February 7, 2023

Summary of Consolidated Financial Results
for the Third Quarter Ended December 31, 2022 [Japan GAAP]
Name of Company:
Stock Code:
Stock Exchange Listing:

KAGA ELECTRONICS CO., LTD.
8154
URL: https://www.taxan.co.jp/
Tokyo Stock Exchange, Prime Market
Title: Representative Director,
Representative
Name: Ryoichi Kado
President & COO
Title: Director, Managing Executive Officer
Contact Person
Name: Eiji Kawamura
Head of Administration Headquarters
Phone:+81-(0)3-5657-0111
Date of filing of quarterly securities report (tentative):
February 14, 2023
Date of commencement of dividend payment (tentative):
Quarterly earnings supplementary explanatory documents:
Yes
Quarterly earnings presentation:
None(Yen in millions, rounded down)
1. Financial results for the third quarter of the fiscal year ending March 2023 (April 1, 2022 –December 31, 2022)(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

Third quarter ended December 2022 452,221

28.2

26,006

77.4

Third quarter ended December 2021

19.9

14,65895.0

352,684%

Million yen%

26,61878.8

19,05382.9

14,886105.9

10,414 (18.2)

Note: Comprehensive income: 3Q of FY3/2023: 23,925 million yen ［86.0%］3Q of FY3/2022: 12,866 million yen ［(0.4)%］

Earnings per
share(diluted)

Earnings per
share
Yen

Yen

Third quarter ended December 2022

725.67－

Third quarter ended December 2021

387.76－(2) Financial Position (Consolidated)
Total assets

Net assets

Equity ratio

Million yen

Million yen%

As of December 31, 2022

299,806

125,192

41.7

As of March 31, 2022

272,139

105,800

Reference: Shareholders’ equity As of December 31, 2022: 125,070 million yen

38.8
As of March 31, 2022: 105,680 million yen

2. Dividends
Dividend per share

Fiscal year ended March 2022
Fiscal year ending March 2023
Fiscal year ending March 2023 (Forecast)

1Q

2Q

3Q

Year-end

Full year

Yen

Yen

Yen

Yen

Yen

-

45.00
100.00-75.00

120.00120.00220.00Notes: Change in the dividend forecast from the latest announcement: Yes
Breakdown of interim dividend for FY3/2022: Ordinary dividend: 40.00 yen; Extraordinary dividend: 5.00 yen
Breakdown of year-end dividend for FY3/2022: Ordinary dividend: 40.00 yen; Extraordinary dividend: 35.00 yen
Breakdown of interim dividend for FY3/2023: Ordinary dividend: 70.00 yen; Extraordinary dividend: 30.00 yen
Breakdown of year-end dividend for FY3/2023 (Forecast): Ordinary dividend: 70.00 yen; 55th Anniversarycommemorative dividend: 10.00 yen; Extraordinary dividend: 40.00 yen
With respect to the revision of dividend forecast, please refer to “Notice regarding upward revision to forecasts forfull-year earnings and dividends (dividend increase)” announced today (February 7, 2023).

3. Forecast for the fiscal year ending March 2023 (Consolidated, April 1, 2022 – March 31, 2023)

Net sales

Full year

Operating income

Million yen%

585,000

18.0

Million yen

29,500(Percentage figures represent year on year changes)
Profit attributable
Earnings per
Ordinary income
to owners of
shareparent%Million yen%

Million yen

%

Yen

41.0

30,00039.8

21,00036.3

799.78

Note: Change in the forecast from the latest announcement: Yes
With respect to the revision of consolidated performance forecast, please refer to “Notice regarding upwardrevision to forecasts for full-year earnings and dividends (dividend increase)” announced today (February 7,2023).

