August 7, 2019

Summary of Consolidated Financial Results
for the First Quarter Ended June 30, 2019 [Japan GAAP]
Name of Company:
Stock Code:
Stock Exchange Listing:
URL:
Representative
Title:
Name:
Contact Person
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:

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, 2019

Yes
No

(Yen in millions, rounded down)
1. Financial results for the first quarter of the fiscal year ending March 2020 (April 1, 2019 – June 30, 2019)(1) Result of operations (Consolidated, year-to-date)(Percentage figures represent year on year changes)
Profit attributable
Net sales
Operating income
Ordinary income
to owners of parent
Million yen%

Million yen%

Million yen%

Million yen%

First quarter ended June 2019109,564

97.4

1,850

24.2

2,045

21.8

1,350

17.6

First quarter ended June 201855,493

(1.2)

1,489

(28.7)

1,679(23.8)

1,148(34.4)

Note: Comprehensive income: 1Q of FY3/2020: 442 million yen (-63.3%) 1Q of FY3/2019: 1,207 million yen (-44.3%)

Earnings per share(diluted)

Earnings per share
Yen

Yen

First quarter ended June 2019

49.20

－

First quarter ended June 2018

41.87

－

(2) Financial Position (Consolidated)
Total assets

Net assets

Equity ratio

Million yen

Million yen%

As of June 30, 2019

209,272

83,472

36.2

As of March 31, 2019

213,761

84,25935.8

Reference: Shareholders’ equity：As of June 30, 2019: 75,837 million yen

As of March 31, 2019: 76,604million yen

2. Dividends
Dividend per share

1Q

2Q

3Q

Year-end

Full year

Yen

Yen

Yen

Yen

Yen

－
－

Fiscal year ended March 2019
Fiscal year ending March 2020
Fiscal year ending March 2020 (Forecast)

35.00

－

45.00

80.00

30.00

－

30.00

60.00

Notes: Change in the dividend forecast from the latest announcement: None
Breakdown of interim dividend for FY3/19: Ordinary dividend 30.00 yen; 50th anniversary commemorative dividend 5.00 yen
Breakdown of year-end dividend for FY3/19: Ordinary dividend: 40.00 yen; Extraordinary dividend: 5.00 yen

3. Forecast for the fiscal year ending March 2020 (Consolidated, April 1, 2019 – March 31, 2020)

Net sales
Full year(Percentage figures represent year on year changes)
Profit attributable toEarnings per
Ordinary income
owners of parent
share

Operating income

Million yen%

Million yen%

Million yen%

Million yen%

Yen

430,000

46.9

7,000

(7.5)

7,000

(10.9)

5,000(37.6)

182.17

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

* Notes(1) Changes in significant subsidiaries (Changes in specified subsidiaries accompanied by changes in the scope 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 7.

(4) Number of shares outstanding (common stock)(a) Shares outstanding (including treasury shares)
As of June 30, 2019:(b) Treasury shares
As of June 30, 2019:28,702,118

As of March 31, 2018:

28,702,118

1,254,939

As of March 31, 2018:

1,254,924

Period ended June 30, 2018:27,433,124(c) Average number of shares (quarterly consolidated during the period)
Period ended June 30, 2019:27,447,190* The quarterly audit procedures by a certified public accountant or auditing firm are not applicable to this 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 thesestatements for a number of reasons. For conditions as assumption for earnings forecast and cautionary statement regarding useof 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............................................................................................................................................ 3(3) Qualitative information on consolidated earnings forecast ................................................................................................... 3
2. Quarterly Consolidated Financial Statements and Major Notes ................................................................................................... 4(1) Quarterly consolidated balance sheet .................................................................................................................................... 4(2) Quarterly consolidated statements of income and comprehensive income ........................................................................... 6
For the first quarter (April 1, 2019 - June 30, 2019) ......................................................................................................... 6(3) Notes to quarterly consolidated financial statements ............................................................................................................ 7(Notes to going concern assumptions).............................................................................................................................. 7(Significant change in shareholders’ equity) .................................................................................................................... 7(Changes in accounting policies)............................................................................................................................ 7(Segment information) ..................................................................................................................................................... 7

