FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of December, 2003
Commission File Number 1-7616
PIONEER CORPORATION
-------------------
(Translation of registrant's name into English)
4-1, MEGURO 1-CHOME, MEGURO-KU, TOKYO 153-8654, JAPAN
-----------------------------------------------------
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F:
Form 20-F [X] Form 40-F [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1):
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7):
Indicate by check mark whether by furnishing the information contained in this
Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [ ] No [X]
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PIONEER CORPORATION
-------------------
(Registrant)
Date: December 3, 2003
By /s/ Kaneo Ito
--------------------------------
Kaneo Ito
President and Representative
Director
This report on Form 6-K contains the following:
1. The English translation version of 58th Semiannual Business Report for the
six-month period ended September 30, 2003.
(TRANSLATION)
THE 58TH SEMIANNUAL BUSINESS REPORT
For the Six Months Ended September 30, 2003
This is a translation of the original Semiannual Business Report written in
the Japanese language, prepared primarily for the benefit and information
of shareholders of the Company's common stock.
PIONEER CORPORATION
Tokyo, Japan
TO OUR SHAREHOLDERS
In the first half of the 58th accounting period, which ended September 30, 2003,
consolidated operating revenue of Pioneer Corporation came to 321,090 million
yen, about the same as last year.
Operating income increased 33.5% from the same period of the previous year to
17,591 million yen, due mainly to the lower cost of sales ratio, reductions in
selling, general and administrative expenses, and higher profits from Patent
Licensing as a result of increased revenue from royalties. Net income for the
six-month period was 12,475 million yen, up significantly from 5,664 million yen
a year earlier, boosted by the growth in operating income, a decrease in foreign
exchange loss, a decline in equity in losses of affiliated companies, and income
from discontinued operations associated with the sale of our audio/video
software subsidiaries.
On a parent-only basis, net sales for the April-September period fell 2.9% to
215,803 million yen, while a net loss of 1,066 million yen was posted, compared
with a net income of 1,311 million yen for the same period last year, due to
losses from the sale of audio/video software subsidiaries and losses on business
reorganization programs.
Interim dividend payments were raised 5.0 yen this year to 12.5 yen per share of
common stock.
We continue to face a severe business environment, including uncertainty
regarding the economic direction of our major markets - Japan, North America and
Europe - and growing price competition for our main products, as well as the
rapid appreciation of the yen. Under these circumstances, we are continuing to
implement our "select and focus" policy to further expand profitability and
improve
1
management efficiency. Pioneer is actively investing management resources in
strategic businesses to achieve the group's medium-term business plan. Examples
of this include converting optical disc production lines to plasma display lines
and the recent transfer of two audio/video software subsidiaries in Japan and
the United States to a third party.
To meet the rapid growth in demand for plasma displays, we are continuing to
build an efficient production system. We are currently expanding the production
line at Pioneer Display Products Corporation, a plasma display production
subsidiary, to boost Pioneer's production capacity to more than 500,000 units
per year by spring 2005. And to differentiate our products from those of our
competitors, we are developing panels that consume less power and offer greater
picture quality, while also working to cut costs.
In the DVD business, demand for recordable DVD drives for personal computer (PC)
use has seen strong growth. We are actively expanding this business as we
strengthen our production capacity in China. Our home-use DVD recorders,
especially those offering higher added value with hard disk drives (HDDs) have
also been selling very well, and we aim to expand our range of models. We will
continue to boost sales in both the PC and home audio/video markets.
Regarding the car electronics business, we will continue to make aggressive
promotions and lead the market. In our car navigation systems, HDD models with
advanced features are performing well, as are DVD models offering ease of use
and affordability. We also maintain a strong position in the car audio market.
To satisfy the increasingly diversified needs of consumers, we have been
releasing a
2
number of advanced products, such as CD players with organic electroluminescent
(OEL) displays that effectively differentiate themselves from the products of
other manufacturers. We are striving to increase our dominance even further.
