Information Meeting for Fiscal Year ended
March 2014

May27, 2014
KAGA ELECTRONICS CO., LTD. (TSE 1st section, 8154)
20 Kandamatsunagacho, Chiyoda-ku, Tokyo 101-8629
TEL:+81-3-5657-0111
FAX:+81-3-3254-7131
http://www.taxan.co.jp

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Financial Highlights
FY3/20142© 20102014 KAGA©
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■ Financial Highlights
Segment information(million yen)

FY3/2013
AmountPct.
Net Sales
216,405
Cost of sales
188,943
平成18年3月期
Gross profit
27,462
SG&A expenses
26,202
Operating income
1,260
Non-operating income
955
Non-operating expence284
Ordinary income
1,931
Extraordinary items
503
Income before income taxes

Income taxes
Income taxes-deferred
Minority interests
Net income

2,434
1,594
559
-164
444

FY3/2014
AmountPct.

100.0%
257,85287.3%
225,330
平成19年3月期（予）12.7%
32,522
12.1%
27,416
0.6%
5,106
0.4%
1,025
0.1%
284
0.9%
5,847
0.2%
-188
1.1%
5,659
0.7%
2,220
0.26%
-447
-0.08%
9
0.2%
3,877

100.0%
87.4%
12.6%
10.6%
2.0%
0.4%
0.1%
2.3%
-0.1%
2.2%
0.9%
-0.2%
0.0%
1.5%

ChangesAmountPct.
41,44736,387
5,060
1,214
3,846
70
0
3,916
-691
3,225
626
-1,006
173
3,433

19.2%
19.3%
18.4%
4.6%
305.2%
7.3%
0.0%
202.8%
132.5%
39.3%
773.2%

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■ Comparison of Consolidated Sales by Business Category（million yen）

FY3/2013
Net sales
Segment income

FY3/2014
Net sales

Pct.

Segment income

Net sales

Changes

Pct.

Amount300,000

250,000

164,16475.9%

194,782

75.5%

30,618

18.7%

2,040

161.9%

3,805

74.5%

1,765

86.5%

Informationequipment

38,30517.7%

46,505

18.0%

8,200

21.4%

-836

-66.3%

866

17.0%

1,702

-

2,874

1.3%

3,306

1.3%

432

15.0%

-61

-4.8%

79

1.5%

140

-

11,060

5.1%

13,258

5.1%

2,198

19.9%

157
216,405
1,260

12.5%
100.0%
100.0%

410
257,852
5,106

8.0%
100.0%
100.0%

253
41,4473,846

161.1%
19.2%
305.2%

Other
Total

* Figures of each segment income are not inter-segment adjusted other than total.

（million yen）

6,000

257,852

Pct.

Electronic
components

SoftwareSegment income

216,405

200,000

Electronic
components
Informatinequipment
SotwareOtther

5,000

Electronic
components
Informatinequipment
Sotware4,000

Otther

5,106

3,000
150,000

1,260
2,000

100,000
1,000
50,0000FY3/2013

0
FY3/2013 FY3/2014

FY3/2014-1,000

Summary■ Electronic components (Development, manufacture and sale of semiconductors, general electronic components and other products, electronic
manufacturing service (EMS), and other activities)
In Japan, there were higher sales of electronic components and semiconductors used in communication, automotive and other products andhigher EMS sales involving electronic devices and amusement equipment. Overseas, EMS demand for electronic devices continued to grow.
Segment sales were 194,782 million yen.
■ Information equipment (Sales of PCs, PC peripherals, photograph and imaging products, original-brand products, and other products)
Demand for PCs and other consumer products was sluggish. However, there was a small rebound the second half mainly due to replacement
demand for Windows XP computers and buying prior to the April 2014 consumption tax hike. Furthermore, government economic stimulus
measures in Japan raised sales of products for the home and environmental products. Segment sales totaled 46,505 million yen.

4
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■ 【Reference】Comparison of Consolidated Sales by Business Category（million yen）

FY3/2013
AmountPct.