1

1. Results of Operations(1) Overview of consolidated business performanceWith sales of electronics components and EMS business (note) as the two pillars of its operations, the Group is pushing
forward with its growth strategy, aiming to achieve the management targets as set out in the “Medium Term Management
Plan 2021” formulated in November 2018, or specifically 500.0 billion yen in net sales, 13.0 billion yen in operating
income and ROE of 8% or higher to be attained in the fiscal year ending March 31, 2022.
Net sales in the first quarter of the fiscal year ending March 31, 2020 increased substantially by 97.4% year on year to
109,564 million yen, due largely to revenue contribution from Fujitsu Electronics Inc. (hereafter, “Fujitsu Electronics"),
which was converted to a subsidiary from January 2019 and whose results are reflected for the full quarter.
In terms of income, reflecting notably the steady performance of EMS business in addition to the effects of businessacquisition, operating income increased by 24.2% year on year to 1,850 million yen, ordinary income increased by 21.8%
to 2,045 million yen, and profit attributable to owners of parent increased by 17.6% to 1,350 million yen.
(Note ) Electronics Manufacturing Service: Provision of product development and manufacturing services on an outsourcing basis.
FY 2019/3 1Q

FY 2020/3 1Q(April 1, 2018 – June 30, 2018) (April 1, 2019 – June 30, 2019)

YoY（Million yen）

（Million yen）

（Million yen）

Net sales

55,493

109,564

54,07097.4%

Gross profit（Margin）

7,641
13.8％

11,06210.1％

3,420-3.7pt

44.8%
－

SG&A

6,152

9,212

3,059

49.7%

Operating income

1,489

1,850

361

24.2%

Ordinary income

1,679

2,045

366

21.8%

Profit before income taxes

1,762

1,799

36

2.1%

1,148

1,350

201

17.6%

109.07Yen

109.90 Yen

0.83Yen－Profit attributable to ownersof parent
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 andother products, the electronics manufacturing service (EMS), and other activities)
In this business, the EMS business maintained steady performance in the areas of air conditioning devices andmedical equipment. Component sales business saw a boost in revenue notably in automotive devices as a result of theconversion of Fujitsu Electronics to a subsidiary in January 2019.
As a result, net sales increased by 133.5% year on year to 94,587 million yen, and segment income increased by
51.3% year on year to 1,621 million yen.
(b) Information equipment (Sales of PCs, PC peripherals, home electric appliances, photograph and imaging products,
original brand products, and other products)
In this business, PCs and PC peripherals for individuals and educational institutions enjoyed strong sales, in contrast
with decreases in commercial facilities-related LED installation business as well as sales in the housing-related homeelectric appliances business, due to such factors as delivery date adjustments by customers.
As a result, net sales decreased by 2.8% year on year to 10,126 million yen, and segment income declined by 40.5%
year on year to 188 million yen.
(c) Software (Production of computer graphics, planning and development of amusement products, and other activities)
In this business, orders for production of computer graphics animation and development of game software continued
to face a difficult situation partly due to customers extending their development schedule. As a result, net sales
decreased by 6.0% year on year to 437 million yen, and segment loss of 61 million yen was recorded (19 million yen of
segment loss in the same period of the previous fiscal year).

2(d) Others (Repair and support for electronics equipment, and sales of amusement equipment and sports goods, andothers)In this business, sales of arcade amusement machines continued to be strong. PC products and PC peripherals
recycling business also showed robust performance, however golf products suffered sluggish sales.
As a result, net sales increased by 7.5% year on year to 4,412 million yen, while segment income decreased by
10.6% year on year to 72 million yen.

FY 2019/3 1Q

FY 2020/3 1Q

YoY(April 1, 2018 – June 30, 2018) (April 1, 2019 – June 30, 2019)（Million yen）

（Million yen）

（Million yen）

Electronic components

Net sales
Segment income

40,507
1,071

94,587
1,621

54,080549

133.5%
51.3%

Information equipment

Net sales
Segment income

10,417317

10,126
188

-291
-128

-2.8%
-40.5%

Software

Net sales
Segment income

465
(19)

437
(61)

