July 30, 2009

Summary of Consolidated Financial Results
For the First Quarter Ended June 2009
Name of Company:
Stock Code:
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Representative
Title:
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Date of quarterly securities report
Date of commencement of dividend payment (tentative):

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
August 7, 2009−
(Yen in millions, rounded down)

1. Financial results for the first quarter ended June 2009 (April 1, 2009 ‐ June 30, 2009)(1) Result of operations (Consolidated, year-to-date)(Percentage figures represent year on year changes)

First quarter ended June 2009First quarter ended June 2008

Net sales
MillionYoY
yen Change %54,062(16.1)
64,439-Net income
per share

Operating income
MillionYoY
yenChange %
(253)
1,367
-

Net income
MillionYoY
yen Change %
(640)
475
-

Net income
per share
fully diluted

Yen(23.22)
16.95

First quarter ended June 2009First quarter ended June 2008

Ordinary income
MillionYoY
yenChange %
(281)
1,486
-

Yen
-

(2) Financial Position (Consolidated)
Total assets

Net assets

Million yen
First quarter ended June 2009
109,870
Fiscal year ended March 2009
117,251
Note: Shareholders’ equity
As of June 30, 2009 :47,352 million yen
As of March 31, 2009 :47,770 million yen

Equity ratio

Million yen
49,07049,560Net assets per share
%
43.1
40.7

Yen
1,715.86
1,730.98

2. Dividends
Reference date

End of 1Q
Yen-

End of 2Q
Yen
25.00

Dividend per share
End of 3Q
Yen-

Fiscal year ended March 2009
Fiscal year ending March 2010
Fiscal year ending March 2010
(est.)
Notes: Change in the estimation of dividend for the fiscal year in this period: No
The estimated amount of dividend for FY2010 is not yet determined.

1-

End of FY
Yen
15.00

Full year
Yen
40.00

-

-

3. Forecast for the fiscal year ending March 2010 (Consolidated, April 1, 2009 to March 31, 2010)
Net sales

Operating income

Ordinary income

Net income

Net income
per share
Yen
0.00
57.98

Million yen% Million yen% Million yen% Million yen%
First half
120,000(15.0)
100(96.9)
200(94.2)
0 (100.0)
Full year
263,000
(3.9)
2,600
15.6
2,800
26.8
1,600
Note: Change in the forecast made in this period : No
(The percentage figures accompanying net sales, operating income, ordinary income, and net income represent year-on-year changes.)

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 quarterly
consolidated financial statements: None
(3) Changes in accounting principles and procedures, presentation methods and other items in the preparation of thequarterly consolidated financial statements (Presented in the section on Changes to the Basis of Presenting theQuarterly Consolidated Financial Statements)(a) Changes due to revision of accounting standards: None(b) Changes other than in (a): None
(4) Number of shares outstanding (common stock)(a) Shares outstanding (including treasury stock)
As of June 30, 2009: 28,702,118
As of March 31, 2009: 28,702,118(b) Treasury stock
As of March 31, 2009: 1,105,038
As of June 30, 2009: 1,105,104(c) Average number of shares(quarterly consolidated cumulative period)
Period ended June 30, 2008: 28,058,717
Period ended June 30, 2009: 27,597,047*Cautionary statement regarding forecasts of operating results and special notes
1. 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.
2. There is no dividend forecast for the fiscal year ending on March 31, 2010 because of the uncertain outlook for theoperating environment. An announcement will be made promptly once a dividend forecast becomes possible due tofuture changes in operating results and other factors.

