August 5, 2021

Summary of Consolidated Financial Results
for the First Quarter Ended June 30, 2021 [Japan GAAP]
Name of Company:
Stock Code:
Stock Exchange Listing:
Representative

KAGA ELECTRONICS CO., LTD.
8154
URL: https://www.taxan.co.jp/
Tokyo Stock Exchange, First Section
Title: President & COO
Name: Ryoichi Kado
Title: Managing Director, Administration
Name: Eiji Kawamura
Contact Person
Headquarters
Phone:+81-(0)3-5657-0111
Date of filing of quarterly securities report (tentative):
August 13, 2021
Date of commencement of dividend payment (tentative):
Quarterly earnings supplementary explanatory documents: Yes
Quarterly earnings presentation:
No(Yen in millions, rounded down)
1. Financial results for the first quarter of the fiscal year ending March 2022 (April 1, 2021 – June30, 2021)(1) Result of operations (Consolidated, year-to-date)(Percentage figures represent year on year changes)
Profit attributable
Operating income Ordinary income
to owners ofparentNet sales
Million yen%

Million yen%

Million yen%

Million yen%

First quarter ended June 2021

105,94925.9

4,452 168.8

4,566 197.8

2,872 (66.6)

First quarter ended June 2020

84,130 (23.2)

1,656 (10.5)

1,533 (25.0)

8,598

536.8

Note: Comprehensive income: 1Q of FY3/2022: 3,383 million yen [(63.0%)] 1Q of FY3/2021: 9,148 million yen[ －%]Earnings per
share(diluted)

Earnings per
share
Yen

Yen

First quarter ended June 2021

104.55－First quarter ended June 2020

313.15－Note1:The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc. was applied
from the first quarter of the current fiscal year.
2:Provisional accounting standards related to a business combination were fixed at the end of the fiscal year ended
in March 2021. Figures for the first quarter of the fiscal year ended in March 2021 reflect the fixed content of theprovisional accounting standards.

(2) Financial Position (Consolidated)
Total assets

Net assets

Equity ratio

Million yen

Million yen%

As of June 30, 2021

228,819

97,081

40.6

As of March 31, 2021

237,004

95,062

38.4

Reference: Shareholdersʼ equity︓As of June 30, 2021: 92,942 million yen As of March 31, 2021: 90,967million yen
Note:The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc. was applied
from the first quarter of the current fiscal year.

2. Dividends
Dividend per share

1Q

2Q

3Q

Year-end

Full year

Yen

Yen

Yen

Yen

Yen

Fiscal year ended March 2021－

Fiscal year ending March 2022－

Fiscal year ending March 2022 (Forecast)

30.00

－

50.00

80.00

40.00

－

40.00

80.00

Notes: Change in the dividend forecast from the latest announcement: None
Breakdown of year-end dividend for FY3/21: Ordinary dividend: 30.00 yen; Extraordinary dividend: 20.00 yen3. Forecast for the fiscal year ending March 2022 (Consolidated, April 1, 2021 – March 31, 2022)(Percentage figures represent year on year changes)
Net sales

Full year

Operating income

Ordinary income

Million yen%

Million yen%

Million yen%

470,000

11.3

13,00013.4

12,000

6.7

Profit attributable

Earnings per

to owners of parent

shareMillion yen%

Yen

8,000 (29.8)

291.20Note: Change in the forecast from the latest announcement: None

* Notes(1) Changes in significant subsidiaries (Changes in specified subsidiaries accompanied by changes in thescope of consolidation):None(2) Use of accounting methods specifically for the preparation of the quarterly consolidated financial
statements: None
(3) Changes in accounting policies, estimates, and retrospective restatement(a) Changes due to revision of accounting standards: Yes(b) Changes other than (a): None(c) Changes in accounting estimates: None(d) Retrospective restatement: None
Note: For more information, please refer “２．Quarterly Consolidated Financial Statements and Major
Notes (3) Notes to quarterly consolidated financial statements (Changes in accounting
policies)” on page 9.
(4) Number of shares outstanding (common stock)(a) Shares outstanding (including treasury shares)
As of June 30, 2021:(b) Treasury shares
As of June 30, 2021:

28,702,118

As of March 31, 2021

28,702,118

1,230,019

As of March 31, 2021

1,229,877(c) Average number of shares (quarterly consolidated during the period)
Period ended June 30, 2021:
27,472,177
Period ended June 30, 2020: 27,458,812* The quarterly audit procedures by a certified public accountant or auditing firm are not applicable to thisQuarterly Financial Results report.
* Cautionary statement regarding forecasts of operating results and special notes(Caution regarding forward-looking statements)
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. For conditions asassumption for earnings forecast and cautionary statement regarding use of the forecast, please see “1.
Results of Operations, (3) Qualitative information on consolidated earnings forecast” on page 4.
(How to obtain supplementary materials on quarterly financial results)
The Company also plans to post the quarterly earnings supplementary explanatory documents on its
website promptly after announcing financial results.

Index for Supplementary Information
1. Results of Operations ............................................................................................ 2(1) Overview of consolidated business performance ................................................ 2(2) Overview of financial condition ........................................................................ 4(3) Qualitative information on consolidated earnings forecast ................................... 4
2. Quarterly Consolidated Financial Statements and Major Notes ................................... 5(1) Quarterly consolidated balance sheet................................................................ 5(2) Quarterly consolidated statements of income and comprehensive income ............. 7
For the first quarter (April 1, 2021 - June 30, 2021) ......................................... 7(3) Notes to quarterly consolidated financial statements .......................................... 9(Notes to going concern assumptions) ............................................................ 9(Significant change in shareholdersʼ equity) ..................................................... 9(Changes in accounting policies) .................................................................... 9(Additional information) ................................................................................ 9(Segment information)................................................................................ 10

1

1. Results of Operations(1) Overview of consolidated business performance
During the first quarter of the consolidated fiscal period under review, there was aresurgence of COVID-19 around the world, including in Japan, and there is still no indicationof when outbreaks will subside. However, economic activity is recovering compared with
one year earlier in China, which was quick to begin its vaccine rollout, as well as in Europe,
the US and other key countries. There were signs of a recovery in capital investment andmanufacturing activity in the manufacturing industry overall.
In the electronics industry to which the Group belongs, there was a shortage in the supplyof electronic parts such as semiconductors in some areas due to an overall recovery indemand. Although this affected manufacturing plans in the auto industry, even among
electronic equipment manufacturers, overall demand remained robust on the back of therecovery in manufacturing activity.
As a result of these factors, net sales in the first quarter of the consolidated fiscal year
rose 25.9% year on year to 105,949 million yen. This growth was driven by the electronic
components business, which is the Groupʼs core business.
In terms of income, in addition to an increase in gross profit following higher sales andimprovements of the gross profit rate, the Company continued the efforts begun in theprevious fiscal year to reduce and scale back expenses, starting with promoting the use of
telework and online meetings, among other measures. As a result, operating income rose
168.8% year on year to 4,452 million yen and ordinary income climbed 197.8% to 4,566
million yen, which were record highs for a first quarter. Profit attributable to owners ofparent was down 66.6% year on year to 2,872 million yen due to the absence of the 7,963
million yen “gain on bargain purchase” posted in the previous fiscal year as extraordinary
income following a corporate acquisition.
The fiscal year ending in March 2022 will be the last year of the Groupʼs three-year
management plan, Medium-Term Management Plan 2021 (2019–2021), which began in
April 2019. In addition to an overall recovery in demand, a recovery in revenue in theelectronic components business, including steady progress in PMI at Kaga FEI Co., Ltd.,and EXCEL Co., Ltd., drove the Group's business performance. This made for a good start
toward achieving the planʼs targets.
The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31,2020), etc. was applied from the first quarter of the current fiscal year. This lowered net
sales in the first quarter by 1,577million yen. For details, refer to “2. Quarterly Consolidated
Financial Statements and Major Notes (3) Notes to quarterly consolidated financial
statements (Changes to accounting policies).”
FY 2021/3 1Q

