Weekly television digest (Jan-Dec 1961)

VOL. 17: No. 27 21 SONY’S SUNNY PROSPECTS & PROSPECTUS: Japan’s Sony Corp. hit the U.S. stock market June 8 with 2 million common shares offered in blocks of 10 at $17.50 a block (Vol. 17:24 pl9). Within 90 minutes, the entire $3.5million offering was gobbled up by American investors who thought they knew a good thing when they saw it. Last week (June 29), Sony’s U.S. quotation was 20 7/8 bid, 22 3/8 asked. Sony’s bright prospects, as well as numerous heretofore unrevealed details about the nature, scope and, success of its operations, were profiled for all to see in a comprehensive prospectus issued by underwriters Smith, Barney & Co. and Normura Securities Co. Ltd. For a company incorporated as recently as 1946, Sony has made tremendous progress. In its 1960 fiscal year (ended Oct. 31, 1960), Sony sales totaled $36,775,000, up from $23,607,000 the preceding year. Of the 1960 sales, $12,964,000 came from exports, compared with 1959’s export value of $8,720,000. Total profit in 1960 was $1,936,000— down from 1959’s $2,046,000. Sony explained that the 1960 earnings “were adversely affected by the company’s virtual discontinuation of [its manufacture of transistors for resale] in order to concentrate on the development & production of new products, such as portable TV receivers.” In the 4 months to Feb. 28 of fiscal 1961, Sony earned $720,000 on net sales of $15,787,000, compared with $638,000 on $10,044,000 sales in the same fiscal-1960 period. The net sales were produced by a variety of products: transistor radios, 61.4%; tape recorders, 23.9%; recording tape, 3.6%; transistor TV sets, 0.7%; semiconductors, 0.7%; other products (hearing aids, microphones, recording heads, magnetic data recorders), 9.7%. The Japanese home market accounted for 65.4% of total sales in fiscal 1960. Other markets: Asia (other than Japan), 10.2%; U.S. 9.1%; Europe, 6.8%; other, 8.5%. Transistor radios accounted for 77.6% of Sony’s foreign sales; audio tape recorders chipped in another 11.5%. The prospectus also noted that “net sales of Sony radios & tape recorders in the U.S. during 1960 accounted for 69.9% & 23% respectively of total net sales of Sony products in that country.” Sony’s Battery-powered Portable TV The 8-in. battery portable introduced to the U.S. market by Sony last week (see p.19), received this description and less-than-enthusiastic send-off in the prospectus: “In May 1960, Sony marketed a transistorized portable TV set which sells at retail in Japan for $199.72. It is anticipated that this set will be introduced in the U.S. in the summer of 1961 to sell at retail for $279.90 [actual list price $249.95 plus $29.95 battery]. This product is the first of its type to be developed & marketed and there is no assurance that it may be profitably marketed in the U.S.” Sony had a healthy financial glow as of Feb. .28, 1961. Its consolidated balance sheet of that date showed $4,820,000 cash on hand. Its total land, buildings, machinery & equipment and construction in progress were valued at $14,581,000. Total current assets were listed at $25,456,000. Current liabilities totaled $25,642,000. An insight into Japanese labor practices also is provided by the prospectus: “Each year Sony grants its employes [3,698 in April, 1961] an annual increase in base wages and these amounted to an average 12%, 10.8% and 17.3% for the years commencing May 1, 1958-59-60 respectively. In addition to base wages, the company, in accordance with Japanese custom, also pays a semi-annual bonus to its employes. Sony paid bonuses equal to approximately 4 months pay for each of the semi-annual periods in 1959 & 1960. “The company has also established the Sony Health Insurance Assn, to which each employe contributes 3% of his base pay and the company contributes an amount equal to 3%% of such base pay. The Association pays the cost of certain medical & dental services for employes and utilizes surplus funds to defray part of the cost of employe recreational benefits. “In addition, the company provides medical facilities & subsidized cafeterias at each of its plants, dormitories for certain of its employes, high school educational facilities where such facilities are not available locally, recreational facilities, and reimbursement of the costs of transportation to & from work. “Employes are required to retire at age 55. Upon retirement, an employe, other than a director, is entitled to receive ... a lump-sum payment based on his years of service, his monthly pay at the time of retirement and certain other factors. An employe who has worked for the company for 30 years is entitled to a maximum lump-sum retirement payment of 37 times his monthly wages at the time of retirement.” * * * Japanese Electronics Output: The Japanese electronics industry’s 1960 production was valued at $1,166 billion — up 25% from the $932 million of 1959, the Commerce Dept.’s Business & Defense Services Administration reported last week on the basis of figures from the Japanese Ministry of International Trade & Industry. The total output in 1959 represented an 87% increase over 1958. Breakdown: TV receivers, 3,551,700 sets at $394.2 million (up from 2,852,800 at $334.8 million in 1959) ; radios with 3 or more transistors, 11.1 million at $169.2 million (vs. 7.6 million at $122.4 million); tubes, $169.8 million ($141.1 million); semiconductors, $71.3 million ($52.9 million). Japan’s production of transistors continued to exceed that of the U.S. in units, but not in dollars. In 1960, Japan produced 139.8 million transistors at $53.8 million (up from 86.5 million at $44.5 million), compared with 1960 U.S. production of 127.9 million transistors at $301.4 million. * * * Japanese Import Re-Alignment: Petely Enterprises Inc., longtime N.Y. importer of Japanese radios, has been named exclusive U.S. & Canadian sales agent for all products of Fuji High Frequency Radio Laboratory, sold under the “Constant” brand name. Another RCA Strike Looms: Some 2,500 members of the Assn, of Scientists & Professional Engineering Personnel were slated to go on strike midnight Saturday at RCA plants in Camden, Moorestown and Pennsauken, N.J. and Croydon, Pa. On June 16, RCA & AFTE came to terms after a 5-hour walkout at the same locations (Vol. 17:25 pl8). The APEP union is asking for a 10% wage boost, a 10-month contract, other benefits. APEP walked out for 6 days last year before arriving at the one-year pact which expired Saturday (Vol. 16:29 pl5). Little Set, Big Speaker: “Revolution in pocket-radio tone quality” is claimed by Zenith for loudspeaker being used in 2 new pocket radios at $39.95 & $60. The “Extended Range” speaker is 3 x 5-in., oval, with the voice coil offset, rather than centered, giving a steep cone angle at the top for greater treble response and a larger cone area below for extended bass. A flat ceramic magnet makes possible the use of the big speaker in a radio only 1%-in. deep.