INTER ACTION First Three Quarters Financial Highlights (1)
(Yen in millions)
Income Statements
(summary)
FY2003 3Q
6/02 - 2/03
%
FY2003
6/02 - 5/03
%
FY2004 3Q
6/03 - 2/04
Y oY change
%
Sales
927
100%
1,710
100%
1,840
100%
913
2,500
100%
790
Gross profit
499
53.9%
948
55.4%
1,023
55.6%
524
1,354
54.2%
406
229
24.8%
338
19.8%
370
20.1%
141
455
18.2%
117
269
29.1%
610
35.7%
653
35.5%
384
899
36.0%
289
SG&A expenses
Operating income
Non-operating income (expenses)
Ordinary income
(8)
(0.9%)
(0.3%)
(34)
(1.8%)
(26)
(34)
(1.4%)
(29)
604
35.3%
619
33.6%
358
865
34.6%
261
(1.3%)
(37)
(2.2%)
(0.3%)
8
1
0.0%
38
26.8%
567
33.2%
615
33.4%
367
864
34.6%
297
104
11.2%
263
15.4%
238
12.9%
134
363
14.5%
100
144
15.6%
329
19.2%
352
19.1%
208
501
20.0%
172
261
28.1%
Extraordinary income (loss)
(12)
Net income before income taxes
248
Income taxes
Net income
Balance Sheets
(summary)
Current assets
As of Feb. 28, 03
%
(5)
As of May 31, 03
%
(4)
1,346
82.9%
2,311
87.5%
2,063
79.9%
278
17.1%
330
12.5%
518
20.1%
240
Total assets
1,624
100%
2,641
100%
2,582
100%
958
Current liabilities
630
38.8%
928
35.1%
658
25.5%
28
Long-term liabilities
451
27.8%
406
15.4%
338
13.1%
(113)
Shareholders' equity
During the nine-month period, Japan’s economy has been staging a rebound fueled by capital expenditures and growth in
exports as overseas economies recover. As their earnings improve, companies are turning away from measures such as the
elimination of excess capacity and restructuring programs to correct errors of the past.
Companies are instead making aggressive capital investments targeting the new technologies and products that will shape the
future of industrial activity in Japan. Overall, this private sector-driven economic rebound is becoming increasingly pronounced.
This situation is leading to hopes of a broad-based recovery if consumer spending, which is showing signs of an upturn,
continues to strengthen. However, the yen’s sudden appreciation relative to the U.S. dollar means that we must remain
cautious about upcoming economic developments.
The semiconductor industry, which has a great bearing on the results of INTER ACTION, is benefiting from strong sales of
Japan-made digital home electronics such as DVD recorders, flat-panel TVs and digital cameras are brisk in Japan and
overseas markets. As the global economy recovers, strong demand for such products is creating shortages of flash memories,
semiconductor imagers, driver ICs and other key devices. Orders for semiconductor manufacturing equipment have increased
year-on-year for eight consecutive months beginning in June 2003, including triple-digit growth for four consecutive months
beginning in October. It appears that companies will continue to make substantial investments in this equipment. For example,
industry association forecasts for semiconductor manufacturing equipment call for steady growth in sales through the 2005
fiscal year.
In the field of semiconductor imagers, INTER ACTION’s primary product category, semiconductor manufacturers made
substantial investments in production and testing facilities in response to the consistently strong sales of digital cameras and
camera-equipped cell phones.
As of Feb. 29, 04
Y oY change
%
Fixed assets
Total liabilities
Results of Operations (First Three Quarters ended February 29, 2004)
FY2004 (estimate)
6/03 - 5/04
Y oY change
%
1,082
66.6%
1,335
50.5%
996
38.6%
541
33.4%
1,306
49.5%
1,585
61.4%
In the third quarter, the three-month period from December through February, some large Japanese manufacturers temporarily
postponed investments in new equipment due to a shortage of available factory space. This caused a minor slowdown in
INTER ACTION’s sales growth. Sales of IP modules (image processing modules) and illuminators for the Agilent 93000SOC
tester, both of which began in the current fiscal year, are strong. The primary users of this tester are companies in Asia, chiefly
Taiwan, that perform tests on an outsourcing basis. INTER ACTION expects demand for these testers to remain strong.
717
(86)
1,044
Due to these factors, the Company reported sales of ¥1,840 million , operating income of ¥653 million, ordinary income of ¥619
million and net income of ¥352 million in the current nine-month period.
Quarterly and Annual
Year-on-Year Comparisons
2,500
2,000
1,500
1,000
Cash Flow Statements
(summary)
FY2003 3Q
6/02 - 2/03
FY2003
6/02 - 5/03
FY2004 3Q
6/03 - 2/04
500
0
Y oY change
Cash flow from
operating activities
(147)
(240)
620
767
Cash flow from
investing activities
(79)
(135)
(222)
(143)
Cash flow from
financing activities
112
738
(310)
(422)
(114)
361
87
201
change in cash and cash
equivalents
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FY 04 3Q
FY 03 3Q
2,500
2,000
1,500
1,000
500
0
e
om
Unit: Yen in millions, rounded down
Copyright © 2004 INTER ACTION Corporation
Ne
Forecasts for Fiscal Year Ending May 2004
With regard to illuminators, large customers accounted for a substantial share of sales in the prior fiscal
year. In the current fiscal year, however, sources of demand are becoming more diversified as the
number of customers grows. Furthermore, semiconductor manufacturers, which have until now retained
a cautious stance about capital expenditures, have begun switching to a more aggressive position in the
current fiscal year.
