Information Meeting for The First Quarterof Fiscal Year ending March 2012

August 11, 2011
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

Financial Highlights
First Quarter of FY3/2012

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■ Consolidated Statement of Income(million yen)

1Q FY3/2011
1Q FY3/2012
ChangesAmountPct.
AmountPct.
AmountPct.
Net Sales59,692
100.0%
55,002100.0%-4,690-7.9%
平成18年3月期
Cost of sales
51,900 平成19年3月期（予）86.9%
47,95487.2%-3,945-7.6%
Gross profit
7,792
13.1%
7,047
12.8%
-745
-9.6%
SG&A expenses
6,875
11.5%
6,799
12.4%
-76
-1.1%
Operating income
916
1.5%
247
0.4%
-669 -73.0%
Non-operating income
196
0.3%
200
0.4%
42.0%
Non-operating expence
119
0.2%
75
0.1%
-44 -37.0%
Ordinary income
993
1.7%
373
0.7%
-620 -62.4%
Extraordinary items
90
0.2%-60-0.1%-150 -166.7%
Income before income taxes
1,083
1.8%
3120.6%-771 -71.2%
Income taxes
386
0.6%
223
0.4%
-163 -42.2%
Income taxes-deferred
127
0.2%-33-0.1%-161 -126.0%
Minority interests
160.0%
60.0%-10 -62.5%
Net income
552
0.9%
1150.2%-436 -79.2%

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Segment information (Net sales)(million yen)
1Q FY3/2011
Net sales
Electroniccomponents
Informationequipment
Software44,811Pct.
75.1%

1Q FY3/2012Net sales
39,429Pct.
71.7%

70,000ChangesAmountPct.

60,000-5,382-12.0%

50,00019.6%

12,547

22.8%

830

7.1%

40,000

569

1.0%

717

1.3%

147

26.0%

30,000

Others

2,594

4.3%

2,308

4.2%

-286

-11.1%

20,000Total

59,692100.0%

55,002100.0%-4,690-7.9%

10,000

Summary(million yen)
55,002

2,594
569

11,716

Note: Segment information in the previous fiscal year is provided only for reference because business segments
were revised in the current fiscal year.

59,692

11,7162,308
717Others

12,547

Sof tware
Inf ormationequipment

44,811

39,429

Electroniccomponents

01Q FY3/2011

1Q FY3/2012

 Electronic components: Sales down 5,382 million yen (-12.0%)
Lower production volume, slowing consumer spending and other effects of the March earthquake caused a drop in orders forsemiconductors used in automobiles and consumer products, for EMS operations for amusement devices, and for other activities.
 Information equipment: Sales up 830 million yen (+7.1%)
Sales in some product categories declined due to the earthquake. But orders were higher because of activities to increase sales of PCs,
PC peripherals and other existing products, higher demand for products for conserving electricity, and orders for terrestrial digital TV
broadcast tuners leading up to the July end of these broadcasts in Japan.
 Others: Sales down 286 million yen (-11.1%)
Orders decreased mainly because of weak sales of golf products and a downturn in the electronic devices recycling business becauseof the earthquake.

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Segment information (Operating income)(million yen)(million yen)
1,400

1Q FY3/2011
Electroniccomponents
Information equipment

1Q FY3/2012

Change

970

1,200
1,000

1,048

184-864

8

54

46288
Others143
8

Software

800
600

Informationequipment

1,048

400

Software-229

35

264

Others143

13-129Total

971

288-682

1354
184

200

35

Electroniccomponents

0-229-200-400
1Q FY3/2011

1Q FY3/2012

Note: Segment information in the previous fiscal year is provided only for reference because business segments
were revised in the current fiscal year.

Summary Electronic componentsOperating income decreased 864 million yen mainly because of lower operating income in the EMS business in Japan as
sales declined due to weak production activity and consumer spending following the earthquake.
 Software
Operating income increased 264 million yen mainly because of higher sales of visual content using computer graphics andof game software.
 Others
Operating income decreased 129 million yen mainly because of weak sales of golf products and a downturn in theelectronic devices recycling business because of the earthquake.

