Information Meeting for Fiscal Year
ended March 2012

June 7, 2012
KAGA ELECTRONICS CO., LTD. (TSE 1st section, 8154)
3-12-8 Sotokannda, Chiyoda-ku, Tokyo 101-8629
Tel: (03) 4455-3131 Fax: (03) 3815-6807
URL：http://www.taxan.co.jp

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Financial Highlights
FY3/2012

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■ Financial Highlights
Consolidated Statement of Income
FY3/2011
AmountPct.

FY3/2012
AmountPct.

237,811100.0%
229,856
Net Sales
207,298
87.2%
201,350
Cost of sales
平成18年3月期
平成19年3月期（予）30,51212.8%
28,506Gross profit
27,08911.4%
26,438
SG&A expenses
3,423
1.4%
2,067
Operating income
876
0.4%
850
Non-operating income
701
0.3%
348
Non-operating expence
3,598
1.5%
2,569
Ordinary income
-376
-0.2%
233
Extraordinary items
Income before income taxes

Income taxes
Income taxes-deferred
Minority interests
Net income

3,223
2,026
-563
-7
1,768

1.4%
0.9%
-0.24%
0.00%
0.7%(million yen)

2,802
1,784
95
8
914

100.0%
87.6%
12.4%
11.5%
0.9%
0.4%
0.2%
1.1%
0.1%
1.2%
0.8%
0.04%
0.00%
0.4%

ChangesAmountPct.
-7,955-3.3%-5,948-2.9%-2,006
-6.6%
-651
-2.4%
-1,356 -39.6%
-26
-3.0%
-353 -50.4%-1,029 -28.6%
609 -162.0%-421 -13.1%-242 -11.9%
658 -116.9%
15 -214.3%-854 -48.3%

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■ Financial Highlights(million yen)Segment information
FY3/2011
Net sales
Segment income

FY3/2012
Pct.

Net sales
Segment income

Changes
Pct.

AmountPct.

Electronic
components

171,576

72.1%

166,468

72.4%-5,108

-3.0%

2,901

84.8%

2,021

97.8%

-880

-30.3%

Informationequipment

50,74521.3%

49,36021.5%-1,385

-2.7%

-67

-2.0%

-533

-25.8%-466

695.5%

5,687

2.4%

3,854

1.7%

-1,833-32.2%

487

14.2%

402

19.4%

-85

-17.5%

9,801

4.1%

10,173

4.4%

372

3.8%

230

6.7%

319

15.4%

89

38.7%

237,8113,423

100.0%
100.0%

229,856
2,067

100.0%
100.0%-7,955-1,356-3.3%-39.6%

Software
Other
Total

* Figures of each segment income are not inter-segment adjusted other than total.

Summary Electronic components (Development, manufacture and sale of semiconductors, general electronic components and other products,
electronic manufacturing service (EMS), and other activities)
This segment focused on increasing sales to current customers and on increasing sales of LED products, solar panels and other products in theenvironmental business, which has attracted attention following the March 2011 earthquake. Sales of electronic components and semiconductors and
EMS orders were down in Japan mainly due to lower output by clients because of the earthquake and slowing consumer spending. Overseas
performance was affected by lower output by clients caused by flooding in Thailand. The result was segment sales of ¥166,468 million.
 Information equipment (Sales of PCs, PC peripherals, photograph and imaging products, original-brand products, and other products)
Orders for terrestrial digital TV broadcast tuners increased because of the July 2011 end of terrestrial analog TV broadcasts in Japan. But performance
was affected by the earthquake and the downturn in spending for consumer products that started in the summer of 2011 and by lower output of
products handled because of flooding in Thailand. The result was segment sales of 49,360 million yen.

4
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■ Financial Highlights(million yen)

Net Sales by Product
FY3/2011

250,000

FY3/2012

ChangesAmountPct.

AmountPct.

AmountPct.

