August 6, 2020

Summary of Consolidated Financial Results
for the First Quarter Ended June 30, 2020 [Japan GAAP]
Name of Company:
Stock Code:
Stock Exchange Listing:
URL:
Representative
Contact Person

KAGA ELECTRONICS CO., LTD.
8154
Tokyo Stock Exchange, First Section
https://www.taxan.co.jp/
President (COO)
Ryoichi Kado
Managing Director, Chief of Administration
Headquarters
Eiji Kawamura+81-(0)3-5657-0111
August 14, 2020

Title:
Name:
Title:Name:
Phone:
Date of filing of quarterly securities report (tentative):
Date of commencement of dividend payment (tentative): Quarterly earnings supplementary explanatory documents:
Quarterly earnings presentation:

Yes
No(Yen in millions, rounded down)

1. Financial results for the first quarter of the fiscal year ending March 2021 (April 1, 2020 – June30, 2020)(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

84,130 (23.2)

1,656 (10.5)

1,533 (25.0)

8,643 540.0

First quarter ended June

109,564

1,850

2,045

1,350

97.4

24.2

Note: Comprehensive income: 1Q of FY3/2021: 9,192 million yen (－%)

21.8

17.6

1Q of FY3/2020: 442 million yen (-63.3%)

Earnings per
share(diluted)

Earnings per
share
Yen

First quarter ended June 2020

314.77First quarter ended June 2019

49.20

Yen

－

(2) Financial Position (Consolidated)
Total assets

Net assets

Equity ratio

Million yen

Million yen%

As of June 30, 2020

214,097

94,34440.3

As of March 31, 2020

207,638

86,25037.7

Reference: Shareholders’ equity：As of June 30, 2020: 86,385 million yen As of March 31, 2020: 78,284million yen

2. Dividends
Dividend per share

Fiscal year ended March 2020
Fiscal year ending March 2021
Fiscal year ending March 2021
(Forecast)

1Q

2Q

3Q

Year-end

Full year

Yen

Yen

Yen

Yen

Yen

－
－

30 00

－

40 00

70 00

30.00

－

30.00

60.00

Notes: Change in the dividend forecast from the latest announcement: Yes
Breakdown of year-end dividend for FY3/20: Ordinary dividend: 30.00 yen; Extraordinary dividend: 10.00 yen
With respect to the revision of dividend forecast, please refer to “Notification of earnings and dividend forecasts”
announced today (August 6, 2020).

3. Forecast for the fiscal year ending March 2021 (Consolidated, April 1, 2020 – March 31, 2021)(Percentage figures represent year on year changes)
Net sales

Full year

Operating income

Million yen%

400,000(9.8)

Million yen

Ordinary income%

Million yen

5,000 (50.1)

Profit attributable

Earnings per

to owners of parent

share

%

Million yen%

Yen

4,500 (55.6)

10,00070.9364.18

Note: Change in the forecast from the latest announcement: Yes
With respect to the revision of consolidated performance forecast, please refer to “Notification of earnings anddividend forecasts ” announced today (August 6, 2020).

* Notes(1) Changes in significant subsidiaries (Changes in specified subsidiaries accompanied by changes in thescope ofconsolidation):Yes
New: 2 (Company Name)：EXCEL CO.,LTD. Advanced Display Solutions (HONG KONG) Limited.
Note: For more information, please refer “2. Quarterly Consolidated Financial Statements and Major
Notes (3) Notes to quarterly consolidated financial statements (Changes to principal
subsidiaries in the current consolidated year to date)” on page 8.
(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:None(b) Changes other than (a): None(c) Changes in accounting estimates: None(d) Retrospective restatement: None
(4) Number of shares outstanding (common stock)(a) Shares outstanding (including treasury shares)
As of June 30, 2020:

28,702,118

As of March 31, 201928,702,118(b) Treasury shares
As of June 30, 2020:

1,243,334

As of March 31, 20119

1,243,279(c) Average number of shares (quarterly consolidated during the period)
Period ended June 30, 2020:

27,458,812

Period ended June 30, 2019: 27,447,190* 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 earnings forecast”.
(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 ......................................... 6(1) Quarterly consolidated balance sheet...................................................................... 6(2) Quarterly consolidated statements of income and comprehensive income ................... 8
For the first quarter (April 1, 2020 - June 30, 2020) ............................................... 8(3) Notes to quarterly consolidated financial statements ................................................ 9(Notes to going concern assumptions) .................................................................. 9(Significant change in shareholders’ equity) ........................................................... 9(Changes to principal subsidiaries in the current consolidated year to date) ............... 9(Additional information) ...................................................................................... 9(Segment information)....................................................................................... 10

