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Alpine Revises Up FY ’12 Forecast

Iwaki, Japan – Alpine Electronics sales,
operating profits and net profits fell during the first three quarters of
fiscal 2012, but raised its fiscal year forecast.

Alpine is optimistic about the full-year
results based on gains in navigation system sales in Japan and to European

For the nine months, ended Dec. 31, net
sales were off 1.3 percent to 145.4 billion yen $1.9 billion), operating income
fell 53.4 percent to 4.56 billion yen ($59.6 million), and net income fell 54.8
percent to 2.97 billion yen ($38.8 million).

Financial metrics for the third quarter
alone were not available.

The currency conversion is based on a
rate of 76.5 yen to the U.S. dollar.

For the full fiscal year ending March
31, Alpine is now forecasting net sales of 200 billion yen ($2.61 billion), up
from a previously forecast 190 billion yen but still down 0.6 percent from
fiscal 2011’s 201.3 billion yen ($2.63 billion). Operating income is forecast
at 5 billion yen ($65.3 million), up from a previously forecast 3.7 billion yen
but down 55.2 percent from fiscal 2011’s 11.2 billion yen ($146.3 million). Net
income is forecast at 3 billion yen ($39.2 million), up from a previously
forecast 2.5 billion yen but down 50.2 percent from fiscal 2011’s 6 billion yen
($78.4 million).

If the forecast bears out, Alpine will
have posted its second consecutive fiscal year in the black.

Fiscal 2012 sales were revised up
because “sales of navigation systems in the Japanese market are robust”
and “sales to mostly European automakers are on the rise despite the reduction
in unit production resulting from the flooding in Thailand,” the company said.
Because of the increased sales projections, the company also said it expects
income to be higher than previously forecasted.

As for the third quarter ending Dec.
31, Alpine attributed sales and profit declines to reduced Japan economic
activity due to the Great East Japan Earthquake, “the appreciation of the yen
at unprecedented levels,” and reduced production caused by the flooding in
Thailand, a base for Japanese manufacturing companies, the company said.

Although the U.S. economy started to
show a gradual recovery, Alpine said, “the recurring financial crisis for Euro
members became a concern, economic growth in developing countries such as India
and China was slowing, oil prices were moving higher, and uncertainty regarding
the future of the world economy continued.”

 Although Alpine suffered from a shortage of
parts due to the Japan and Thailand natural disasters, “we kept our production
at stable levels and focused on selling high-value added products and
developing new products meeting market needs,” the company said.

In the company’s audio products
segment, consisting of aftermarket and OEM audio products, nine-month sales
fell 21.2 percent to 40.4 billion yen ($527.8 million), and operating income
fell 77 percent to 928 million yen ($12.1 million) from 4.02 billion yen. In
the information and communications segment consisting of OEM display systems
and OEM and aftermarket navigation, sales rose 9.3 percent to 105.1 billion yen
($1.37 billion) from 96.2 billion yen, and operating profits fell 26.5 percent to
6.83 billion yen ($89.2 million) from 9.29 billion yen.

In the audio segment, due to “increasingly
intense price competition, sales in the European and the United States market
of head units, chiefly CD players, were severe,” the company said.

In OEM audio, sales fell because “mainstay
customers decreased production due to the Great East Japan Earthquake and
flooding in Thailand.”

In the information and
communications segment, competition in the Japan aftermarket “intensified with
attempts by competitors to strengthen product lineups,” but the company
nonetheless “achieved strong sales due to the success of promotional campaigns.”

Aftermarket segment sales were “positive”
in the European and U.S. markets, “owing to positive customer response to the
strong cost performance of our affordably priced navigation systems,” the
company said. Nonetheless, “sales decreased due to the aggressive marketing strategies
of our competitors and deteriorating market conditions.”

In OEM navigation and display sales,
“production cutbacks among our major customers affected sales to automakers,”
Alpine said. However, sales of new models were strong to high-end European car
manufacturers in North America and China, and “installation rates are recovering
for such highly functional items as navigation and display products, pushing up