* 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: NoneNote: 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 10.
(4) Number of shares outstanding (common stock)(a) Shares outstanding (including treasury shares)
As of December 31, 2022:

28,702,118 As of March 31, 2022:

28,702,118

2,440,811 As of March 31, 2022:

2,454,162(b) Treasury shares
As of December 31, 2022:(c) Average number of shares (quarterly consolidated during the period)
Period ended December 31 2022:

26,255,971 Period ended December 31, 2021: 26,858,954* The quarterly audit procedures by a certified public accountant or auditing firm are not applicable tothis Quarterly 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 performance forecast” on page 4.
(How to obtain supplementary materials on quarterly financial results)
Supplementary materials on quarterly financial results are will be posted on TDnet and our website
today (February 7, 2023).

Index for Supplementary Information
1. Results of Operations ................................................................................................................. 2(1) Overview of consolidated business performance...................................................................... 2(2) Overview of financial conditions ............................................................................................ 4(3) Qualitative information on consolidated performance forecast................................................... 4
2. Quarterly Consolidated Financial Statements and Major Notes ......................................................... 6(1) Quarterly consolidated balance sheet ..................................................................................... 6(2) Quarterly consolidated statements of income and comprehensive income .................................. 8
For the third quarter (April 1, 2022 - December 31, 2022) ..................................................... 8(3) Notes to quarterly consolidated financial statements ............................................................. 10(Notes to going concern assumptions) ............................................................................... 10(Significant change in shareholders’ equity) ....................................................................... 10(Changes in accounting policies) ....................................................................................... 10(Additional information) ................................................................................................. 10(Segment information) .................................................................................................... 11-1-

1. Results of Operations(1) Overview of consolidated business performance
During the third quarter of the consolidated fiscal period under review, the US economy
continued to recover on the back of solid personal spending and an increase in exports, despite theimpact of inflation and monetary tightening. In Europe, the economy slowed due to a spike inenergy prices resulting from the prolonged conflict in Ukraine, as well as rising inflation. Conditions
remain uncertain in China due to factors such as another increase in COVID-19 cases followingchanges to the zero-COVID policy. Meanwhile, the Japanese economy steadily recovered, although
COVID-19 continues to have an impact. The relaxation of restrictions on economic activity
normalized economic activity, personal spending and the employment environment gradually
improved, and capital investment in the corporate sector was also solid.
In the electronics industry to which the Group belongs, global supply shortages and extended
lead times continued to affect some semiconductors and electric components, but supply/demandconditions improved, with the exception of some products, such as automotive-related applications,and demand remains robust in a wide range of industries.
In this kind of management environment, net sales in the third quarter of the consolidated fiscal
year rose 28.2% year on year to 452,221 million yen driven by the electronic components business,
which is the Group’s mainstay business.
Operating income increased by 77.4% year on year to 26,006 million yen due to a significant
increase in gross profit resulting from higher net sales and improved gross profit margin. Ordinary
income increased by 78.8% year on year to 26,618 million yen and profit attributable to owners ofparent increased by 82.9% to 19,053 million yen. All metrics from net sales to ordinary income forthe quarter achieved record highs for the third quarter of a consolidated fiscal year.
In November 2021, the Group announced its three-year management plan, the Medium-Term
Management Plan 2024 (2022–2024), which runs from the fiscal year ending March 31, 2023, tothe fiscal year ending March 31, 2025. The new Medium-Term Management Plan sets “organic
growth + further M&A challenges” as growth engines, seeks to reinforce and expand overseas and
EMS (note) businesses, and aims to realize the goal of becoming “Japan’s top-class corporate groupin the industry with net sales of 750 billion yen” by the Plan’s final fiscal year ending on March 31,
2025. The Company made steady progress in the fiscal year ending March 31, 2023, the first fiscal
year of the new Medium-Term Management Plan.
(Note) Electronics Manufacturing Service: Provision of product development and manufacturing services on an
outsourcing basis.

