SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Rule 13a-16 or 15d-16 under

the Securities Exchange Act of 1934

For the month of October, 2003

MAKITA CORPORATION

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(Translation of registrant’s name into English)

3-11-8, Sumiyoshi-cho, Anjo City, Aichi Prefecture, Japan

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(Address of principal executive offices)

[Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:]

Form 20-F    x        Form 40-F ___

[Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.]

Yes ___     No    x   

 

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SIGNATURES
CONSOLIDATED FINANCIAL RESULTS
THE MAKITA GROUP
MANAGEMENT POLICIES
OPERATING RESULTS AND FINANCIAL POSITION
CONSOLIDATED BALANCE SHEETS
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
SIGNIFICANT ACCOUNTING POLICIES
OPERATING SEGMENT INFORMATION
MARKETABLE SECURITIES AND INVESTMENT SECURITIES
DERIVATIVES TRANSACTIONS
ESTIMATED RETIREMENT AND TERMINATION ALLOWANCES
NET SALES BY PRODUCT CATEGORIES
OVERSEAS SALES BY PRODUCT CATEGORIES
EARNINGS PER SHARE
SUPPORT DOCUMENTATION

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

				MAKITA CORPORATION (Registrant)
		By:		/s/ Masahiko Goto
				(Signature)
				Masahiko Goto
				President

Date: October 28, 2003

 

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Makita Corporation

 

Consolidated Financial Results
for the six months
ended September 30, 2003
(U.S. GAAP Financial Information)

 

(English translation of “KESSAN TANSHIN”
originally issued in Japanese language)

 

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CONSOLIDATED FINANCIAL RESULTS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2003

October 28, 2003

Makita Corporation
Stock code: 6586
URL: http://www.makita.co.jp/
Masahiko Goto, President
Date of Board Meeting: October 28, 2003
(Consolidated financial information has been prepared in accordance
with accounting principles generally accepted in the United States.)

1.		Results of the six months ended September 30, 2003 (From April 1, 2003 to September 30, 2003)
(1)		FINANCIAL RESULTS

											Yen (million)
		For the six months ended								For the six months ended								For the fiscal year ended
		September 30, 2003								September 30, 2002								March 31, 2003
						%								%								%
Net sales			91,757				4.7				87,648				7.2				175,603				5.7
Operating income			9,247				47.5				6,269				63.9				12,468				112.3
Income before income taxes			9,894				123.7				4,423				108.3				9,292				173.1
Net income			4,981				58.8				3,137				764.2				6,723				4954.9
											Yen
Earnings per share:
Basic			34.25								20.96								45.29
Diluted			33.32								20.48								44.20

Notes:			1.			Equity in net earnings of affiliated companies (including non-consolidated subsidiaries): Not applicable
			2.			Average number of shares outstanding:
						Six months ended September 30, 2003:	145,451,532
						Six months ended September 30, 2002:	149,644,939
						Year ended March 31, 2003:	148,444,219
			3.			Change in accounting policies: Not applicable
			4.			Percentage change: Ratio of change against corresponding period of the previous year on Net sales, Operating income, Income before income taxes, Net income.

(2)

FINANCIAL POSITION

			Yen (million)
			As of				As of				As of
			September 30, 2003				September 30, 2002				March 31, 2003
Total assets				277,647				276,228				278,600
Shareholders’ equity				185,134				187,336				182,400
Shareholders’ equity ratio to total assets (%)				66.7	%			67.8	%			65.5	%
			Yen
Shareholders’ equity per share				1,286.27				1,252.23				1,249.59
Note:   Number of shares outstanding:
	As of September 30, 2003:			143,930,908
	As of September 30, 2002:			149,602,105
	As of March 31, 2003:			145,967,876

