August 3, 2023

Summary of Consolidated Financial Results
for the First Quarter Ended June 30, 2023 [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: Senior Executive Officer
Contact Person
Name: Yasuhiro Ishihara
Head of Administration Headquarters
Phone:+81-(0)3-5657-0111
Date of filing of quarterly securities report (tentative):
August 10, 2023
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 2024 (April 1, 2023 – June30, 2023)(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 2023

137,694(7.8)

6,994 (28.8)

6,909 (29.9)

5,767 (17.4)

First quarter ended June 2022

149,30240.9

9,820 120.6

9,858 115.9

6,984 143.2

Note: Comprehensive income: 1Q of FY2024/3: 9,404 million yen [(16.9%)] 1Q of FY2023/3: 11,314 million yen[ 234.4%]

Earnings per
share(diluted)

Earnings per
share
Yen

Yen

First quarter ended June 2023

219.63－First quarter ended June 2022

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

Net assets

Equity ratio

Million yen

Million yen%

As of June 30, 2023

292,822

135,983

46.4

As of March 31, 2023

286,217

129,737

45.3

Reference: Shareholders’ equity：As of June 30, 2023: 135,850 million yen

As of March 31, 2023: 129,608 million yen

2. Dividends
Dividend per share

1Q

2Q

3Q

Year-end

Full year

Yen

Yen

Yen

Yen

Yen

Fiscal year ended March 2023－

Fiscal year ending March 2024－

Fiscal year ending March 2024 (Forecast)

100.00－120.00220.00110.00－110.00220.00Notes: Change in the dividend forecast from the latest announcement: None
Breakdown of interim dividend for FY2023/3: Ordinary dividend: 70.00 yen; Extraordinary dividend: 30.00 yen
Breakdown of year-end dividend for FY2023/3: Ordinary dividend: 70.00 yen; 55th anniversary commemorative
dividend: 10.00 yen; Extraordinary dividend: 40.00 yen3. Forecast for the fiscal year ending March 2024 (Consolidated, April 1, 2023 – March 31, 2024)(Percentage figures represent year on year changes)
Net sales

Full year

Operating income

Million yen%

550,000(9.5)

Million yen

Ordinary income%

Million yen

25,000 (22.5)%

25,000 (23.6)

Profit attributable

Earnings per

to owners of parent

shareMillion yen%

Yen

18,000 (22.0)

685.42

Note: 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 : 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, 2023:(b) Treasury shares

28,702,118

As of March 31, 2023

28,702,118

As of June 30, 2023:

2,441,233

As of March 31, 2023

2,440,983(c) Average number of shares (quarterly consolidated during the period)
Period ended June 30, 2023:
26,261,015
Period ended June 30, 2022: 26,247,868* 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)
Supplementary materials on quarterly financial results are disclosed through TDnet and posted on the
Company’s website today (August 3, 2023).

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, 2023 - June 30, 2023) ......................................... 7(3) Notes to quarterly consolidated financial statements .......................................... 9(Notes to going concern assumptions) ............................................................ 9(Significant change in shareholders’ equity) ..................................................... 9(Changes in accounting policies) ..................................................................... 9(Segment information).................................................................................. 9

