Business Report 2010

Making digital life enjoyable
Making digital life enjoyable
MELCO HOLDINGS INC. Investor Information
(As of March 31, 2010)
Accounts closed
March 31
Scheduled shareholders’ meeting
June
Dates to determine stock ownership
Shareholders entitled to vote: March 31
Shareholders entitled to year-end dividend: March 31
Shareholders entitled to interim dividend: September 30
First Section of Tokyo Stock Exchange and First Section of Nagoya Stock Exchange
Listed stock exchanges
6676
Stock code
22,237,873 (shares excluding treasury stock 22,214,985)
Number of shares issued
10,386 (As of March 31, 2010)
Number of shareholders
100 shares
Number of shares per unit
http://melco-hd.jp/koukoku/
Notice to shareholders
Transfer agent
Mitsubishi UFJ Trust Banking Corporation
4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo
Mitsubishi UFJ Trust Banking Corporation Security Agent Department
Stock agencies
For information regarding your shareholdings, please contact our transfer agent, Mitsubishi UFJ Trust
Banking Corporation, anytime between 9:00 a.m. and 5:00 p.m. on regular banking days.
Tel. 0120_232_711 (toll free)
Requests for share related documentation can be handled by the Mitsubishi UFJ Trust Banking
Corporation, or on the internet 24 hours a day.
Tel. 0120_244_479 (toll free)
http://www.tr.mufg.jp/daikou/
Managing underwriters
(Main) Daiwa Securities SMBC
(Other) Nomura Securities, Mizuho Investors Securities, Nikko Cordial securities
MELCO HOLDINGS INC.
http://melco-hd.jp/ Securities code: 6676
Business Report 2010
Headquarters
15, Shibatahondori 4-chome, Minami-ku, Nagoya, 457-8520, Japan
TEL. 81-52-619-1551 FAX. 81-52-619-1800
BUFFALO INC.
April.1,2009- March.31,2010
http://buffalo.jp/
Headquarters
15, Shibatahondori 4-chome, Minami-ku, Nagoya, 457-8520, Japan
TEL. 81-52-619-1811 FAX. 81-52-619-1800
Tokyo Branch Office
Kayabacho Tower, 21-2, Shinkawa 1-chome, Chuo-ku, Tokyo,104-0033, Japan
TEL. 81-3-3523-3333 FAX. 81-3-3523-3300
Melco Group
Strategy
Corporate Direction
Focusing on enhancing product strengths
Actively investing in the groundwork for future growth
The Melco Group, the nucleus of which is a Buffalo Inc., manufacturer of PC peripherals.
While the Japanese economy is likely to continue recovering slowly in fiscal 2010, the impact will seem largely
In fiscal 2009 (year ended March 31, 2010), the Japanese economy emerged from the worst of the global
intangible in the prolonged deflationary environment. On the upside, new markets for digital home electronics
financial crisis and returned to a recovery path, albeit a moderate one. The PC industry, to which the Melco
peripherals are emerging as digital home electronics and home networks grow in prevalence.
Group’s fortunes are closely linked, saw a mild recovery in consumer demand buoyed by the launch of a new
Against such a backdrop, the Melco Group aims to actively offer a diverse range of products and solutions that
operating system (Windows 7) in the fiscal second half. Corporate demand, however, remained sluggish, and the
enrich consumers’ digital lives, capitalizing on its track record as an integrated PC peripheral manufacturer,
related PC peripherals market faced ongoing headwinds.
thereby facilitating growth of the digital home electronics peripherals market.
Amid such an adverse market environment, the Melco Group endeavored to retain and increase its sales market
In pursuit of future growth, the Melco Group will endeavor to expand overseas markets and cultivate new
share while revisiting its basic philosophy of enhancing product strengths and actively launching products aimed
businesses, its priority strategic challenges. To this end, the Group will actively invest in human resources training
driving growth in the digital home electronics market. Despite these efforts, for the fiscal year as a whole, sales
to develop globally competent personnel and invest in the resources required for new business development.
declined 2.8% year on year to ¥116,911 million, owing to falling sales prices in the deflationary environment and
By virtue of these initiatives, the Group projects sales of ¥130.0 billion (11.2% year-on-year growth), operating
withdrawals from the loss-making domestic LCD business and North American memory products business.
income of ¥8.0 billion (6.1% year-on-year growth), ordinary income of ¥8.0 billion (4.5% year-on-year growth),
Overseas subsidiaries achieved substantial profit growth due to a strategic shift toward emphasizing profitability,
and net income of ¥4.9 billion (126.1% year-on-year decrease) in fiscal 2010 (year ended March 31, 2010).
while in the domestic market, the Group launched high-value-added products, rigorously streamlined
management, and reduced cost and expenditures. The Group achieved record earnings by virtue of these
The Melco Group will respond flexibly to societal changes and continue pushing ahead with a frontier spirit in
efforts. Operating income increased 253.8% year on year to ¥7,542 million, ordinary income increased 238.8%
pursuit of ongoing growth.
to ¥7,652 million, and net income increased 605.2% to ¥4,990 million.
*Windows is a registered trademark of Microsoft Corporation in the United States and other countries.