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(3)  CASH FLOWS

		Yen (million)
		For the six months				For the six months				For the fiscal year
		ended September 30,				ended September 30,				ended March 31,
		2003				2002				2003
Net cash provided by operating activities			11,696				13,206				27,141
Net cash used in investing activities			(4,994	)			(2,931	)			(9,659	)
Net cash used in financing activities			(4,938	)			(6,778	)			(13,381	)
Cash and cash equivalents, end of period			21,496				21,033				20,370

(4)		SCOPE OF CONSOLIDATION AND EQUITY METHOD
		Consolidated subsidiaries: 40 subsidiaries
		Non-consolidated subsidiaries accounted for under the equity method: Not applicable
		Affiliated companies accounted for under the equity method: Not applicable
(5)		CHANGE IN SCOPE OF CONSOLIDATION AND EQUITY METHOD

Consolidation: (Newly included) 1		Equity method: Not applicable

2.

Forecast for the fiscal year ending March 31, 2004 (From April 1, 2003 to March 31, 2004)

		Yen (million)
		For the fiscal year ending March 31, 2004
Net sales			178,800
Income before income taxes			15,600
Net income			7,800
		Yen
Earnings per share			54.19

FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements based on Makita’s own projections and estimates. The power tools market, where Makita is mainly active, is subject to the effects of rapid shifts in economic conditions, demand for housing, currency exchange rates, changes in competitiveness, and other factors. Due to the risks and uncertainties involved, actual results could differ substantially from the content of these statements. Therefore, these statements should not be interpreted as representation that such objectives will be achieved.

 

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THE MAKITA GROUP

     The Makita Group is comprised of 42 companies (Makita Corporation, 40 consolidated subsidiaries and 1 non-consolidated subsidiary, accounted for by the cost method). The Makita Group mainly manufactures and sells electric power tools.

     The Makita Group is outlined as follows:

 

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MANAGEMENT POLICIES

(1)

Basic Policies

Makita has set itself the goal of consolidating a strong position in the global power tool industry as a global supplier of a comprehensive range of power tools that assist people in creating homes and living environments. To do this, the Company is emphasizing such strategic management concepts as giving top priority to customer satisfaction, proactively striving to work in harmony with society, and fostering a flexibly dynamic corporate culture that makes the most of each individual employee’s potentials. The Company aims to generate solid profitability so that it can promote its sustained corporate development and meet the needs of its shareholders, customers, and employees as well as regional societies.

(2)

Basic Policy Regarding Profit Distribution

	Makita’s basic profit distribution policy objective is to strive to strengthen its capabilities and financial position to promote stable operations over the long term while also sustaining cash dividends at a stable level of 18 yen per year.
	In addition to dividends, Makita is endeavoring to implement a flexible capital policy, augment the efficiency of its capital employment, and thereby boost shareholder profit as well as realizing other objectives through sustained repurchases of the shares it has issued. In the period from the fiscal year ended March 31, 1999, through the end of the six months ended September 30, 2003 under review, the Company repurchased 16,687,000 of its own outstanding shares, of which 13,000,000 have been retired. These repurchases represented 10.4% of all shares issued by Makita prior to the repurchases. The Company is considering continued stock repurchases in the future as means of further boosting capital efficiency and shareholder profit.

(3)

Policy Regarding Reducing the Basic Trading Unit of Shares

	Makita recognizes that encouraging investors to make stable, long-term investments in its shares is an important issue in its capital policies.
	The Company is considering the issue of reduced-quantity trading units but believes that decisions on the issue should be made prudently based on a comprehensive assessment of such factors as stock prices, stock liquidity, the timing of the implementation of nonissuance of stock certificate stipulated by Japanese Commercial Code, and projected cost effectiveness associated with decisions.