1. Results of Operations(1) Overview of consolidated business performance
The Group’s net sales in the first quarter of the fiscal year ending March 31, 2021,
decreased by 23.2% year on year to 84,130 million yen due to several factors, including
the termination of a large sales agency agreement that Fujitsu Electronics Inc. (hereafter,“Fujitsu Electronics”), a consolidated subsidiary of the Company, had entered into.
Another major factor was the impact of the COVID-19 pandemic, which prompted
countries to take containment measures such as lockdowns. This led to a decline in
consumption and caused manufacturing companies to suspend operation of some of theirproduction facilities.
In terms of income, operating income decreased by 10.5% year on year to 1,656
million yen and ordinary income decreased by 25.0% year on year to 1,533 million yen.
Despite efforts to curb selling, general and administrative expenses through enhancementof operational efficiency, the decrease in gross profit resulting from the decrease in net
sales could not be fully offset. Meanwhile, profit attributable to owners of the parent
increased substantially by 540.0% year on year to 8,643 million yen, reflecting a “gain on
bargain purchase” associated with the acquisition of EXCEL CO., LTD. (hereafter, “EXCEL”)
in April 2020, which was recognized as extraordinary income.
FY 2020/3 1Q

FY 2021/3 1Q(April 1, 2019 –(April 1, 2020 –June 30, 2019)

June 30, 2020)（Million yen）

（Million yen）

Net sales

109,564

84,130Gross profit

11,062

9,997(1,064)(9.6)％（Margin）

10.1％

11.9％

1.8pt

－

SG&A

9,212

8,341

(870)

(9.4)％

Operating income

1,850

1,656

(194)

(10.5)％

Ordinary income

2,045

1,533

(512)

(25.0)％

Profit before income taxes

1,799

9,110

7,311

406.4％

1,350

8,643

7,292

540.0％

109.90 Yen

107.62 Yen(2.28)Yen－

Profit attributable to ownersof parent

YoY（Millionyen）(25,434)(23.2)％

Exchange Rate
(Average rate during the year)

USD

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 EMS business maintained steady performance in the medical
equipment area, but was sluggish in the areas of automotive and air conditioning
devices due to the spread of COVID-19 and the ensuing lockdowns in many countries
that caused suspension of operations and production adjustments at some overseas
plants of both the Company and its customers. The component sales business recorded2

a decrease in revenue from the impact notably of the termination, in October 2019, of asales agency agreement that Fujitsu Electronics had entered into with the US-based
Cypress Semiconductor Corporation.
As a result, net sales decreased by 27.9% year on year to 68,196 million yen, andsegment income decreased by 26.9% year on year to 1,185 million yen.
(Note ) Electronics Manufacturing Service: Provision of product development andmanufacturing services on an 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, the housing-related home electric appliances business declined due
in part to delivery date adjustments by customers. On the other hand, PCs and PC
peripherals enjoyed strong sales driven by the expansion of remote working and online
learning amid the spread of COVID-19.
As a result, net sales increased by 23.8% year on year to 12,537 million yen, andsegment income increased by 208.8% year on year to 583 million yen.
(c) Software (Production of computer graphics, planning and development of amusement
products, and other activities)
In this business, front-loading customer orders in such areas as production ofcomputer graphics animation and development of game software helped to increase
revenue.
As a result, net sales increased by 12.4% year on year to 491 million yen, andsegment loss of 44 million yen was recorded (61 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 maintained steady
performance, but game equipment for the amusement industry and golf products saw
sluggish sales due to store closures in response to the COVID-19 pandemic.
As a result, net sales decreased by 34.2% year on year to 2,904 million yen, andsegment loss of 101 million yen was recorded (72 million yen of segment income in thesame period of the previous fiscal year).
FY 2020/3 1Q

FY 202213 1Q(April 1, 2019 –(April 1, 2020 –June 30, 2019)

June 30, 2020)（Million yen）

YoY

（Million yen） （Million yen）

Electronic

Net sales

94,587

68,196(26,391)(27.9)％

components

Segment income

1,621

1,185

(435)

(26.9)％

Information

Net sales

10,126

12,537

2,411

23.8％

equipment

Segment income

188

583

394

208.8％

Software

Net sales

437

491

54

12.4％

Segment income

(61)

(44)

17

－

4,412

2,904

(1,508)(34.2)％

72

(101)

(174)

－

109,564

84,130(25,434)(23.2)％

1,850

1,656

(194)

