FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
REPORT OF FOREIGN ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of November 2001
COMMISSION FILE NUMBER: 1-7239
KOMATSU LTD.
...............................................
Translation of registrant's name into English
3-6 Akasaka 2-chome, Minato-ku, Tokyo, Japan
............................................
Address of principal executive offices
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INFORMATION TO BE INCLUDED IN REPORT
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1. Two company announcements made on November 9, 2001.
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.
KOMATSU LTD.
-----------------------------
(Registrant)
Date: November 9, 2001 By: /s/ Kenji Kinoshita
-----------------------------
Kenji Kinoshita
Executive Officer
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[LETTERHEAD OF KOMATSU]
KOMATSU ANNOUNCES CONSOLIDATED INTERIM RESULTS
FOR FISCAL 2002 AND OUTLOOK FOR THE REST OF THE YEAR
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The accompanying financial information is prepared in accordance with generally
accepted accounting principles in the United States of America.
Komatsu Ltd. posted consolidated net sales of (Yen)505.4 billion (US$4,248
million, at US$1=(Yen)119) for the interim period of fiscal 2002 ending March
31, 2002, down 8.8% from the corresponding period last year. Operating loss for
the period registered (Yen)5.3 billion (US$45 million). Net loss for the period
amounted to (Yen)42.6 billion (US$359 million).
Millions of yen and US dollar, except per share amounts
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2002 2001 2002
------------------------------------------------------------------------------------------------------------
Net sales (Yen) 505,455 (Yen) 554,530 $ 4,248
Japan 239,542 288,922 2,013
Overseas 265,913 265,608 2,235
Operating income (loss) (5,320) 12,839 (45)
Net income (loss) (42,665) 3,152 (359)
Net income (loss) per share --- Basic (Yen) (44.69) (Yen) 3.29 (Cents) (37.6)
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1. Business Results by Operation
Construction and Mining Equipment
---------------------------------
Consolidated net sales of the construction and mining equipment business for the
interim period declined 2.7% from the corresponding period last year, to
(Yen)353.0 billion (US$2,967 million).
Japanese sales for the interim period declined 9.2% from the corresponding
period last year, to (Yen)129.6 billion (US$1,089 million) on a consolidated
basis. Total demand for construction equipment in Japan dropped more than
anticipated, as the Japanese construction industry became increasingly reluctant
over equipment investments because of their recessionary mindset compounded by
reduced public investments. Against this backdrop, Komatsu embarked on full-
scale market launchings of the new-generation construction equipment GALEO
series in order to expand sales during the interim period. The Company also
accelerated its involvement in downstream markets. Together with its
distributors and affiliated rental companies nationwide, the Company reinforced
its sales-rental-service integrated initiatives and application-specific sales
of new machines. Furthermore, the Company continued to offer its customers with
value programs like management strategy seminars, strengthening its relationship
with them.
IT (Information Technology) is a very effective means for Komatsu to
sharpen its product competitiveness and differentiation. The Company introduced
its original KOMTRAX machine operation management system to selected models of
the GALEO series as a standard feature. Based on real-time information
concerning the conditions of equipment, the Company is now positioned to timely
deliver new services and establish a new business model in which it will be able
to help customers reduce their total costs.
Consolidated overseas sales improved 1.5% over the corresponding period
last year, to (Yen)223.4 billion (US$1,878 million).
In North America, market demand for construction equipment slipped further
largely due to reduced equipment investment by customers who were concerned
about uncertainty over the economy,
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inventory cutbacks by rental customers and other negative developments. Against
this backdrop, Komatsu converged efforts to accelerate sales of new machines
such as minimal rear-swing radius hydraulic excavators but failed short of
increasing sales over the corresponding period last year.
In Europe, while major markets such as France sustained firm demand, demand
sharply dropped in the largest European market of Germany. As a result, European
demand, which had continued to expand since 1997, downturned for the interim
period under review. The Company's sales in Europe for the interim period also
declined from the previous corresponding period.
Chinese demand for construction equipment continued to sustain momentum of
rapid expansion carried over the last few years. Already with a wealth of
business experience over many years, Komatsu further reinforced its business as
represented by the establishment of Komatsu (China) Ltd. in February, and
accomplished substantial growth in sales over the corresponding period a year
ago. In Southeast Asia, recovery of demand for construction equipment was
delayed amid political turmoil in Indonesia and the Philippines, and the
Company's sales declined slightly from the corresponding period last year.
However, the Company expects to improve sales for fiscal 2002 over the previous
year, as demand for mining and other equipment is recovering in Indonesia in
tandem with political stability.
Demand in the mining equipment market is growing substantially, supported
by demand for fleet renewals against the backdrops of stabilized price of copper
and increased price of coal. The Company is expanding sales of super-large dump
trucks in particular, which it enjoys high evaluations of customers for their
high rate of operation and high level of reliability.
Worldwide demand for utility equipment, which had expanded steadily,
declined as affected by slowed demand in major markets of North America and
Europe. While the Company expects to see continued trend for decrease into the
second half period, it is prepared to increase its market share and sales by
introducing new models and expanding sales in regions other than North America
and Europe. In addition, the Company is planning to commence production of
equipment in 2002 at a plant currently under construction in South Carolina.
Capitalizing on this local production, the Company will also work to expand
sales in North America.
