Report on Financial Result
Third Quarter of Fiscal Year 2013
April to December 2012

February 7, 2013

KAGA ELECTRONICS CO., LTD. (TSE 1st section, 8154)
3-12-8 Sotokannda, Chiyoda-ku, Tokyo 101-8629
Tel: (03) 4455-3131 Fax: (03) 3254-7132
URL：http://www.taxan.co.jp

Financial Highlights
Third Quarter of Fiscal Year 2013
April to December 2012
(Consolidated Third Quarter)

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■ Consolidated Statement of Income（million yen）

3Q FY3/2012
AmountPct.
平成18年3月期
Net Sales
173,565
Cost of sales
152,425
Gross profit
21,140
SG&A expenses
19,988Operating income
1,151
Non-operating income
544
Non-operating expenses
418
Ordinary income
1,277
Extraordinary items-1,058

Income before income taxaes

Income taxes
Income taxes-beferred
Minority interests
Net income

219
880-262
32-4303Q FY3/2013
AmountPct.

平成19年3月期（予）100.0%
156,891

87.8%
12.2%
11.5%
0.7%
0.3%
0.2%
0.7%
-0.6%
0.1%
0.5%
-0.15%
0.02%-0.2%137,663
19,22819,268
-39
585
194
351
-63289
797
446
-138
-817

100.0%
87.7%
12.3%
12.3%
0.0%
0.4%
0.1%
0.2%
0.0%
0.2%
0.5%
0.28%
-0.09%-0.5%

ChangesAmountPct.
-16,674-14,762-1,912-720-1,190
41
-224
-926
995
70
-83
708
-170
-387

-9.6%
-9.7%
-9.0%
-3.6%
-103.4%
7.5%-53.6%-72.5%
94.0%
32.0%
-9.4%
270.2%-531.3%90.0%

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Comparison of Consolidated Sales by Business Category（million yen）

3Q FY3/2012
Net sales
Segment income

3Q FY3/2013
Net sales

Pct.

Segment income

Pct.

AmountPct.

124,428

71.7%

117,782

75.1%-6,646

-5.3%

1,223

106.3%

878-2251.3%-345-28.2%

Informationequipment

39,20722.6%

28,771

18.3%-10,436-26.6%-313-27.2%-513

1315.4%

-200

63.9%

2,445

1.4%

1,976

1.3%

-469

-19.2%

66

5.7%

-469

1202.6%

7,484

4.3%

8,361

5.3%

243
173,565
1,151

21.1%
100.0%
100.0%

113
156,891-39-289.7%
100.0%
100.0%

Other
Total

Segment incomeChanges

Electtroniccomponents

Software（million yen）

Net sales
173,565

1,151

156,891--39-535 -810.6%
877

11.7%

-130 -53.5%-16,674-9.6%-1,190 -103.4%* Figures of each segment income are not inter-segment adjusted other than total.

Summary■ Electronic components (Development, manufacture and sale of semiconductors, general electronic components and other products, electronic
manufacturing service (EMS), and other activities)
There was growth in sales of in-vehicle electronic components and semiconductors and in EMS business sales, mainly for air conditioning There
were growth in sales of in automotive business, sales of electronic components and semiconductors, and EMS business, mainly for air
conditioning equipment overseas. In Japan, sales decreased in the field of amusement devices, sales of electronic components andsemiconductors. As a result, segment sales were 117,782 million yen.
■ Information equipment (Sales of PCs, PC peripherals, photograph and imaging products, original-brand products, and other products)
Although there were measures to increase sales of current products, lower sales of personal computers and the negative impact of changes indistribution channels for memory-card products sold at large consumer electronics stores and specialty shops resulted in segment sales of
28,771 million yen.

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【Reference】Comparison of Consolidated Sales by Business Category（million yen）

（million yen）
173,565

Changes

3Q FY3/2012

3Q FY3/2013

AmountPct.

AmountPct.

