February 6, 2020

Summary of Consolidated Financial Results
for the Third Quarter Ended December 31, 2019 [Japan GAAP]
Name of Company:
Stock Code:
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Representative
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Title:Name:
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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, Administration Headquarters
Eiji Kawamura+81-(0)3-5657-0111
February 13, 2020
Yes
None

(Yen in millions, rounded down)
1. Financial results for the third quarter of the fiscal year ending March 2020 (April 1, 2019 – December 31, 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%

Third quarter ended December 2019

338,801

95.0

7,732

34.5

7,975

32.9

4,924

1.0

Third quarter ended December 2018

173,782

(0.2)

5,748

(13.1)

6,000(15.4)

4,875(11.5)

Note: Comprehensive income: 3Q of FY3/2020: 5,043 million yen ［23.6%］

3Q of FY3/2019: 4,081 million yen ［(41.0%)］

Earnings per share(diluted)

Earnings per share
Yen

Yen

Third quarter ended December 2019179.43−

Third quarter ended December 2018

177.69−(2) Financial Position (Consolidated)
Total assets

Net assets

Equity ratio

Million yen

Million yen%

As of December 31, 2019

210,004

87,261

37.7

As of March 31, 2019

213,761

84,25935.8

Reference: Shareholders’equity As of December 31, 2019: 79,254 million yen As of March 31, 2019: 76,604 million 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
30.00

-

45.00

80.00

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

Million yen%

Million yen%

Million yen%

Million yen%

Yen

442,000

51.0

9,000

18.9

9,000

14.5

5,000

(37.6)

182.17

Note: Change in the forecast from the latest announcement: Yes
With respect to the revision of consolidated performance forecast, please refer to “ KAGA ELECTRONICS Revises Consolidated Earnings
Forecast ” announced today (February 6, 2020).

* 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: Yes(a) Changes due to revision of accounting standards: None(b) Changes other than (a): None(c) Changes in accounting estimates: None(d) Retrospective restatement
Note: For more information, please refer “2. Quarterly Consolidated Financial Statements and Major Notes (3) Notes to quarterly
consolidated financial statements (Changes in accounting policies)” on page 9.

(4) Number of shares outstanding (common stock)(a) Shares outstanding (including treasury shares)
As of December 31, 2019:(b) Treasury shares
As of December 31, 2019:28,702,118

As of March 31, 2019:28,702,118

1,255,151

As of March 31, 2019:

1,254,924

Period ended December 31, 2018:27,437,214(c) Average number of shares (quarterly consolidated during the period)
Period ended December 31 2019:27,447,141* 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
use of the forecast, please see “1. Results of Operations, (3) Qualitative information on consolidated earnings forecast” onpage 4..

(How to obtain supplementary materials on quarterly financial results)
The Company also plans to post the supplementary materials on quarterly financial results, 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 conditions ..........................................................................................................................................3(3) Qualitative information on consolidated performance 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 third quarter (April 1, 2019 - December 31, 2019)...............................................................................................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(Additional information) ................................................................................................................................................9(Segment information) ...................................................................................................................................................11

1

1. Results of Operations(1) Overview of consolidated business performance
The Group is pushing forward with its growth strategy by strengthening sales of electronics components and EMS
business (note) in order to achieve the management targets 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, andROE of 8% or higher to be attained in the fiscal year ending March 31, 2022.
The Group has steadily implemented measures to achieve the targets set out in the plan, including the conversion into
group companies of Fujitsu Electronics Inc. (hereafter, “Fujitsu Electronics") in January 2019, and Kaga EMS Towada(formerly Towada Pioneer Corporation) in October of the same year. In addition, the new Fukushima factory started
operating in October 2019, and the second Thailand factory began operations in December 2019.
Net sales in the third quarter of the fiscal year ending March 31, 2020 increased substantially by 95.0% year on year to338,801 million yen, due largely to revenue contribution from Fujitsu Electronics, whose results are reflected for the fullquarter.
In terms of income, reflecting notably the steady performance of the electronic component business led by the EMS
business in addition to the effects of business acquisitions, operating income increased by 34.5% year on year to 7,732
million yen, ordinary income increased by 32.9% year on year to 7,975 million, and profit attributable to owners of parent
increased by 1.0% year on year to 4,924 million yen.
Operating income and ordinary income achieved record highs for a third-quarter period.
(Note) Electronics Manufacturing Service: Provision of electronic device development and manufacturing services on an outsourcing basis

