Information Meeting for Fiscal Year ended
March 2013

May16, 2013
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
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Financial Highlights
FY3/2013

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■ Financial Highlights
Segment information(million yen)

FY3/2012
AmountPct.
Net Sales
229,856
Cost of sales
201,350
平成18年3月期
Gross profit
28,506
SG&A expenses
26,438Operating income
2,067
Non-operating income
850
Non-operating expence
348
Ordinary income
2,569
Extraordinary items
233
Income before income taxes

Income taxes
Income taxes-deferred
Minority interests
Net income

2,802
1,784
95
8
914

FY3/2013
AmountPct.

100.0%
216,405
87.6%
188,943
平成19年3月期（予）12.4%
27,462
11.5%
26,202
0.9%
1,260
0.4%
955
0.2%
284
1.1%
1,931
0.1%
503
1.2%
2,434
0.8%
1,594
0.04%
559
0.00%
-164
0.4%
444

100.0%
87.3%
12.7%
12.1%
0.6%
0.4%
0.1%
0.9%
0.2%
1.1%
0.7%
0.3%
-0.1%
0.2%

ChangesAmountPct.
-13,451-12,407-1,044
-236
-807
105
-64
-638
270
-368
-190
464
-172
-470

-5.9%
-6.2%
-3.7%
-0.9%
-39.0%
12.4%-18.4%-24.8%
115.9%-13.1%-10.7%
488.4%-2150.0%-51.4%

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■連結事業部門別業績比較（million yen）

FY3/2012
Net sales
Segment income

FY3/2013
Net sales

Pct.

Segment income

Net sales

Changes

Pct.

Amount229,856
216,405

Pct.

Electronic
components

166,46872.4%

164,16475.9%-2,304

-1.4%

2,021

97.8%

2,040

161.9%

19

0.9%

Informationequipment

49,36021.5%

38,30517.7%-11,055-22.4%-533-25.8%-836-66.3%

-303

-

3,854

1.7%

2,874

1.3%

-980

-25.4%

402

19.4%

-61

-4.8%

-463 -115.2%

10,173

4.4%

11,060

5.1%

887

8.7%

319
229,856
2,067

15.4%
100.0%
100.0%

157
216,405
1,260

12.5%
100.0%
100.0%-162-13,451-807-50.8%-5.9%-39.0%

Software
Other
Total

Segment income（million yen）

2,067
1,260

* 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 otherproducts, electronic manufacturing service (EMS), and other activities)
There was growth in sales of electronic components and semiconductors for automotive devices and in EMS business sales, mainly for air
conditioning equipment overseas. In Japan, sales of electronic components for amusement devices and of semiconductors and other products
decreased. As a result segment sales were 164,164 million yen.

■Information equipment (Sales of PCs, PC peripherals, photograph and imaging products, original-brand products, and otherproducts)
Personal computer sales decreased and there was a decline in sales of memory-card products caused by changes in sales and distribution
channels for products sold at large consumer electronics stores and specialty shops. The result was segment sales of 38,305 million yen.

4
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■ Financial Highlights（million yen）
229,856

FY3/2012

Changes

FY3/2013

AmountPct.

AmountPct.

AmountInformationequipment

44,27619.3%

44,147

20.4%

-129

-0.3%

EMS

62,65527.3%

70,546

32.6%

7,891

12.6%

Semiconductor

59,30325.8%

50,96023.5%-8,343-14.1%

General electronics
compornent

30,356

13.2%

25,636

11.8%-4,720-15.5%

Others33,264

14.5%

25,113

11.6%-8,151-24.5%

Total

229,856

100.0%

216,405

100.0%-13,451-5.9%（million yen）
216,405

Pct.

Summary■Information equipment sales: Down 129 million yen (-0.3%)
Personal computer sales decreased and there was a decline in sales of memory-card products caused by changes in sales and distribution channels
for products sold at large consumer electronics stores and specialty shops. The result was sales of 44,147 million yen.

■「EMS sales: Up 7,891 million yen (+12.6%)
Higher EMS orders, mainly overseas from Japanese manufacturers of air conditioning equipment, raised sales to 70,546 million yen.

■Semiconductor sales: Down 8,343 million yen (-14.1%)
Sales decreased to 50,960 million yen mainly because of a decline in orders in Japan for semiconductors used in amusement devices.

■General electronic components sales: Down 4,720 million yen (-15.5%)
Sales decreased to 25,636 million yen because of lower orders for electronic components used at the overseas factories of Japanese manufacturersof digital consumer electronics products.