FY 2022/3 1Q(April 1, 2020 –(April 1, 2021 –June 30, 2020)

June 30, 2021)（Million yen）

（Million yen）

Net sales

84,130105,949

21,81925.9％Gross profit

9,997

13,550

3,553

35.5％

（Margin）

11.9％

12.8％

0.9pt

－

SG&A

8,341

9,098

757

9.1％

Operating income

1,656

4,452

2,796

168.8％

Ordinary income

1,533

4,566

3,033

197.8％

Profit before income taxes

9,066

4,129

(4,937)(54.5％)

8,598

2,872

(5,726)(66.6％)

107.62yen

109.49yen

1.87yen－Profit attributable to ownersof parent

YoY（Million yen）

Exchange Rate
(Average rate during the year period)

USD

2

Business segment performance was as follows.
(a) Electronic components (Development, manufacture and sale of semiconductors,
general electronic components and other products, the electronics manufacturingservice (EMS), and other activities)
In this business, the components sales business experienced a shortfall in the supplyof electronic parts such as semiconductors in some areas, but results were solid due torobust demand from a wide range of industries. In the EMS business, demand from theautomotive, industrial equipment, and medical sector remained solid.
As a result, net sales increased by 32.9% year on year to 90,624 million yen, andsegment income increased by 212.0% year on year to 3,699 million yen.
Since the fiscal year of the overseas subsidiaries of EXCEL, which became
consolidated in April 2020, ends in December, earnings for January–March 2020, prior
to consolidation, were not posted as quarterly data for the previous fiscal year, but theJanuary–March 2021 results were posted for this consolidated fiscal year
(Note ) Electronics Manufacturing Service: Provision of product development and manufacturing services onan outsourcing basis.

(b) Information equipment (Sales of PCs, PC peripherals, home electric appliances,photograph and imaging products, original brand products, and other products)
In this business, sales of PCs to educational institutions and PC peripherals such as
security software remained strong, but sales declined due to a reactionary decline in thesale of PCs for remote work and delays to work in the LED installation businessnecessitated by the customerʼs circumstances, among other factors.
As a result, net sales decreased by 15.2% year on year to 10,636 million yen, andsegment income decreased by 2.6% year on year to 568 million yen.
(c) Software (Production of computer graphics, planning and development of amusement
products, and other activities)
In this business, the development of games for smartphones was solid due to stay-athome demand, but development costs and other expenses increased.
As a result, net sales increased by 15.5% year on year to 568 million yen, andsegment loss of 67 million yen was recorded (44 million yen of segment loss in thesame period of the previous fiscal year).
(d) Others (Repair and support for electronics equipment, and sales of amusement
equipment and sports goods, and others)
In this business, the PC and PC peripheral recycling business was strong. In addition,
voluntary restrictions on operating hours at large commercial facilities and others aspart of COVID-19 measures were relaxed, and the sale of game equipment for theamusement industry as well as golf products increased.
As a result, net sales increased by 41.9% year on year to 4,120 million yen, andsegment income of 217 million yen was recorded (101 million yen of segment loss inthe same period of the previous fiscal year).
Financial Results by Business Segment
FY 2020/3 1Q(April 1, 2020 –June 30, 2020)

FY 2022/3 1Q(April 1, 2021 –June 30, 2021)

YoY（Million yen）

（Million yen）

（Million yen）

Electronic

Net sales

68,196

90,62422,42732.9％

components

Segment income

1,185

3,699

2,514

212.0％

Information

Net sales

12,537

10,636(1,901)(15.2％)

equipment

Segment income

583

568

(14)

(2.6％)

Software

Net sales

491

568

76

15.5％

Segment income

(44)

(67)

(22)

－

Net sales

2,904

4,120

1,216

41.9％

Segment income

(101)

217

319

－

Net sales

84,130105,949

21,81925.9％

Segment income

1,656

4,452

2,796

168.8％

OthersTotal

Note: “Segment income” shows unadjusted figures for each business segment and adjusted figures
for the total.

