May 26, 2020
Company
Name:
Representative:

Contact:

Tel:

Nihon Dempa Kogyo Co., Ltd.
Hiromi Katoh, Representative Directorand President
Code: 6779, First Section of the Tokyo
Stock Exchange
Michio Aoyama, Corporate Officer andGeneral Manager of Administration
Division
03-5453-6711

Notice Regarding Company Split (Absorption-type Split) for SAW Filter BusinessNihon Dempa Kogyo Co., Ltd. ("NDK") announced that at the board of directors meeting held today, it has
decided to conduct an absorption-type company split to form NDK SAW Devices Co., Ltd. (“NSD”), a wholly
owned subsidiary of NDK, to take over Hakodate NDK Co., Ltd. (“Hakodate NDK”) business related to thedevelopment and manufacturing of SAW filters, effective as of July 1, 2020 (planned), as below:
Note that since this absorption-type company split involves a reorganization between NDK and its wholly
owned subsidiary, some disclosure items and details are omitted.
１．Reason for the absorption-type company split
As announced in “Announcement of execution of TERM SHEET with regard to the establishment of a jointventure company of Saw filter” dated March 18, 2020, NDK and its wholly owned subsidiary Hakodate NDKCo., Ltd. are in negotiations with JICT to establish a joint venture company that develops, produces, and sells
SAW filters to be achieved by spinning off the development and manufacturing businesses related to the SAW
filter business that is currently handled by Hakodate NDK Co., Ltd.
The Group's SAW filter business will be consolidated into NSD newly established on May 19, 2020, and theabsorption-type company split will be carried out with the aim of establishing a system that allows for thetimely establishment of a joint venture after the conclusion of negotiations.
2. Outline of the absorption-type company split(1) Schedule
Resolution by the Board of Directors (NDK)
Conclusion of Contract for Split (each company)
General Meeting of Shareholders Resolution (Hakodate NDK)
General Meeting of Shareholders Resolution ( NSD)
Effective Date

May 26, 2020
May 28, 2020 (planned)
June 30, 2020 (planned)
June 30, 2020 (planned)
July 1, 2020 (planned)

Note: Since this absorption-type company split is a simplified company-level split based on Article 784,
Paragraph 2 of the Companies Act, no shareholders meeting will be held to approve the absorption-typecompany split.

(2) Method of the absorption-type company split
NDK and Hakodate NDK will be the splitting companies and NSD will be the succeeding entity.
(3) Details of allocation relating to the absorption-type split
No shares or other assets will be allocated as a result of the absorption-type split.
(4) Handling of stock acquisition rights and bonds with stock acquisition rights following the absorption-typecompany split
Not applicable.
(5) Decrease in paid-in capital due to the absorption-type company split
There will be no increase or decrease in capital due to the absorption-type company split.
(6) Rights and obligations to be passed on to the succeeding company
The succeeding company will receive the assets, debts, contracts, and other rights and obligations related to
the SAW filter business of NDK and Hakodate NDK, which are the splitting companies on the effective date,to the extent specified in each company’s split agreement.
(7) Estimates for the performance of liabilities
It has been determined that the succeeding company in this absorption-type company split will have no issues
in relation to meeting its liabilities(8) Outline of companies involved in the absorption-type company split
Splitting Company(As of March 31, 2020)

Splitting Company(As of March 31, 2020)

Succeeding Company(As of May 19, 2020)

1. Company Name

Nihon Dempa Kogyo Co.,Ltd.

Hakodate NDK Co., Ltd.

NDK SAW Devices Co., Ltd.

2. Location

1-47-1 Sasazuka, Shibuya-ku,
Tokyo

3-63 Suzuranokachō
Hakodate, Hokkaido

3-63 Suzuranokachō
Hakodate, Hokkaido

3. President Name

Hiromi Katoh, RepresentativeDirector and President

Kazuya Koura
Representative Directorand President

Hiromi Katoh,
Representative Director andPresident

4. Details of Business

Integrated production andsales of crystal-related
products such as crystal
devices (e.g. crystal units,crystal oscillators, crystal
filters), ultrasonic transducers,synthetic quartz and crystal
blanks.

Manufacture and designof crystal devices such as
crystal units, crystal
oscillators, and surface
acoustic wave (SAW)
devices.