1. Results of Operations(1) Overview of consolidated business performance
During the first quarter of the consolidated fiscal period under review, while sales
increased in the information equipment business, the software business, and the others
business, decreased in the electronic components business, which is the Group’s corebusiness, due to the disappearance of spot demand and emergence of some impact of
inventory adjustments by customers in general, given easing of supply shortages ofsemiconductors and electronic components. As a result, net sales were 137,694 million
yen, down 7.8% year on year. Operating income decreased by 28.8% year on year to
6,994 million yen. Aside from a decline in gross profit due to lower sales, the income
decrease resulted from having incorporated loss on valuation of inventories and provisionof allowance for doubtful accounts on trade receivables associated with a business
partner of the Group that filed a petition for commencement of civil rehabilitation
proceedings. Ordinary income decreased by 29.9% year on year to 6,909 million yen.
Profit attributable to owners of parent decreased by 17.4% year on year to 5,767 million
yen, with gain on sales of securities recorded as extraordinary income in connection withthe sale of shares that were held for investment purposes.
In November 2021, the Group formulated its three-year management plan, MediumTerm Management Plan 2024, which runs from the fiscal year ended March 31, 2023, up
to the fiscal year ending March 31, 2025. Having achieved, two years ahead of the plan,
the targets for the two income items of operating income and ROE in the previous fiscal
year, which was the first year of the plan, the Group announced the latest outlook in May
2023, with net sales of 750 billion yen, operating income of 30 billion yen or higher, andROE of 10% or higher.
In the earnings forecasts the Group announced for the fiscal year ending in March
2024, the second year of the plan, decreases are projected in both net sales and incomeson the assumption that the impact of inventory adjustments would become tangible inthe supply chain in which the Group is involved with respect to the electronic components
business. Nonetheless, performance exceeded the internal plan in the first quarter underreview, which therefore got off to a good start.
FY 2023/3 1Q

FY 2024/3 1Q(April 1, 2022 –(April 1, 2023 –June 30, 2022)

June 30, 2023)

YoY（Million yen）

（Million yen）

Net sales

149,302137,694(11,608)(7.8％)

Gross profit

19,83817,553(2,284)(11.5％)（Margin）

13.3％

12.7％

(0.6pt)－SG&A

10,01810,559541

5.4％

Operating income

9,820

6,994

(2,826)(28.8％)

Ordinary income

9,858

6,909

(2,948)(29.9％)

Profit before income taxes

9,982

7,912

(2,069)(20.7%)

6,984

5,767

(1,216)(17.4%)

129.57yen

137.37yen

7.80yen－Profit attributable to ownersof parent（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, sales in the component sales business declined sharply, attributable
partly to the disappearance of spot demand for some products and emergence of some
impact of inventory adjustments by customers in general, given easing of supply
shortages of semiconductors and electronic components that had continued for two
consecutive years until the previous fiscal year. In the EMS business, sales in theautomotive sector increased due to improved supply and demand balance ofsemiconductors and electronic components, whereas sales in applications related to
medical and industrial equipment decreased due partly to inventory adjustments at key
customers.
As a result, net sales decreased by 10.1% year on year to 120,015 million yen, andsegment income decreased by 34.3% year on year to 5,922 million yen.
(Note) Electronics Manufacturing Service: Provision of product development and manufacturing 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, amid the season of high demand for newly enrolled students, sales of
PCs to educational institutions were strong. Sales of security software and PC peripheralproducts also remained solid. The LED installation business made steady progress with
contribution from sales of large-scale projects that the Group has been pushing forward
on a full scale since the previous fiscal year.
As a result, net sales increased by 8.1% year on year to 12,050 million yen, andsegment income increased by 32.2% year on year to 746 million yen.
(c) Software (Production of computer graphics, planning and development of amusement
products, and other activities)
In this business, overall loss decreased reflecting increased sales with contribution
from orders for large-scale and new projects in smartphone games development andcomputer graphics production.
As a result, net sales increased by 15.8% year on year to 577 million yen, andsegment loss of 4 million yen was recorded (33 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 and sports goods, and others)
In this business, the PC and PC peripheral recycling business was strong. Sales ofgame equipment for the amusement industry also increased both in domestic andoverseas markets.
As a result, net sales increased by 20.9% year on year to 5,050 million yen, andsegment income increased by 17.0% year on year to 291 million yen.
Financial Results by Business Segment
FY 2023/3 1Q

FY 2024/3 1Q(April 1, 2022 –(April 1, 2023 –June 30, 2022)

June 30, 2023)

YoY（Million yen）

（Million yen）

Electronic
components

Net sales
Segment income

133,477
9,018

120,015
5,922(13,461)(3,095)(10.1%)(34.3%)

