July 31, 2013

Summary of Consolidated Financial Results
For the First Quarter Ended June 30, 2013 [Japan GAAP]
Name of Company:
Stock Code:
Stock Exchange Listing:
URL:
Representative
Title:
Name:
Contact Person
Title:Name:
Phone:
Date of quarterly securities report (tentative):
Date of commencement of dividend payment (tentative):
Quarterly earnings supplementary explanatory documents:
Quarterly earnings presentation:

KAGA ELECTRONICS CO., LTD.
8154
Tokyo Stock Exchange, First Section
http://www.taxan.co.jp/President & COO
Tomohisa Tsukamoto
Director, Administration Headquarters
Eiji Kawamura+81-(0)3-4455-3111
August 13, 2013
NoneNone(Yen in millions, rounded down)

1.

Financial results for the first quarter of the fiscal year ending March 2014 (April 1, 2013 – June 30, 2013)(1) Result of operations (Consolidated, year-to-date)(Percentage figures represent year on year changes)
Net sales

Operating income

Ordinary income

Net income

Million yen%
Million yen%
Million yen%
Million yen
First quarter ended June 2013
57,675
16.1
351
520
54
First quarter ended June 2012
49,686
(9.7)
(289)
(282)
(350)
Note: Comprehensive income: First quarter of FY3/2014: 661 million yen [-%], First quarter of FY3/2013: (865) million yen [-%]Net income per share

Net income per share fully dilutedYen-Yen
1.94(12.71)First quarter ended June 2013
First quarter ended June 2012
(2) Financial Position (Consolidated)
Total assets

Net assets

Million yen
116,646
111,888

As of June 30, 2013
As of March 31, 2013
Reference: Shareholders’ equity
As of June 30, 2013:48,893 million yen
2.

Equity ratio

Million yen
49,04348,806
As of March 31, 2013

%41.9
43.5
48,656 million yenDividends
End of 1Q
Yen-

End of 2Q
Yen
15.00

Dividend per share
End of 3Q
Yen-

Fiscal year ended March 2013
Fiscal year ending March 2014
Fiscal year ending March 2014 (est.)
15.00
Note: Change in the estimation of dividend from the latest announcement: None3.

End of FY
Yen
15.00

Full year
Yen
30.00

15.00

30.00

-Forecast for the fiscal year ending March 2014 (Consolidated, April 1, 2013 to March 31, 2014)(Percentage figures represent year on year changes)
Net income
Net sales
Operating income
Ordinary income
Net income
per share%

YenFirst Half
114,000
9.8
100300(200)
230,000
6.3
1,800
42.8
2,300
19.1
1,200
169.8
Full year
Note: Change in the forecast from the latest announcement: Yes
Please refer “Notice of Revision in Forecast for Fiscal Year Ending March 2014” announced on 31 July, 2013.

Million yen%

Million yen%

Million yen%

Million yen(7.08)
42.47%-* Notes(1) Changes in significant subsidiaries (Changes in specific subsidiaries accompanied by changes in the scope ofconsolidation): None
(2) Use of of accounting methods specifically for the preparation of the quarterly consolidated financial statements: None
(3) Changes in accounting principles and estimates, and retrospective restatement(a) Changes due to revision of accounting standards: None(b) Changes other than in (a): None(c) Changes in accounting estimates: None(d) Retrospective restatement: None
(4) Number of shares outstanding (common stock)(a) Shares outstanding (including treasury stock)
As of June 30, 2013:

28,702,118

As of March 31, 2013:

28,702,118

As of June 30, 2013:

444,046

As of March 31, 2013:

443,831

Period ended June 30, 2012:

27,596,898(b) Treasury stock(c) Average number of shares (quarterly consolidated cumulative period)
Period ended June 30, 2013:

28,258,153* Information concerning quarterly review procedure
The rule mandating a review of quarterly financial statements (under the Financial Instruments and Exchange Act) does not apply
to this Summary of Financial Results. The financial statements for the first quarter were under review at the time this Summary ofFinancial Results was released.
* Cautionary statement regarding forecasts of operating results and special notes
Forward-looking statements in these materials are based on information available to management at the time this report wasprepared and assumptions that management believes are reasonable. Actual results may differ significantly from these statements
for a number of reasons. Please refer (3) Forecast in 1. Results of Operations on page 3 of Supplementary Information for furtherinformation.