Information equipment

42,31824.4%

33,065

21.1%-9,253-21.9%

EMS

44,31325.5%

47,984

30.6%

3,670

8.3%

Semiconductors

45,962

26.5%

38,23024.4%-7,732-16.8%

Generalelectronic
components

24,046

13.9%

19,37812.4%-4,667-19.4%

Others

16,9249.8%

18,232

11.6%

1,308

7.7%

Total

173,565

100.0%

156,890

100.0%-16,674-9.6%

156,891

AmountPct.

Summary■ Information equipment sales: - 9,253 million yen (-21.9%)
Sales decreased due to personal computers and changes in distribution channels for memory-card products sold at large consumer
electronics stores and specialty shops resulted in sales of 33,065 million yen.

■ EMS sales: + 3,671 million yen (+8.3%)
Increase of EMS orders, mainly overseas from Japanese manufacturers of air conditioning equipment, raised sales to 47,984 million yen.

■ Semiconductor sales: - 7,732 million yen (-16.8%)
Decrease of sales due to lower orders in Japan for semiconductors used in amusement devices, resulting 38,230 million yen.
■ Electronic Parts sales: - 4,667 million yen (-19.4%)
Decrease of sales due to lower orders for electronics components used at overseas factories of Japanese manufactures of consumer
electronics products, resulting 19,378 million yen.

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Selling, General and Administrative Expenses（million yen）
（million yen）

3QFY3/2012
AmountPacking and freight
1,880
R&D
417
Others981
Total selling expenses
3,278
Depreciations
523
Rent
1,499
Personnel expenses
10,787
Others3,901
Total administrative
16,710Total SG&A expenses
19,9883Q FY3/2013

Pct.
Amount
9.4%1,650
2.1%
199
4.9%
937
16.4%
2,786
2.6%
418
7.5%
1,546
54.0%
10,666
19.5%
3,850
83.6%
16,480100.0%
19,267

Changes

Pct.
Amount
8.6%
-230
1.0%
-218
4.9%
-44
14.5%
-492
2.2%
-105
8.0%
47
55.4%
-121
20.0%
-51
85.5%
-230
100.0%-721

Pct.

19,98819,267-12.2%-52.3%-4.5%-15.0%-20.1%
3.1%
-1.1%
-1.3%
-1.4%
-3.6%

Summary
Selling, general and administrative expenses
Packing and freight: Down 230 million yen year-on-year because of lower sales
R&D: Down 218 million yen year-on-year due to changes in development project schedules

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Consolidated Balance Sheets
Consolidated Balance Sheets

Current assets
Cash and cash equivalents
Notes and account receivable-trade

Merchandize and f inished goods

Goods in progress
Raw materials and other supplies

OthersFixed assets
Property , plant and equipment

Intangible assets
Investments and other assets

Total assets（million yen）

End ofEnd ofChange
FY3/2012 FY12/2012
94,37487,319-7,055 Current liabilities
9,775
11,273
1,498 Notes and accounts payable-trade
Short-term bank loans
55,97949,373-6,606
Others17,104
16,629-475
334
771
437 Long-term liabilities
Long-term bank loans
4,115
4,556
441
Others
7,067
4,717-2,350Total liabilities
Shareholders' equity
20,340
9,487
2,245
8,607

21,978
10,564
2,431
8,982

114,714109,297

End of
End ofChange
FY3/2012 FY12/2012
59,47452,751-6,72341,74835,484-6,264
11,084
11,696
612
6,642
5,569
1,071
7,303
10,033
2,730
2,833
5,487
2,654
4,470
4,546
76
66,77762,784-3,9930
Paid-in capital
12,133
12,1330Capital surplus
13,912
13,9120
1,638
Retained earnings
25,03823,393-1,645
1,077
Treasury stock
186-1,333-1,3330375 Valuation and translation adjustment-3,341-2,858483
Minority interests
1,526
1,264
-262
Total net assets
47,936
46,512-1,424-5,417 Total liabilities and net assets
114,714109,297-5,4177©©2010All Rights
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Forecast for FY3/2013

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■ Forecast for FY3/2013
Consolidated Statement of Income（million yen）

FY3/2012(actual)A

FY3/2013 plan（before）

FY3/2013 plan（after）

B

C

AmountNet Sales
Cost of sales
Gross profit
SG&A expenses
Operating income
Non-operating income
Ordinary income
Net income

Changes(Ｃ-A）

Changes（Ｃ-B）

Pct.
AmountPct.
Amount
平成18年3月期
平成19年3月期（予）229,856
100.0% 230,000
100.0%
216,000

Pct.