FY3/2014
AmountPct.

257,852

ChangesAmount（million yen）

300,000

250,000

Pct.

Informationequipment

44,14720.4%

52,874

20.5%

8,727

19.8%

EMS

70,54632.6%

90,12335.0%

19,577

27.8%

Semiconductor

50,96023.5%

60,654

23.5%

9,694

19.0%

General electronics
compornent

25,636

11.8%

26,825

10.4%

1,189

4.6%

Others25,113

11.6%

27,375

10.6%

2,262

9.0%

Total

216,405

100.0%

257,852

100.0%

41,44719.2%

216,405

200,000

Informationequipment

150,000

ＥＭＳ

100,000

Semiconductors

50,0000FY3/2013

FY3/2014

Summary■ Information equipment sales: Up 8,727 million yen (+19.8%)
Sales increased to 52,874 million yen mainly because of higher sales of products for the home, environmental
products and other products.
■ EMS sales: Up 19,577 million yen (+27.8%)
Higher EMS volume for electronic devices overseas and other factors raised sales to 90,123 million yen.
■ Semiconductor sales: Up 9,694 million yen (+19.0%)
Sales increased to 60,654 million yen mainly because of growth in orders in Japan for semiconductors used incommunication, automotive and other products.

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■ Overseas sales（million yen）

FY3/2013

257,852

Changes

FY3/2014（million yen）

300,000

250,000

216,405

AmountPct.

AmountPct.

152,303

70.4%

180,170

69.9%

27,867

18.3%

North America

2,428

1.1%

3,918

1.5%

1,490

61.4%

Europe

3,392

1.6%

2,430

0.9%

-962

-28.4%

East Asia

58,281

26.9%

71,33327.7%

13,05222.4%

計216,405

100.0%

257,852

100.0%

41,447

19.2%

Japan

AmountPct.

200,000

Japan
NortuAmerica

150,000

EuropeEastAsia

100,000

50,0000FY3/2013

FY3/2014

Summary■ Japan: Up 27,867 million yen (+18.3%)
Sales increased to 180,170 million yen. There were higher sales of electronic components and semiconductors
for communication, automotive and other products and growth in EMS volume for electronic devices andamusement equipment. Higher sales of housing products and environmental products also contributed to sales
growth in Japan.
■ Eastern Asia: Up 13,052 million yen (+22.4%)
Higher EMS volume for electronic devices and other factors raised sales to 71,333 million yen.

6
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■ Consolidated Balance Sheets（million yen）

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

End of
End of
End of
End ofChangeChangeFY3.2013 FY3/2014
FY3.2013 FY3/2014
89,945102,930
12,985 Current liabilities
53,35563,41010,055
12,25814,192
1,934 Notes and accounts payable-trade37,423
41,695
4,272
Short-term bank loans
54,58060,667
6,087
9,567
12,172
2,605
Others
14,075
16,378
2,303
6,365
9,543
3,178
637
848
211 Long-term liabilities
9,726
9,792
66
Long-term bank loans
5,121
4,681
-440
4,065
3,991
-74
Others
4,605
5,111
506
4,330
6,854
2,524
Total liabilities
63,082
73,202
10,120Shareholders' equity
0
Paid-in capital
資本金12,133
12,1330Capital surplus
13,912
13,912
0
21,94323,0981,155 資本剰余金
Retained earnings
10,55912,6252,066 利益剰余金
24,384
27,414
3,030
Treasury stock
2,226
1,533
-693
-535
-536
-1
9,157
8,938
-219 Valuation and translation adjustment-1,238-137
1,101
Minority interests
149
39
-110
Total net assets
48,80652,825
4,019
111,888
126,028
14,140 Total liabilities and net assets
111,888
126,028
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■ Selling, General and Administrative Expenses（million yen）

（million yen）
30,000FY3/2012
AmountPacking and freight
2,346
R&D
265
Others1,306
Total selling expenses
3,917
Depreciations
543
Rent
2,160
Personnel expenses
14,363
Others5,217
Total administrative
22,283
Total SG&A expenses
26,202