Informationequipment

47,19619.8%

44,27619.3%-2,920-6.2%

EMS70,93729.8%

62,65527.3%-8,282-11.7%

Semiconductor

58,58724.6%

59,303

25.8%

716

1.2%

237,811229,856

Others200,000
Generalelectronics
compornent

150,000

Semiconductor
100,000
EMS

Generalelectronics
compornent

27,774

Others33,31514.0%

33,264

14.5%

-51

-0.2%

Total

237,811100.0%

229,856

100.0%-7,955

-3.3%

11.7%

30,356

13.2%

2,582

9.3%

50,000Informationequioment

0
FY3/2011

FY3/2012

Summary EMS sales: Down 8,282 million yen (-11.7%)
EMS orders were lower in Japan mainly because of shortages of parts due to the March 2011 earthquake and flooding in Thailand as well as theresulting decline in output at clients. The result was sales of 62,655 million yen.
 Information equipment sales: Down 2,920 million yen (-6.2%)
Sales of PCs and terrestrial digital TV broadcast tuners increased but sales were held down by lower production of products handled that wascaused by the March 2011 earthquake and a downturn in consumer spending that started in the summer of 2011. The result was sales of 44,276
million yen.
 General electronic components sales: Up 2,582 million yen (+9.3%)
Measures to secure procurement channels for parts where shortages occurred temporarily after the March 2011 earthquake along withaggressive sales activities, including measures to increase sales to current customers, resulted in sales of 30,356 million yen.

5
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■ Financial Highlights(million yen)

SG&A Expenses
FY3/2011
AmountPacking and freight

FY3/2012

Pct.

AmountPct.

27,089ChangesAmount

Pct.

2,340

8.6%

2,450

9.3%

110

4.7%

R&D

659

2.4%

576

2.2%

-83

-12.6%

Others

1,318

4.9%

1,159

4.4%

-159

-12.1%

4,317

15.9%

4,185

15.8%

-132

-3.1%

Total selling expenses

30,00026,43825,000

Other Admin

20,000

Personnel expenses
Rent
15,000Depreciations
Rent

786

2.9%

731

2.8%

-55

-7.0%

2,102

7.8%

2,025

7.7%

-77

-3.7%

Depreciations
Other Selling
R&D

10,000

Personnel
expenses

14,43453.3%

14,249

53.9%

-185

-1.3%

Others

5,449

20.1%

5,247

19.8%

-202

-3.7%

Total administrative
expenses

22,77184.1%

22,252

84.2%

-519

-2.3%

Total SG&A expenses

27,089100.0%

26,438 100.0%

-651

-2.4%

Packing and freight

5,000

0
FY3/2011

FY3/2012

Summary Selling, general and administrative expenses
Personnel expenses: Down 185 million yen
Group workforce: Down 486 (from 5,725 to 5,239)
Reasons for the workforce decline(1) Decrease of 214 at KAGA COMPONENTS and its overseas factories (China, Malaysia)(2) Decrease of 256 at KAGA ELECTRONICS (THAILAND), mainly factory workers

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■ Financial Highlights
Consolidated Balance Sheets

Current assets
Cash and cash equivalents
Notes and account receivable-trade

Merchandize and f inished goods

Goods in progress
Raw materials and other supplies

OthersEnd of
FY3/2011
92,78911,92654,025
15,775
555
3,189
7,319

(million yen)

End of
FY3/2012
94,374
9,775
55,97917,104
334
4,115
7,067

End of
FY3/2011

End of
FY3/2012

Change1,585 Current liabilities
Notes and accounts payable-trade-2,151
Short-term bank loans
1,954
Others1,329-221 Long-term liabilities
Long-term bank loans
926
Others-252

56,98759,474

2,487

40,79041,748958

8,505

11,084

2,579

7,692

6,642

-1,050

9,099

7,303

-1,796

4,636

2,833

-1,803

4,463

4,470

7

Total liabilities

66,087

66,777690

ChangeShareholders' equity

Fixed assets
Property , plant and equipment

Intangible assets
Investments and other assets

Total assets

21,810
9,724
2,599
9,485

114,599

20,340
9,487
2,245
8,607

114,714-1,470
-237
-354
-878

115

0

Paid-in capital

12,133

12,1330Capital surplus

13,912

13,9120Retained earnings

24,95225,03886

Treasury stock-1,332-1,333-1

Valuation and translation adjustment-2,817-3,341-524

Minority interests

1,664

1,526

-138

Total net assets

48,51247,936-576

Total liabilities and net assets 114,599

114,714115

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■ Financial Highlights(million yen)

