Contact :FDK CORPORATION, Corporate Communications Dept.
E-mail : narishi@fdk.co.jp or hkoji@fdk.co.jp

FOR IMMEDIATE RELEASE
Oct.29,2002

FDK Reports FY2002 Half-Year Financial Results
1. Summary of Consolidated Resultsa. Summary of Consolidated Statements of Operations
Yen(millions)
1st Half
1st Half
FY2002(*1)
FY2001(*2)
Net Sales
Operating Income(loss)
Income(loss) Before Income Taxes
and minority interests
Net Income(loss)
Amounts Per Share of Common Stock:
Basic earnings(loss)
Diluted Earnings

Yen(million)
Change(%)

FY2001(*3)

U.S.Dollars(thousands)
1st Half
FY2002¥43,165(532)¥52,567
583

-17.9
-

¥100,614(227)$350,935($4,325)(3,063)(3,193)(1,632)(1,762)-(11,482)(12,308)($24,902)($25,959)(38.44) yen- yen(21.21) yen
- yen

-

(148.16) yen- yen(31) cent- centb.Net Sales by Business Segment

Electronic Components
Batteries
Total

Yen
(millions)
1st Half
1st Half
FY2002
FY2001¥32,306¥39,100
10,85913,467¥43,165¥52,567

Yen(million)
Change(%)
-17.4
-19.4
-17.9

FY2001¥75,239
25,375¥100,614

2002/3/31¥85,010
6,381
7.5%

U.S.Dollars(thousands)
2002/9/30$654,862$42,195
6.4%

c.Summary of Consolidated Financial Condition

Total Assets
Shareholders'Equity
Shareholders'Equity Ratio
Shareholders'Equity
Per Share

2002/9/30¥80,548
5,190
6.4%

62.49 yen

Yen(millions)
2001/9/30¥96,777
16,106
16.6%

193.87 yen

76.82 yen

51 cent

U.S.Dollars(thousands)
1st Half
FY2002$262,650$88,285$350,935

d.Summary of Consolidated Statements of Cash FlowsYen(millions)
1st Half
FY2001

FY2001

U.S.Dollars(thousands)
1st Half
FY2002¥115¥2,679(¥1,356)$935(2,536)(3,865)(6,544)($20,618)

2,525(2,645)(883)$20,528

9,722

14,393

9,798$79,041

1st Half
FY2002
Cash Flows fromOperating Activities
Cash Flows from
Investing Activities
Cash Flows from
Financing Activities
Cash and Cash Equivalents
at End of period

Consolidated Subsidiaries
Unconsolidated Subsidiaries
Affiliates(equity method applied only)

16 companies
7 companies- companies

2.Projections for FY2002 (April 1,2002-March 31, 2003)
Consolidated Earnings Forecast

Net Sales
Operating IncomeNet Income(loss)
Net Income(loss) per ShareYen(million)¥95,300
900(4,500)

change(%)-5.3-(54.17) yen-U.S.Dollars(thousands)$774,797$7,317($36,585)(44) cent

Note :All yen figures have been converted to U.S.dollars for convenience only at a uniform rate of $1=123yen*1. 1st Harf FY2002 : April 1,2002 - September 30, 2002
*2. 1st Harf FY2001 : April 1,2001 - September 30, 2001
*3. FY2001 : April 1,2001 - march 31, 2002

Consolidated Statements of Operations
Yen (millions)

Net sales

1H of FY2002

1H of FY2001¥¥

43,16552,567

FY2001¥100,614

Operating costs and expenses
Cost of sales

37,88544,638Selling, general and administrative expenses

5,812

7,346

14,502

43,69751,984

100,841

(532)

583

(227)

106

Operating income (loss)

86,339Other income (expenses)
Interest and dividend income

4469

Equity in earnings (losses) of affiliates, net

0

(27)

(70)

(372)

(439)

(819)