FY 2022/3 3Q(April 1, 2021 –December 31, 2021)

FY 2023/3 3Q(April 1, 2022 –December 31, 2022)

YoY（Million yen）

（Million yen）

（Million yen）

352,684

452,22199,53728.2％

Gross profit

42,761

59,884

17,12240.0％（Margin）

12.1％

13.2％

1.1pt

－

SG&A

28,10233,877

5,774

20.5％

Operating income

14,65826,006

11,348

77.4％

Ordinary income

14,886

26,618

11,731

78.8％

Profit before income taxes

14,70627,134

12,42884.5％

10,414

19,053

8,638

82.9％

111.10Yen

136.51Yen

25.41Yen－

Net sales

Profit attributable to ownersof parent
Exchange Rate
(Average rate during the year)
USD

-2-

Business segment performance was as follows.
(a) Electronic components (Development, manufacture and sale of semiconductors, generalelectronic components and other products, the electronics manufacturing service (EMS), and otheractivities)
In this business, the component sales business continued to attract a high level of sales in a
broad range of industries, in part due to the gradual easing of supply/demand conditions forsemiconductors and electronic components, which had remained tight. Some products forautomotive-related applications continue to face supply shortages, but the Company mobilized its
abilities and secured sales volume by using its strength in procurement capabilities as anindependent trading company as well as proposing alternative products.
In the EMS business, sales to key customers primarily in automotive and medical equipment
applications grew significantly. The yen has been weak since the start of the fiscal year, and thispushed up revenue on a yen basis.
As a result, net sales increased by 30.2% year on year to 40,568 million yen, and segment
income increased by 79.5% year on year to 23,341 million yen.
b) Information Equipment (Sales of PCs, PC peripherals, home electric appliances, photograph andimaging products, original brand products, and other products)
In this business, sales of PCs for corporations and educational institutions were firm,
particularly for high-priced products. Sales of PC peripherals such as security software also
remained solid. In the LED installation business, large-scale work that had been delayed due to ashortage of materials made steady progress and improved revenue significantly.
As a result, net sales increased by 10.8% year on year to 29,139 million yen, and segment
income increased by 23.3% year on year to 1,499 million yen.
(c) Software (Production of computer graphics, planning and development of amusement products,
and other activities)
In this business, sales were firm due to a recovery in orders for large-scale and new projects insmartphone games development and computer graphics production.
As a result, net sales increased by 12.8% year on year to 2,076 million yen, and segment
income of 135 million yen was recorded (109 million yen of segment loss in the same period of
the previous fiscal year).
(d) Others (Repair and support for electronics equipment, and sales of amusement equipment andsports goods, and others)
In this business, the PC and PC peripheral recycling business was strong. In addition, sales ofgame equipment for the amusement industry in Japan and overseas as well as golf products wererobust, in part due to the relaxation of restrictions on movement during the pandemic.
As a result, net sales increased by 17.3% year on year to 15,397 million yen, and segment
income increased by 105.3% year on year to 971 million yen.
< Financial Results by Business Segment >FY 2022/3 3Q(April 1, 2021 –December 31, 2021)

FY 2022/3 3Q(April 1, 2022 –December 31, 2022)

YoY（Million yen）

（Million yen）

（Million yen）

311,412405,608

94,196

30.2％

Electronic

Net sales

Components

Segment income

13,002

23,341

10,33979.5％

Information

Net sales

26,301

29,139

2,838

10.8％

Equipment

Segment income

1,216

1,499

283

23.3％

Software

Net sales

1,841

2,076

234

12.8％

Segment income

(109)