Consolidated Cash Flows
FY3/2011

FY3/2012

Changes

Operating activities

6,321

958

-5,363

Investing activities-6,369-2,645

3,724

Financing activities

478

-242

-720

Net change in cash and cash equivalents

-431

-171

260

Increase/declease in cash and cash equivalents-1-2,100-2,099Cash and cash equivalents at beginning of year

11,797

11,796-1

Cash and cash equivalents at end of year

11,796

9,695-2,101

Summary Operating activities:
Net cash provided was 958 million yen mainly due to income before income taxes and minority interests
 Investing activities:
Net cash used was 2,645 million yen, including payments for the purchase of property, plant and equipment
 Financing activities:
Net cash used was 242 million yen, including the repayment of long-term loans payable8© 20102012 KAGAKAGA ELECTRONICS
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Forecast for FY3/20139© 20102012 KAGAKAGA ELECTRONICS
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■ Forecast for FY3/2013
Consolidated Statement of Income(million yen)

FY3/2012
AmountNet sales
Cost of sales
Gross profit
SG&A expenses
Operating income
Non-operating income
Ordinary income
Net income

FY3/2013 (Forecast)
Pct.

Amount229,856 平成19年3月期（予）100.0%
234,000
平成18年3月期

Pct.

ChangeAmountPct.

100.0%

4,144

1.8%

201,35087.6%

204,500

87.4%

3,150

1.6%

28,506

12.4%

29,500

12.6%

994

3.5%

26,43811.5%

27,300

11.7%

862

3.3%

2,067

0.9%

2,200

0.9%

133

6.4%

502

0.2%

500

0.2%

-2

-0.4%

2,569

1.1%

2,700

1.2%

131

5.1%

914

0.5%

1,600

0.8%

686

75.1%

10
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■ Forecast for FY3/2013
Consolidated Sales by Segment(million yen)

FY3/2012
Net sales
Segment income

Electronic
components

Pct.

Net sales
Segment income

Pct.

ChangesAmountPct.

166,46872.4%

170,400

72.8%

3,932

2.4%

2,021
49,360
-533
3,854

97.8%
21.5%
-25.8%
1.7%

1,750
49,176
596
3,742

79.5%
21.0%
27.1%
1.6%

-271
-184
1,129
-112

-13.4%-0.4%-211.8%-2.9%

402
10,173
319

19.4%
4.4%
15.4%

433
10,682
338

19.7%
4.6%
15.4%

31
509
19

7.7%
5.0%
6.0%

229,856
2,067

100.0%
100.0%

234,000
2,200

100.0%
100.0%

4,144
133

1.8%
6.4%

Informationequipment
Software
Other
Total

FY3/201 (Forecast)* Figures of each segment income are not inter-segment adjusted other than total.

Summary Electronic components (Development, manufacture and sale of semiconductors, general electronic components andother products, electronic manufacturing service (EMS), and other activities)
Forecast an increase in sales because of higher EMS sales in Japan and overseas as clients recover from the effects of the March 2011
earthquake and flooding in Thailand Information equipment (Sales of PCs, PC peripherals, photograph and imaging products, original-brand products, andother products)
There will be numerous activities to increase sales, such as measures to increase sales of PCs and PC peripherals to current customers
and increase sales of products associated with portable devices.

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■ Forecast for FY3/2013(million yen)

Net Sales by Product
FY3/2012
Informationequipment

250,000

FY3/2013 (E)229,856

Changes

Net sales

Pct.

Net sales

Pct.

ChangePct.

44,276

19.3%

51,100

21.8%

6,824

15.4%

234,000

200,000
Others150,000

EMS

62,65527.3%

75,80032.4% 13,145

General electronic
components

21.0%

Semiconductors

Semiconductors

59,30325.8%

58,800

25.1%

-503

-0.8%

General electronic
components

30,35613.2%

22,3009.5%-8,056 -26.5%

Others33,26414.5%

26,00011.1%-7,264 -21.8%

Total

229,856

100.0% 234,000

100.0%

4,144

100,000

EMS
Informationequipment

50,0001.8%
0FY3/12

FY3/13(E)Summary Information equipment: Sales up 6,824 million yen (+15.4%) due to measures to increase sales of PCs and PC peripherals
 EMS: Sales up 13,145 million yen (+21.0%) along with recovery in output by overseas clients
 Semiconductors: Sales down 503 million yen (-0.8%) mainly because of lower output at clients in Japan General electronic components: Sales down 8,056 million yen (-26.5%) mainly because of lower output at clients in Japan Others: Sales down 7,264 million yen (-21.8%) mainly because of decreases in sales from the recycling business, production ofcomputer graphics and application software