AmountPct.

AmountPct.

100.0%-13,856-6.0%-14,000-6.1%

201,350

87.6%

202,300

88.0%

189,600

87.8%-11,750-5.8%-12,700-6.3%

28,506

12.4%

27,70012.0%

26,40012.2%-2,106-7.4%-29,806-4.7%

26,438

11.5%

26,20011.4%

25,900

12.0%

-538

-2.0%

-26,738

-1.1%

2,067

0.9%

1,500

0.7%

500

0.2%

-1,567-75.8%-3,067-66.7%

502

0.2%

300

0.1%

500

0.2%

-2

-0.4%

200

66.7%

2,569

1.1%

1,800

0.8%

1,000

0.5%

-1,569-61.1%-3,369-44.4%

9140.4%

3000.4%1000.1%-814-89.1%-1,114-66.7%

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Comparison of Consolidated Sales by Business Category（million yen）

FY3/2012(Actual) A
Net sales
Segment income

Pct.

FY3/2013 Plan(before) B

FY3/2013 Plan(after) C

Net sales

Net sales

Segment income

Pct.

Segment income

Changes(C-A)

Changes(C-B)

Pct.

AmountPct.

Amount75.7%-2,968

-1.8%

Pct.

Electtronic
components

166,468

72.4%

171,500

74.6%

163,500

2,021

97.8%

2,000

133.3%

1,500 300.0%-521 -25.8%-500 -25.0%

Informationequipment

49,36021.5%

42,00018.3%

36,000-13,360 -27.1%-6,000 -14.3%-533-25.8%-500-33.3%-1,000 -200.0%

-467

87.6%

-500 100.0%

3,854

1.7%

4,000

1.7%

4,000

1.9%

146

3.8%

0

0.0%

402

19.4%

-250

-16.7%-250-50.0%-652 -162.2%

0

0.0%

10,173

4.4%

12,5005.4%

12,500

5.8%

2,327

00.0%

319 15.4%
229,856 100.0%
2,067 100.0%

250
230,000
1,500

16.7%
100.0%
100.0%

250 50.0%
216,000 100.0%
500 100.0%

Software
OtherTotal

16.7%

22.9%

-8,000（million yen）

Net sales
229,856

Segment income
216,000

2,067-4.7%
500-69 -21.6%
0 0.0%-13,856 -6.0% -14,000 -6.1%-1,567 -75.8% -1,000 -66.7%* Figures of each segment income are not inter-segment adjusted other than total.

Summary■ Electronic components (Development, manufacture and sale of semiconductors, general electronic components and otherproducts, electronic manufacturing service (EMS), and other activities)
There was a sales increase in the Oversea EMS business; however, electronics components and semiconductor sales decreased in the marketof amusement and consumer electronics. Overall sales seem to be decreased from the initial forecast.

■ Information equipment (Sales of PCs, PC peripherals, photograph and imaging products, original-brand products, and other products)
Decrease in the market of personal computer, digital camera, and other current products and lower sales of new products lead the overallsales to be reduced from the initial forecast.

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【Reference】Comparison of Consolidated Sales by Business Category（million yen）

（million yen）

FY3/2012(Actual) A

FY3/2013 Plan(before) B

FY3/2013 Plan
(after) CAmountPct.

AmountPct.

AmountPct. Amount Pct. Amount Pct.