Electronics
-----------
Consolidated net sales of the electronics business dropped 26.2% from the
previous corresponding period, to (YEN)41.0 billion (US$345 million) for the
interim period under review, reflecting worldwide IT-triggered sluggish
economies.
On a nonconsolidated basis, sales of electronic products decreased from the
corresponding period last year. The Company expanded sales of network terminals
and new wireless LAN products, but they were offset by dropped sales of FA-use
panel computers and programmable displays.
Komatsu Electronic Metals Co., Ltd. secured profits on a nonconsolidated
basis, while the market conditions for silicon wafers remained sluggish. In
addition to reinforcing sales and service operations, the company worked to
improve corporate strength by cutting total costs with substantial reduction of
fixed costs. Formosa Komatsu Silicon Corporation, its subsidiary, worked to
expand its product mix and export sales. However, it fell short of absorbing a
loss associated with the start-up cost in Taiwan where the semiconductor market
was hit hardest.
Advanced Silicon Materials LLC., in an effort to meet a drastic decline in
demand for polycrystalline silicon for semiconductors, strove to expand sales of
polycrystalline silicon for use in solar batteries and sales of silane. However,
sales for the interim period declined from the previous corresponding period. In
addition to the reduced sales, the company also faced an increased burden of
electric power rates due to the change in power companies. As a result of
expanded production costs, the company reported an operating loss for the
interim period. In relation to the cancellation of power supply contract, the
company included a penalty of (Yen)7.6 billion (US$64 million) as income for the
interim period, which was paid by the concerned electric power company. The
company also reported an impairment loss of (Yen)13.4 billion (US$113 million)
on fixed assets in Montana.
Komatsu Electronics, Inc. experienced a drastic decline in sales of
thermoelectric modules for use in fiber optic communication networks, compared
to outstanding sales up through last year. The drop in sales during the interim
period reflects reduced investments and inventory adjustments of
telecommunication equipment manufacturers. Despite these conditions, the company
continued to focus its efforts in the development of next-generation products.
Sales of semiconductor manufacturing equipment also dropped sharply for the
interim period as client manufacturers refrained from equipment investments.
GIGAPHOTON INC. a company accounted for by the equity method, focused on
research and development of industry-pacesetting, next-generation technologies
and realignment of global sales networks. As a result, the company advanced
sales for the interim period over the previous corresponding period under
adverse effects of investment cutbacks by semiconductor manufacturers. With
heavy expenses for new product
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development, however, the company was not able to substantially improve earnings
for the interim period.
Others
------
Consolidated net sales from other businesses totaled (Yen)111.3 billion (US$936
million), an 18.1% decline from the corresponding period a year ago.
On a nonconsolidated basis, Komatsu's large press business improved sales
and increased the volume of orders placed by Japanese automakers over the
previous corresponding period, reflecting their good evaluation of a new
operational setup which enabled the Company to meet different needs and
expectations of customers promptly.
Komatsu Industries Corporation, in charge of sheet metal forming machinery
and small and medium-sized presses, advanced sales for the interim period, when
the press and machine tool industries faced a very difficult environment with
downturn in total orders. Success of the company reflects positive outcomes of
its proposal-oriented marketing and expanded demand for medium-sized presses
from automotive related manufacturers who need larger equipment. Since the start
of the new management board in 1999, the company has continued to increase
orders, sales and earnings, achieving improvements for the past four consecutive
interim periods.
While Japanese demand for agricultural equipment slowed down, Komatsu
Zenoah Co. expanded sales of machinery designed for environmental conservation
to the lease and rental industries in Japan and sales of outdoor power equipment
in North America and Europe, supported by outstanding growth in orders for
blowers developed for North America.
Komatsu Forklift Co. launched renewed models of 2-ton shovel loaders and
expanded its market share substantially. The company continued to forge the
alliance relationship with Linde of Germany, including sales of Linde-made
forklift trucks in Japan since October 2000. The company also launched
production of its engine-powered forklift trucks for Europe at Fiat OM Carrelli
Elevatori S.p.A. in Italy in January 2001. While the company concerted its
efforts to expand sales both in Japan and overseas and enhance product
competitiveness, they were offset by adverse effects from a drastic fall in
demand for industrial vehicles in the United States. While sales for the interim
period dropped sharply from the corresponding period last year, the company was
able to maintain a minimal decline of earnings.
Concerning the business with Japan's Defense Agency, sales were steady
during the interim period but declined from the previous corresponding period.
Sales of environmental control and systems slipped considerably.
2. Conditions of Consolidated Cash Flows
Net cash provided by operating activities for the interim period totaled
(Yen)41.7 billion (US$351 million). Net cash used in investing activities
amounted to (Yen)19.6 billion (US$165 million), and net cash used in financing
activities ended in (Yen)34.6 billion (US$291 million).
3. Outlook for the Rest of Fiscal 2002
It is concerned that adverse effects of the terrorist attacks in the United
States should further deteriorate the world economies. Komatsu anticipates that
it will continue to face a very difficult business environment during the second
half period of fiscal 2002. Under such an environment, the Company is determined
to ride over the current, critical times by promoting the reform of management
structure (see page 7) which is designed to reduce fixed and production costs
substantially. At the same time, the Company will strive to build a corporate
structure capable of generating stable earnings even under low growth economy.