Pioneer is continuing its drive to minimize operating costs and expenses
throughout the group. As well as cutting manufacturing costs by expanding
production in China, we are implementing a system that places strict controls on
expenses and working on improving ratio in selling, general and administrative
expenses. Last April, we launched full operation of a group-wide supply chain
management system for some of our products - the result of a project to
thoroughly control consolidated inventories. The combination of these efforts
should improve our cash flows and further boost profitability.
We sincerely hope that you, our shareholders, will continue in your
understanding and support of Pioneer.
December 2003
Kaneo Ito
President and Representative Director
3
CONSOLIDATED OPERATING REVENUE BY BUSINESS SEGMENT
PERCENT OF OPERATING REVENUE
Six Months Ended
September 30
--------------------------------------
2001 2002 2003
---- ---- ----
Home Electronics ............ 31.1% 30.3% 25.0%
Car Electronics ............. 43.2% 45.3% 44.2%
Patent Licencing ............ 3.6% 1.9% 2.6%
Others ...................... 22.1% 22.5% 28.2%
----- ----- -----
100.0% 100.0% 100.0%
===== ===== =====
As a result of the sale of audio/video software subsidiaries in the first half
of the 58th accounting period, figures for the corresponding period last year in
the "Others" segment have been reclassified.
HOME ELECTRONICS
THIS SEGMENT INCLUDES DVD PLAYERS, DVD RECORDERS, PLASMA DISPLAYS, PROJECTION
TVS, STEREO SYSTEMS, INDIVIDUAL STEREO COMPONENTS, EQUIPMENT FOR CABLE-TV
SYSTEMS, DIGITAL BROADCAST SET-TOP BOXES AND TELEPHONES.
Sales in the Home Electronics segment amounted to 80,149 million yen, a decline
of 17.2% from the same period last year.
In Japan, while sales of DVD recorders showed strong gains, sales of plasma
displays for home use and DVD players fell, resulting in total domestic sales of
27,025 million yen, down 8.3% from the same period last year.
Overseas, sales of plasma displays for home use grew in North
4
America, while sales declined for DVD players in Europe and Asia, for audio
products and digital cable-TV set-top boxes in North America, and for digital
broadcast set-top boxes in Europe. Total overseas sales thus came to 53,124
million yen, a decline of 21.1% compared to the same period last year.
CAR ELECTRONICS
THIS SEGMENT INCLUDES CAR STEREOS, CAR AV (AUDIO/VIDEO) SYSTEMS, CAR SPEAKERS
AND CAR NAVIGATION SYSTEMS.
Sales in the Car Electronics segment decreased 2.0% from the same period last
year, to 141,840 million yen.
In Japan, sales of car navigation systems in the consumer market, both HDD
and DVD models, showed healthy growth, as did car audio products sold to
automobile manufacturers, resulting in total domestic sales of 57,110 million
yen, up 8.2% over the previous year.
Overseas, while sales of car audio products in the Asian consumer markets,
particularly China, grew, sales of car audio products in North America both to
consumers and automobile manufacturers declined. Total overseas sales in this
segment amounted to 84,730 million yen, a drop of 7.9% from the corresponding
period last year.
5
PATENT LICENSING
THIS SEGMENT INCLUDES THE LICENSING OF PATENTS RELATED TO OPTICAL DISC
TECHNOLOGIES.
Though patents related to optical discs have expired in some regions, royalty
revenue from Patent Licensing rose to 8,404 million yen, up 39.0% over the same
period last year, due to a revenue from a renewed contract with a licensee.
OTHERS
THIS SEGMENT INCLUDES RECORDABLE DVD DRIVES, DVD-ROM DRIVES, BUSINESS-USE PLASMA
DISPLAYS, ORGANIC ELECTROLUMINESCENT (OEL) DISPLAY PANELS, FACTORY AUTOMATION
SYSTEMS AND ELECTRONIC DEVICES.
Sales in this segment increased 26.1% over the same period last year, to 90,697
million yen.
