Minebea Reports Third Quarter 2006 Results

Minebea Co. Ltd., (Japan, TSE: 6479) reported fiscal third quarter 2006 financial results, for the period ended December 31, 2005. Sales in the quarter were up ¥ 4.6 billion (USD $38.9 million) over 2005, to ¥ 80.948 billion ($685 million). Net income jumped more than 52%, to ¥ 2.4 billion ($20.3 million) in the quarter, from ¥ 1.6 billion ($13.5 million) in 2005. However, Minebea said sales, without international currency effects, were essentially flat from third quarter 2005 to third quarter 2006. And approximately half the gain in net income was also due to currency translation effects. Minebea is an industrial manufacturing and distribution conglomerate, made up of 47 companies operating in two business units -- Machined Components and Electronic Devices and Components. We will focus on the Machined Components Business, where bearing manufacturing and sales operations are contained. Products in this business include ball bearings, mechanical components such as rod-end bearings for aircraft and aerospace, and pivot assemblies for hard disk drives. The business also produces automotive screws and miscellaneous defense-related products and equipment. Minebea's bearing manufacturing operations are Minebea Co. Ltd., New Hampshire Ball Bearings Inc., NMB-Minebea UK Ltd., NMB Singapore Ltd., Pelmec Industries Ltd., NMB Thai Ltd., Pelmec Thai Ltd., NMB Hi-Tech Bearings Ltd., and Minebea Electronics & Hi-Tech Components Ltd. Sales of bearing-related products in the quarter were ¥ 24.49 billion ($207.4 million), up 13.7% from 2005. Operating income from the Machined Components Business was ¥ 6.97 billion ($59 million). Minebea said miniature and small size ball bearing sales were higher in the quarter, particularly for fan motor applications. Even so, the company is promoting further cost reduction efforts to remain competitive. Strong demand continued for aircraft and aerospace bearings. The continued explosive growth in manufacture and sale of computer hard disk drives was a key market for Minebea in the quarter. Minebea produces disk drive spindle motors and pivot assemblies. It said it will continue to expand its business in that area, particularly in pivot assemblies, and focus on profitability by improving assembly yield and reducing the production costs of components. Overall, sales of ball bearings to OEM auto manufacturers and manufacturers of information and telecommunications equipment stayed strong year-on-year, "owing to our vigorous sales expansion efforts." Sales of rod-end bearings to the aerospace industry were up, driven by demand in the U.S. and Europe. Pivot assembly sales grew rapidly, from hard disk drive makers. Minebea was also able to raise prices on pivot assemblies, strongly impacting profits there. Looking forward, Minebea said it will continue to aggressively expand sales of its mainstay ball bearings, which are in demand by manufacturers of household electrical appliances, automobiles and information and telecommunications equipment. The company said that by achieving economies of scale in manufacturing from the sales expansion and from cost reductions, operating results should continue to improve. In addition, the aircraft market for rod end bearings remains strong, particularly in the United States and Europe. Pivot assembly sales are also expected to continue strong.