November 8, 2023

Summary of Consolidated Financial Results
for the First Half Ended September 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):
November 13, 2023
Date of commencement of dividend payment (tentative):
December 1, 2023
Quarterly earnings supplementary explanatory documents: Yes
Quarterly earnings presentation:
Yes (For institutional investors and analysts)(Yen in millions, rounded down)
1. Financial results for the first half of the fiscal year ending March 2024 (April 1, 2023 –September 30, 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 half ended September 2023

275,044(7.9)

13,876(24.4)

13,945 (26.3)

11,404 (15.0)

First half ended September 2022

298,760

34.0

18,361

121.2

18,932

13,412 138.5

Note: Comprehensive income: First half of FY3/2024: 16,983 million yen [(19.3%)]

Earnings per
share(diluted)

Earnings per
share
Yen

First half ended September 2023

434.23－First half ended September 2022

510.88－124.0First half of FY3/2023: 21,035 million yen [218.9%]

Yen(2) Financial Position (Consolidated)
Total assets

Net assets

Equity ratio

Million yen

Million yen%

As of September 30, 2023

290,328

143,607

49.4

As of March 31, 2023

286,217

129,737

45.3

Reference: Shareholdersʼ equity︓As of September 30, 2023: 143,465 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－

100.00－120.00220.00Fiscal year ending March 2024－

110.00－110.00220.00Fiscal year ending March 2024 (Forecast)

Notes: Change in the dividend forecast from the latest announcement: None
Breakdown of interim dividend for FY3/2023: Ordinary dividend: 70.00 yen; Extraordinary dividend: 30.00 yen
Breakdown of year-end dividend for FY3/2023: 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)
Net sales
Full year

Operating income

Million yen%

550,000(9.5)

Million yen%(Percentage figures represent year on year changes)
Profit attributable Earnings per
Ordinary income
to owners of parent
shareMillion yen

25,000 (22.5)%

Million yen%

Yen

25,000 (23.6)

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 September 30, 2023:

28,702,118

As of March 31, 2023:

28,702,118

2,434,067

As of March 31, 2023:

2,440,983(b) Treasury shares
As of September 30, 2023:(c ) Average number of shares (quarterly consolidated during the period)
Period ended September 30, 2023:

26,264,058

Period ended September 30, 2022:

26,253,692* 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 as assumption for earnings forecast and cautionary statement regarding use of theforecast, please see “1. Results of Operations, (3) Qualitative information on consolidated earnings
forecast” on page 5.
(Supplementary materials for financial results and how to obtain details of the financial results meeting)
We plan to hold an earnings briefing for institutional investors and analysts on Friday, November
24, 2023. Supplementary materials for the earnings briefing will be posted on TDnet and our
website today (Wednesday, November 8th). We plan to post a video of the earnings briefing,
together with the briefing materials used on that day, on our website on November 24th.
(A video of the earnings briefing in English will be posted at a later date.)（Japanese）https://www.taxan.co.jp/jp/ir/event /event_01.html（English） https://www.taxan.co.jp/en/ir/event /event_01.html

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 ........................................................

5

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 half (April 1, 2022 - September 30, 2022) .........................................................