Information equipment

44,27619.3%

49,00021.3%

36,00016.7% -8,276 -18.7% -13,000 -26.5%

EMS

62,65527.3%

70,00030.4%

70,00032.4% 7,345 11.7%

Semiconductors

59,30325.8%

58,00025.2%

56,50026.2%

Generalelectronic
components

30,35613.3%

24,000

13.3%

Others33,26414.5%

29,00012.6%

Total

229,856 100.0%

230,000 100.0%

Changes(C-A)

Changes(C-B)

00.0%-4.7% -1,500-2.6%

25,00011.5% -5,356 -17.6% 1,000

4.2%

28,500

13.2%

-500

-1.7%

-6.0% -14,000-6.1%-2,803-4,764 -14.3%

216,000 100.0% -13,856

229,856
216,000

Summary
Information equipment Sales: -8,276 million yen (-18.7%) due to decrease in sales of personal computers, digital cameras and other current products
Semiconductors sales : -2,803 million yen (-4.7%) due to reduce of orders for semiconductors in the market of consumer electronics products andamusement devices.
General electronic components Sales: -5,356 million yen (-17.6%) due to reduce of orders for electronic components in the market of consumer electronics
products and amusement devices.
Others Sales: -4,764 million yen (-14.3%) due to decrease of computer graphics production and application software sales.

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Forecast for FY3/2013
Selling,General and Administrative Expenses（million yen）

Packing and freight

R&DOthers
Total selling expenses

Depreciations
Rent
Personnel expenses

OthersTotal administrative
Total SG&A expenses

FY3/2012
FY3/2013(Actual)(Plan)
ChangesAmountPct.
Amount
Pct.
2,450
9.3%
2,239
8.6%
-211
576
2.2%
287
1.1%
-289
1,159
4.4%
1,277
4.9%
118
4,185
15.8%
3,803
14.7%
-382
731
2.8%
576
2.2%
-155
2,025
7.7%
2,036
7.9%
11
14,24953.9%
14,113
54.5%
-136
5,247
19.8%
5,371
20.7%
124
22,252
84.2%
22,09685.3%-156
26,438100.0%
25,900100.0%-538（million yen）
26,43825,900

Summary
Selling, general and administrative expenses
Packing and freight: Forecast a decrease of 211 million yen year-on-year because of lower sales
R&D: Forecast a decrease of 289 million yen year-on-year mainly because of changes in development project schedules

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topics
1. Unprofitable companies
2. Strengthening of overseas business

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topics ① Unprofitable companies◆Status of unprofitable subsidiaries
Kaga Electronics Group put restoring of unprofitable subsidiaries as
one of the highest priorities.

＜Third quarter initiatives＞①KAGA COMPONENTS
1. Downsize factories in Japan
2. Reduce the number of unprofitable products
3. Restructuring

Implementing structural reforms andexpect a profit in the second half ofthe current fiscal year (October to March)②KAGA HIGHTECH
1. Reduce inventories
2. Major change in the organization and workforce

Focusing on improving operations
and locating new products

3. Form ties with new vendors

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topics ① Unprofitable companies③ADM
1. Make ADM a wholly owned subsidiary(faster management decisions)
2. Restructuring

Focusing on cost cutting and developing newmarkets

3. Increase new vendor sales④SI ELECTRONICS
1. Start sales of original LSIs (Y3)
2. Increase new vendor sales

Expect a profit in the second half of thecurrent fiscal year (October to March)⑤ CyberFront
1. Renew management team
2. Conduct tightly focused operations
3. Increase equity to support operations

CyberFront hopes to return to profitability inthe next fiscal year

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topics ② Strengthening of overseas business
China
Enforce sales to expand sales channels.
We have acquired number of new opportunities in the market
of home appliances, smart phone, tablet PC, and automotive
business.
We seek growth in the China market.

ThailandAD DEVICE is preparing to establish a subsidiary in Bangkok (scheduled for February 2013).
AD DEVICE, which mainly handles
Toshiba semiconductor, will establish a new subsidiary
in Bangkok for local Japanese Automotive business.
By collaborating with Kaga Thailand andother subsidiaries, AD DEVICE Bangkok seeks increasein the sales.

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topics ② Strengthening of overseas businessIndonesia/Philippines
Part kitting business opportunity has increasedby focusing on the Japanese home appliances,office supplies, and automotive makers.

India
Energetic sales to the local companies introducing
Japanese Technologies, including power semiconductors.
Seek a design win next year.

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Contact: Public Relations Department
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E-mail： webmaster@taxan.co.jp
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