OMRON Corporation Reports Consolidated Financial Results for the First Quarter Ended...

OMRON Corporation Reports Consolidated Financial Results for the First Quarter Ended June 30, 2008

KYOTO, Japan--(Business Wire)--
OMRON Corporation (TOKYO:6645)(ADR:OMRNY) today reported
consolidated results for the first quarter of fiscal 2008, ending
March 31, 2009.

Net sales for the first quarter decreased 3.5 percent compared
with the same period of the previous fiscal year to JPY 169,934
million, reflecting the effect of the stagnant U.S. economy and a
worsening capital investment environment in the manufacturing sector
in Japan. Although the OMRON Group worked diligently to reduce
expenses, an increase in depreciation expenses associated with
production facility expansions that are essential to sustainable
growth, along with the decrease in net sales, led to a 50.3 percent
decrease in operating income compared with the same period of the
previous fiscal year to JPY 4,806 million. Income from continuing
operations before income taxes decreased 53.6 percent to JPY 5,561
million and net income for the first quarter was JPY 3,503 million, a
decrease of 63.9 percent compared with the same period of the previous
fiscal year.

Note: All amounts are rounded to the nearest million yen.

Overview of Conditions

Economic conditions in first quarter of fiscal 2008 were harsh
overall. The U.S. economy was flat due to factors including weak
corporate earnings, the continuing slump in the housing market and a
decline in consumer spending. In the European economy, the slowdown
that began in the second half of the previous fiscal year continued.
In China and Southeast Asia, economic growth remained solid, but
inflation rates increased due to rising crude oil and raw material
prices worldwide. In Japan, while consumer spending was firm, rising
energy and raw material prices impacted corporate earnings, and
overall economic growth slowed.

In markets related to the Omron Group, capital investment in
manufacturing was generally weak. A trend toward restrained capital
investment arose particularly in the semiconductor and automotive
industries.

In this environment, the Omron Group set "securing a foothold for
sustainable growth" as its policy for fiscal 2008. Our basic stance is
to make the necessary investments to realize a mechanism for sustained
growth in fiscal 2008, the start of the third stage of our long-term
management vision "Grand Design 2010" (GD2010), and to ensure the
achievement of profit targets, which take into account the effects of
exchange rate changes and high crude oil prices. We have been
carefully scrutinizing expenses throughout the Company and
implementing cost reductions.

The average exchange rates for the first quarter ended June 30,
2008 were USD 1 = JPY 104.3 and EUR 1 = JPY 163.5 (16.4 yen less and
1.2 yen more than the same period of the previous fiscal year,
respectively).

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*T
1. Consolidated Sales and Income
(Percentages represent changes compared with the previous fiscal
year.)

----------------------------------------------------------------------
Millions of yen - except per share
data and percentages
----------------------------------------------------------------------
Three months ended Three months ended
June 30, 2008 June 30, 2007
----------------------------------------------------------------------
Change (%) Change (%)
----------------------------------------------------------------------
Net sales 169,934 (3.5) 176,127 15.1
----------------------------------------------------------------------
Operating income 4,806 (50.3) 9,669 4.1
----------------------------------------------------------------------
Income before income taxes 5,561 (53.6) 11,992 (10.3)
----------------------------------------------------------------------
Net income 3,503 (63.9) 9,716 41.7
----------------------------------------------------------------------
Net income per share (yen) 15.80 42.14
----------------------------------------------------------------------
Net income per share, diluted
(yen) 15.80 42.11
----------------------------------------------------------------------
Note: Pursuant to U.S. Financial Accounting Standards Board (FASB)
Statement No. 144, net income from continuing
operations before income taxes is presented in "Income before income
taxes" for the three months ended June 30, 2007
due to the presentation of income from operations discontinued in the
previous fiscal year as "Net income from
discontinued operations."
*T

Results by Business Segment

Industrial Automation Business (IAB)

IAB segment sales for the first quarter totaled JPY 76,919
million, a decrease of 1.2 percent compared with the same period of
the previous fiscal year, due mainly to weak capital investment among
manufacturers in Japan, particularly in the semiconductor, electronic
components and automotive industries. However, domestic sales of
safety components and related products increased over the same period
of the previous fiscal year as a result of increased demand in the
applications business.

Overseas, demand for motion controllers, safety components and
other products expanded in Europe, and in the United States, demand
for control equipment for oil and gas-related companies rebounded.
Nevertheless, overall sales were affected by slowing capital
investment by automotive and other manufacturers. In China, there were
concerns about the effects of a tighter fiscal policy on investment
among manufacturers, but sales of programmable controllers and
photoelectric sensors increased steadily due to ongoing efforts to
strengthen sales operations.

