For Institutional Investors/Analysts

Financial Results for the Third Quarter of theFiscal Year ending March 2018
Nine months: April 1, 2017 – December 31, 2017

February ６, 2018

KAGA ELECTRONICS CO., LTD.
（TSE 1st section, 8154）

Key Points of the Financial Results

１２

３

Financial Results for the First Nine Months ofthe Fiscal Year Ending March 2018
 Driven by strong performance in electronic components andinformation equipment segments, the Group’s overall results
showed strong growth both in net sales and profits year-on-year.
Profit attributable to owners of parent hit a record-high.

Revision of Performance Forecast for
the Fiscal Year Ending March 2018
 While considering the strong performance to date, the Group carefullyreflected uncertainties about the amusement machine-related market.
Revised upward the full-year forecast aiming at record-high ordinary
income.

Revision of Dividend Forecast

Increased the year-end dividend by 5 yen per share, taking into
consideration the expected profit exceeding the previous forecast.
The annual dividend will be increased by 10 yen per share from theprevious year to 70 yen per share, enhancing shareholder returns.

© 2018 KAGA ELECTRONICS CO., LTD. All Rights Reserved.

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Consolidated Financial Results
for the First Nine Months
of FY ending Mar/2018© 2018 KAGA ELECTRONICS CO., LTD. All Rights Reserved.

2

Financial Highlights(Million Yen)FY2017/3

FY2018/3

3Q Results

3Q Results

Net sales

167,486

174,047

4%

Gross profit

23,07624,242

5%

13.8%

13.9%

17,898

17,628-2%

Operating income

5,178

6,613

28%

Ordinary income

5,500

7,093

29%

Profit attributableto owners of parent

4,863

5,510

13%

Gross profit margin

SG&A

Exchange rates
(Yen)
USD
THB
RMBHKD© 2018 KAGA ELECTRONICS CO., LTD. All Rights Reserved.

3Q Average

106.63
3.03
16.50
13.75

YoY

3Q Average

111.70
3.33
16.47
14.31

3

Financial Highlights by Business Segment(Million Yen)

Net sales

FY2017/3

FY2018/3

3Q Results

3Q Results

Summary

127,268

129,058

1%

4,061

4,509

11%

30,64734,745

13%

844

1,659

97%

1,992

1,541

-23%

300

91

-70%

7,577

8,702

15%

-144

236

Returned
to profit

167,486 174,047

4%

YoY

Electroniccomponents
Segment income

Informationequipment

Net sales

Segment income

Net sales

SoftwareSegment income

Net sales

OthersSegment income
Net sales

Total
Operating income

5,178

6,613

・ While amusement machine-related business was sluggish,
EMS* business for electric tool, medical equipment, and officeequipment showed favorable growth.
・Semiconductors sales for air conditioning and others also
showed favorable growth.
・Housing-related and commercial facility-related products
showed favorable growth.
・PC sales secured the same level as those in the same periodof the previous year.
· CG production and software development projects foramusement machine-related business decreased.
・Upfront investments for development of new areas such as
VR/AR* increased.

・Arcade amusement machines and golf products showed solidgrowth.

28%

Note: Figures of each segment income are not inter-segment adjusted.
Total amount is inter-segment adjusted (operating income).
© 2018 KAGA ELECTRONICS CO., LTD. All Rights Reserved.