Index for Supplementary Information
1.

Results of Operations ........................................................................................................................................................... 2(1)Overview on consolidated business performance .......................................................................................................... 2(2)Overview of financial condition .................................................................................................................................... 2(3)Forecast ........................................................................................................................................................................ 32.

Other Information ................................................................................................................................................................ 3(1)Changes in significant subsidiaries:............................................................................................................................... 3(2)Use of of accounting methods specifically for the preparation of the quarterly consolidated financial statements: ........ 3(3)Changes in accounting principles and estimates, and retrospective restatement: ............................................................ 3

3.

Quarterly Consolidated Financial Statements ....................................................................................................................... 4(1)Quarterly consolidated balance sheet ............................................................................................................................ 4(2)Quarterly consolidated statements of income and consolidated statements of comprehensive income ........................... 6(3)Notes to quarterly consolidated financial statement ....................................................................................................... 8(Notes to ongoing concern assumptions) .............................................................................................................................. 8(Significant change in shareholders’ equity) ......................................................................................................................... 8(Segment information) ......................................................................................................................................................... 81

1.
(1)

Results of Operations
Overview on consolidated business performance
In the first quarter, there were signs of a recovery of the Japanese economy. The yen weakened and stock prices rose becauseof expectations about the benefits of economic measures by the new government and monetary easing by the Bank of Japan.
However, there are still sources of uncertainty about the Japanese economy. There are concerns about slowing overseas
economic growth, partly because of slowing growth in China and the sluggish European economy, and the weaker yen ismaking raw materials more costly in Japan.
In the electronics industry, which the KAGA ELECTRONICS Group belongs to, sales of portable information devices likesmartphones and tablets are strong. But the demand is weak in the markets for digital consumer electronics and informationequipment, particularly personal computers and peripherals. As a result, the operating environment in this industry remaineddifficult.
In this environment, the KAGA ELECTRONICS Group worked on strengthening ties among group companies, increasing
sales to current large customers and adding new products. Taking these and other actions resulted in growth in sales in theamusement equipment sector, overseas EMS* sales and sales in other categories.
First quarter consolidated net sales were 57,675 million yen, 16.1% higher than one year earlier. Operating income was 351
million yen compared with a 289 million yen loss one year earlier, ordinary income was 520 million yen compared with a282 million yen loss one year earlier, and net income was 54 million yen compared with a 350 million yen net loss one yearearlier.
*EMS: Electronics Manufacturing Service is a term used for the provision of product development and manufacturingservices on an outsourcing basis.
Business segment performance was as follows.
(a) Electronic components (Development, manufacture and sale of semiconductors, general electronic components andother products, EMS, and other activities)
There were higher sales in Japan for EMS involving amusement equipment and for semiconductors. Overseas EMS
sales increased, too. The result was a 20.4% increase in segment sales from one year earlier to 45,007 million yen and a
316.9% increase in operating income to 423 million yen.
(b) Information equipment (Sales of PCs, PC peripherals, photograph and imaging products, original-brand products, andother products)
Actions were taken to increase sales of existing products and add new products. Sales increased for personal computersand software for schools and for environmental products and some other products. But sales of personal computers toconsumers decreased because of the increasing use of smartphones, tablets and other mobile devices. As a result, sales
decreased 3.1% from one year earlier to 8,893 million yen. The operating loss was 17 million yen compared with a 193
million yen loss one year earlier.
(c) Software (Production of computer graphics, planning and development of amusement products, and other activities)
Activities in this segment focused on the production of computer graphics for animation applications, image processing
for amusement equipment and game software development and sales. Sales were 723 million yen, 13.7% higher than
one year earlier, the operating loss decreased to 121 million yen from 169 million yen one year earlier.
(d) Others (Electronic device repairs and support, sales of sporting goods, and other activities)
Sales of amusement machines to arcades in Japan recovered and there were strong sales of golf products and otherproducts in this segment. As a result, sales increased 21.9% from one year earlier to 3,050 million yen. Operating
income was 63 million yen compared with a 21 million yen loss one year earlier.