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Selling, General and Administrative Expenses(million yen)

Packing and freight

1Q FY3/2011

1Q FY3/2012

AmountAmount

559

Pct.
8.1%

631

Pct.
9.3%

R&D

122

1.8%

132

1.9%

Others

370

5.4%

223

1,051

15.3%

Depreciations

195

Rent

Total selling expenses

Personnel expenses
OthersChangesAmount Pct.
72
1012.9%(million yen)
8,000

6,875

8.2%

6,000

3.3%

-147 -39.7%

5,000

986

14.5%

-65

2.8%

162

2.4%

-33 -16.9%

536

7.8%

492

7.2%

-44-8.2%

3,648

53.1%

3,734

54.9%

86

2.4%

-6.2%

1,442

21.0%

1,422

20.9%

-20

-1.4%

Total administrative

5,822

84.7%

5,812

85.5%

-10

-0.2%

Total SG&A expenses

6,875 100.0%

6,799 100.0%

-76

-1.1%

6,799

7,000
1,442

1,422

Personnel
expenses
Rent

4,000
3,648

Depreciations

3,734

3,000

Other selling

2,000
1,000
0

Other
adminstrative

R&D

536
195
370
122
559

492
162
223
132
631

1Q FY3/2011

1Q FY3/2012

Packing andfreight

Summary Selling expenses
Decreased 65 million yen mainly because of a 124 million yen decrease in the provision for doubtful receivables Administrative expenses
Rent: Decreased 44 million yen mainly because of lower leasing expenses at facilities operated by KAGA SPORTS
Personnel expenses: 86 million yen Workforce: +408 (from 5,361 to 5,769)*Workforce increase: +462 at overseas EMS factories (+170 at KAGA (SHENZHEN) ELECTRONICS and +345 at
KAGA TAXAN ELECTRONICS (SUZHOU))

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■ Consolidated Balance Sheets(million yen)
End ofFY3/2011

End of 1Q
FY3/2012（ ASSETS）
Current assets

114,686

111,352

92,876

90,126

Cash and cash equivalents

11,926

10,944-982

Notes and account receivable-trade54,17350,896Merchandize and finished goods

15,775End ofFY3/2011

End of 1Q
FY3/2012-3,334 (LIABILITIES)

66,087

63,694-2,393-2,750 Current liabilities

56,98755,065-1,922

Notes and accounts payable-trade

40,79039,333-1,457-3,277

Short-term bank loans

8,505

9,759

1,254

17,8092,034Others

7,692

5,973

-1,719

555

674

119

9,099

8,628

-471

Raw materials and other supplies

3,189

3,301

112

Long-term bank loans

4,636

4,182

-454

Others

7,256

6,499

-757

Others

4,463

4,446

-17

(NET ASSETS)

48,59847,657-941

Shareholders' equity

49,75249,453-299

Goods in progress

ChangeLong-term liabilities

ChangeFixed assets

21,81021,225-585

Paid-in capital

12,133

12,1330

Property, plant and equipment

9,724

9,595

-129

Capital surplus

13,912

13,9120Intangible assets

2,599

2,433

-166Retained earnings

25,03824,740-298

Investments and other assets

9,485

9,196-289

Treasury stock-1,332-1,3320

Valuation and translation adjustment-2,817-3,346-529

Minority interests

1,664

1,550

-114

-3,334 Total liabilities and net assets

114,686

111,352-3,334

Total assets

114,686

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■ Forecast for FY3/2012
Consolidated Statement of Income(million yen)

FY3/2011 (actual)

FY3/2012 (plan)

AmountPct.