8(3) Consolidated statement of cash flows ..................................................................................... 10(4) Notes to quarterly consolidated financial statements ............................................................... 12(Notes to going concern assumptions) ................................................................................. 12(Significant change in shareholdersʼ equity) .......................................................................... 12(Segment information) ........................................................................................................ 12－ 1 －1. Results of Operations(1) Overview of consolidated business performance
Looking at the global economy during the first half of the consolidated fiscal period under review, agradual recovery was observed in the U.S. with growth in personal consumption and capital
investment, but economic stagnation continued in Europe, while in China, the economy faced
downward pressure from a sluggish real estate market. Uncertainties thus remain in the global
economic outlook. In Japan, with normalization of economic activities progressing, modest recovery
continued, led by personal consumption against the backdrop of increased employment and rising
wages.
In the electronics industry to which the Group belongs, polarization of the supply–demand balance
continues. On the one hand, automotive applications, where production is recovering with alleviationof global semiconductor shortages, continue to enjoy robust demand on the back of vehicle
electrification. By contrast, demand for PCs and smartphones remains sluggish, and demand forindustrial equipment applications remains in an adjustment phase.
Under such a management environment, during the first half of the consolidated fiscal year underreview, sales increased in the information equipment business and the others business, but theelectronic components business, which is the Groupʼs core business, was affected notably bydisappearance of spot demand and emergence of some impact of inventory adjustments by customers
in general, given easing of supply shortages of semiconductors and electronic components. As aresult, net sales were 275,044 million yen, down 7.9% year on year. Operating income decreased by
24.4% year on year to 13,876 million yen. Aside from a decline in gross profit due to lower sales, theincome decrease reflected factors such as provision of allowance for doubtful accounts of 400 million
yen recorded in the first quarter in connection with a petition for commencement of civil rehabilitation
proceedings filed by a business partner of the Group. Ordinary income decreased by 26.3% year on
year to 13,945 million yen. Profit attributable to owners of parent decreased by 15.0% to 11,404
million yen, reflecting in part posting of extraordinary income that included 1,074 million yen in gainon sales of investment securities and 481 million yen in gain on bargain purchase associated with acorporate acquisition.
FY 2023/3 2Q(April 1, 2022 –FY 2024/3 2Q(April 1, 2023 –YoY

September 30, 2022)

September 30, 2023)（Million yen）

（Million yen）

（Million yen）

Net sales

298,760

275,044(23,716)(7.9％)

Gross profit

40,00135,160(4,840)(12.1%)（Margin）

13.4％

12.8%

(0.6pt)－SG&A

21,63921,284(355)(1.6%)

Operating income

18,361

13,876(4,485)(24.4%)

Ordinary income

18,932

13,945(4,986)(26.3%)

Profit before income taxes

18,951

15,795(3,156)(16.7%)

13,412

11,404(2,007)(15.0%)

133.97yen

141.00yen

7.03yen－Profit attributable to ownersof parent
Exchange Rate

(Average rate during the year)

USD

－ 2 －

Business segment performance was as follows.
(a) Electronic components (Development, manufacture and sale of semiconductors, general electronic
components and other products, the electronics manufacturing service (EMS), and other activities)
In this business, sales in the component sales business declined sharply, attributable partly todisappearance of spot demand 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 of semiconductors andelectronic 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 9.6% year on year to 242,564 million yen, and segment income
decreased by 29.1% year on year to 11,785 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 andimaging products, original brand products, and other products)
In this business, sales of PCs for educational institutions were strong. Sales of security software andPC peripheral products also remained solid. In the LED installation business, sales of large-scale
projects that we started pushing forward on a full scale in the previous fiscal year contributed.
As a result, net sales increased by 5.7% year on year to 20,715 million yen, and segment income
increased by 32.7% year on year to 1,280 million yen.
(c) Software (Production of computer graphics, planning and development of amusement products,
and other activities)
In this business, orders for games development and computer graphics production remained solid.
Net sales were almost at the same level year on year, or down 6.3% year on year to 1,225 million
yen, and segment income increased by 18.2% year on year to 112 million yen.
(d) Others (Repair and support for electronics equipment, and sales of amusement equipment andsports goods, and others)
In this business, the PC and PC peripheral recycling business remained strong, and so did sales ofamusement equipment and sporting goods. Net sales increased by 12.2% year on year to 10,539
million yen, and segment income decreased by 5.3% year on year to 623 million yen.
Financial Results by Business Segment

FY 2023/3 2Q

FY 2024/3 2Q

YoY(April 1, 2022 –(April 1, 2023 –September 30, 2022)

September 30, 2023)（Million yen）

（Million yen）

（Million yen）

Electronic

Net sales

268,464

242,564(25,899)(9.6％)

components

Segment income

16,617

11,785(4,831)(29.1％)

Information

Net sales

19,597

20,715equipment

Segment income

1,118
315

5.7％
32.7％

Software

Net sales(82)
17(6.3％)
18.2％

1,147
(34)

12.2％
(5.3％)(23,716)(4,485)(7.9％)(24.4％)