3(2) Overview of financial condition
Assets, liabilities and net assets
Total assets as of June 30, 2021 decreased by 8,185 million yen from March 31, 2020,
to 228,819 million yen.
Current assets decreased by 8,344 million yen compared with the end of the previous
fiscal year, to 191,834 million yen. This was primarily due to a 16,804 million yen decreasein notes and accounts receivable – trade and a 9,595 million yen increase in merchandiseand finished goods.
Non-current assets increased by 159 million yen from March 31, 2021, to 36,984
million yen.
Liabilities decreased by 10,204 million yen from March 31, 2021, to 131,738 million
yen. This is primarily due to a decrease of 8,979 million yen in notes and accounts
payable – trade, a decrease of 1,314 million yen in income taxes payable.
Net assets increased by 2,018 million yen from March 31, 2021, to 97,081 million yen.
This is primarily the result of recording 2,872 million yen of profit attributable to ownersof the parent.

(3) Qualitative information on consolidated earnings forecast
There are no changes in the consolidated earnings forecasts for the current consolidated
fiscal year from the forecasts announced on May 13, 2021.
(Reference) Forecast for the fiscal year ending March 2022 and Medium-term Management Plan 2021
Management Targets
Results

Forecasts

FY2021/3

FY2022/3

YoY

Management
Targets FY2021（Million yen）

（Million yen）

Net Sales

422,365

470,000

Operating Income

11,467

13,00013.4％

13,000Ordinary Income

11,241

12,000

6.7％－

11,3998,000(29.8％)

－

13.5％

8.5％

(5.0pt)8% or higher

Profit attributable toowners of parent
ＲＯＥ

11.3％

（Million yen）

500,000

Note: The above earnings forecasts are based on the information currently available to theCompany on the date of release and certain assumptions deemed reasonable. Actual results
may vary from the forecast for a variety of reasons.

42. Quarterly Consolidated Financial Statements and Major Notes(1) Quarterly consolidated balance sheet(Million yen)
Fiscal year ended March 2021 First quarter ended June 2021
(As of March 31, 2021)(As of June 30, 2021)

ASSETS
Current assets
Cash and deposits

45,63640,239103,773

86,969

4,621

5,043

302

290

Merchandise and finished goods

29,72739,323Work in process

1,280

1,643

Raw materials and supplies

6,940

9,019

Other

9,921

10,525

Allowance for doubtful accounts(2,024)(1,220)Total current assets

200,179

191,834

Buildings and structures, net

7,021

6,750

Machinery, equipment andvehicles, net

4,642

5,006

Tools, furniture and fixtures, net

1,378

1,321

Land

5,074

5,074

Construction in progress

107

75

Total property, plant andequipment

18,225

18,229Goodwill

209

180

Software

2,338

2,816

62

56

2,609

3,053

Investment securities

10,771

11,007

Deferred tax assets

2,252

1,758

Guarantee deposits

931

897

Insurance funds

910

911

Other

1,629

2,417

Allowance for doubtful accounts(504)(1,290)Total investments and other assets

15,99015,701

Total non-current assets

36,82536,984

237,004

228,819

Notes and accounts receivable trade
Electronically recorded monetaryclaims - operating
Securities

Non-current assets
Property, plant and equipment

Intangible assets

Other
Total intangible assets
Investments and other assets

Total assets

5

(Million yen)
Fiscal year ended March 2021 First quarter ended June 2021
(As of March 31, 2021)(As of June 30, 2021)

