Summary Report on Financial Results for the Second Quarter of the Year Ending March 2010
November 2, 2009
Listing: JASDAQ
Company name: Fukuda Denshi Co., Ltd.
Code No.: 6960

(http://www.fukuda.co.jp)

Representative:

Kotaro Fukuda, President & CEO

Inquiries:

Shuichi Fukuda, Executive Director and Senior Manager of Accounting & Finance
DepartmentTel:+81-3-3815-2121 (main)

Scheduled date for filing the quarterly report:

November 9, 2009

Scheduled date for commencement of dividend payment:

December 4, 2009

(Amounts less than one million yen are discarded)
1.

Consolidated financial results for the Second quarter of the year ending March 2010 (April 1, 2009
through September 30, 2009)(1) Consolidated operating results (cumulative)(Percentages represent increases or decreases from the previous year)
Net sales

Second quarter of theyear ending March 31,
2010
Second quarter of theyear ended March 31,
2009

Operatingincomemillion%yen

millionyen%

millionyen%

Net income

millionyen%

41,578

(2.9)

2,803

(9.6)

2,901

(8.4)

1,114

(32.8)

42,813

―

3,101

―

3,166

―

1,658

―

yen

Fully diluted net income
per share
yen

58.56

―

86.19

―

Net income per share
Second quarter of theyear ending March 31,
2010
Second quarter of theyear ended March 2009

Ordinary income-1-(2). Consolidated financial situation

million yen

million yen

Shareholders'equity ratio％

98,03074,46676.0

4,032.17

101,200

74,79573.9

3,885.41

Total assets
Second quarter of theyear ending March 2010
Year ended March 2009

Net assets

Net assets per
share
yen

(Reference) Shareholders' equity:
Second quarter of the year ending March 2010:
Year ended March 2009:2

74,466 million yen

74,786 million yen

Dividends
Record date

End of the firstquarteryenYear ended March
2009
Year ending March
2010
Year ending March2010 (estimate)

End of the second
quarter
yen

―

40.00

―

40.00

Dividends per share
End of the third
quarteryen

End of the term

Annual

yen

yen

―

40.00

80.00

―

40.00

80.00

Note: There have been no revisions of dividend projections in the current quarter.
3

Forecast of consolidated financial results for the year ending March 2010 (April 1, 2009 throughMarch 31, 2010)(Percentages represent increases or decreases from the previous year)
millionyen%

millionyen%

millionyen%

millionyen%

Net income
per shareyen

89,500

(0.1)

6,000

(10.7)

6,000(10.6)

2,800(25.7)

147.17

Net sales

Full-year

Operating income

Ordinary income

Net income

Note: There have been no revisions of consolidated earnings projections’ numerical values in the current
quarter.
4.

Others(1) Change in significant subsidiaries during the year under review (change in specific subsidiaries
involving change in the scope of consolidation): None
(2) Application of a simplified accounting method and accounting principles specific to the preparationof consolidated quarterly financial statements: Yes
Note: For details, please refer to 4. Others in the “Qualitative Information and Financial Statements”
section on pages 5 through 6.
(3) Changes in accounting principles and procedures, and presentation related to the preparation of
consolidated quarterly financial statements (described in changes in basis of preparation for the-2-

consolidated quarterly financial statements):(i) Changes owing to the adoption of revised accounting standards or such like: None(ii) Changes other than (i) above: Yes
Note: For details, please refer to 4. Others in the “Qualitative Information and Financial
Statements” section on pages 5 through 6.
(4) Number of outstanding issues (common stock)(i) Number of outstanding shares at the year-end (including treasury stock)
Second quarter of the year ending March 2010: 19,588,000 sharesYear ended March 2009: 19,588,000 shares(ii) Number of shares of treasury stock at the year-end:
Second quarter of the year ending March 2010: 1,119,911 sharesYear ended March 2009: 339,945 shares(iii) Average number of shares during the period (accumulated consolidated quarter)
Second quarter of the year ending March 2010: 19,025,133 shares
Second quarter of the year ended March 2009: 19,247,875 shares* Explanation about appropriate use of the forecasts of financial results, and other noteworthy matters
1. The forecasted financial results described above are based on information available as of November 2,
2009. Actual results may differ from the results projected and presented hereby for a variety of reasons.
2. With respect to the preconditions for the forecast of financial results, please refer to “3. Qualitative
information about earnings forecast for the fiscal year ending March 2010” in the “Qualitative
Information and Financial Statements" section on page 5.

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Qualitative Information and Financial Statements
1.