FY3/2013

Pct.
Amount
9.0%
2,569
1.0%
219
5.0%
1,087
14.9%
3,875
2.1%
768
8.2%
2,061
54.8%
15,221
19.9%
5,431
85.0%
23,481100.0%
27,416

Changes

Pct.
Amount
9.4%
223
0.8%
-46
4.0%
-219
14.1%
-42
2.8%
225
7.5%
-99
55.5%
858
19.8%
214
85.6%
1,198
100.0%
1,214

Pct.
9.5%
-17.4%-16.8%
-1.1%
41.4%
-4.6%
6.0%
4.1%
5.4%
4.6%

Summary

26,202

27,41625,000

Packing andfreight
R&D

20,000

Selling others
Depreciations
15,000Rent
Personnel
expenses
Administrative

10,000others5,000

0FY3/2013

FY3/2014■Selling, general and administrative expenses
Packing and freight:
Up 223 million yen because sales increased
Depreciation:
Up 225 million yen because of the growth in assets
Personnel expenses: Up 858 million yen because of salary revisions

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■ Consolidated Cash Flows（million yen）

Operating activities

FY3/2012
7,041

FY3/2013
3,334

Changes-3,707

Investing activities-4,910-3,339

1,571

Financials activities

-403

1,024

1,427

Net change in cash and cash equivalents

456

463

7

Increase (decrease) in cash and cash equivalents

2,183

1,482

-701

Cash and cash equivalents at beginning of year

9,695

11,8782,183

Cash and cash equivalents at end of year

11,87813,361

1,483

Summary■Operating activities: Net cash provided was 3,334 million yen mainly due to income before income taxes andminority interest.
■Investing activities: Net cash used was 3,339 million yen mainly due to payments for the purchase of property, plant andequipment.
■Financing activities: Net cash provided was 1,024 million yen mainly due to an increase in short-term loans
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Forecast for FY3/201510© 20102014 KAGA©
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■ Forecast for FY3/2014
Consolidated Statement of Income
FY3/2014(actual)

FY3/2015(plan)

AmountAmount

平成18年3月期

Net Sales（million yen）

Pct.

Pct.

Changes
AmonutPct.

平成19年3月期（予）257,852

100.0%

260,000

100.0%

2,148

0.8%

225,33087.4%

227,200

87.4%

1,870

0.8%

32,52212.6%

32,800

12.6%

278

0.9%

27,416

10.6%

27,500

10.6%

84

0.3%

5,106

2.0%

5,300

2.0%

194

3.8%

741

0.3%

700

0.3%

-41

-5.5%

Ordinary income

5,847

2.3%

6,000

2.3%

153

2.6%

Net income

3,877

1.7%

4,000

1.8%

123

3.2%

Cost of sales
Gross profit
SG&A expenses
Operating income
Non-operating income

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■ Comparison of Consolidated Sales by Business Category（million yen）

FY3/2014(Actual)
Net sales
Segment income

Electtronic
components
Informationequipment
Software
Other
Total

FY3/2015(Plan)
Net sales

Pct.

Segment income

Pct.

ChangesAmount（million yen）
Net sales

Segment income

300,000

Pct.

257,852

260,000

250,000

194,78275.5%

200,000

76.9%

5,218

2.7%

3,805

74.5%

3,850

72.6%

45

1.2%

46,50518.0%

43,00016.5%-3,505

-7.5%

866

17.0%

800

15.1%

-66

-7.6%

3,306

1.3%

3,000

1.2%

-306

-9.3%

79

1.5%

150

2.8%

71

89.9%

13,2585.1%

14,000

5.4%

742

5.6%

410
257,852
5,106

8.0%
100.0%
100.0%

500
260,000
5,300

9.4%
100.0%
100.0%

90
2,148
194

22.0%
0.8%
3.8%

* Figures of each segment income are not inter-segment adjusted other than total.