135

245

-

13,12915,397

2,267

17.3％

473

971

498

105.3％Net sales

352,684

452,22199,53728.2％

Segment income

14,65826,006

11,348

77.4％

Others

Net sales
Segment income

Total

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

-3-(2) Overview of financial conditions
Assets, liabilities and net assets
Total assets as of December 31, 2022, increased by 27,666 million yen from March 31, 2022, to299,806 million yen.
Current assets increased by 26,293 million yen from March 31, 2022, to 260,278 million yen. Thisis primarily due to increases of 14,304 million yen in Merchandise and finished goods and a 9,942
million yen increase in Cash and deposits.
Non-current assets increased by 1,372 million yen from March 31, 2022, to 39,527 million yen.
Liabilities increased by 8,274 million yen from March 31, 2022, to 174,613 million yen. This is
primarily due to increases of 7,096 million yen in short-term loans payable.
Net assets increased by 19,391 million yen from March 31, 2022, to 125,192 million yen. This is
primarily due to an increase of 19,053 million yen in profit attributable to owners of parent.
(3) Qualitative information on consolidated performance forecast
In the first nine months of the fiscal year ending March 31, 2023, sales in a broad range ofindustries, such as the automotive and medical equipment industries, were high, and as a result, theCompany achieved record highs for net sales and all income metrics for this period.
Since supply/demand trends for semiconductors and electronic components, exchange rate
fluctuations, and other factors make it difficult to predict the outlook, the Company only took earnings
trends during the first three quarters of this fiscal year into account in revising the full-year earnings
forecasts announced on November 8, 2022, as shown below. The year-end dividend forecasts havealso been raised in accordance with the revisions to earnings forecasts.
For details, please refer to “Notice regarding upward revision to forecasts for full-year earnings anddividends (dividend increase)” announced today (February 7, 2023).
1.

Revisions to consolidated earnings forecasts for the fiscal year ended March 31,2023（from April 1, 2022 to March 31, 2023）
Results
FY2022/3

Previous
Forecasts
FY2023/3

Current
Forecasts
FY2023/3

Difference from
Previous Forecasts(Million yen)

(Million yen)

(Million yen)

(Million yen)

Net Sales

495,827570,000

585,000

15,000

2.6％

Operating Income

20,91528,00029,500

1,500

5.4％

Ordinary Income

21,45629,00030,000

1,000

3.4％

Profit attributable toowners of parent

15,401

20,00021,000

1,000

5.0％

ＲＯＥ

15.7％

17.0％

18.0％

1.0pt

－

-4-

2.

Revision of dividend forecast
Annual dividends
End of 1st halfPrevious forecast

Revised forecast

fiscal year
Dividends for the previous
fiscal year

Total

100.00 yen

200.00 yen

120.00 yen

220.00 yen

75.00 yen

120.00 yen(Ordinary dividend 70 yen) (Ordinary dividend 140 yen)(commemorative dividend 10 yen) (commemorative dividend 10 yen)
(Extraordinary dividend 20 yen) (Extraordinary dividend 50 yen)

(Announced on November 8, 2022)

Dividends for the current

Year-end(Ordinary dividend 70 yen) (Ordinary dividend 140 yen)(commemorative dividend 10 yen) (commemorative dividend 10 yen)
(Extraordinary dividend 40 yen) (Extraordinary dividend 70 yen)

100.00 yen(Ordinary dividend 70 yen)
(Extraordinary dividend 30 yen)

45.00 yen(Ordinary dividend 40 yen) (Ordinary dividend 40 yen) (Ordinary dividend 80 yen)
(Fiscal year ended March 31, 2022） (Extraordinary dividend 5 yen) (Extraordinary dividend 35 yen) (Extraordinary dividend 40 yen)
Note: The above earnings forecasts are based on the information currently available to the Company on the dateof release and certain assumptions deemed reasonable. Actual results may vary from the forecast for avariety of reasons.