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■ Selling, General and Administrative Expenses（million yen）

FY3/2012
AmountPacking and freight
2,450
R&D
576
Others
1,159
Total selling expenses
4,185
Depreciations
731
Rent
2,025
Personnel expenses
14,249Others5,247
Total administrative
22,252
Total SG&A expenses
26,438

FY3/2013

Pct.
Amount
9.3%
2,346
2.2%
265
4.4%
1,306
15.8%
3,917
2.8%
543
7.7%
2,160
53.9%
14,363
19.8%
5,217
84.2%
22,283100.0%
26,202

Changes

Pct.
Amount
9.0%
-104
1.0%
-311
5.0%
147
14.9%
-268
2.1%
-188
8.2%
135
54.8%
114
19.9%
-30
85.0%
31
100.0%-236

26,438（million yen）
26,202Pct.
-4.2%-54.0%
12.7%-6.4%-25.7%
6.7%
0.8%
-0.6%
0.1%
-0.9%

主な増減のポイント■Administrative expenses
Packing and freight: Down 104 million yen year-on-year because of lower sales
R&D: Down 311 million yen year-on-year mainly because of changes in schedules of development projects

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■貸借対照表の業績比較（million yen）

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

Merchandize and f inished goods

Goods in progress
Raw materials and other supplies

OthersFixed assets
Property , plant and equipment

Intangible assets
Investments and other assets

Total assets

End of
End ofChangeFY3.2012 FY3/2013
94,37489,945-4,429 Current liabilities
9,775
12,2582,483 Notes and accounts payable-trade
Short-term bank loans
55,97954,580-1,399Others17,104
14,075-3,029334
637
303 Long-term liabilities
Long-term bank loans
4,115
4,065
-50
Others
7,067
4,330-2,737
Total liabilities
Shareholders' equity
Paid-in capital
資本金
Capital surplus
20,34021,943
1,603 資本剰余金
Retained earnings
9,487
10,559
1,072 利益剰余金
2,245
8,607

2,226
9,157

114,714

111,888

Treasury stock-19
Valuation and translation adjustment
550
Minority interests
Total net assets-2,826

Total liabilities and net assets

End of
End of
FY3/2011 FY3/2012
59,47453,35541,74837,423
11,084
9,567
6,640
6,365
7,303
9,726
2,833
5,121
4,470
4,605
66,77763,082
12,133
13,91225,038-1,333-3,341
1,526
47,936
114,714

12,133
13,912
24,384-535-1,238149
48,806
111,888

Change-6,119-4,325-1,517
-275
2,423
2,288
135
-3,695
0
0
0
-654
798
2,103
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■ Consolidated Cash Flows（million yen）

FY3/2012
958

FY3/2013
7,041

Changes
6,083

Operating activities-2,645-4,910-2,265Investing activities

-242

-403

-161

Financials activities

-171

456

627

Net change in cash and cash equivalents-2,100

2,183

4,283

Increase (decrease) in cash and cash equivalents

11,796

9,695-2,101

Cash and cash equivalents at beginning of year

9,695

11,8782,183

Summary■Operating activities：Net cash provided was 7,041 million yen mainly due to a decrease in inventories.
■Investing activities： Net cash used was 4,910 million yen mainly due to payments for the purchase of property, plantand equipment.
■Financing activities： Net cash used was 403 million yen mainly due to dividend payments.

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Forecast for FY3/2014

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■Forecast for FY3/2014
Consolidated Statement of Income

Net Sales
Cost of sales
Gross profit
SG&A expenses
Operating income
Non-operating income
Ordinary income
Net income（million yen）

FY3/2013(Actual)

FY3/20124(Plan)

AmountAmount

平成18年3月期

216,405Pct.

平成19年3月期（予）Changes

Pct.

AmonutPct.

100.0%

230,000

100.0%

13,595

6.3%

188,94387.3%

201,000

87.4%

12,057

6.4%

27,462

12.7%

29,000

12.6%

1,538

5.6%

26,202

12.1%

27,200

11.8%

998

3.8%

1,260

0.6%

1,800

0.8%

540

42.9%

671

0.3%

500

0.2%

-171

-25.5%

1,931

0.9%

2,300

1.0%

369

19.1%

444

0.2%

1,200

0.6%

756

170.3%

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■Comparison of Consolidated Sales by Business Category（million yen）

FY3/2013(Actual)
Net sales
Segment income

FY3/2014(Plan)Net sales

Pct.