In Japan, while sales of devices related to cellular phones such as OEL
displays rose, sales of karaoke products for commercial use declined as a result
of the sale of karaoke-related subsidiaries, and sales of DVD-ROM drives for PCs
also declined, resulting in total domestic sales of 34,263 million yen, down
4.3% from the same period last year.
Overseas, strong growth in sales of recordable DVD drives for PCs, and
higher sales of plasma displays for business use in Europe and optical disc
manufacturing systems in Asia, resulted in total overseas sales of 56,434
million yen, up 56.1% over the corresponding period last year.
6
CONSOLIDATED FINANCIAL STATEMENTS
PIONEER CORPORATION AND SUBSIDIARIES
(1) CONSOLIDATED BALANCE SHEETS
(In millions of yen)
September 30
-----------------------
2003 2002
-------- --------
ASSETS
Current assets:
Cash and cash equivalents ..................... 137,936 140,412
Available-for-sale securities ................. -- 7
Trade receivables, less allowance ............. 102,912 105,610
Inventories ................................... 110,316 106,801
Others ........................................ 65,763 60,936
-------- --------
Total current assets .................... 416,927 413,766
Investments and long-term receivables ............ 28,360 30,269
Property, plant and equipment, less depreciation . 154,319 149,870
Intangible assets ................................ 17,403 14,023
Other assets ..................................... 42,817 33,673
-------- --------
659,826 641,601
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings and current portion
of long-term debt ........................... 35,594 45,500
Trade payables ................................ 78,526 70,060
Others ........................................ 108,607 90,776
-------- --------
Total current liabilities ............... 222,727 206,336
Long-term debt ................................... 28,528 35,112
Other long-term liabilities ...................... 71,944 48,567
Minority interests ............................... 17,728 18,079
Shareholders' equity:
Common stock .................................. 49,049 49,049
Capital surplus ............................... 82,294 82,060
Retained earnings ............................. 263,548 245,018
Accumulated other comprehensive income (loss) . (65,535) (39,101)
Treasury stock ................................ (10,457) (3,519)
-------- --------
Total shareholders' equity .............. 318,899 333,507
-------- --------
659,826 641,601
======== ========
7
(2) CONSOLIDATED STATEMENTS OF INCOME
(In millions of yen except
per share information)
Six months ended
September 30
------------------------
2003 2002
-------- --------
Operating revenue:
Net sales ................................... 312,686 313,467
Royalty revenue ............................. 8,404 6,044
-------- --------
321,090 319,511
-------- --------
Operating costs and expenses:
Cost of sales ............................... 220,052 222,028
Selling, general and administrative ......... 83,447 84,308
-------- --------
303,499 306,336
-------- --------
Operating income ............................... 17,591 13,175
Other income (expenses):
Interest income ............................. 730 986
Foreign exchange gain (loss) ................ (1,005) (1,459)
Interest expense ............................ (1,186) (1,338)
Others, net ................................. 462 191
-------- --------
(999) (1,620)
-------- --------
Income from continuing operations before
income taxes .............................. 16,592 11,555
Income taxes ................................... 6,828 3,360
Minority interest in income of subsidiaries .... (168) 867
-------- --------
Equity in losses of affiliated companies ....... (1,761) (2,758)
-------- --------
Income from continuing operations .............. 7,835 6,304
Income (loss) from discontinued operations,
net of taxes .............................. 4,640 (640)
-------- --------
Net income ..................................... 12,475 5,664
======== ========
Net income per share (in yen):
Basic ....................................... 71.11 31.53
Diluted ..................................... 71.09 31.53
8
(3) CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of yen)
Six months ended
September 30
-----------------------
2003 2002
-------- --------
Operating activities:
Net income .................................... 12,475 5,664
(Income) loss from discontinued
operations, net of taxes .................... (4,640) 640
Depreciation and amortization ................. 18,891 16,781
(Increase) decrease in trade receivables ...... 1,022 14,893
Increase in inventories ....................... (21,013) (12,474)
Increase (decrease) in trade payables ......... 15,209 14,452
Increase in other accrued liabilities ......... 4,632 3,623
Other ......................................... (3,355) (1,444)
-------- --------
Net cash provided by operating activities ... 23,221 42,135
-------- --------
Investing activities:
Payment for purchase of fixed assets .......... (28,239) (20,375)
Other ......................................... 3,631 4,948
-------- --------
Net cash used in investing activities ....... (24,608) (15,427)
-------- --------
Financing activities:
Increase (decrease) in short-term borrowings
and long-term debt .......................... 4,610 (3,205)
Dividends paid ................................ (1,754) (1,350)
Purchase of treasury stock .................... (5) (3,507)
Other ......................................... (186) (171)
-------- --------
Net cash provided by (used in)
financing activities .................... 2,665 (8,233)
-------- --------
Effect of exchange rate changes on cash
and cash equivalents .......................... (5,822) (5,176)
-------- --------
Net increase (decrease) in cash
and cash equivalents .......................... (4,544) 13,299
Cash and cash equivalents at beginning of period . 142,480 127,113
-------- --------
Cash and cash equivalents at end of period ....... 137,936 140,412
======== ========
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Notes:
1. The Company's consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in the United States of
America.