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FY 04 (es
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FY 03
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Sa
INTER ACTION Corporation
Regarding IP modules, the company currently has a ¥268 million backlog of orders from a number of
Asian testing companies, most of which are located in Taiwan and Singapore. Some of these units will
be delivered during the current fiscal year and the remainder during the following fiscal year. Moreover,
IP modules are expected to generate a steady stream of sales following delivery for services such as the
development of testing programs and maintenance. Additionally, there are a number of inquiries
concerning these modules from other companies. These developments indicate that IP modules will
become an important element of INTER ACTION’s activities. The Agilent 93000SOC tester is used
primarily by testing companies. These companies regard as highly appealing the ability to enter the
market for testing C-MOS imagers, a market with considerable growth potential, by simply making
follow-up investments to add INTER ACTION’s IP module and illuminators to their existing testing
equipment. Consequently, INTER ACTION will collaborate with its sales agents and Agilent
Technologies to aggressively market these modules and illuminators to testing companies.
In view of the recent trends in operating results and the above factors, the Company is not revising the
forecasts for the current fiscal year announced on September 29, 2003. Based on these factors INTER
ACTION is forecasting net income of ¥501 million and ordinary income of ¥864 million on estimated
sales of ¥2,500 million. Of the total sales, illuminators (including illuminators for IP modules) are likely to
account for an estimated ¥1,900 million, IP modules ¥380 million and others (components and
maintenance) ¥220 million.
1
INTER ACTION First Three Quarters Financial Highlights (2)
Quarterly Sales by Geographic Segment
Domestic
Sales
Share
192
94.1%
339
89.2%
311
90.7%
622
79.4%
1,465
85.7%
778
99.9%
516
83.2%
259
58.5%
1,553
84.4%
Quarterly Sales by Product Segment
Illuminator
Units
FY2003
Units
Sales
Other
Total
Sales
Sales
First quarter
17
190
0
0
13
204
Second quarter
27
314
0
0
66
380
Third quarter
25
286
4
31
26
343
Fourth quarter
Full year
58
690
6
50
43
783
127
1,481
10
81
147
1,710
4.7%
8.6%
100.0%
0
53
779
Share of total sales
FY2004
IP modules
Sales
86.6%
First quarter
54
726
0
Second quarter
41
539
4
35
46
620
Third quarter
25
275
7
112
54
442
Total
120
Share of total sales
1,540
11
83.7%
147
8.0%
153
8.3%
1,841
FY2003
FY2004
Illuminators
100.0%
Full year
Share of total sales
FY2003
Sales by Customer
30
360
11
233
67
660
150
1,900
22
380
220
2,500
15.2%
8.8%
100.0%
76.0%
FY2004 First Three Quarters
Sales by Customer
FY2004
Total
Sales
204
380
343
783
1,710
779
620
442
1,841
Actual
Forecast
First Three Quarters
Operating Expenses (summary)
Under
2ch
FY2003
Forecast
Fourth quarter
First quarter
Second quarter
Third quarter
Fourth quarter
Full year
First quarter
Second quarter
Third quarter
Total
Exports
Sales
Share
12
5.9%
41
10.8%
31
9.0%
161
20.6%
245
14.3%
0
0.1%
104
16.8%
183
41.5%
288
15.6%
First quarter
Second quarter
Third quarter
Fourth quarter
Full year
Share of total sales
First quarter
Second quarter
Third quarter
Total
Share of total sales
13
19
11
35
78
61.4%
33
20
19
72
60.0%
4ch
4
8
14
22
48
37.8%
16
15
4
35
29.2%
8ch
0
0
0
1
1
0.8%
5
6
2
13
10.8%
Total
17
27
25
58
127
100.0%
54
41
25
120
100.0%
Operating expenses
R&D expenditures
Capital investment
Depreciation and amortization
FY2003 FY2004
total
3Q
32
47
136
249
5
9
FY2004
FY2003
As of
May 31,
2003
Employees
Number of employees
Average age
As of
Feb. 29,
2004
22
28.1
31
29
As of
Apr. 1,
2004
42
27.4
Quarterly Orders Received