Segment income（million yen）
Net sales

Changes

230,000

Pct.

AmountPct.

164,16475.9%

178,500

77.6%

14,336

8.7%

2,040

161.9%

1,950

108.3%-90-4.4%

Informationequipment

38,30517.7%

31,00013.5%-7,305-19.1%-836-66.3%-470-26.1%

366

-

2,874

1.3%

6,800

3.0%

3,926

136.6%

-61

-4.8%

140

7.8%

201

-

11,0605.1%

13,700

6.0%

2,640

23.9%

157
216,405
1,260

12.5%
100.0%
100.0%

180
230,000
1,800

10.0%
100.0%
100.0%

23
13,595
540

14.6%
6.3%
42.9%

Other
Total

1,260

1,800

216,405

Electtronic
components

SoftwareSegment income* 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 otherproducts, electronic manufacturing service (EMS), and other activities)
Forecast growth in sales mainly because of higher sales of electronic components and semiconductors for automotive devices andcommunication products and higher EMS sales overseas.
■Information equipment (Sales of PCs, PC peripherals, photograph and imaging products, original-brand products, and otherproducts)
Forecast sales that are lower than initially expected mainly because of declining demand for personal computers and other current
products.

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■【Reference】Comparison of Consolidated Sales by Business Category（million yen）

FY3/2013(Actual)

FY3/2014(Plan)

AmountAmountPct.

Pct.

（million yen）

Changes

230,000

Amount Pct.

Information equipment

44,14720.4%

46,500

20.2%

2,353

5.3%

EMS

70,54632.6%

84,00036.5% 13,454

19.1%

Semiconductors

50,96023.5%

56,500

24.6%

5,540

10.9%

Generalelectronic
components

25,636

11.8%

16,5007.2%-9,136-35.6%

Others25,113

11.6%

26,500

11.5%

1,387

5.5%

Total

216,405

100.0%

230,000

100.0% 13,595

6.3%

216,405

Summary■Information equipment:：Sales up 2,353 million yen (+5.3%) due to expected growth in sales of current products and the addition of new
products■EMS:：Sales up 13,454 million yen (+19.1%) due to EMS growth outside Japan for air conditioning and office equipment■Semiconductors： Sales up 5,540 million yen (+10.9%) because of expected growth in orders for semiconductors for automotive devices
and communication products■General electronic components： Sales down 9,136 million yen (-35.6%) because of declining orders for electronic components used indigital consumer electronics products and amusement devices■Others：Sales up 1,387 million yen (+5.5%) because of higher sales associated with the recycling business, the production of computer
graphics and the sale of application software

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■ Forecast for FY3/2014（million yen）

FY3/2013
FY3/2014
ChangesAmountPct.
AmountPct.
Packing and freight
2,346
9.0%
2,446
9.0%
100
R&D
265
1.0%
422
1.6%
157
Others
1,306
5.0%
1,215
4.5%
-91
Total selling expenses
3,917
14.9%
4,083
15.0%
166
Depreciations
543
2.1%
569
2.1%
26
Rent
2,160
8.2%
2,186
8.0%
26
Personnel expenses
14,36354.8%
15,32956.4%
966
Others
5,217
19.9%
5,033
18.5%
-184
Total administrative
22,28385.0%
23,11785.0%
834
Total SG&A expenses
26,202100.0%
27,200100.0%
998（million yen）
26,202

27,200

Summary■Selling and administrative expenses
Packing and freight：Forecast a 100 million increase along with growth in sales
R&D：Forecast a 157 million yen increase because of higher R&D expenditures at KAGA ELECTRONICS, KAGA HIGHTECH and
SI ELECTRONICS
Personnel：Forecast a 966 million yen increase because of growth in personnel expenses at KAGA ELECTRONICS

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Topics① Status of poorly performing subsidiaries②Growth strategy for the KAGA ELECTRONICS Group(1) Focus on growing markets(2) Increase the speed of globalization
1. Expand the EMS network
2. Build a stronger base for increasing sales ofelectronic components(3) New businesses

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① Status of poorly performing subsidiaries

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① Status of poorly performing subsidiaries（million yen）
①KAGA COMPONENTS②KAGA HIGHTECH（simple tabulation ）FY
3/2012