237,951
平成18年3月期

100.0%
238,000
平成19年3月期（予）100.0%

49

0.0%

207,298

87.1%

209,000

87.8%

1,702

0.8%

30,65312.9%

29,00012.2%-1,653-5.4%

27,08911.4%

26,900

11.3%

-189

-0.7%

3,563

1.5%

2,100

0.9%

-1,463-41.1%

175

0.1%

500

0.2%

325

185.7%

Ordinary income

3,738

1.6%

2,600

1.1%

-1,138-30.4%

Extraordinary income

-376

-0.2%

-100

0.0%

276

-73.4%

Income taxes

1,516

4.9%

1,200

4.1%

-316

-20.8%Net income

1,854

0.9%

1,300

0.5%

-554

-29.9%Net sales
Cost of sales
Gross profit
SG&A expenses
Operating income
Non-operating income

AmountPct.

ChangesAmountPct.

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■ Forecast for FY3/2012 by segment
Net Sales(million yen)
250,000

FY3/2011
Net sales
Electronic components

171,576

Pct.

FY3/2012 (E)Net sales

72.1% 162,471

Pct.
68.3%

ChangesAmount-9,105

Pct.

237,951
9,801
5,687

200,000

50,885238,000(million yen)

12,3338,156

55,040-5.3%

OthersSoftwareInformation equipment50,885

21.4%

55,040

23.1%

4,155

8.2%

Software

5,687

2.4%

8,156

3.4%

2,469

43.4%

150,000
Informationequipment
Electroniccomponents

100,000
171,576

Others

9,801

4.1%

12,333

5.2%

2,532

25.8%

237,951 100.0% 238,000

100.0%

49

0.0%

162,471

50,000Total

Note: Segment information in the previous fiscal year is provided only for reference because business segments
were revised in the current fiscal year.

0FY3/2011

FY3/2012(E)Summary Electronic components
A rebound in supplies of electronic components, semiconductors and other components is expected along with earthquake recovery progress and overseas EMS
business volume is expected to grow. But a sales decline of 9,105 million yen (-5.3%) is forecast because of lower sales in the EMS business in Japan due tolower production volume and slowing consumer spending caused by the earthquake.

 Information equipment
Up 4,155 million yen (+8.2%) because of growth in the volume of products handled due mainly to activities to increase sales of PCs, PC peripherals and other existingproducts and to the addition of new products.

 Software
Up 2,469 million yen (+43.4%) because of higher sales of visual content and game software.

 Others
Up 2,532 million yen (+25.8%) because of growth in the recycling of amusement and electronics equipment associated with earthquake recovery activities.

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■ Forecast for FY3/2012 by segment(million yen)

Operating income
FY3/2011

FY3/2012(E)Change(million yen)
4,000

3,500

2,901

1,252

-1,649

Information equipment

72357

285

Software487750263

Electronic components

3,692

2,716230
487

3,000

Others72
Software2,500

Informationequipment
2,000

1,500

Others
Total

230

357

127

3,692

2,716

-976

Note: Segment information in the previous fiscal year is provided only for reference because business segments
were revised in the current fiscal year.

357

750

2,901

Electroniccomponents

357

1,000
1,252
500

0
FY3/2011

FY3/2012(E)Summary Electronic components
Down 1,649 million yen (-56.8%) because of lower sales in the EMS business in Japan due to declines in production and consumer spending andto declining prices of semiconductors and other components.
 Information equipment
Up 285 million yen (+395.8%) mainly because of growth in sales of PCs and PC peripherals.
 Software
Up 263 million yen (+54%) mainly because of growth in production and sales of visual content and game software.
 Others
Up 127 yen million (+55.2%) mainly because of higher sales from the recycling of amusement and electronics equipment.