965

1,280

1,307

1,225

95

112

9,392

10,539658

623

Net sales

298,760

275,044

Segment income

18,361

13,876

Segment income
Others

Net sales
Segment income

Total

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

－ 3 －(2) Overview of financial condition(a) Assets, liabilities and net assets
Total assets as of September 30, 2023, increased by 4,110 million yen from March 31, 2023, to
290,328 million yen.
Current assets increased by 6,765 million yen compared with the end of the previous fiscal year, to252,337 million yen. This was primarily due to a 9,886 million yen increase in cash and deposits anda 7,375 million yen increase in inventories, along with a 11,327 million yen decrease in accounts
receivable - trade.
Non-current assets decreased by 2,654 million yen from March 31, 2023, to 37,990 million yen.
This was primarily due to a 2,590 million yen decrease in Investment securities.
Liabilities decreased by 9,758 million yen from March 31, 2023, to 146,720 million yen. This wasprimarily due to a 3,389 million yen decrease in income taxes payable and a 1,879 million yen
decrease in notes and accounts payable – trade as a result of payment of income taxes.
Net assets increased by 13,869 million yen from March 31, 2023, to 143,607 million yen. This is
primarily due to a 8,295 million yen increase in total shareholdersʼ equity and a 5,772 million yen
increase in foreign currency translation adjustment resulting from the recording of profit
attributable to owners of parent.
(b) Cash flows
Cash and cash equivalents as of September 30, 2023, increased by 6,898 million yen from March
31, 2023, to 57,205 million yen.
(Operating activities)
Net cash provided by operating activities was 9,551 million yen (10,650 million yen provided by thesame period of the previous fiscal year), mainly due to the posting of profit before income taxes.
(Investing activities)
Net cash used in investing activities was 797 million yen (3,492 million yen used in the same
period of the previous fiscal year), mainly due to purchase of property, plant and equipment.
(Financing activities)
Net cash used in financing activities was 4,194 million yen (3,187 million yen used in the same
period of the previous fiscal year), mainly due to the payment of dividends.

－ 4 －(3) Qualitative information on consolidated earnings forecast
Continuing the trend of the first quarter, performance in the first half of the consolidated fiscal year
under review made good progress and exceeded the internal plan. However, in light of growing
uncertainty about the outlook, including heightening geopolitical risks from Russiaʼs prolonged
aggression against Ukraine and increasing tensions in the Middle East, in addition to concerns overrising inflation and prolonged monetary tightening, no revision is made to the full-year earnings
forecasts announced on May 11, 2023.
In line with the growth strategy formulated in the Medium-Term Management Plan 2024, theGroup will seek to achieve further growth and reinforce profit structure, and work on improving its
corporate value.
Reference: Earning Forecasts for FY2024/3 and Management Targets of Medium-Term Management Plan 2024
FY2024/3
Forecasts

FY2023/3
2Q Results(Announced on May 11, 2023)

Progress rate

Management Targets of
Medium-Term
Management Plan 2024
(FY2025/3)

50.0%

750 billion yen(Million yen)

(Million yen)

Net Sales

275,044550,000

Operating Income

13,87625,00055.5%

30 billion yen or higher

Ordinary Income

13,94525,00055.8%－

Profit attributable toowners of parent

11,40418,000

63.4%

－

－

13.3％

－

Stable 10% or higher

ＲＯＥ

Note: The above earnings forecasts are based on the information currently available to the Company
on the date of release and certain assumptions deemed reasonable. Actual results may varyfrom 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

First half ended

March 2023

September 2023

(As of March 31, 2023)(As of September 30, 2023)

Cash and deposits

052,60062,487

Notes receivable – trade

1,534

1,751

ASSETS
Current assets

Electronically recorded monetary claims – operating
Accounts receivable – trade
Securities
Merchandise and finished goods

9,683

9,446

117,881195

106,554
214

41,37545,974

2,277

2,553

Raw materials and supplies

12,552

15,053

Other
Allowance for doubtful accounts

7,624

8,481

(153)

(179)