Pursuing growth through
three strategies
Proliferation of
digital home
electronics products
Overseas market
expansion
Cultivating
new businesses
Broadband
Digital home
Internet
Home networks
Ubiquitous networks
Melco Holdings Inc.
Makoto Maki
1
President and CEO
Photo provided by the Asahi Shimbun newspaper
2
Eye
Society of the future
The growing prevalence of digital homes
Alongside growing use of the Internet by digital terrestrial TVs, mobile phones
increasingly feature wireless LAN connectivity. Connecting to home networks
and using high-speed wireless LANs makes it easy to rapidly download
Nintendo
PlayStation 3
(PlayStation Portable)
data-intensive content, such as application software and videos.
Digital TV
Add the latest
functionality to older
TVs with multifunctional
digital terrestrial tuners
We have also launched video recorder models that employ external hard disk
drives to record digital terrestrial TV programs, making it easier to record
many hours of video by connecting external drives even if the video
recorder’ s hard disk drive runs out of space.
Enjoy on-the-road
access via PC or
mobile phone to
data stored at home
Enjoy recorded
programs
anytime on a
big-screen TV
Game console
Game online with
friends around
the globe
Digital homes that integrate digital home electronics, home networks, and PC
peripherals in these ways are already growing in prevalence. Ongoing
integration will make it even easier for consumers to experience the fun and
convenience of the digital home.
Notebook PC
Get online via wireless
LAN even from your
kitchen. Look up
recipes with ease.
Connect devices
throughout
the home
Digital TV
Analog TV
Wi-Fi mobile phone
Enjoy recorded
programs anytime
on a big-screen TV
Enjoy clear digital
broadcasts on an
analog TV
Swift video download
via wireless LAN!
Digital terrestrial
TV tuner
Connect
Store
Share
Wireless LAN
Network-attached
storage
(NAS)
Shared access to
music, videos,
and images
A home network linking TVs, PCs, and game
consoles offers unfettered enjoyment of
online content, TV programs, and recorded
videos in any room.
3
Smartphone
Store data
HDD for use with TV
*Nintendo DS and Wii are registered trademarks of Nintendo Co., Ltd.
*The descriptions and illustrations herein were independently researched and produced by the Melco Group and are not recognized, endorsed, or approved by Nintendo. Readers are kindly asked to refrain from making inquiries to Nintendo regarding these descriptions and illustrations.
*PlayStation is registered trademark of, and the PlayStation 3 a product of, Sony Computer Entertainment Inc.
*©2010 Sony Computer Entertainment Inc. All rights reserved. Design and specifications are subject to change without notice.
*PlayStation and PSP are registered trademarks of, and the PSP is a product of, Sony Computer Entertainment Inc.
*©2008 Sony Computer Entertainment Inc. All rights reserved. Design and specifications are subject to change without notice.
*iPhone is a trademark of Apple Inc. * is a trademark of Actvila Corporation.
4
Outline
Business Overview
Memory
Digital Home
Memory modules increase PCs’ memory capacity. Upgrading a PC’s
Digital home products connect PCs and other home electronics
memory capacity increases the number of programs that can be run at
USB memory
hardware via networks. The Melco Group’s steadily growing line of
one time and enables the PC to process data faster and more
digital home products includes Choi Tele Full digital terrestrial TV
efficiently. Other memory products include conveniently portable
tuners for conveniently enjoying high-vision broadcasts on PCs,
USB memories, SD Cards and CompactFlash used in digital
cameras, and microSD cards used in mobile phones.
Digital terrestrial
tuner for
analog TV
Digital terrestrial
tuner for PC
multifunctional digital terrestrial tuners for analog TVs that add the
Memory module
latest functionality to older models.
Micro SD card
Other Products
Storage
Supplies and Accessories
Storage products are memory devices that store software and/or
The Group offers accessories that make digital home electronics
data. The Group’s storage products include external Blu-ray drives,
(including PC and TV) more enjoyable and user-friendly, including
external DVD drives, external hard disk drives, portable hard disk
drives, network hard disk drives (NAS), and silicon disks (SSDs), a
input devices such as PC mice and keyboards, multimedia devices
External hard disk drive for TV
compact, shock-resistant, low-noise portable storage device.
(such as FM transmitters), USB and various other cables, and
External hard disk drives
accessories for TVs such as LCD TV shields.
External hard disk drives are a core product that accounts for most
Other Products and Services
of the Group’s storage product sales. They are used to store PC
Other hardware products include DOS/V parts. Service offerings
data, digital photo and video collections, and other such files.
External hard disk drive
Recently, external hard disk drives are increasingly used to record
PC mouse
Bluetooth 2.0 headset
such as webcams and headsets, portable music player accessories
include PC set-up service for consumers, and hardware installation
Internet set-up service
(Buffalo Service Alliance)
Kurouto Shikou
and consulting services for businesses.
digital terrestrial TV programs, driving demand for add-on hard disk
drives.
