Summary Report on Financial Results for First quarter of the year ending March 31, 2009

August 5, 2008
Company name: Fukuda Denshi Co., Ltd.
Code No.:6960(http://www.fukuda.co.jp)
Listing:

JASDAQ

Representative: Kotaro Fukuda, President & CEO
Inquiries:

Shuichi Fukuda, Executive Director and General Manager of Accounting & Finance
DepartmentTel:+81-3-3815-2121

Scheduled date of the filing the quarterly report:

August 13, 2008

(Amounts less than one million yen are discarded)
1.

Consolidated financial results for 1st quarter of the year ending March 31, 2009 (April 1, 2008
through June 30, 2008)(1) Consolidated operating results (cumulative)(Percentages represent increases or decreases from the previous year)

First quarter ofthe year ending
March 31, 2009First quarter ofthe year ended
March 31, 2008

Net sales
millionyen%

20,054

-

1,041

-

1,140

-

629

-

18,787-3.1

279-80.0%

374

-75.4

548

-36.6

yen

Fully diluted
net income per
share
yen

32.71

-

28.51

-

Net income
per shareFirst quarter ofthe year ending
March 31, 2009First quarter ofthe year ended
March 31, 2008

Operating income
million%yen-1-Ordinary income
million%yen

Net income
million%yen

(2) Consolidated financial situation

million yen

million yen

Shareholders’ equity
ratio%

100,552

73,64073.2

3,825.32

99,58573,83374.1

3,835.32

Total assets
Firstquarter oftheyear
endingMarch 31,2009
Year ended
March 2008

Net assets

Net assets per shareyen(Reference) Shareholders’ equity:
First quarter of the year ending March 31, 2009: 73,629 million yen
Year ended March 2008: 73,821 million yen

2.

Dividends

Record date

End of theFirst Quarteryen

End of theSecondQuarter
yen

-

Year
ended
March 2008
Year
endingMarch 2009
Year
endingMarch
2009(estimate)

Dividends per share
End of theThird QuarterEnd of theterm

Annual

yen

yen

yen

40.00

-

40.00

80.00

-

-

-

-

-

-

40.00

-

40.00

80.00

Note: There have been no revisions of dividend projection in the current quarter.

3.

Forecast of consolidated financial results for fiscal 2008 (April 1, 2008 through March 31, 2009)(Percentages represent increases or decreases from the previous year for the full-year figures, and fromthe second quarter of the previous year for the cumulative figures by the consolidated second quarter.)
Net sales

Consolidated
cumulative
figures by thesecond quarter
Full-year

Operatingincomemillion%yen

Ordinary
incomemillion%yen

millionyen%

Net income
per shareyen

Net income

millionyen%

42,300

-

2,500

-

2,550

-

1,370

-

71.20

90,000

1.6

5,300

-1.3

5,500

-3.2

3,020

-4.9

156.94

Note: There have been no revisions of numerical values of consolidated earnings projections in thecurrent quarter.

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4.

Others(1) Change in significant subsidiaries during the term (change in specific subsidiaries involving change
in the scope of consolidation): None
(2) Application of simplified accounting method and accounting principles specific to the preparation of
consolidated quarterly financial statements: Yes
Note: For details, please refer to 4. Others in the “Qualitative Information and Financial Statements”
section on page 6.
(3) Change in accounting principles and procedures, presentation related to the preparation of
consolidated quarterly financial statements (described in changes in basic significant mattersregarding the preparation of consolidated quarterly financial statements)(i) Changes owning to adoption of revised accounting standards or such like: Yes(ii) Changes other than (i) above: Yes
Note: For details, please refer to 4. Others in the “Qualitative Information and Financial Statements”
section on page 6.
(4) Number of outstanding issues (common stock)1) Number of outstanding shares at the end of the period (including treasury stock)
First quarter of the year ending March 31, 2009:

19,588,000 sharesYear ended March 31, 2008:

19,588,000 shares

2) Number of treasury shares at the end of the period
First quarter of the year ending March 31, 2009:

340,119 sharesYear ended March 31, 2008:

340,139 shares

3) Average number of shares during the period (accumulated consolidated quarterly period)First quarter of the year ending March 31, 2009:

19,247,851 sharesFirst quarter of the Year ended March 31, 2008:

19,230,475 shares*Explanation about appropriate use of the forecasts of financial results, and other noteworthy matters
1.