245,572

252,337

Work in process

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

6,690

6,613

Machinery, equipment and vehicles, net

Buildings and structures, net

6,466

7,043

Tools, furniture and fixtures, net

1,103

1,179

Land

5,859

6,050

Construction in progress

39

1,065

20,15821,951

48

32

2,617

2,244

36

45

2,702

2,321

12,144

9,554

Deferred tax assets

2,162

1,120

Guarantee deposits

1,280

1,056

Total property, plant and equipment
Intangible assets
Goodwill
Software
Other
Total intangible assets
Investments and other assets
Investment securities

Insurance funds

920

871

Distressed receivables

4,842

5,030

Other

1,298

1,172

Allowance for doubtful accounts(4,864)(5,090)Total investments and other assets

17,784

13,717

Total non-current assets
Total assets－ 6 －40,64537,990286,217290,328

(Million yen)
Fiscal year ended

First half ended

March 2023

September 2023

(As of March 31, 2023)(As of September 30, 2023)

Notes and accounts payable - trade79,23277,353

Short-term loans payable

19,585

19,939Accrued expenses

8,400

7,943

Income taxes payable

6,011

2,621

465

16

Other

13,852

9,162

Total current liabilities

127,547

117,037

Bonds payable

10,00010,000Long-term loans payable

10,60010,600

Deferred tax liabilities

2,634

3,181

143

141

Net defined benefit liability

2,148

2,270

Asset retirement obligations

627

644

Other

2,778

2,845

Total non-current liabilities

28,932

29,682

156,479

146,720

Capital stock

12,133

12,133

Capital surplus

14,82014,849Retained earnings

95,945

104,198

Treasury shares(5,614)(5,600)Total shareholders’ equity

117,285

125,581

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

2,534

2,277

(18)

30

Foreign currency translation adjustment

9,568

15,340Remeasurements of defined benefit plans

239

235

12,322

17,884

129

142

129,737

143,607286,217290,328

LIABILITIESCurrent liabilities

Provision for directors’ bonuses

Non-current liabilities

Provision for directors’ retirement benefits

Total liabilities
NET ASSETS
Shareholders’ equity

Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets－ 7 －(2) Quarterly consolidated statements of income and comprehensive income
For the First half (April 1, 2023 – September 30, 2023)(Million yen)First half ended
September 2022

First half ended
September 2023

(April 1, 2022 –September 30, 2022)(April 1, 2023 –September 30, 2023)

Net sales
Cost of sales
Gross profit

298,760
258,759
40,001275,044
239,883
35,160

Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Commission fee
Share of profit of entities accounted forusing equity method
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other

21,63918,361

21,284
13,876

76
177
109

291
179
88

21

20

359
215
959

－
406
987

294
－
95

441
291
184

Total 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
Gain on bargain purchase
Gain on liquidation of subsidiaries andassociates
Other
Total extraordinary income
Extraordinary loss
Impairment loss
Loss on retirement of non-current assets
Loss on valuation of investment securities
Other
Total extraordinary loss
Profit before income taxes

389
18,932917
13,945

11
39
126
－

6
1,074
－
481

－

480

1
177

2
2,043

28
1
126
1
158
18,951

7
1
184
1
193
15,795

Income taxes - current
Income taxes - deferred
Total income taxes

4,773
756
5,529

2,501
1,878
4,379

Profit13,422

11,416

Profit attributable to owners of parent
Profit attributable to non-controlling interests

13,412
911,40411－ 8 －(Million yen)First half ended
September 2022

First half ended
September 2023

(April 1, 2022 –September 30, 2022)

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 ofassociates accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to owners ofparentComprehensive income attributable to noncontrolling interests－ 9 －(April 1, 2023 –September 30, 2023)

168

(258)

92

49

7,326

5,711

(129)

(3)

156

69

7,613

5,567

21,035

16,98321,01916,96516

18

(3) Consolidated statement of cash flows

Cash flows from operating activities

First half ended
September 2022
(April 1, 2022 –September 30, 2022)(Million yen)First half ended
September 2023
(April 1, 2023 –September 30, 2023)

Profit before income taxes

18,951

15,795

Depreciation

2,009

2,026

Impairment loss

28

7

Amortization of goodwill

34

16

(114)

228

(253)

(471)

281

441

(21)

(20)

(39)

(1,073)

126

184

－

(481)

－

(480)

3,614

15,540(3,984)(4,491)

1,828

519

79

222

(8,020)(5,723)