2

Results of Operations
1. Analysis of results of operations
In the fiscal year’s first quarter, the economic recession continued because of the global financial crisis. In the UnitedStates and Europe, there are hopes of a recovery due to economic stimulus measures but no signs of an upturn haveappeared. Unemployment remains high and consumer spending is sluggish. In East Asia, economic stimulus measuresin China are producing benefits. The resulting strength in consumer spending and exports is having a positive effectwithin China and in other countries as well.
In Japan, the economic picture remains challenging despite indications of a recovery in sales of automobiles and digital
home electronics. The improvement in earnings of Japanese companies is weak and there have been further declines incapital expenditures and employment.
In the electronics industry, the core area of our operations, inventory reductions by manufacturers of all types ofelectronic products have been completed. Demand for electronic components used in environmental products, notablyenergy-efficient home appliances and electric automobiles, is climbing because of government economic stimulus
programs. However, this has not led to a recovery in capital expenditures or consumer spending. As a result, theoperating environment for the electronics industry remains difficult.
In this difficult environment, companies of the KAGA ELECTRONICS Group are working even more closely together
and operating more efficiently. Group companies are also working on handling more new products and expanding sales
routes. First quarter consolidated net sales decreased 16.1% to 54,062 million yen. There was an operating loss of 253
million yen compared with operating income of 1,367 million yen one year earlier and an ordinary loss of 281 million
yen compared with ordinary income of 1,486 million yen one year earlier. The first quarter net loss was 640 million yen
compared with net income of 475 million yen one year earlier.
Performance by geographic segment was as follows.
1) Japan
Economic stimulus measures by the government produced an upturn in demand for some products, including
environmental products. However, the Japanese economy is still weak as the recession brings down corporate earnings
and rising unemployment holds down consumer spending. The operating environment is challenging in the Japaneseelectronics industry as well.
First quarter performance in Japan benefited from higher sales of electronic components used in PCs and the sales ofa subsidiary that was newly consolidated during the previous fiscal year. However, EMS* orders and sales ofsemiconductors declined because of lower production volume at electronic device manufacturers and other factors.
The result was a 13.2% decrease in sales to 47,504 million yen and an operating loss of 303 million yen comparedwith operating income of 978 million yen one year earlier.
*Electronics Manufacturing Service is a term used for companies that design, test, manufacture, distribute, andprovide return/repair services.
2) North America
The U.S. economy remained weak because of the impact of turmoil in financial markets. In this environment, there
were declines in orders for semiconductors used in digital home electronics, amusement equipment and otherproducts. Sales decreased 6.5% to 157 million yen and there was an operating loss of 21 million yen compared with a
29 million yen loss one year earlier.
3) Europe
The operating environment in Europe remained challenging as global volatility in financial markets caused consumer
spending to fall because of rising unemployment and other factors. Due to these difficult market conditions, there was a
decline in orders in the EMS business for circuit boards and other components as manufacturers of electronic products
cut production. Sales fell 57.1% to 625 million yen and there was an operating loss of 40 million yen compared with
operating income of 26 million yen one year earlier.
4) East Asia
In China, the economy is starting to recover as consumer spending and exports increase due to the benefits of economic
stimulus measures. However, there was a decline in orders in the EMS business from Japanese manufacturers of office3equipment, climate control equipment and other products. Sales decreased 31.1% to 10,052 million yen and operating
income was down 89.0% to 37 million yen.
Net sales by product category
Product category

Information equipment
EMS
Semiconductors
General electronic components
Others
Total

First quarter FY2009
For the three months ended Jun. 2008

First quarter FY2010
For the three months ended Jun. 2009

Amount (million yen)

Proportion

Amount (million yen)

Proportion

14,745
20,33814,051
7,468
7,836
64,439

22.9%
31.6%
21.8%
11.6%
12.1%
100.0%

13,675
11,98912,941
8,178
7,277
54,062

25.3%
22.2%
23.9%
15.1%
13.5%
100.0%

Information equipment
Group companies worked on using the group’s sales network in Japan, which includes major consumer electronics
retailers, specialty stores and other channels, to increase sales of PCs, peripherals and other products. Another goal wasincreasing sales of new products, such as products used in rental condominiums and security system products. However,a decline in the volume of products handled in the projector business of KAGA COMPONENTS CO., LTD. caused
sales to decrease 7.3% to 13,675 million yen.
EMS
Orders were down sharply because of cuts in production volume at client companies in the EMS business. In Japan,
there was a decline in the output of LCD units used by manufacturers of amusement equipment. Overseas, there was a
decline in output of circuit boards Japanese office equipment manufacturers and in other products. As a result, sales
were down 41.1% to 11,989 million yen.
Semiconductors
ADM Inc., a semiconductor trading company that became a consolidated subsidiary in August 2008, contributed to firstquarter sales. But declines in the volume handled of signal conversion ICs for digital audio-visual products, control ICs
for automotive electronic devices and other products caused sales to decrease 7.9% to 12,941 million yen.
General electronic components
Sales of electronic components for PCs continued to grow, resulting in an increase of 9.5% in sales to 8,178 million yen.
OthersThe volume of products handled was lower because of changes in market conditions for photography products. Sales
decreased 7.1% to 7,277 million yen.

