February 1, 2010

Summary of Consolidated Financial Results
For the Third Quarter Ended December 2009
Name of Company:
Stock Code:
Stock Exchange Listing:
URL:
Representative
Title:
Name:
Contact Person
Title:Name:
Phone:
Date of quarterly securities report:
Date of commencement of dividend payment:

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
February 10, 2010
(Yen in millions, rounded down)

1. Financial results for the third quarter ended December 2009 (April 1, 2009 ‐ December 31, 2009)(1) Result of operations (Consolidated, year-to-date)(Percentage figures represent year on year changes)

Third quarter ended Dec 2009
Third quarter ended Dec 2008

Net sales
MillionYoY
yen Change %174,926(17.2)
211,138-

Operating income
MillionYoY
yen Change %883(78.0)
4,009-

Net income
per share

Net income
per share
fully diluted

Yen(28.71)(0.52)

Third quarter ended Dec 2009
Third quarter ended Dec 2008

Ordinary income
MillionYoY
yen Change %791(77.5)
3,522-

Net income
MillionYoY
yen Change %
(792)
(14)
-

Yen
-

(2) Financial Position (Consolidated)
Total assets

Net assets

Million yen
Third quarter ended Dec 2009
114,456
Fiscal year ended March 2009
117,251
Note: Shareholders’ equity
As of December 31, 2009 : 46,213 million yen
As of March 31, 2009 :47,770 million yen

Equity ratio

Million yen
47,922
49,560Net assets per share
%
40.4
40.7

Yen
1,674.61
1,730.98

2. Dividends
End of 1Q
Yen-

End of 2Q
Yen
25.00
15.00

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: None1

End of FY
Yen
15.00

Full year
Yen
40.00

15.00

30.00

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

Operating income

Ordinary income

Net income

Net income
per share
Yen
0.00

Million yen% Million yen% Million yen% Million yen%
Full year
245,000(10.5)
1,500(33.3)
1,400(36.6)
0Note: Change in the forecast made in this period: Yes(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 December 31, 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 December 31, 2009: 1,105,790(c) Average number of shares (quarterly consolidated cumulative period)
Period ended December 31, 2008: 28,005,288
Period ended December 31, 2009: 27,596,733*Cautionary statement regarding forecasts of operating results and special notes
1. The forecast for consolidated performance that was announced on September 15, 2009 has been revised in thisdocument. For information about this revision, please see “3. Forecast for fiscal year ending March 2010” onpage 5.
2. 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Results of Operations
1. Analysis of results of operations
In the first three quarters of the fiscal year, the U.S. economy became increasingly stable due to financial stabilizationand other initiatives. However, a full-scale recovery has not started because of high unemployment and sluggish
consumer spending. In Europe as well, the economy remains soft because recoveries taking place in Germany, France
and other major countries are weak. In East Asia, a solid recovery taking place in China, India and other countries ismaking this region an increasingly important element of the global economy.
The Japanese economy is benefiting from a recovery in exports to the U.S. and Asia. However, the economy is still
held back by the yen’s strength and slumping consumer spending caused by concerns about jobs.
In the electronics industry, the primary area of our operations, market conditions have been recovering. Sales ofenergy-efficient environmental products like eco-cars and “green” home appliances are increasing and there havebeen concerns about the adequacy of supplies of some electronic components. In this environment, the companies of
the KAGA ELECTRONICS Group worked even more closely together with the aim of expanding the lineup ofenergy-efficient products and other environmental products, such as LED lights, and enlarging sales routes for theseproducts. Despite these activities, consolidated net sales in the first three quarters decreased 17.2% to 174,926 million
yen. Operating income was down 78.0% to 883 million yen, ordinary income fell 77.5% to 791 million yen, and the
net loss increased from 14 million yen to 792 million yen.
Performance by geographic segment was as follows.
1) JapanThe operating environment in Japan remained challenging despite a recovery in exports to the U.S. and Asia.
Consumer spending has become even weaker against a backdrop of a strong yen and high unemployment.
Sales benefited from the addition of new products in the environmental sector and other categories as well as from thecontribution of companies that were newly consolidated during the previous fiscal year. However, there were declines
in EMS* orders from amusement equipment manufacturers and in sales of signal conversion ICs used bymanufacturers of audio-visual products. The result was a 15.9% decrease in sales to 153,802 million yen and an
85.1% decrease in operating income to 404 million yen.
*Electronics Manufacturing Service is a term used for companies that design, test, manufacture, distribute, andprovide return/repair services.
2) North America
In the U.S., there is progress in stabilizing the economy due to financial stabilization measures and other initiatives.
Nevertheless, there is still no full-scale recovery due to the lackluster recovery in consumer spending caused partly byhigh unemployment. Sales were down 24.5% to 325 million yen because of a decrease in orders for amusement
equipment components and other products. The operating loss increased from 77 million yen to 85 million yen.
3) Europe
Although economies are recovering in Germany, France and other major European countries, market conditions
remain challenging due to the weak pace of the recovery. There was a decrease in EMS orders for circuit boards usedby climate control equipment manufacturers and for other products as manufacturers of electronic products cut
production. The result was a 41.9% decrease in sales to 1,915 million yen and an increase in the operating loss from31 million yen to 117 million yen.
4) East Asia
The East Asian economy is playing a greater role in the global economy because of a solid recovery in China, India andother countries. However, there was a decline in orders in the EMS business from Japanese manufacturers of officeequipment, climate control equipment and other products. Sales were down 21.1% to 35,524 million yen and operating
income fell 61.1% to 395 million yen.