2. The consolidated financial statements include the accounts of the parent
company and 134 subsidiaries and the investments in 5 affiliated companies
accounted for on an equity basis.
3. Effective from the fiscal 2003 year-end presentation, the Company classified
gains and losses on sale and disposal of fixed assets, which were previously
included in "Others, net" in "Other income (expenses)," into "Selling, general
and administrative expenses." Previously reported amounts have been reclassified
accordingly.
4. As a result of the sale of subsidiaries in audio/video software business in
the second quarter of the fiscal 2004, the gain on such sale, as well as the
business results of discontinued operations, are presented as a separate line
item in the consolidated statements of income in accordance with Statement of
Financial Accounting Standards No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." Previously reported amounts have been
reclassified accordingly.
10
FINANCIAL STATEMENTS
PIONEER CORPORATION -- PARENT COMPANY ONLY
(1) CONDENSED BALANCE SHEETS
(In millions of yen)
September 30
----------------------
2003 2002
------- -------
ASSETS
Current assets:
Cash .......................................... 29,100 24,329
Notes and accounts receivable--trade .......... 37,899 39,714
Marketable securities ......................... 18,782 42,350
Inventories ................................... 29,874 25,629
Other current assets .......................... 30,992 42,439
------- -------
Total current assets ........................ 146,650 174,464
Fixed assets:
Tangible ...................................... 39,443 31,282
Intangible .................................... 16,769 9,458
Investments and others ........................ 190,020 179,188
------- -------
Total fixed assets .......................... 246,233 219,929
------- -------
Total assets ..................................... 392,883 394,394
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable--trade ....................... 45,533 43,016
Accrued expenses .............................. 38,348 32,389
Other current liabilities ..................... 10,017 14,796
------- -------
Total current liabilities ................... 93,898 90,202
Long-term liabilities ............................ 28,996 28,443
------- -------
Total liabilities ................................ 122,895 118,645
Shareholders' equity ............................. 269,988 275,748
------- -------
Total liabilities and shareholders' equity ....... 392,883 394,394
======= =======
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(2) CONDENSED STATEMENTS OF INCOME
(In millions of yen)
Six months ended
September 30
-----------------------
2003 2002
-------- --------
Net sales ........................................ 215,803 222,282
Cost of sales ................................. 168,143 179,906
Selling, general and administrative expenses .. 44,227 40,374
-------- --------
Operating income ................................. 3,432 2,001
Non-operating income (expenses), net .......... 132 (632)
-------- --------
Ordinary income .................................. 3,565 1,368
Other expenses, net ........................... (6,050) (316)
-------- --------
Income (loss) before income taxes ................ (2,485) 1,052
Income taxes .................................. (1,418) (259)
-------- --------
Net income (loss) ................................ (1,066) 1,311
======== ========
Notes:
1. Accumulated depreciation on tangible fixed assets on September 30, 2003 and
2002 was 90,756 million yen and 92,673 million yen, respectively.