-5-2. Quarterly Consolidated Financial Statements and Major Notes(1) Quarterly consolidated balance sheet(Million yen)
Fiscal year ended

Third quarter ended

March 2022

December 2022

(As of March 31, 2022) (As of December 31, 2022)
ASSETS
Current assets
Cash and deposits

41,05150,994

Notes receivable – trade

1,449

2,301

Electronically recorded monetary claims – operating
Accounts receivable – trade

9,258

9,494

110,240

111,285264

212

Merchandise and finished goods

46,23060,535Work in process

2,363

3,259

Raw materials and supplies

14,013

15,055

Other

9,388

7,309

Securities

Allowance for doubtful accounts

(275)

(168)

233,984

260,278

Buildings and structures, net

6,925

6,794

Machinery, equipment and vehicles, net

6,048

6,799

Tools, furniture and fixtures, net

1,030

1,055

Land

5,074

5,074

313

554

19,393

20,279Total current assets
Non-current assets
Property, plant and equipment

Construction in progress
Total property, plant and equipment
Intangible assets
Goodwill

98

56

Software

3,021

2,655

42

34

3,163

2,747

Investment securities

10,313

11,117

Deferred tax assets

2,189

2,170

Guarantee deposits

1,068

1,285

915

919

Other
Total intangible assets
Investments and other assets

Insurance funds

3,466

5,917

Allowance for doubtful accounts(2,355)(4,909)Total investments and other assets

15,59816,500Total non-current assets

38,15539,527272,139

299,806

Other

Total assets-6-

(Million yen)
Fiscal year ended

Third quarter ended

March 2022

December 2022

(As of March 31, 2022) (As of December 31, 2022)
LIABILITIESCurrent liabilities
Notes and accounts payable - trade

86,49390,273

Short-term loans payable

23,85830,955

Accrued expenses

7,138

8,749

Income taxes payable

2,834

5,013

301

138

Other

12,291

10,656

Total current liabilities

132,918

145,787－

10,000Long-term loans payable

25,136

10,109Deferred tax liabilities

2,046

2,807

Provision for directors’ bonuses

Non-current liabilities
Bonds payable

Provision for directors’ retirement benefits

123

135

Net defined benefit liability

2,095

2,172

Asset retirement obligations

572

617

Other

3,446

2,984

Total non-current liabilities

33,421

28,826

166,339

174,613

Capital stock

12,133

12,133

Capital surplus

14,81814,820Total liabilities
NET ASSETS
Shareholders’ equity

Retained earnings

77,42391,928Treasury shares(5,643)(5,613)

Total shareholders’ equity

98,732

113,268

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges

1,299

1,688

(2)

(118)

Foreign currency translation adjustment

5,439

10,158Remeasurements of defined benefit plans

210

73

6,948

11,801120

121

105,800

125,192

272,139

299,806

Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets-7-

(2) Quarterly consolidated statements of income and comprehensive income
For the third quarter (April 1, 2022 – December 31, 2022)

Net sales
Cost of sales
Gross profit

Third quarter ended
December 2021
(April 1, 2021 –December 31, 2021)
352,684
309,923

Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Commission fee
Share of profit of entities accounted forusing equity method
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using
equity method
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on transfer of business
Gain on revision of retirement benefit plan
Reversal of estimated losses associatedwith fund leakage incident that involved
our American subsidiary
Other
Total extraordinary income
Extraordinary loss
Impairment loss
Loss on retirement of non-current assets
Loss on valuation of investment securities
Loss on liquidation of subsidiaries andassociates
Provision of allowance for doubtful
accounts
Other
Total extraordinary loss

42,761
28,102

59,88433,877

14,65826,006

102
146
135

143
214
166

－

58

143
506
1,034

375
312
1,270

222

494

499

－

84

164

806
14,886659
26,618

7
118
7
－

14
626
－
126

174

－

17

1

324

768

51
11
60

30
31
187

174

－

175

－

32

1
251
27,134504
14,706

Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes(Million yen)
Third quarter ended
December 2022
(April 1, 2022 –December 31, 2022)
452,221392,337

3,626
412

7,264
802
8,066

Profit4,039
10,667

19,067

Profit attributable to owners of parent

10,414

19,053

252

14

Profit attributable to non-controlling interests-8-Other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges(Million yen)
Third quarter ended
December 2022
(April 1, 2022 –December 31, 2022)