NAS (network hard disk drives)
Digital Home
Portable hard disk drive
NAS (network-attached storage) is storage that is connected to a
Many of the Melco Group’s products stand to benefit from the growing prevalence of digital homes. The products
include multifunctional digital tuners that add the latest functionality to older-model TVs; external hard disk drives
for recording digital terrestrial TV programs; wireless LANs, the core of home networks; and network hard disk
drives (NAS) that serve as additional storage capacity for DVD recorders and home servers.
network and enables large volumes of data to be shared among
multiple PCs or other digital home electronics hardware. The Melco
Group offers a broad line of NAS products, ranging from compact
models
convenient
for
household
use
to
highly
reliable,
Network hard disk drive
high-performance commercial models.
Record
Play
Televi
-sion
Game console
Wireless
LAN
router
Network and Broadband
Key networking products include wireless LAN routers, wired
broadband routers, LAN hubs, and LAN adapters. Use of such
Layer-3 Giga Intelligent Switch
Internet
Store
networking products enables Internet access and data sharing
Watch
across multiple PCs. Home-network usage of wireless LANs in
Watch
particular is growing because they do not require bothersome wiring.
Recently, growing use of digital appliances such as mobile phones,
Television
Home server
digital terrestrial TVs, and game consoles also has been making
PC
wireless LANs increasingly prevalent.
Wireless LAN router
5
External hard disk
drive for TV
Commercial wireless LAN router
with built-in network administrator
functionality
Tuner unit
Media player
Digital terrestrial tuner
6
Group Companies
Group Profile
The Melco Group comprises Melco Holdings Inc. and 14 consolidated subsidiaries. As an integrated manufacturer of
Melco Group
PC peripherals, the Group supplies businesses and consumers throughout Japan with hardware and services required
to build IT/network environments. The Group’s operations cover a full spectrum from product development to sales,
●MELCO HOLDINGS INC.
15, Shibatahondori 4-chome, Minami-ku,
Nagoya, 457-8520, Japan
Tel. 81-52-619-1551
●BUFFALO INC.
15, Shibatahondori 4-chome, Minami-ku,
Nagoya, 457-8520, Japan
Tel. 81-52-619-1811 Fax 81-52-619-1800
installation, setup, maintenance services, and after-sales support.
●BUFFALO KOKUYO SUPPLY INC. 6-1, Arahamacho 4-chome, Minami-ku,
Fax 81-52-619-1800
Tel. 81-52-619-7511 Fax 81-52-619-7555
Nagoya, 457-0831, Japan
●CFD SALES INC.
15, Shibatahondori 4-chome, Minami-ku,
Nagoya, 457-8520, Japan
Tel. 81-52-619-1311 Fax 81-52-619-7785
●BUFFALO IT SOLUTIONS INC.
Kayabacho Tower, 21-2, Shinkawa 1-chome,
Chuo-ku, Tokyo,104-0033, Japan
Tel. 81-3-6280-0777 Fax 81-3-6280-0779
●BUFFALO LOGISTICS INC.
Chukyo Warehouse, 1-3, Mutsuno 2-chome,
Atsuta-ku, Nagoya, 456-0023, Japan
Tel. 81-52-883-3035 Fax 81-52-883-3042
●BUFFALO LEASE INC.
Kayabacho Tower, 21-2, Shinkawa 1-chome,
Chuo-ku, Tokyo,104-0033, Japan
Tel. 81-3-3523-3354 Fax 81-3-3523-3300
●BUFFALO DIRECT INC.
Chukyo Warehouse, 1-3, Mutsuno 2-chome,
Atsuta-ku, Nagoya, 456-0023, Japan
Tel. 81-52-882-3302 Fax 81-52-882-3302
●BUFFALO IT SOLUTIONS INC.
●BUFFALO LOGISTICS INC.
●BUFFALO LEASE INC.
●BUFFALO INC.
MELCO
HOLDINGS INC.
●BUFFALO DIRECT INC.
●MELCO PERSONNEL SUPPORT INC.
●BUFFALO KOKUYO SUPPLY INC.
●CFD SALES INC.
●LIBERTY SHIP INC.
Asia
●BUFFALO TECHNOLOGY (TAIWAN) INC.
Europe ●BUFFALO EU B.V.
●BUFFALO TECHNOLOGY UK LIMITED
USA
●BUFFALO TECHNOLOGY (USA), INC.
●MELCO PERSONNEL SUPPORT INC. 15, Shibatahondori 4-chome, Minami-ku,
Tel. 81-52-619-7224 Fax 81-52-619-7233
Nagoya, 457-8520, Japan
●LIBERTY SHIP INC.
■ Buffalo Inc.
The Melco Group’s nucleus. Manufacturer of core Buffalo brand products. Proactively pursuing
development and growth of products that will contribute to the digital home market’s growth.
■ Buffalo IT Solutions Inc.
Provides PC setup, network installation, maintenance and other services to consumers and businesses.
■ Buffalo Logistics Inc.
Manufactures, inspects, packages, and ships PC peripherals.
■ Buffalo Lease Inc.
Provides equipment leasing services to communications carriers, video broadcasters, etc..
■ Buffalo Direct Inc.
Online direct marketer of Melco Group products.