For the construction and mining equipment business in Japan, the Company
will work to expand sales of advanced models of the GALEO series which was
launched during the period under review. It will also promote conversion of the
business model into a new one to provide total solutions to customers through
teamwork of sales, rental and service operations. Outside of Japan, while
striving to secure earnings by meeting the market needs by region, business and
product categories, the Company will facilitate new growth in strategic regions
and business fields.
The Company anticipates sluggish demand will prolong in its electronics and
other businesses. Accordingly, in addition to undertaking cost reduction
activities, the Company will strive to secure earnings by continuing to focus
its management resources on those businesses where it can demonstrate
technological advantages.
Concerning the reform of management structure, the Company is planning to
appropriate (Yen)23.0 billion as a temporary expense for early retirement and
transfers of employees to affiliated companies. By considering all these
factors, the Company projects consolidated net sales of (Yen)1,060 billion, pre-
tax loss of (Yen)52 billion and
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net loss of (Yen)45 billion for fiscal 2002 ending March 31, 2002.
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Cautionary Statement
The announcement set forth herein contains forward-looking statements which
reflect management's current views with respect to certain future events,
including expected financial position, operating results, and business
strategies. These statements can be identified by the use of terms such as
"will," "believes," "should," "projects" and similar terms and expressions
that identify future events or expectations. Actual results may differ
materially from those projected, and the events and results of such forward-
looking assumptions cannot be assured.
Factors that may cause actual results to differ materially from those
predicted by such forward-looking statements include, but are not limited to,
unanticipated changes in demand for the Company's principal products, owing
to changes in the economic conditions in the Company's principal markets;
changes in exchange rates or the impact of increased competition;
unanticipated cost or delays encountered in achieving the Company's
objectives with respect to globalized product sourcing and new Information
Technology tools; uncertainties as to the results of the Company's research
and development efforts and its ability to access and protect certain
intellectual property rights; and, the impact of regulatory changes and
accounting principles and practices.
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Management Policy
Basic Management Policy
The cornerstone of Komatsu's management lies in its commitment to Quality and
Reliability. This commitment is not limited to delivering safe and innovative
products and services. We are also continuing our efforts to enhance the Quality
and Reliability of all organizations, businesses, employees and management of
the entire Komatsu Group.
Mid- and Long-Range Management Strategy and Issues Ahead
Last year, we launched the "G" to the 21/st/ mid-range management strategy for a
period of three years, extending to fiscal year ending March 31, 2003. The "G"
to the 21st strategy specifies the following four strategies.
1) New growth strategy for the construction and mining equipment business,
2) Reduction of environmental stress and expansion of environmental business,
3) Focused attention to business in which Komatsu can maintain a technological
edge on a global scale, and
4) Attainment of competitive advantage by deploying IT or e-KOMATSU.
We have been aggressively carrying out a series of measures to facilitate our
growth and strengthen our corporate structure under the mid-range management
strategy. However, the international economies in general have slowed down,
making their prospect even more uncertain. In Japan, the recessionary economy
has been further deteriorating. Under the current difficult management
environment, we have recently embarked on a group-wide program to reform our
management structure in order to improve earnings to facilitate early recovery
of our performance. To solidly build a corporate structure capable of generating
stable earnings, we are firmly determined to accomplish reduction of a
consequential amount of fixed and production costs. At the same time, we are
prepared to execute a number of decisive measures designed to accelerate the
growth of our core business of construction and mining equipment.
Reform of Management Structure
1) Reduction of Fixed Costs
Komatsu Group will aggressively reduce fixed costs. Our fixed costs, higher than
those of our competitors in the international marketplace, have resulted in a
weighty factor pressing our earnings. We will commit ourselves in this effort
and score reduction of approximately (Yen)30.0 billion by the end of March 2004
from the current level on a consolidated basis. We are going to curtail a
substantial amount of manpower costs and SG&A expenses through consolidation of
separate businesses, reorganization and operational rationalization on a group-
wide basis. In Japan, especially, we are prepared to cut down overhead costs by
offering early retirement for approximately 800 employees and transfer to
affiliated companies in order to reinforce business operations and improve
earnings of both Komatsu and affiliated companies.
2) Sizable Cutbacks of Production Costs
Komatsu Group is working to cut down its production costs worldwide. With full
deployment of our technologies and expertise based on the "spirits of
manufacturers" gained in Japanese plants over the years, we are set to reduce
production costs at our offshore plants. To this end, we will work to lower our
costs substantially in the product development phase in addition to conventional
cost reduction programs, and will also promote a global alliance for production.
3) To Renew Growth of Our Construction and Mining Equipment Business
To maintain and enhance our profitability in the Japanese market, where demand
for construction equipment has remained depressed, we have striven to expand
after-sale businesses such as rental and used equipment, parts and services,
while developing creative products as represented by the GALEO series. Such
initiatives mean a reform of our business structure itself, and these new
business models are indispensable for further growth in Japan. By capitalizing
on our advantage of Komatsu machines in use which outnumbers other brands in the
Japanese market and utilizing IT as a manufacturer, we are ready to aggressively
expand our business in those market domains in line with the lifecycle of
equipment.
Demand for construction and mining equipment in overseas markets has grown
in a long-range time span. Therefore, we consider the current, difficult market
conditions as temporary adjustment in the supply and demand cycle. We are
focusing our business expansion in the major markets of North America and Europe
as well as the rapidly expanding Chinese market, where we are going to implement
proactive measures by region and product line in order to enhance our global
market position.
