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May 12, 2008
DISCO Announces an Amendment to the Dividend Policy and Notification about the Year-end Dividend

DISCO Corporation (“the Company”) today announced that its Board of Directors adopted a resolution on May 12, 2008, to amend its dividend policy and make a dividend payment for the surplus as of March 31, 2008 as explained below.

1.

Revised Dividend Policy

To improve the transparency of the Company's stance prioritizing the return of profits to shareholders, the Company's dividend policy has been amended as follows. This time, the dividend policy has been amended and the dividend payout for the Fiscal Year Ending March 31,2008 has been increased in accordance with the achieved income performance as seen in (2) below.*1
(1)

The target dividend payout ratio is set at 20% of consolidated net income. However, notwithstanding this net income-linked benchmark, the Company will strive to maintain an annual dividend payment of not less than 20 yen per share as a stable base dividend.

(2)

If the consolidated ordinary income margin exceeds 20%, averaged over four years, the dividend payout will be increased from 20% to 24%.*2

(3)

Furthermore, with the exception of fiscal years in which a net loss is recorded, in fiscal years where the Company's cash balance, after the payment of dividends and income taxes, exceeds the amount necessary for such uses as a technology acquisition reserve, including the purchase of intellectual property and investments in start-up firms, plant and equipment expansion, and planned repayment of interest-bearing debt, approximately one-third of the excess cash will be allocated as additional dividends.

(4)

In the case where a consolidated net loss is recorded in three consecutive fiscal years, the policy explained in (1) above-regarding the maintenance of a stable 20 yen per share base dividend-may be subject to review.

The Company believes that this revised dividend policy will enhance the ability of shareholders to make long-term investment decisions. The Company will continue its efforts to enhance the exchange of value with its shareholders and other stakeholders, and looks forward to the ongoing support of shareholders in these endeavors.

2.

Year-end dividend for this term

The year-end dividend for this term is ¥44 by applying the 24% dividend payout rule since the current profit to sales ratio in the four-year accumulated consolidated net sales was 20.4%. The annual dividend will be ¥79 in total together with the interim dividend of ¥35. This matter will be presented to the 69th General Meeting of Shareholders to be held on June 24, 2008.

3.

Details of the Dividend

Amount determined Most recent anticipated dividend
(announced on February 1, 2008)
Results of the previous term
(term ended March 31, 2007)
Base date March 31, 2008 Same as at the left March 31, 2007
Dividend per share ¥ 44.00 ¥ 38.00 ¥ 45.00
(including ¥ 10.00 of commemorative dividend)
Total amount of dividend ¥ 1,493 million - ¥ 1,528 million
Effective date June 25, 2008 - June 25, 2007
Source of dividend Earned surplus - Earned surplus

Reference
Breakdown of the annual dividend

Dividend per share
Base date Intermediate dividend Year-end dividend Annual dividend
Results for this year ¥ 35.00 ¥ 44.00 ¥ 79.00
Results of the previous term
(term ended March 31, 2007)
¥ 30.00 ¥ 45.00 ¥ 75.00
<Note>
*1 The DISCO Vision was written to establish targets and measure various aspects of DISCO's business performance. The Economic Vision aspect states “DISCO has sufficient economic competence and structure to realize growth as a corporation.” The measurement criterion states DISCO has the ability to maintain an ordinary income margin of 20% or more, averaged over 4 years. The above dividend amendment is based on this Vision and measurement criterion.
*2 Amended on May 12, 2008.
Contact: Keizo Sekiya
Phone: 81-3-4590-1099
Investors

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