(2)

Overview of financial condition
Assets, liabilities and net assets
Assets totaled 116,646 million yen at the end of the first quarter, 4,757 million yen higher than at the end of the previous
fiscal year mainly because of increases in cash and deposits in current assets.
Liabilities increased 4,520 million yen to 67,602 million yen mainly because of an increase in notes and accounts payabletrade in current liabilities.
Net assets increased 236 million yen to 49,043 million yen. This was primarily the result of an increase in the foreign
currency translation adjustment caused by foreign exchange rate movements.

2(3)Forecast(a) Consolidated forecast for the first half ending September 2013 (April 1, 2013 – September 30, 2013)

Previous forecast (A)Million yen
104,000

OperatingincomeMillion yen(600)Million yen(500)

Net income
per shareYen(17.69)

Revised forecast (B)114,000

100300(200)(7.08)

Difference (B-A)

10,000

700

600

300-

Pct. change (%)

9.6----

103,845

(470)

(355)

(1,373)(49.79)Net Sales(Ref.) Previous first half (firsthalf ended September 30, 2012)

Ordinary
incomeMillion yen(300)

Net income(b) Reason for revisions
The forecast for the first half of the fiscal year has been revised mainly because sales in the EMS business in Japan andoverseas are higher than initially expected.
There are no revisions to the fiscal year forecast because the outlook is still unclear. An announcement will be madepromptly if there is a need to revise this forecast later in the fiscal year.

2.

Other Information(1)

Changes in significant subsidiaries:
None

(2)

Use of of accounting methods specifically for the preparation of the quarterly consolidated financial statements:
None

(3)

Changes in accounting principles and estimates, and retrospective restatement:
None33.

Quarterly Consolidated Financial Statements(1)

Quarterly consolidated balance sheet(Million yen)
Fiscal year ended March 2013
(As of March 31, 2013)

First quarter ended June 2013
(As of June 30, 2013)ASSETS
Current assets
Cash and deposits

12,25815,201

Notes and accounts receivable-trade54,58052,048

Short-term investment securities

111

111

Merchandise and finished goods

14,075

15,780

637

998

4,065

4,728

482

835

Other

3,823

4,383

Allowance for doubtful accounts

(90)

(83)

89,94594,003

Buildings and structures, net

3,126

3,093

Machinery, equipment and vehicles, net

1,714

1,690

805

873

4,305

4,305

606

1,103

10,55911,066

Goodwill

799

752

Software435

393

Other991

896

2,226

2,042

4,491

4,879

Work in process
Raw materials and supplies
Deferred tax assets

Total current assets
Fixed assets
Property, plant and equipment

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

Total intangible assets
Investments and other assets
Investment securities

472

452

Other

5,239

5,270

Allowance for doubtful accounts(1,046)(1,068)

Total investments and other assets

9,157

9,533

21,94322,642

111,888

116,646

Deferred tax assets

Total noncurrent assets
Total assets

4

(Million yen)
Fiscal year ended March 2013
(As of March 31, 2013)

First quarter ended June 2013
(As of June 30, 2013)

LIABILITIESCurrent liabilities
Notes and accounts payable-trade37,42340,760

Short-term loans payable

9,567

11,187

Income taxes payable

1,055

588

Other

5,309

5,535

Total current liabilities

53,35558,072Long-term loans payable

5,121

4,752

Provision for retirement benefits
Provision for directors' retirement benefits

1,643

1,475

1,398

1,403

Other

1,5621,900

Total noncurrent liabilities

9,726

9,530

63,082

67,602

Capital stock

12,133

12,133

Capital surplus

13,912

13,912Retained earnings

24,38424,015

Treasury stock

(535)

(535)

Total shareholders' equity

49,89549,526

(180)

(59)

Noncurrent liabilities

Total liabilities
NET ASSETS
Shareholder’s equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

(6)

(0)

Foreign currency translation adjustment(1,052)(572)

Total accumulated other comprehensive income(1,238)(632)

Minority interests149150

Total net assets

48,80649,043111,888

116,646

Deferred gains or losses on hedges

Total liabilities and net assets

5

(2)