LIABILITIESCurrent liabilities
Notes and accounts payable - trade

79,85470,874

Short-term loans payable

10,80012,760Accrued expenses

5,957

5,229

Income taxes payable

2,136

822

126

13

9,642

8,639

108,517

98,339Long-term loans payable

25,16625,158Deferred tax liabilities

1,685

1,866

106

111

Net defined benefit liability

2,272

2,274

Asset retirement obligations

343

344

Other

3,850

3,644

Total non-current liabilities

33,42433,398141,942

131,738

Capital stock

12,133

12,133

Capital surplus

14,327

14,327Retained earnings

64,56866,074

Treasury shares(1,984)(1,984)

Total shareholdersʼ equity

89,04590,551

1,378

1,275

50

14

470

1,074

21

25

1,921

2,391

Non-controlling interests

4,095

4,138

Total net assets

95,062

97,081

237,004

228,819

Provision for directorsʼ bonuses
Other
Total current liabilities
Non-current liabilities

Provision for directorsʼ retirement
benefits

Total liabilities
NET ASSETS
Shareholdersʼ equity

Accumulated other comprehensive
incomeValuation difference on availablefor-sale securities
Deferred gains or losses on hedges
Foreign currency translation
adjustment
Remeasurements of defined benefit
plans
Total accumulated othercomprehensive income

Total liabilities and net assets

6

(2) Quarterly consolidated statements of income and comprehensive income
For the First quarter (April 1, 2021 – June 30, 2021)
First quarter ended June 2020
(April 1, 2020– June 30,2020)(Million yen)First quarter ended June 2021
(April 1, 2021 – June 30, 2021)

Net sales

84,130105,949

Cost of sales

74,132

92,398Gross profit
Selling, general and administrative
expenses

9,997

13,550

8,341

9,098

Operating income

1,656

4,452

Interest income

29

28

Dividends income

74

63

Foreign exchange gains－

106

Commission income

50

60

Other

142

137

Total non-operating income

296

394

Non-operating income

Non-operating expenses
Interest expenses
Share of loss of entities accounted forusing equity method
Foreign exchange losses

68

74

150

171

184

－

Other

15

34

Total non-operating expenses

419

280

1,533

4,566

0

0

39

9

7,963

－

Gain on sale of businesses

7

7

Other

2

－

8,012

16

－

31

12

6

421

6

－

109

－

281

Other

45

18

Total extraordinary loss

480

454

Profit before income taxes

9,066

4,129

Income taxes - current

292

478

Income taxes - deferred

177

741

Total income taxes

470

1,220

8,596

2,908

Ordinary income
Extraordinary income

Gain on sales of non-current
assetsGain on sales of investment
securities
Gain on bargain purchaseTotal Extraordinary income
Extraordinary loss

Impairment loss
Loss on retirement of non-current
assetsLoss on valuation of investment
securities

Loss on liquidation of subsidiaries
and associates
Provision of allowance for doubtful
accounts

Profit7

(Million yen)First quarter ended June 2020
(April 1, 2020– June 30,2020)

First quarter ended June 2021
(April 1, 2021 – June 30, 2021)

Profit attributable to owners of parent
Profit (loss) attributable to non-controllinginterests
Other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges

8,598

2,872

(2)

36

534

(104)

(14)

(36)

Foreign currency translation adjustment
Remeasurements of defined benefit
plans, net of tax
Share of other comprehensive incomeof associates accounted for using
equity method
Total other comprehensive income

(42)

567

7

4

67

44

552

475

9,148

3,383

9,154

3,341

(6)