Informationequipment

Net sales
Segment income

11,147564

12,050
746

902
181

8.1%
32.2％

Software

Net sales
Segment income

498
(33)

577
(4)

78
28

15.8%
－

Others

Net sales
Segment income

4,178
249

5,050
291

872
42

20.9％
17.0%

Total

（Million yen）

Net sales
149,302137,694(11,608)(7.8％)
Segment income
9,820
6,994
(2,826)(28.8％)
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, 2023 increased by 6,605 million yen from March 31, 2023,
to 292,822 million yen.
Current assets increased by 9,302 million yen from the end of the previous fiscal year, to254,874 million yen. This was primarily due to a 14,352 million yen increase in inventory
and a 6,757 million yen increase in cash and deposits, along with a 14,006 million yen
decrease in accounts receivable – tradeNon-current assets decreased by 2,696 million yen from March 31, 2023, to 37,948
million yen. This is primarily due to decreases of 2,410 million yen in investment
securities.
Liabilities increased by 359 million yen from March 31, 2023, to 156,839 million yen.
Net assets increased by 6,246 million yen from March 31, 2023, to 135,983 million yen.
This is primarily the result of recording 5,767 million yen of profit attributable to ownersof the parent.

(3) Qualitative information on consolidated earnings forecast
No revision is made to the full-year earnings forecasts announced on May 11, 2023.
Although the Group has made a good start against the internal plan in the first quarter
under review, the management environment is expected to remain uncertain in thesecond quarter and beyond, with concerns about rising inflation, heightening of
geopolitical risks and other factors.
In line with the growth strategy formulated in the Medium-Term Management Plan
2024, the Group will seek to achieve further growth and reinforce profit structure, andwork on improving its corporate value.

Reference: Earning Forecasts for FY2024/3 and Management Targets of Medium-Term Management Plan 2024
FY2023/3
Results

FY2024/3
Forecasts

Change(Announced on May 11, 2023)(Million yen)

(Million yen)

Net Sales

608,064

550,000

Operating Income

32,249Ordinary Income

Management Targetsof Medium-Term
Management Plan 2024
(FY2025/3)(9.5%)

750 billion yen

25,000(22.5%)

30 billion yen or higher

32,73925,000(23.6%)－

Profit attributable toowners of parent

23,07018,000(22.0%)

－

ＲＯＥ

19.6％

13.3％

(6.3pt)Stable 10% or higher

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 2023 First quarter ended June 2023
(As of March 31, 2023)(As of June 30, 2023)
ASSETS
Current assets
Cash and deposits

52,60059,358Notes receivable – trade

1,534

1,920

Electronically recorded monetary claims- operating

9,683

10,095

117,881

103,874

195

180

41,37553,030Accounts receivable – trade
Securities
Merchandise and finished goods
Work in process

2,277

2,539

Raw materials and supplies

12,552

14,987

Other

7,624

9,058

Allowance for doubtful accounts

(153)

(171)

245,572

254,874

Buildings and structures, net

6,690

6,619

Machinery, equipment and vehicles,
net

6,466

6,793

Tools, furniture and fixtures, net

1,103

1,099

Land

5,859

5,924

39

794

20,15821,231

Goodwill

48

40

Software

2,617

2,463

36

37

2,702

2,541

Investment securities

12,144

9,734

Deferred tax assets

2,162

1,069

Guarantee deposits

1,280

1,238

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

Construction in progress
Total property, plant and equipment
Intangible assets

Other
Total intangible assets
Investments and other assets

920

921

Distressed receivables

4,842

5,022

Other

1,298

1,271

Allowance for doubtful accounts(4,864)(5,082)

Total investments and other assets

17,784

14,176

Total non-current assets

40,64537,948286,217292,822

Insurance funds

Total assets- 5-

(Million yen)
Fiscal year ended March 2023 First quarter ended June 2023
(As of March 31, 2023)(As of June 30, 2023)