3

Net sales by product category
Product category

Information equipment
EMS
Semiconductors
General electronic components
OthersTotal

For the nine months ended Dec. 2008
(April 1, 2008 – December 31, 2008)

For the nine months ended Dec. 2009
(April 1, 2009 – December 31, 2009

Amount (million yen)

Proportion

Amount (million yen)

Proportion

51,28760,40046,63529,38523,429211,138

24.3%
28.6%
22.1%
13.9%
11.1%
100.0%

45,65443,91038,286
22,95824,116
174,926

26.1%
25.1%
21.9%
13.1%
13.8%
100.0%

Information equipment
One goal in this segment is increasing sales of PCs and peripherals. We also worked on increasing sales of new
products and services such as network construction and security systems to companies, schools and the public sector.
However, performance in this sector was impacted by a decline in products handled for a large U.S. PC manufacturer
and a decrease in the volume of products handled at KAGA COMPONENTS CO., LTD. resulting from thereorganization of its projector business also brought down segment sales. As a result, sales decreased 11.0% to 45,654
million yen.
EMS
There was a large downturn in orders caused by cuts in production volume at EMS client companies. In Japan, orders
decreased for LCD units used by amusement equipment manufacturers. Overseas, orders were lower for circuitboards used by Japanese manufacturers of office equipment and climate control equipment. As a result, sales were
down 27.3% to 43,910 million yen.
Semiconductors
There was a contribution to sales from ADM Inc., a JASDAQ-listed semiconductor trading company that became aconsolidated subsidiary in August 2008. However, lower handling volumes of image processing ICs for amusement
equipment and signal conversion ICs for digital audio-visual products caused sales to decrease 17.9% to 38,286
million yen.
General electronic components
There was an increase in the handling volume for products used by large manufacturers of LCD TVs and automotive
devices. But there was a decline in sales of electronic components to manufacturers of office equipment, climate
control equipment and amusement equipment. The result was a 21.9% decrease in sales to 22,958 million yen.
OthersThere was a decline in sales of photographic products due to changes in market conditions. But segment performance
benefited from higher sales of energy-conserving home appliances and strong sales of amusement equipment. The
result was a 2.9% increase in sales to 24,116 million yen.