The forecasted financial results described above are based on information available as ofAugust 5, 2008. Actual results may differ from the results projected and presented hereby for a variety ofreasons.
2.

With respect to the preconditions for the forecasts of financial results, please refer to “3.

Qualitative information about consolidated earnings forecast for the fiscal year ending March 2009” inthe “Qualitative Information and Financial Statements” section on page 6.
3.

Effective from the consolidated fiscal year ending March 2009, the Company adopted the“Accounting Standard for Quarterly Financial Reporting” (Accounting Standards Board of Japan Report
No. 12) and the “Implementation Guidance on the Accounting Standard for Quarterly Financial
Reporting” (ASBJ Implementation Guidance No. 14). Consolidated quarterly financial statements areprepared in conformity with the “Regulations of Consolidated Quarterly Financial Statements.”-3-

Qualitative Information and Financial Statements
1.

Qualitative information about consolidated operating results
During the first quarter under review, the economic environment remained uncertain, as
exemplified by the price hikes of crude oil and raw materials, abrupt exchange rate fluctuations andmisgivings about the effects of the subprime mortgage problem in the U.S. on the real economy. The
feeling began to spread that exports, which had supported growth, would slow, and there is concern
about a worsening of corporate earnings that have been on a recovery track.
In the medical equipment industry, institutional changes were pushed forward with, including therevision of medial treatment fees in April 2008 and expansion of the adoption of the comprehensive
medical fee payment system, called DPC (diagnosis procedure combination), at medial institutions.
Meanwhile, efforts were made to pursue medical efficiency and curb medical fees, including a further
division of functions between hospitals and clinics and an expansion of the field of home medical
treatment.
Under such circumstances, the Group posted consolidated net sales of 20,054 million yen,operating income of 1,041 million yen, ordinary income of 1,140 million yen and quarterly net
income of 629 million yen.

(1) Physiological diagnostic equipment segment
Sales of electrocardiographs and retinal cameras increased partly because of the influence ofthe start of compulsory specific medical checkups in April 2008, but sales of ultrasounddiagnostic imaging systems dropped both at home and abroad.
As a result, consolidated sales were 4,625 million yen.
(2) Patient monitoring equipment segment
With a decrease in the number of large business talks, including high-end monitors that arepurchased, sales were 995 million yen.
(3) Medical treatment equipment segment
Sales of automated external defibrillators (AEDs) increased substantially, and the businessof renting medical equipment for home treatment (including oxygen-concentrator devices,
equipment used to treat sleep apnea syndrome and homecare ventilators) remained steady.
As a result, sales were 8,929 million yen.
(4) Other products and accessories segment
In this segment, we mainly handle recording paper, disposable electrodes and accessories
and consumables used for devices handled by the other segments.
Sales of this segment were 5,504 million yen.

2.

Qualitative information about consolidated financial situation
Total assets were 100,552 million yen at the end of the first quarter under review, up 966 million-4-yen from the end of the previous fiscal year.
The increase is mainly because of an increase of 2,670 million yen in cash and deposits, anincrease of 839 million yen in merchandises and an increase of 583 million yen in tangible fixed
assets, despite a decrease of 3,324 million yen in trade notes and accounts receivable.
Liabilities amounted to 26,912 million yen, up 1,159 million yen from the end of the previous
fiscal year.
The increase is chiefly because of an increase of 906 million yen in trade notes and accounts
payable and an increase of 861 million yen in allowance for bonuses to employees.
Net assets were 73,640 million yen, down 193 million yen from the end of the previous fiscal
year.
The decrease is primarily attributable to a decline of 122 million yen in retained earnings and adrop of 146 million yen in foreign currency translation adjustment account.

3.

Qualitative Information about consolidated earnings forecast for the fiscal year ending March 2009
With earnings in the first quarter under review generally in line with the projections, there is nochange in our forecast of financial results for the accumulated period up to the second quarter and forthe full fiscal year, which we announced in the summary of consolidated financial results released on
May 19, 2008.

4.

Others(1) Change in significant subsidiaries during the term (change in specific subsidiaries involving change
in the scope of consolidation)
Not Applicable.

