A member of FASF
February 12, 2009

Summary of Consolidated Operating Results and Financial Position
For the Third Quarter ended December 2008
Name of Company:
Stock Code:
Stock Exchange Listing:
URL:
Representative
Title:
Name:
Contact Person
Title:Name:
Tel:
Date of filing:

KAGA ELECTRONICS CO., LTD.
8154
Tokyo Stock Exchange, First Section
http://www.taxan.co.jp/
President & COO
Tomohisa Tsukamoto

Senior Managing Director, Finance & Administration Headquarters
Waichiro Shimoyama+81-(0) 3-4455-3111
February13th, 2009
(Yen in millions, rounded down)

1. Financial results for the third quarter ended December 2008 (April 1, 2008 ‐ December 31, 2008)(1) Results of operations (consolidated, year-to-date)(Percentage figures represent year on year changes)
Operating income
Ordinary income
Net income
MillionYoYMillionYoYMillionYoY
yen Change %yen Change %yen Change %
4,009
3,522
(14)
5,543
23.2
5,537
19.6
2,496
(17.2)

Third quarter ended Dec 2008
Third quarter ended Dec 2007

Net sales
MillionYoY
yen Change %211,138
214,598
9.3

Third quarter ended Dec 2008
Third quarter ended Dec 2007

Net income per
Net income per share,
share
fully diluted
Yen
Yen(0.52)
87.12-(2) Financial position (Consolidated)
Total assets
Third quarter ended Dec 2008
Fiscal year ended March 2008
Note: Shareholders’ equity
As of December 31, 2008 :As of March 31, 2008:

Net assets

Million yen
128,368
130,423

Equity ratio

Million yen
50,47352,192

Net assets per share
%
37.8
40.0

Yen
1,758.35
1,858.26

48,528 million yen
52,140 million yen

2. Dividends
Dividend per shareFirst quarter

Second quarter

Third quarter

End fiscal Year

Yen

Yen
25.00

Yen
Yen
25.00
Fiscal year ended March 2008
25.00
Fiscal year ending March 2009
Fiscal year ending March 2009 (Est.)
Notes: Change in the estimation of dividend for the fiscal year in this period: Yes
At present, the estimated amount of year-end dividend is not yet determined.

-

-

-

Full year
Yen
50.00
-

3. Forecast for the fiscal year ending March 2009 (Consolidated, April 1, 2008 to March 31, 2009)(Percentage figures represent year on year changes)
Net income
Net sales
Operating profit
Ordinary income
Net income
per share
Million yen% Million yen% Million yen% Million yen%
Yen
Full year
275,000(5.6)
3,800 (51.2)
3,600 (48.9)(200)
Note: Change in the forecast made in this period : Yes-1-

4. Others(1)Changes in significant subsidiaries (Changes in specific subsidiaries accompanied by changes in the scope of consolidation): None(2)Use of simple method in accounting procedures and application of accounting procedures specific to the consolidated quarterly
financial statements: None
(3)Changes in accounting principles and procedures, presentation methods and other items in the preparation of the quarterly
consolidated financial statements (Presented in the section on Changes to the Basis of Presenting the Quarterly Consolidated
Financial Statements):(a) Changes due to revision of accounting standards: Yes(b) Changes other than in (a): Yes
Note: For details, see Page 5: Results of Operations, Sub-section 4. Others (3) Changes in accounting principles, procedures,presentation methods, etc. for preparation of quarterly consolidated financial statements(4)Numbers of shares outstanding (common stock)(a) Shares outstanding (including treasury stock)
As of December 31, 2008:
28,702,118
As of March 31, 2008:
28,702,118(b) Treasury stock
As of December 31, 2008:
1,103,252
As of March 31, 2008:
643,305(c) Average number of shares (consolidated half cumulative)
Period ended December 31, 2008:
28,005,288
Period ended December 31, 2007:
28,656,045*Cautionary statement regarding forecasts of operating results and special notes
1. The fiscal year figures in the consolidated forecast that was announced on November 10, 2008 have been revised.
2. The year-end dividend forecast has been revised to undecided at this time. Due to the uncertain outlook for market
conditions, a year-end dividend proposal will be announced later after further examining the forecasts for the current
fiscal year and the next fiscal year.
3. Forward-looking statements in these materials are based on information available to management at the time thisreport was prepared and assumptions that management believes are reasonable. Actual results may differ significantly
from these statements for a number of reasons. For a more thorough discussion of information about assumptions used
for the forecasts and the forecast revision mentioned in item 1. above, see “Results of Operations 3. Forecast for fiscal
year ending March 2009” on page 5.
4. Effective from the current fiscal year, the Company is using “Accounting Standard for Quarterly Financial Reporting”(ASBJ Statement No. 12) and “Guidance on Accounting Standard for Quarterly Financial Reporting” (ASBJ
Implementation Guidance No. 14). In addition, the quarterly consolidated financial statements have been prepared inaccordance with “Rules for Quarterly Consolidated Financial Statements.”-2-