4

2. Analysis of financial condition
Total assets decreased 2,795 million yen from the end of the previous fiscal year to 114,456 million yen at the end of
the third quarter. The main reason was a decrease in notes and accounts receivable-trade.
Net assets decreased 1,638 million yen to 47,922 million yen and the equity ratio was down 0.4 point to 40.4%.
(Cash flows)
There was a net increase of 600 million yen in cash and cash equivalents from the end of the previous year to 11,969
million yen.
Net cash provided by operating activities was 2,669 million yen. A decrease in notes and accounts receivable-trade
was a major source of cash.
Net cash used in investing activities was 2,669 million yen. Cash was used mainly for payments for the purchase ofproperty, plant and equipment.
Net cash provided by financing activities was 605 million yen. A net increase in short-term bank loans was theprimary source of cash.
3. Forecast for fiscal year ending March 2010
(1) Revised consolidated forecast for the fiscal year ending on March 31, 2010 (April 1, 2009 - March 31, 2010)(million yen)
Net sales
Operating
Ordinary
Net income
Net income perincomeincomeshare (yen)Previous forecast (A)250,000
1,600
2,000
300
10.87
Revised forecast (B)245,000
1,500
1,400
0
0.00
Difference (B-A)(5,000)
(100)
(600)
(300)
Pct. change (%)
(2.0)
(6.3)
(30.0)(100.0)(Ref.) Previous fiscal year
273,610
2,249
2,208
(806)
(28.91)(2) Reason for revision
The electronics industry is recovering slowly due to progress at finished product manufacturers in reducing
inventories and to higher sales of “green” home appliances and other energy-efficient environmental products. This
recovery has produced signs of an upturn at the KAGA ELECTRONICS Group due to higher orders for someproducts. However, performance has been impacted by a decline in deliveries of parts caused by the postponement of
product introductions at Japanese amusement equipment manufacturers and by a decline in handling volume in theinformation equipment segment. These factors caused shortfalls in sales and earnings compared with the original plan.
In response, the fiscal year forecast has been revised as shown above.
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)
Third quarter ended December 2009 Fiscal year ended March 2009
(As of December 31, 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

11,96959,01466
14,499
901
3,204
580
6,552
(183)

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

96,606

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

2,606
1,410
1,097
1,297
21

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

Total property, plant and equipment

6,433

6,168

557
731
394

884
878
152

1,683

1,914

5,552
236
5,277
(1,333)

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

Total current assets

Intangible assets
Goodwill
Software
OthersTotal intangible assets
Investments and other assets
Investment securities
Deferred tax assets
OthersAllowance for doubtful receivables
Total investments and other assets
Total fixed assets
Total assets

6

9,732

9,528

17,84917,612

114,456

117,251

(million yen)
Third quarter ended December 2009 Fiscal year ended March 2009
(As of December 31, 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
Others42,592
11,491
599
79
5,133

44,772
9,291
949
9
5,499

59,89560,521

2,750
1,467

3,620
1,342

1,200

1,122

1,220

1,084

6,637

7,168

Total liabilities

66,53367,690

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

12,133
13,912
23,538(1,333)

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

48,25149,873(110)
5(1,933)(364)(0)(1,737)

Total long-term liabilities

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(2,038)(2,103)

Minority interests

1,709

1,790

Total net assets

47,922

49,560114,456

117,251

Total valuation and translation adjustments

Total liabilities and net assets

7

(2) Quarterly statements of income
For the first three quarters ended December 2009
(million yen)
For the nine months ended Dec. 2008 For the nine months ended Dec. 2009
(April 1, 2008 – December 31, 2008) (April 1, 2009 ‐ December 31, 2009)
Net sales

211,138

174,926

Cost of sales

186,261

154,235

Gross profit

24,877

20,690

Selling, general and administrative expenses

20,86819,807

Operating income

4,009

883

Interest income

111

49

Dividend income

101

80

Others370

398

Total non-operating income

583

528

136
805
129

100
358
162

1,071

620

3,522

791

7
14
62

16
69
40
-

84

126

96
1,315
235
108

5
196
106
24

1,756

332

Income before income taxes and minority interests

1,850

584

Income, inhabitants and enterprise taxes
Income tax adjustment

2,017
(31)