Electronic
components
Informatinequipment
Sotware200,000

6,000

5,000

5,106

5,300

OttherElectronic
components
Informatinequipment
SotwareOtther4,000
150,000

3,000
100,000

2,000
50,0001,000

0FY3/2014(P) FY3/2015(P)0
FY3/2014(P)FY3/2015(P)Summary■ Electronic components (Development, manufacture and sale of semiconductors, general electronic components and other products, electronic
manufacturing service (EMS), and other activities)
Forecast sales and earnings growth mainly because of higher EMS and semiconductor sales in Japan and higher EMS sales overseas.
■ Information equipment (Sales of PCs, PC peripherals, photograph and imaging products, original-brand products, and other products)
Forecast declines in sales and earnings. There will be measures to increase sales of current products and demand will continue to exist for
products for the home and PC software for schools. But also expect a downturn in one-time sales following the April 2014 consumption tax hike.
■ Software (Production of computer graphics, planning and development of amusement products, and other activities)
Forecast lower sales and higher earnings following the liquidation of CyberFront Corporation.

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

Information equipment

FY3/2014(Actual)

FY3/2015(Plan)

AmountAmountPct.

52,874

20.5%

Pct.

49,80019.2%（million yen）
300,000

ChangesAmount Pct.
-3,074

257,852

260,000

250,000-5.8%
200,000

EMS

90,12335.0%

94,800

36.5%

4,677

5.2%

Semiconductors

60,65423.5%

56,20021.6%-4,454-7.3%

Generalelectronic
components

26,825

10.4%

27,80010.7%

975

3.6% 100,000

Others27,375

10.6%

31,400

12.1%

4,025

14.7%

50,000

Total

257,852

100.0%

260,000

100.0%

2,148

0.8%

0

Informationequipment

150,000

ＥＭＳ
Semiconduc
tors

FY3/2014

FY3/2015(P)Summary■ Information equipment:： Sales down 3,074 million yen (-5.8%)
mainly due to a downturn in one-time sales following higher replacement demand prior to the April 2014 consumption tax hike

■ EMS： Sales up 4,677 million yen (+5.2%)

because of growth in EMS operations in Higher EMS volume for electronic devices overseas and other factors raised
sales to 90,123 million yen.

■ Semiconductor： Sales down 4,454 million yen (-7.3%)

mainly because of a change in sales and distribution channels■ General electronic components: Sales up 975 million yen (+3.6%)
mainly due to higher sales of components used in communication equipment and automobiles■ Others: Sales up 4,025 million yen (+14.7%) mainly due to an increase in sales of game machines to amusement centers and higher salesof golf products

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■ Overseas sales（million yen）

FY3/2014(Actual)AmountFY3/2015(Plan)

Pct.

AmountChanges

250,000

257,852

260,000
Japan

Pct.

AmountPct.

180,17069.9%

171,600

66.0%-8,570-4.8%

North America

3,918

1.5%

4,000

1.5%

82

2.1%

Europe

2,430

0.9%

2,400

0.9%

-30

-1.2%

East Asia

71,83327.9%

82,00031.5%

10,167

14.2%

Total

257,852

100.0%

260,000

100.0%

2,148

0.8%

Japan

（million yen）

300,000

200,000

NortuAmerica
Europe150,000

EastAsia
100,000

50,0000FY3/2014

FY3/2015(P)Summary■JapanSales down 8,570 million yen (-4.8%) primarily because of a change in sales and distribution channels andlower one-time sales following the April 2014 consumption tax hike
■Eastern Asia
Sales up 10,167 million yen (+14.2%) because of growth in orders in the electronic components segment(electronic components, semiconductors, EMS)

14
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■ Forecast for FY3/2015（million yen）