(4)

Medium-to-Long-Term Management Strategy

	Through a basic strategy of concentrating corporate assets in Makita’s core business, which is principally power tools for professional use, the Company is working to increase its sales and profitability with operations in this business based on the solid foundation of the Makita brand’s strong association with high quality and Makita’s extensive domestic and overseas marketing and service networks.
	In the future, the Company intends to further strengthen its subsidiaries and affiliates in each overseas market and take other measures to bolster and expand its marketing systems while increasing professional users’ satisfaction by maintaining a solid and appealing brand image. These strategies are designed to make Makita what it refers to as a “Strong Company,” a company that can earn and maintain top shares of markets for professional-use power tools in regions worldwide. Makita is striving diligently to be such a “Strong Company” and achieve improved performance.

(5)		Basic Policies Regarding Corporate Governance and Implementation of Related Measures
		Basic Policies Regarding Corporate Governance

Makita believes that bolstering its supervision of management is a crucial means of enhancing management transparency. Besides working to strengthen the capabilities of the Board of Directors and the Board of Auditors, the Company is striving to increase the sophistication of its corporate governance system. In view of the need to ensure that corporate governance systems function effectively, the Company is endeavoring to proactively and promptly disclose information in a manner that promotes proper and transparent operations. The Company is also working to use the Internet to disclose financial information and otherwise undertake a broad range of information disclosure initiatives.

 

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Implementation of Related Measures

(1)

Current Management Administration Systems for Management Decision Making, Policy Execution, Supervision, and Other Aspects of Corporate Governance

	o		Makita employs a board-of-auditors system. The Company’s Board of Auditors comprises four members, of which two are outside auditors. The two full-time auditors facilitate capabilities for continuous monitoring of the directors’ performance of their duties. By presenting reports whenever necessary on auditing and corporate matters to the Company’s independent auditor, who is responsible for conducting audits, we work to provide a common base of information with independent auditors.
	o		The Board of Directors makes decisions on the Company’s basic policies and statutory issues as well as other important management issues.
	o		Makita’s consolidated financial statements and non-consolidated financial statements are subject to audit of independent auditors. The Company employs Asahi & Co. (a member firm of KPMG International, a Swiss cooperative that provides no professional services to clients) to serve as independent public accountants. Regarding the relationships among the Company, Asahi & Co., and engagement partners, there are no noteworthy interest as defined by provisions of the Certified Public Accountant Law in Japan.
	o		The Company’s legal advisor confirms the Company’s legal compliance whenever the Company requires legal opinions and judgments. The legal advisor thereby performs a management control function with regard to legal issues.

(2)

Overview of the Company’s Human and Capital Relationships with Outside Directors and Outside Auditors as well as Transactional Relationships and Other Relationships of Material Interest

			Makita does not currently have outside directors. The Company is not involved with personal, financial, technical, or other types of transactions that might create a conflict of interest with the companies for which outside auditors and their close relatives serve as directors. In addition, the outside auditors have neither been employees nor directors of the Company.

(3)

Progress in Implementation of Measures Aimed at Strengthening the Company’s Corporate Governance during the Past Year

	o		In April 2003, an Internal Audit Department was established as a means of strengthening a system for performing internal audits whenever necessary.
	o		In accordance with U.S. Public Company Accounting Reform and Investor Protection Act (Sarbanes-Oxley Act), the Company is taking the following active initiatives to improve its corporate governance.

	(a)		In May 2003, the Company formed a Disclosure Committee with the objective of substantially increasing the accuracy and reliability of information disclosed through the clarification of procedures and other matters related to disclosure.
	(b)		In August 2003, the Company issued its Policy and Procedures Related to Prior Approvals for Auditing and Non-Auditing Activities requiring prior approval of the Company’s Board of Auditors for entering into a service contract with an independent auditing firm in order to clarify the independence of the Company’s independent auditors.

	o		In June 2003, the Company issued its Business Ethics Guidelines to provide guidance for actions of management and staff, clarify activities that are ethical, forbid conflicts of interest, ensure compliance with relevant laws and regulations, and provide guidelines for disclosure.
	o		The Company is also taking initiatives to promote better awareness of compliance issues; these activities include holding study group meetings for new directors, led by the Company’s legal counsel.