(10.5)％

Others

Net sales
Segment income

Total

Net sales
Segment income

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, 2020 increased by 6,459 million yen from March 31, 2020,
to 214,097 million yen.
Current assets increased by 3,833 million yen from March 31, 2020, to 178,165 million
yen. This is primarily attributable to a decline in sales resulting in a decrease of 8,831
million yen in notes and account receivable – trade and an increase of 14,699 million yen
in merchandise and finished goods.
Non-current assets increased by 2,625 million yen from March 31, 2020, to 35,932
million yen. This is largely the result of respective increases of 992 million yen and 824
million yen in investment securities and deferred tax assets.
Liabilities decreased by 1,635 million yen from March 31, 2020, to 119,753 million yen.
This is primarily due to a decrease of 8,335 million yen in notes and accounts payable –trade, a decrease of 1,072 million yen in income taxes payable and an increase of 8,541
million yen in short-term loans payable.
Net assets increased by 8,094 million yen from March 31, 2020, to 94,344 million yen.
This is primarily the result of recording 8,643 million yen of profit attributable to ownersof the parent.

(3) Qualitative information on consolidated earnings forecast①Revisions to consolidated earnings forecasts for the fiscal period ending March 31, 2021
(from April 1, 2020 to March 31, 2021)
OperatingincomeNet sales

Profitattributableto owners ofparentOrdinary
incomeNet income
per share

Million yen

Million yen

Million yen

Million yen

yen

－

－

－

－

－

400,000

5,000

4,500

10,000364.18Difference (B-A)

－

－

－

－

－

Difference (%)

－

－

－

－

－

443,615

10,014

10,1375,852

213.21

Previous forecast (A)（announced on May 21, 2020）

Revised forecast (B)(Reference) Results for theyear ended March 31, 2020

②Reasons for consolidated earnings forecasts
With respect to consolidated earnings forecast for the fiscal year ending March 31, 2021,
the Company reported it as undecided as of May 21, 2020, when the “Summary ofConsolidated Financial Results for the Year Ended March 2020 (Japan GAAP)” wasannounced, as it was difficult to logically estimate the effects of COVID-19 on the Group’sbusiness operations. Calculations have now been made based on information that iscurrently available, estimates and any other pertinent data as of the date of reporting.
Looking ahead at the fiscal year ending March 31, 2021, it is expected that the COVID19 pandemic will continue unabatedand will impact the Group’s business activities in avariety of ways. In the information equipment business, demand for IT-related products
such as PCs and tablets is expected to grow as remote working and online learning
continue to expand. However, in the Group’s core electronic components business, adecline in demand is inevitable, notably in the automotive and industrial equipment
markets. Given also the impact of the dissolution of large commercial rights at Fujitsu
4Electronics, a subsidiary of the Group, net sales are expected to fall below those of theprevious fiscal year. Although Group-wide efforts will be made to enhance operational
efficiency and curb selling, general and administrative expenses, a decrease in net sales is
expected, accompanied by year on year decreases in operating income and ordinary
income. Meanwhile, a year on year increase in profit attributable to owners of the parent
is projected because the “gain on bargain purchases” associated with the acquisition of
EXCEL in April 2020 will be recognized as extraordinary income.
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.

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

2020

2020

(As of March 31, 2020)(As of June 30, 2020)

ASSETS
Current assets
Cash and deposits

43,38436,404

Notes and accounts receivable -85,49576,663

Electronically recorded monetary claims -

5,876

7,927

Securities

254

268

25,27639,976567

1,231

Raw materials and supplies

6,063

6,609

Other

7,601

9,340

Merchandise and finished goods
Work in process

Allowance for doubtful accounts

(188)

(257)

174,331

178,165

Buildings and structures, net

7,365

7,548

Machinery, equipment and

4,477

4,884

Tools, furniture and fixtures, net

1,060

1,056

Land

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

4,924

4,924

Construction in progress

145

79

Total property, plant and

17,974

18,494

Intangible assets
Goodwill
Software
Other

322

294

1,743

1,938

190

93

Total intangible assets

2,256

2,326

Investments and other assets
Investment securities

8,502

9,494

Deferred tax assets

1,584

2,408

Guarantee deposits

857

911

Insurance funds

894

967

Other

1,791

1,904

Allowance for doubtful accounts

(552)

(574)

Total investments and other assets

13,075

15,112

Total non-current assets
Total assets

6

33,30635,932

207,638

214,097(Million yen)
Fiscal year ended MarchFirst quarter ended June

2020

2020

(As of March 31, 2020)(As of June 30, 2020)

