------------------------------------------------------------------------------------------------------
Summarized balance sheet of
FY2005 interim FY2006 interim FY2005
(As of September 30, 2005) (As of September 30, 2006) (As of March 31, 2006)
- -----------------------------------------------------------------------------------------------------------------------------------
Amount Percentage Amount Percentage Amount Percentage
(in million yen) (%) (in million yen) (%) (in million yen) (%)
- -----------------------------------------------------------------------------------------------------------------------------------
(Assets)
I Current Assets
1. Cash and deposits 78,440 88,398 86,669
2. Trade notes receivables 3,929 844 1,001
3. Accounts receivable 62,322 67,352 71,892
4. Inventory 21,861 19,721 21,607
5. Other receivable 1,613 1,089 1,962
6. Deferred tax assets 9,510 8,331 9,514
7. Other 7,048 6,852 7,224
8. Allowance for doubtful accounts (0) - -
----- ----- ------
Total current assets 184,726 72.2 192,591 72.3 199,872 72.8
------- ------- -------
II Noncurrent assets
(1)Property, plant and equipment
1. Buildings 14,869 13,740 14,163
2. Land 18,108 17,915 17,915
3. Other 6,163 6,239 6,702
------ ------ ------
Total property, plant and 39,141 15.3 37,894 14.2 38,781 14.1
equipment ------ ------ -------
(2)Intangible fixed assets 1,286 0.5 1,343 0.5 1,233 0.5
------ ------ -------
(3)Investments and other assets
1. Investment in associated 16,470 16,470 16,470
companies
2. Deferred tax assets 3,679 4,124 3,482
3. Other 10,479 13,781 14,698
------ ------ ------
Total investment and other 30,629 12.0 34,376 13.0 34,650 12.6
assets ------- ------- -------
Total noncurrent assets 71,057 27.8 73,615 27.7 74,665 27.2
------- ------- -------
Total assets 255,783 100.0 266,206 100.0 274,538 100.0
------- ------- -------
(Liabilities)
I Current liabilities
1. Trade accounts payable 27,718 21,049 30,476
2. Current installments of bonds 20,000 - -
3. Income tax payable 7,021 6,910 16,315
4. Allowance for product warranty 4,435 4,395 4,877
5. Bonus accrual for directors - 104 -
6. Other 13,137 13,625 16,451
------ ------ ------
Total current liabilities 72,311 28.3 46,085 17.3 68,120 24.8
------- ------- -------
II Noncurrent liabilities
1. Long-term borrowings 15 5 10
2. Allowance for retirement benefits 7,043 6,359 6,970
3. Allowance for officers' 1,523 - 1,681
retirement benefits
4. Other 890 2,296 529
------ ------ ------
Total noncurrent liabilities 9,472 3.7 8,661 3.3 9,191 3.4
------- ------- -------
Total liabilities 81,783 32.0 54,746 20.6 77,311 28.2
------- ------- -------
- -----------------------------------------------------------------------------------------------------------------------------------
- 25 -
- -----------------------------------------------------------------------------------------------------------------------------------
Summarized balance sheet of
FY2005 interim FY2006 interim FY2005
(As of September 30, 2005) (As of September 30, 2006) (As of March 31, 2006)
- -----------------------------------------------------------------------------------------------------------------------------------
Amount Percentage Amount Percentage Amount Percentage
(in million yen) (%) (in million yen) (%) (in million yen) (%)
- -----------------------------------------------------------------------------------------------------------------------------------
(Stockholders' equity)
32,362 11.8
I Common stock 32,362 12.7 - -
II Capital surplus 32,973
-------
1. Additional paid-in capital 32,973 - 32,973 12.0
------- -------
Total capital surplus 32,973 12.9 - -
-------
III Retained earnings
1. Legal reserve 3,083 - 3,083
2. Voluntary reserve 148,942 - 148,942
3. Unappropriated earnings at end 20,338 - 35,204
of period ------- -------
Total retained earnings 172,363 67.4 - - 187,229 68.2
------- -------
IV Net unrealized holding gains on
other securities 1,426 0.5 - - 2,677 0.9
V Treasury stock (65,126) (25.5) - - (58,017) (21.1)
------- -------
Total stockholders' equity 173,999 68.0 - - 197,226 71.8
-------
Total liabilities and
stockholders' equity 255,783 100.0 - - 274,538 100.0
-------
(Net assets)
I Stockholders' equity
1. Common stock - - 32,362 12.2 - -
2. Capital surplus
(1)Additional paid-in capital - 32,973 -
Total capital surplus - - 32,973 12.4 - -
3. Retained earnings
(1)Legal reserve - 3,083 -
(2)Other retained earnings
Reserve for losses in foreign
investments - 27,062 -
General reserves - 146,880 -
Retained earnings brought forward - 22,197 -
Total retained earnings - - 199,222 74.8 - -
4. Treasury stock - - (56,024) (21.1) - -
Total stockholders' equity - - 208,534 78.3 - -
II Difference of appreciation and conversion
1. Net unrealized gains on securities - 2,277 -
Total difference of appreciation
and conversion - - 2,277 0.9 - -
III Stock acquisition rights - - 648 0.2 - -
Total net assets - - 211,459 79.4 - -
Total liabilities and net assets - - 266,206 100.0 - -
- ------------------------------------------------------------------------------------------------------------------------------------