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■ Forecast for FY3/2013(million yen)

Selling, General and Administrative Expenses
30,00026,438

FY3/2012
Net sales
Packing and freight
R&D
OthersTotal selling expenses
Depreciations
Rent
Personnel
expenses
OthersTotal administrative
expenses
Total SG&A expenses

FY3/2013 (E)Pct.

Net sales

Pct.

Changes

27,30025,000

2,450
576
1,159
4,185
731
2,025

9.3%
2.2%
4.4%
15.8%
2.8%
7.7%

2,596
574
1,242
4,412
584
2,113

9.5%
2.1%
4.5%
16.2%
2.1%
7.7%

146
-2
83
227
-147
88

14,24953.9%

14,941

54.7%

692

5,247
22,252

19.8%
84.2%

5,249
22,887

19.2%
83.8%

2
635

5,000

26,438100.0%

27,300100.0%

862

0

Administrative
Others
Personnel

20,000Rent
Depreciations

15,000

Selling Others
R&D

10,000

Packing andfreight

FY3/12

FY3/13(E)Summary Selling expenses:
Expect a 146 million yen increase in packing and freight expenses along with higher sales at KAGA HIGHTECH
and other companies Administrative expenses:
Expect a 692 million yen increase in personnel expenses along with increase in the group’s workforce (increaseof 59, from 5,239 at end of FY3/12 to 5,239 early in FY3/13)

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Topics

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Topics (1) Changes in Business Unit Executives
Many new business unit executives were named in April 2012 for the purposes ofenergizing the entire organization and creating new businesses.

Components Business Unit
(Electronic Components Business)
Ryoichi Kado, Vice President andDirector(previously Entertainment Business Unit Executive)

Entertainment Business Unit
(Products and services for theamusement industry)
Shinsuke Takahashi, Senior
Managing Director

Information Business Unit
(Information Equipment Business)

Waichiro Shimoyama, Senior
Managing Director(previously general manager of Administration Division)(previously executive for Information Business Unit)

Isao Tsukamoto
Chairman & CEO

Tomohisa Tsukamoto
President & COO

Promotion Business Unit
(Environment, communications andother leading-edge businesses)

Yukio Takashi, Senior Managing
Director

KAGA
ELECTRONICS
Administration
Division

Manufacturing Business Unit
(EMS Business, manufacturing operations)

Shintaro Kakei, Managing
Director(no change)(previously executive for Components Business Unit)

Eiji Kawamura, Executive
Officer15© 2012
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Topics (2)(2)-1 New Overseas Business Sites in FY3/12
Japanese companies are shifting production activities from China, where the higher cost of labor israising the cost of manufacturing, to countries in Southeast Asia. We are establishing new bases inthis region to capitalize on opportunities to capture new business.
Strategies -- Deepen ties with Japanese companies-- Build relationships with local companies (move away from operations relying on Japanese customers)

Established subsidiary inIndia (July 2011)

The new subsidiary sells power semiconductors and electronic components
made by Mitsubishi Electric, aiming to serve both Japanese and Indiancompanies. This company also plans to use India as a base to conduct
operations in Middle East and other nearby countries.

Established subsidiary in
Malaysia (December 2011)

This company plans to provide services in Malaysia and other Southeast
Asian countries as Japanese amusement equipment companies, its primarycustomer segment, start operations in these countries.

Established liaison office inIndonesia (February 2012)

The primary roles of this office are to increase sales to Japanese companies(manufacturers of audio equipment, office equipment, home appliances,etc.) and to establish relationships with local companies.

Established liaison officein the Philippines (March 2012)

The primary roles of this office are to increase sales to Japanese companies(manufacturers of automotive devices, etc.) and to establish relationships
with local companies.

* Studies are under way for the establishment of a sales base in Brazil. KAGA ELECTRONICS is also
considering the establishment of EMS manufacturing facilities in Cambodia, Laos and Myanmar.

