Financial Presentation (Year Ended March 31, 2007) May 15, 2007 Fields Corporation
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Financial Presentation (Year Ended March 31, 2007) May 15, 2007 Fields Corporation FIELDS CORPORATION 2767:JASDAQ THE GREATEST LEISURE FOR ALL PEOPLE http://www.fields.biz Copyright 2007 FIELDS CORPORATION All rights reserved. 1 Index 1. Highlights for the Year Ended March 2007 3 2. Outlook for the Year Ending March 2008 8 3. PS Field 11 4. PS Field: Sales results for the Year Ended March 2007 15 5. Game Field and Other Field 22 6. Appendix I 27 7. Appendix II 34 Copyright 2007 FIELDS CORPORATION All rights reserved. 2 Highlights for the Year Ended March 2007 Copyright 2007 FIELDS CORPORATION All rights reserved. 3 Year Ended March 2007 Consolidated Operating Results (Unit: ¥million) Year ended March 2006 Year ended March 2007 4th 4th Full Year Full-Year Full Year YOY (%) Actual to Quarter Plan* Quarter Plan Net sales 52,856 96,814 109,880 21,176 85,321 88.1% 77.6% Due to slow demand for new Gross profit 16,035 29,737 34,120 9,916 29,248 98.4% 85.7% regulation pachislot machines (¥22.5 billion) SG&A expenses 5,046 17,389 19,960 5,667 20,303 116.8% 101.7% Operating income 10,988 12,348 14,160 4,248 8,944 72.4% 63.2% Operating income margin 20.8% 12.8% 12.9% 20.1% 10.5% Loss on disposal of fixed assets due to in-house system Ordinary income 11,373 13,127 14,150 4,160 9,202 70.1% 65.0% renovation (¥600 million) Ordinary income margin 21.5% 13.6% 12.9% 19.6% 10.8% Loss on closing of a fitness clubs and impairment of fixed Net income 6,402 7,085 7,480 1,414 3,710 52.4% 49.6% assets of former Total Workout Corporation of Japan Sports Marketing Inc. (JSM) Net income margin 12.1% 7.3% 6.8% 6.7% 4.3% (¥200 million) * Revised projections to the estimates announced on October 30, 2006 Source: Fields Copyright 2007 FIELDS CORPORATION All rights reserved. 4 Year Ended March 2007 Non-Consolidated Operating Results (Unit: ¥million) Year Ended March 2006 Year Ended March 2007 Full-Year 4th Quarter Full Year Plan* 4th Quarter Full Year YOY (%) Actual to Plan Net sales 50,017 88,251 93,810 18,141 71,314 80.8% 76.0% Gross profit 15,338 26,568 28,840 8,842 25,150 94.7% 87.2% SG&A expenses 4,046 14,071 15,120 4,889 16,150 114.8% 106.8% Operating income 11,291 12,497 13,720 3,953 8,999 72.0% 65.6% Operating income margin 22.6% 14.2% 14.6% 21.8% 12.6% Ordinary income 11,327 12,836 14,020 3,982 9,393 73.2% 67.0% Ordinary income margin 22.6% 14.5% 14.9% 22.0% 13.2% Net income 6,114 6,934 7,610 1,722 4,773 68.8% 62.7% Net income margin 12.2% 7.9% 8.1% 9.5% 6.7% * Revised projections to the estimates announced on October 24, 2006 Source: Fields Copyright 2007 FIELDS CORPORATION All rights reserved. 5 Year Ended March 2007 Segment Information (Unit: ¥million) Year Ended March Year Ended March 2007 2006 Full-Year Results Full-Year Results Composition YOY (%) Net sales PS field 88,349 71,306 82.2% 80.7% An increase due to full-scale sales expansion of D3 Inc. in Game field 5,052 9,946 11.5% 196.9% Europe and the United States Other field 4,083 5,521 6.4% 135.2% Subtotal 97,485 86,774 100.0% 89.0% Elimination or incorporation (671) (1,453) Total 96,814 85,321 88.1% Operating income PS field 12,711 9,073 103.3% 71.4% Game field 277 220 2.5% 79.4% Sluggish business due to Other field (655) (513) -5.8% — closing the existing facilities and delayed Subtotal 12,333 8,780 100.0% 71.2% opening of new facilities of Total Workout fitness club of Elimination or incorporation 15 164 Japan Sports Marketing Inc. (JSM) Total 12,348 8,944 72.4% Source: Fields Copyright 2007 FIELDS CORPORATION All rights reserved. 