* Refer to glossary for EMS, VR, and AR

4

Consolidated Balance Sheet(Million Yen)
2017/32017/12

Cash and deposits

103,684
26,423

104,571
30,945887
4,522

Notes and accounts
receivable - trade

52,00947,855-4,154Inventories

19,325
5,925

21,3394,431

2,014-1,494Current assets

Other2017/3vs 2017/3

50,242

48,671-1,571

Notes and accounts
payable - trade37,55336,378-1,175

Short-term loans payable

4,883
7,806
9,576
4,603
4,973
59,81964,481
12,133
13,91240,476-2,040

5,136
7,155
9,262
3,482
5,779
57,933
68,14812,133
13,85344,203-2,042

253
-651
-314
-1,121806-1,886
3,667
0-59
3,727
-2

1,391

2,780

1,389

59
65,93275
71,00416
5,072

125,751

128,937

3,186

Other

Non-current liabilities
Other

Property, plant and equipment
Intangible assets
Investments and other assets

22,067
11,745841
9,479

24,366
12,045921
11,399

2,299
300
80
1,920

Total liabilities
Shareholders' equity
Capital
資本金stock
Capitalsurplus
資本剰余金
Retainedearnings
利益剰余金Treasury shares

Total accumulated othercomprehensive income

Non-controlling interests
Total net assets
Total assets

125,751© 2018 KAGA ELECTRONICS CO., LTD. All Rights Reserved.

128,937

3,186

vs 2017/3

Current liabilities

Long-term loans payableNon-current assets

2017/12

Total liabilities
and net assets5

Consolidated Earnings Forecasts
for FY ending Mar/2018© 2018 KAGA ELECTRONICS CO., LTD. All Rights Reserved.

6

Consolidated Earnings Forecasts(Million Yen)FY2017/3

FY2018/3

FY2018/3

Results

Previous
forecasts

Revisedforecasts

Net sales

227,209

232,000

232,000

2%0%Gross profit

31,22532,25032,250

3%

0%

13.7%

13.9%

13.9%

24,34624,75024,2500%-2%Operating income

6,879

7,500

8,000

16%

7%

Ordinary income

7,343

8,200

8,700

18%

6%

Profit attributableto owners of parent

6,975

6,300

6,450

-8%

2%

108.38
3.08
16.37
13.97

110.50
3.30
16.30
14.00

111.70
3.33
16.47
14.31

Gross profit margin

SG&A

Exchange rates (Yen)
USD
THB
RMB
HKD

© 2018 KAGA ELECTRONICS CO., LTD. All Rights Reserved.

vs Previous
forecasts

YoY

7

Dividend Forecast/ROE Forecast(Yen)FY2017/3

FY2018/3

FY2018/3

Results

Previous
forecasts

Revisedforecasts

YoY

vs Previous
forecasts

249.43229.63235.10-14.33

+5.47

60.00

65.00

70.00

+10.00+5.00

Ordinary dividend

40.00

60.00

60.00

+20.000.00

Extraordinary dividend

20.00

5.00

10.00

-10.00

+5.00

10.0%

9.2%

9.4%

-0.6pp+0.2ppEPS
Dividend per share

ROE© 2018 KAGA ELECTRONICS CO., LTD. All Rights Reserved.

8

Consolidated Forecasts by Business Segment(Million Yen)FY2017/3

FY2018/3

FY2018/3

Results

Previous
forecasts

Revisedforecasts

171,227

176,000

171,500

0%

-3%

4,917

5,500

5,500

12%

0%

42,54742,50047,00010%11%

Segment income

1,491

1,500

2,100

41%

40%

Net sales

3,159

2,500

2,500

-21%

0%

528

200

150

-72%

-25%

10,274

11,00011,000

7%

0%

-212

300

250

--

227,209

232,000

232,000

2%

0%

6,879

7,500

8,00016%

7%

Electroniccomponents

Net sales

Informationequipment

Net sales

SoftwareOthers

TotalSegment income

Segment income
Net sales
Segment income
Net sales
Operating incomevs previousforecasts

YoY

Note: Figures of each segment income are not inter-segment adjusted.
Total amount is inter-segment adjusted (operating income).

© 2018 KAGA ELECTRONICS CO., LTD. All Rights Reserved.

9<References>© 2018 KAGA ELECTRONICS CO., LTD. All Rights Reserved.