LIABILITIESCurrent liabilities
Notes and accounts payable - trade79,232

88,374

Short-term loans payable

19,585

20,258

Accrued expenses

8,400

6,820

Income taxes payable

6,011

1,643

465

11

Other

13,852

10,424

Total current liabilities

127,547

127,531

Bonds payable

10,00010,000Long-term loans payable

10,60010,600

Deferred tax liabilities
Provision for directors’ retirement
benefits
Net defined benefit liability

2,634

2,992

143

136

2,148

2,204

627

636

Other

2,778

2,737

Total non-current liabilities

28,932

29,307

156,479

156,839

Capital stock

12,133

12,133

Capital surplus

14,82014,820Retained earnings

95,94598,562

Treasury shares(5,614)(5,615)

Total shareholders’ equity

117,285

119,900

2,534

2,336

(18)

8

9,568

13,370239

233

12,322

15,949129

133

129,737

135,983

286,217292,822

Provision for directors’ bonuses

Non-current liabilities

Asset retirement obligations

Total liabilities
NET ASSETS
Shareholders’ 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
Non-controlling interests
Total net assets
Total liabilities and net assets- 6-

(2) Quarterly consolidated statements of income and comprehensive income
For the First quarter (April 1, 2023 – June 30, 2023)(Million yen)First quarter ended June 2022
(April 1, 2022– June 30,2022)

First quarter ended June 2023
(April 1, 2023 – June 30, 2023)

Net sales

149,302137,694

Cost of sales

129,464

120,140

Gross profit

19,83817,553

Selling, general and administrative
expenses

10,01810,559Operating income

9,820

6,994

Interest income

26

116

Dividends income

7176

Commission fee
Share of profit of entities accounted forusing equity method
Other

60

51

－

31

97

182

Total non-operating income

256

458

Interest expenses

105

226

Loss from equity method investments

17－

Foreign exchange losses

23

238

Other

70

77

Total non-operating expenses

217

542

9,858

6,909

Non-operating income

Non-operating expenses

Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on revision of retirement benefit
plan
Other
Total extraordinary income

10

1

7

1,065

126

－

1

－

144

1,067

19

5

0

0

0

58

0

0

21

65

9,982

7,912

Extraordinary loss
Impairment loss
Loss on retirement of non-current
assetsLoss on valuation of investment
securities
Other
Total extraordinary loss
Profit before income taxes
Income taxes - current

1,633

606

Income taxes - deferred

1,360

1,533

Total income taxes

2,993

2,139

Profit

6,989

5,772

Profit attributable to owners of parent
Profit attributable to non-controllinginterests

6,984

5,767

4

5

- 7-

(Million yen)First quarter ended June 2022
(April 1, 2022– June 30,2022)

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

First quarter ended June 2023
(April 1, 2023 – June 30, 2023)

(146)

(200)

(44)

28

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

4,566

3,782

(131)

(5)

81

26

4,325

3,631

Comprehensive income

11,314

9,404

11,305

9,394

8

9

Comprehensive income attributable toowners of parent
Comprehensive income attributable tonon-controlling interests- 8-(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)
Not applicable(Segment information)
For the first quarter ended June 2022 (April 1, 2022 – June 30, 2022)
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

133,477

11,147498

4,178

149,302－

149,302

Inter-segment
sales or transfers

900

1,690

180

1,935

4,707

(4,707)－

134,378

12,838678

6,114

154,009(4,707)

149,302

9,018

564

(33)

249

9,798

21

9,820

Total
Segment income(loss)
Notes:

1. Adjustment in segment income of 21 million yen includes 21 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.

For the first quarter ended June 2023 (April 1, 2023 – June 30, 2023)
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

120,015

12,050577

5,050

137,694－

137,694

Inter-segment
sales or transfers

840

2,426

178

1,247

4,692

(4,692)－

120,855

14,477755

6,298

142,386(4,692)

137,694

5,922

746

(4)

291

6,956

37

6,994

Total
Segment income(loss)
Notes:

1. Adjustment in segment income of 37 million yen includes 37 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.

- 9-