915
514

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

1,985

1,430

(121)
(14)

(53)
(792)

Non-operating income

Non-operating expenses
Interest expense
Loss in foreign exchange
OthersTotal non-operating expenses
Ordinary income
Extraordinary income
Gain on sale of fixed assets
Gain on sale of investment securities
Compensation income
OthersTotal extraordinary income
Extraordinary losses
Loss on retirement of fixed assets
Loss on revaluation of investment securities
Loss on impairment of fixed assets
OthersTotal extraordinary losses

8For the third quarter ended December 2009
(million yen)
Third quarter ended December 2008
Third quarter ended December 2009
(October 1, 2008 – December 31, 2008) (October 1, 2009 – December 31, 2009)
Net sales
Cost of sales

69,94561,96360,99953,970Gross profit

7,982

7,029

Selling, general and administrative expenses

7,197

6,513

Operating income

784

515

Non-operating income
Interest income
Dividend income
Others

30
42
124

16
39
121

197

176

68
819
16

32
33
36

Total non-operating income
Non-operating expenses
Interest expense
Loss in foreign exchange
Others904

102

Ordinary income

78

589

Extraordinary income
Gain on sale of investment securities
Others

14
3

18
0

17

18

17
451
197
2

1
16
13
0

669

31

(573)
336
160

576
295
143

496

439

(102)
(967)

(2)
139

Total non-operating expenses

Total extraordinary income
Extraordinary losses
Loss on retirement of fixed assets
Loss on sale of investment securities
Loss on revaluation of investment securities
Loss on impairment of fixed assets
OthersTotal extraordinary losses
Income (loss) before income taxes and minority
interests
Income, inhabitants and enterprise taxes
Income tax adjustment
Total taxes
Minority interests in income (loss) of consolidated
subsidiaries
Net income (loss)

9(3) Quarterly statements of cash flows(million yen)
For the nine months ended Dec. 2008 For the nine months ended Dec. 2009
(April 1, 2008 – December 31, 2008) (April 1, 2009 – December 31, 2009)
Operating activities
Income before income taxes and minority interest
Depreciation and amortization
Loss on impairment of fixed assets
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 accrued expenses
Increase (decrease) in notes and accounts payable-trade
Increase (decrease) in other current liabilities
Others

1,850
1,225
235
195
(213)
136
1,315
6,648
(3,378)1,178(264)(7,015)
999
127

584
1,473
106
169
(130)
100
196
2,286
(449)
2,081
(561)
(2,083)760
336

Sub-total

3,041

4,870

Decrease (increase) in advance payments
Interest and dividend received
Interests paid
Income taxes-paid
Others

(343)
208
(135)
(3,417)
(27)

(952)
137
(102)
(1,274)
(10)

(673)

2,669

(1,822)(621)-(1,997)
(396)
(786)
401

(441)

-

(1,259)
1,086
(4)
-

164
(632)
354
(495)
705
(152)
166

Net cash provided by (used in) investing activities(3,061)(2,669)Financing activities
Increase (decrease) in short-term bank loans, net
Proceeds from long-term bank loans
Payment for acquisition of treasury stock
Payment of dividends
Others

(131)
5,000
(488)
(1,393)
(29)

1,421
(0)
(767)
(48)

2,957

605

Net cash provided by (used in) operating activities
Investing activities
Payment for purchase of property, plant and equipment
Payment for purchase of intangible assets
Payment for purchase of investment securities
Proceeds from sale of investment securities
Payment for acquisition of securities of subsidiaries,
which changed the scope of consolidation
Proceeds from acquisition of securities of subsidiaries,
which changed the scope of consolidation
Short term loans provided
Short-term loans collected
Security deposits provided
Security deposits collected
OthersOther payments
Other proceeds

Net cash provided by (used in) financing activities

(707)

(4)