-8-
4) Impairment on Fixed Assets of Subsidiaries in Electronics Business
In our electronics business, we recorded impairment losses of (Yen)38.3 billion
(US$323 million) on fixed assets of two subsidiaries in the United States during
the interim period in response to the drastic deterioration of market conditions
for silicon wafers.
Concerning Komatsu Silicon America, Inc., we had planned to reuse it as a
production facility for silicon wafers. However, it is projected that market
recovery may be delayed longer than we had earlier anticipated. In this light,
we have changed our policy to consider a wider range of options, and recorded
impairment loss of (Yen)24.9 billion (US$210 million) on their fixed assets. In
the meantime, we will continue our silicon wafer business by focusing on Komatsu
Electronic Metals Co., Ltd. and Formosa Komatsu Silicon Corporation as before.
Demand for polycrystalline silicon as a material for silicon wafers has
also weakened further since the spring of this year. Advanced Silicon Materials
LLC.'s plant in Montana is unlikely to maintain a sufficient rate of operation
in the foreseeable future. In this light, we recorded impairment loss of
(Yen)13.4 billion (US$113 million) on their fixed assets.
For Komatsu to overcome the current difficult times and upturn its performance,
it is imperative that all employees of the Komatsu Group work together for their
respective businesses with their talents and actions. We are firmly determined
to improve our earnings and make our early recovery of business results. To this
end, all employees will strive to accomplish the reform of management structure
with the spirit of unity and teamwork while each and every employee fully
demonstrates his/her capabilities.
Basic Policy for Dividends
Komatsu works to build a sound and stable financial position and flexible and
agile corporate strength. Concerning interim cash dividends to shareholders, the
Company maintains the basic policy of redistributing profits by taking payout
ratios into account and reflecting business results, as it secures sufficient
internal reserves for reinvestment.
Measures to Strengthen Corporate Governance
Komatsu reorganized its Board of Directors and introduced the Executive Officers
and Global Officers system in June 1999, with an eye to strengthening corporate
governance and establishing a system capable of quickly responding to the
changes and fierce competition in its business environment. In order to
facilitate sufficient deliberation and quick decision-making on important
management matters, we minimized the number of members of the Board. An external
board director was also appointed to ensure the transparency and objectivity of
management.
We publish the Komatsu's Code of Worldwide Business Conduct and ensure all
employees of Komatsu Group companies around the world understand how important
it is to observe the Rules of the Business Community. In June this year, we
established the Compliance Department to manage and lead our group-wide
corporate activities in compliance with the Rules.
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Consolidated Financial Highlights
---------------------------------
For the first six months of fiscal 2002 and 2001 ended September 30, 2001 and
2000, respectively.
Millions of yen & US dollars
except per share amounts
---------------------------------------------------------------------------------------------------------------------
2002 2001 Changes (2002-2001)
Apr. 1-Sept. 30, 2001 Apr. 1-Sept. 30, 2000 Increase (Decrease)
-------------------------------------------------------------------------------------------------
Yen Dollar Yen Yen (%)
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Net sales 505,455 4,248 554,530 (49,075) (8.8)
Japan 239,542 2,013 288,922 (49,380) (17.1)
Overseas 265,913 2,235 265,608 305 0.1
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Income (loss) before (50,857) (427) 11,195 (62,052) ---
Income taxes
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Net income (loss) (42,665) (359) 3,152 (45,817) ---
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Net income (loss)
per share
Basic (Yen) (44.69) (cents)(37.6) (Yen) 3.29 (Yen) (47.98) ---
Diluted --- --- --- --- ---
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Note:
1) Number of consolidated subsidiaries: 128 companies
Number of affiliated companies: 173 companies (including 45 companies
accounted for by the equity method)
2) The translation of Japanese yen amounts into US dollar amounts is
included solely for convenience and has been made for 2002 at the rate
of (Yen)119 to $1, the approximate rate of exchange at September 28,
2001.
