Kenwood Pres. Calls Company 'Revitalized'
By Joseph Palenchar -- TWICE, 1/20/2003
LAS VEGAS — Kenwood turned a net profit of $8 million in the first half of fiscal 2002, and is on track to turn a $40 million net profit for the full fiscal year, ending March 30, said Kenwood Japan president/CEO Haruo Kawahara.
The fiscal performance will mark the company's first net profit following a three-year string of net losses that culminated in a staggering $222 million loss in fiscal 2001 and $182 million in the 2000 fiscal period. Kenwood also registered a massive restructuring, that ended late last year, with the layoffs of 3,000 of 8,800 employees and the closing of a third of its factories.
Kawahara, who made his comments at International CES here earlier this month, called the company's situation "severe" upon his arrival last June. But, Kenwood has been "revitalized," he said.
He also said he is committed to maintaining Kenwood's home electronics presence, even though the company exited unprofitable categories such as mini and microsystems in calendar 2002. "Former management was concerned about continuing in the home, but I decided we will continue in the home electronics business after properly restructuring," he said.
The plus side of the mature home audio market is that it is "an established big market with few players and almost no newcomers," he said. The business "is quite attractive if it is properly restructured to meet the market."
The company's negative net worth of $142 million has been erased with a cash infusion from banks and investors, and the company is currently enjoying a $100 million positive net worth, he said.
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