November 7, 2019

Summary of Consolidated Financial Results
for the First Half Ended September 30, 2019 [Japan GAAP]
Name of Company:
Stock Code:
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Representative
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Date of filing 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
https://www.taxan.co.jp/
President & COO
Ryoichi Kado
Managing Director, Chief of Administration Headquarters
Eiji Kawamura+81-(0)3-5657-0111
November 14, 2019
December 6, 2019
Yes
Yes (For institutional investors and analysts)(Yen in millions, rounded down)
1. Financial results for the first half of the fiscal year ending March 2020 (April 1, 2019 – September 30, 2019)(1) Result of operations (Consolidated, year-to-date)(Percentage figures represent year on year changes)
Profit attributable
Net sales
Operating income
Ordinary income
to owners of parent
Million yen%

First half ended September 2019230,630First half ended September 2018

115,383

Million yen

99.9
(1.0)

%

Million yen%

Million yen

5,239

38.9

5,546

37.0

3,772
Note: Comprehensive income: First half of FY3/2020: 2,436 million yen [ (29.7%)](14.2)

4,049(13.9)

%

3,502

27.4

2,750 (21.8)
First half of FY3/2019: 3,467 million yen [ (15.3%)]

Earnings per share(diluted)

Earnings per share
Yen

Yen

First half ended September 2019

127.62－First half ended September 2018

100.25－(2) Financial Position (Consolidated)
Total assets

Net assets

Equity ratio

Million yen

Million yen%

As of September 30, 2019

214,475

85,46636.2

As of March 31, 2019

213,761

84,25935.8

Reference: Shareholders’ equity：As of September 30, 2019: 77,617 million yenAs of March 31, 2019: 76,604million yen

2. Dividends
Dividend per share

1Q

2Q

3Q

Year-end

Full year

Yen

Yen

Yen

Yen

Yen

－
－

Fiscal year ended March 2019
Fiscal year ending March 2020
Fiscal year ending March 2020 (Forecast)

35.00
30.00

－

45.00

80.00

－

30.00

60.00

Notes: Change in the dividend forecast from the latest announcement: None
Breakdown of interim dividend for FY3/19: Ordinary dividend 30.00 yen; 50th anniversary commemorative dividend 5.00 yen
Breakdown of year-end dividend for FY3/19: Ordinary dividend: 40.00 yen; Extraordinary dividend: 5.00 yen

3. Forecast for the fiscal year ending March 2020 (Consolidated, April 1, 2019 – March 31, 2020)

Net sales
Full year(Percentage figures represent year on year changes)
Profit attributable toEarnings per
Ordinary income
owners of parent
share

Operating income

Million yen%

Million yen%

Million yen%

Million yen%

Yen

430,000

46.9

7,000

(7.5)

7,000

(10.9)

5,000(37.6)

182.17

Note: Change in the forecast from the latest announcement: None

* Notes(1) Changes in significant subsidiaries (Changes in specified subsidiaries accompanied by changes in the scope of consolidation ):None(2) Use of accounting methods specifically for the preparation of the quarterly consolidated financial statements: None
(3) Changes in accounting policies, estimates, and retrospective restatement(a) Changes due to revision of accounting standards:Yes(b) Changes other than (a): None(c) Changes in accounting estimates: None(d) Retrospective restatement: None
Note: For more information, please refer “2. Quarterly Consolidated Financial Statements and Major Notes (4) Notes to quarterly
consolidated financial statements (Changes in accounting policies)” on page 9.

(4) Number of shares outstanding (common stock)(a) Shares outstanding (including treasury shares)
As of September 30, 2019:(b) Treasury shares
As of September 30, 2019:28,702,118

As of March 31, 2019:28,702,118

1,254,995

As of March 31, 2019:

1,254,924

Period ended September 30, 2018:27,432,859(c) Average number of shares (quarterly consolidated during the period)
Period ended September 30, 2019: 27,447,183* The quarterly audit procedures by a certified public accountant or auditing firm are not applicable to this Quarterly Financial
Results report.
* Cautionary statement regarding forecasts of operating results and special notes(Caution regarding forward-looking statements)
Forward-looking statements in these materials are based on information available to management at the time this report
was prepared and assumptions that management believes are reasonable. Actual results may differ significantly from thesestatements for a number of reasons. For conditions as assumption for earnings forecast and cautionary statement regarding
use of the forecast, please see “1. Results of Operations, (3) Qualitative information on consolidated earnings forecast”.