FY 2019/3 3Q

FY 2020/3 3Q(April 1, 2018 –(April 1, 2019 –December 31, 2018)

December 31, 2019)

YoY（Million yen）

（Million yen）

Net sales

173,782

338,801

165,018

95.0%

Gross profit（Margin）

24,02313.8%

35,245
10.4%

46.7%
−

SG&A

18,27527,513

11,221(3.4pt)
9,238

50.6%

Operating income

5,748

7,732

1,983

34.5%

Ordinary income

6,000

7,975

1,974

32.9%

Profit before income taxes

5,746

7,587

1,840

32.0%

4,875

4,924

49

1.0%

111.14Yen

108.67Yen(2.47Yen)−

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

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 led by medical equipment and automotive. The
component sales business was upbeat for automotive and consumer LED applications, and the conversion of FujitsuElectronics to a subsidiary added new revenue, especially from mobile phone and automotive applications.
As a result, net sales increased by 135.0% year on year to 293,527 million yen, and segment income increased by
69.8% year on year to 6,418 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, schools, and other educational institutions enjoyed strong
sales. In contrast, the commercial facilities-related LED installation business was affected by a pause in replacement
demand from major customers, while sales in the housing-related home electric appliances business decreased due tosuch factors as delivery date adjustments by customers.

2

As a result, net sales decreased by 8.0% year on year to 29,789 million yen and segment income decreased by 36.2%
year on year to 854 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 and the small scale of the jobs.
As a result, net sales decreased by 8.0% year on year to 1,788 million yen, and segment income decreased by 92.0%
year on year to of 9 million yen.
(d) Others (Repair and support for electronics equipment, and sales of amusement equipment and sports goods, and others)
In this business, sales of arcade amusement machines continued to be strong. The PC peripherals and mobile phones
recycling business showed robust performance, however golf products suffered sluggish sales.
As a result, net sales decreased by 6.0% year on year to 13,696 million yen, and segment income decreased by 12.3%
year on year to 364 million yen.
FY 2019/3 3Q

FY 2020/3 3Q(April 1, 2018 –(April 1, 2019 –December 31, 2018)

December 31, 2019)（Million yen）

YoY

（Million yen）

（Million yen）

Electronic components

Net sales
Segment income

124,893
3,780

293,527
6,418

168,633
2,638

135.0％
69.8％

Information equipment

Net sales
Segment income

32,374
1,339

29,789854(2,585)(484)(8.0％)(36.2％)

Software

Net sales
Segment income

1,943
122

1,788
9

(155)
(112)

(8.0％)(92.0％)

Others

Net sales
Segment income

14,570415

13,696
364

(874)
(51)

(6.0％)(12.3％)Total

Net sales
Segment income

173,782
5,748

338,801
7,732

165,018
1,983

95.0％
34.5％

Note: “Segment income” shows unadjusted figures for each business segment and adjusted figures for the total.
(2) Overview of financial conditions
Assets, liabilities and net assets
Total assets as of December 31, 2019 decreased by 3,756 million yen from March 31, 2019 to 210,004 million yen.
Current assets decreased by 7,539 million yen to 174,856 million yen. This is primarily due to a decrease of 8,743
million yen in notes and accounts receivable –trade, and a decrease of 7,359 million yen in merchandise and finishedgoods, although cash and deposits increased by 7,080 million yen.
Non-current assets increased by 3,783 million yen to 35,147 million yen. This is primarily attributable to an increase of
2,899 million yen for buildings and structures, net.
Liabilities decreased by 6,758 million yen to 122,742 million yen. This is primarily attributable to a decrease of 5,845
million yen in notes and accounts payable –trade.
Net assets increased by 3,002 million yen to 87,261 million yen. This is primarily due to recording 4,924 million yen of
profit attributable to owners of parent.