Customers
Customers
Shares
Sony
41.5%
Matsushita Electric
11.9%
Sony Semiconductor Kyushu
Shares
Fujifilm Microdevices
19.4%
Fujifilm Microdevices
8.7%
Matsushita Electric
18.0%
King Yuan (Taiwan)
7.6%
Toyo Electronics
6.4%
Sharp
6.3%
King Yuan (Taiwan)
6.1%
Samsung (Korea)
4.2%
STATS (Sinapore)
3.4%
Toshiba
3.9%
Iwate Toshiba Electronics
2.7%
Sanyo Electric
3.6%
Sony
2.3%
Others
Total
12.4%
100%
Others
Total
Unit: Yen in millions, rounded down
Copyright © 2004 INTER ACTION Corporation
11.2%
100%
Quarterly Results of Operations
FY2003
30.7%
1Q ended 2Q ended 3Q ended 4Q ended
May 31,
Aug. 31, Nov. 30, Feb. 28,
2003
2003
2002
2002
Order received
Deliveries
Order backlog
218
204
606
430
380
556
FY2004
635
343
848
721
783
786
Order breakdown
(3Q ended
Feb. 28, 2004)
643
779
650
Illuminators
IP modules
Others
671
620
701
INTER ACTION Corporation
600
500
300
200
694
442
1095
54 units
13 units
-
700
400
1Q ended 2Q ended 3Q ended
Aug. 31, Nov. 30, Feb. 28,
2004
2003
2003
Order received
Deliveries
Order backlog
800
Sales
Operating income
Ordinary income
Net income
100
0
667
269
159
FY
1Q
04
20
2Q
3Q
4Q
t im
(es
)
ate
2
Data on Imaging Devices
Area Image Sensor Market Trends
The Imaging Devices Market (Unit: 10,000units)
Kps
600,000
Image Sensor Total (CAGR: 35.6%)
CCD Sensor (CAGR: 27.6%)
CMOS Sensor (CAGR: 43.8%)
Revenue (CAGR: 23.3%)
500,000
3,242.3
3,058.6
301,200
300,000
1,179.7
316,950
CCD
186,100
205,400
CMOS
110,920
Other CCD applications
1,000
20,000
500
10,000
2003
2004
2005
2006
2007
CCD linear f orecast (10,000 units)
1997 1998 1999 2000 2001 2002 2003 2004 2005E
Camcorder
Camera Phone
PDA
PC Camera
CCTV
Car/ITS
Others
Forecast
3,500
More than 5
mega pixels
60%
3 - 4 mega
pixels
2,500
2 - 3 mega
pixels
1,500
200,000
20%
More than 2
mega pixels
1,000
100,000
500
0
Kps
2002 2003 2004 2005 2006 2007 2008
0
US$M
0%
Jan. Apr.
2002 2003 2004 2005 2006 2007 2008
Source: Techno Systems Research Co., Ltd.
“CCD/CMOS Area Image Sensor Market Analysis 2004 (March 2004)”
Copyright © 2004 INTER ACTION Corporation
Jan.
May
Sep.
2002
Jan.
2003
May
Sep.
Jan.
2004
Source: Camera & Imaging Products Association
2001
15,000,000
11,000,000
9,000,000
7,000,000
Jul.
Oct. Jan. Apr.
2002
Jul.
Oct. Jan. Apr.
2003
Jul.
Oct. Jan.
2004
3Q ended Feb. 29,2004
5,000,000
an
Jap
40%
2,000
300,000
Sep.
13,000,000
80%
3,000
400,000
May
17,000,000
100%
4 - 5 mega
pixels
Forecast
Jan.
2001
Digital Camera Shipments by Resolution Level
4,000
600,000
500,000
Camcorder
PC Camera
CCTV
Others
Sep.
Source: Equity Research Division, Mizuho Securities Co., Ltd.
Amount (Unit: US$M)
DSC,LEDSC
Camera Phone
PDA
Car/ITS
May
2000
Area Image Sensor Market by Application
DSC,LEDSC
0
Jan.
2008
Source: Techno Systems Research Co., Ltd.
“CCD/CMOS Area Image Sensor Market Analysis 2004 (March 2004)”
Volume (Unit: 1,000 sensors)
1,000,000
CCD area cell phones
0
2002
2,000,000
CCD area digital cameras
0
51,587
0
3,000,000
CCD area surv eilance cameras
CCD area v ideo cameras
142,000
66,945
4,000,000
CIS sensor f orecast (10,000 units)
40,000
30,000
Others
N. America
Europe
Japan
5,000,000
C-MOS sensors f or cell phones
50,000
1,500
226,600
218,200
184,203
121,610
2,000
271,950
228,800
159,200
118,532
C-MOS sensors f or toy cameras
2,500
232,530
200,000
C-MOS sensors f or digital cameras
70,000
60,000
370,303
1,791.8
100,000
3,000
434,200
2,353.5
400,000
6,000,000
543,550
490,150
2,707.7
Digital Camera Shipments
(Monthly shipments)
US$M
3,356.0 3,500
Forecast
e
rop
Eu
3Q ended Feb. 28, 2003
Am
N.
a
eric
rs
he
Ot
3Q ended
3Q ended
Growth
Feb. 28, 2003 Feb. 29, 2004
rate
(3/02 - 2/03)
(3/03 - 2/04)
Japan
6,948,678
8,475,837
122%
Europe
7,850,999
16,034,241
204%
N. America
8,732,321
14,613,906
167%
Others
3,317,377
7,287,455
220%
Source: Camera & Imaging Products Association
INTER ACTION Corporation
3