(Supplementary materials for financial results and how to obtain details of the financial results meeting)
The Company plans to hold a financial results meeting for institutional investors and analysts on Thursday, Nobember
28, 2019.
The Company plans to post a streaming video of the meeting on its website promptly after the meeting.The Company
also plans to post the details of the presentation material use at the meeting, on its website promptly after announcing
financial results.

Index for Supplementary Information
1. Results of Operations ................................................................................................................................................................

2(1) Overview of consolidated business performance ..............................................................................................................

2(2) Overview of financial condition........................................................................................................................................

3(3) Qualitative information on consolidated earnings forecast ...............................................................................................

4

2. Quarterly Consolidated Financial Statements and Major Notes ...............................................................................................

5(1) Quarterly consolidated balance sheet................................................................................................................................

5(2) Quarterly consolidated statements of income and comprehensive income .......................................................................

7

For the First half (April 1, 2019 - September 30, 2019) ...............................................................................................

7(3) Consolidated statement of cash flows ...............................................................................................................................

8(4) Notes to quarterly consolidated financial statements ........................................................................................................

9(Notes to going concern assumptions)..........................................................................................................................

9(Significant change in shareholders’ equity) ................................................................................................................

9(Changes in accounting policies)..................................................................................................................................

9(Segment information) .................................................................................................................................................

9－1－

1. Results of Operations(1) Overview of consolidated business performanceWith sales of electronics components and EMS business (note) as the two pillars of its operations, the Group is pushing
forward with its growth strategy, aiming to achieve the management targets as set out in the “Medium Term Management
Plan 2021” formulated in November 2018, or specifically 500.0 billion yen in net sales, 13.0 billion yen in operating
income and ROE of 8% or higher to be attained in the fiscal year ending March 31, 2022.
Net sales in the first half of the fiscal year ending March 31, 2020 increased substantially by 99.9% year on year to230,630 million yen, due largely to revenue contribution from Fujitsu Electronics Inc. (hereafter, “Fujitsu Electronics"),
which was converted to a subsidiary from January 2019 and whose results are reflected for the full quarter.
In terms of income, reflecting notably the steady performance of the electronic component business led by the EMS
business in addition to the effects of business acquisitions, operating income increased by 38.9% year on year to 5,239
million yen, ordinary income increased by 37.0% year on year to 5,546 million, and profit attributable to owners of parent
increased by 27.4% to 3,502 million yen.
With specific respect to operating income and ordinary income, record highs were achieved for a first half period.
(Note ) Electronics Manufacturing Service: Provision of product development and manufacturing services on an outsourcing basis.
FY 2019/3 2Q

FY 2020/3 2Q(April 1, 2018 –(April 1, 2019 –September 30, 2018)

September 30, 2019)

YoY（Million yen）

（Million yen）

（Million yen）

Net sales

115,383

230,630

115,247

Gross profit（Margin）

16,023
13.9%

23,771
10.3%

7,747(3.6pt)

48.4%
－

SG&A

12,251

18,531

6,279

51.3%

Operating income

3,772

5,239

1,467

38.9%

Ordinary income

4,049

5,546

1,497

37.0%

Profit before income taxes

4,142

5,302

1,160

28.0%

2,750

3,502

752

27.4%

110.26Yen

108.63Yen(1.63Yen)－

Profit attributable to ownersof parent
Exchange Rate
(Average rate during the year)
USD

99.9%

Business segment performance was as follows.
(a) Electronic components (Development, manufacture and sale of semiconductors, general electronic components andother products, the electronics manufacturing service (EMS), and other activities)
In this business, the EMS business maintained steady performance led by medical equipment and automotive.
Component sales business enjoyed revenue from LED lightings and other consumer devices as well as the addition ofrevenue resulting from the conversion of Fujitsu Electronics to a subsidiary in such areas as mobile phones andautomotive devices.
As a result, net sales increased by 139.4% year on year to 199,818 million yen, and segment income increased by
71.3% year on year to 4,238 million yen.
(b) Information equipment (Sales of PCs, PC peripherals, home electric appliances, photograph and imaging products,
original brand products, and other products)
In this business, PCs and PC peripherals for individuals, schools, and other educational institutions enjoyed strong
sales. In contrast, the commercial facilities-related LED installation business was affected by a pause in replacement
demand from major customers, while sales in the housing-related home electric appliances business decreased due tosuch factors as delivery date adjustments by customers.
As a result, net sales decreased by 5.6% year on year to 19,968 million yen and segment income decreased by 28.5%
year on year to 618 million yen.