Electronic Components Business (ECB)

ECB segment sales for the first quarter totaled JPY 34,465
million, a decrease of 9.7 percent compared with the same period of
the previous fiscal year.

In Japan, this segment was affected by restrained capital
investment in the semiconductor and automotive industries, which began
in the second half of the previous fiscal year, along with general
weakness in the consumer and commercial components industry.

Overseas, while sales were generally slow in North America from
the second half of the previous fiscal year, business expansion of
energy-efficient products such as air conditioners increased
opportunities in China, where sales were solid. Sales were also firm
in Europe. Sales of miniature backlights and HMI devices for mobile
and IT devices remained strong because of the timely introduction of
new products that met customer needs.

Automotive Electronic Components Business (AEC)

AEC segment sales for the first quarter totaled JPY 25,903
million, a decrease of 5.3 percent compared with the same period of
the previous fiscal year.

This segment suffered a sharp decline in sales in North America as
a result of decreased production volume among major North American
auto manufacturers, but in China, where automobile manufacturers are
shifting production and expanding global procurement, production
expanded with the launch of new themes, and sales to the Chinese
market were strong.

While the growth of worldwide automobile production volume slowed
overall due to rising gasoline prices and the global economic
downturn, needs for car electronics that support automobile safety and
environmental friendliness increased.

Social Systems Business (SSB)

SSB segment sales for the first quarter totaled JPY 14,186
million, an increase of 2.6 percent compared with the same period of
the previous fiscal year.

In the public transportation systems business, sales increased
substantially compared with the first quarter of the previous fiscal
year due to demand for installation of passenger gates, system
monitoring panels, data aggregation systems and other equipment in
connection with the opening of new train lines. In the ID management
solutions business, sales decreased substantially compared with the
same period of the previous fiscal year as demand related to the shift
to electronic money dropped further. In the maintenance business,
sales were solid even amid slumping capital investment in Japan. In
the software business, sales declined sharply compared with the same
period of the previous fiscal year due to a further drop in demand in
the distribution industry and a decrease in consigned development due
to the saturation of the mobile phone market in Japan.

Healthcare Business (HCB)

HCB segment sales for the first quarter totaled JPY 14,662
million, a decrease of 1.2 percent compared with the same period of
the previous fiscal year.

In Japan, sales of pedometers and electric toothbrushes continued
to expand strongly, but sales of digital blood pressure monitors, body
composition analyzers and devices for medical institutions were
sluggish. Overseas, sales were strong overall, led by sales to major
distributors in North America and the digital blood pressure monitor
business in Russia and Central and Eastern Europe. In China and the
Southeast Asia region, products marketed for Mothers Day and Fathers
Day sold well.

Others

The "Others" segment consists mainly of new businesses being
explored and developed by the Business Development Group and
development and expansion of other businesses that are not covered by
internal companies.

Segment sales for the first quarter totaled JPY 3,799 million, a
decrease of 7.2 percent compared with the same period of the previous
fiscal year. In existing businesses, sales of uninterruptible power
supplies and broadband routers in the computer peripherals business
were weak. In new businesses, sales in the radio frequency
identification (RFID) market were slow because of intensified
competition and other factors, and sales were also sluggish in the
electricity usage monitoring business.

Consolidated Financial Position and Cash Flows

Total assets as of June 30, 2008 increased JPY 5,522 million
compared with the end of the previous fiscal year to JPY 622,889
million due to an increase in inventories and other factors.
Shareholders' equity increased JPY 15,217 million compared with the
end of the previous fiscal year to JPY 383,719 million due to factors
including the effect of the weaker yen on foreign currency translation
adjustments. As a result, the net worth ratio increased to 61.6
percent from 59.7 percent at the end of the previous fiscal year.

Net cash provided by operating activities in the first quarter was
JPY 12,775 million (a decrease of JPY 1,312 million compared with the
same period of the previous fiscal year) due to a decrease in trade
notes and accounts receivable. Net cash used in investing activities
was JPY 10,642 million (an increase in cash used of JPY 3,135 million
compared with the same period of the previous fiscal year) as a result
of investments to expand production facilities to ensure sustained
growth. Net cash provided by financing activities was JPY 165 million
(compared with net cash used of JPY 6,506 million in the same period
of the previous fiscal year) because although the Company paid
dividends, it also obtained bank loans.

As a result, the balance of cash and cash equivalents at June 30,
2008 increased JPY 2,260 million from the end of the previous fiscal
year to JPY 42,884 million.