- 26 -
[Interim Statements of Income]
- -----------------------------------------------------------------------------------------------------------------------------------
Summarized statement of
FY2005 interim FY2006 interim income of FY2005
(April 1, 2005 through (April 1, 2006 through (April 1, 2005 through
September 30, 2005) September 30, 2006) March 31, 2006)
----------------------------------------------------------------------------------------------------------------------------------
Amount Percentage Amount Percentage Amount Percentage
(in million yen) (%) (in million yen) (%) (in million yen) (%)
- -----------------------------------------------------------------------------------------------------------------------------------
I Net sales 101,484 100.0 99,562 100.0 217,688 100.0
II Cost of sales 53,972 53.2 50,768 51.0 113,606 52.2
------- ------ -------
Gross profit 47,512 46.8 48,793 49.0 104,082 47.8
III Selling, general and 26,350 25.9 27,328 27.4 54,335 25.0
administrative expenses ------- ------ -------
Operating income 21,161 20.9 21,465 21.6 49,746 22.8
IV Non-operating income 4,769 4.6 3,852 3.8 6,433 3.0
V Non-operating expenses 1,341 1.3 1,024 1.0 2,301 1.0
------- ------ -------
Ordinary income 24,589 24.2 24,293 24.4 53,878 24.8
------- ------ -------
Income (loss) before income 24,589 24.2 24,293 24.4 53,878 24.8
taxes
Income taxes 7,173 6,774 18,364
Income taxes - deferred 891 8,065 7.9 810 7,585 7.6 239 18,604 8.6
----------------- ---------------- -------
Net income 16,524 16.3 16,707 16.8 35,273 16.2
Retained earnings brought 4,024 - 4,024
forward
Loss from disposition of 210 - 1,780
treasury stock
Interim dividend - - 2,313
------- -------
Unappropriated earnings at 20,338 - 35,204
end of period ------- -------
- -----------------------------------------------------------------------------------------------------------------------------------
- 27 -
(Interim Statements of Changes in Stockholders' Equity)
FY2006 interim (April 1, 2006 through September 30, 2006)
- -----------------------------------------------------------------------------------------------------------------------------------
Difference of
Stockholders' equity appreciation
and conversion
---------------------------------------------------------------------------------------------------
Capital Retained earnings Total
surplus net
----------------------------------------------------- Total Net Stock assets
Common Other retained earnings Treasury stockholders' unrealized acquisition
stock -------------------------------- stock equity gains on rights
Additional Reserve Retained securities
paid-in Legal for General earnings
capital reserve losses in reserves brought
foreign forward
investments
- -----------------------------------------------------------------------------------------------------------------------------------
Balance as
of March
31, 2006
(Millions
of yen) 32,362 32,973 3,083 27,062 121,880 35,204 (58,017) 194,548 2,677 - 197,226
- -----------------------------------------------------------------------------------------------------------------------------------
Changes in
the term
- -----------------------------------------------------------------------------------------------------------------------------------
Transfer to
voluntary
reserve
(Note) 25,000 (25,000) - -
- -----------------------------------------------------------------------------------------------------------------------------------
Bonus of
directors
and
corporate
auditors (Note) (203) (203) (203)
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends
from
surplus
(Note) (4,199) (4,199) (4,199)
- -----------------------------------------------------------------------------------------------------------------------------------
Net income 16,707 16,707 16,707
- -----------------------------------------------------------------------------------------------------------------------------------
Purchase of
treasury
stock (18) (18) (18)
- -----------------------------------------------------------------------------------------------------------------------------------
Disposal of
treasury
stock (312) 2,010 1,698 1,698
- -----------------------------------------------------------------------------------------------------------------------------------
Net changes
of items
other than
stockholders'
equity - (400) 648 247
- -----------------------------------------------------------------------------------------------------------------------------------
Total
changes
in the term
(Millions
of yen) 25,000 (13,007) 1,992 13,985 (400) 648 14,233
- -----------------------------------------------------------------------------------------------------------------------------------
Balance of
September
30, 2006
(Millions
of yen) 32,362 32,973 3,083 27,062 146,880 22,197 (56,024) 208,534 2,277 648 211,459
- -----------------------------------------------------------------------------------------------------------------------------------
(Note) These are appropriation items as of the Ordinary Shareholders' Meeting held in June 2006.
- 28 -