3(3) Qualitative information on consolidated performance forecast
The Company made the following revisions to the full-year consolidated earnings forecasts for the fiscal year ending
March 31, 2020, which it published on November 7, 2019.
（Reasons for revisions）
The electronic components sales business, a core business, was solid, particularly for medical equipment and automotive
devices. As a result, the Company expects net sales to exceed the previous forecast.
The Company also expects operating income and ordinary income to surpass the previous forecasts because grossmargin increased as a result of higher net sales, personnel costs decreased following personnel reductions, and efforts tocurb other expenses were a success. At the same time, the Company left its forecast for profit attributable to owners ofparent unchanged to take into account the posting of costs related to structural reforms in preparation for changes in theinternal and external conditions, which are uncertain.
Revisions to consolidated earnings forecasts for the fiscal period ending March 31, 2020 (from April 1, 2019 to March 31,
2020)
Operating

Net sales

incomeProfit attributable
Ordinary income

Net income per

to owners of
shareparentMillion yen

Million yen

Million yen

Million yen

yenPrevious forecast (A)430,000

7,000

7,000

5,000

182.17

Revised forecast (B)442,000

9,000

9,000

5,000

182.17

Difference (B-A)

12,000

2,000

2,000

-

-

2.8

28.6

28.6

-

-

292,779

7,570

7,859

8,014

292.07

Difference (%)(Reference) Results for theyear ended March 31, 2019

Note: The above earnings forecasts are based on the information currently available to the Company on the date of release andcertain 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 2019
(As of March 31, 2019)

Third quarter ended December 2019
(As of December 31, 2019)

Cash and deposits

35,00342,084

Notes and accounts receivable - trade96,14587,401

Electronically recorded monetary claims - operating

5,361

5,022

261

247

33,734

26,374489

1,212

Raw materials and supplies

5,802

5,721

Other

5,894

7,077

ASSETS
Current assets

Securities
Merchandise and finished goods
Work in process

Allowance for doubtful accounts

(296)

(283)

182,396

174,856

Buildings and structures, net

4,910

7,810

Machinery, equipment and vehicles, net

3,506

4,613

Tools, furniture and fixtures, net

1,104

987

Land

4,861

5,024

628

60

15,011

18,496

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

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

259

350

Software

1,819

1,534

Other

126

187

2,206

2,072

Investment securities

10,085

10,711

Deferred tax assets

1,292

1,077

Guarantee deposits

870

866

Insurance funds

951

898

Other

1,462

1,519

Allowance for doubtful accounts

(515)

(494)

Total investments and other assets

14,147

14,578

Total intangible assets
Investments and other assets

Total non-current assets
Total assets

531,36435,147

213,761

210,004

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

Third quarter ended December 2019
(As of December 31, 2019)

Notes and accounts payable - trade

77,88472,038

Short-term loans payable

30,656

7,691

Accrued expenses

5,307

4,644

Income taxes payable

1,147

986

105

14

6,239

8,875

121,340

94,252Long-term loans payable

1,882

21,054

Deferred tax liabilities

1,300

1,845

94

89

Net defined benefit liability

1,997

1,961

Asset retirement obligations

280

323

Other

2,606

3,217

Total non-current liabilities

8,161

28,490129,501

122,742

Capital stock

12,133

12,133

Capital surplus

13,865

13,865Retained earnings

51,29754,163

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

Total shareholders’equity

75,272

78,138

1,018

1,160

2

15

LIABILITIESCurrent liabilities

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-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment

527

123

Remeasurements of defined benefit plans

(215)

(182)

Total accumulated other comprehensive
income

1,332

1,116

Non-controlling interests

7,654

8,007

Total net assets

84,25987,261

213,761

210,004

Total liabilities and net assets

6

(2) Quarterly consolidated statements of income and comprehensive income
For the third quarter (April 1, 2019 –December 31, 2019)(Million yen)
Third quarter ended December 2018 Third quarter ended December 2019
(April 1, 2018 –December 31, 2018) (April 1, 2019 –December 31, 2019)
Net sales

173,782

338,801

Cost of sales

149,758

303,555

Gross profit

24,02335,245

Selling, general and administrative expenses

18,27527,513Operating income

5,748

7,732

Interest income

102

190

Dividends income

144

163

Commission fee

152

182

Foreign exchange gains

−

98

Other

254

336

Total non-operating income

653

972

Interest expenses

134

235

Share of loss of entities accounted for using equity method

68

357

Foreign exchange losses

122

−

Other

75

136

Total non-operating expenses

401

728

6,000

7,975

Gain on sales of non-current assets

11

19

Gain on sales of investment securities

214

73

Non-operating income

Non-operating expenses

Ordinary income
Extraordinary income

Gain on transfer of business7

12

Settlement received

−

498

Other

−

1

Total extraordinary income

233

605

Loss on retirement of non-current assets

58Loss on sales of investment securities

Extraordinary loss
2

54

Loss on valuation of investment securities

462

553

Loss on valuation of golf club membership

5−

Extra retirement payments−

127

Impairment loss

9

245

Other

2

4

Total extraordinary loss

487

993

Profit before income taxes

5,746

7,587

Income taxes - current

1,460

1,642

Income taxes - deferred

(599)

612

Total income taxes

861

2,255

Profit

4,884

5,332

Profit attributable to owners of parent

4,875

4,924

9

407

Profit attributable to non-controlling interests

7

(Million yen)
Third quarter ended December 2018 Third quarter ended December 2019
(April 1, 2018 –December 31, 2018) (April 1, 2019 –December 31, 2019)
Other comprehensive income
Valuation difference on available-for-sale securities(1,069)142

Deferred gains or losses on hedges

15

12Foreign currency translation adjustment

266

(418)

Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income ofassociatesaccounted for using equity method

20

30

(37)

(55)

Total other comprehensive income

(803)

(288)

