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Press Release
September 14, 2007 |
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Lion Corporation
President: Sadayoshi Fujishige
(Code 4912) |
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Notice of Revision to Financial Results Report for the Interim Period Ended June 30, 2007 in Accordance with the Occurrence of Subsequent Events |
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Lion announces the following revisions to its financial results report for the interim period ended June 30, 2007, which was released on July 31, 2007.
| 1. |
Reason for revision |
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Lion Corporation launched sales of its Varsan Hyosatsu Jet Spray for Flying Bugs and Varsan Hyosatsu Jet Spray for Creeping Bugs in March 2007, both of which are aerosol products employing a flammable gas. Despite Lion’s inclusion of warning labels on the sprays advising against use in proximity to open flames or sparks, several cases of combustion have occurred during use of the products. Placing top priority on customer safety, Lion decided to implement a voluntary recall of the products to prevent further incidents. Lion announced the recall on August 27, 2007.
Accordingly, Lion has revised its consolidated interim financial statements and interim financial statements for the six months ended June 30, 2007 to reflect estimated costs associated with the recall and the related loss on inventory valuation as of June 30, 2007.
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| 2. |
Details of revision |
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In accordance with the reasons detailed above, Lion recorded a total of ¥1,023 million in estimated costs associated with the recall and the related loss on inventory valuation as of June 30, 2007. The estimated total was recorded under extraordinary losses as “Voluntary product recall expenses.” |
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As a result, consolidated extraordinary losses for the interim period ended June 30, 2007 increased ¥1,023 million year on year to ¥1,319 million, while net income before income taxes as well as net income declined by an equivalent amount, finishing at ¥2,690 million and ¥1,862 million respectively. |
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In addition, non-consolidated extraordinary losses for the interim period ended June 30, 2007 increased ¥1,023 million year on year to ¥1,338 million, while net income before income taxes as well as net income declined by an equivalent amount, finishing at ¥3,320 million and ¥2,909 million respectively. |
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| 3. |
Impact of revision |
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| (Consolidated) |
(Millions of yen) |
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Original Data
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Revised Data
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Change
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Consolidated
Interim Statements of Income |
Extraordinary loss
Voluntary product recall expenses
Net income before income taxes
Net income
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296
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3,713
2,885 |
1,319
1,023
2,690
1,862 |
1,023
1,023
(1,023)
(1,023) |
| Consolidated Interim Balance Sheets |
Current assets
Inventories
Total assets
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121,015
29,756
247,020
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120,846
29,587
246,851 |
(169)
(169)
(169) |
Current liabilities
Other payables and accrued expenses
Total liabilities
Shareholders’ equity
Retained earnings
Total net assets
Total liabilities and net assets
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96,951
31,878
139,083
98,299
48,158
107,937
247,020 |
97,805
32,732
139,937
97,276
47,135
106,914
246,851 |
854
854
854
(1,023)
(1,023)
(1,023)
(169) |
Consolidated Interim Statements of Cash Flows
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Income before income taxes
Increase in inventories
Increase (decrease) in
accrued expenses and other payables
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3,713
(3,026)
(942) |
2,690
(2,857)
(88) |
(1,023)
169
854 |
| (Non-consolidated) |
(Millions of yen) |
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Original Data
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Revised Data
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Change
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| Interim Statements of Income |
Extraordinary loss
Voluntary product recall expenses
Net income before income
taxes
Net income |
315
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4,343
3,932
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1,338
1,023
3,320
2,909
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1,023
1,023
(1,023)
(1,023)
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Interim Balance Sheets
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Current assets
Products and goods
Total assets
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93,889
16,162
211,994
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93,720
15,993
211,825
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(169)
(169)
(169)
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Current liabilities
Accrued expenses
Total liabilities
Shareholders equity
Retained earnings
Other retained earnings
Unappropriated
retained earnings
Total net assets
Total liabilities and net assets
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82,220
25,506
120,037
87,499
37,359
31,807
9,535
91,957
211,994
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83,074
26,360
120,891
86,476
36,336
30,784
8,512
90,934
211,825
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854
854
854
(1,023)
(1,023)
(1,023)
(1,023)
(1,023)
(169)
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| 4. |
Location of revisions |
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Revisions to the interim financial results report are indicated with an underline.
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| 5. |
Impact on results for the fiscal year ending December 31, 2007 |
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The expected effect of the product recall on the Company’s full-year results will be announced when confirmed. |
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