－2－

(c) Software (Production of computer graphics, planning and development of amusement products, and other activities)
In this business, orders for production of computer graphics animation and development of game software continued
to face a difficult situation partly due to customers extending their development schedule.
As a result, net sales decreased by 5.1% year on year to 1,332 million yen, and segment income decreased by 67.2%
year on year to of 46 million yen.
(d) Others (Repair and support for electronics equipment, and sales of amusement equipment and sports goods, and others)
In this business, sales of arcade amusement machines continued to be strong. The PC peripherals and mobile phones
recycling business showed robust performance, however golf products suffered sluggish sales.
As a result, net sales increased by 1.4% year on year to 9,510 million yen, and segment income increased by 19.6%
year on year to 259 million yen.
FY 2019/3 2Q

FY 2020/3 2Q(April 1, 2018 –(April 1, 2019 –September 30, 2018)

September 30, 2019)

YoY（Million yen）

（Million yen）

（Million yen）

Electronic components

Net sales
Segment income

83,4552,474

199,818
4,238

116,3631,764

139.4％
71.3％

Information equipment

Net sales
Segment income

21,143864

19,968618（5.6％)（28.5％)

Software

Net sales
Segment income

1,404
143

1,332
46

(1,174)（246)

Others

Net sales
Segment income

9,379
216

9,510
259

131
42

（5.1％)（67.2％)
1.4％
19.6％

Total

Net sales
Segment income

115,383
3,772

230,630
5,239

115,247
1,467

99.9％
38.9％

（72)
（96)

Note: “Segment income” shows unadjusted figures for each business segment and adjusted figures for the total.
(2) Overview of financial condition(a) Assets, liabilities and net assets
Total assets as of September 30, 2019 increased by 713 million yen from March 31, 2019, to 214,475 million yen.
Current assets decreased by 262 million yen from March 31, 2019, to 182,133 million yen. This is primarily due to adecrease of 2,544 million yen in notes and accounts receivable – trade, and a decrease of 5,503 million yen inmerchandise and finished goods, although cash and deposits increased by 7,927 million yen.
Non-current assets increased by 976 million yen from March 31, 2019, to 32,341 million yen. This is primarily the
result of an increase of 2,008 million yen in property, plant and equipment due to such factors as the application of
IFRS 16 as well as construction of new facilities in Fukushima and second factory in Thailand, and a decrease of 633
million yen in investment securities.
Liabilities decreased by 493 million yen from March 31, 2019, to 129,008 million yen. This is primarily attributed toa decrease of 3,188 million yen in notes and accounts payable – trade, an increase of 1,054 million yen in short-termloans payable, and an increase of 1,174 million yen in lease obligations.
Net assets increased by 1,206 million yen from March 31, 2019, to 85,466 million yen. This is primarily due torecording 3,502 million yen of profit attributable to owners of parent and dividend payments of 1,235 million yen.
(b) Cash flows
Cash and cash equivalents as of September 30, 2019 increased by 8,957 million yen from March 31, 2019 to 41,189
million yen.
(Operating activities)
Net cash provided by operating activities was 12,242 million yen. This is attributable primarily to recording income
before income taxes and a decrease in inventories.
(Investing activities)
Net cash and cash equivalents used in investing activities was 1,899 million yen, mainly due to purchase of property,
plant and equipment.
(Financing activities)
Net cash and cash equivalents used in financing activities was 746 million yen, mainly due to cash dividends paid.
－3－(3) Qualitative information on consolidated earnings forecast
The business environment surrounding the Group in the third quarter and beyond will likely remain in an unpredictablesituation given the uncertainties including the impact of various trade issues originating from the U.S., trends in China’s
domestic economy, the Brexit issue, and geopolitical risks in Iran and other parts of the Middle East.
Having carefully assessed the uncertain outlook in the business environment as described above, the Company decided
to keep full year performance forecasts unchanged from the previously announced forecasts given the solid progress madein the second quarter of the fiscal year ending March 31, 2020. The exchange rate assumptions used for the performance
forecasts also remain unchanged.
In this first fiscal year of the “Medium Term Management Plan 2021,” the Company will continue to make Group-wide
efforts to achieve its targets, with a focus on electronic components sales business and EMS business.