Comprehensive income

4,081

5,043

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

4,072

4,704

8

339

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)(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 December 31, 2019: in non-current assets,“buildings and structures (net)” by 1,091 million yen, “machinery, equipment and vehicles (net)” by 3 million yen, and“tools, furniture and fixtures (net)” by 0 million yen; "other" in current liabilities by 268 million yen, and "other" in noncurrent liabilities by 817 million yen.
The effect of this change on profit and loss for the third quarter of the fiscal year ending March 2020 is immaterial.
(Additional information)(Share transfer agreement with CITY INDEX ELEVENTH CO., Ltd. for acquisition of shares in EXCEL CO., LTD.)At the board of directors meeting held on December 9, 2019, Kaga Electronics Co., Ltd (“the Company” ) resolved toconclude a share transfer agreement with CITY INDEX ELEVENTH CO.,Ltd (“CI11") with respect to the outstanding
shares issued by EXCEL CO., LTD. (“EXCEL” ), and concluded the said agreement on the same date. The acquisition of
EXCEL shares under the said agreement (“the Share Acquisition” ) is scheduled to be executed on April 1, 2020, upon which
EXCEL will become the Company’s wholly-owned subsidiary effective the same date.
Pursuant to the integrated contract entered into between the Company, EXCEL, Office Support K.K. (“Office Support” ),the parent company of CI11, and CI11 on December 9, 2019, the Share Acquisition shall be executed upon (1) CI11 making
EXCEL a wholly-owned subsidiary through share exchange for cash consideration (“the Share Exchange” ), andsubsequently (2) payment of dividend in kind being made to CI11 using a portion of assets owned by EXCEL as dividend
property (“the Dividend in Kind").
1. Reasons for the management integration and acquisition of the shares
Since its foundation, the Company has been expanding its business domain by responding to the various needs ofcustomers in accordance with its philosophy of “everything we do is for our customers” . As an independent general trading
company that specializes in electronics, the Company is engaged in a wide variety of business activities and offers a variety
of services to customers both in Japan and abroad, ranging from distribution of Electronic Parts and Semiconductors thatleverages its expertise in the segment, the EMS business where it has a competitive advantage in high-mix low-volume
production, to support for customers in planning, development and design of their products, creation of software/video
images, and provision of network solutions and other system support services.
Meanwhile, changes are taking place with increasing speed in the business environment surrounding the electronics tradingindustry, where there still are many players competing with each other. We have seen reorganization and consolidation ofsemiconductor/device manufacturers, our suppliers, which have led to review of their policies on distribution agents, moves
by end-products manufacturers, our customers, to relocate their production facilities to overseas sites for assembly offinished products, changes in demand and supply and price fluctuations in both domestic and overseas markets reflecting
US-China tariff policies and uncertainty in the future of the global economy. There has also been shortening of product life
cycles as a result of ongoing technological innovations. Against this backdrop, we believe that the competition for survival
among electronic trading companies will become more and more intense in the coming years.
Under these circumstances, the Company has formulated the three-year “Medium Term Management Plan 2021” that runs
from the fiscal year ending March 31, 2020 to March 31, 2022 (announced on November 6, 2018, “the Medium Term Plan” ),in line with which it is working on enhancement of revenue base, stabilization of management base and creation of new

9

businesses, being guided by its medium to long-term vision of becoming “Japan’s No. 1 corporate group in the industry” by
establishing “profit-focused management” and putting it firmly in place, with the aim of developing into a competitive“world-class company” .
In January last year, Fujitsu Electronics Inc., a core trading company of the Fujitsu Group, was converted to a subsidiary of
the Group, to achieve expansion the Group’s trading company business. In October, the Company acquired from Pioneer
Corporation shares of Towada Pioneer Corporation (currently Kaga EMS Towada Co., Ltd.), a manufacturing subsidiary of
Pioneer, to strengthen manufacturing capabilities.
The decision to make EXCEL a subsidiary based on the share transfer agreement concluded with CI11 also forms a part of
the Company’s efforts to achieve its growth strategy. In the course of the decision, the Company recognized that EXCEL’s
strengths in its key domestic and overseas products in the area of liquid crystal devices as well as its customer base in China
were particularly attractive for the Company as it seeks to achieve its growth strategy.
EXCEL operates a business focusing on electronic devices led by liquid crystal, semiconductors and integrated circuits,
and its integration into the Group is expected to generate the following synergies.
(1)Market share expansion for the Electronic Parts and Semiconductor businessWe will seek to strengthen ability to respond to customer needs and expand share in the electronic parts andsemiconductor markets by complementing the respective companies’offerings and sales channels. In particular,
realization of synergies can be expected with EXCEL’s strengths in its key domestic and overseas products in the LCD
domain to expand sales to the Company’s customers, as well as EXCEL’s customer base in China to strengthen
distribution of the Company’s products.
(2)Expansion in the scale of the EMS businessWe will strive to further strengthen the profitability of the Company’s EMS business by sharing the Company’s
global network of EMS manufacturing bases with EXCEL, and reaching out to the EXCEL customer base with theCompany’s EMS business.
(3)Acquisition of new businesses
We will bring in EXCEL’s promising new businesses such as EV-related business and mobilize the collective
strength of the Group to achieve early commercialization.
(4)Further improvement in management efficiency through business collaboration between the two companies
We will seek to improve the profitability of both the Company and EXCEL by optimizing and sharing to the greatest
extent possible the two firms’sales related organizations and other functions.