Manufacturing design and salesof surface acoustic wave (SAW)
devices.

5. Paid-in CapitalJPY 10,649 million

JPY 50 million

JPY 1 million

6. Date ofEstablishment

April 15, 1948

March 23, 1989

May 19, 2020

7. Number of Sharesof Common Stock

20,757,905 shares

1,200 shares

100 shares

8. End of Financial

March 31

December 31

December 31

Year
9. Investment Ratio

Resona Bank, Limited 3.21%
Toshiaki Takeuchi 3.00%
Saitama Resona Bank,
Limited 2.93%

100% owned by NDK

100.0% owned by NDKMarusan Securities Co.,
Ltd. 2.82%
Japan Trustee Services
Bank, Ltd. (Trust Account)
2.70%
Hiroshi Takeuchi 2.54%
The Master Trust Bank ofJapan, Ltd. (TrustAccount) 2.34%
International Core Equity
Portfolio DFA Investment
Dimensions Group Inc.
1.76%
Japan Trustee Services
Bank, Ltd. (Trust Account5) 1.75%
J.P. Morgan Securities PLC
1.55%
10. Financial position and business results for the previous financial year (March 2019)
Financial Year

March 2019 (consolidated)

March 2019(non-consolidated)-Net Assets

JPY14,725 million

JPY2,079 million

JPY 1 million

Total Assets

JPY60,784 million

JPY4,354 million

JPY 1 million

Total Assets per Share

JPY750.37

JPY1,733,236.58

JPY 10,000

Net Sales

JPY42,498 million

JPY8,265 million-

Operating Income(Loss)

JPY 406 million

JPY (386) million-

Income (Loss) before
Income Tax

JPY (56) million

JPY (412) million-

Net Income (Loss)

JPY (251) million

JPY (413) million-

JPY (344,394.58)-

Net (loss) attributable toowners of the parent
Net income (Loss) Per
Share

JPY (12.80)

Note 1: The shareholding ratio of NDK’s major shareholders in the above table is calculated by rounding
down to the second decimal place based on the shareholder register as of March 31, 2020.
The above table does not include treasury stock, but the NDK owns 1,133 thousand shares of treasury stock.
Note 2: The successor company was established on May 19, 2020, and there is no previous business year.
Therefore, in point 10. Financial position and business results for the previous financial year (ended March 31,2019), the net assets, total assets, and net assets per share only refer to figures at the date of its establishment
only.

(9) Outline of the business divisions to be split from NDK① Business description of the divisions to be split
Business related to the development and manufacturing of SAW filters② Business results of the business divisions to be split (Fiscal year ending March 31, 2019)
A. Divisions split off from NDKNet Sales

Business (a)Results(non-consolidated) (b)Ratio (a/b)

JPY1,109 million

JPY 37,553 million

2.9%

B. Split off from Hakodate NDKNet Sales: JPY799 million
Note: The above sales figures are for the entire SAW business in the fiscal year ended March 31, 2019 andmay differ from the sales figures transferred to NSD under the contract.
③ Assets and liabilities of business divisions to be split (as of September 30, 2019)
AssetsLiabilities

Line Item

Book ValueLine Item

Book Value

Current Assets

JPY152 million

Current Liabilities-Non-Current Assets

JPY812 million

Non-Current Liabilities-Total Assets

JPY964 million

Total Liabilities-Note: The table lists the total amount of assets and liabilities split from NDK and Hakodate NDK.
In addition, the amount is an estimated amount based on the current position as of the end of September 2019,
and the actual amount of assets and liabilities to be split may change from the above.
(10) Position of splitting company and succeeding company after the absorption-type split (as of July 1, 2020
(planned)
There will be no change in the name, location, title/name of representative, business details, paid-in capital,
and accounting period of the parties involved in the absorption-type split.
(11) Outlook
As this absorption-type company split is conducted as reorganization within the Group, it is judged that itsimpact on the consolidated business results of the Company will be minor, but should it be determined that theimpact to the outlook is significant we will disclose such detail promptly.
EndThis translation is provided only to assist our English-speaking stakeholders in better understanding of ouroriginal press release. Since this might include slight variation in meaning due to translation, please refer tothe original linked to: https://www.ndk.com/jp/news/2020/1191101_j.pdf