August 4, 2015

Summary of Consolidated Financial Results
For the First Quarter Ended June 30, 2015 [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
Ryoichi Kado
Managing Director, Administration Headquarters
Eiji Kawamura+81-(0)3-5657-0111
August 13, 2014
NoneNone(Yen in millions, rounded down)

1.

Financial results for the first quarter of the fiscal year ending March 2016 (April 1, 2015 – June 30, 2015)(1) Result of operations (Consolidated, year-to-date)(Percentage figures represent year on year changes)
Profit attributable toNet sales
Operating income
Ordinary income
owners of parent

Million yen%
Million yen%
Million yen%
Million yen
73.3
First quarter ended June 2015
58,349
2.6
1,598
89.6
1,773
1,147
96.8
First quarter ended June 2014
56,849(1.4)
842 139.9
1,023
451
Note: Comprehensive income: 1Q FY3/2016: 1,289 million yen [377.1%], 1Q FY3/2015: 270 million yen [-59.1%]
Net income per share

Net income per share fully diluted
Yen-Yen
40.60
15.99

First quarter ended June 2015
First quarter ended June 2014

%
153.9
723.0

(2) Financial Position (Consolidated)
Total assets
As of June 30, 2015

Equity ratio

Million yen
121,684

Million yen
60,197%49.4

127,948

59,60346.6

As of March 31, 2015
Reference: Shareholders’ equity
As of June 30, 2015:60,151 million yen
2.

Net assets

As of March 31, 2015

59,564 million yen

Dividends
End of 1Q
Yen-

End of 2Q
Yen
15.00

Dividend per share
End of 3Q
Yen-

Fiscal year ended March 2015
Fiscal year ending March 2016
Fiscal year ending March 2016 (est.)
20.00
Note: Change in the estimation of dividend from the latest announcement: None

End of FY
Yen
25.00

Full year
Yen
40.00

20.00

40.00

-Year-end dividend of FY3/15 includes ordinary dividend of 15.00 yen and commemorative dividend of 10.00 yen

3.

Forecast for the fiscal year ending March 2016 (Consolidated, April 1, 2015 to March 31, 2016)(Percentage figures represent year on year changes)
Profit attributable
Net income
Net sales
Operating income
Ordinary income
to owners of parent
per share%

Million yen%

Million yen%

YenFirst Half
125,000
3.9
3,100
1.1
260,000
1.9
6,500
2.2
Full year
Note: Change in the forecast from the latest announcement: None

Million yen%

Million yen

3,300
7,000

(9.3)
(8.7)

2,200
4,600

2.0
4.2

77.86
162.80* Notes(1) Changes in significant subsidiaries (Changes in specific subsidiaries accompanied by changes in the scope ofconsolidation): None
(2) Use 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: Yes(b) Changes other than in (a): None(c) Changes in accounting estimates: None(d) Retrospective restatement: None
Note: For more information, please see 2. Other Information (3) Changes in accounting principles and estimates, andretrospective restatement on page 3.
(4) Number of shares outstanding (common stock)(a) Shares outstanding (including treasury shares)
As of June 30, 2015:

28,702,118

As of March 31, 2015:

28,702,118

As of June 30, 2015:

446,123

As of March 31, 2015:

446,040

Period ended June 30, 2014:

28,257,098(b) Treasury shares(c) Average number of shares (quarterly consolidated cumulative period)
Period ended June 30, 2015:

28,256,017* 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 thisreport was prepared and assumptions that management believes are reasonable. Actual results may differ significantly
from these statements for a number of reasons.

Index for Supplementary Information
1.

Results of Operations ....................................................................................................................................................................2(1)Overview on consolidated business performance ....................................................................................................................2(2)Overview of financial condition ..............................................................................................................................................2(3)Forecast for fiscal year ending in March 2016 .........................................................................................................................22.

Other Information (Note) ..............................................................................................................................................................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
For the first quarter (April 1, 2015 – June 30, 2015).....................................................................................................................6(3)Notes to quarterly consolidated financial statement.................................................................................................................7(Notes to going concern assumptions) ..........................................................................................................................................7(Significant change in shareholders’ equity) .................................................................................................................................7(Segment information) ..................................................................................................................................................................71

1.