Increase (decrease) in cash and cash equivalents(1,485)600

Cash and cash equivalents, beginning of period

14,011

11,368Cash and cash equivalents, end of period

12,525

11,969Effect of exchange rate changes on cash and cash equivalents10(4) Notes to ongoing concern assumptions
None(5) Segment Information
Operating segment information
For the third quarter ended December 2008 (October 1, 2008 – December 31, 2008) and the third quarter ended
December 2009 (October 1, 2009 – December 31, 2009); the first three quarters ended December 2008 (April 1, 2008 –December 31, 2008) and the first three quarters ended December 2009 (April 1, 2009 – December 31, 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 third quarter ended December 2008 (October 1, 2008 – December 31, 2008)
Japan
Net sales(1) (of which to outside customers)(2) (of which inter-segment)
Total
Operating income (loss)

57,072
4,177
61,249307

North
America

Europe

74
45
119
(25)

634
3
637
(51)

(million yen)

East
Asia

Total

12,164
2,096
14,260199

69,945
6,321
76,267429

Eliminations
or
Corporate

Consolidated(6,321)(6,321)
354

69,94569,945784

For the third quarter ended December 2009 (October 1, 2009 – December 31, 2009)
Japan
Net sales(1) (of which to outside customers)(2) (of which inter-segment)
Total
Operating income (loss)

49,4504,439
53,889276

North
America

Europe

88
6
94
(28)

688
14
702
(25)

(million yen)

East
Asia

Total

10,773
1,959
12,733
171

60,9996,419
67,419393

Eliminations
or
Corporate

Consolidated(6,419)(6,419)121

60,99960,999515

For the first three quarters ended December 2008 (April 1, 2008 – December 31, 2008)
Japan
Net sales(1) (of which to outside customers)(2) (of which inter-segment)
Total
Operating income (loss)

170,657
12,129182,787
2,715

North
America

Europe

254
176
431
(77)

3,243
53
3,296
(31)

East
Asia

Total

36,9838,044
45,0281,017

211,138
20,405
231,543
3,624(million yen)
Eliminations
or
Corporate

Consolidated(20,405)(20,405)385

211,138
211,138
4,009

For the first three quarters ended December 2009 (April 1, 2009 – December 31, 2009)
Japan
Net sales(1) (of which to outside customers)(2) (of which inter-segment)
Total
Operating income (loss)

142,992
10,809
153,802404

North
America

Europe

217
107
325
(85)

1,890
24
1,915
(117)

11

East
Asia

Total

29,825
5,699
35,524395

174,926
16,641
191,568597(million yen)
Eliminations
or
Corporate

Consolidated(16,641)(16,641)286

174,926
174,926883

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
For the first three quarters of the previous fiscal year
(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, for the first three quarters of the current fiscal
year, operating income in Japan decreased by 139 million yen compared with the figure that would have beenreported if the previous accounting standard had been applied consistently.
Overseas sales
For the third quarter ended December 2008 (October 1, 2008 – December 31, 2008)(million yen)
North America
I Overseas sales
II Consolidated sales
III Share of overseas sales in total sales (%)

756
1.1

EuropeEast Asia

1,048
1.5

16,882
24.1

Total
18,687
69,94526.7

For the third quarter ended December 2009 (October 1, 2009 – December 31, 2009)(million yen)
North America
I Overseas sales
II Consolidated sales
III Share of overseas sales in total sales (%)

Europe605
1.0

East Asia
875
1.4

12,80521.0

Total
14,28660,99923.4

For the first three quarters ended December 2008 (April 1, 2008 – December 31, 2008)(million yen)
North America
I Overseas sales
II Consolidated sales
III Share of overseas sales in total sales (%)

1,767
0.8

Europe4,192
2.0

East Asia
52,982
25.1

Total
58,942
211,138
27.9

For the first three quarters ended December 2009 (April 1, 2009 – December 31, 2009)(million yen)
North America
I Overseas sales
II Consolidated sales
III Share of overseas sales in total sales (%)

1,837
1.1

Europe2,245
1.3

East Asia
38,97922.3

Total
43,062
174,926
24.6

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’ equityNone12