Financial Position
------------------
(As of September 30, 2001 and 2000)
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2002 2001
-----------------------------------------------------------------------------
Total assets (Millions of yen) 1,300,430 1,388,875
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Shareholders' equity (Millions of yen) 424,210 472,002
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Equity ratio (%) 32.6 34.0
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Shareholders' equity per share (Yen) 444.45 493.46
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Projection for FY2002
---------------------
(From April 1, 2001 to March 31, 2002)
Millions of yen
---------------------------------------------------------------------------------------------
Net sales Income (loss) before income taxes Net income (loss)
---------------------------------------------------------------------------------------------
The entire FY2002 1,060,000 (52,000) (45,000)
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Consolidated Balance Sheets
---------------------------
(As of September 30, 2001 and 2000)
Millions of yen
-----------------------------------------------------------
Changes
2002 2001 Increase(Decrease)
----------------------------------------------------------------------------------------------------------------
(A) (B) (A)-(B)
Assets
------
Current assets:
Cash and cash equivalents (Yen) 29,138 (Yen) 54,713 (Yen) (25,575)
Time deposits 2,764 899 1,865
Marketable securities -- 1,196 (1,196)
Trade notes and accounts receivable 342,228 388,019 (45,791)
Inventories 253,713 238,458 15,255
Other current assets 102,195 104,450 (2,255)
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Total current assets 730,038 787,735 (57,697)
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Investments 83,483 101,304 (17,821)
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Property, plant, and equipment -
Less accumulated depreciation 397,665 426,502 (28,837)
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Other assets 89,244 73,334 15,910
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Total 1,300,430 1,388,875 (88,445)
-----
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Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
Short-term debt (including current
maturities of long-term debt) 191,595 237,525 (45,930)
Trade notes and accounts payable 178,308 209,221 (30,913)
Income taxes payable 4,584 7,729 (3,145)
Other current liabilities 134,051 125,561 8,490
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Total current liabilities 508,538 580,036 (71,498)
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Long-term liabilities 321,564 288,544 33,020
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Minority interests 46,118 48,293 (2,175)
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Shareholders' equity:
Common stock 67,870 67,870 --
Capital surplus 117,439 117,366 73
Retained earnings 271,980 320,326 (48,346)
Accumulated other (30,167) (31,809) 1,642
Comprehensive income (loss) (*)
Treasury stock (2,912) (1,751) (1,161)
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Total shareholders' equity - net 424,210 472,002 (47,792)
--------------------------------------------------------------------------------------------------------------
Total (Yen) 1,300,430 (Yen) 1,388,875 (Yen) (88,445)
-----
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Changes
2002 2001 Increase (Decrease)
------------------------------------------------------------------------------------------------------------------
(*) Accumulated other comprehensive income (loss):
Foreign currency translation adjustments (Yen) (23,022) (Yen) (39,427) (Yen) 16,405
Net unrealized holding gains on securities
available for sale 3,741 12,151 (8,410)
Pension liability adjustments (10,518) (4,533) (5,985)
Net unrealized gains (losses) on
derivative instruments (368) -- (368)
-11-
Consolidated Statements of Income
---------------------------------
(For the six months ended September 30, 2001 and 2000)
Millions of yen
-----------------------------------------------------------
Changes
2002 2001 Increase (Decrease)
---------------------------------------------------------------------------------------------------------------
(A) (B) (A)-(B) %
Revenues
--------
Net sales (Yen) 505,455 (Yen) 554,530 (49,075) (8.8)
Interest and other income 15,993 19,649 (3,656)
--------------------------------------------------------------------------------------------------------------
Total 521,448 574,179 (52,731) (9.2)
---------------------------------------------------------------------------------------------------------------
Costs and expenses
------------------
Cost of sales 381,666 409,592 (27,926)
Selling, general and administrative expenses 129,109 132,099 (2,990)
Interest expense 9,045 10,805 (1,760)
Other expense 52,485 10,488 41,997
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Total 572,305 562,984 9,321 1.7
---------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes, minority
interests, and equity in earnings (50,857) 11,195 (62,052) ---
---------------------------------------------------------------------------------------------------------------
Income taxes (5,502) 8,631 (14,133)
---------------------------------------------------------------------------------------------------------------
Minority interests in income (loss) of
consolidated subsidiaries - net 2,123 54 2,069
---------------------------------------------------------------------------------------------------------------
Equity in earnings of
affiliated companies - net 567 534 33
---------------------------------------------------------------------------------------------------------------
Net income (loss) (Yen) (42,665) (Yen) 3,152 (45,817) ---
---------------------------------------------------------------------------------------------------------------
Note: Aggregated net comprehensive income (loss) for the years ended September
30, 2001 and 2000 were (53,075) million yen and (9,067) million yen,
respectively.
-12-
Consolidated Statements of Cash Flows
-------------------------------------
(For the six months ended September 30, 2001 and 2000)
Millions of yen
-----------------------------------------------------------------------------------------------------------
2002 2001
Apr. 1-Sept. 30, 2001 Apr. 1-Sept. 30, 2000
-----------------------------------------------------------------------------------------------------------
Net cash provided by operating activities (Yen) 41,793 (Yen) 21,268
-----------------------------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities (19,601) 607
-----------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financial activities (34,651) (47,584)
-----------------------------------------------------------------------------------------------------------
Effect of exchange rate change on cash and cash equivalents 19 (54)
-----------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents (12,440) (25,763)
-----------------------------------------------------------------------------------------------------------
Cash and cash equivalents, beginning of year 39,760 80,476
-----------------------------------------------------------------------------------------------------------
Adjustments for change of fiscal period on
consolidated subsidiaries 1,818 ---
-----------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of year (Yen) 29,138 (Yen) 54,713
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Basis of Financial Statements (Consolidated)
--------------------------------------------
1) Changes in group of entities
Consolidated subsidiaries
Addition: Komatsu (China) LTD, and one other company
Removal: Komatsu Utility Corporation (merger), KEM America Inc.
(liquidation)
2) Impact to integration of fiscal year end
Certain consolidated subsidiaries changed the fiscal year end from December 31
to March 31. The change resulted in a decrease to retained earnings of (Yen)3.7
billion (US$31 million) and an increase to other comprehensive income of
(Yen)9.4 billion (US$79 million), respectively.
3) Derivative Instruments and Hedging Activities
The Company adopted Statement of Financial Accounting Standards (SFAS) No.133,
"Accounting for Derivative Instruments and Hedging Activities" and SFAS No.138,
"Accounting for Derivative Instruments and Certain Hedging Activities, an
amendment of FASB Statement No.133," for the year beginning April 1, 2001.