－4－

2. Quarterly Consolidated Financial Statements and Major Notes(1) Quarterly consolidated balance sheet(Million yen)
Fiscal year ended March 2019
(As of March 31, 2019)

First half ended September 2019
(As of September 30, 2019)ASSETS
Current assets
Cash and deposits

35,00342,931

Notes and accounts receivable - trade96,14593,600Electronically recorded monetary claims - operating

5,361

3,909

261

229

33,73428,230489

664

Raw materials and supplies

5,802

5,898

Other

5,894
(296)

6,986
（317)

182,396

182,133

Buildings and structures, net

4,910

5,800

Machinery, equipment and vehicles, net

3,506

4,027

Tools, furniture and fixtures, net

1,104

987

Land

4,861

4,764

628

1,438

15,011

17,020

Securities
Merchandise and finished goods
Work in process

Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment

Construction in progress
Total property, plant and equipment
Intangible assets
Goodwill

259

217

Software

1,819

1,580

Other

126

159

2,206

1,957

Investment securities

10,085

9,452

Deferred tax assets

1,292

1,143

Guarantee deposits

870

860

Insurance funds

951

897

Total intangible assets
Investments and other assets

Other

1,462

1,518

Allowance for doubtful accounts

(515)

（507)

Total investments and other assets

14,147

13,364

Total non-current assets
Total assets－5－31,36432,341

213,761

214,475

(Million yen)
Fiscal year ended March 2019
(As of March 31, 2019)

First half ended September 2019
(As of September 30, 2019)

LIABILITIESCurrent liabilities
Notes and accounts payable - trade

77,88474,696

Short-term loans payable

30,656

31,710Accrued expenses

5,307

5,015

Income taxes payable

1,147

1,162

105

35

6,239

8,005

121,340

120,626

Long-term loans payable

1,882

1,372

Deferred tax liabilities

1,300

1,455

94

101

Net defined benefit liability

1,997

1,919

Asset retirement obligations

280

286

Other

2,606

3,247

Total non-current liabilities

8,161

8,382

129,501

129,008

Capital stock

12,133

12,133

Capital surplus

13,865

13,865Retained earnings

51,29753,564

Treasury shares(2,024)（2,024)

Total shareholders’ equity

75,272

77,539

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges

1,018

593

2

21

Foreign currency translation adjustment

527

（345)

Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeNon-controlling interests

(215)

（191)

1,332

77

7,654

7,848

Total net assets

84,25985,466

213,761

214,475

Provision for directors’ bonuses
Other
Total current liabilities
Non-current liabilities

Provision for directors’ retirement benefits

Total liabilities
NET ASSETS
Shareholders’ equity

Total liabilities and net assets－6－

(2) Quarterly consolidated statements of income and comprehensive income
For the First half (April 1, 2019 – September 30, 2019)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Commission fee
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using
equity method
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on transfer of businessSettlement received
Other
Total extraordinary income
Extraordinary loss
Loss on retirement of non-current assets
Loss on sales of investment securities
Loss on valuation of investment securities
Loss on valuation of golf club membership
Impairment loss
Other
Total extraordinary loss
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit(Million yen)First half ended September 2018
First half ended September 2019
(April 1, 2018 – September 30,2018) (April 1, 2019 – September 30, 2019)
115,383
230,630
99,360206,859
16,023
23,771
12,251
18,531
3,772
5,239

Profit attributable to owners of parent
Profit attributable to non-controlling interests
Other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests
－7－

57
111
102
－
177
448

117
126
147
137
212
740

83

156

34

216

36
17
171
4,049

－
61
434
5,546

3
214
7
－
－
225

17
29
12
498
1
559

3
2
110
5
9
1
132
4,142
1,069
314
1,384
2,758

3
13
536
－
245
4
803
5,302
1,135
317
1,453
3,848

2,750
7

3,502
346

（45)

（423)

26
744
13

19
（986)
21

（29)

（42)

709
3,467

（1,411)
2,436

3,457

2,243

9

193

(3) Consolidated statement of cash flows(Million yen)First half ended
September 2019
(April 1, 2019 –September 30, 2019)