(2,203)(1,818)(10,472)(2,531)(2,215)(11,255)(3,063)(1,632)(11,482)

139

162

198
537

Interest charges
Other, net

Income (loss) before income taxes and minority interests
Income taxes
Current
DeferredIncome (loss) before minority interests
Minority interests in income of consolidates subsidiaries
Net income (loss)

(28)

(98)

111

64

735

(3,174)(1,696)(12,217)

(19)

(66)

(91)

¥ ( 3,193)¥ ( 1,762)¥ ( 12,308)

Consolidated Balance Sheets
Yen (millions)30-Sep-02

30-Sep-01

31-Mar-02¥ 10,187¥ 14,922¥ 10,456

AssetsCurrent assets
Cash and time deposit
Notes receivable-trade

2,079

2,262

2,192

Accounts receivable-trade

19,26225,423

21,911Inventories

10,35815,48412,016

Deferred tax assets

155

407

176

Other current assets

2,993

3,059

3,981

Less: Allowance for doubtful receivable

(120)

(154)

(134)

44,914

61,40350,598

Building and structures

11,566

10,936

11,816

Other depreciable assets

16,375

17,963

17,665

Land

4,484

1,657

1,715

Total current assets
Tangible fixed assets

Construction in progress

421

1,058

372

32,846

31,61431,568

1,426

1,428

1,429

Securities investments

518

1,028

556

Deferred tax assets

155

509

129

Other investments and long-term loans

689

795

730

1,362

2,332

1,415

¥ 80,548¥ 96,777¥ 85,010¥ 258
10,37935,781
3,789
167
5,918
56,292¥ 1,667
15,75038,113
5,435
161
8,101
69,227¥ 948
13,21334,783
4,121
109
8,345
61,51913,9704,001
13018,101

5,472
5,008
39
10,51912,2203,715
140
16,075

965

925

1,035

13,206
7,585(15,194)
70
(471)
(6)
5,190

13,206
7,583(3983)
(185)
(515)
0
16,106

13,206
7,583(14,530)
87
37
(2)
6,381

¥ 80,548¥ 96,777¥ 85,010

Total tangible fixed assets
Intangible assets
Investments and long-term loans

Total investments
Total assets

Liabilities, minority interests and shareholders' equity
Current liabilities
Notes Payable-trade
Account payable-trade
Short-term borrowings
Current portion of long-term debt
Accrued income taxes
Other current liabilities
Total current liabilities
Long-term liabilities
Long-term debt
Accrued retirement benefits
Other long-term liabilities
Total long-term liabilities
Minority interests in consolidated subsidiaries
Shareholders' equity
Common stock
Capital surplus
DeficitUnrealized gains (losses) on securities, net of taxes
Foreign currency translation adjustments
Treasury stock
Total shareholders' equity
Total Liabilities, minority interestsand shareholders' equity

Consolidated Statements of Cash Flows
Yen (millions)
1H of FY2002

1H of FY2001

FY2001

Cash flows from operating activities
Income (loss) before income taxes and minority interests¥ ( 3,062)¥ ( 1,632)¥ ( 11,482)

2,654

2,849

5,524

Adjustments to reconcile income before income taxes andminority interests to net cash provided by operating activities
Depreciation and amortization
Equity in earnings of affiliates, net

02770(Increase) decrease in receivable-trade

2,264

4,766

9,016

(Increase) decrease in inventories

1,409

105

4,011

Increase (decrease) in payable-trade(2,811)(1,773)(6,285)(666)42(596)

Cash generated from operations

496

3,746

188

Interest paid

(345)

(455)

(847)

Other, net

Interest and dividends received

44

69

106

Income taxes paid

(80)

(681)

(803)

115

2,679

(1,356)(2,573)(4,315)(7,410)

20

610

606

(169)

(56)

(155)Net cash provided by operating activities

Cash flows from investing activities
Purchase of tangible fixed assets
Proceeds from sales of tangible fixed assets
Purchase of intangible assets
Other, net
Net cash used in investing activities