Net sales

FY
3/2013FY
3/2014（P）

FY
3/2012FY
3/2013FY
3/2014（P）③ADM
FY
3/2012

16,702 16,201 17,794 40,449 28,280 28,000 10,416④SI ELECTRONICS⑤CyberFront

FY
3/2014（P）

FY
3/2012FY
3/2013FY
3/2014（P）

FY
3/2012FY
3/2013FY
3/2014（P）

9,225 10,001

2,459

2,087

3,680

1,189

843

986

FY
3/2013Operating
Income

-517

-253

-60

-489

-1,154

-296

-41

-279

110

-127

9

28

-66

-480

64

Ordinary
Income

-529

-175

-57

-330

-1,095

-240

-46

-283

100

-144

-9

10

-69

-488

54

Net income-1,028

-37

-101

-577

-1,784

-240

-22

-420

100

-145

-9

10

-335

-444

54

FY3/14
Actions

Implement structural
IFocus on improving
reforms
operations and locating
1. Downsize factories in new productsJapan
1. Focus resources on
2. Reduce the number of key business activities
unprofitable products
2. Reduce the workforce
3. Reduce the workforce 3. Locate new suppliers

Cut costs and enter new Sell more original
Reform management andmarkets
products
aim for profitability
1. Make a wholly owned 1. Increase sales of
1. Make a wholly owned
subsidiary; end the stock original LSI products (Y3) subsidiarylistings
2. Increase sales
2. Replace directors and2. Reduce the workforce associated with new
corporate auditors
3. Increase sales
vendors
3. Focus resources on
associated with new
3. Use collaboration with key business activities
vendors
the technical section of
KAGA ELECTRONICS

The goal is to make these five companies profitable by continuing to focus on rebuilding
poorly performing subsidiaries in this fiscal year.

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②Growth strategy for the KAGA ELECTRONICS Group(1) Focus on growing markets(2) Increase the speed of globalization
1. Expand the EMS network
2. Build a stronger base for increasing sales ofelectronic components(3) New businesses

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(1) Focus on growing markets

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②Growth strategy for the KAGA ELECTRONICS Group （１）Focus on growing markets

１．Automotive Devices➢Japanese automobile and automotive device manufacturers = Expanding production in Asia
➢Rising demand associated with hybrid cars and safety = More growth of the car
electronics market
World car output prediction (the source:) General Giken Co., Ltd.)

Global market change of car output and the target electronics （Fuji chimera research institute)（unit: 1,000）＜KAGA ELECTRONICS Group initiatives＞➢AD DEVICE, Toshiba’s semiconductor trading company, absorbed AS DEVICE (July 2012)
Established AD DEVICE (Thailand) (February 2013)⇒Increasing sales of Toshiba semiconductors for automotive devices⇒Enlarging value-added services for activities extending from the procurement of electronic components
and semiconductors to EMS operations (collaboration with KAGA ELECTRONICS (THAILAND))➢Supply a broader range of products for hybrid vehicles and vehicle safety (power semiconductors,
automotive camera modules, LCD panels, etc.)⇒Diversify the automotive device business from the current primary focus on car navigation system HDDs

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②Growth strategy for the KAGA ELECTRONICS Group （１）Focus on growing markets

２．Wireless and other communications➢ It is shifted to a smartphone tablet by a cell-phone➢ Demand spreads in environment, a car, various fields including the medical equipment
スマートフォン出荷台数の推移・予測（2013年3月予測）（出展：株式会社MM総研）
A change, a prediction(March, 2013 plan) of the smartphone shipment
number (exhibition:MM research)

Number of domestic cell-phone module terminal market contracts prediction （unit: ten thousand ）（出典：シード・プランニ（Exhibition: Seed plannin）＜KAGA ELECTRONICS Group initiatives＞➢ Co-operation with the communications carrier⇒ The business suggestion that I included to service / contents➢ Entry to wireless and other communications, the communication
market in the Environmental Products field⇒ Sensor sale for smart meters➢ In addition, (including the tablet navigator)⇒In LTE mobile router, LTE module, USB module, STB, it is expanded
sales of the communication module
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②Growth strategy for the KAGA ELECTRONICS Group （１）Focus on growing markets

３．Environmental Products➢LED lighting products
Demand for LED lighting is increasing to cut electricity use in residences, offices, factories and other locations.