Qualitative Information about consolidated operating results
During the second quarter under review, the Japanese economy remained mired in a deep slump as

the unemployment rate worsened thus reducing employment and household incomes, though the signs ofa mild recovery could be seen in some industries.
In the medical environment, medical system reforms continued to be pushed forward , including the
expansion of the adoption of the comprehensive medical fee payment system, called DPC (Diagnosis
Procedure Combination), aimed to restrain medical expenses. In addition a further division of functions
between hospitals and clinics such as the consolidation of acute phase hospitals and an increase in thenumber of clinics assisting home medial treatment has been seen.
Under such circumstances, the Group posted a consolidated net sales of 41,578 million yen (down
2.9% year-on-year), operating income of 2,803 million (down 9.6%), ordinary income of 2,901 million
yen (down 8.4%) and a net income of 1,114 million yen (down 32.8 %) in the second quarter to date.
(i) Physiological diagnostic equipment segment
Sales of vascular screening systems, blood cell counters, and air sterilization and deodorizationequipment (partly driven by an increased demand due to the new types of influenza) continued
to increase, but sales of electrocardiographs and ultrasound diagnostic imaging systems declined.
As a result, consolidated net sales were 10,783 million yen (down 7.2% year-on-year).
(ii) Patient monitoring equipment segment
Sales increased both domestically and abroad.
As a result, consolidated net sales were 2,412 million yen (up 3.4% year-on-year).
(iii) Medical treatment equipment segment
The business of renting medical equipment for home treatment and the sales of pacemakers
remained sturdy. Sales of Automated External Defibrillators (AEDs) declined, affected by thebusiness downturn.
Sales of ventilators declined as the anticipated increase due to the new types of influenza was
not realized in the second quarter under review, and the demand for them on rental rather thanfor purchase grew for both new and replaced equipment.
As a result, consolidated net sales were 17,479 million yen (down 4.7% year-on-year).
(iv) Other products and accessories segment
In the Other products and accessories segment, we mainly handle recording paper, disposable
electrodes and accessories, as well as consumables used for devices handled by the othersegments.
Consolidated net sales for this segment were 10,903 million yen (up 3.6% year-on-year).

2.

Qualitative information about consolidated financial situation
Total assets were 98,030 million yen at the end of the second quarter under review, down 3,169-4-

million yen from the end of the previous fiscal year.
The main factors are a decline of 3,622 million yen in trade notes and accounts receivable and adecrease of 699 million yen in merchandise and products despite an increase of 302 million yen intangible fixed assets and an increase of 987 million yen in investments and other assets.
Liabilities amounted to 23,564 million yen, down 2,840 million yen from the end of the previous
fiscal year.
This is primarily because of a decrease of 825 million yen in trade notes and accounts payable, adecrease of 700 million yen in short-term borrowings, and a decrease of 660 million yen in income tax
payable, etc. despite an increase of 182 million yen in allowance for retirement benefits.
Net assets were 74,466 million yen, down 329 million yen from the end of the previous fiscal year.
The decrease is primarily because of an increase of 1,735 million yen in treasury stock despite anincrease of 335 million yen in retained earnings and an increase of 1,044 million yen in evaluationdifference on other securities.

3.

Qualitative information about consolidated earnings forecast for the fiscal year ending
March 2010
The economic situation will likely remain stagnant in the foreseeable future as there are deteriorationof corporate earnings and declines in consumer spending because of the worldwide economic recession,
rapid fluctuations in foreign exchange rates and the rising cost of raw materials. In the medical equipment
industry, the business environment is expected to remain harsh, as there are concerns about aconsolidation or reduction in the number of public hospitals and refraining patients from visiting hospitals
for medical advice because of the recession.
However, there is no change at this moment in the forecast of the financial results for the full fiscal
year.

4.

Others(1) Change in significant subsidiaries during the year under review (change in specific subsidiaries
involving change in the scope of consolidation):
Not applicable.
(2) Application of simplified accounting method and accounting principles specific to the preparation of
consolidated quarterly financial statements(i) Simplified accounting treatment
Tax expenses of consolidated subsidiaries are calculated by multiplying the quarterly net income
before taxes by the effective income tax rate after tax effect accounting application in thestatement of income of the previous fiscal year.

-5-Corporate tax adjustments are included in corporate, inhabitants’ and enterprise taxes.
(ii) Accounting principles specific to the preparation of consolidated quarterly financial statements
Not applicable.
(3) Change in accounting principles and procedures, presentation related to the preparation of
consolidated quarterly financial statements:(i) Previously, expenses for the development of new products in research and development activities
were posted as cost of sales. However, effective from the first quarter under review, such expenses
are treated as general and administrative expenses, with a view to appropriately grasping the costs
corresponding to sales and more properly indicating profit/loss for the period, more properly taking
advantage of the building of a system to manage expenses incurred in developing new products,
since the development of new products has come to be regarded less as cost, and more as researchand development as it involves the development of new technologies and new mechanisms.
As a result of this change, cost of sales decreased 694 million yen and gross profit increased by
the same amount for the second quarter under review compared with the figures under the previous
method, while operating income and ordinary income each declined 23 million yen due to anincrease of 717 million yen in selling, general and administrative expenses.
Quarterly net income before taxes decreased 152 million yen, since 129 million yen, equivalent
to research and development expenses in indirect manufacturing cost, which were included in
beginning inventories, was posted as extraordinary losses.
(ii)

Loss on investment in partnership, which was included in other under non-operating expenses in

the previous second quarter, is recorded as an independent item in the second quarter under review
since the amount of such loss exceeded 20% of the total non-operating expenses. In addition, theamount of loss on investment in partnership included in other under non-operating expenses in theprevious second quarter was 28 million yen.

