Information Meeting for Fiscal 2010

May 13, 2010
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

The Fiscal Year Ending March 20102
© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

■ Fiscal 2010 Financial Highlights
Comparative Consolidated Income Statement
FY2009AmountPct.
Net Sales
FY06
Cost of sales
Gross profit
SG&A expenses
Operating income
Non-operating income
Non-operating expence
Ordinary income
Extraordinary items
Income before income taxes
Income and inhabitants taxes
Deferred taxes
Minority interests
Net income

FY2010
AmountPct.

273,610 FY2007
100.0%(est.) 239,391
243,226
88.9% 211,153
30,383
11.1%
28,23728,134
10.3%
26,655
2,249
0.8%
1,582
854
0.3%
714
896
0.3%
1,016
2,208
0.8%
1,280
-2,159
-0.8%
116
49
0.02%
1,396
1,459
0.5%
1,411
-364
-0.1%
347
-238
-0.1%
-43
-806
-0.3%
-318

100.0%
88.2%
11.8%
11.1%
0.7%
0.3%
0.4%
0.5%
0.05%
0.6%
0.6%
0.1%
-0.02%-0.1%(million yen)

ChangeAmount Pct.
-34,219-32,073-2,146-1,479
-667
-140
120
-928
2,275
1,347
-48
711
195
488

-12.5%-13.2%-7.1%-5.3%-29.7%-16.4%
13.4%-42.0%-3.3%-

3© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

Comparison of Consolidated Sales by Product (FY2009 and FY2010)(million yen)

FY2009Net sales

FY2010Pct.

Net sales

ChangePct.

ChangePct.

66,19724.2%

64,16926.8%-2,028-3.1%

EMS

77,46528.3%

60,91025.4%-16,555-21.4%

Semiconductor

61,83722.6%

51,861

21.7%-9,976-16.1%

Total

36,024

13.2%

29,592

12.4%-6,432-17.9%

32,08411.7%

32,857

13.7%

773

2.4%

273,610100.0%

239,391

100.0%-34,219-12.5%

Summary

273,610(million yen)

Informationequipment

General electronics
compornent
Others300,000

250,000

32,084

239,391

36,02432,857200,000

29,592

General electronics
compornent
Semiconductor

51,861

EMS

61,837150,000

100,000

OthersInformationequipment

77,46560,91050,00066,19764,169

FY09

FY10

0

■Information equipment：Sales Down ¥2,028million（-3.1%）・・Decrease sales of PCs handled in the Unite state.
■ＥＭＳ：Sales Down ¥16,555 million（-21.4%）・・ Decrease sales of LCD units for amusement equipment manufacturers and circuit board
assembly for overseas office equipments because of delays in product introductions and cuts in production volume by EMS clientcompanies.
■Semiconductors：Sales Down ¥9,976 million（-16.1%）・・ Decrease sales of semiconductors for amusement equipments and digital audiovisual products.
■General electronic components： Sales Down ¥ 6,432million（-17.9%）・・ Decrease sales for amusement equipments and Japanese
office equipments manufacturers in china as these companies reduce production volume.
■Others： Sales Up ¥ 773 million（+2.4%）・・Sales in this segment includes Tokyo DenDen Kogyo (renamed KAGA TECHNO SERVICE on
April 2010). Increase sales from terrestrial digital TV reception construction for apartment.

4© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

・Selling, General and Administrative Expenses (FY2009 and FY2010)(million yen)

FY2009Packing and freight
R&D
OthersTotal selling
expenses
Depreciations expence
Rent
Personnel expenses
OthersTotal administrative
expenses
Total SG&A expenses

Amount
2,402
1,422
1,779

FY2010

Pct.
Amount
8.5%
2,283
5.1%
736
6.3%
1,490

Pct.
8.6%
2.8%
5.6%

5,603

19.9%

4,509

517
2,233
13,283
6,497

1.8%
7.9%
47.2%
23.1%

22,53080.1%

ChangeChange
Pct.
-119
-686
-289

-5.0%
-48.2%-16.2%

16.9%-1,094-19.5%

700
2,332
13,806
5,306

2.6%
8.7%
51.8%
19.9%

183
99
523
-1,191

35.4%
4.4%
3.9%
-18.3%

22,144

83.1%

-386

-1.7%

30,00026,65525,000100.0%

26,655100.0%-1,479

6,497

5,306

20,00015,00013,283Administrative Others
Personnel expenses
Rent
Depreciations expence
Selling Others
R&D
Packing and freight

13,806

10,0005,000

28,13428,134

-5.3%

2,233
517
1,779
1,422

2,332
700
1,490
736

2,402

2,283

FY09

FY10

0

Summary■Selling expenses： R&D has decreased for 686 million yen.(SI electronics decrease 611 million yen)
Sales promotion expense has decreased for 248 million yen.
■Administrative expenses: Personnel expenses has increased for 523 million yen.
Traveling expanses transportation has decrease for 210 million yen.
Entertainment expense has decreased for 182 million yen.