LIABILITIESCurrent liabilities
Notes and accounts payable - trade70,18861,852

Short-term loans payable

6,540

15,081

Accrued expenses

5,739

3,966

Income taxes payable

1,884

812

101

14

Other

9,201

10,019Total current liabilities

93,65591,746Long-term loans payable

20,833

20,512

Deferred tax liabilities

1,378

1,567

95

96

Net defined benefit liability

1,969

2,237

Asset retirement obligations

329

375

Other

3,127

3,217

Total non-current liabilities

27,73228,006

121,388

119,753

Capital stock

12,133

12,133

Capital surplus

13,87813,878Retained earnings

55,091

62,635

Treasury shares(2,005)(2,005)

Total shareholders’ equity

79,09786,642

Valuation difference on available-for-sa

0534

Deferred gains or losses on hedges

28

14

Foreign currency translation

(707)

(678)

Remeasurements of defined benefit

(133)

(126)

Provision for directors’ bonuses

Non-current liabilities

Provision for directors’ retirement

Total liabilities
NET ASSETS
Shareholders’ equity

Accumulated other comprehensive

(812)

(256)

Non-controlling interests

Total accumulated other

7,965

7,958

Total net assets

86,25094,344

207,638

214,097

Total liabilities and net assets

7

(2) Quarterly consolidated statements of income and comprehensive income
For the First quarter (April 1, 2020 – June 30, 2020)(Million yen)First quarter ended June 2019
(April 1, 2019– June 30,2019)

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

Net sales
Cost of sales
Gross profit
Selling, general and administrative
expenses
Operating income
Non-operating income
Interest income
Dividends income
Foreign exchange gains
Commission income
Commission fee
Other
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted forusing equity method
Foreign exchange losses
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 businessTotal extraordinary income
Extraordinary loss
Loss on retirement of non-current
assetsLoss on sales of investment securities
Loss on valuation of investment
securities
Loss on valuation of investment
securities
Other
Total extraordinary loss
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit109,564
98,501
11,062

84,13074,132
9,997

9,212

8,341

1,850

1,656

80
83
43
85
119
412

29
74
－
50
142
296

75
88

68
150

－

184

53
217
2,045

15
419
1,533

5
0
－
12
－
18

0
39
8,007
7
2
8,057

0

12

13

－

247

421

4
265
1,799
211
157
368
1,430

45
480
9,110
292
177
470
8,640

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

1,350

8,643

80

(2)

Comprehensive income attributable to ownersof parent
Comprehensive income attributable to noncontrolling interests

8

(330)

534

(13)
(644)

(14)
(42)

12

7

(11)

67

(987)
442

552
9,192

463

9,199

(20)

(6)

(3) Notes to quarterly consolidated financial statements(Notes to going concern assumptions)Not applicable(Significant change in shareholders’ equity)
Not applicable（Changes to principal subsidiaries in the current consolidated year to date）
Effective April 1, 2020, as part of the Group’s growth strategy, the Company acquired
all of the shares of EXCEL and made it a wholly owned subsidiary. As a result, EXCELASIAN TAIWAN CO.,LTD, EXCEL ELECTRONICS (HONG KONG) LTD., EXCELINTERNATIONAL TRADING (SHANGHAI) CO.,LTD.,

EXCEL SINGAPORE PTE LTD., EXCELELECTRONICS TRADING (SHENZHEN) LTD., Advanced Display Solutions Limited.,
Advanced Display Solutions (HONG KONG) Limited., EXCEL ELECTRONICS
TRADING(THAILAND)CO.,LTD.、and ALFA BUS JAPAN CO.,LTD. became indirectly owned
subsidiaries of the Company.
Note that EXCEL CO.,LTD. and Advanced Display Solutions (HONG KONG) Limited.
constitutes a specified subsidiary of the Company as the amount of its capital is greaterthan 10% of the amount of the Company’s capital.
(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, 2020and do not include significant changes from the financial statement for the previous
consolidated fiscal year. Such accounting estimates assume that the impact of the COVID19 pandemic will continue until March 31, 2021 and that there will be a gradual recovery
from the fiscal year ending March 31, 2022. That being said, since the unprecedented
impact of the COVID-19 pandemic contains elements of uncertainty, differences may
arise between the estimates and subsequent results.

9

(Segment information)
I. For the first quarter ended June 2019 (April 1, 2019 – June 30, 2019)
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

94,587

10,126

437

4,412

109,564－

109,564

Inter-segment
sales or transfers

754

160

91

965

1,973

(1,973)－

95,342

10,286529

5,378

111,537(1,973)

109,564

1,621

188

(61)

72

1,820

30

1,850

Total
Segment income(loss)
Notes:

1. Adjustment in segment income of 30 million yen includes 30 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 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.

10