 

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OPERATING RESULTS AND FINANCIAL POSITION

1.		Results of Operations
(1)		Operations and Results during the Year Under Review

	Regarding economic trends overseas during the period under review, the United States showed a gradual recovery trend supported by upward trends in personal consumption and private capital investment and firmness in housing investment. In Europe, domestic demand in the principal eurozone countries was weak and this, together with other factors, led to a virtual standstill in the economies of the region. On the other hand, in Asia, the pace of economic recovery has been gradual, owing to the influence of SARS and other factors.
	In the Japanese economy, although personal consumption and employment conditions continued to be weak, private capital investment and corporate profits showed signs of recovery, leading to a sense that the economy was beginning to bottom out.
	Against this backdrop, Makita has moved forward with the expansion of production at its operations in China, taken measures to reduce manufacturing costs through the use of parts manufactured in China as well as other measures, and also continued its ongoing efforts to develop new product to meet user needs.
	In the United States, Makita focused especially on strengthening its marketing position in the professional-use market with the aim of enhancing its brand image. The Company also continued to take steps to improve profitability, including reducing inventories and realigning its logistics centers to reduce distribution costs.
	On a consolidated basis, net sales amounted to 91,757 million yen, up 4.7% from the same period of the previous fiscal year. Net sales in Japan amounted to 19, 244 million yen, representing a decline of 0.1% year on year; although sales of new products, especially those linked to home remodeling, expanded, the number of new housing starts was stagnant. Overseas sales rose 6.0% year on year, to 72,513 million yen as a result of (a) higher sales in the Europe regions and elsewhere and (b) the favorable impact of the weaker yen relative to the EURO. As a result of this expansion, overseas sales accounted for 79.0% of consolidated net sales for the period.
	Looking at overseas sales in individual regions, sales in Europe were up 19.4%, to 32,085 million yen, while sales in North America slipped 8.7%, to 22,085 million yen. Sales in Southeast Asia rose 1.9%, to 7,314 million yen and sales in other regions climbed 8.8%, to 11,029 million yen.
	Profitability was positively affected by such developments as an improvement in the cost of sales ratio, owing to the shifting of production to Makita’s subsidiary in China, and improvement among non-operating profit and loss items, including the significant decrease in exchange losses on foreign currency transactions for the period under review compared to foreign exchange losses for the same period of the previous fiscal year. As a result, income before income taxes surged to 9,894 million yen, 123.7% up year on year. Net income for the first six months of the fiscal year under review showed a sharp increase of 58.8%, to 4,981 million yen.
	At the General Meeting of Shareholders held in June 2003, a proposal was approved to repurchase a maximum of 5 million of the Company’s shares (with a maximum value of 5 billion yen). Through the end of the first six months of the fiscal year, the Company repurchased a total of 2,002 thousand of its outstanding shares (with a value of 2,142 million yen). In addition, as a result of the retiring of 5 million treasury stock held by the Company on August 20, 2003, the number of treasury stock still held by the Company stood at 4,076 thousand at the end of period.

(2)

Outlook for the Fiscal Year Ending March 31, 2004

	As a significant number of uncertainties remain, including the possibility of sharp movements in foreign currency rates, the operating environment for the Company’s activities is therefore expected to continue to be harsh.

	The outlook for the full year ending March 31, 2004 will be as follows:

	o		The yen is forecast to strengthen against the U.S. dollar.
	o		Expansion in the domestic market for power tools is viewed as unlikely.
	o		Competition will become more intense in the U.S. market for power tools.
	o		Market growth is expected in Eastern Europe/Russia, but Western Europe will remain at a standstill.

 

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	Based on consideration of these and other factors, Makita has prepared the following performance forecast.