186

(104)

415

(2,536)(3,865)(6,544)

Cash flows from financing activities
Proceeds from long-term debt

3,784

396

8,120

Repayment of long-term debt

(3,357)(2,319)(4,832)

Increase (decrease) in short-term borrowings

2,102(477)(3,958)Proceeds from issuance of new common stock---Dividends paid

0(249)(249)

Other, net
Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash from new consolidation of subsidiaries
Cash and cash equivalents at end of period

(4)

436

2,525

(2,645)

(883)

(180)

(28)

329

(76)

(3,859)(8,454)

9,798

18,252

18,252---¥ 9,722¥ 14,393¥ 9,798

Consolidated Statements of Shareholders' Equity
Yen (millions)30-Sep-01

30-Sep-02

31-Mar-02

Common Stock:
Beginning balance¥ 13,206

Increase from capital stock issued
Ending balance¥ 13,206-¥ 13,206--¥ 13,206¥ 13,206¥ 13,206¥ 7,583¥ 7,583¥ 7,583

Capital Surplus:
Beginning balance
Increase in capital surplus from merger with a subsidiary

2

Transfer to Retained Earnings
Ending balance---¥ 7,585¥ 7,583¥ 7,583¥ ( 14,530)¥ ( 1,942)¥ ( 1,942)

2,529

--

Retained Earnings(Deficit)
Beginning balance
Decrease in deficit from merger with a subsidiaryTransfer from Capital Surplus---

Cash dividends paid-(250)(250)

Others

-(29)

(30)

Net income(loss)(3,193)(1,762)(12,308)

Ending balance¥ ( 15,194)¥ ( 3,983)¥ ( 14,530)¥ 87¥ ( 77)¥ ( 77)

(17)

(108)

164

¥ 70

¥ ( 185)¥ 87

Beginning balance¥ 37¥ ( 701)¥ ( 701)

Net increase in foreign currency transaction adjustment

(508)

186

738

¥ ( 471)¥ ( 515)¥ 37¥ ( 2)¥ ( 2)¥ ( 5)(4)

23¥ ( 6)¥ 0¥ ( 2)

Unrealized Gain(loss) on Securities,net of taxes:
Beginning balance
Net increase in unrealized gain(loss) on securities
Ending balance

Foreign Currency Translation Adjustments:

Ending balance

Treasury Stock:
Beginning balance
Net decrease(increase) Treasury stock
Ending balanceManagement Directions
The mission and core values of the FDK group
The FDK group contributes to the progress of technology as an environment-friendly
component manufacturer who pursues the motto of: "Everything made from excellent
materials." By constantly improving its leading edge technologies for material development,
the group also strives to position itself as a key device supplier in the advanced field ofinformation technology. The group will work to enhance its corporate values and soundness
by strategically and efficiently using of all resources to meet the changes of the businessenvironment, while contributing to society through principled corporate activity which isexpected to further improve and generate the value for the company.
Management strategy
The market for electronic products is subject to temporary slowdown due to featurelessmarket stemming from the IT slump. However, the intermediate term still holds great
expectations for the information and communications field. Under such circumstances, FDK
will intensify the offerings of solutions to customer by developing products that utilize its
strengths in material technology and the high-density mounting technology.
We base our field of business on broadband networking and network related equipment,
mobile communications equipment, as well as aiming at strong deployment efforts in theautomotive, amusement, and the environmental fields. Moreover, in order to heighten pricecompetitiveness, further low-cost manufacturing is promoted by streamlining domestic
production bases and efficient use of overseas factories.
A harsh business environment is expected to continue into the future. In such anenvironment, rationalization measures such as streamlining domestic production bases andconstant cost reduction must be resolutely conducted in to cope with the severe situation.
Moreover, to ensure the fastest recovery of the company’s performance, it must aim with thehighest priority at developing products swiftly in accordance with customer’s needs, andconcentrating management resources on its core business in accordance with productstrategies based on the mid- and long-term perspective. Furthermore, striving forimprovement and strengthening of its financial structure is critical..