Results of Operations
1. Analysis of results of operations
During the first three quarters of the current fiscal year, the financial crisis that began with the U.S. subprime loan
problem deepened, causing a steep drop in stock prices and weakness in consumer spending that severely impacted
the economies of countries worldwide.
In Japan, stock prices fell sharply, the yen strengthened and consumer spending declined. In response to these rapidchanges in the operating environment, companies in all industries were forced to take actions such as postponing
capital expenditures and reducing production. As a result, perceptions of the state of Japan's economy in thecorporate sector deteriorated further.
In the electronics industry, manufacturers are starting to reduce production of cell phones, flat-panel televisions,digital cameras and other digital home electronics because of falling demand. These reductions are creating adifficult operating environment due to a drop in demand for semiconductors and other electronic components usedin these products.
In this environment, the companies of the KAGA ELECTRONICS Group worked even more closely together andtook steps aimed at raising operating efficiency. Group companies also concentrated on locating new products andexpanding sales channels.
For the first three quarters, consolidated net sales decreased 1.6% to 211,138 million yen, operating income
decreased 27.7% to 4,009 million yen, ordinary income decreased 36.4% to 3,522 million yen and there was a net
loss of 14 million yen compared with net income of 2,496 million yen one year earlier.
Performance by geographic segment was as follows.
1) Japan
The global economic downturn caused exports from Japan to drop rapidly, which resulted in a decline in capital
expenditures as manufacturers reduced production. In addition, consumer spending weakened as unemployment
climbed, causing a big decrease in demand for high-end digital home electronics and other products. In response, theKAGA ELECTRONICS Group recorded solid sales of electronic components used in PCs due to measures toincrease sales in this market sector. However, there were declines in the volume handled of sound ICs for overseas
cell phone manufacturers, which were major buyers of these ICs, and of image processing ICs used by amusement
equipment manufacturers in Japan. As a result, sales in Japan decreased 0.4% to 182,787 million yen and operating
income decreased 27.3% to 2,715 million yen.
2) North America
In the United States, the recession is deepening as the subprime loan problem and other events are having a severe
impact on the economy. The result was a decline in orders at group companies for semiconductors used in digital
home electronics and components used in amusement equipment. Sales fell 64.8% to 431 million yen and there wasan operating loss of 77 million yen compared with a 102 million yen loss one year earlier.
3) Europe
In Europe, economies are remaining weak as rising unemployment and other effects of the global financial crisis
hold down consumer spending. The KAGA ELECTRONICS Group benefited from consistently strong orders in the
EMS* business for components used in climate control equipment and other products. But expenses for up-front
investments in Russia and other activities had a negative effect on performance. Sales increased 177.2% to 3,296
million yen and there was an operating loss of 31 million yen compared with a 228 million yen loss one year earlier.
* Electronics Manufacturing Service is a term used for companies that design, test, manufacture, distribute andprovide return/repair services.
4) East Asia
There was a sharp decline in exports from East Asia of electronics products, which account for a large share of-3-

exports in this region, because of the global economic downturn. Even the Chinese economy, which had been
posting strong growth, has started to weaken. In this environment, there was a decline in orders in the EMS businessfor components used in office equipment, climate control equipment and other products. Sales decreased 6.0% to
45,028 million yen and operating income was down 54.3% to 1,017 million yen.
Net sales by product category
Business

Information equipment
EMS
Semiconductors
General electronic components
Others
Total