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Topics (2)(2)-2 New Overseas Business Sites in FY3/12
To provide services that meet all our customers’ needs, we are expanding our network in the ASEAN
region, where economic growth is strong, along with the entry of Japanese manufacturers of home
appliances, AV products, automotive parts and other products.
KAGA DEVICES INDIA
Established July 2011

KAGA AMUSEMENT MALAYSIA
Established December 2011

KAGA SINGAPORE
Philippines Liaison Office (Manila)
Opened March 2012

After China, India is attracting the mostattention as a base for manufacturing anda consumer market. Many Japanesemanufacturers of home appliances and
AV products are setting up operations inIndia.
Plans to sell mainly semiconductors andelectronic components in India and toestablish a sales network in nearby
countries and the Middle East. The
company started operations as a sales
agent for Renesas.

Malaysia is home to many factories of Japanesecompanies. This company supplies
semiconductors and electronic components toJapanese companies and aims to captureorders from local companies, too. At first, thegoal is to upgrade and expand services alongwith the entry in Malaysia of Japanese
amusement equipment manufacturers.

Many Japanese manufacturers of homeelectronics, automobiles and other products haveoperations in this region or plan to start
operations. The roles of this office are to increase
sales of semiconductors and electronic
components and to establish relationships withlocal companies.

KAGA SINGAPORE
Indonesia Liaison Office (Jakarta)
Opened February 2012

New
Existing

KAGA
ELECTRONICS(THAILAND)KAGA COMPONENTS(MALAYSIA)

Many Japanese companies havefactories in Indonesia or are thinking
about building factories in this country.
This office sells semiconductors andelectronic components to Japanesecompanies and establishes
relationships with local companies.

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Topics (2)(2)-3 New Factory at KAGA ELECTRONICS (THAILAND)
Flooding in Thailand in October 2011 caused severe damage at the Ayutthaya factory of consolidated
subsidiary KAGA ELECTRONICS (THAILAND). The company responded quickly by moving the factory to
Amata Nakorn, a location at a higher elevation that is unlikely to be affected by flooding. Operations at the
new factory started in February 2012. The company plans to use its highly advanced equipment tomanufacture products more efficiently and further increase sales.
The New Amata Nakorn Factory
Location:

Amata Nakorn, Chonburi, Thailand

Products:

PCBA (mainly office equipment, climate control
equipment, and automotive substrates)

Site:

10,144 m2 (leased)

Building:

5,250 m2 (leased)

Employees:

249 (June 1, 2012)

Operations:Started February 2012

Ayutthaya factory
Amata Nakorn factory

The flooded factory in Ayutthaya

The new factory in Amata Nakorn

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Topics (3)(3)-1 Increase Sales Activities in Growing Markets
 JapanEnvironmental operations• Rapid growth in demand for environmental products and services
due to the shortage of electricity• Increasing sales to retailers of all types (LED illumination products)• Strengthening sales activities in other industries

 Overseas
Increase the volume of business with local companies• Increasing demand for power semiconductors: more measures toprotect the environment in the automobile industry• Increasing use of inverters is in large home appliances

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Topics (3)(3)-2 Smart Houses and the Smart Grid
Smart House

Electricity
Information

Voltage step-up unit
(optional)

Home fuel cell

Large renewable energy sources
Connection unit

Solar panels

Hub storage battery(NAS battery)Power
conditioner
Electric panel

Eco Cute

Home storage
batteryPowerconditioner

Purchased
power meter

HEMS
monitorSold power
meter

Smart
grid
Centralized
powersources

Electric utility (Control of electricity supply)
Electric vehicle/Plug-in hybrid

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Topics (3)(3)-3 A Typical HEMS Solution
Tablet computer
Power distribution panel

Smartphone

Air conditioner

IPcameraDoorintercom

Power sensor

Smart Box

Smoke detector

HDMI

Smart meter

Motion sensor• Specified low-power
wireless link (920MHz band)• Wireless LAN• Power line communication

Scale

Access point©©2010
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Auto door

Door mat21 21

Topics (3)(3)-4 Focusing on Changes in the Automobile Industry

Shift in energy source

Growth of markets inemerging countries(From fossil fuel to electricity)New
competitors

Intense price competition
Change in value on“vehicles”