(2) Application of simplified accounting method and accounting principles specific to the preparation of
consolidated quarterly financial statements
1)

Simplified accounting treatment
Not Applicable.

2)

Accounting principles specific to the preparation of consolidated quarterly financial statements
Subsidiaries calculate tax expenses by first rationally estimating the effective income tax rate

after applying income tax allocation accounting on net income before taxes for the consolidated fiscal
year, including the first quarter under review, and then multiplying the quarterly net income before
taxes by the said effective income tax rate. Corporate tax adjustments are included in corporate,
inhabitants’ and enterprise taxes.

(3) Change in accounting principles and procedures, presentation related to the preparation of
consolidated quarterly financial statements:-5-(i) Effective from the consolidated first quarter under review, the Company adopted the“Accounting Standard for Quarterly Financial Reporting” (Accounting Standards Board of Japan
Report No. 12, March 14, 2007) and the “Implementation Guidance on the Accounting Standard
for Quarterly Financial Reporting” (ASBJ Implementation Guidance No. 14, March 14, 2007).
Consolidated quarterly financial statements are prepared in conformity with the “Regulations ofConsolidated Quarterly Financial Statements.”(ii) Change in valuation standards and methods for inventories
Previously, ordinary inventories held for the purpose of sales were mainly stated at cost
determined by the first-in, first-out method. With the application of the “Accounting Standards
for Measurement of Inventories” (ASBJ Report No. 9, July 5, 2006), inventories are primarily
stated at cost determined by the first-in first-out method (with regard to the amounts stated in thebalance sheets, the method of book value devaluation based on decline in profitability is used),effective from the first quarter under review.
This change had little effect on our operating income, ordinary income and quarterly net
income before taxes.
(iii) Application of the “Practical Solution on Unification of Accounting Policies Applied to Foreign
Subsidiaries for Consolidated financial Statement”
Effective from the first quarter under review, the Company adopted the “Practical Solution
on Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated financial
Statement” (ASBJ Practical Solution No. 18, May 17, 2006), and made revisions necessary forconsolidated settlement of accounts.
This change had little effect on our operating income, ordinary income and quarterly net
income before taxes.
(iv) Application of accounting standard for lease transactions
Previously, finance lease transactions in which the ownership of the leased properties did
not transfer to the lessees underwent the same accounting treatment as ordinary leasetransactions. Since the “Accounting Standard for Lease Transactions” (ASBJ Report No. 13(June 17, 1993 (First Sectional Committee of the Business Accounting Council), amended on
March 30, 2007) and the “Implementation Guidance on the Accounting Standard for Lease
Transactions” (ASBJ Implementation Guidance No. 16 (January 18, 1994 (Accounting
Committee of the Japanese Institute of Certified Public Accountants), amended on March 30,2007) became applicable from the consolidated quarterly financial statements concerning theconsolidated fiscal years starting on or after April 1, 2008, the Company adopted theseaccounting standards and used the accounting method for ordinary lease transactions, effectivefrom the first quarter under review.
Depreciation of leased assets concerning finance lease transactions in which the ownershipof the leased properties does not transfer to the lessees is calculated using the straight-line-6-

method over the lease terms without residual value.
Finance lease transactions in which the ownership of the leased properties does not transfer
to the lessees and that started before the first year of the application of the lease accounting
standards and similar regulations undergo the same accounting treatment as ordinary leasetransactions, the same as they did before.
This change had little effect on our operating income, ordinary income and quarterly net
income before taxes.

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5.

Consolidated Quarterly Financial Statements(1) Consolidated quarterly balance sheets(Unit: million yen)
End of the consolidated firstquarter under review(As of June 30, 2008)
AssetsCurrent assets
Cash and deposits
Trade notes and accounts
receivable
Securities
Merchandise
Products
Raw materials
Work in progress
Other
Allowance for doubtful
accounts
Total current assets
Fixed assets
Tangible fixed assets
Intangible fixed assets
Investments and other assets
Investments and otherassetsAllowance for doubtful
accounts
Total investments andother assets
Total fixed assets
Total assets
Liabilities
Current liabilities
Trade notes and accounts
payableShort-term borrowings
Income tax payable, etc.
Allowance for bonuses to
employees
Other allowance
Other
Total current liabilities
Fixed liabilities
Long-term loans borrowings
Allowance for retirement
benefits
Other allowance
Negative goodwill
Other
Total fixed liabilities
Total liabilities-8-