Business performance and finances
Business performance overview
Although some areas of the information and communication fields have showed signs ofrecovery in the beginning of 2002, market conditions have continued to lag in the mid-term.
Furthermore, the slackening of American economy and the uncertain prospects of corporate
earnings in the end of this mid-term as well as a plunge in worldwide stock market has
harshened the environment surrounding the company.
FDK has strengthened its enterprise base efficiently in th e last fiscal year. The FDK grouphas by shifted its ferrite business to China, rationalized mainly by reducing the staff Japan

and overseas, concentrated management resources to growth fields focusing on broadband
Internet related products, and strengthened its group alignment and the like. However, themarket is still in a slump with a central focus on information and communication field.
Especially for the optical communications business, which was cultivated and considered as
one of the pillars of our company, it has come under ruinous outside influences, in addition tothe continued failure of North America communication efforts. Therefore, a short-term
recovery was difficult. Moreover, while market was still inelastic, there are great pressuresfrom the further intensified competition of the rapidly rising of Chinese manufacturers.
Consequently, the net sales decreased by 17.9% over the corresponding period of last year
resulting sales of 43,165 million yen, the operating loss is 532 million yen and the mid-term
net loss is 3,193 million yen.
Electric components
Although the sales of hybrid modules for liquid crystal and plasma displays, and stepper
motors for OA apparatus and VCO of cellular phones have elongated, the sales of switching
power supply and coil devices, have declined. Moreover, optical communications parts, suchas optical isolators and optical attenuators have decreased sharply due to inactivity of the
optical-communications market. Consequently, the net sales of the whole enterprisedecreased by 17.4% compared with the corresponding period of last year resulting in 32,306
million yen in sales.
Batteries
Although with the inflow of overseas products and intensified price competition, the sameamount of net sales as the corresponding period of last year was secured from generaldomestic customers. However, the dry cell production equipment was less than thecorresponding period of last year because of a shipment adjustment of major overseas
customer. Consequently, the sales of the whole enterprise changed to 10,859 million yen witha decrease of 19.4% compared with the corresponding period of last year. In addition, in orderto strengthen battery business, the battery-manufacturing department was spun off into aseparate company, and the "FDK ENERGY incorporated company" was founded. The newcompany provides products with price competitiveness and high quality through amanagement organization concentrated on the low-cost manufacturing.
Cash Flow
The cash flow from operating activities at this mid-term showed a net loss before adjustment
for taxes of 3,062 million yen, although there was an increase in fund of 115 million yen
according to reduction of inventory and efforts put into management efficiency.
The cash flow from investment activities of this mid-term was reduced to 2,536 million yen
due to the investment of stepper motor business and hybrid module business in overseas
subsidiaries.
Moreover, the cash flow from financing activities of this mid-term increased 2,525 million
yen because of increased borrowing.
Consequently, the balance of cash and cash equivalent at the end of mid-term decreased by
76 million yen, resulting in a balance of 9,722 million yen.

Projections
Along with the economic slump, the information and communication fields have showedsigns of long-term stagnation, due to the intensified market competition from Chinese
manufacturers. Therefore, a severer business environment is expected in the future years
At present, the outlook of 2003 March quarter is as follows:
Outlook for FY2002 (April 1,2002-March 31, 2003)
Yen (million)
Net Sales

Consolidated Earnings Forecastchange (%)
95,300-5.3

Operating income
Net Income (loss)

900(4,500)-The above forecast takes in consideration of the estimated impact of a worsening in theworldwide economic deceleration and uncertain ramifications that might diminish thecompany’s results somehow and cause a slight difference with the actual achievements.
These negative factors include the supply-and-demand trends of products and components
in major markets, exchange rates, etc.