Third quarter FY2008
For the nine months ended Dec. 2007
AmountPct. share
45,831
21.4
63,615
29.6
49,28623.0
24,921
11.6
30,944
14.4
214,598
100.0(Million yen)
Third quarter FY2009
For the nine months ended Dec. 2008
AmountPct. share
51,28724.3
60,40028.6
46,63522.1
29,38513.9
23,42911.1
211,138
100.0

Information equipment
Performance benefited from activities to increase sales of PCs and peripherals to current customers and frommeasures to increase sales of security system products and other new products. The result was an 11.9% increase insales to 51,287 million yen.
EMS
Overseas, sales at EMS operations in China serving Japanese manufacturers of office equipment decreased mainly
because of lower production by client companies. In Japan, there was a downturn in orders for the manufacture ofamusement equipment components. As a result, sales decreased 5.1% to 60,400 million yen.
Semiconductors
This segment includes the operations of semiconductor trading company ADM Inc. starting in August 2008, when
this company was added to the KAGA ELECTRONICS Group. Despite the contribution to sales of this company,
segment sales declined because of decreases in the volume handled of sound ICs for overseas cell phone
manufacturers, which were major buyers of these ICs, and of image processing ICs used by amusement equipment
manufacturers in Japan. Sales decreased 5.4% to 46,635 million yen.
General electronic components
Due to strong sales of electronic components for PCs, a market sector where group companies have been working
on capturing more orders, sales increased 17.9% to 29,385 million yen.
OthersSales of chemical film and other photographic products were down significantly as the entire market contracted. As
a result, sales decreased 24.3% to 23,429 million yen.
* Year-on-year changes in sales are provided for reference.
2. Analysis of financial condition
Total assets at the end of the third quarter were 128,368 million yen, 2,054 million yen less than at the end of theprevious fiscal year. The decrease was attributable mainly to a decline in notes and accounts receivable.
Net assets decreased 1,719 million yen to 50,473 million yen and the equity ratio was down 2.2 points to 37.8%.
Cash flows
Cash and cash equivalents decreased 1,485 million yen compared with the end of the previous fiscal year to 12,525
million yen at the end of the third quarter.

-4-

Net cash used in operating activities was 673 million yen due mainly to a decrease in notes and accounts
payable-trade.
Net cash used in investing activities was 3,061 million yen due mainly to payments for the purchase of property,
plant and equipment.
Net cash provided by financing activities was 2,957 million yen due mainly to an increase in long-term bank loans.