Tel. 81-3-3523-3368 Fax 81-3-3523-3300
Overseas Subsidiaries
Asia BUFFALO TECHNOLOGY (TAIWAN) INC. Production and sales of Networking devices and computer
■ Buffalo Kokuyo Supply Inc.
Develops, manufactures, and sells PC accessories, cables, and supplies.
■ CFD Sales Inc.
Aims to be an all-around PC parts supplier. Operates under the Kurouto Shikou brand name.
Kayabacho Tower, 21-2, Shinkawa 1-chome,
Chuo-ku, Tokyo,104-0033, Japan
peripherals
7F, No.18, Lane609, Sec.5, Chung Hsin Rd., Sanchung City,
Taipei Hsien, TAIWAN
Europe BUFFALO EU B.V.
Europe head Office
Polarisavenue 85, 2132 JH Hoofddorp, The Netherlands
BUFFALO TECHNOLOGY UK LIMITED Sales of Networking devices and computer peripherals
2, Bracknell Beeches, Old Bracknell Lane, Bracknell, Berkshire
RG12 7BW, United Kingdom
U.S.A.
BUFFALO TECHNOLOGY (USA), INC. Production and sales of Networking devices and computer
peripherals
11100 Metric Boulevard, suite 750 Austin, Texas 78758, USA.
Tel. 886-2-2999-9860
Fax 886-2-2999-2264
Tel. 31-23-554-6010
Fax 31-23-554-6019
Tel. 44-1344-381700
Fax 44-1344-381710
Tel. 1-512-794-8533
Fax 1-512-794-8520
■ Melco Personnel Support Inc.
Temp staffing agency that recruits and dispatches teams of clerical personnel, mainly to Melco Group
companies.
■ Liberty Ship Inc.
Provides online consumer-to-consumer and business-to-consumer communication services.
7
8
R&D
Research & Development
Buffalo’s technological prowess is a driving force
behind advances in memory technology
Topics
Key Topics
Launch of a high-design external hard disk
drive with stylish piano-black casing
Since 1996, Buffalo has been contributing to the formulation of global memory
In December 2009, Buffalo launched a stylish, high-design external hard disk
module standards as a member of the Joint Electron Device Engineering Council
drive that can be placed alongside and connected to the latest PCs with TV
(JEDEC), an organization that promotes standardization of electronic parts. Nearly
tuners or large LCD displays or to digital terrestrial TVs. A storage meter on
all notebook PCs in use throughout the world today are equipped with globally
the device provides a quick indication of remaining capacity, giving users a
standardized memory modules at least partially designed by Buffalo. Going
guide to whether they should delete unneeded programs or add another
forward, Buffalo will continue to proactively develop next-generation, high-speed
hard disk drive.
External hard disk drive for TV
memory modules.
World’s first* external USB 3.0 hard disk drive
AOSS accelerates the spread of home networks
In October 2009, Buffalo launched the first external hard disk drive in the
In 2001, Buffalo independently developed AOSS (AirStation One-Touch Secure
world to achieve USB 3.0 transfer speeds of up to 5Gbps, 10 times faster
System) in the aim of boosting prevalence of wireless LANs. AOSS enables users
than USB 2.0 (up to 480Mbps). Buffalo is expanding its USB 3.0 product
to set up a secure wireless LAN connection with a single touch of a button.
TV
Because of its ease of configuration, AOSS has been incorporated into many
*Source: The Melco Group (as of October 7, 2009)
Automatic
secure
connection
mobile phone handsets, digital home electronics including digital terrestrial TVs,
and Blu-ray disk recorders.
Connection
and
security
Additionally, a push-button interface promoted by Buffalo based on AOSS-derived
standard formulated by the Wi-Fi Alliance.* This exemplifies Buffalo’s status as a
Push the
AirStation
AOSS button
Push the
AOSS button
on the digital
appliance
globally recognized leader in development of home wireless network technologies.
*An industry association of companies that manufacture and sell wireless LAN-related products.
Products conducive to the digital home market’s
development
Growth in digital homes’ prevalence is accelerating as the complete switchover to
Selected as a vendor of basic digital
terrestrial tuners to be distributed for free by
Japan’s MIC
In September 2009, Buffalo was selected as a vendor of basic digital
terrestrial tuners to be distributed for free by Japan’s MIC (Ministry of Internal
Affairs and Communications) as part of a project to support purchases of
digital terrestrial TV receivers with a view to the impending complete
switchover to digital terrestrial broadcasts on July 24, 2011.
USB 3.0 Blu-ray drive
USB 3.0 portable
hard disk drive
Digital terrestrial tuner
for analog TV
Launch of Buffalo Tools™, a suite of software
to enhance PC speed and convenience
digital terrestrial broadcasts in 2011 approaches. As part of its efforts to grow the
digital home market, Buffalo sells multifunctional digital tuners that add the latest
Buffalo Tools™ is a feature-rich suite of optional software included in many
functionality to older-model TVs.
