TOKYO, November 7, 2002 - CSK Corporation ("CSK") today revised consolidated and non-consolidated forecasts for the financial year ending March 31, 2003. Details of the revised forecasts are as follows, along with the previous forecasts issued on May 21, 2002.

1. Revised forecasts for the interim period April 1, 2002 - September 30, 2002

Consolidated interim forecasts

Period ended September 30, 2002	(¥ million)
Net sales Ordinary income Net income Previous (A) 170,000 10,000 3,000 Revised (B) 165,700 7,500 1,000 Change (B) - (A) (4,300) (2,500) (2,000) Change in percent (2.5%) (25.0%) (66.7%)

Non-consolidated interim forecasts

Period ended September 30, 2002	(¥ million)
Net sales Ordinary income Net income Previous (A) 56,000 4,300 2,000 Revised (B) 58,000 3,600 2,600 Change (B) - (A) 2,000 (700) 600 Change in percent 3.6% (16.3%) 30.0%

 

2. Reasons for revision of forecasts

(A) Consolidated forecasts
With the aim of being "No. 1 in e-services", CSK has since the previous period been pursuing measures to strengthen its business base through the implementation of systematic group management, Group reorganization, and strengthening Group financial structure.
 
As a result of this, for the interim period ended September 30, 2002 CSK is forecasting net sales of ¥165.7 billion, ordinary income of ¥7.5 billion, and net income of ¥1.0 billion. These forecasts are significantly better than results for the previous half year ended September 30, 2001, which on net sales of ¥200.0 billion produced an ordinary loss of ¥1.4 billion and a net loss of ¥4.9 billion.
 
Further, consolidated results for the half year to September 2001 included two companies, ASCII CORPORATION and T-ZONE. (formerly CSK ELECTRONICS CORPORATION), where management control transferred outside the Group in March 2002. If current interim forecasts are compared to the previous interim results recalculated to exclude the above two companies, the current forecasts show an increase in net sales of ¥9 billion, an increase in operating and ordinary income of ¥1.7 billion and ¥6.1 billion respectively, and an increase in net income of ¥1.8 billion.

Consolidated interim forecasts

(¥ million)

Previous interim results (FY ended March 2002) Current interim forecasts (FY ending March 2003) Change Change in percent Net sales 200,063 165,700 (34,363) (17.2%) Operating income 5,179 9,500 4,321 83.4% Ordinary income (loss) (1,477) 7,500 8,977 - Net income (loss) (4,984) 1,000 5,984 -

The principal reasons for the revision are as follows:

1)

Although CSK non-consolidated sales have proceeded largely as planned at the beginning of the period, results at some consolidated subsidiaries have been weak, with the worsening economic environment leading to delays or limits on IT investment.

2)

Consolidated ordinary income and net income forecasts have been reduced in line with the forecast reduced net sales, and have also been impacted by below-forecast sales of game software at SEGA CORPORATION, an affiliated company to which the equity method is applied, and a deteriorating environment that led to reduced income from parent treasury operations. Additionally significant declines in the market price of some equity holdings negatively impacted the bottom line of ¥4.2 billion at the parent level.

(B) Non-consolidated forecasts
The CSK parent company is forecasting a year on year increase in interim sales of ¥200 million to ¥58 billion, as growth in ERP-related systems integration projects has compensated for a reduction in financial consolidated-related projects.
 
The non-consolidated operating income forecast of ¥4.4 billion is largely in line with the previous forecast. Ordinary income, however, is expected to be impacted by a deteriorating environment that led to reduced income from treasury operations, and is forecast at ¥3.6 billion, lower than both the previous forecast and results for the previous interim period.
 
Forecast net income for the interim period has been revised upwards to ¥2.6 billion. This is a projected year on year improvement of ¥32.7 billion, and reflects factors such as the absence of losses that arose in the previous interim period in respect of ASCII CORPORATION and T-ZONE.

Non-consolidated interim forecasts

(¥ million)

Previous interim results (FY ended March 2002) Current interim forecasts (FY ending March 2003) Change Change in percent Net sales 57,777 58,000 223 0.4% Operating income 4,875 4,400 (475) (9.7%) Ordinary income (loss) 4,494 3,600 (894) (19.9%) Net income (loss) (30,101) 2,600 32,701 -

 

3. Full year forecasts
Because certain Group subsidiaries are at present compiling definitive financial reports, CSK plans to announce full year consolidated and non-consolidated forecasts along with interim results for the current financial year on November 21.