Pioneer : Announces Business Results for 1Q Fiscal 2017 (PDF 254 KB)

For Immediate Release August 5, 2016

Pioneer Corporation today announced its consolidated first-quarter business results for the period ended June 30, 2016.

(In millions of yen except per share information) Three months ended June 30

2016 2015 Percentchange

Net sales ¥95,329 ¥109,020 -12.6% Operating income 376 69 +444.9

Ordinary income (loss) 2,023 (592) - Net income (loss) * ¥ 1,271 ¥ (2,514) -%

Net income (loss) * per share ¥3.46 ¥(6.85)

* Net income (loss) attributable to owners of Pioneer Corporation

For the first quarter of fiscal 2017, the three months ended June 30, 2016, consolidated net sales declined 12.6% year on year, to ¥95,329 million, mainly from decreased sales of Car Electronics resulting from the negative effects of the Japanese yen's appreciation and the Kumamoto Earthquake in Japan.

Operating income was ¥376 million, compared with an operating income of ¥69 million for the first quarter of fiscal 2016, reflecting a decline in selling, general and administrative (SG&A) expenses, mainly as a result of foreign exchange rate movements, and an improvement in the cost of sales ratio, despite the decrease in sales. Net income attributable to owners of Pioneer was ¥1,271 million, compared with a net loss of ¥2,514 million for the first quarter of fiscal 2016, mainly due to the increase in operating income and a larger foreign exchange gain.

During the first quarter of fiscal 2017, the average value of the Japanese yen rose 12.2% against the U.S. dollar year on year, to ¥108.14=1 U.S. dollar, and 9.9% against the euro, to ¥122.02=1 euro.

For further information, please contact: Investor Relations & Public Relations Division Corporate Management Division

Pioneer Corporation, Tokyo

Phone: +81-3-6634-8777 / Fax: +81-3-6634-8745

E-mail: pioneer_ir@post.pioneer.co.jp IR Website: http://pioneer.jp/en/ir/

Car Electronics sales declined 14.1% year on year, to ¥76,191 million, mainly from the negative effects of the Japanese yen's appreciation and the Kumamoto Earthquake.

Sales of consumers market business declined. Sales of car audio products fell due to a decrease in overseas sales, primarily in North America and Central and South America. Car navigation system sales increased because of growth in China and Japan, despite a decline mainly in Europe.

Sales of OEM business declined. Sales of car audio products fell, mainly because of a decrease in North America. Car navigation system sales decreased mainly from lower sales in China and Southeast Asia, despite higher sales in Central and South America.

OEM business sales accounted for 62% of total Car Electronics sales, compared with 61% a year earlier.

By geographic region, sales in Japan declined 4.1%, to ¥29,797 million, and overseas sales dropped 19.5%, to ¥46,394 million.

Operating income declined 38.3% year on year, to ¥952 million, due to the decline in sales, despite lower SG&A expenses and an improved cost of sales ratio, mainly as a result of foreign exchange rate movements.

In the Others segment, sales declined 5.7% year on year, to ¥19,138 million. Although sales of factory automation systems increased, lower sales of optical disc drive-related products and electronic devices and parts led to an overall decline.

By geographic region, sales in Japan decreased 13.5%, to ¥9,412 million, and overseas sales grew 3.3%, to ¥9,726 million.

The segment's operating loss was reduced to ¥481 million, compared with an operating loss of ¥1,329 million for the first quarter of fiscal 2016, mainly from an improved cost of sales ratio.

Notes: 1. Operating income (loss) in each business segment represents operating income (loss) before elimination of intersegment transactions.

2. From the first quarter of fiscal 2017, map software, previously classified in "Others," is reclassified in "Car Electronics." Figures for the first quarter of fiscal 2016 have been reclassified accordingly.