Heatedcompetition
for market share

Movement of structural reforms of the industry
Supply parts to overseas auto assembly plants by using the KAGAELECTRONICS Group’s global procurement capabilities

United States / Europe / China
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2012KAGAKAGAELECTRONICS
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CO.,LTD All
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OtherInformation (1) Poorly Performing Group Companies
その他トピックス(Million yen)

Net Income/Loss of Major Poorly Performing Group Companies
Company

KAGA COMPONENTS

FY3/10-393-9KAGA HIGHTECHSI ELECTRONICS

ADM

CyberFront
Total

-86
-106
-594

FY3/11

-6
-75
30
-98

FY3/13 (Plan)

FY3/12-707 -140

Sold projector business in previous FY andcurrently reorganizing overseas factories
and improving operations-577

New ly established department devoted
solely to overseas brand developm ent;
w orking on finding new products overseas
and increasing sales

-145
-22

244
63

First shipm ent of substrates, the coreproduct, in FY3/13; increasing sales of
karaoke products to individuals

30

Working on selling products for industrial
devices, m edical equipm ent andautomobiles and on adding new products
to the lineup
Focusing on im proving performance in
FY3/13, this company’s third year as a
mem ber of the KAGA ELECTRONICS Group

-206

-335

101

-355

-1,786298

We will examine actions to take based on the current performance and potential of eachcompany and the significance of each company’s role in the KAGA ELECTRONICS Group.

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ELECTRONICS CO.,LTD©
CO.,LTDAll
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Other Information (1) Poorly Performing Group Companies
KAGA COMPONENTS(power supply
production)(1) Reexamine the basic organizational structure(2) Reexamine the oversight of production processes(3) Develop highly profitable products

KAGA HIGHTECH(information equipment)

Find overseas products and increase sales of theseproducts

SI ELECTRONICS(substrates foramusement equipment)• Start shipments of substrates, the core product• Work closely with KAGA ELECTRONICS engineers

ADM(sales agent for Analog
Devices)(1) Shift from East-West Japan sales divisions to anorganization based on sales categories(2) Increase the number of new products

CyberFront(development of games)

Improve the framework for business operations

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Other Information (2) New Partner for Businesses Collaboration
Collaboration as a sales partner with SICOXS, manufacturer of SiC
substrates for nextnext-generation power semiconductors
Main applications: Power conditioners for solar panels,
DC/DC converters for electric/plug-in
hybrid vehicles, and others

Example of downsizing

Conventional power
conditioner

This substrate increases power conversion efficiency
while reducing size and weight.
Name ： SICOXS CORPORATION
Established： June 1, 2012

Sample power
conditioner using an
SiC substrate

Representative： Mitsuharu Kato
Activities: Manufacture and sale of SiC (silicon carbide)
substrates, outsourced processing for SiC
semiconductor parts, and other activities25© 20102012 KAGAKAGA ELECTRONICS
ELECTRONICS CO.,LTD©
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Reserved.

Other Information (3) Corporate Citizenship (Solar Eclipse Viewers)
As part of our corporate citizenship activities, we distributed 4,600 pairs of solar
eclipse viewers, a product sold by KAGA HIGHTECH, to elementary and junior highschools in the city of Tamura in Fukushima prefecture, an area damaged by theGreat East Japan Earthquake. The solar eclipse occurred on May 21.

From left: Tomohiro Ohno, manager of the Takine-machi Hoshinomura
Observatory, KAGA ELECTRONICS Senior Managing Director
Waichiro Shimoyama, and Hiromichi Sukegawa, school superintendentof the city of Tamura

Waichiro Shimoyama hands out eclipse viewers at anelementary school←↑Children viewing the eclipse

Vixen solar eclipse viewers

26© 20102012 KAGAKAGA ELECTRONICS
ELECTRONICS CO.,LTD©
CO.,LTDAll
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Rights Reserved.
Reserved.

Contact: Public Relations Department
3-12-8 Sotokannda,Chiyoda-ku,Tokyo 101-8629
TEL:03-4455-3131
FAX:03-3254-7132
E-mail： webmaster@taxan.co.jp
http://www.taxan.co.jp

27© 20102012 KAGAKAGA ELECTRONICS
ELECTRONICS CO.,LTD©
CO.,LTDAll
All Rights
Rights Reserved.
Reserved.