3. Forecast for fiscal year ending March 2009
(1) Revisions to consolidated forecast for fiscal year ending March 2009 (April 1, 2008 – March 31, 2009)(Million yen)
Net sales
Operating
Ordinary
Net income
incomeincomePrevious forecast (A)290,000
6,000
6,200
2,400
Revised forecast (B)275,000
3,800
3,600
(200)
Difference (B) – (A)(15,000)(2,200)(2,600)(2,600)Pct. change (%)(5.2)(36.7)(41.9)(Ref.) Previous fiscal year
291,331
7,786
7,040
3,684
(2) Reasons for revisions
In the current fiscal year, the global economy is declining because of the increasingly severe effects of the financial
crisis, including the failure of a major U.S. securities company due to the subprime loan problem. In the electronics
industry as well, the operating environment has rapidly deteriorated as falling earnings cause companies to postpone
capital expenditures and weak consumer spending brings down demand for digital products.
In response to these difficult market conditions, the KAGA ELECTRONICS Group concentrated on monitoringmarket trends and conducting flexible sales activities focused on increasing sales to current customers, developing
ties with new customers and achieving other goals. However, sales in the current fiscal year have been weaker thaninitially planned. Production cuts by manufacturers have lowered sales of electronic components andsemiconductors as well as orders for components used in amusement equipment. There is also a decline in orders in
the EMS business for manufacturers of office equipment and other products. Furthermore, earnings have been
reduced by securities valuation losses caused by the steep drop in stock prices and by consolidated foreign exchange
losses resulting from the rapid appreciation of the yen. Expenses associated with the head office relocation will also
hold down earnings. For these reasons, the fiscal year forecast has been revised as shown in the table above.
4. Others(1) Changes in significant subsidiaries (Changes in specific subsidiaries accompanied by changes in the scope of
consolidation)None(2) Simplified accounting methods and special accounting treatment used only for preparation of quarterly
consolidated financial statements
None(3) Changes in accounting principles, procedures, presentation methods, etc. for preparation of quarterly
consolidated financial statements
1. Effective from the current fiscal year, the Company is using “Accounting Standard for Quarterly Financial
Reporting” (ASBJ Statement No. 12) and “Guidance on Accounting Standard for Quarterly Financial Reporting”(ASBJ Implementation Guidance No. 14). In addition, the quarterly consolidated financial statements have been
prepared in accordance with “Rules for Quarterly Consolidated Financial Statements.”
2. Beginning with the first quarter of the current fiscal year, valuations of inventories held for sale in the ordinary
course of business are determined in accordance with “Accounting Standard for Measurement of Inventories”(ASBJ Statement No. 9). Previously, inventories were valued primarily based on the cost method using the-5-specific identification method or the cost method using the moving-average method. As a result of this change,
inventories are now valued primarily based on the cost method using the specific-identification method (in which
the book values of inventories are reduced to reflect declines in profitability) or the cost method using themoving-average method (in which the book values of inventories are reduced to reflect declines in profitability).
For the first three quarters of the current fiscal year, this change resulted in a decrease of 139 million yen inconsolidated gross profit, operating income, ordinary income and income before income taxes. The effect on
business segments is shown in the business segment information section.
3. Beginning with the first quarter of the current fiscal year, the “Practical Solution on Unification of Accounting
Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements” (ASBJ Practical Issues Task
Force No. 18) has been applied and the consolidated financial statements revised as necessary. This change did
not have a significant effect on earnings.
4. Financial leases and other leases where ownership is transferred were previously accounted for using accounting
methods for rental transactions. Beginning with the current fiscal year, the group is using “Accounting Standard
for Lease Transactions” (ASBJ Statement No. 13) and “Guidance on Accounting Standard for Lease
Transactions” (ASBJ Guidance No. 16) before the required application of this standard. As a result of this change,financial leases other than leases where ownership is transferred are now accounted for using accounting methods
applicable to ordinary buying and selling transactions. This change did not have a significant effect on earnings.

-6-

5. Quarterly Consolidated Financial Statements(1) Quarterly balance sheets

Third quarter ended December 2008
(As of December 31, 2008)(Million yen)
Fiscal year ended March 2008
(As of March 31, 2008)

Cash and cash equivalent

12,535

14,021

Notes and account receivable-trade67,93572,53063

84

Merchandize and finished goods

19,28015,998

Goods in progress

1,107

506

Raw materials and other supplies

4,185

3,672

566

570

Others

5,864

5,924

Allowance for doubtful receivables

(179)

(161)

111,361

113,147

Buildings and structures, net

2,196

1,012

Machinery, equipment and vehicles, net

1,545

1,919

978

552

1,323

1,324

-

606

6,044

5,415

Goodwill

1,016

745

Software

838

593

Others

173

219

2,028

1,559

Investment securities

4,948

6,596

Deferred tax assets

348

213

Others

4,822

4,637

Allowance for doubtful receivables(1,184)(1,146)

Total investments and other assets

8,934

10,301

Total fixed assets

17,007

17,276

Total assets

128,368

130,423ASSETS
Current assets

Marketable securities

Deferred tax assets

Total current assets
Fixed assets
Property, plant and equipment

Tools and office furniture, net
LandConstruction in progress
Total property, plant and equipment
Intangible assets

Total intangible assets
Investments and other assets-7-

Third quarter ended December 2008
(As of December 31, 2008)

Fiscal year ended March 2008
(As of March 31, 2008)

Notes and accounts payable-trade49,193

56,109

Short-term bank loans

14,866

11,697

Income tax payable

771

2,238

Allowance for directors’ and corporate
auditors’ bonuses

109

137

Others

5,369

4,278

Total current liabilities

70,31074,461Long-term bank loans

4,110

625

Allowance for retirement benefits for employees

1,315

1,159

1,097

1,004

1,062

980

7,585

3,769

77,89578,231

Paid-in capital

12,133

12,133

Capital surplus

13,912

13,912Retained earnings

25,951

27,413

Treasury stock(1,331)(843)

Total Shareholders’ equity

50,666

52,615

Valuation difference on available-for sales
securities

(239)