➢ Solar power systems
The solar power market in Japan has been growing since the July 2012 start of the feed-in tariff systemfor purchasing all electricity from renewable energy sources.
Domestic PV system market size
(exhibition:)Yano Economic Research Institute)

Domestic LED light market size(the source: Fuji Economic Research Institute)＜KAGA ELECTRONICS Group initiatives＞➢Established a facility project section in the current fiscal year with the aim of shifting away from anenvironmental business with emphasis on selling products. The group is starting a value-added business with
one-stop convenience that goes from installation and maintenance work to communication services. Anothergoal is capturing orders for large projects such as for LED projectors and mega-solar power facilities.
物販

設置
工事

保守
管理

通信
ｻｰﾋﾞｽ

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（２） Increase the speed of globalization
１．Enlarge the EMS network
２．Build a stronger base for increasing sales ofelectronic components

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② Growth strategy for the KAGA ELECTRONICS Group（２） Increase the speed of globalization

１． Enlarge the EMS network■ChinaTo create a base for sales in inland China, establishedthe second factory of Shenzhen in the province of Hubei.
The new location will work with the current EMS basesin Shenzhen and Suzhou in order to become more efficient and increase sales .

■Thailand
A new factory was established in Amata Nakorn
in February 2012 following the widespread floodingof October 2011. Plan to increase capacity inresponse to requests from customers.
Now considering the addition of another EMS basein Thailand to meet the growing demand for
EMS services

湖北

蘇州
深セン

■Indonesia
Now studying opportunities for sales of parts as well
as for the EMS business. Many Japanese automotive
device manufacturers are operating in Indonesia, indicatingthat this country may become the next growing market in Asia following Thailand.

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② Growth strategy for the KAGA ELECTRONICS Group（２） Increase the speed of globalization

２．Build a stronger base for increasing sales ofelectronic components■China・Shanghai
Assigned factory automation engineers to Shanghai starting in April 2013 to reinforce
technical support
Aiming to increase sales by providing microprocessor software support for localmanufacturers ofkitchen appliances, automobiles, motors and other products as well as by offering proposals thatuse reference boards

・Qingdao
Opened a KAGA (DALIAN) ELECTRONICS office in Qingdao that will focus on increasing sales of
microprocessors and power semiconductors to large Chinesehome
大連
appliance manufacturers for their refrigerators and air conditioners

・Hong Kong
The goal is to establish relationships with the local companies. Sales include
microprocessors, LCDs, NFL (e-payment) antennas, specialty molded partsand other products for kitchen appliances, smartphones and tablets.

・Other activities

青島
上海
香港

KAGA ELECTRONICS plans to establish partnerships with trading
companies in China.

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② Growth strategy for the KAGA ELECTRONICS Group（２） Increase the speed of globalization■Thailand
KAGA ELECTRONICS (THAILAND), where the EMS has been
the core business, established a sales department in April 2013
for electronic components and semiconductors. The new department
is working with the EMS business to start selling electronic
components and semiconductors to Japanese manufacturersof automotive devices and office equipment.

■Malaysia
Opened a KAGA (SINGAPORE) ELECTRONICS liaison officein April 2013
・ Increase sales to Malaysian companies⇒ The new office sells electronic components and semiconductors (sensors, etc.)
to automakers and conducts other activities.

・ Increase sales to Japanese companies in Malaysia⇒ Many Japanese manufacturers of home appliances, automotive devices andother products have moved their design and production operations to Malaysia.
Sales activities centered on kitting will be used in order to increase sales by selling parts
as well as by operating value-added businesses.

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② Growth strategy for the KAGA ELECTRONICS Group（２） Increase the speed of globalization■IndiaKAGA ELECTRONICS sells semiconductors for air conditioners and refrigeratorsthat are made in India. In addition, KAGA ELECTRONICS is the sales agentof a major Indian manufacturer of control components and has sent people
from Japan to specialize in selling these components.
(Previously, European companies dominated the control components.)■United States
・ Considering the establishment of a Detroit sales office to strengthen relationships with Japaneseand U.S. manufacturers of automotive devices. Another goal is to make kitting a contributor
to sales growth.
・Using a cooperation with KAGA (TAIWAN) ELECTRONICS to start sales activities targeting U.S.
manufacturers of communication products and servers■Europe/Russia
・ Opened a representative office in Germany in October 2012. Focusing on sales of components forautomotive devices and industrial equipment. Sales activities target Japanese manufacturers
in this region as well as local companies.
In Russia, using a license to sell raw materials for LEDs in order to conduct sales activities
targeting local companies.

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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

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2013 KAGAKAGA ELECTRONICS
ELECTRONICS CO.,LTD
CO.,LTD All
Rights Reserved.
Reserved.