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Consolidated Financial Position
----------------------------------------------------------------------
Millions of yen -
except per share data and percentages
----------------------------------------------------------------------
As of June 30, 2008 As of March 31,
2008
----------------------------------------------------------------------
Total assets 622,889 617,367
----------------------------------------------------------------------
Net assets 383,719 368,502
----------------------------------------------------------------------
Net worth ratio (%) 61.6 59.7
----------------------------------------------------------------------
Net assets per share (yen) 1,730.98 1,662.32
----------------------------------------------------------------------
Note: In accordance with U.S. GAAP, net assets, net worth ratio and
net assets per share are calculated using total
shareholders' equity.
*T

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Consolidated Cash Flows
----------------------------------------------------------------------
Millions of yen
----------------------------------------------------------------------
Three Three
months months
ended ended
June 30, June 30,
2008 2007
----------------------------------------------------------------------
Net cash provided by operating activities 12,775 14,087
----------------------------------------------------------------------
Net cash used in investing activities (10,642) (7,507)
----------------------------------------------------------------------
Net cash provided by (used in) financing 165 (6,506)
activities
----------------------------------------------------------------------
Cash and cash equivalents at end of period 42,884 44,633
----------------------------------------------------------------------
*T

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2. Dividends

----------------------------------------------------------------------
Dividends per share (yen)
----------------------------------------------------------------------
1st quarter 2nd quarter 3rd quarter Year-end Full year
----------------------------------------------------------------------
Year ended
March 31, 2008 -- 17.00 -- 25.00 42.00
----------------------------------------------------------------------
Year ending
March 31, 2009 -- --
----------------------------------------------------------------------
Year ending
March 31, 2009
(projected) 18.00 -- -- --
----------------------------------------------------------------------
Notes:
1. There were no revisions to projected dividends during the three
months ended June 30, 2008.
2. The year-end dividend for the year ended March 31, 2008 consists
of a regular dividend of JPY 20.00
and a commemorative dividend of JPY 5.00.
3. Dividends for the third quarter of the year ending March 31,
2009 and thereafter are undetermined, but
will be set and disclosed in accordance with the Company's Basic
Policy for Distribution of Profits at a
point when there is a high level of certainty of achieving the
Company's performance forecast. The
Company plans to announce the year-end dividend sometime between
January and March 2009 at the
latest. The Company's Basic Policy for Distribution of Profits
(dividends for each year) depends partly on
the necessary level of retained earnings, but is set from the
standpoint of enhancing stable and
continuing shareholder returns, taking into account factors such as
return on equity (ROE) and dividends
on equity (DOE) multiplied by the payout ratio. Specifically, the
Company has the near-term objective of
maintaining the payout ratio at a minimum of 20 percent and DOE at
around 2 percent.

*T

3. Consolidated Performance Forecast

The Omron Group has positioned fiscal 2008, the first year of the
third stage of GD2010, as a year for "securing a foothold for
sustainable growth." First-quarter performance was weak in a
challenging economic environment, but there is no change to the
consolidated performance forecast announced on April 28, 2008 for the
first half and the full fiscal year.

The assumed exchange rates for the second quarter and beyond,
which have been used in the performance forecast for the first half
and the full fiscal year, are USD 1 = JPY 100 and EUR 1 = JPY 155.

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*T
Projected Results for the Fiscal Year Ending March 31, 2009
(Percentages represent changes compared to the previous fiscal year
for the full year and compared
with the previous interim period for the interim year.)
----------------------------------------------------------------------
Millions of yen - except percentages
----------------------------------------------------------------------
Cumulative Year
second ending
quarter Change (%) March Change (%)
ending 31,
September 2009
30, 2008
----------------------------------------------------------------------
Net sales 368,000 0.5 780,000 2.2
----------------------------------------------------------------------
Operating income 20,000 (24.8) 60,000 (8.1)
----------------------------------------------------------------------
Income from continuing
operations 19,500 (28.6) 59,000 (8.1)
before income taxes
----------------------------------------------------------------------
Net income 12,000 (36.2) 36,500 (13.9)
----------------------------------------------------------------------
Net income per share,
basic (yen) 54.24 165.34
----------------------------------------------------------------------
Note: This information has been translated from Japanese as a guide
for non-Japanese investors and contains
forward-looking statements that are based on management's estimates,
assumptions and projections at the time of
writing. A number of factors could cause actual results to differ
materially from projections.
*T

About OMRON

Headquartered in Kyoto, Japan, OMRON Corporation is a global
leader in the field of automation. Established in 1933 and headed by
President and CEO Hisao Sakuta, OMRON has over 33,000 employees in 36
countries working to provide products and services to customers in a
variety of fields, including industrial automation, electronic
components, social systems (ticket gate machines, ticket vending
machines and traffic control) and healthcare. For more information,
visit OMRON's website at www.omron.com.

OMRON Corporation
Masaki Haruta, +81-75-344-7070
General Manager, Accounting and Finance Center
Corporate Resources Innovation Headquarters

Copyright Business Wire 2008