-14-
Business Information
--------------------
1. Information by Business Unit
(1) Sales and Operating Profit (Loss)
Millions of yen
--------------------------------------------------------------------------------------------------
2002 2001
Apr. 1-Sept. 30, 2001 Apr. 1-Sept. 30, 2000
--------------------------------------------------------------------------------------------------
Sales Operating Margin Sales Operating Margin
Profit (Loss) % Profit(Loss) %
------------------------------------------------------------------------------------------------------------------------
Construction &
Mining Equipment 356,892 282 0.1 366,297 13,300 3.6
------------------------------------------------------------------------------------------------------------------------
Electronics 41,199 (4,850) (11.8) 55,823 (2,520) (4.5)
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Others 125,683 2,390 1.9 162,171 3,992 2.5
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Subtotal 523,774 (2,178) (0.4) 584,291 14,772 2.5
------------------------------------------------------------------------------------------------------------------------
Corporate &
Elimination (18,319) (3,142) --- (29,761) (1,933) ---
------------------------------------------------------------------------------------------------------------------------
Total 505,455 (5,320) (1.1) 554,530 12,839 2.3
------------------------------------------------------------------------------------------------------------------------
Note: Sales amount of each business unit includes inter-unit transactions.
(2) Assets, Depreciation, and Capital Expenditures
Millions of yen
----------------------------------------------------------------------------------------------
2002 2001
---------------------------------------------------------------------------------------------
As of Apr. 1-Sept. 30, 2001 As of Apr. 1-Sept. 30, 2000
Sept. 30, Sept. 30,
2001 2000
---------------------------------------------------------------------------------------------
Assets Depreciation Capital Assets Depreciation Capital
and Expenditures and Expenditures
Amortization Amortization
-------------------------------------------------------------------------------------------------------------------
Construction &
Mining Equipment 836,855 18,051 20,241 746,382 14,693 15,085
-------------------------------------------------------------------------------------------------------------------
Electronics 186,226 9,092 2,843 236,944 9,680 3,783
-------------------------------------------------------------------------------------------------------------------
Others 241,184 3,772 5,606 288,222 8,197 11,208
-------------------------------------------------------------------------------------------------------------------
Subtotal 1,264,265 30,915 28,690 1,271,548 32,570 30,076
-------------------------------------------------------------------------------------------------------------------
Corporate &
Elimination 36,165 14 --- 117,327 --- ---
-------------------------------------------------------------------------------------------------------------------
Total 1,300,430 30,929 28,690 1,388,875 32,570 30,076
-------------------------------------------------------------------------------------------------------------------
-15-
2. Information by Region
(1) Sales and Operating Profit (Loss)
Millions of yen
-------------------------------------------------------------------------------------
2002 2001
Apr. 1-Sept. 30, 2001 Apr. 1-Sept. 30, 2000
-----------------------------------------------------------
Sales Operating Margin Sales Operating Margin
Profit(Loss) % Profit(Loss) %
-------------------------------------------------------------------------------------
Japan 336,342 (1,311) (0.4) 399,882 12,655 3.2
-------------------------------------------------------------------------------------
Americas 133,174 (2,390) (1.8) 134,783 (677) (0.5)
-------------------------------------------------------------------------------------
Europe 57,967 1,388 2.4 63,817 2,799 4.4
-------------------------------------------------------------------------------------
Others 49,555 (420) (0.8) 42,375 (45) (0.1)
-------------------------------------------------------------------------------------
Subtotal 577,038 (2,733) (0.5) 640,857 14,732 2.3
-------------------------------------------------------------------------------------
Corporate & Elimination (71,583) (2,587) --- (86,327) (1,893) ---
-------------------------------------------------------------------------------------
Total 505,455 (5,320) (1.1) 554,530 12,839 2.3
-------------------------------------------------------------------------------------
Note: Sales amount of each region segment includes inter-segment transactions.
(2) Assets
Millions of yen
-----------------------------------------------------------------------
2002 2001
As of Sept. 30, 2001 As of Sept. 30, 2000
---------------------------------------------
Assets Ratio(%) Assets Ratio(%)
-----------------------------------------------------------------------
Japan 971,306 74.7 995,798 71.7
-----------------------------------------------------------------------
Americas 314,375 24.2 321,563 23.2
-----------------------------------------------------------------------
Europe 78,157 6.0 77,751 5.6
-----------------------------------------------------------------------
Others 95,352 7.3 91,786 6.6
-----------------------------------------------------------------------
Subtotal 1,459,190 112.2 1,486,898 107.1
-----------------------------------------------------------------------
Corporate & Elimination (158,760) (12.2) (98,023) (7.1)
-----------------------------------------------------------------------
Total 1,300,430 100.0 1,388,875 100.0
-----------------------------------------------------------------------
3. Overseas Sales
(1) For the six months ended September 30, 2001
Millions of yen
----------------------------------------------------------------------------------------
Americas Europe Others Total
----------------------------------------------------------------------------------------
Overseas sales 120,470 62,248 83,195 265,913
----------------------------------------------------------------------------------------
Consolidated net sales --- --- --- 505,455
----------------------------------------------------------------------------------------
Ratio of overseas sales to consolidated net sales 23.8 12.3 16.5 52.6
----------------------------------------------------------------------------------------
(2) For the six months ended September 30, 2000
Millions of yen
----------------------------------------------------------------------------------------
Americas Europe Others Total
----------------------------------------------------------------------------------------
Overseas sales 129,787 66,019 69,802 265,608
----------------------------------------------------------------------------------------
Consolidated net sales --- --- --- 554,530
----------------------------------------------------------------------------------------
Ratio of overseas sales to consolidated net sales 23.4 11.9 12.6 47.9
----------------------------------------------------------------------------------------
Notes: Overseas sales represent the sales of the company and its consolidated
subsidiaries to areas other than Japan.