The Group’s R&D activities in this vein include developing products equipped with
line-up with portable hard disk drives, silicon disks (SSD), and external
Blu-ray drives.
consumer electronics products, including Sony’s and Nintendo’s game consoles,
technology was incorporated into the user-friendly Wi-Fi Protected Setup (WPS)
USB 3.0 external
hard disk drive
LT-H91DTV (3-wave model)
Buffalo storage products and hard disk drives. It includes TurboPC to
enhance PC speed; TurboCopy to enhance file copying performance; and
FeliCa™* contactless IC-card reader/writer functionality that enables users to
Eco Manager, an environmentally friendly energy-efficiency tool designed to
more easily pay for Internet services content. The Melco Group is driving growth of
conserve energy by regulating the power use of Buffalo external hard drives.
the digital home market through development of such products.
Buffalo aims to include Buffalo Tools™ primarily in high-spec storage
*FeliCa™ is a contactless IC-card (smartcard) system developed by Sony Corporation.
products and hard drives slated for future launch.
A range of products catering to corporate
customers’ needs
Buffalo Tools™ setup screen
Improving data security as mandated by the Personal Information Protection Act,
RUF2-HSCW
USB memory
amended Companies Act, and Financial Instruments and Exchange Act is an
increasingly important priority for companies. Buffalo sells a diverse range of
products catering to corporate customers’ needs, including SecureLock Manager,
a software program for centralized management of secure USB memory sticks to
prevent information leakage, and BN-ADT, a software program for centralized
administration and configuration of network equipment to reduce the work
required to configure settings.
9
SecureLock Manager
setup screen
10
Topics
Key Topics
Digital Life Promotion Association
established by three PC peripheral
makers
Social Contributions
In February 2010, I-O Data Device, Inc., DigiOn, Inc., and Melco
Holdings Inc., three major PC peripheral makers, established the
Digital Life Promotion Association. The association defines new
modes of viewing TV broadcasts (including the switchover to
Exploratory IT Human Resources
Project
digital terrestrial broadcasting and TV viewing on PCs) as “digital
Japan’s Information Technology Promotion Agency (IPA) is
life” and aims to ensure development of a convenient, safe, and
conducting an Exploratory IT Human Resources Project to
reliable digital society for technology users.
identify and cultivate IT talent. The project seeks out and
Makoto Maki, President and CEO of Melco Holdings Inc., is Chairman
develops exceptionally skilled individuals (“Super Creators”)
of the Association. The association is making recommendations
who have creative ideas and skills and are capable of driving
on building environments and rules that will enable consumers to
innovations in software development and utilizing those
enjoy digital life (including digital terrestrial broadcasting) more
innovations. Training is overseen by exceptionally skilled
easily.
project managers (PMs) with outstanding track records. The Melco
(http://dlpa.jp/)
Group serves as the project’s administrative organization.
Through its involvement in the project, the Group has started
new projects together with exceptionally skilled researchers
Making further inroads into overseas
markets
To accelerate its overseas expansion, the Melco Group is
structuring its operations to enable overseas subsidiaries to
engage in product planning and development that translates
overseas customers’ needs directly into new products. Part of
these efforts was the January 2010 launch of Dualie, which was
developed by Buffalo Technology (USA), Inc., while promotional
efforts were handled by Buffalo Technology (UK), Ltd.
capable of playing a leading role in creating next-generation IT
markets. These projects have the potential to drive creation of
new markets. In association with the product development
personnel recruitment activities undertaken by the Group in
2009, the Group recruited a researcher who was awarded the
Super Creator designation in the first half of fiscal 2008.
Another individual who was designated a Super Creator in the
second half of fiscal 2008 is slated to join the company in
spring 2011.
The Melco Group will continue endeavoring to optimally
structure its overseas operations and expand overseas markets.
*iPhone is a trademark of Apple Inc.
The Melco Foundation
To commemorate the 30th anniversary of its founding, the
Melco Group established the Melco Foundation in 2007 to
Europe-wide partnership signed with
Ingram Micro
contribute to society. The foundation aims to contribute to the
development and widespread practice of managerial
accounting and more broadly, to the development of Japanese
Buffalo EU B.V. signed a Pan-European partnership agreement
academia and culture through support for research related to
with Ingram Micro Nederland BV in the aim of expanding its
Japanese managerial accounting.
sales network in Europe. Ingram Micro is one of the world’s
In fiscal 2009, the Foundation supported 19 researchers
largest vendors engaged in IT product wholesaling worldwide.
through programs such as Research on 21st-century
With this agreement, the Melco Group aims to drive expansion
Corporate Organizations and Managerial Accounting as a
of its sales network in European markets.
Strategy Execution Function. With managerial accounting
gaining importance, the fruits of such programs should
contribute broadly to society.
