Information Meeting for Fiscal 200９

May 11, 2009
KAGA ELECTRONICS CO., LTD. (TSE 1st section, 8154)
2-2-9 Hongo, Bunkyo-ku, Tokyo 113-8503 Tel: (03) 4455-3131 Fax: (03) 3815-6807
http://www.taxan.co.jp

The Fiscal Year Ending March 20092© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

■ Fiscal 2009 Financial Highlights
Comparative Consolidated Income Statement
FY2008AmountPct.
Net Sales
Cost of sales
Gross profit
SG&A expenses
Operating income
Non-operating income
Non-operating expence
Ordinary income
Extraordinary items
Income before income taxes
Income and inhabitants taxes
Deferred taxes
Minority interests
Net income
FY

06

291,331
256,090
35,24027,454
7,786
969
1,715
7,040
372
7,412
3,693
99
64
3,684
FY

2

0

100.0%
87.9%
12.1%
9.4%
2.7%
0.3%
0.6%
2.4%
0.1%
2.6%
1.3%
0.03%
0.02%
1.3%
07

(est

(million yen)

FY2009AmountPct.

ChangeAmount Pct.

273,610
243,226
30,38328,134
2,249
854
896
2,208-2,159
49
1,459
-364
-238
-806

-17,721-12,864-4,857680-5,537-115-819-4,832-2,531-7,363-2,234-463-302-4,490. )100.0%
88.9%
11.1%
10.3%
0.8%
0.3%
0.3%
0.8%
-0.8%
0.02%
0.5%
-0.13%-0.09%
-0.3%

-6.1%
-5.0%
-13.8%
2.5%-71.1%-11.9%-47.8%-68.6%-99.3%-60.5%-3© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

Comparison of Consolidated Sales by Product (FY2008 and FY2009)(million yen)

FY2008Net sales
63,192

EMS

90,281

General electronics
compornentOthers
Total

Pct.

Net sales

350,000

ChangePct.

Change(million yen)Pct.

300,000

291,331
39,246

Informationequipment
Semiconductor

FY200965,544

21.7%
31.0%
22.5%

66,197
77,46561,837

24.2%
28.3%
22.6%

3,005
-12,816-3,7074.8%-14.2%-5.7%

250,000

200,000

273,61
32,08433,06565,54436,024General electronics
compornent
Semiconductor

61,837

EMS

150,000

33,065

11.3%

36,024

13.2%

2,959

8.9%

100,000

39,24613.5%

32,08411.7%-7,162-18.2%

50,000291,331100.0%

273,610100.0%-17,721-6.1%

OthersInformationequipment
90,281

77,46563,192

66,197

FY08

FY090Summary■Information equipment：Sales Up ¥3,005million（+4.8%）・・Higher sales of PCs and peripher als and sales ofsecurity systems.
■ＥＭＳ：Sales Down ¥12,816 million（-14.2%）・・Lower sales from overseas office equipment circuit board assembl yas manufactur ers reduced production.
■Semiconductors：Sales Down ¥3,707 million（-5.7%）・・Lower sales of semiconductors for amusement equipments
and cell phones.
■General electronic components： Sales Up ¥ 2,959million（+8.9%）・・Higher sales of HD for information devices■Others： Sales Down ¥ 7,162 million（-18.2%）・・Lower sales of chemical film and other photography products.

4© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

・Selling, General and Administrative Expenses (FY2008 and FY2009)
30,000Comparison of SG&A Expenses
FY2007
Packing and freight
R&D
OthersTotal selling
expenses
Depreciations expence
Rent
Personnel expenses
OthersTotal administrativeexpenses
Total SG&A expenses

27,454(million yen)Amount
2,655
699
2,387

FY2008

Pct.
Amount
9.7%
2,402
2.5%
1,422
8.7%
1,779

Pct.
8.5%
5.1%
6.3%

5,741

20.9%

5,603

339
2,184
12,402
6,788

1.2%
8.0%
45.2%
24.7%

21,71327,454

ChangeChangePct.

25,000

-253
723
-608

-9.5%
103.4%-25.5%

19.9%

-138

-2.4%

517
2,233
13,283
6,497

1.8%
7.9%
47.2%
23.1%

178
49881
-291

52.5%
2.2%
7.1%
-4.3%

10,00079.1%

22,530

80.1%

817

3.8%

5,000

100.0%

28,134100.0%

680

2.5%

6,788

28,134
6,497

20,00015,00012,402

2,184
339

Administrative Others
Personnel expenses
Rent
Depreciations expence
Selling Others
R&D
Packing and freight13,283

2,233

2,387

517
1,779

699

1,422

2,655

2,402

FY08

FY090Summary■Selling expenses：Decline in packing and freight due to review of the logistics system at KAGA HIGHT ECH,
decline of 253 million yen.
■Administrative expenses: Personnel expenses up 881 mi llion yen.

5© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

■ Financial Highli ghts of FY 2009
Consolidated Balance Sheets（ASSETS）
Current assets
Cash and cash equivalents
Notes and account receiv able-trade

Merchandize and finished goods

Goods in progress
Raw materials and other supplies

OthersFixed assets
Property, plant and equipment

Intangible assets
Investments and other assets（million yen）

FY2008FY2009 Change
FY end130,423 117,251 -13,172
113,147
99,639 -13,508
14,021
11,378-2,64372,53061,053 -11,477
15,998
13,969-2,029
506
577
71
3,672
3,749
77
6,420
8,913
2,493

18 3

17,276
5,415
1,559
10,30119 3

17,612
6,168
1,914
9,528

336
753
355
-773

（LIABILITIES）
Current liabilities
Notes and accounts payable-trade

Short-term bank loans
OthersLong-term liabilities
Long-term bank loans
Others（NET ASSETS）
Shareholders' equity
Paid-in capital
Capital surplus
Retained earnings
Treasury stock
Valuation and translation adjustment

Minority interests
Total assets

130,423

117,251-13,172

Total liabilities and net assets

FY2008 Interim
ChangeFY end FY2009
78,231
67,690 -10,541
74,461
60,521 -13,940
56,10944,772 -11,337
11,697
9,291-2,406
6,655
6,458
-197
3,769
7,168
3,399
625
3,620
2,995
3,144
3,548
404
52,192
49,560-2,632
12,133
13,912
27,413-843-475
51
130,423

12,133
13,91225,158-1,331-2,103
1,790
117,25100-2,255-488-1,628
1,739-13,1726© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

Consolidated Cash Flows (FY2008 and FY2009)(million yen)

FY2008FY endOperating activities

640

FY2009FY end5,435

Investing activities-718-4,212-3,494

Financials activities

718-3,407-4,125

Net change in cash and cash equivalents-1,186-457

729

Decrease in cash and cash equivalents-546-2,642-2,096

Cash and cash equivalents at beginning of year

14,55814,011-547

Cash and cash equivalents at end of year

14,011

11,368-2,643

Change4,795

Summary■Operating activities ：Provided net cash of 5,435 million yen mainly because of a decrease in receivables■Investing activities ： Used net cash of 4,212 million yen mainly because of payments for the pur chase of property,plant and equipment.
■Financing activities ：Used net cash of 3,407 million yen mainly because of dividend payments

7© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

■ Forecast for the Fiscal Year Ending March 2010Consolidated Income Statement (FY2009 and FY2010 Plan)
FY2009 (actual)

18Amount
3FY2010 (plan)

ChangePct.change

263,000

100.0%-10,610

-3.9%

88.9%

231,800

88.1%-11,426-4.7%

30,383

11.1%

31,200

11.9%

817

2.7%

28,134

10.3%

28,600

10.9%

466

1.7%

2,249

0.8%

2,600

1.0%

351

15.6%

-42-0.02%

200

0.1%

242

-

Ordinary income

2,208

0.8%

2,800

1.1%

592

26.8%

Net income

-806

-0.3%

1,600

0.6%

2,406

Cost of sales
Gross profit
SG&A expenses
Operating income
Non-operating income

Amount273,610

100.0%

243,226

ChangePct.

Net salesPct.
19 3（million yen）

-8© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

■ Consolidated Sales Forecast by Business Category (FY2009 and FY2010 plan)
300,000

273,610（million yen）

FY2009Net sales

Informationequipment
EMS

66,197FY2010(est.)

Pct.
24.2%

Net sales
63,900Pct.
24.3%

Change250,000

Change Pct.change-2,297-3.5%

77,46528.3%

83,600

31.8%

6,135

7.9%

Semiconductors

61,83722.6%

62,500

23.8%

663

1.1%

General electronic
components

36,02413.2%

24,5009.3% -11,524-32.0%

Others32,08411.7%

28,50010.8%-3,584-11.2%

Total

273,610100.0% 263,000

100.0% -10,610-3.9%

32,084（million yen）

263,000
28,50036,02424,500General electronics
compornent
Semiconductor

61,83762,500

EMS

200,000

Informationequipment

150,000

100,000

Others77,46583,60066,19763,900

FY09

FY10(Plan)

50,0000Summar y■Information equipment：Sales down 2,297 million yen due to lower the prices of portable music player made in US, and business
contraction of projectors (KAGA COMPON ENTS).
■ＥＭＳ：Sales up 6,135 million yen. Sales for LCD units for amusement equipment in Japan increased.
■Semiconductors：Sales up 663 million yen.
■General electronic components：Sales down 11,524 milli on yen due to lower sales of electr onic components because of adjust
production of makers.
■Others：Sales down 3,584 milli on yen due to lower sales of chemical film and other photography products.

9© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

Highlights of fiscal

10© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

■Information Equipment Business -１System Solution Business transfer from KAGA Electronics to KAGA SOLNET「KAGA Electronics system solution business 」「KAGA SOLNET」

・Retail of PCs and PC Related products.

・Building a network (LAN) system.

・Retail of VOD and VOD related equipment for rental

・Retail of network related products and software.

apartment.

・IT consulting service.

・Retail of security system equipment.

・Management of computer system.

・Retail of digital audio-visual editing equipment.
・Development of CG and 3D image for WEB.

FY2009FY2009Net sales : 1,900 million yen/Employee : 42

Net sales : 8,900 million yen / Employee : 78

New「 KAGA SOLNET」 ～Integrated on 1-Apr-2009～

FY2010(plan)

・KAGA SOLNET handle all information equipment business of KAGA Electronics group. Net sales:10,800 M
・Retail of PCs and PC related products,building the network system and security system.
→Create synergy effect by efficient sales network and wide range of products.

Ordinary income:400 M

Employee:119

11© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

■Information Equipment Business -２Information Equipment Business of KAGA Electronics Group「KAGA HIGHTECH」
Major customer:A mass home electric and a mass camera retailer.

FY2010(plan)

Main products:PCs and PC related products,digital camera

Net sales:62,200 M
Ordinary income:300 M

analogue camera,SD card and so on.

Employee:199
80,000「KAGA SOLNET」

Main products:PCs and PC related products,audio-visual editing
equipment,VOD system,building a computer network,management and maintenance service of
information system.

SolnetHightech
KAGA

70,000Major customer:General company and public office.

60,000FY2010(plan)
Net sales:10,800 M

50,00040,00030,000Ordinary income:400M
Employee:119※2009/Apr/1

20,00010,000
0FY2006

FY2007

FY2008FY2009FY2010(plan)

Efficient business,effective use of human resources and improve synergy effectBy handle all information equipment business of KAGA Electronics group.

12© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

Strategic Change of Projector

13© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

■Profile of KAGA COMPONENTS
Name : KAGA COMPONENTS CO.,LTD.
Established : March,1968
Capital : 400 million yen
Head office : 2-2-9 Hongo,Bunkyo-ku,Tokyo
President : Isao Tsukamoto
Employees : 1,867 (Non-cons:313 Overseas group:1,563)
Activities : Development,design,manufacture and sale of power supplies
Accessories for AV remote controls,etc.
Development,manufacture and sale of projectors and other finishedelectronics products and outsourced assembly of circuit board.
Branches : Osaka,hamamatsu
Factories : Niigata,Kumamoto
Affiliates : KAGA COMPONENTS（MALASIA）,KAGA COMPONENTS（HONG KONG）
DONGGUAN POWERTEK ELECTRONICS,KAGA INSTRUMENTS SHANTOU© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

14

■Strategies of rebuilding the projector business①
Plan for rebuilding business through growth and greater efficiency on Oct.2007＜Rebuilding strategy＞① Sales strategy : Focus on four strategic area.
② Cut expenses : Relocate production activities,purchase parts and material locally,cut R&D
expenditures and take other actions.
③ Enlarge the product lineup : Expand the lineup from one model to five models.

Competition with low price products which made in China and Taiwan.
Shrinking of the projector market by deterioration of economy.
Approximately 2,000 million yen loss in projector business on FY200915© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

■ Strategies of rebuilding the projector business ②＜Net sales＞＜Ordinary income＞（million yen）

15,000（million yen）

1000

500

4,878
3,359

10,000544
3,46460558
1240

29009,692

5,000
7,277

7,883

8,1528,564

projector
power supply▲ 801-500-1000▲ 1862▲ 1924

FY2008FY2009-15000FY2005

FY2006

FY2007

FY2008FY2009※In the above graph,the power supply business includes DMS business.

© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

-2000

FY2005

FY2006

FY200716

■ Strategies of rebuilding the projector business ③～strategies of rebuilding the projector business～
FY2009■Products strategy

FY2010■Products strategySales the projector which developed

Sales the projector of OEM supplied byinternally.

foreign companies.

■Area strategy
Japan/china/India/Middle East and■Area strategy
Focus on Japan and China

Eastern Europe■Sales strategy
Focus 0n public sector market such as■Sales strategy
Same as FY2009.

educational market.

17© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

KAGA ELECTRONICS CO.,LTD.
Century Tower,2-2-9 Hongo,Bunkyo-ku, Tokyo 113-8503

Contact:Public Relations Department
TEL:03-4455-3131
FAX:03-3815-6807
E-mail：webmaster@taxan.co.jp

http://www.taxan.co.jp※We will move our headquarters on 1-aug-2009.
For more information,please contact the public relations department.

© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

18