January 31, 2013

Summary of Consolidated Financial Results
For the Third Quarter Ended December 31, 2012 [Japan GAAP]
Name of Company:
Stock Code:
Stock Exchange Listing:
URL:
Representative
Title:
Name:
Contact Person
Title:Name:
Phone:
Date of quarterly securities report (tentative):
Date of commencement of dividend payment (tentative):
Quarterly earnings supplementary explanatory documents:
Quarterly earnings presentation:

1.

KAGA ELECTRONICS CO., LTD.
8154
Tokyo Stock Exchange, First Section
http://www.taxan.co.jp/
President & COO
Tomohisa Tsukamoto
Director, Finance & Administration Headquarters
Eiji Kawamura+81-(0)3-4455-3111
February 13, 2013
None
None

(Yen in millions, rounded down)
Financial results for the first three quarters of the fiscal year ending March 2013 (April 1, 2012 – December 31, 2012)(1) Result of operations (Consolidated, year-to-date)(Percentage figures represent year on year changes)
Net sales

Operating income

Ordinary income

Million yen% Million yen% Million yen
First three quarters of FY3/2013
156,891
-9.6
-39
351
First three quarters of FY3/2012
173,565
-2.2
1,151
-63.1
1,277
Note: Comprehensive income: First three quarters of FY3/2013:-470 million yen (-%)
First three quarters of FY3/2012: -1,770 million yen (-%)
Net income per share
Yen-29.62-15.60First three quarters of FY3/2013
First three quarters of FY3/2012

Net income% Million yen
-72.5
-817
-58.0
-430

%
-

Net income per share fully diluted
Yen-(2) Financial Position (Consolidated)
Total assets

Net assets

Equity ratio

Million yen
109,297

Million yen
46,512%41.4

As of March 31, 2012
114,714
Reference: Shareholders’ equity
As of December 31, 2012:
45,248 million yen

47,936

40.5

As of December 31, 20122.

As of March 31, 2012:

Dividends
End of 1Q
Yen-

End of 2Q
Yen
15.00
15.00

Dividend per share
End of 3Q
Yen-

Fiscal year ended March 2012
Fiscal year ending March 2013
Fiscal year ending March 2013 (est.)
Note: Change in the estimation of dividend from the latest announcement: None
3.

46,410 million yen

End of FY
Yen
15.00

Full year
Yen
30.00

15.00

30.00

Forecast for the fiscal year ending March 2013 (Consolidated, April 1, 2012 to March 31, 2013)(Percentage figures represent year on year changes)
Net income
Net sales
Operating income
Ordinary income
Net income
per share
Million yen% Million yen% Million yen% Million yen%
Yen
Full year
216,000
-6.0
500
-75.8
1,000
-61.1
100
-89.1
3.62
Note: Change in the forecast from the latest announcement: Yes
Please refer “Notice of Revision in Forecast for Fiscal Year Ending March 2013” announced on 31 January 2013.

*

Notes
(1) Changes in significant subsidiaries (Changes in specific subsidiaries accompanied by changes in the scope of
consolidation): None
(2) Use of of accounting methods specifically for the preparation of the quarterly consolidated financial statements: None
(3) Changes in accounting principles and estimates, and retrospective restatements(a) Changes due to revision of accounting standards: Yes(b) Changes other than in (a): None(c) Changes in accounting estimates: Yes(d) Retrospective restatements: None
Note: Please refer 2. Other information (3) Changes in accounting principles and estimates, and retrospective restatementon page 3 of Supplementary Information for more details.
(4) Number of shares outstanding (common stock)(a) Shares outstanding (including treasury stock)
As of December 31, 2012:
28,702,118

As of March 31, 2012:

28,702,118

As of March 31, 2012:

1,105,201(c) Average number of shares (quarterly consolidated cumulative period)
Period ended December 31, 2012:
27,596,769
Period ended December 31, 2011:

27,597,345(b) Treasury stock
As of December 31, 2012:

1,105,556* Description of quarterly review procedure implementation status
It is under the quarterly review procedure process based upon the Financial Instruments and Exchange Act at the time of disclosureof this report.
* Cautionary statement regarding forecasts of operating results and special notes
Forward-looking statements in these materials are based on information available to management at the time this report was
prepared and assumptions that management believes are reasonable. Actual results may differ significantly from these statements
for a number of reasons. Please refer (3) Forecast in 1. Results of Operations on page 3 of Supplementary Information for further
information.

Index for Supplementary Information
1.

2.

3.