11
12
Financial Report
Financial Report
Memory Products
Storage Products
Overseas Sales
Unit sales of PC memory modules declined 23.4% year on
We were forced to lower sales prices of our mainstay hard
Overseas sales declined 5.0% year on year as economic
year, and sales revenues declined 30.7% year on year to
disk drive products. However, use of hard disk drives to
headwinds continued to plague North America and Europe. Amid
¥10,151 million in the wake of stagnant demand for memory
record digital terrestrial TV programs generated new demand
such an environment, sales in Asia and Oceania grew
upgrades due to an increase in new PC models’ factory
in addition to that from conventional use with PCs. As a
substantially by 37.3% year on year as a result of the Group’s
-installed memory capacity as well as withdrawals from
result, unit sales of hard disk drives grew 9.2% year on year,
efforts to expand sales. Sales in both North America and Europe
North American markets. Unit sales of USB and other flash
and sales revenues grew 1.4% year on year to ¥42,646
declined, but the Melco Group achieved operating profit in both
memory products grew 2.2% year on year, and sales
million. Network hard drive (NAS) sales declined 3.4% year
markets as it focused on strengthening its management structure
revenues increased 8.3% to ¥9,699 million, by virtue of
on year to ¥12,834 million, adversely affected by a year-on-
while withdrawing from loss-making operations with an emphasis
intense sales efforts.
year decline in unit sales of 0.9% due to stagnant demand
on balancing revenue and profits.
Consolidated Ordinary Income and Ordinary Profit Margin
8,000
7,652
(million yen)
8,000
8
（％）
6,000
6
5,446
5,439
6.5
6.2
4,000
4
4.0
3.9
2,258
2,000
from overseas and domestic corporate customers.
2
1.9
0
0
2007/3
Networking Products
2008/3
2009/3
2010/3
2011/3
(Projected)
Other Products
Networking products have increased in prevalence as
Unit sales of digital home products grew 84.7% year on year,
products such as mobile phone handsets and digital
and sales revenues rose 10.5% year on year to ¥3,778
terrestrial TVs are increasingly equipped with wireless LAN
million. Sales of Digital terrestrial tuners for analog TV began
connectivity. Unit sales of broadband products grew 10.4%
to grow gradually, and Melco Group products were adopted
year on year, and sales revenues grew 5.3% year on year to
by the Ministry of Internal Affairs and Communications as
¥21,425 million. An increase in sales of high-power value-
basic digital terrestrial tuners to be distributed for free as part
added products compatible with the IEEE802.11n standard
of a project to support purchases of digital terrestrial TV
for enhanced wireless communications and cost cutting
receivers. Unit sales of supplies and accessories grew 7.2%,
efforts contributed to profits.
buoyed by the Group’s efforts to increase market share, but
Consolidated Net Income and Net Profit Margin
Overseas Sales
4,900
4
4.3
3,615
3.8
25,200
10,600
25,000
(million yen)
5
（％）
4,000
26,268
12,062
3,000
3
2,728
2.6
2,000
sales revenue only grew marginally to ¥9,447 million.
2
2.0
21,723
10,418
Europe
20,260
9,740
20,000
Consolidated Sales
4,990
5,000
(million yen)
19,246
8,552
1,000
1
707
0.6
0
2007/3
2008/3
2009/3
0
2010/3
2011/3
(Projected)
150,000
(million yen)
21,570
130,000
21,280
120,276
120,000
23,009
22,982
20,957
116,911
59,168
20,352
Other
4,600
9,454
23,400
North
America
33,240
(million yen)
Network
6,063
4,574
10,000
Asia
Oceania
Storage
40,795
4,750
13
10,000
5
2.5
0
4,456
2009/3
2008/3
2009/3
0
2010/3
Memory
19,850
20,000
2,041
0
2008/3
10
2007/3
0
2007/3
（％）
6,119
35,850
23,607
15
16.4
12.9
20,000
62,200
5,000
30,000
28,652
10.5
55,480
60,000
26,962
9,264
10,000
21,425
49,461
55,355
29,464
30,000
20,151
24,400
90,000
Consolidated Shareholders’ Equity and Return on Equity
15,000
139,571
134,547
2010/3
2011/3
(Projected)
2007/3
2008/3
2009/3
2010/3
2011/3
(Projected)
Note regarding forecasts:
The above earnings forecasts were formulated based on information
available as of the forecast date and are subject to numerous uncertainties.
Actual results may differ from earnings forecasts as a result of changes in
business conditions.
14
Financial Report
Financial Report
Consolidated balance sheet
Fiscal year
Item
(million yen)
Ended
Ended
March 31, 2010
March 31, 2009
Consolidated statement of income
(million yen)
Consolidated Statement of Changes in Shareholders' Capital
Fiscal year ended March 31, 2010 (April 1, 2009 to March 31, 2010)
Ended
Ended
March 31, 2010
March 31, 2009
Item
(April 1, 2009 to
March 31, 2010)
(April 1, 2008 to
March 31, 2009)
Sales
116,911
120,276
Cost of sales
93,466
102,194
Selling, general and administrative
expenses
15,902
15,949
7,542
2,132
201
196
91
69
7,652
2,258
Extraordinary income
130
313
Repurchase of stock
Extraordinary loss
Sale of treasury stock
Cancellation of treasury stock
Fiscal year
Assets
57,617
46,345
5,352
5,735
Operating income
867
1,487
Non-operating income
Intangible fixed assets
2,373
2,699
Non-operating expenses
Investments etc.
2,112
1,549
Ordinary income
Current assets
Total fixed assets
Tangible fixed assets
Total assets
62,970
52,080
Liabilities
Current liabilities
Long-term liabilities
Total liabilities
26,646
21,467
3,082
1,960
29,729
23,427
452
854
Current term net income before
taxes and other adjustments
7,329
1,717
Corporation, resident and
enterprise taxes
1,386
315
737
533
214
161
4,990
707
Adjustment for corporation taxes, etc.