36

Deferred gain or losses on hedges

(25)

2

Foreign currency translation adjustments(1,871)(514)

Total valuation and translation adjustments(2,137)(475)

Minority interests

1,944

51

Total net assets

50,47352,192

Total liabilities and net assets

128,368

130,423

LIABILITIESCurrent liabilities

Long-term liabilities

Allowance for retirement benefits for directors
and corporate auditors
OthersTotal long-term liabilities
Total liabilities
NET ASSETS
Shareholders’ equity

Valuation and translation adjustment-8-

(2) Quarterly statements of income
For the third quarter ended December 2008 (April 1, 2008 – December 31, 2008)(Million yen)
Third quarter ended December 2008
(April 1, 2008 – December 31, 2008)
Net sales

211,138

Cost of sales

186,261

Gross profit

24,877

Selling, general and administrative expenses

20,868Operating income

4,009

Non-operating income
Interest income

111

Dividend income

101

Others370

Total non-operating income

583

Non-operating expenses
Interest expense

136

Loss in foreign exchange

805

Others129

Total non-operating expenses

1,071

Ordinary income

3,522

Extraordinary income
Gain on sale of fixed assets

7

Gain on sale of investment securities

14

Others62

Total extraordinary income

84

Extraordinary losses
Loss on retirement of fixed assets

96

Loss on revaluation of investment securities

1,315

Loss on impairment of fixed assets

235

Others108

Total extraordinary losses

1,756

Income before income taxes and minority interests

1,850

Income, residential and enterprise taxes

2,017

Income tax adjustment(31)

Total taxes

1,985

Minority interest in income/loss of consolidated subsidiaries(121)

Net income/loss

(14)

-9-

For the third quarter ended December 2008(October 1, 2008 – December 31, 2008)(Million yen)
Third quarter ended December 2008
(October 1, 2008 – December 31,
2008)
Net sales

69,945

Cost of sales

61,963Gross profit

7,982

Selling, general and administrative expenses

7,197

Operating income

784

Non-operating income
Interest income

30

Dividend income

42

Others124

Total non-operating income

197

Non-operating expenses
Interest expense

68

Exchange loss

819

Others16

Total non-operating expenses

904

Ordinary income

78

Extraordinary income
Gain on sale of investment securities

14

Others3

Total extraordinary income

17

Extraordinary losses
Loss on retirement of fixed assets

17

Loss on revaluation of investment securities

451

Loss on impairment of fixed assets

197

Others2

Total extraordinary losses

669

Income/loss before income taxes and minority interests(573)

Income, residential and enterprise taxes

336

Income tax adjustment

160

Total taxes

496

Minority interest in income/loss of consolidated subsidiaries(102)

Net income/loss(967)- 10 -

(3) Quarterly statements of cash flows(Million yen)
Third quarter ended December 2008
(April 1, 2008 – December 31, 2008)
Operating activities
Income before income taxes and minority interest

1,850

Depreciation

1,225

Loss on impairment of fixed assets

235

Goodwill amortization

195

Interest and dividend income(213)

Interest expense

136

Loss/(gain) on revaluation of investment securities

1,315

Decrease/(increase) in notes and accounts receivable-trade

6,648

Decrease/(increase) in inventories(3,378)Decrease/(increase) in non-trade receivables

1,178

Increase/(decrease) in accrued expenses(264)

Increase/(decrease) in notes and accounts payable(7,015)

Increase/(decrease) in other current liabilities

999

Others127

Sub total

3,041

Decrease/(increase) in advance payments(343)

Interest and dividend received

208

Interest paid

(135)

Income taxes paid

(3,417)

Others(27)

Cash flow from operations(673)

Investing activities
Payment for purchase of property, plant and equipment(1,822)

Payment for purchase of intangible assets(621)

Payment along with exchange of stock related to changes in thescope of consolidation(441)

Short term loans provided(1,259)

Short term loans collected

1,086

Others(4)

Cash flow from investing activities(3,061)

Financing activities
Increase/(decrease) in short-term bank loans, net(131)

Proceeds from long-term bank loans

5,000

Payment for acquisition of treasury stocks,(488)

Payment of dividends(1,393)

Others(29)