Results of Operations(1)

Overview on consolidated business performance
In the first quarter of the fiscal year, the slow recovery of the Japanese economy continued despite concerns about thedeclining economic growth rate in China, the European debt problem and other issues. Consumer spending as well isstarting to rebound as companies report higher earnings and the number of jobs grows along with government economic
stimulus measures and monetary easing by the Bank of Japan.
In the electronics industry, the principal area of operations for the KAGA ELECTRONICS Group, market conditions weregenerally favorable. Demand for PCs and consumer electronics remained sluggish. However, demand increased for mobiledevices, automotive devices, and medical and healthcare products. There was also growth in new electronics market
sectors like environmental and energy products, the Internet of things (*1) and wearable devices.
During the first quarter, based on its management philosophy of “Everything we do, we do for our customers,” the KAGAELECTRONICS Group revised its organizational structure to enable group companies to work more closely together andworked on increasing sales to major current customers, adding new products and expanding overseas operations.
First quarter consolidated net sales were 58,349 million yen, 2.6% higher than one year earlier. Operating income
increased 89.6% to 1,598 million yen, ordinary income increased 73.3% to 1,773 million yen and profit attributable toowners of parent increased 153.9% to 1,147 million yen.
*1

Internet of Things is a generic name given to new services and business models based on connecting all things through the Internetor underlying technologies that enable it.

Business segment performance was as follows.
(a) Electronic components (Development, manufacture and sale of semiconductors, general electronic components andother products, EMS (*2), and other activities)
In Japan, sales of communication equipment and electronic components and semiconductors used in amusementproducts were higher. Overseas, the performance of the EMS business for electronic devices was strong. As a result,sales increased 3.6% from one year earlier to 45,592 million yen and operating income increased 64.8% to 1,472
million yen.
*2 EMS: Electronics Manufacturing Service is a term used for the provision of product development and manufacturing services onan outsourcing basis.

(b) Information equipment (Sales of PCs, PC peripherals, photograph and imaging products, original-brand products, andother products)
The volume of PCs, digital cameras and other products decreased due to soft demand but sales of housing-related
products and some other products were higher. The result was a 1.5% decrease in sales from one year earlier to 9,666
million yen and operating income of 93 million yen compared with a 26 million yen loss one year earlier.
(c) Software (Production of computer graphics, planning and development of amusement products, and other activities)
In this segment, activities focused mainly on the production of computer graphics for animation applications and on thedevelopment and sales of game software. There were also cost-cutting measures. Due to these activities, sales
increased 75.9% from one year earlier to 471 million yen and operating income was 144 million yen compared with a
21 million yen loss one year earlier.
(d) Others (Electronic device repairs and support, sales of sporting goods, and other activities)
First quarter performance was weak for arcade amusement machines in Japan and the PC and communicationequipment reuse business. Sales decreased 5.2% to 2,618 million yen and the operating loss increased to 88 million yen
from 36 million yen one year earlier.
(2)

(3)

Overview of financial condition
Assets, liabilities and net assets
Assets were 121,684 million yen at the end of the first quarter, 6,264 million yen less than at the end of the previous fiscal
year. A decrease in notes and accounts receivable-trade was the main reason.
Liabilities decreased 6,858 million yen to 61,486 million yen mainly because of a decrease in notes and accounts payabletrade.
Net assets increased 594 million yen to 60,197 million yen mainly because of first quarter profit attributable to owners ofparent.
Forecast for fiscal year ending in March 2016
There is no change in the forecast for consolidated results of operations that was announced on May 7, 2015.

2

2.

Other Information (Note)(1)

Changes in significant subsidiaries:
None

(2)

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

(3)

Changes in accounting principles and estimates, and retrospective restatement:
Changes in accounting policy(Application of accounting standard concerning business combinations and other accounting standards)
Beginning with the first quarter of the fiscal year ending on March 31, 2016, KAGA ELECTRONICS is using
Accounting Standard for Business Combinations (ASBJ Statement No. 21, September 13, 2013), Accounting Standard
for Consolidated Financial Statements (ASBJ Standard No. 22, September 13, 2013) and Accounting Standard forBusiness Divestitures (ASBJ Statement No. 7, September 13, 2013). As result, quarterly net income has been renamed
and minority interests is now called non-controlling interests. To reflect these changes in the presentation of the financial
statements, first quarter and fiscal year consolidated financial statements for the previous fiscal year have been revised.

33.