42

Comprehensive income
Comprehensive income attributable toowners of parent
Comprehensive income attributable tonon-controlling interests8(3) Notes to quarterly consolidated financial statements(Notes to going concern assumptions)Not applicable(Significant change in shareholdersʼ equity)
Not applicable(Changes to Accounting Policies)(Application of the Accounting Standard for Revenue Recognition, etc.)
The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ
Statement No. 29, March 31, 2020), etc. effective from the beginning of the first quarterof the current fiscal year, and it recognizes revenue as the amount expected to bereceived in exchange for goods or services when control over the promised goods andservices passes over to the customer.
As a result, in the case of a performance obligation in which the promise with thecustomer involves the supply of goods or services provided by another party, the net
amount received as the agent is recognized as revenue.
The application of the Accounting Standard for Revenue Recognition, etc. is subject tothe transitional treatment provided for in the proviso of Paragraph 84 of the AccountingStandard for Revenue Recognition. The cumulative effect of the retrospective application,
assuming the new accounting policy had been applied to periods prior to the beginning of
the first quarter, was added to or subtracted from the beginning balance of retained
earnings of the first quarter, and thus the new accounting policy was applied from the
beginning balance.
However, the method provided for in Paragraph 86 of the Accounting Standard for
Revenue Recognition was applied so that the new accounting policy was not
retrospectively applied to contracts where recognitions of nearly all the revenue amounts
for periods prior to the beginning of the first quarter were subject to the previous
treatment.
As a result, compared to the previous method, in this first quarter, net sales decreased
by 1,577 million yen, and the impact on operating income, ordinary income, and profit
before income taxes was minimal.
(Application of Accounting Standards for Fair Value Measurement)
The “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4,2019) was applied from the start of the first quarter of this consolidated fiscal year, andin accordance with the transitional treatment set forth in Article 19 of “AccountingStandard for Fair Value Measurement” and Article 44-2 of “Accounting Standard for
Financial Instruments” (ASBJ Statement No. 10, July 4, 2019), the Company will continue
to apply new accounting policies prescribed by “Accounting Standard for Fair Value
Measurement” and other standards into the future. The effects of this adoption on thequarterly consolidated financial statements are immaterial.
(Additional information)(Accounting estimates associated with the COVID-19 pandemic)
Accounting estimates such as of impairment of non-current assets and collectability ofdeferred tax assets are made based on information that is available as of June 30, 2021
and do not include significant changes from the financial statement for the previous
consolidated fiscal year.

9

(Segment information)
Ⅰ. For the first quarter ended June 2020 (April 1, 2020 – June 30, 2020)
Information about net sales and income (loss) by reportable segments(Million yen)
Reportable segments
Electronic

Information

components equipment

SoftwareAdjustment Consolidated

Others

Total(Note 1)

(Note 2)

Net sales:
Sales to externalcustomers

68,196

12,537491

2,904

84,130－84,130Inter-segment
sales or transfers

615

1,072

125

874

2,687

(2,687)－

68,811

13,610617

3,778

86,817(2,687)

84,130

1,185

583

(44)

(101)

1,622

33

1,656

Total
Segment income(loss)
Notes:

1. Adjustment in segment income of 33 million yen includes 33 million yen for elimination of inter-segment
trade.
2. Segment income (loss) is adjusted for operating income on the quarterly consolidated statements ofincome and comprehensive income.

Ⅱ. For the first quarter ended June 2021 (April 1, 2021 – June 30, 2021)
Information about net sales and income (loss) by reportable segments(Million yen)
Reportable segments
Electronic

Information

components equipment

SoftwareAdjustment Consolidated

Others

Total(Note 1)

(Note 2)

Net sales:
Sales to externalcustomers

90,624

10,636568

4,120

105,949－

105,949

Inter-segment
sales or transfers

949

1,171

49

1,547

3,718

(3,718)－91,573

11,807

617

5,668

109,667(3,718)105,949

3,699

568

(67)

217

4,418

33

4,452

Total
Segment income(loss)
Notes:

1. Adjustment in segment income of 33 million yen includes 33 million yen for elimination of inter-segment
trade.
2. Segment income (loss) is adjusted for operating income on the quarterly consolidated statements ofincome and comprehensive income.

10