Forecast for the Fiscal Year Ending March 31, 2004

			Yen (million)
			For the fiscal year ending March 31, 2004
Consolidated Basis:
	Net sales			178,800
	Operating income			15,400
	Income before income taxes			15,600
	Net income			7,800
Non-consolidated Basis:
	Net sales			83,700
	Operating income			6,000
	Ordinary profit			7,000
	Net income			5,000

Assumptions

	1.		The above forecast is based on the assumption of exchange rates of 108 yen to US$1 and 126 yen to 1 Euro for the second half of the fiscal year.
	2.		The above forecast does not address the effect of the transfer to government of the substitutional portion of the employee’s pension fund managed by the Company because the final transfer to the government is not determined at this point.

Based on this outlook, the Company will continue to work to improve performance through expansion of its share of the market for professional-use power tools, expansion of its sales and service systems, and development of value-added products.

FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements based on Makita’s own projections and estimates. The power tools market, where Makita is mainly active, is subject to the effects of rapid shifts in economic conditions, demand for housing, currency exchange rates, changes in competitiveness, and other factors. Due to the risks and uncertainties involved, actual results could differ substantially from the content of these statements. Therefore, these statements should not be interpreted as representation that such objectives will be achieved.

 

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2.	Cash Flows and Financial Ratios
	Total cash and cash equivalents (cash) at the end of period amounted to 21,496 million yen, up 1,126 million yen from the same period of the previous fiscal year.

(Net Cash Provided by Operating Activities)

	Net cash provided by operating activities amounted to 11,696 million yen, down 1,510 million yen from the level at the end of the same period of the previous year. This was primarily owing to a decrease in inventories accompanying measures to reduce inventory stocks.

(Net Cash Used in Investing Activities)

	Net cash used in investing activities totaled 4,994 million yen, up 2,063 million yen from the level of the same period in the previous year. This was mainly due to purchase of property, plant and equipment such as buildings of head office and purchase of financial instruments such as held-to-maturity securities in preparation for the redemption of convertible bonds due 2005.

(Net Cash Used in Financing Activities)

	Net cash used in financing activities totaled 4,938 million yen, down 1,840 million yen from the level in the same period of the previous year. This principally reflected the repurchase of the Company’s treasury stock, and the payment of cash dividends.

Financial Ratios

		As of (fiscal year ended) March 31,																As of
																		September 30,
		2000				2001				2002				2003				2003
Equity ratio			68.5	%			65.5	%			66.6	%			65.5	%			66.7	%
Equity ratio based on a current market price			49.7	%			40.1	%			45.1	%			43.5	%			52.7	%
Debt redemption (years)			1.8				6.3				1.4				0.8				0.9
Interest coverage ratio (times)			15.7				4.3				20.8				40.4				36.4
Operating income to net sales ratio			5.8	%			4.5	%			3.5	%			7.1	%			10.1	%

Definitions   Equity ratio: shareholders’ equity/total assets   Equity ratio based on a current market price: total current market value of outstanding shares/total assets   Debt redemption: interest-bearing debt/net cash inflow from operating activities   Interest coverage ratio: net cash inflow from operating activities/interest expense   Operating income to net sales ratio: operating income/net sales

Notes

	1.		All figures are calculated based on a consolidated basis.
	2.		The total current market value of outstanding shares is calculated by multiplying the closing market price at the period end by the number of outstanding shares (after deducting the number of treasury stock.)
	3.		Interest-bearing debt includes all consolidated balance-sheet debt on which interest payments are made.
	4.		The debt redemption period for the interim period is calculated based on an estimate of operating cash flows computed by multiplying operating cash flow for the interim period by two.

 

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CONSOLIDATED BALANCE SHEETS

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CONSOLIDATED BALANCE SHEETS

Note: Accumulated other comprehensive loss as of September 30, 2003 and March 31, 2003 was as follows:

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

SIGNIFICANT ACCOUNTING POLICIES

1.