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5. Consolidated Quarterly Financial Statements(1) Consolidated quarterly balance sheets(Million yen)
End of the consolidated second
quarter under review(as of September 30, 2009)

Summarized balance sheets
related to the previous fiscal year
(as of March 31, 2009)

28,152

28,224

19,69623,319

998
7,783
50
1,637
3,086

999
8,483
44
1,642
2,951

(199)

(243)

61,20565,421

20,2772,424

19,975
2,668

14,13913,151(16)(16)

14,122

13,13436,824
98,03035,778101,200

11,575

12,401

2,166
1,036

2,866
1,697

1,653

1,739

56
2,382
18,871

116
3,043
21,865

19

50

3,412

3,230

166
－
1,093
4,692
23,564

192
0
1,065
4,538
26,404

AssetsCurrent assets
Cash and deposits
Trade notes and accounts
receivable
Securities
Merchandise and products
Work in progress
Raw materials and supplies
Other
Allowancefordoubtfulaccounts
Total current assets
Fixed assets
Tangible fixed assets
Intangible fixed assets
Investments and other assets
Other
Allowance for doubtful
accounts
Total investments andother assets
Total fixed assets
Total assets
Liabilities
Current liabilities
Trade notes and accounts
payableShort-term borrowings
Income tax payable, etc.
Allowance for bonuses to
employees
Other allowances
Other
Total current liabilities
Long-term liabilities
Long-term borrowings
Allowance for retirement
benefits
Other allowances
Negative goodwill
Other
Total long-term liabilities
Total liabilities-7-

End of the consolidated second
quarter under review(as of September 30, 2009)

Summarized balance sheets
related to the previous fiscal year
(as of March 31, 2009)

4,621
9,982
62,029(2,501)
74,131

4,621
9,982
61,693(766)
75,531

448

(595)

(113)

(149)

334

(745)

－
74,46698,030974,795
101,200

Net assets
Shareholders' equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity
Valuationandtranslation
adjustments
Evaluation difference onother securities
Foreign currency translation
adjustment accountTotal
valuationandtranslation adjustments
Minority interests
Total net assets
Total liabilities and net assets-8-(2) Consolidated quarterly statements of income(Second quarter of the consolidated term)(Million yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative
expenses
Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange profit
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Loss on investment in partnership
Other
Total non-operating expenses
Ordinary income
Extraordinary gains
Gains on sale of fixed assets
Gain on insurance adjustment
Gains on insurance surrender
Gains on reversal of allowancefor doubtful accounts
Other
Total extraordinary gains
Extraordinary losses
Losses on sale of fixed assets
Losses on disposal of fixed assets
Loss on valuation of investment
securities
Impairment losses
Loss on prior period adjustment
Other
Total extraordinary losses
Quarterly net income before taxes
Corporate, inhabitants' andenterprise taxes
Corporate tax adjustments
Total income taxes
Minority interests in earnings ofconsolidated subsidiaries
Net income

Second quarter of the previous
consolidated term(from April 1, 2008 to
September 30, 2008)
42,81324,121
18,691

Second quarter of theconsolidated term(from April 1, 2009 to
September 30, 2009)
41,57822,305
19,272

15,59016,469

3,101

2,803

11
91
－
149
251

8
85
13
68
175

31
120
－
35
187
3,166

15
－
54
7
77
2,901

5
－
100

3
33
170

21

43

1
128

2
253

3
111

0
12

139

680

13
－
1
270
3,024

4
129
7
834
2,320

1,448

1,228

(83)
1,364

(22)
1,205

1

0

1,658

1,114

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(3) Note concerning premise of going concern
Not applicable.
(4) Segment information(Segment information by business type)
Second quarter of the consolidated term under review (from April 1, 2009 to September 30, 2009)
Segment information by business type is omitted because the amounts of sales and operating incomeof the medical electronic equipment business account for over 90 percent of the total sales and total
operating income of all segments.
(Segment information by geographical area)
Second quarter of the consolidated term under review (from April 1, 2009 to September 30, 2009)
Segment information by geographical area is omitted because the amount of sales in Japan accounts
for over 90 percent of the total sales of all segments.
(Overseas sales)
Second quarter of the consolidated term under review (from April 1, 2009 to September 30, 2009)
Overseas sales are omitted because such sales accounted for less than 10 percent of consolidated
sales.
(5) Note when there is a significant fluctuation in the amount of shareholders’ equity
The Board of Directors approved the resolution on the acquisition of Fukuda Denshi’s own shares
under the Article 156 of the Corporation Law of Japan applied as mutatis mutandis pursuant to the
Article 165 (3) of the same Law during its meeting held on August 19, 2009, and as of August 25,
2009, 779,700 common shares have been acquired through a fixed price trading, which amounted to
1,734 million yen.

6.

Other information
Not applicable.

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