Results of Operations.................................................................................................................................................................2(1)

Overview on consolidated business performance .............................................................................................................2(2)

Overview of financial condition .......................................................................................................................................2(3)

Forecast for fiscal year ending in March 2013 .................................................................................................................3

Other Information ......................................................................................................................................................................3(1)

Changes in significant subsidiaries:..................................................................................................................................3(2)

Use of of accounting methods specifically for the preparation of the quarterly consolidated financial statements: .........3(3)

Changes in accounting principles and estimates, and retrospective restatements: ............................................................3

Quarterly Consolidated Financial Statements............................................................................................................................4(1)

Quarterly consolidated balance sheet ...............................................................................................................................4(2)

Quarterly consolidated statements of income and consolidated statements of comprehensive income ............................6(3)

Notes to going concern assumptions ................................................................................................................................8(4)

Segment information ........................................................................................................................................................8(5)

Notes on significant change in shareholders’ equity: .......................................................................................................91

1.

Results of Operations(1)

Overview on consolidated business performance
In the first three quarters of the fiscal year, there was a recovery in the Japanese economy as a result of supportive factors
including demand associated with earthquake reconstruction and the effects of government measures to stimulate theeconomy but the persistence of the debt crisis in Europe and further slowing in the rate of global economic growth resulted
in the outlook for the domestic economy remaining unclear.
In the electronics industry, market conditions for digital consumer electronics in which KAGA ELECTRONICS operates,
the market for portable information devices such as smartphones and tablets continued to grow but the market environment
for the home electronics products, particularly flat-panel televisions, remained difficult as overall demand failed to recover.
In this environment, the KAGA ELECTRONICS Group focused on conducting aggressive marketing activities to boost
growth of in-vehicle electronic components, electronic components for telecommunications equipment and LED lamps andother environmental products on the basis of our management philosophy of “Everything we do, we do for our customers”
while reinforcing collaboration among group companies. As a result, there were increases in sales of automotive products
and in overseas EMS* sales in the first three quarters of the current fiscal year. But sales in areas related to the Japanese
amusement sector decreased and there was also weakness in sales of consumer information equipment and in the software
business. Consequently, consolidated net sales decreased 9.6% from one year earlier to 156,891 million yen in the first
three quarters of the current fiscal year. There was an operating loss of 39 million yen compared with operating income of
1,151 million yen one year earlier and ordinary income decreased 72.5% to 351 million yen. After an asset impairment
charge for fixed assets at a poorly performing subsidiary, the reversal of deferred tax assets and other items, there was a net
loss of 817 million yen in the first three quarters of the current fiscal year compared with a net loss of 430 million yen one
year earlier.
* Abbreviation for Electronics Manufacturing Service which is a term used for the provision of product development andmanufacturing services on an outsourcing basis.
Business segment performance was as follows.
(a) Electronic components (Development, manufacture and sale of semiconductors, general electronic components andother products, electronic manufacturing service (EMS), and other activities)
In the Electronics Components segment, there was growth in sales of in-vehicle electronic components andsemiconductors and in the EMS business, mainly for office and air conditioning equipment overseas. But in Japanorders were lower for electronic components used in amusement devices and for semiconductors and other products.
As a result, sales decreased 5.3% to 117,782 million yen and operating income was down 28.2% to 878 million yen.
(b) Information equipment (Sales of PCs, PC peripherals, photographic and imaging products, original-brand products, andother products)
The Information Equipment business took measures to increase sales of existing products and add new products.
However, there was a decline in sales mainly because of lower sales of personal computers and the negative impact ofchanges in sales and distribution channels for memory-card products sold at large consumer electronics stores andspecialty shops. The result was a 26.6% decrease in sales to 28,771 million yen and an operating loss of 513 million
yen compared with a 313 million yen loss one year earlier.
(c) Software (Production of computer graphics, planning and development of amusement products, and other activities)
The Software business segment concentrated its activities on the production of computer graphics for animation
applications, and sales of image processing for amusement equipment but a decline in sales of game software andadditional time required for the development of this software resulted in sales decreasing 19.2% to 1,976 million yen.
The segment recorded an operating loss of 469 million yen compared with operating income of 66 million yen one year
earlier.
(d) Others (Electronic device repairs and support, sales of sporting goods, and other activities)
There was growth in amusement equipment and sales of golfing products showed a recovery. As a result, sales
increased 11.7% to 8,361 million yen. However, due mainly to higher selling, general and administrative expenses
associated with growth in the scale of operations, operating income decreased 53.5% on one year earlier to 113 million
yen.