Quarterly consolidated statements of income and consolidated statements of comprehensive income
For the first quarter (April 1, 2013 – June 30, 2013)(Million yen)First quarter ended June 2012
(April 1, 2012 – June 30, 2012)

First quarter ended June 2013
(April 1, 2013 – June 30, 2013)

Net sales

49,686

57,675

Cost of sales

43,54550,619Gross profit

6,141

7,056

Selling, general and administrative expenses

6,431

6,704

Operating income (loss)

(289)

351

Interest income

1118

Dividends income

3650

Commission fee

46

33

Other

90

135

Total non-operating income

185

237

Interest expenses

32

32

Foreign exchange losses

118-

Loss on investments in partnership

921

Other

16

15

Total non-operating expenses

177

69(282)520

Gain on sales of noncurrent assets

2

1

Total extraordinary income

21

Non-operating income

Non-operating expenses

Ordinary income (loss)
Extraordinary income

Extraordinary loss
Loss on retirement of noncurrent assets

11

Loss on valuation of investment securities

8273

Loss on valuation of golf club membership

1-Other01

Total extraordinary loss

85

76

(365)

445

Income taxes-current

195

286

Income taxes-deferred

(178)

101

Income (loss) before income taxes

17388

Income (loss) before minority interests

(383)

57

Minority interests in income (loss)

(32)

2

Net income (loss)

(350)

54

Minority interests in income (loss)

(32)

2

Income (loss) before minority interests

(383)

57

Total income taxes

6

(Million yen)First quarter ended June 2012
(April 1, 2012 – June 30, 2012)

First quarter ended June 2013
(April 1, 2013 – June 30, 2013)

Other comprehensive income
Valuation difference on available-for-sale securities

(88)

121

Deferred gains or losses on hedges

28

5Foreign currency translation adjustment

(422)

476

Total other comprehensive income

(482)

603

(865)

661

(838)

660

(27)

0

Comprehensive income
Comprehensive income attributable to owners of
the parent
Comprehensive income attributable to minority
interests

7

(3)Notes to quarterly consolidated financial statement(Notes to ongoing concern assumptions)
None(Significant change in shareholders’ equity)
None(Segment information)
I For the first quarter ended June 2012 (Apr. 1, 2012 – June 30, 2012)
Information about sales and income (loss) by reportable segments
Reporting segments

Adjustment(Note 1)

(Million yen)Amount on thequarterly
consolidated
statements ofincome andconsolidated
statements ofcomprehensiveincome(Note 2)

Electroniccomponents

Informationequipment

Software

OthersTotal

37,366

9,180

636

2,503

49,686-

49,686

246

209

209

839

1,505

(1,505)-37,612

9,390

846

3,342

51,192(1,505)49,686

Net salesof which tooutside customersof which intersegment
TotalSegment
101(193)
(169)
(21)
(282)
(7)
(289)
income (loss)
Notes:
1. The adjustment reducing segment income by 7 million yen includes amounts for intersegment cancellation of 9
million yen and for goodwill amortization of -16 million.
2. Segment income (loss) is adjusted for operating income (loss) on the quarterly consolidated statements of income
and consolidated statements of comprehensive income.
II For the first quarter ended June 2013 (Apr. 1, 2013 – June 30, 2013)
Information about sales and income (loss) by reportable segments

Reporting segments

Adjustment(Note 1)

(Million yen)Amount on thequarterlyconsolidated
statements ofincome andconsolidated
statements ofcomprehensive
income(Note 2)

Electronic
components

Informationequipment

Software

OthersTotal

45,007

8,893

723

3,050

57,675-57,675

329

136

362

700

1,528

(1,528)-45,337

9,030

1,085

3,751

59,204(1,528)57,675Net salesof which tooutside customersof which intersegment
Total

Segment
423
(17)
(121)
63
347
4351
income (loss)
Notes:
1. The adjustment increasing segment income by 4 million yen includes amounts for intersegment cancellation of 20
million yen and for goodwill amortization of -16 million.
2. Segment income (loss) is adjusted for operating income (loss) on the quarterly consolidated statements of income
and consolidated statements of comprehensive income.
8