Third quarter ended
December 2021
(April 1, 2021 –December 31, 2021)
359

Foreign currency translation adjustment
Remeasurements of defined benefit plans,
net of tax
Share of other comprehensive income ofassociates accounted for using equity
methodTotal other comprehensive income
Comprehensive income
Comprehensive income attributable toowners of parent
Comprehensive income attributable tonon-controlling interests

-9-

390

(34)

(116)

1,765

4,516

13

(137)

94

205

2,199

4,857

12,86623,925

12,567

23,907299

18

(3) Notes to quarterly consolidated financial statements(Notes to going concern assumptions)Not applicable(Significant change in shareholders’ equity)
Not applicable(Changes in accounting policies)(Application of Implementation Guidance on Accounting Standard for Fair Value Measurement)
The “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ
Implementation Guidance No. 31, June 17, 2021, hereinafter referred to as ASBJ Guidance No. 31)
is applied from the start of the first quarter of the consolidated fiscal year under review. In
accordance with the transitional treatment set forth in Article 27-2 of the ASBJ Guidance No. 31,
the Company will continue to apply the new accounting policies prescribed by ASBJ Guidance No.
31 into the future. The effect of this application on the quarterly consolidated financial statements
is immaterial.
(Additional information)(Application of the Practical Solution on the Accounting and Disclosure Under the Group Tax Sharing
System)The Company and some of its domestic consolidated subsidiaries have transitioned from theconsolidated taxation system to the group tax sharing system with effect from the first quarter ofthe consolidated fiscal year under review. Accordingly, accounting treatment and disclosure ofcorporation tax, local corporation tax and tax effect accounting are conducted pursuant to “thePractical Solution on the Accounting and Disclosure Under the Group Tax Sharing System” (Practical
Solution No. 42, August 12, 2021; hereinafter referred to as “Practical Solution No. 42”). Based on
the provisions of Paragraph 32 (1) of Practical Solution No. 42, we see no impact from the changein accounting policy associated with application of Practical Solution No. 42.
(Accounting estimates associated with the COVID-19 pandemic)
Accounting estimates such as of impairment of non-current assets and collectability of deferred tax
assets are made based on information that is available as of December 31, 2022 and do not include
significant changes from the financial statement for the previous consolidated fiscal year.

- 10 -

(Segment information)
I. For the third quarter ended December 2021 (April 1, 2021 – December 31, 2021)
Information about net sales and income (loss) by reportable segments
Reportable segments
Electronic

Information

Components Equipment

Software

Others

Total(Million yen)
Adjustment

Consolidated(Note 1)

(Note 2)

Net sales:
Sales to external

311,41226,301

1,841

13,129352,684－

352,684

2,189

3,890

528

4,873

11,482(11,482)－

Total

313,601

30,191

2,370

18,003364,166(11,482)352,684

Segment income

13,002

1,216

(109)

473

14,58176

14,658customers
Inter-segment
sales ortransfers

Notes:

1. Adjustment in segment income of 76 million yen includes 76 million yen for elimination of inter-segment trade.
2. Segment income is adjusted for operating income on the quarterly consolidated statements of income andcomprehensive income.

II. For the third quarter ended December 2022 (April 1, 2022 – December 31, 2022)
Information about net sales and income (loss) by reportable segments
Reportable segments
Electronic

Information

Components Equipment

Software

Others

Total(Million yen)
Adjustment

Consolidated(Note 1)

(Note 2)

Net sales:
Sales to external

405,608

29,1392,076

15,397452,221－452,221

2,684

5,323

697

5,877

14,582(14,582)－

Total

408,293

34,462

2,773

21,274

466,803(14,582)452,221

Segment income

23,341

1,499

135

971

25,94857

26,006customers
Inter-segment
sales ortransfers

Notes:

1. Adjustment in segment income of 57 million yen includes 57 million yen for elimination of inter-segment trade.
2. Segment income is adjusted for operating income on the quarterly consolidated statements of income andcomprehensive income.

- 11 -