(2)

Overview of financial condition
Assets, liabilities and net assets
Assets totaled 109,297 million yen at the end of the third quarter, 5,417 million yen less than at the end of the previous
fiscal year mainly because of a decrease in accounts receivable.
Liabilities decreased 3,993 million yen to 62,784 million yen mainly because of a decrease in notes and accounts payabletrade.
Net assets decreased 1,423 million yen to 46,512 million yen. This was due primarily to the net loss for the quarter andpayment of dividends.

2

(3)

Forecast for fiscal year ending March 2013(a) Consolidated forecast for the fiscal year ending March 2013 (April 1, 2012 – March 31, 2013)
Net Sales

OperatingincomeMillion yen
1,500

Ordinary
incomeMillion yen
1,800

Million yen
300

Net income
per share
Yen
10.87

1,000

100

3.62

-800

-200

-

-66.7

-44.4

-66.7

-

2,067

2,569

914

33.13

Previous forecast (A)Million yen
230,000

Revised forecast (B)216,000

500

Difference (B-A)-14,000-1,000-6.1
229,856

Difference (%)(Ref.) Previous fiscal year
(Fiscal year ended March 2012)

Net income(b) Reason for revisions
We have revised the forecast for the current fiscal year as shown above because the slowdown in the global economy
triggered by the European debt crisis has caused recovery in demand for semiconductors and electronic components for
consumer and industrial equipment and for our EMS business to be further delayed and because sales of consumer
information equipment also remain weak.

2.

Other Information(1)

Changes in significant subsidiaries:
None

(2)

Use of of accounting methods specifically for the preparation of the quarterly consolidated financial statements:
None

(3)

Changes in accounting principles and estimates, and retrospective restatements:(Changes in accounting policies for items that are difficult to categorize as changes in accounting estimates)
In accordance with revisions to the Corporation Tax Act, starting with the first quarter of the current fiscal year, KAGAELECTRONICS and its consolidated subsidiaries in Japan are calculating depreciation for property, plant and equipmentthat was acquired on or after April 1, 2012 by using the method based on the revised Corporation Tax Act. The effect of
this change on earnings was immaterial.

3

3.

Quarterly Consolidated Financial Statements(1)

Quarterly consolidated balance sheet(Million yen)
Fiscal year ended March 2012
(As of March 31, 2012)ASSETS
Current assets
Cash and cash equivalents
Notes and accounts receivable-tradeMarketable securities
Merchandize and finished goods
Work in process
Raw materials and other supplies
Deferred tax assets
OthersAllowance for doubtful receivables

Third quarter ended December 2012
(As of December 31, 2012)

9,775
55,97974
17,104
334
4,115
861
6,272
(144)

11,27349,37378
16,629
771
4,556
638
4,071
(73)

94,37487,319Fixed assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Tools, furniture and fixtures, net
LandConstruction in progress

2,945
1,492
926
4,077
45

3,107
1,606
938
4,304
606

Total property, plant and equipment

9,487

10,564

253
800
1,191

843
477
1,110

2,245

2,431

Investments and other assets
Investment securities
Deferred tax assets
OthersAllowance for doubtful receivables

4,032
341
5,911
(1,678)

4,463
375
5,382
(1,239)Total investments and other assets

8,607

8,982

Total current assets

Intangible assets
Goodwill
Software
OthersTotal intangible assets

Total fixed assets
Total assets

4

20,34021,978

114,714109,297(Million yen)
Fiscal year ended March 2012 Third quarter ended December 2012
(As of March 31, 2012)(As of December 31, 2012)
LIABILITIESCurrent liabilities
Notes and accounts payable-trade
Short-term loans payable
Income taxes payable
OthersTotal current liabilities
Noncurrent liabilities
Long-term loans payable
Provision for retirement benefits
Provision for directors' retirement benefits
OthersTotal noncurrent liabilities

41,74811,084
1,082
5,558

35,484
11,696494
5,075

59,47452,751

2,833
1,579
1,399
1,491

5,487
1,620
1,374
1,551

7,303

10,033

Total liabilities

66,77762,784

NET ASSETS
Shareholder’s equity
Capital stock
Capital surplus
Retained earnings
Treasury stock

12,133
13,91225,038(1,333)

12,133
13,912
23,393(1,333)49,751

48,106(653)(24)(2,663)(592)(34)(2,231)(3,341)(2,858)

0
1,526

0
1,264

Total shareholder’s equity
Valuation and translation adjustments
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Total valuation and translation adjustments
Subscription rights to shares
Minority interests
Total net assets
Total liabilities and net assets

547,936

46,512

114,714109,297

(2)Quarterly consolidated statements of income and consolidated statements of comprehensive income
For the first three quarters (April 1, 2012 – December 31, 2012)(Million yen)
Third quarter ended December 2011
(April 1, 2011 - December 31, 2011)