-27
-42

-6.0%
－

Others

Net sales
Segment income

4,103
80

4,412
72

309
-8

7.5%
-10.6%Total

Net sales
Segment income

55,493
1,489

109,564
1,850

54,070
361

97.4%
24.2%

Note: “Segment income” shows unadjusted figures for each business segment and adjusted figures for the total.
(2) Overview of financial condition
Assets, liabilities and net assets
Total assets as of June 30, 2019 decreased by 4,488 million yen from March 31, 2019, to 209,272 million yen.
Current assets decreased by 5,747 million yen from March 31, 2019, to 176,649 million yen. This is primarily
attributed to a decrease of 8,153 million yen in notes and account receivable - trade, and an increase of 3,444 million
yen in merchandise and finished goods.
Non-current assets increased by 1,258 million yen from March 31, 2019, to 32,623 million yen. This is largely the
result of an increase of 1,067 million yen in buildings and structures (net) due in part to the application of IFRS 16.
Liabilities decreased by 3,701 million yen from March 31, 2019, to 125,800 million yen. This is primarily
attributed to a decrease of 6,199 million yen in notes and accounts payable - trade, and an increase of 3,034 million yen
in short-term loans payable.
Net assets decreased by 787 million yen from March 31, 2019, to 83,472 million yen. This is primarily due todecreases of 332 million yen in valuation difference on available-for-sale securities and 550 million yen in foreignexchange translation adjustment.

(3) Qualitative information on consolidated earnings forecast
The business environment surrounding the Group in the second quarter and beyond will likely remain in an
unpredictable situation given the uncertainties including the impact of various trade issues originating from the US,
trends in China’s domestic economy, the Brexit issue, and geopolitical risks in Iran and other parts of the Middle East.
In this first fiscal year of the “Medium Term Management Plan 2021”, the Company will continue to make Groupwide efforts to achieve its targets, with focus on components sales business and EMS business.
In view of the solid progress made in the first quarter of the fiscal year ending March 31, 2020, the Company has
decided to keep full year performance forecasts unchanged from the previously announced forecasts. The exchange rate
assumptions used for the performance forecasts also remain unchanged.

3

2. Quarterly Consolidated Financial Statements and Major Notes(1) Quarterly consolidated balance sheet(Million yen)
Fiscal year ended March 2019
(As of March 31, 2019)

First quarter ended June 2019
(As of June 30, 2019)ASSETS
Current assets
Cash and deposits

35,00332,668Notes and accounts receivable - trade96,14587,991

Electronically recorded monetary claims - operating

5,361

5,243

261

229

33,73437,178489

837

Raw materials and supplies

5,802

5,908

Other

5,894
(296)

6,894

182,396

176,649

Buildings and structures, net

4,910

5,978

Machinery, equipment and vehicles, net

3,506

3,656

Tools, furniture and fixtures, net

1,104

1,036

Land

4,861

4,861

628

1,066

15,011

16,599Securities
Merchandise and finished goods
Work in process

Allowance for doubtful accounts
Total current assets(304)

Non-current assets
Property, plant and equipment

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

259

238

Software

1,819

1,775

126

153

2,206

2,167

Investment securities

10,085

9,802

Deferred tax assets

1,292

1,233

Guarantee deposits

870

845

Insurance funds

951

953

Other

1,462

1,535

Allowance for doubtful accounts

(515)

(513)

Total investments and other assets

14,147

13,856

Total non-current assets

31,36432,623

213,761

209,272

Other
Total intangible assets
Investments and other assets

Total assets

4

(Million yen)
Fiscal year ended March 2019
(As of March 31, 2019)

First quarter ended June 2019
(As of June 30, 2019)

LIABILITIESCurrent liabilities
Notes and accounts payable - trade

77,884

71,685

Short-term loans payable

30,656

33,690Accrued expenses

5,307

4,051

Income taxes payable

1,147

568

105

26

6,239

7,145

121,340

117,167

Long-term loans payable

1,882

1,692

Deferred tax liabilities

1,300

1,348

94

97

Net defined benefit liability

1,997

1,937

Asset retirement obligations

280

284

Other

2,606

3,272

Total non-current liabilities

8,161

8,632

129,501

125,800

Capital stock

12,133

12,133

Capital surplus

13,865

13,865Retained earnings

51,29751,412

Treasury shares(2,024)(2,024)

Total shareholders’ equity

75,27275,387

Provision for directors’ bonuses
Other
Total current liabilities
Non-current liabilities