6 Year Ended March 2007 Consolidated Balance Sheets (Condensed) (Unit: ¥million) At March 31, At March 31, At March 31, At March 31, 1. Notes and accounts receivable— Assets Increase/ Liabilities and Net Assets Increase/ 2006 2007 Decrease (Liabilities and Shareholders’ equity) 2006 2007 Decrease trade and accounts payable—trade → Accounts payable—trade1 34,869 9,094 (25,774) A large number of machines were Cash and cash equivalents 15,777 17,902 2,125 Short-term borrowings2 730 2,230 1,500 sold at the end of the year ended Other 6,927 7,540 613 March 2006 Total current liabilities 42,526 18,865 (23,661) Notes and accounts receivable— 46,385 18,523 (27,862) trade1 Corporate bonds 490 370 (120) Long-term debt 366 1,238 871 Other 3,150 2,770 (379) 2. Inventories, short-term Inventories2 1,568 2,972 1,403 Total fixed liabilities 4,007 4,379 371 borrowings and long-term debt → Total liabilities 46,534 23,244 (23,289) An increase due to the development of large-scale Other current assets 6,147 6,746 598 products at D3 Inc. in the Game Minority interest in consolidated 1,610 — — subsidiaries field Common stock 7,948 — — Total current assets 69,879 46,144 (23,735) Capital surplus 7,994 — — Retained earnings 22,726 — — Other 742 — — Total tangible fixed assets3 4,689 5,756 1,067 Total shareholders’ equity 39,411 — — 3. Total tangible fixed assets →An increase due to the acquisition Total intangible fixed assets4 2,752 4,036 1,283 Common stock — 7,948 — Capital surplus — 7,994 — of properties for branch offices. Retained earnings — 24,943 — Total investments and other assets 10,235 10,144 (90) Total shareholders’ equity — 40,886 — Total valuation and translation — 228 — differences Total fixed assets 17,676 19,936 2,260 Stock acquisition rights — 15 — 4. Total intangible fixed assets →An increase due to system Minority interest in consolidated — 1,705 — subsidiaries investments to improve the in- Total assets 87,556 66,081 (21,474) Total net assets — 42,836 — house infrastructure Total liabilities and net assets (Total liabilities, minority interest and shareholders’ equity) 87,556 66, 081 — Source: Fields Copyright 2007 FIELDS CORPORATION All rights reserved. 7 Outlook for the Year Ending March 2008 Copyright 2007 FIELDS CORPORATION All rights reserved. 8 Year Ending March 2008 Business Plan (Consolidated) (Unit: ¥million) Year Ended March 2007 Year Ending March 2008 1st-Half 2nd-Half Full-Year 1st-Half 2nd-Half Full-Year Results Results Results Plan YOY (%) Plan YOY (%) Plan YOY (%) Net sales 47,122 38,198 85,321 53,000 112.5% 45,000 117.8% 98,000 114.9% Gross profit 14,050 15,198 29,248 14,400 102.5% 17,700 116.5% 32,100 109.7% SG&A expenses 9,329 10,973 20,303 10,100 108.3% 12,400 113.0% 22,500 110.8% Operating income 4,720 4,224 8,944 4,300 91.1% 5,300 125.5% 9,600 107.3% Operating income margin 10.0% 11.1% 10.5% 8.1% 11.8% 9.8% Ordinary income 4,980 4,221 9,202 4,200 84.3% 5,100 120.8% 9,300 101.1% Ordinary income margin 10.6% 11.1% 10.8% 7.9% 11.3% 9.5% Net income 2,225 1,484 3,710 1,000 44.9% 2,800 188.6% 3,800 102.4% Net income margin 4.7% 3.9% 4.3% 1.9% 6.2% 3.9% Source: Fields Copyright 2007 FIELDS CORPORATION All rights reserved. 9 Year Ending March 2008 Business Plan (Non-Consolidated) (unit: ¥million) Year Ended March 2007 Year Ending March 2008 1st-Half 2nd-Half Full-Year 1st-Half 2nd-Half Full-Year Results Results Results Plan YOY (%) Plan YOY (%) Plan YOY (%) Net sales 41,141 30,173 71,314 46,000 111.8% 29,000 96.1% 75,000 105.2% Gross profit 12,351 12,799 25,150 12,300 99.6% 11,860 92.7% 24,160 96.1% SG&A expenses 7,373 8,776 16,150 7,600 103.1% 8,160 93.0% 15,760 97.6% Operating income 4,977 4,022 8,999 4,700 94.4% 3,700 92.0% 8,400 93.3% Operating income margin 12.1% 13.3% 12.6% 10.2% 12.8% 11.2% Ordinary income 5,284 4,109 9,393 4,800 90.8% 3,700 90.0% 8,500 90.5% Ordinary income margin 12.8% 13.6% 13.2% 10.4% 12.8% 11.3% Net income 2,810 1,962 4,773 800 28.5% 2,000 101.9% 2,800 58.7% Net income margin 6.8% 6.5% 6.7% 1.7% 6.9% 3.7% Source: Fields Copyright 2007 FIELDS CORPORATION All rights reserved. 10 PS Field Copyright 2007 FIELDS CORPORATION All rights reserved. 11 PS Field Year Ended March 2007 Drastic Change in Pachinko Business Environment Events Management conditions of pachinko halls - Summer through fall in 2006 - Withdrew the popular old regulation A decline in earnings (Model No. 4.5) Pachislot machines Machine replacement expenses occurred An increase in expenses - Fall in 2006 through spring in 2007 - Slowly replaced old regulation pachislot A further decline in earnings machines with new regulation one More machine replacement expenses occurred An increase in expenses To create a new source for earnings, we have applied content from highly profitable pachislot machines to new pachinko machines as well.