Scope of consolidation and equity method

Consolidated subsidiaries: 40 consolidated subsidiaries

Major subsidiaries are as follows:

Makita U.S.A Inc., Makita Werkzeug GmbH (Germany), Makita (U.K.) Ltd., Makita (China) Co., Ltd.,

Makita (Australia) Pty. Ltd., etc.

2.

Change in scope of consolidation and equity method

Consolidation: (Newly included) 1: Makita Farramentas, Sociedad Unipersonal, Lda.

3.

Consolidated Accounting Policies (Summary)

Consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America.

(1)

Marketable and Investment Securities

The Company conforms with SFAS No.115 “Accounting for Certain Investments in Debt and Equity Securities”.

(2)

Inventories

Inventories are mainly stated at the lower of average cost or market. Inventory costs include raw materials, labor and manufacturing overheads.

(3)

Property, Plant and Equipment and Depreciation

Depreciation of property, plant and equipment is computed by using the declining-balance method over the estimated useful lives.

(4)

Income Taxes

Provision is made currently for income taxes applicable to all items of revenue and expense included in the consolidated financial statements regardless of when such items are taxable or deductible. The Company conforms with SFAS No.109, “Accounting for Income Taxes”.

(5)

Pension Plans

The Company conforms with SFAS No.87, “Employer’s Accounting for Pensions”, in accounting for retirement and termination benefit plans.

(6)

Earnings Per Share

The Company conforms with SFAS No.128, “Earnings per Share”. SFAS No.128 requires dual presentation of basic and diluted earnings per share.

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(7)

Impairment of Long-Lived Assets

The Company conforms with SFAS No. 144, “Accounting for the Impairment or Disposed of Long-Lived Assets”, effective April 1, 2002.

(8)

Derivative Financial Instruments

The Company conforms with SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” and No. 138, “Accounting for Certain Derivative Instruments and Certain Hedging Activities, and amendment of SFAS No. 133.”

(9)

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(10)

Revenue Recognition

The Company and consolidated subsidiaries recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred and the title and risk of loss has passed to customers, the sales price is fixed or determinable, and collectibility is reasonably assured, which typically occurs when products are received by customers.

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OPERATING SEGMENT INFORMATION

Six months ended September 30, 2003

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MARKETABLE SECURITIES AND INVESTMENT SECURITIES

1.   Available-for-sale securities
As of September 30, 2003

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2.   Held-to-maturity securities
As of September 30, 2003

DERIVATIVES TRANSACTIONS

Figures for derivatives transactions are omitted because Makita discloses financial information under electronic declaration process in accordance with Article 27-30-6 of the Securities and Exchange Law in Japan.

ESTIMATED RETIREMENT AND TERMINATION ALLOWANCES

The Company and certain of its consolidated subsidiaries have various contributory and noncontributory employees’ benefit plans covering substantially all of the employees. The Company provides retirement and termination allowances based on projections of the values of employee benefit payment liabilities and annuity fund assets at the end of the fiscal year.

The domestic plan represents substantially the entire pension obligation as of September 30, 2003. The discount rate and expected long-term rate of return on plan assets assumed to determine the pension obligation for the Company relevant to the domestic plan were 2.0% and 2.0% for the half year ended September 30, 2003, 2.0% and 2.5% for the year ended March 31, 2003 and 2.5 % and 2.5 % for the half year ended September 30, 2002, respectively.

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NET SALES BY PRODUCT CATEGORIES

OVERSEAS SALES BY PRODUCT CATEGORIES

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EARNINGS PER SHARE

A reconciliation of the numerators and denominators of the basic and diluted earnings per share computations is as follows:

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SUPPORT DOCUMENTATION

1.   Results and forecast

2.   Net sales by geographic area

3.   Exchange rates

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4.   Sales growth in local currency basis (major countries)

5.   Production ratio (unit basis)

6.   Capital expenditures, depreciation and amortization, and R&D cost

7.   Cash flow

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