4

2. Analysis of financial condition
Total assets were 109,870 million yen at the end of the first quarter, 7,380 million yen less than at the end of theprevious fiscal year. A decline in notes and accounts receivable-trade was the main reason.
Net assets decreased 490 million yen to 49,070 million yen and the equity ratio increased by 2.4 points to 43.1%.
(Cash flows)
There was a net increase of 1,366 million yen in cash and cash equivalents during the first quarter to 12,735 million yen.
Net cash provided by operating activities was 76 million yen. There were decreases in notes and accounts receivabletrade, accounts receivable-other and notes and accounts payable-trade.
Net cash used in investing activities was 1,696 million yen. Cash was used mainly for payments for the purchase ofproperty, plant and equipment.
Net cash provided by financing activities was 2,778 million yen. The primary source of cash was net proceeds fromshort-term bank loans.
3. Forecast for fiscal year ending March 2010
There are no changes to the forecast for consolidated performance that was announced on May 11, 2009.
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 quarterly
consolidated financial statements: None
(3) Changes in accounting principles and procedures, presentation methods and other items in the preparation of thequarterly consolidated financial statements: None5

5. Quarterly Consolidated Financial Statements(1) Quarterly Balance sheet(million yen))First quarter ended June 2009 Fiscal year ended March 2009
(As of June 30, 2009)(As of March 31, 2009)ASSETS
Current assets
Cash and cash equivalents
Notes and accounts receivable-tradeMarketable securities
Merchandize and furnished goods
Goods in progress
Raw materials and other supplies
Deferred tax assets
OthersAllowance for doubtful receivables
Total current assets

12,73552,90264
13,771
927
3,505
876
6,397
(158)

11,37861,05358
13,969
577
3,749
994
8,017
(159)

91,022

99,639Fixed assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Tools and office furniture, net
LandConstruction in progress

2,382
1,556
1,144
1,324
100

2,321
1,486
1,029
1,324
6

Total property, plant and equipment

6,507

6,168

814
819
136

884
878
152

Intangible assets
Goodwill
Software
Others

1,770

1,914

Investments and other assets
Investment securities
Deferred tax assets
OthersAllowance for doubtful receivables

Total intangible assets

5,582
199
6,045
(1,257)

4,854
346
5,675
(1,347)

Total investments and other assets

10,5699,528

18,847

17,612

109,870

117,251

Total fixed assets
Total assets

6

(million yen)First quarter ended June 2009 Fiscal year ended March 2009
(As of June 30, 2009)(As of March 31, 2009)
LIABILITIESCurrent liabilities
Notes and accounts payable-trade
Short-term bank loans
Income taxes payable
Allowance for directors’ and corporate auditors’ bonuses
OthersTotal current liabilities
Long-term liabilities
Long-term bank loans
Allowance for retirement benefits for employees
Allowance for retirement benefits for directors andcorporate auditors
OthersTotal long-term liabilities

35,496
12,730
512
49
4,925

44,772
9,291
949
9
5,499

53,71460,521

3,330
1,411

3,620
1,342

1,150
1,193

1,122
1,084

7,085

7,168

Total liabilities

60,80067,690

NET ASSETS
Shareholder’s equity
Paid-in capital
Capital surplus
Retained earnings
Treasury stock

12,133
13,912
24,104(1,332)

12,133
13,91225,158(1,331)

48,81749,873(2)(2)(1,460)(364)(0)(1,737)(1,464)(2,103)

1,717

1,790

Total shareholder’s equity
Valuation and translation adjustments
Valuation differences on available-for-sales securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Total valuation and translation adjustments
Minority interests
Total net assets
Total liabilities and net assets

7

49,07049,560109,870

117,251

(2) Quarterly statements of income
For the first quarter ended June 2009
(million yen)First quarter ended June 2008
(April 1, 2008 – June 30, 2008)

First quarter ended June 2009
(April 1, 2009 – June 30, 2009)

Net sales
Cost of sales

64,43956,33854,062
47,615Gross profit

8,101

6,447

Selling, general and administrative expenses

6,734

6,700

Operating income (loss)

1,367

(253)

28
48
49
118

14
32
112

246

158

36
89

33
75
78

Non-operating income
Interest income
Dividend income
Gain in foreign exchange
OthersTotal non-operating income
Non-operating expenses
Interest expense
Loss in foreign exchange
OthersTotal non-operating expenses
Ordinary income (loss)
Extraordinary income
Gain on sale of investment securities
Cancellation refund of insurance policies
Compensation income
OthersTotal extraordinary income
Extraordinary losses
Loss on retirement of fixed assets
Loss on revaluation of investment securities
OthersTotal extraordinary losses

126

186

1,486

(281)

6
1

51
40
22

8

113

68
121
73

1
87
1

263

89

1,231

(257)

Income, inhabitants and enterprise taxes
Income tax adjustment

714
76

263
162

Total taxes
Minority interests in income (loss) of consolidated
subsidiaries
Net income (loss)

791

425

(35)

(42)

475

(640)

Income (loss) before income taxes and minority interests8(3) Quarterly statements of cash flows(million yen)First quarter ended June 2008
(April 1, 2008 – June 30, 2008)

First quarter ended June 2009
(April 1, 2009 – June 30, 2009)