2. A net loss per share of common stock of 6.08 yen was recorded for the six
months ended September 30, 2003, while net income per share of common stock for
the corresponding period of 2002 was 7.30 yen.
12
CONDITION OF SHAREHOLDERS AND SHARES
(AS OF SEPTEMBER 30, 2003)
NUMBER OF SHARES ISSUED 180,063,836 shares
Note: 4,630,826 shares of treasury stock held by the Company are included.
DISTRIBUTION OF SHARE-OWNERSHIP
Percentage of
Number of Number of Shareholdings to
Shareholders Shares Held Total Issued Shares
------------ ----------- -------------------
Financial institutions ............ 130 79,859 44.35%
Securities companies .............. 54 2,598 1.44
Other Japanese business
corporations ................... 289 4,227 2.35
Foreign corporations
and individuals ................ 452 62,407 34.66
Japanese individuals
and others ..................... 24,844 30,970 17.20
------ ------- ------
Total ............................. 25,769 180,063 thousand 100.00%
TOP TEN LARGEST SHAREHOLDERS
Number of Shares Held
and its Percent to Total
---------------------------
Japan Trustee Services Bank, Ltd. (Trust Account) 17,803 thousand (9.88%)
The Master Trust Bank of Japan, Ltd.
(Trust Account) 10,151 (5.63)
UFJ Trust Bank Limited (Trust Account A) 5,997 (3.33)
State Street Bank and Trust Company 5,250 (2.91)
The Bank of Tokyo-Mitsubishi, Ltd. 4,154 (2.30)
The Sumitomo Mitsui Banking Corporation 4,089 (2.27)
Mizuho Bank, Ltd. 4,000 (2.22)
Mizuho Trust & Banking Co., Ltd., Pension Trust,
Mizuho Bank Account 3,955 (2.19)
Bank of Bermuda Limited, Hamilton 3,840 (2.13)
Kanya Matsumoto 3,828 (2.12)
Note: The Company holds 4,630 thousand shares as treasury stock.
13
STOCK EXCHANGE LISTINGS
Tokyo Stock Exchange New York Stock Exchange
Osaka Securities Exchange Euronext Amsterdam
PRICE PER SHARE AND VOLUME OF SHARES TRADED ON THE TOKYO STOCK
EXCHANGE
Volume
High Low (thousand
(yen) (yen) shares)
----- ----- -------
2000
Oct. 4,580 3,190 21,829
Nov. 3,680 3,030 27,982
Dec. 3,800 2,710 24,129
2001
Jan. 3,640 2,920 19,327
Feb. 3,350 2,765 15,574
Mar. 3,750 2,720 21,924
Apr. 3,930 3,020 22,531
May 4,250 3,570 24,332
June 3,950 3,580 22,121
July 3,920 2,960 18,429
Aug. 3,430 2,355 24,539
Sept. 2,710 2,155 21,630
Oct. 2,860 2,210 23,175
Nov. 3,150 2,285 28,229
Dec. 3,290 2,635 23,439
2002
Jan. 3,330 2,800 24,977
Feb. 2,685 2,150 42,385
Mar. 2,910 2,440 27,601
Apr. 2,860 2,385 26,982
May 2,595 2,280 25,405
June 2,355 1,981 23,528
July 2,210 1,980 24,659
Aug. 2,260 2,025 31,233
Sept. 2,220 1,900 21,349
Oct. 2,130 1,805 20,215
Nov. 2,430 2,045 32,263
Dec. 2,490 2,150 22,870
2003
Jan. 2,405 2,070 21,562
Feb. 2,600 2,260 33,006
Mar. 2,620 2,390 24,271
Apr. 2,460 2,225 25,507
May 2,555 2,290 23,202
June 2,840 2,490 35,912
July 2,970 2,635 31,308
Aug. 2,815 2,515 27,317
Sept. 3,030 2,600 40,815
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