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■ Forecast for FY3/2012
Selling, General and Administrative Expenses
FY3/2011
Packing and freight
R&DOthers
Total selling expenses
Depreciations
Rent
Personnel expenses
OthersTotal administrative
Total SG&A expenses

FY3/2012(E)AmountPct.
Amount
Pct.
2,340
8.6%
2,355
8.8%
659
2.4%
540
2.0%
1,318
4.9%
1,373
5.1%
4,317 15.9%
4,268 15.9%
784
2.9%
661
2.5%
2,102
7.8%
2,142
8.0%
14,434 53.3% 14,643 54.4%
5,451 20.1%
5,185 19.3%
22,771 84.1% 22,631 84.1%
27,089 100.0% 26,900 100.0%(million yen)
30,00027,08926,900

5,451

5,185

Change15-11955-49-123
40
209
-266
-140
-189

25,000Other
admin.
Personnel
expenses

20,000Rent
15,00014,434

14,643

Depreciatio
ns
Other
selling

10,000

R&D
5,000

2,102
784
1,318
659
2,340

2,142
661
1,373
540
2,355

FY3/2011

FY3/2.12(E)Packingand freight

0Summary Selling expenses
Forecast 119 million yen decrease in R&D expenses mainly because of completion of development of products at SI ELECTRONICS.

 Administrative expenses
Forecast 209 million yen increase in personnel expenses mainly because of growth in the workforce at overseas EMS factories.

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Business initiatives for FY3/2012
Business Units

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■ Development of Business Units (No.1)
Components Business Unit
The electronic component/semiconductor/module business
The foundation for operations of the KAGA ELECTRONICS Group
KAGA ELECTRONICS, KAGA TECH, KAGA DEVICES, AD DEVICE, ADM, WORKBIT, KAGA (USA), KAGA DEVICES(H.K.), KAGA (DALIAN), KAGA (KOREA), KAGA (SINGAPORE), KAGA (TAIWAN)

 Business initiatives(1)Sell new products to major customers and add more suppliers
Procure goods from overseas and build a sales network in Japan to meet customers’ diversifying needs and overcome increasingly
heated competition. Conduct global activities that capitalize on KAGA’s position as an independent corporate group.
Capture business by creating added value, such as by developing semiconductors (microprocessors).

(2)Increase sales to companies in other countries
Started strengthening operations in past fiscal year to increase sales to companies based in China; plan to continue expanding thesesales activities(3)Start operations in emerging countries by forming alliances with major customers
Established KAGA DEVICES INDIA PVT LTD. in August 2011 to start business activities in India; moving forward with plans to start
operations in Brazil and other emerging countries(4)Further deepen ties among group companies to become a global organization
Pursue more synergies by creating centralized business units within the KAGA Group consisting of companies with the same types ofoperations

Use value-added businesses to target growing markets
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■ Development of Business Units (No.2)
Manufacturing Business Unit
A manufacturing business that uses manufacturing and EMS capabilities to perform all steps
from development and design to production for semi-finished and finished products
KAGA ELECTRONICS, KAGA COMPONENTS, KAGA (H.K.) ELECTRONICS, KAGA (SHANGHAI) ELECTRONICS, KAGAELECTRONICS (THAILAND), KAGA (EUROPE) ELECTRONICS, DONGGUAN POWERTEK ELECTRONICS, KAGACOMPONENTS (MALAYSIA), KD TEC, KAGA TAXAN ELECTRONICS (SUZHOU) Business initiatives(1)Upgrade procurement = Implement centralized procurement strategy/Transferred businesses = Deepenties within the group
Put the EMS business and power supply business (KAGA COMPONENTS) in the same business unit to cut costs by unifying theprocurement of parts and materials, use factories more effectively and benefit from other synergies.

(2)Capitalize on business opportunities anywhere in the world/operate a manufacturing network able toimmediately meet customers’ diversifying needs
Receive more EMS orders from operations of Japanese companies in China, Thailand and other countries; expand manufacturing
activities

Centralize manufacturing operations to make high-performance,high-quality products
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KAGA ELECTRONICS CO.,LTD.
3-12-8 Sotokannda,Chiyoda-ku,Tokyo 101-8629

Contact:Public Relations Department
TEL:03-4455-3131
FAX:03-3254-7133
E-mail：webmaster@taxan.co.jp

http://www.taxan.co.jp
For more information,please contact the public relations department.

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2010 KAGAKAGAELECTRONICS
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