Increase (decrease) in accrued expenses

908

(918)

Decrease (increase) in consumption taxes
refund receivable

1,021(1,287)

Decrease (increase) in other current assets

(13)

589

(4,195)(4,515)

Other, net

1,355

640

Subtotal

13,59816,750

254

474

(266)

(440)

(2,936)(7,232)

10,6509,551

Increase (decrease) in allowance for doubtful
accounts
Interest and dividend income
Interest expenses
Share of (profit) loss of entities accounted forusing equity method
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment
securities
Gain on bargain purchase
Loss (gain) on liquidation of subsidiaries andassociates
Decrease (increase) in notes and accounts
receivable - trade
Decrease (increase) in inventories
Decrease (increase) in accounts receivable other
Decrease (increase) in advance payments
Increase (decrease) in notes and accounts
payable - trade

Increase (decrease) in other current liabilities

Interest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating
activities
Cash flows from investing activities
Payments into time deposits(934)(2,803)Purchase of property, plant and equipment
Proceeds from sales of property, plant andequipment(1,786)(1,987)19

10Purchase of intangible assets
Proceeds from purchase of shares ofsubsidiaries resulting in change in scope of
consolidation

(258)

(118)

－

491

Purchase of investment securities

(392)

(25)

－ 10 －

First half ended
September 2022
(April 1, 2022 –September 30, 2022)
Proceeds from sales of investment securities(Million yen)First half ended
September 2023
(April 1, 2023 –September 30, 2023)

261

3,204

Short-term loan advances

(361)

(30)

Other payments

(66)

(103)

Other proceeds

25

563

(3,492)

(797)

(709)

(746)

(10,018)(20)

Proceeds from issuance of bonds

9,945

－

Purchase of shares of subsidiaries not resulting
in change in scope of consolidation

(21)

－

Net cash provided by (used in) investing
activities
Cash flows from financing activities
Increase (decrease) in short-term loans
payableRepayments of long-term loans payable

Purchase of treasury shares

(1)

(3)

(1,966)(3,146)

(415)

(277)

(3,187)(4,194)

2,425

2,338

6,396

6,898

Cash and cash equivalents at beginning of period

39,24050,307

Cash and cash equivalents at end of period

45,63657,205

Cash dividends paid
Other, net
Net cash provided by (used in) financing
activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash
equivalents－ 11 －

(4) Notes to quarterly consolidated financial statements(Notes to going concern assumptions)Not applicable(Significant change in shareholders’ equity)
Not applicable(Segment information)
I. For the first half ended September 2022 (April 1, 2022 – September 30, 2022)
Information about net sales and income (loss) by reportable segments
Reportable segments
Electronic Information
components equipment

Software

Others

Total(Million yen)
Adjustment

Consolidated(Note 1)

(Note 2)

Net sales:
Sales to external

268,464

19,597

1,307

9,392

298,760－

298,760

1,772

3,393

517

4,039

9,723

(9,723)－

Total

270,236

22,9901,824

13,431

308,484(9,723)298,760

Segment income

16,617

965

95

658

18,33525

18,361

customers
Inter-segment
sales or transfers

Notes:

1. Adjustment in segment income of 25 million yen includes 25 million yen for elimination of inter-segment trade.
2. Segment income is adjusted for operating income on the quarterly consolidated statements of income andcomprehensive income.

II. For the first half ended September 2023 (April 1, 2023 – September 30, 2023)
Information about net sales and income (loss) by reportable segments
Reportable segments
Electronic Information
components equipment

Software

Others

Total(Million yen)
Adjustment

Consolidated(Note 1)

(Note 2)

Net sales:
Sales to external

242,564

20,715

1,225

10,539275,044－

275,044

1,604

4,383

582

2,638

9,208

(9,208)－

Total

244,169

25,098

1,807

13,178284,252(9,208)275,044

Segment income

11,785

1,280

112

623

13,80174

13,876customers
Inter-segment
sales or transfers

Notes:

1. Adjustment in segment income of 74 million yen includes 74 million yen for elimination of inter-segment trade.
2. Segment income is adjusted for operating income on the quarterly consolidated statements of income andcomprehensive income.

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