Third quarter ended December 2012
(April 1, 2012 - December 31, 2012)

Net sales
Cost of sales

173,565
152,425

156,891
137,663

Gross profit

21,14019,228Selling, general and administrative expenses

19,98819,268Operating income (loss)

1,151

(39)

Non-operating income
Interest income
Dividend income
Commission income
Others

45
66
127
304

29
69
130
356

544

585

109
231
76

100
94

418

194

1,277

351

11
195
0

5
6
365
-

207

377

36
133
3
1,050
42

3
117
122
80
74
42

Total non-operating income
Non-operating expenses
Interest expense
Foreign exchange losses
OthersTotal non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Gain on sales of investment securities
Gain on sales of subsidiaries and affiliates' stocks
Insurance income
OthersTotal extraordinary income
Extraordinary losses
Loss on retirement of noncurrent assets
Loss on valuation of investment securities
Impairment loss
Loss on disaster
Litigation settlement
Business structure improvement expenses
Others1,265

440

Income before income taxes and minority interests

219

289

Income taxes-current
Income taxes-deferred

880
(262)

797
446

Total income taxes
Income (loss) before minority interests

617
(398)

Total extraordinary losses

Minority interests in income (loss)
Net income (loss)

32

1,244
(955)
(138)

(430)

(817)

Minority interests in income (loss)

32

(138)

(398)

(955)

Income (loss) before minority interests

6

Third quarter ended December 2011
(April 1, 2011 - December 31, 2011)

Third quarter ended December 2012
(April 1, 2012 - December 31, 2012)

(644)
(0)
(727)

65
(9)
428

(1,372)484(1,770)(470)

Other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of
the parent
Comprehensive income attributable to minority
interests(1,803)
32

7

(334)
(136)

(3)

Notes to going concern assumptions
None

(4)

Segment information(Segment information)
For the first three quarters ended December 2011 (April 1, 201 – December 31, 2011)
1. Information about sales and income (loss) by reportable segments
Reporting segments(Million yen)Amount in the
consolidated statements
of income andAdjustments
consolidated statements(Note 1)of comprehensive
income(Note 2)

Electronic
components

Informationequipment

Software

OthersTotal

Net salesof which to outside
customersof which intersegment

124,428

39,207

2,445

7,484

173,565-

173,565

1,170

583

2,313

1,931

5,999

(5,999)-Total

125,598

39,791

4,758

9,416

179,565(5,999)173,565

Segment income
1,223
(313)
66
243
1,220
(68)
1,151
(loss)
Note: 1. Adjustment of segment loss of 68 million yen includes -8 million yen of elimination of inter-segment trade and -59
million yen of amortization of goodwill.
2. Segment income includes adjustments to match operating income as presented in the consolidated statement ofincome and statement of comprehensive income.
2. Information about impairment losses on fixed assets and goodwill by reportable segments(Significant impairment losses on fixed assets)
Omitted because insufficiently significant(Major changes in goodwill)
None

8For the first three quarters ended December 2012 (April 1, 2012 – December 31, 2012)
1. Information about sales and income (loss) by reportable segments
Reporting segments(Million yen)Amount in the
consolidated statements
of income andAdjustments
consolidated statements(Note 1)of comprehensive
income(Note 2)

Electronic
components

Informationequipment

Software

OthersTotal

Net salesof which to outside
customersof which intersegment

117,782

28,771

1,976

8,361

156,891-

156,891

1,018

509

1,259

1,462

4,249

(4,249)-Total

118,800

29,281

3,236

9,823

161,141(4,249)156,891

Segment income
878
(513)
(469)
113
9
(48)
(39)
(loss)
Note: 1. Adjustment of segment loss of 48 million yen includes -1 million yen of elimination of inter-segment trade and -50
million yen of amortization of goodwill.
2. Segment income includes adjustments to match operating income as presented in the consolidated statement ofincome and statement of comprehensive income.
2. Information about impairment losses on fixed assets and goodwill by reportable segments(Significant impairment losses on fixed assets)
In the Information equipment segment, asset impairment losses of 122 million yen were recognized on fixed
assets in the third quarter of the fiscal year as a result of a decline in earnings.
(Major changes in goodwill)In the Electronic components segment, goodwill was booked due to the merger of AD DEVICECORPORATION and AS Device Co., Ltd. The increase in goodwill in the first three quarters of the current
fiscal year resulting from this merger was 718 million yen.
(5)

Notes on significant change in shareholders’ equity:None9