-16-
Consolidated Sales by Operation
-------------------------------
(For the six months ended September 30, 2001 and 2000)
---------------------------------------------------------------------------------------------------------------------
2002 20001 Changes
Apr. 1-Sept. 30, 2001 Apr. 1-Sept. 30, 2000 Increase (Decrease)
---------------------------------------------------------------------------------------
(Yen) Million Ratio(%) (Yen) Million Ratio(%) (Yen) Million (%)
---------------------------------------------------------------------------------------------------------------------
Construction Japan 129,635 25.7 142,726 25.8 (13,091) (9.2)
----------------------------------------------------------------------------------------------------
& Mining
Equipment Overseas 223,437 44.2 220,193 39.7 3,244 1.5
----------------------------------------------------------------------------------------------------
353,072 69.9 362,919 65.5 (9,847) (2.7)
---------------------------------------------------------------------------------------------------------------------
Electronics Japan 23,789 4.7 37,140 6.7 (13,351) (35.9)
----------------------------------------------------------------------------------------------------
Overseas 17,259 3.4 18,459 3.3 (1,200) (6.5)
----------------------------------------------------------------------------------------------------
41,048 8.1 55,599 10.0 (14,551) (26.2)
--------------------------------------------------------------------------------------------------------------------
Others Japan 86,118 17.0 109,056 19.7 (22,938) (21.0)
----------------------------------------------------------------------------------------------------
Overseas 25,217 5.0 26,956 4.9 (1,739) (6.5)
----------------------------------------------------------------------------------------------------
111,335 22.0 136,012 24.5 (24,677) (18.1)
--------------------------------------------------------------------------------------------------------------------
Total Japan 239,542 47.4 288,922 52.1 (49,380) (17.1)
----------------------------------------------------------------------------------------------------
Overseas 265,913 52.6 265,608 47.9 305 0.1
----------------------------------------------------------------------------------------------------
505,455 100.0 554,530 100.0 (49,075) (8.8)
--------------------------------------------------------------------------------------------------------------------
-17-
Financial Instruments
---------------------
1. Derivative Financial Instruments
Millions of Yen
------------------------------------------------------------------------- -----------------------------------
2002 2001
As of Sept. 30, 2001 As of Sept. 30, 2000
------------------------------------- -----------------------------------
Contract, Carrying Estimated Contract, Carrying Estimated
Notional Amounts Fair Value Notional Amounts Fair Value
Amounts Amounts
------------------------------------------------------------------------- -----------------------------------
Foreign exchange contracts and
option contracts 5,081 112 112 2,455 50 227
FY 2001
Purchase of foreign currencies
the equivalent of yen 21,226
Sale of foreign currencies
the equivalent of yen 23,681
FY 2002
Purchase of foreign currencies
the equivalent of yen 20,636
Sale of foreign currencies
the equivalent of yen 23,700
Option contracts(Purchased)
the equivalent of yen 2,017
Interest rate swap, currency swap and
interest rate cap agreements 290,080 (3,333) (3,333) 257,763 52 11,253
------------------------------------------------------------------------- -----------------------------------
2. Marketable Securities and Investment Securities
Millions of yen
-------------------------------------------------------------------------------- ---------------------------
2002 2001
As of Sept. 30, 2000 As of Sept. 30, 2001
-------------------------------------------------------------------------------- ---------------------------
Marketable securities available for sale
Marketable equity securities
Cost - 1,094
Fair value - 1,089
Gross unrealized holding gains (losses) - (5)
Marketable debt securities
Cost - 107
Fair value - 107
Gross unrealized holding gains - 0
Investment securities available for sale
Marketable equity securities-
Cost 32,789 37,536
Fair value 42,282 61,124
Gross unrealized holding gains 9,493 23,588
Marketable debt securities
Cost 1,004 10
Fair value 1,004 10
Gross unrealized holding gains 0 0
-------------------------------------------------------------------------------- ---------------------------
-18-
Financial Highlights of the Parent Company
------------------------------------------
The following financial information is prepared based on the non-consolidated
financial results of the parent company in accordance with generally accepted
accounting principles and practices in Japan.