FY3/2013
FY3/2014
ChangesAmountPct.
AmountPct.
Packing and freight
2,569
9.4%
2,750
10.0%
181
R&D
219
0.8%
220
0.8%
1
Others
1,087
4.0%
1,330
4.8%
243
Total selling expenses
3,875
14.1%
4,300
15.6%
425
Depreciations
768
2.8%
750
2.7%
-18
Rent
2,061
7.5%
1,250
4.5%
-811
Personnel expenses
15,221
55.5%
15,00054.5%-221
Others
5,431
19.8%
6,200
22.5%
769
Total administrative
23,481
85.6%
23,20084.4%-281
Total SG&A expenses
27,416100.0%
27,500100.0%
84（million yen）

30,00027,41627,50025,000

Packing and freight
20,000

R&D
Selling others

15,000Depreciations
Rent

10,000

Personnel expenses
Administrative
others5,000

0Summary

FY3/2014

FY3/2015(P)■Selling, general and administrative expenses
Packing and freight:
Up 181 million yen because of sales growth
Rent:
Down 820 million yen because of the head office relocation
Personnel expenses:
Down 221 million yen

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topics(1) Initiatives of the fiscal year ended
March 2014
(2) Goals for the fiscal year ending
March 201516
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①Initiatives of the fiscal year ended

March 2014

Financial Highlights
Sales amount, profit mark increases both in sales andprofits from the prior quarter together➢Markets recovered➢Japan – Higher sales of electronic components and semiconductors used in communication and automotive products➢Overseas – Growth in EMS operations(1) Higher volume of business with Japanese companies(2) Enlarged overseas network (AD DEVICE (SHANGHAI), KAGA ELECTRONICS (SUZHOU), etc.)➢Sales of PCs and peripherals recovered due to replacement demand fueled by the end of Windows XP and the rush to buy before
the April 2014 consumption tax hike➢Sales and earnings at poorly performing subsidiaries recovered.

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① Initiatives of the fiscal year ended

March 2014

The October merger of KAGA DEVICES and ADM createdthe New KAGA DEVICES

Sells semiconductors and electronic parts and devices as theagent of Mitsubishi Electric, Renesas Electronics, SK hynix
Japan and other companies

FY3/15 sales
CEO
Activities

CapitalAffiliates＋

Sells semiconductors and electronic parts and devices as
the sales agent of Analog Devices, Omnivision Technology
and other companies

３２９bilion yen

Shigeru Matsushita
Sale of semiconductors and electronic parts and devices as the agent of Mitsubishi Electric, Renesas
Electronics, SK hynix Japan and other companies and as the sales agent of Analog Devices, Omnivision
Technology and other companies
395 million yen
KAGA DEVICES(H.K)LIMITED、 KAGA (SHENZHEN) TRADING CO., LTD 、KAGA DEVICES INDIA PRIVATE LIMITED＜ Expected synergies from the merger ＞
 Growth by sharing the two companies’ customers the products (higher sales) Growth of the overseas network (Hong Kong, Shenzhen, India, Singapore) Growth of functions by sharing technical teams (creation of new businesses)

Goal is to use merger synergies to increase sales to 50 billion yen in three years

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① Initiatives of the fiscal year ended

March 2014

December 19, 2013 – Resolution approved to liquidate CyberFront
KAGA ELECTRONICS acquired CyberFront Corporation in April 2011 andtook numerous actions to rebuild a sound base for operations. However, due
to the difficulty of improving operations, the decision was made to liquidate
this company. Liquidation proceedings are now under way.

CyberFront Corporation
Representative:
Activities:
Capital:Satoru Enomoto, Liquidator
Planning, development, production and sale of game software and application software
100 million yen

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① Initiatives of the fiscal year ended

March 2014

Demonstration Test of Multi e-Money Payment System for Amusement Centers
KAGA AMUSEMENT participated in a joint demonstration test of an e-money payment system foruse at game centers and other amusement facilities. The other participants were Yamato System
Development and Yamato Financial, which are members of the Yamato Holdings Group.
The goal is to supply an easy-to-use comprehensive infrastructure that reflects the distinctive
characteristics of the amusement industry. Discussions and studies will continue to prepare for thestart of sales of this new e-money payment system.