Gains (losses) attributable to
minority interests
Current term net income
(million yen)
Shareholders' capital
Item
Balance as of March 31, 2009
Valuation and translation adjustments
Net
Total
Foreign
Total
unrealized Deferred
valuation Stock Minority Total net
Common Additional Retained Treasury
currency
option interests assets
shareholders'
paid-in
hedging
gains/losses
and
earnings stock
stock
translation
capital
capital
on other gain/loss
adjustments translation
securities
adjustments
1,000
774 26,810
Changes due to accounting treatment
of overseas subsidiaries
△57
28,527
5
0
△290
△285
4
405 28,652
−
−
−
Cash dividends
△755
△755
△755
Net income
4,990
4,990
4,990
△0
△0
△0
−
−
−
−
−
−
−
−
Changes during the period
Net change in items other than
shareholders’ capital during the period
Total changes during the period
Balance as of March 31, 2010
−
1,000
122
2
14
139
−
214
353
214
4,588
4,235
△0
4,234
122
2
14
139
−
774 31,045
△58
32,762
127
2
△276
△145
4
−
619 33,240
Net assets
Fiscal year ended March 31, 2009 (April 1, 2008 to March 31, 2009)
Shareholders' capital
(million yen)
Shareholders' capital
Common stock
Additional paid-in capital
Retained earnings
Treasury stock
Total shareholders' capital
1,000
1,000
774
774
31,045
26,810
△58
△57
32,762
28,527
Valuation and translation adjustments
Fiscal year
Item
Operating activity cash flow
Investing activity cash flow
(million yen)
Ended
Ended
March 31, 2010
March 31, 2009
(April 1, 2009 to
March 31, 2010)
(April 1, 2008 to
March 31, 2009)
12,133
4,164
△12,262
△2,155
△801
△1,440
8
△95
△922
472
Item
Balance as of March 31, 2008
1,927 26,881 △637
29,172
275
8
△159
123
2
165 29,464
△5
△5
△5
△774
△774
△774
707
707
707
△573
△573
△573
△0
1
0
0
△1,151
1,151
−
−
Changes during the period
Cash dividends
127
5
Financing activity cash flow
Deferred hedging gains (losses)
2
0
Balance of cash/cash-equivalent conversions
Foreign currency translation
adjustments
△276
△290
Increase of cash/cash-equivalents
Total valuation and translation
adjustments
△145
△285
Cash/cash-equivalent opening balance
12,900
12,428
4
4
Cash/cash-equivalent closing balance
11,977
12,900
619
405
Total net assets
33,240
28,652
Total changes during the period
Total liabilities and net assets
62,970
52,080
Balance as of March 31, 2009
Minority interest in consolidated
subsidiaries
1,000
Net
Total
Foreign
unrealized Deferred
valuation Stock Minority Total net
Additional
Total
currency
Retained Treasury
option interests assets
and
paid-in
shareholders' gains/losses hedging translation
earnings stock
on other gain/loss
translation
capital
capital
adjustments
securities
adjustments
Changes due to accounting treatment
of overseas subsidiaries
Net unrealized gains (losses) on
other securities
Stock option
15
Consolidated cash flow statement
Common
stock
Valuation and translation adjustments
Net income
Repurchase of stock
Sale of treasury stock
Cancellation of treasury stock
Net change in items other than
shareholders’ capital during the period
△8
△130
△408
1
239 △167
△66
579
△639
△269
△8
△130
△408
1
239 △806
774 26,810
△57
28,527
5
0
△290
△285
4
405 28,652
− △1,152
1,000
△269
16
Company Data
Evolution of the Melco Group
Origin of Company Names
MELCO HOLDINGS INC.
Company Profile
Board of Directors
Melco is an acronym for Maki Engineering Laboratory Company. Maki is the surname of Melco
Company Name
MELCO HOLDINGS INC.
Board of Directors
Holdings’ founder and current President and CEO, Makoto Maki. The name dates back to the
Incorporated
July 1,1986
President and CEO
Makoto Maki
company’s inception in 1975.
President and CEO
Makoto Maki
Senior Managing Director
Kuniaki Saiki
Capital
¥1 billion
Managing Director
Hidetoshi Yamaguchi
Director
Tamio Matsuo
Director
Lee Yang Hun
Director
Hiromi Maki
Director
Iwao Tsusaka
Senior Corporate Auditor
Hiromichi Maki
Corporate Auditor
Toshio Nishikawa
Corporate Auditor
Yuzuru Kawashima
Corporate Auditor
Tomotsune Sumi
Buffalo was named after the printer buffer, an early PC peripheral.
Business activities
In 1982, Melco had a major hit product in the internal printer buffer, a peripheral device that
Melco Holdings : Holding Company
allowed PCs to be used even while printing. The internal printer buffer became the cornerstone
Holdings the shares of the group operating companies under its control
of Melco’s subsequent dramatic growth. When Melco later solicited public suggestions for a
No. of employees : 70 MELCO Group consolidated : 871
brand name, it decided on Buffalo as a name that aptly conveys an image of a dynamic growth
Group affiliates : Total of 14 companies (9 domestic, 5 overseas)
company and also evokes the printer buffer’s contribution to the company’s growth.