Provision for directors’ retirement benefits

Total liabilities
NET ASSETS
Shareholders’ equity

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

1,018

685

2

(11)

Foreign currency translation adjustment

527

(23)

Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeNon-controlling interests

(215)

(200)

1,332

450

7,654

7,634

Total net assets

84,25983,472

213,761

209,272

Total liabilities and net assets5(2) Quarterly consolidated statements of income and comprehensive income
For the First quarter (April 1, 2019 – June 30, 2019)(Million yen)First quarter ended June 2018
(April 1, 2018 – June 30,2018)

First quarter ended June 2019
(April 1, 2019 – June 30, 2019)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Foreign exchange gains
Gain from equity method investments
Commission fee
Other
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using
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 assets
Loss on sales of investment securities
Loss on valuation of investment securities
Loss on valuation of golf club membership
Other
Total extraordinary loss
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit55,49347,851
7,641
6,152
1,489

109,564
98,501
11,062
9,212
1,850

21
87
－
12
53
101
275

80
83
43
－
85
119
412

37

75

－

88

35
12
85
1,679

－
53
217
2,045

1
184
7
193

5
0
12
18

0
－
104
5
0
110
1,762
264
345
609
1,152

0
13
247
－
4
265
1,799
211
157
368
1,430

Profit attributable to owners of parent
Profit attributable to non-controlling interests
Other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive income
Comprehensive income

1,148
3

1,350
80

(137)

(330)

16
182
6

(13)
(644)
12

(13)

(11)

55
1,207

(987)
442

Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

1,203

463

4

(20)

6

(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)(IFRS 16 “Leases”)
Subsidiaries that adopt International Financial Reporting Standards are applying International Financial ReportingStandard No. 16 “Leases” (hereafter, “IFRS 16”) from the first quarter ended June 30, 2019. In accordance with thestandards, right-of-use assets and lease liabilities are recognized in principle for all of the lessee’s lease transactions, anddepreciation of right-of-use assets and interest on lease liabilities are recorded.
In applying IFRS 16, the transition provisions are followed, opting therefore to measure lease liability at the present value,
discounted using lessee’s incremental borrowing rate at the date of initial application, and record this same amount for rightof-use asset.
As a result of the application of IFRS 16, the following items increased as of June 30, 2019: in non-current assets,“buildings and structures (net)” by 1,150 million yen, “machinery, equipment and vehicles (net)” by 4 million yen, and“tools, furniture and fixtures (net)” by 1 million yen; "other" in current liabilities by 251 million yen, and "other" in noncurrent liabilities by 911 million yen. Further, as a result of the application of IFRS 16, there was a decrease of 84 million
yen in ordinary income for the first quarter ended June 30, 2019.
(Segment information)
I. For the first quarter ended June 2018 (April 1, 2018 – June 30, 2018)
Information about net sales and income (loss) by reportable segments(Million yen)
Reportable segments
Adjustment(Note 1)

Consolidated(Note 2)

Electronic
components

Informationequipment

Software40,507

10,417465

4,103

55,493－55,493

669

185

177

959

1,992

(1,992)－

Total

41,176

10,603643

5,062

57,485(1,992)55,493

Segment income(loss)

1,071

317

(19)

80

1,450

38

1,489

OthersTotal

Net sales:
Sales to externalcustomers
Inter-segment sales
or transfers

Notes:

1.
2.

Adjustment in segment income of 38 million yen includes 38 million yen for elimination of inter-segment trade.
Segment income (loss) is adjusted for operating income on the quarterly consolidated statements of income and comprehensive
income.

7II. 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
Adjustment(Note 1)

Consolidated(Note 2)

109,564－

109,564

965

1,973

(1,973)

－

529

5,378

111,537(1,973)

109,564

(61)

72

1,820

30

1,850

Electronic
components

Informationequipment

Software

94,587

10,126

437

4,412

754

160

91

Total

95,342

10,286

Segment income(loss)

1,621

188

OthersTotal

Net sales:
Sales to externalcustomers
Inter-segment sales
or transfers

Notes:

1.
2.

Adjustment in segment income of 30 million yen includes 30 million yen for elimination of inter-segment trade.
Segment income (loss) is adjusted for operating income on the quarterly consolidated statements of income and comprehensive
income.

8