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① Initiatives of the fiscal year ended

March 2014

Participation in Solar Power (Mega Solar) Remote Monitoring Service
KAGA DEVICES started offering a connection box and cloud monitoring service for solar power
generation systems in April 2014. This business uses a connection box with a monitoring capability
that is made by Clean Energy Corporation Australia. Power storage, power conditioner and power
meter data are all monitored remotely. This system also greatly reduces the cost.

Ground-based mega-solar
system made by Clean Energy
Corporation

Connection box with storing
monitoring capability made by
Clean Energy Corporation

21© 20102014 KAGA©
KAGA ELECTRONICS
ELECTRONICS CO.,LTD
CO.,LTDAll
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Reserved.

②Goals for the fiscal year ending March 2015

Business Environment
Operating environment for the KAGA ELECTRONICS Group➢In Japan’s semiconductor market, there is significant demand but no prospects for growth.
➢Sales continue to be strong for automotive devices, environmental and energy equipment,
wireless and other communication equipment, and smartphones and tablets.

Actions of the KAGA ELECTRONICS Group①Focus on growing market sectors➢Automotive devices➢Wireless and other communications➢The environment and energy➢Medical services and health care➢Social infrastructure②Expand overseas operations➢Reinforce bases in Eastern and Southeast Asia
➢Add service bases in line with growth of overseas operations at Japanesecompanies➢Increase volume of business with companies in other countries22© 20102014 KAGA©
KAGA ELECTRONICS
ELECTRONICS CO.,LTD
CO.,LTDAll
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Reserved.

②Goals for the fiscal year ending March 2015
Eliminate waste to operate efficiently
Action – Improve poorly performing subsidiaries
FY3/13
Unprofitable subsidiaries 15 out of 50
Net losses at these subsidiaries 2.9 billion yen

FY3/14
Unprofitable subsidiaries 11 out of 50
Net losses at these subsidiaries 1.2billion yen

Big cut in subsidiary losses was a major cause of the FY3/14 recovery in consolidated earnings

Activities at poorly performing subsidiaries➢KAGA COMPONENTS➢KAGA HIGHTECH➢ADM➢CyberFront➢SI ELECTRONICS➢KAGA CREATE

Reorganized money-losing operations, cut production in Japan, joint
activities with other group companies
Used reorganization, reexamination of workforce composition and focus on
carefully selected businesses to improve profitability
Merged with KAGA DEVICES in October 2013, used the new structure to streamline operations
Liquidation resolution was approved in December 2013
Strengthened ability to capture technology development projects by transferring KAGA ELECTRONICS
technology operations to this company
A tight focus on strategic operations (event and content businesses were moved to another subsidiaryto allow this company to concentrate exclusively on the game business)➢Make operations profitable by reexamining current businesses and eliminating waste➢External consultants are currently studying management systems and structures23© 20102014 KAGA©
KAGA ELECTRONICS
ELECTRONICS CO.,LTD
CO.,LTDAll
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Reserved.

②Goals for the fiscal year ending March 2015
KAGA ELECTRONICS Group goals for FY3/15
Continue current initiatives based on the management philosophy of“Everything we do, we do for our customers.”

Goal
Place priority on profits. Aim for ordinary income of 10 billion yen.

➢ Improve the profitability of all business units by utilizing the originalityof the KAGA ELECTRONICS Group.
➢ Eliminate waste to operate efficiently
・Rebuild or shut down unprofitable businesses
・Rigorously cut costs24© 20102014 KAGA©
KAGA ELECTRONICS
ELECTRONICS CO.,LTD
CO.,LTDAll
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Reserved.

Contact: Public Relations Department
20Kandamatsunagacho,Chiyoda-ku,Tokyo 101-8629
TEL:+81-3-5657-0106
FAX:+81-3-3254-7132
E-mail： webmaster@taxan.co.jp
http://www.taxan.co.jp

25© 20102014 KAGA©
KAGA ELECTRONICS
ELECTRONICS CO.,LTD
CO.,LTDAll
All Rights
Rights Reserved.
Reserved.