First half ended
September 2018
(April 1, 2018 –September 30, 2018)
Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment loss
Amortization of goodwill
Increase (decrease) in provision for directors’
retirement benefits
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expenses
Share of (profit) loss of entities accounted for using
equity method
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Decrease (increase) in notes and accounts receivable trade
Decrease (increase) in inventories
Decrease (increase) in accounts receivable - other
Decrease (increase) in advance payments
Increase (decrease) in notes and accounts payable trade
Increase (decrease) in accrued expenses
Decrease (increase) in consumption taxes refund
receivable
Decrease (increase) in other current assets
Increase (decrease) in other current liabilities
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Other, net
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Short-term loan advances
Proceeds from cancellation of insurance funds
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Other payments
Other proceeds
Net cash provided by (used in) investing activities
Cash flows from financing activities
Increase (decrease) in short-term loans payable
Proceeds from long-term borrowings
Repayments of long-term loans payable
Cash dividends paid
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
－8－

4,142
750
9
44

5,302
1,284
245
42

(1,191)

6

25
（168)
83

29
（243)
156

34

216

（211)
110

（15)
536

1,904

2,979

（2,248)
338
（15)

4,784
（497)
（1,460)（1,459)（2,095)

（241)

（269)

（46)

802

（52)
（425)
1,263
2,643
170
（78)
（838)
1
1,898

66
1,201
（159)
12,913
253
（164)
（633)
（126)
12,242（3,092)
340
（775)
84
（78)
（1,941)
546
－
11
（15)
14
（41)
8
（4,938)

（517)
1,507
（1,695)
181
（244)
（922)
299
（550)
52
（26)
30
（53)
39
（1,899)

1,116
－
（623)
（1,095)
（82)
（685)

1,165
161
（639)
（1,233)
（201)
（746)

354

（638)

（3,370)28,87925,5098,957
32,231
41,189(4) Notes to quarterly consolidated financial statements(Notes to going concern assumptions)Not applicable(Significant change in shareholders’ equity)
Not applicable(Changes in accounting policies)(IFRS 16 “Leases”)
Subsidiaries that adopt International Financial Reporting Standards are applying International Financial ReportingStandard No. 16 “Leases” (hereafter, “IFRS 16”) from the first quarter ended June 30, 2019. In accordance with thestandards, right-of-use assets and lease liabilities are recognized in principle for all of the lessee’s lease transactions, anddepreciation of right-of-use assets and interest on lease liabilities are recorded.
In applying IFRS 16, the transition provisions are followed, opting therefore to measure lease liability at the present value,
discounted using lessee’s incremental borrowing rate at the date of initial application, and record this same amount for rightof-use asset.
As a result of the application of IFRS 16, the following items increased as of September 30, 2019: in non-current assets,“buildings and structures (net)” by 1,117 million yen, “machinery, equipment and vehicles (net)” by 3 million yen, and“tools, furniture and fixtures (net)” by 0 million yen; "other" in current liabilities by 265 million yen, and "other" in noncurrent liabilities by 869 million yen.
Note that this change had no material effects on profit and loss in the first half of the fiscal
year ending March 31, 2020.
(Segment information)
I. For the first half ended September 2018 (April 1, 2018 – September 30, 2018)
Information about net sales and income (loss) by reportable segments(Million yen)
Reportable segments
Adjustment(Note 1)

Consolidated(Note 2)

Electronic
components

Informationequipment

Software

83,455

21,143

1,404

9,379

115,383－

115,383

1,348

460

361

2,060

4,231

（4,231)－

Total

84,803

21,604

1,766

11,440

119,615（4,231)

115,383

Segment income

2,474

864

143

216

3,698

73

3,772

OthersTotal

Net sales:
Sales to externalcustomers
Inter-segment sales
or transfers

Notes:

1. Adjustment in segment income of 73 million yen includes 73 million yen for elimination of inter-segment trade.
2. Segment income is adjusted for operating income on the quarterly consolidated statements of income and comprehensive income.

II. For the first half ended Septmber 2019 (April 1, 2019 – September 30, 2019)
Information about net sales and income (loss) by reportable segments(Million yen)
Reportable segments
Adjustment(Note 1)

Consolidated(Note 2)

230,630－

230,630

1,659

3,667

（3,667)－

1,631

11,170234,298（3,667)

230,630

46

259

5,163

76

5,239

Electronic
components

Informationequipment

Software199,818

19,968

1,332

9,510

1,280

428

298

201,099

20,396

4,238

618

OthersTotal

Net sales:
Sales to externalcustomers
Inter-segment sales
or transfers
Total
Segment income
Notes:

1. Adjustment in segment income of 76 million yen includes 76 million yen for elimination of inter-segment trade.
2. Segment income is adjusted for operating income on the quarterly consolidated statements of income and comprehensive income.

－9－