Summarized balance sheets
related to the previous fiscal year
(As of March 31, 2008)

25,211
20,38522,54023,710

997
8,249
3,275
2,415
87
3,659
-273

999
7,410
3,245
2,430
84
3,384
-308

64,00763,497

19,0793,167

18,496
3,295

14,341

14,345-44-49

14,297

14,29636,544
100,552

36,08899,585

13,371

12,465

3,726
674
2,527

3,500
884
1,666

123
2,141
22,565210
2,620
21,347

100
3,134

183
3,097

162
1
948
4,346
26,912

197
1
925
4,404
25,752

(Unit: million yen)
End of the consolidated firstquarter under review(As of June 30, 2008)
Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Valuationandtranslation
adjustments
Evaluation difference onother securities
Foreign currency translation
adjustment accountTotal
valuationandtranslation adjustments
Minority interests
Total net assets
Total liabilities and net assets-9-

Summarized balance sheets
related to the previous fiscal year
(As of March 31, 2008)

4,621
9,982
59,350-766
73,1884,621
9,982
59,473-766
73,311

524

447

-83

63

441

510

10
73,640100,552

11
73,833
99,585

(2) Consolidated quarterly statements of income(Consolidated first quarter)(Unit: million yen)

Net sales
Cost of sales
Gross profit
Selling,
generalandadministrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary gains
Gains on sale of fixed assets
Gains on insurance surrender
Gains on reversal of allowancefor doubtful accounts
Total extraordinary gains
Extraordinary losses
Losses on sale of fixed assets
Losses on disposal of fixed
assets
Losses on devaluation of
investment securities
Impairment losses
Other
Total extraordinary losses
Quarterly net income before
taxes
Corporate,
inhabitants’enterprise taxes

Consolidated first quarter underreview(April 1, 2008 to June 30, 2008)
20,054
11,104
8,950
7,908
1,041
3
78
85
167
18
47
2
69
1,140
1
100
39
141
0
1
12
7
1
23
1,259

and

893

Corporate tax adjustments
Total corporate taxes, etc.
Minority interests in earnings ofconsolidated subsidiaries
Quarterly net income

-264
629
0
629

- 10 -

Effective from the fiscal year ending March 2009, the Company adopted the “Standard for Quarterly
Financial Reporting” (ASBJ Report No. 12, March 14, 2007) and the “Implementation Guidance on theStandard for Quarterly Financial Reporting” (ASBJ Implementation Guidance No. 14, March 14, 2007).
Consolidated quarterly financial statements are prepared in conformity with the “Regulations ofConsolidated Quarterly Financial Statements.”(3) Note concerning premise of going concern
Not applicable.

(4) Segment informationa.

Segment information by business type
Consolidated first quarter under review (from April 1 to June 30, 2008)
Segment information by business type is omitted because the amounts of sales, operating income

and assets of the medical electronic equipment business account for over 90 percent of the total sales,
total operating income and total assets of all segments.

b.

Segment information by geographic area
Consolidated first quarter under review (from April 1 to June 30, 2008)
Segment information by geographic area is omitted because the amounts of sales and assets inJapan account for over 90 percent of the total sales and total assets of all segments.

c.

Overseas sales
Consolidated first quarter under review (from April 1 to June 30, 2008)
Overseas sales are omitted because such sales accounted for less than 10 percent of consolidated

sales.

(5) Note when there is a significant fluctuation in the amount of shareholders’ equity
Not applicable.

- 11 -

Reference
Financial statements related to the first quarter of the previous year
(Summary) Consolidated quarterly statements of income
Consolidated firstquarter of theprevious fiscal
year(April 1, 2007 toJune 30, 2007)
Amount(million yen)

Item

I

Net sales

18,787

II

Cost of sales

10,689Gross profit

8,097

III Selling,

general

and

7,817

administrative expenses
Operating income

279

IV Non-operating income

153

V

Non-operating expenses

59

Ordinary income374

VI Extraordinary gains

604

VII Extraordinary losses

7

Quarterly net income before

971

taxes

Tax expenses
Minority interests in income
Quarterly net income

422
0
548

- 12 -