Financial Results Millions of yen & US dollars
amounts except per share
-----------------------------------------------------------------------------------------------------------------------
2002 2001 Changes(2002-2001)
Apr. 1-Sept. 30, 2001 Apr. 1-Sept. 30, 2000 Increase(Decrease)
------------------------------------------------------------------------------------------
Yen Dollar Yen Yen (%)
-----------------------------------------------------------------------------------------------------------------------
Net sales 183,367 1,541 206,929 (23,561) (11.4)
Japan 117,074 984 131,833 (14,759) (11.2)
Overseas 66,293 557 75,096 (8,802) (11.7)
-----------------------------------------------------------------------------------------------------------------------
Operating
Income 1,941 16 4,804 (2,863) (59.6)
-----------------------------------------------------------------------------------------------------------------------
Ordinary Income 2,587 22 4,307 (1,720) (39.9)
-----------------------------------------------------------------------------------------------------------------------
Net income (loss) (21,909) (184) 3,719 (25,628) ---
-----------------------------------------------------------------------------------------------------------------------
Net income (loss)
per share (Yen) (22.85) (Cents) (19.2) (Yen) 3.87 (Yen) (26.72) ---
-----------------------------------------------------------------------------------------------------------------------
Note:
1. The translation of Japanese yen amounts into United States dollar
amounts is included solely for convenience and has been made for 2002
at the rate of (Yen) 119 to $1, the approximate rate of exchange at
September 28, 2001.
2. The numbers of average common shares outstanding were as follows:
. September 30, 2001 ---958,921,701
. September 30, 2000 ---961,435,362
. March 31, 2001 ---960,181,975
Dividends
---------------------------------------------------------------------------------------------------
2002 2001
---------------------------------------------------------------------------------------------------
Cash dividends per share (Yen)
Interim 3.00 3.00
Year-end --- 3.00
---------------------------------------------------------------------------------------------------
Financial Position
------------------
(As of September 30, 2001 and 2000)
--------------------------------------------------------------------------------------------------
2002 2001
--------------------------------------------------------------------------------------------------
Total assets (Millions of yen) 704,622 752,793
--------------------------------------------------------------------------------------------------
Shareholders' equity (Millions of yen) 445,007 478,652
--------------------------------------------------------------------------------------------------
Equity ratio (%) 63.2 63.6
--------------------------------------------------------------------------------------------------
Shareholders' equity per share (Yen) 464.07 499.16
--------------------------------------------------------------------------------------------------
-19-
Sales by Operation
------------------
(For the six months ended September 30, 2001 and 2000)
-----------------------------------------------------------------------------------------------------------------------
2002 2001 Changes
Apr. 1-Sept. 30, 2001 Apr. 1-Sept. 30, 2000 (2002-2001)
---------------------------------------------------------------------------------------
(Yens) Million Ratio(%) (Yens) Million Ratio(%) (Yens) Million (%)
----------------------------------------------------------------------------------------------------------------------
Construction Japan 93,838 51.2 104,924 50.7 (11,086) (10.6)
& Mining
Equipment
--------------------------------------------------------------------------------------------------
Overseas 63,120 34.4 71,198 34.4 (8,077) (11.3)
--------------------------------------------------------------------------------------------------
156,958 85.6 176,122 85.1 (19,163) (10.9)
--------------------------------------------------------------------------------------------------------------------
Electronics Japan 2,001 1.1 4,145 2.0 (2,144) (51.7)
--------------------------------------------------------------------------------------------------
Overseas 265 0.1 2 0.0 262 ---
--------------------------------------------------------------------------------------------------
2,266 1.2 4,148 2.0 (1,881) (45.4)
----------------------------------------------------------------------------------------------------------------------
Others Japan 21,234 11.6 22,763 11.0 (1,529) (6.7)
--------------------------------------------------------------------------------------------------
Overseas 2,908 1.6 3,895 1.9 (987) (25.3)
--------------------------------------------------------------------------------------------------
24,142 13.2 26,659 12.9 (2,516) (9.4)
----------------------------------------------------------------------------------------------------------------------
Total Japan 117,074 63.8 131,833 63.7 (14,759) (11.2)
--------------------------------------------------------------------------------------------------
Overseas 66,293 36.2 75,096 36.3 (8,802) (11.7)
--------------------------------------------------------------------------------------------------
183,367 100.0 206,929 100.0 (23,561) (11.4)
----------------------------------------------------------------------------------------------------------------------
Projection for FY2002
----------------------
(From April 1, 2001 to March 31, 2002)
Millions of yen
--------------------------------------------------------------------------------------------------------
Net sales Ordinary Income Net income (loss)
--------------------------------------------------------------------------------------------------------
The entire FY2002 410,000 11,000 (24,000)
--------------------------------------------------------------------------------------------------------
-20-
[LETTERHEAD OF KOMATSU]
NEWS RELEASE
------------
KOMATSU AND VOLVO CONSTRUCTION EQUIPMENT IN TALKS ON INDUSTRIAL COOPERATION FOR
COMPONENTS
Komatsu Ltd. and Volvo Construction Equipment have initiated discussions
regarding future cooperation in the production and development of construction
equipment components. Tangible outcomes from the discussions are expected by
mid-year 2002.
The intention is to determine whether both companies can find ways to strengthen
their cost competitiveness and to increase customer satisfaction.
"We believe this cooperation could lead us to find high quality and cost
effective solutions," says Mr. Masahiro Sakane, President of Komatsu, and Mr.
Anthony C. Helsham, President & CEO of Volvo Construction Equipment, in a common
statement to the announcement.
In the discussions, Komatsu and Volvo Construction Equipment will not include
sales, service, distribution and equity participation.
Both companies will continue to engage in business as independent competitors
using their own dealer networks, brands and identities.
-ends-
The Komatsu Group, with Komatsu Ltd. at its center , comprises 128 consolidated
subsidiaries with approximately 31,000 employees. Komatsu is the world's second
largest manufacturer of construction and mining equipment with 28 production
bases in 14 countries worldwide.