10

Financial Highlights （Last 3 months）(Million Yen)FY2017/3

FY2018/3

3Q Results

3Q Results

YoY

Net sales

57,826

57,465-1%Gross profit

7,903

8,0232%

13.7%

14.0%

SG&A

5,938

5,804-2%

Operating income

1,965

2,219

13%

Ordinary income

2,455

2,390-3%

Profit attributableto owners of parent

1,752

1,994

14%

3Q

3Q

109.30
3.09
15.35
14.09

112.98
3.43
16.64
14.47

Gross profit margin（Reference）
Exchange rates
(Yen)
USD
THB
RMB
HKD
© 2018 KAGA ELECTRONICS CO., LTD. All Rights Reserved.

11

Financial Highlights by Business Segment （Last 3 months）(Million Yen)

3Q Results

YoY-3%

1,694

1,616-5%

10,122

11,29912%

Segment income

305

543

78%

Net sales

550399-27%-6-20-2,668

2,627-2%-87

37

Returned
to profit

57,826

57,465

-1%

1,965

2,219

13%

Informationequipment

Net sales

Total

3Q Results

43,139Net sales

Others

FY2018/3

44,484

Electronic
components

Software

FY2017/3

Segment income

Segment income
Net sales
Segment income
Net sales
Operating income

Note: Figures of each segment income are not inter-segment adjusted.
Total amount is inter-segment adjusted (operating income).

© 2018 KAGA ELECTRONICS CO., LTD. All Rights Reserved.

12Products and Services by Business Segment

Electronic components• Sale of semiconductors (general-purpose products and customizedproducts)• Sale of electronic components (transformers, condensers, cables,connectors, and switches, etc.), LED, and storage devices• Development, manufacture and sales related to EMS (airconditioning, office equipment, automotive devices, industrial
equipment, amusement machines, electric tool, communicationequipment, medical equipment, etc.)

Information equipment• Sales of PCs and PC peripherals, home electric appliances/lighting
fixtures, photograph and imaging products, original brand products,etc.)

Software• Production of computer graphics, planning and development ofamusement products, and other activities

Others• Repair and supports for electronics equipment, manufacture andsales of amusement equipment, and wholesale/retail of sports goods,etc.)© 2018 KAGA ELECTRONICS CO., LTD. All Rights Reserved.

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GlossaryEMS(Electronics ManufacturingService)

・ Provide high-volume lot production based on an agreement withcustomers, in contrast to simple subcontract services
・ The Company excels in offering one-stop service to customers bygetting involved in processes including design, components
procurement, sales, and support in addition to manufacturing.

AR・ Technology which augments a reality environment perceived byhuman using computers. Also refers to the computer-augmented
reality environment itself

VR・ Technology which scientifically generates an environment that is notreal or original but essentially functions in the same way, by stimulating
human senses including users’ five senses(Augmented Reality)(Virtual Reality)

ADAS(Advanced DriverAssistance Systems)

・ Systems developed to automate, adjust, and enhance the vehicle
systems for safe and better driving

DMS

・ Driver support system for safe and comfortable driving. It consistsof sensor, image/signal processing and indicator.

(Driver Monitor System)

LPWA(Low Power Wide Area)© 2018 KAGA ELECTRONICS CO., LTD. All Rights Reserved.

・ Wireless communication technology with lower power consumptionthat enables long-distance telecommunication in relatively wider areawith one base station
・ It is expected to be customized for IoT (all things are connected tothe Internet) and M2M (direct communication between devices via theInternet).

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“Everything we do isfor our customers”
20 Kandamatsunagacho, Chiyoda-ku, Tokyo 101-8629
Contact: Secretarial & Public Relations Office
TEL:+81-3-5657-0106
FAX:+81-3-3254-7133
E-mail： webmaster@taxan.co.jp

http://www.taxan.co.jp
Forward-looking statements in these materials are based on information available tomanagement 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.

© 2018 KAGA ELECTRONICS CO., LTD. All Rights Reserved.

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