(As of June 29, 2010)
Evolution of Melco Group
1975 May ● Incorporated for the purpose of manufacturing and selling audio equipment.
1978 Aug. ● Melco became a joint-stock corporation upon establishment of Melco Inc. (currently Buffalo Inc.).
BUFFALO INC.
1981 Jul. ● Entered the personal computer peripherals market in earnest.
Company Name
1982 Nov. ● Began marketing an internal printer buffer.
1986 Jul. ● Established Buffalo (now Melco Holdings Inc.)
1988 Oct. ● Began marketing Japan’s first EMS board (memory module).
1991 Oct. ● Melco Inc. (now Buffalo Inc.) registered with JASDAQ.
Company Profile
BUFFALO INC.
Board of Directors (As of June 29, 2010)
Founded
May 1,1975
Chairman and CEO
Makoto Maki
Incorporated
August 5,1978
President and COO
Kuniaki Saiki
Chairman and CEO
Makoto Maki
Managing Director
Hidetoshi Yamaguchi
Capital
¥320 million
Director
Tamio Matsuo
Director
Masanao Tsuzuki
Director
Hajime Nakai
Corporate Auditor
Hiromichi Maki
Corporate Auditor
Nobumasa Kaneko
1992 Jan. ● Melco Inc. opened its High-Tech Center (now Buffalo Inc. headquarters) as its Technical R&D Center.
Aug. ● Began marketing LAN products.
Business activities
1994 Feb. ● Began marketing hard disks; shifted emphasis to manufacture of computer peripheral devices.
Development, manufacture and sales of computer and broadband
1995 Jan. ● Melco Inc. listed on second section of Nagoya Stock Exchange.
equipment, and supply of related services
Aug. ● Melco Inc. listed on second section of Tokyo Stock Exchange.
Board of Directors
No. of employees : 434
Sep. ● Melco Inc. obtained ISO9001 certification, the international quality assurance standard.
1996 Sep. ● Melco Inc. listed on first section of Tokyo Stock Exchange and Nagoya Stock Exchange.
1999 Jan. ● Entered the wireless LAN market; released Airconnect
2000 Oct. ● Developed worldwide standard specification of DDR memory for notebook computers.
2001 Jan. ● Melco Inc. obtained ISO4001 certification, the environment management system standard.
2003 May ● Buffalo Inc. changed trade name to Melco Holdings Inc., moved head office.
Oct. ● Melco Inc. changed company name to Buffalo Inc., moved head office.
Oct. ● Melco Holdings Inc. and Buffalo Inc. swapped stock and shifted to holding company system.
Oct. ● Melco Holdings Inc. listed on first section of Tokyo Stock Exchange and Nagoya Stock Exchange.
2004 Jan. ● Established new Digital Home Solutions Business Division.
2005 Mar. ● Began supply of special set-top boxes for NTT East and West corporations.
Jul. ● Buffalo Inc. established its Technical Service Center in Minami-ku, Nagoya.
2007 Apr. ● Melco Holdings Inc. made Arvel Inc. as a consolidated subsidiary.
May ● MTS Inc. changed its company name to Buffalo IT Solutions.
Business locations
Headquarters
15 Shibatahondori 4-chome, Minami-ku, Nagoya 457-8520 Japan
TEL.81-52-619-1811 FAX.81-52-619-1800
Tokyo Branch Office
Kayabacho Tower, 21-2 Shinkawa 1-chome, Chuo-ku, Tokyo 104-0033 Japan
TEL.81-3-3523-3333 FAX.81-3-3523-3300
Osaka Branch Office
Access Tanimachi Bldg., 1-18 Tanimachi 9-chome, Chuo-ku, Osaka 542-0012 Japan
TEL.81-6-6191-1511 FAX.81-6-6191-1510
Nagoya Branch Office
Kamiya Bldg., 11-50 Ohsu 4-chome, Naka-ku, Nagoya 460-0011 Japan
TEL.81-52-249-6600 FAX.81-52-249-6601
Sendai Branch Office
Miyagino Center Bldg., 5-22 Tsutsujigaoka 4-chome, Miyagino-ku, Sendai 983-0852 Japan
TEL.81-22-291-0311 FAX.81-22-298-9470
Fukuoka Sales Office
Yaoji Center Bldg., 9-2 Hakataekimae 4-chome, Hakata-ku, Fukuoka 812-0011 Japan
TEL.81-92-477-3711 FAX.81-92-477-3755
Sapporo Sales Office
San Keisei Bldg., 4-1 Kitaichijo Higashi 1-chome, Chuo-ku, Sapporo 060-0031 Japan
TEL.81-11-200-8150 FAX.81-11-200-8151
Aug. ● Arvel Inc.’s name changed to Buffalo Kokuyo Supply Inc.
2008 Apr. ● Established Buffalo EU B.V.
2009 Mar. ● Melco Holdings Inc.’s head office moved to Minami-ku, Nagoya.
17
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