1,231
330
57
(85)
36
121
11,431(2,482)
1,050(6,725)
(291)

(257)
493
59
(46)
33
87
8,527
226
1,288
(9,519)175

Sub-total

4,675

1,068

Decrease (increase) in advance payments
Interest and dividend received
Interests paid
Income taxes-paid
Others24
83(35)(2,270)
7

(252)
54
(34)
(739)
(18)

Net cash provided by (used in) operating activities

2,483

76

Investing activities
Payment for purchase of property, plant and equipment
Payment for purchase of intangible assets
Short term loans provided
Long term loans provided
Others

(516)
(132)
(563)
(37)
(9)

(1,127)
(51)
(262)
(255)

Net cash provided by (used in) investing activities(1,258)(1,696)

Financing activities
Increase (decrease) in short-term bank loans, net
Payment of dividends
Others(1,137)
(599)
(10)

3,172
(360)
(34)

(1,747)

2,778

(3)

208

Operating activities
Income (loss) before income taxes and minority interest
Depreciation and amortization
Amortization of goodwill
Interest and dividend income
Interest expenses
Loss (gain) on revaluation of investment securities
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Decrease (increase) in accounts receivable-other
Increase (decrease) in notes and accounts payable-trade
OthersNet cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Increase (decrease) in cash and cash equivalents

(525)

1,366

Cash and cash equivalents, beginning of period

14,011

11,368Cash and cash equivalents, end of period

13,485

12,7359

(4) Notes to ongoing concern assumptions
None(5) Segment Information
Operating segment information
For the first quarter ended June 2008 (April 1, 2008 – June 30, 2008) and the first quarter ended June 2009 (April 1,2009 – June 30, 2009)
Operating segment information is not presented since the KAGA ELECTRONICS Group has been engaged in a single
sector generally described as the manufacturing and sale of electronics merchandise and products.
Geographical segment information
For the first quarter ended June 2008 (April 1, 2008 – June 30, 2008)(million yen)Japan
Net sales(1) (of which to outside customers)(2) (of which inter-segment)
Total
Operating income (loss)

51,263
3,497
54,760978

North
America

Europe

101
66
168
(29)

1,432
26
1,459
26

East
Asia

Total

11,641
2,952
14,594338

64,4396,543
70,982
1,314

Eliminations
or
Corporate

Consolidated(6,543)(6,543)53

64,43964,4391,367

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, and Russia(3) East Asia: Hong Kong, Singapore, Taiwan, Korea, China, Malaysia, and Thailand
3. Change in accounting method(Accounting standard for inventories)
Effective from the current fiscal year, the Company has adopted Accounting Standard for Measurement of Inventories(ASBJ Statement No. 9, July 5, 2006). As a result, operating income decreased by 56 million yen in Japan comparedwith the figure that would have been reported if the previous accounting standard had been applied consistently.
For the first quarter ended June 2009 (April 1, 2009– June 30, 2009)(million yen)
Japan

North
America

Europe

East
Asia

Total

Eliminations
or
Corporate

Consolidated

Net sales(1) (of which to outside customers)(2) (of which inter-segment)

45,012
2,492

97
60

624
1

8,328
1,723

54,062
4,277(4,277)54,062-

Total
Operating income (loss)

47,504
(303)

157
(21)

625
(40)

10,05237

58,340(327)(4,277)74

54,062(253)

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, and Russia(3) East Asia: Hong Kong, Singapore, Taiwan, Korea, China, Malaysia, and Thailand

10

Overseas sales
For the first quarter ended June 2008 (April 1, 2008– June 30, 2008)(Million yen)
North America
I Overseas sales
II Consolidated sales
III Share of overseas sales in total sales (%)

401
0.6

EuropeEast Asia

1,760
2.7

Total

16,041
24.9

18,20464,43928.3

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, and Russia(3) East Asia: Hong Kong, Singapore, Taiwan, Korea, China, Malaysia, and Thailand
3. Overseas sales refer to sales posted by the Company and its consolidated subsidiaries in countries and regions
outside JapanFor the first quarter ended June 2009 (April 1, 2009 – June 30, 2009)(million yen)
North America
I Overseas sales
II Consolidated sales
III Share of overseas sales in total sales (%)

621
1.1

EuropeEast Asia
706
1.3

Total

12,21822.6

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, and Russia(3) East Asia: Hong Kong, Singapore, Taiwan, Korea, China, Malaysia, and Thailand
3. Overseas sales refer to sales posted by the Company and its consolidated subsidiaries in countries and regions
outside Japan.
(6) Notes on significant change in shareholders’ equity
None
6. OthersNone

11

13,54654,06225.1