Cash flow from financing activities

2,957

Effect of exchange rate changes on cash and cash equivalents(707)

Increase/(decrease) in cash and cash equivalents(1,485)

Cash and cash equivalents, beginning of period

14,011

Cash and cash equivalents, end of period

12,525- 11 -

Effective from the current fiscal year, the Company is using the “Accounting Standards for Quarterly
Consolidated Financial statements” (Accounting Standards Board of Japan Statement No. 12) and“Implementation Guidance for Accounting Standards for Quarterly Consolidated Financial Statements”(Accounting Standards Board of Japan Implementation Guidance No. 14). In addition, the quarterly consolidated
financial statements have been prepared in accordance with “Rules for Quarterly Consolidated Financial
Statements.”(4) Notes to ongoing concern assumptions
None(5) Segment Information
Operating segment information
For the third quarter ended December 2008 (October 1, 2008 – December 31, 2008)
Operating segment information is not presented since the KAGA ELECTRONICS Group has been engaged in asingle sector generally described as the manufacturing and sale of electronics merchandise and products.
For the third quarter ended December 2008 (April 1, 2008 – December 31, 2008)
Operating segment information is not presented since the KAGA ELECTRONICS Group has been engaged in asingle sector generally described as the manufacturing and sale of electronics merchandise and products.
Geographical segment information
For the third quarter ended December 2008 (October 1, 2008 – December 31, 2008)(Million yen)
Japan

North
America

Europe

East
Asia

Total

Eliminations
orConsolidated
Corporate

Net sales(1) (of which to outside customers)

57,07274

634

12,16469,945−69,945(2) (of which inter-segment)

4,177

45

3

2,096

6,321

(6,321)−

61,249119637

14,26076,267(6,321)

69,945

307

(25)

(51)

199

429

354

784

Total
Operating income (loss)

For the third quarter ended December 2008 (April 1, 2008 – December 31, 2008)(Million yen)
Japan

North
America

Europe

East
Asia

Total

36,983

211,138

Eliminations
orConsolidated
Corporate

Net sales(1) (of which to outside customers)(2) (of which inter-segment)
Total
Operating income (loss)

170,657

254

3,243

−

211,138

12,129

176

53

8,044

20,405(20,405)−

182,787

431

3,296

45,028

231,543(20,405)

211,138

2,715

(77)

(31)

1,017

3,624

385

4,009

Notes: 1. Countries and regions are classified according to geographical proximity.
2. Countries and regions outside Japan are broken down into the following geographical areas.
(1) North America: United States(2) Europe: United Kingdom, Czech Republic, Russia(3) East Asia: Hong Kong, Singapore, Taiwan, Korea, China, Malaysia, Thailand
3. Change in accounting(Accounting standards on inventories)
Effective from the current fiscal year the company has adapted the “Accounting Standard on- 12 -

Inventory Evaluation” (Corporate Accounting Standard, No 9, July 5th, 2006). As a result, theoperating profit decreased by 139 million yen in Japan compared with the case where the previous
standard was applied.
Overseas sales
For the third quarter ended December 2008 (October 1, 2008 – December 31, 2008)(Million yen)
North America
I Overseas sales
II Consolidated sales
III Share of overseas sales in total sales (%)

756
−
1.1

Europe1,048−
1.5

East Asia
16,882
−
24.1

Total
18,687
69,94526.7

For the third quarter ended December 2008 (April 1, 2008 – December 31, 2008)(Million yen)
North America
I Overseas sales
II Consolidated sales
III Share of overseas sales in total sales (%)

1,767
−
0.8

Europe4,192−
2.0

East Asia
52,982
−
25.1

Total
58,942
211,138
27.9

Notes: 1. Countries and regions are classified according to geographical proximity.
2. Countries and regions outside Japan are broken into the following geographical area:(1) North America: United States(2) Europe: United Kingdom, Czech Republic, Russia(3) East Asia: Hong Kong, Singapore, Taiwan, Korea, China, Malaysia, Thailand
3. Overseas sales refer to sales posted by the Company and its consolidated subsidiaries in countries andregions outside Japan(6) Notes on significant change in shareholders’ equity
KAGA ELECTRONICS has repurchased 458,500 shares of its common stock at a cost of 486 million yen inaccordance with a resolution approved by its board of directors on November 10, 2008. After including shareholders
requests for the purchase and sale of stock involving holdings of less than one trading unit, stock repurchases during
the first three quarters totaled 488 million yen. At the end of the third quarter, treasury stock totaled 1,331 million
yen.