Total assets as of June 30, 2016 were ¥272,666 million, a decrease of ¥25,346 million from March 31, 2016, mainly due to decreases in trade receivables and cash and deposits. Trade receivables decreased ¥12,631 million, to ¥61,965 million, mostly reflecting lower sales for the first quarter of fiscal 2017 compared with sales for the fourth quarter of

fiscal 2016. Cash and deposits decreased ¥9,421 million, to ¥42,572 million.

Total liabilities were ¥189,986 million, a ¥17,540 million decrease from March 31, 2016, mainly from a ¥9,497 million decline in trade payables primarily due to the Japanese yen's appreciation, as well as decreases of ¥3,529 million in accrued expenses and ¥2,566 million in short-term borrowings.

Total equity was ¥82,680 million, a ¥7,806 million decline from March 31, 2016.

This mainly reflected a ¥9,029 million decrease in foreign currency translation adjustments resulted from the Japanese yen's appreciation against the U.S. dollar, despite the recording of ¥1,271 million of net income attributable to owners of Pioneer for the quarter.

During the three months ended June 30, 2016, operating activities provided net cash in the amount of ¥4,227 million, compared with ¥8,508 million in net cash used in the same period a year ago. This was mainly because of an ¥8,860 million decline in the amount of decrease in accrued expenses primarily in the absence of the payment of special retirement benefits in the same period a year ago, and a ¥5,136 million rise in the amount of decrease in trade receivables.

Investing activities used net cash in the amount of ¥10,454 million, a ¥4,621 million increase year on year, mainly from a ¥4,057 million increase in the purchase of noncurrent assets.

Financing activities used net cash in the amount of ¥1,970 million, a ¥1,079 million increase year on year, mainly due to a rise in the amount of decrease in short- term borrowings.

Foreign currency translation adjustments on cash and cash equivalents were a negative ¥2,770 million, compared with a positive ¥561 million in the same period a year ago.

As a result, cash and cash equivalents as of June 30, 2016, totaled ¥41,026 million, a ¥10,967 million decrease from March 31, 2016.

Net sales of consolidated business forecasts for fiscal 2017, ending March 31, 2017, have been revised, for both first-half and full-year periods, from those announced on May 12, 2016, as shown below.

* Net income (loss) attributable to owners of Pioneer Corporation

We have revised the net sales forecasts for the first half of fiscal 2017 and full year of fiscal 2017 as per above, to reflect the recent foreign exchange rate movements. The forecasts for operating income, ordinary income and net income attributable to owners of Pioneer remain unchanged from previous forecasts.

The yen-U.S. dollar exchange rate assumption for the second quarter onward of fiscal 2017 is ¥105, an appreciation of ¥10 from the previous assumption, while the yen- euro exchange rate assumption is ¥115, an appreciation of ¥10 from the previous assumption.

Statements made in this release with respect to our current plans, estimates, strategies and beliefs, and other statements that are not historical facts are forward-looking statements about our future performance. These statements are based on management's assumptions and beliefs in light of the information currently available to it. We caution that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, and therefore you should not place undue reliance on them. It is not our obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We disclaim any such obligation. Risks and uncertainties that might affect us include, but are not limited to: (i) general economic conditions in our markets, particularly levels of consumer spending, and levels of demand in the major industrial sectors which we serve; (ii) exchange rates, particularly between the Japanese yen and the U.S. dollar, the euro, and other currencies in which we make significant sales or in which our assets and liabilities are denominated;

(iii) our ability to continuously design and develop and win acceptance for our products in extremely competitive markets; (iv) our ability to successfully implement our business strategies; (v) the success of our joint ventures, alliances and other business relationships with third parties; (vi) our ability to access funding;

(vii) our continued ability to devote sufficient resources to research and development, and capital expenditure; (viii) our ability to ensure the quality of our products; (ix) conditions in which we are able to continuously procure key parts essential to our manufacturing operations; and (x) the outcome of contingencies.

Pioneer Corporation is a leading global manufacturer of car electronics products. Its shares are traded on the Tokyo Stock Exchange.

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Attached are consolidated financial statements for the three months ended June 30, 2016.