Through the Share Acquisition, we will seek to solidify our footing as “Japan’s No. 1 corporate group in the industry” as
set out in the Medium Term Plan, and will continue efforts to expand and improve the scale and the quality of Groupmanagement, with the aim of achieving sustainable growth as a competitive “world-class company” which can stand up to
overseas competition with their sales crossing the trillion yen mark.
2. Name, business details, and size of company whose shares are to be acquired(1) Name

EXCEL CO., LTD.

(2) Business

Sale, import and export of LCD devices, integrated circuits, semiconductor devices and other electronic
components and equipment(3) Size of company (consolidated figures for the fiscal year ended March 2019)

Consolidated net assets
Consolidated total assets
Consolidated net sales
Consolidated operating income
Consolidated ordinary income
Ordinary income attributable to owners of parent

10

24,611 million yen
43,739 million yen
67,499 million yen
369 million yen
252 million yen
569 million yen

3. Name of the selling shareholder

CITY INDEX ELEVENTH CO.,Ltd4. Date of share acquisition (planned)

April 1, 2020
5. Number of shares to be acquired, acquisition price, and ownership ratio following acquisition (planned)(1) Shares to be acquired

8,666,084 shares (Note 1)(2) Acquisition price
Shares of common stock in EXCEL CO., LTD. (estimate)

100 million yen (Note 2)

Advisory and other fees (estimate)

250 million yen

Total (estimate)

350 million yen(3) Ownership ratio following acquisition
100.0%
Note 1: The number indicated herein is the total number of outstanding shares of EXCEL as of September 30, 2019(9,086,755 shares), net of the number of treasury shares as of the same date (420,671 shares). However, as weunderstand that EXCEL is planning to cancel the treasury shares it holds at the time immediately preceding theeffective date of the Share Exchange, “the number of shares to be acquired” and “the number of shares held after
the acquisition” may change according to change in the number of EXCEL’s treasury shares.
It is anticipated that the Company will recognize approximately 8.2 billion yen of gain on bargain purchase fromthe Share Acquisition.
Note 2: The Company plans to provide financing of around 8 billion yen to EXCEL as working capital on the execution
date of the Share Acquisition.

(Segment information)
I. For the third quarter ended December 2018 (April 1, 2018 –December 31, 2018)
Information about net sales and income (loss) by reportable segments(Million yen)
Reportable segments
Adjustment(Note 1)

Consolidated(Note 2)

173,782−

173,782

3,305

6,587

(6,587)−2,403

17,875

180,370(6,587)

173,782

122

415

5,657

91

5,748

Electronic
components

Informationequipment

Software

Others

Total

Sales to externalcustomers

124,893

32,374

1,943

14,570Inter-segment sales
or transfers

2,151

670

460

127,045

33,045

3,780

1,339

Net sales:

Total
Segment income
Notes:

1. Adjustment in segment income of 91 million yen includes 91 million yen for elimination of inter-segment trade.
2. Segment income is adjusted for operating income on the quarterly consolidated statements of income and comprehensive income.

11II. For the third quarter ended December 2019 (April 1, 2019 –December 31, 2019)
Information about net sales and income (loss) by reportable segments(Million yen)
Reportable segments
Adjustment(Note 1)

Consolidated(Note 2)

338,801−

338,801

2,595

5,627

(5,627)−

2,170

16,291

344,428(5,627)

338,801

9

364

7,647

84

7,732

Electronic
components

Informationequipment

Software

Others

Total

Sales to externalcustomers

293,527

29,7891,788

13,696

Inter-segment sales
or transfers

1,867

782

381

295,394

30,572

6,418

854

Net sales:

Total
Segment income
Notes:

1. Adjustment in segment income of 84 million yen includes 84 million yen for elimination of inter-segment trade.
2. Segment income is adjusted for operating income on the quarterly consolidated statements of income and comprehensive income.

12