- 13 -

Appendix
Financial summary of the third quarter ended December 2007 (April 1, 2007 – December 31, 2007)(1) Quarterly Statements of income(Million yen)

Third quarter ended December 2007
(April 1, 2007 – December 31, 2007)
Amount%214,598
100.0
188,351
87.8

Account
I.
II.

Net sales
Cost of sales

Gross profit
III. Selling, general and administrative expenses
Operating income
IV. Non-operating income
V. Non-operating expenses
Ordinary income
VI. Extraordinary income
VII. Extraordinary losses
Income before income taxes and minority interests
Income, residential and enterprise taxes
Income tax adjustment
Minority interest in income/loss of consolidated subsidiaries
Net income- 14 -

26,247
20,704
5,543
729
735
5,537
98
512
5,123
2,448
237
59

12.2
9.6
2.6
0.3
0.3
2.6
0.0
0.2
2.4

(0.0)

2,496

1.2

(2) Quarterly statement of cash flow
(Million yen)
Third quarter ended December 2007
(April 1, 2007 – December 31, 2007)

Account

AmountI.

II.

Operating activities
Income before income taxes and minority interest

5,123

Increase in notes and accounts receivable-trade(4,927)

Increase in inventories(4,828)

Increase in notes and accounts payable

7,649

Others(133)

Sub total

2,882

Income taxes paid

(3,166)

Others104

Cash flow from operations(179)

Investing activities
Payment for purchase of property, plant and equipment(1,042)

Payment for purchase of investment securities(1,259)Others696

Cash flow from investing activities
III.

(1,605)

Financing activities
Increase/(decrease) in short-term bank loans, net

4,740

Repayment of long-term borrowing(1,980)

Payment of dividends by parent company(1,349)Others(28)

Cash flow from financing activities

1,380

IV.

Effect of exchange rate changes on cash and cash equivalents

(87)

V.

Decrease in cash and cash equivalents

(492)

VI.

Cash and cash equivalents, beginning of period

14,558VII.

Cash and cash equivalents, end of period

14,065- 15 -

(3) Segment Information
Operating segment information
Operating segment information is not presented since the KAGA ELECTRONICS Group was engaged in a single
sector generally described as the manufacturing and sale of electronics merchandise and products.
Geographical segment information
For the third quarter ended December 2007 (April 1, 2007 – December 31, 2007)(Million yen)
Japan

North
America

Europe

East
Asia

Total

Eliminations
orConsolidated
Corporate

Net sales(1) (of which to outside customers)

171,196

858

1,095

41,447

214,598−

214,598(2) (of which inter-segment)

12,348

368

93

6,430

19,241(19,241)−

Total

183,545

1,227

1,189

47,878233,840(19,241)

214,598

Operating expenses

179,807

1,330

1,417

45,651

228,207(19,151)

209,055

3,737

(102)

(228)

2,226

5,632

(89)

5,543

Operating income (loss)

Notes: 1. Countries and regions are classified according to geographical proximity.
2. Countries and regions outside Japan are broken down into the following geographical areas.
(1) North America: United States(2) Europe: United Kingdom, Czech Republic, Russia(3) East Asia: Hong Kong, Singapore, Taiwan, Korea, China, Malaysia, Thailand
Overseas sales
For the third quarter ended December 2007 (April 1, 2007 – December 31, 2007)(Million yen)
North America
I Overseas sales
II Consolidated sales
III Share of overseas sales in total sales

1,992
−
0.9%

Europe
2,578
−
1.2%

East Asia
49,727
−
23.2%

Total
54,298214,598
25.3%

Notes: 1. Countries and regions are classified according to geographical proximity.
2. Countries and regions outside Japan are broken into the following geographical area:(1) North America: United States(2) Europe: United Kingdom, Czech Republic, Russia(3) East Asia: Hong Kong, Singapore, Taiwan, Korea, China, Malaysia, Thailand
3. Overseas sales refer to sales posted by the Company and its consolidated subsidiaries in countries andregions outside Japan- 16 -