Quarterly Consolidated Financial Statements(1)

Quarterly consolidated balance sheet(Million yen)
Fiscal year ended March 2015
(As of March 31, 2015)

First quarter ended June 2015
(As of June 30, 2015)

ASSETS
Current assets
Cash and deposits

18,13017,272

Notes and accounts receivable-trade58,16752,095127

125

17,276

18,262

401

832

5,024

4,819

929

798

4,497

4,103

Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets
Other(131)(127)

104,424

98,183

Buildings and structures, net

5,455

5,354

Machinery, equipment and vehicles, net

2,285

2,265

936

880

4,041

4,041

6

6

12,725

12,549Goodwill

607

574

Software479

498

Other44

95

1,131

1,167

6,351

6,535

Allowance for doubtful accounts
Total current assets
Noncurrent 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

274

276

Other

4,210

4,146

Allowance for doubtful accounts(1,169)(1,174)

Total investments and other assets

9,6679,783

23,52423,500127,948

121,684

Deferred tax assets

Total noncurrent assets
Total assets

4(Million yen)
Fiscal year ended March 2015
(As of March 31, 2015)

First quarter ended June 2015
(As of June 30, 2015)

Notes and accounts payable-trade40,54335,598

Short-term loans payable

5,925

5,106

Income taxes payable

1,286

800

LIABILITIESCurrent liabilities

Other

6,856

6,704

Total current liabilities

54,612

48,210Long-term loans payable

8,253

7,896

Provision for directors' retirement benefits

1,501

1,155

Net defined benefit liability

1,643

1,711

Other

2,335

2,513

Total noncurrent liabilities

13,733

13,276

68,34561,486

Capital stock

12,133

12,133

Capital surplus

13,912

13,912Retained earnings

31,02931,470Treasury shares

(537)

(537)

56,53856,978790

927

Noncurrent liabilities

Total liabilities
NET ASSETS
Shareholder’s equity

Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment

233

2,462

2,542Remeasurements of defined benefit plans

(250)

(300)

Total accumulated other comprehensive income

3,026

3,172

38

45

Non-controlling interests
Total net assets
Total liabilities and net assets

559,60360,197

127,948

121,684

(2)Quarterly consolidated statements of income and consolidated statements of comprehensive income
For the first quarter (April 1, 2015 – June 30, 2015)(Million yen)First quarter ended June 2014
(April 1, 2014 – June 30, 2014)

First quarter ended June 2015
(April 1, 2015 – June 30, 2015)

56,84949,579
7,269
6,426
842

58,34950,334
8,014
6,416
1,598

41
58
77
147
325

2663
53
78
221

2991
24
145
1,023

27
3
15
46
1,773

7
70
113
163
4
171
859
269
134
403
455
451
30
20
2
1,772
347
281
629
1,143
1,147
(3)

42

136

(6)
(238)

(19)
79

16(50)

(185)
270

146
1,289

266

1,293

4(3)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Commission fee
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Gain on sales of investment securities
Total extraordinary income
Extraordinary loss
Loss on retirement of noncurrent assets
Loss on valuation of investment securities
Office transfer expenses
Other
Total extraordinary loss
Income before income taxes and minority interests
Income taxes-current
Income taxes-deferred
Total income taxes
Net income
Profit attributable to owners of parent
Profit (loss) 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 oftax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to owners ofparent
Comprehensive income attributable to noncontrolling interests

6

(3)

Notes to quarterly consolidated financial statement(Notes to going concern assumptions)
None(Significant change in shareholders’ equity)
None(Segment information)
I For the first quarter ended June 2014 (April. 1, 2014 – June 30, 2014)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

Others44,004

9,812

268

2,763

56,849-56,849

281

158

729

622

1,792

(1,792)-44,286

9,971

997

3,386

58,641(1,792)

56,849Total

Net salesof which tooutside customersof which intersegment
Total

Segment
893
(26)
(21)
(36)
809
33
842
income (loss)
Notes:1.
The adjustment 33 million yen includes amounts for intersegment cancellation of 33 million yen.
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 2015 (April. 1, 2015 – June 30, 2015)
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

Others45,592

9,666

471

2,618

58,349-58,349

187

170

684

238

1,281

(1,281)-45,779

9,837

1,156

2,857

59,631(1,281)

58,349Total

Net salesof which tooutside customersof which intersegment
TotalSegment
1,472
93
144(88)
1,622
(24)
1,598
income (loss)
Notes:
1.
The adjustment -24 million yen includes amounts for intersegment cancellation of 14 million yen andamortization of goodwill of -38 million yen.
2.
Segment income (loss) is adjusted for operating income (loss) on the quarterly consolidated statements of income
and consolidated statements of comprehensive income.

7