5
© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

■ Financial Highlights of FY 2010
Consolidated Balance Sheets（ASSETS）
Current assets
Cash and cash equiv alents
Notes and account receiv able-trade
Merchandize and f inished goods
Goods in progress
Raw materials and other supplies
OthersFixed assets
Property , plant and equipment
Intangible assets
Inv estments and other assets(million yen)

FY2009FY2010 Change
FY end（LIABILITIES）
117,251 113,962-3,289Current liabilities
99,63996,838-2,801
平成18年3月期
平成19年3月期（予）Notes and accounts pay able-trade
11,378
11,917539
Short-term bank loans
61,05359,214-1,839Others13,96914,483514
Long-term liabilities
577
647
70
Long-term bank loans
3,749
3,011
-738
Others
8,913
7,566-1,347（NET ASSETS）
Shareholders' equity
Paid-in capital
17,612
17,123-489
Capital surplus
6,168
6,434
266
Retained earnings
1,914
1,901
-13
Treasury stock
9,528
8,786
-742
Valuation and translation adjustment

Minority interests
Total assets

117,251

113,962-3,289Total liabilities and net assets

FY2009FY2010 Change
FY end67,69065,408-2,28260,521
58,779-1,742
44,772
43,535-1,237
9,291
8,935
-356
6,458
6,309
-149
7,168
6,629
-539
3,620
2,500
-1,120
3,548
4,129
581
49,56048,553-1,00749,873
48,726-1,147
12,133
12,1330
13,912
13,912
025,15824,012-1,146-1,331-1,332-1-2,103-1,884
219
1,790
1,711
-79
117,251 113,962-3,2896© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

Consolidated Cash Flows (FY2009 and FY2010)(million yen)

FY2009FY2010ChangeOperating activities

5,435

5,728

293

Investing activities-4,212-3,040

1,172

Financials activities-3,407-2,307

1,100

Net change in cash and cash equivalents

-457

49

506

Increase in cash and cash equivalents-2,642428

3,070

Cash and cash equivalents at beginning of year

14,011

11,368-2,643

Cash and cash equivalents at end of year

11,368

11,797429

Summary■Operating activities ：Provided net cash of 5,728 million yen mainly because of a decrease in note andaccounts receivable-trade,depreciation and amortization■Investing activities ： Used net cash of 3,040 million yen mainly because of payments for the purchase of property,
plant and equipment.
■Financing activities ：Used net cash of 2,307 million yen mainly because of long-term bank loans
payment and dividends payment.

7© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

■ Forecast for the Fiscal Year Ending March 2011
Consolidated Income Statement (FY2010 and FY2011 Plan)
FY2010(actual)
Amount

平成18年3月期

Pct.

FY2011 (plan)
Amount

平成19年3月期（予）（million yen）

ChangePct.

ChangePct.change

239,391

100.0%

225,000

100.0%-14,391-6.0%

211,153

88.2%

195,000

86.7%-16,153-7.6%

28,23711.8%

30,000

13.3%

1,763

6.2%

26,655

11.1%

28,300

12.6%

1,645

6.2%

1,582

0.7%

1,700

0.8%

118

7.5%

-302

-0.13%

400

0.2%

702

-

Ordinary income

1,280

0.5%

2,100

0.9%

820

64.1%

Net income

-318

-0.2%

1,300

0.6%

1,618

-

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

8© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

■ Consolidated Sales Forecast by Business Category (FY2010 and FY2011 plan)
300,000（million yen）

（million yen）

FY2010Net sales

Informationequipment
EMS

Pct.

FY2011(est.)
Net sales

Pct.

Change250,000

239,391

Others225,000

Change Pct.change

32,85730,00064,16926.8%

47,00020.9% -17,169-26.8%

60,91025.4%

70,000

31.1%

14.9%

9,090

Semiconductors

51,861

21.7%

58,000

25.8%

6,139

11.8%

General electronic
components

29,592

12.4%

20,0008.9%-9,592-32.4%

Others32,857

13.7%

Total

239,391

100.0% 225,000

200,000

150,000

100,000

29,592

51,861

General electronics
compornent
Semiconductor

20,000EMS

58,000Informationequipment

60,91070,00030,00013.3%-2,857-8.7%

100.0% -14,391-6.0%

50,00064,16947,0000Summary

FY10

FY11(Plan)■Information equipment：Sales down 17,169 million yen due to decrease sales of PCs in the US.
■ＥＭＳ：Sales up 9,090 million yen due to increase sales of LCD units for amusement equipment in Japan and circuit board assemblyfor overseas office equipments■Semiconductors：Sales up 6,139 million yen due to completing of inventory reductions by amusement equipment manufacturers andelectric products manufacturers.
■General electronic components：Sales down 9,592 million yen due to decrease sales of electronic components of major electronics
equipment manufacturers.
■Others：Sales down 2,857 million yen due to decrease sales of terrestrial digital TV reception construction work for apartment.

9© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

Topics of fiscal 201010
© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

■Financial Highlights (Quarter)
Trend of Net sales and Income before income taxes (consolidated)
90,00080,000(Million yen)

Net sales
Income before tax

4,000

Signs of
Recovery

70,000

3,000
2,000

60,00050,0001,000

40,000030,000-1,00020,000-2,00010,0000-3,000Ｑ１ Ｑ２ Ｑ３ Ｑ４ Ｑ１ Ｑ２ Ｑ３ Ｑ４ Ｑ１ Ｑ２ Ｑ３ Ｑ４FY2008FY2009FY201011© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

■ Financial Highlights
Trends of Ordinary income about major group companies
50.0
43.7

(100 Million yen)

40.0
KAGA ELECTRONICS CO., LTD.

30.0

Decrease significantly sales of semiconductors and EMS orders from amusement equipment manufacturers.

20.0
17.4

10.0

5.7

6.2 5.5

1.2

3.3

5.4

5.9 4.9

3.8 4.4

5.7
1.7 2.0-0.7

0.0-1.2 -0.7-1.4 -1.0-1.2 -2.1

-2.7

-5.7

-10.0

-3.8

KAGA COMPORNENTS CO., LTD.

-20.0

Become profitable caused by downsizing projector business.

-30.0
Kaga
kaga solnet
electronics

-20.6

Kaga
devicesDML

Kaga
ThailandKaga
TaiwanMicrosolution

Kaga Tech

SIE

ADM

HANZAWA

Kaga
hightechKagacompornentsIncome（09/03）

43.7

1.2

6.2

3.3

5.9

3.8

1.7

-1.2

-5.7

-1.4

-1.2

5.7

-20.6

Income（10/03）

17.4

5.7

5.5

5.4

4.9

4.4

2.0

-0.7

-0.7

-1.0

-2.1

-2.7

-3.8

12
© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

■ Deficit-ridden group companies on FY2010
KAGA COMPONENTS CO.,LTD.

SI ELECTRONICS LTD.

(Manufacture and sales of switching power supplies
and electronics devices.

(Development,design,manufacture,and sale of image
display-related devices for amusement machines.)

Net sales
Ordinary income
14,00012,00010,000
8,000
6,000
4,000
2,000
0

12,317
10,773

Net sales
Ordinary income（Million yen）

156
10,152

-384

500

5,000

4,600

400

0

4,000

313

200

-500

3,000

-1,000-1,500-2,000-2,060-2,500FY2009FY2010（Million yen）

FY2011(plan)

2,000
1,000

0

-75
1,503

-200

1,670

-400
-600

-577

0

-800
FY2009FY2010FY2011(plan)＜SUMMARY＞ EDMS business＜SUMMARY＞ EDMS business・Stopped developing the projectors by own company.

・ R&D expenses decreased significantly by the development ofgraphic ASIC ”Y3 ” was completed.

Sales OEM projectors supplied by foreign companies.
・ Focus on environment-related switching power supplies.

・ From this term, expect increase orders of 2D and 3D graphics
engines from amusement equipment manufacturers.

・ Closed unprofitable foreign factories.

13© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

■ Deficit-ridden group companies on FY2010
ADM INC.

KAGA TECH CO.,LTD.

Sales of electronic devices and partial products,
primarily manufactured by Analog Devices.

Domestic sales with attention to detail,primarily of mechanical parts for industrial equipment.

Net sales
Ordinary income
14,000（Million yen）
11,50012,00010,09010,000

100
50

50
0

8,000
-50
6,000
-100

4,000

2,809

2,000

-141

-100
-150

0

-200
FY2009FY2010Net sales
Ordinary income

FY2011(plan)＜SUMMARY＞ SEMICONDUCTORS Business.
・ Increase sales of camera module for mobile phone andrestarting new business in China.
・ Recover highly profitable sales of electronic devices forindustrial equipment, but the profit growth stopped because of pricereduction of consumer products.

2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0

（Million yen）

1,788
1,692
29
1,347

-71
-127
FY2009FY2010

40
20
0
-20
-40
-60
-80
-100
-120
-140

FY2011(plan)＜SUMMARY＞ General Electronic Components Business・ Affected by the economic slowdown, decrease sales of devices
for industrial and amusement equipment.
・ Focus on sales of LED devices(Samsung,Lumimicro) for LED
lighting and LED lighting power supplies.

・ Plan to increase sales by operation which include development
and collaboration with group companies.

14© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

■ Deficit-ridden group companies on FY2010
KAGA HIGHTECH CO.,LTD.

HANZAWA (HK) LTD.

Sales of PCs,peripherals,and camera equipment, general agent
in Japan for Kodak products.

Electric toy manufacturer in Hong Kong.

Net sales
Ordinary income
70,00060,00061,10358,264573

50,00037,70940,00030,00020,0002

10,000-274

0FY2009FY2010Net sales
Ordinary income（Million yen）

700
600
500
400
300
200
100
0
-100
-200
-300
-400

FY2011(plan)

1,800
1,600
1,400
1,200
1,000
800
600
400
200
0

1,680

（Million yen）

-17
1,268

0
-50
-100

835
-126

-150
-200
-214

FY2009FY2010-250
FY2011(plan)＜SUMMARY＞ Information Equipment Business Div.

＜SUMMARY＞ Others

・ Decrease sales due to change the marketing strategy by PC
manufacturers.

・ Affected by the economic slowdown all over the world, decrease
sales of products for Japan, Europe, USA and Asia area.

・Focus on sales of high value-add products ,such as SD cards
which stored popular contents and electric commerce.

・ Decrease 214 Million yen by increase cost for developing new
products.
・ Focus on reducing loss by reduction in cost by restructuring,andincrease sales of new products.

15© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

■ Topics ～ Expanding of environmental products ～Increasing needs of the environment-related products→ Raising awareness of global warming and cost advantage
Expanding of environmental products■ Back ground・Concern to the global environment → To set the reduction targets of gases by countries
・Advantage → Advantage of “low power consumption”, “durability”

Promoting environment businesses in KAGA ELECTRONICS Grope
１．LED Lighting
・・ “low power consumption”, “High life” → To convenience store and Food chain

２．Solar power generation system
・・ Reducing energy bills by generation of electricity

３．Energy-saving system
・・ automatically control “lighting”, “air conditioning”→ to amusement facilities16© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

■ ENVIRONMENTAL PRODUCTS■Focus on LED Lighting
Revised Energy conservation low ⇒Companies have to grasp amount of energy consumption

Manufacturers
・LED devices
・LED drives

KAGA GroupSale

60companies,18countries
Purchase

・Power supply

Lighting
manufacturers

KAGA TECHNO SERVUCE

SaleConstruction
Delivery

Purchase
LED lighting

Customers（companies,convenience
store and others）

Provide “One-Stop-Service” for LEDs by KAGA group synergies
17© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

■TELE-COMMUNICATIONS FIELD■ Sales of Huawei Technologies products

Increase in inquiries from several industries⇒ Expansion of telecommunication environment
Major PCs Manufacturers

Digital Signage

Built in Laptop computer.

Deliver the advertisements in real time.

Improvement of usability andportability by using wireless.

Set the equipments flexibly.

Security RelatedElectronic Money

Inform it timely in the emergency.

Expansion of electronic money market.。

Set the equipments flexibly.

For vending machine and handy Terminal.

Development of new market and proposal new applications→ Sales Target 10 Billion yen.

18
© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

■GENERAL ELECTRONICS COMPONENTS AND SEMICONDUCTORS■ CMOS CAMERA MODULE
Hansung Elecomtec (Korea)
・・・ Deliver to major mobile phone manufacturers in Korea.
CMOS camera module

・・・ Offer the CMOS modules from 2 million pixels to 8 million pixels.
Possible to offer the CMOS modules of mobile phone cameras and digital cameras.
“High quality”, “High technology”, “Low price” and “Good support”

Target field
Mobile phone (including smart phone),camera of PCs

Focus on mobile phone manufacturers in Japan⇒ Sales target after 3 years is 3 billion yen.
19
© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

■ENTERTAINMENT FIELD■ 「IP-STB」 service for hotels“2011 problem” ・・・ “Analog broadcasting” to “Digital broadcasting”
Propose the STB of “ZAXAS Corp.” to hotel industry
・・・ Offer the IP-TV service include VOD for hotels.
High-difinition and high-quality IPTV service by correspond to HD TV
broadcasting.

Products with additional value
・・・ Delivery not only TV and movie programs,
but also high-definition and effective advertisement.

Focus on major hotel chains such as city hotels
20© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

■ENVIROMENTAL RELATED PRODUCTS■ Content Business of KAGA HIGHTECH
Kaga Hightech → Sales of PCs and peripherals to mass retailer.
「Content SD card」⇒ Original products are offered by adding the additional value toexisting products.
Contents of movie,TVand music stored on
microSD card.

Content SD card
（Impossible to copy by CPRM）

Insert the microSD
card to mobile phone
and watch the contents.

Play by mobile phone
Unnecessary for download contents!

21© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

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.

22© 2009 KAGA ELECTRONICS CO.,LTD All Rights Reserved.