Summary Report on Financial Results for the Second Quarter of the Year Ending March 31, 2009

November 5, 2008
Company name: Fukuda Denshi Co., Ltd.
Security code no.: 6960
(http://www.fukuda.co.jp)
Listing: JASDAQ
Representative: Kotaro Fukuda, President& CEO
Inquiries: Shuichi Fukuda, Executive Director and General Manager of Accounting & Finance
Department
Tel: +81-3-3815-2121
Scheduled date for filing the quarterly report: November 12, 2008
Scheduled date for commencement of dividend payment: December 5, 2008

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

Consolidated financial results for the second quarter of the year ending March 31, 2009 (April 1,2008 through September 30, 2008)(1) Consolidated operating results (cumulative)(Percentages represent increases or decreases from the previous year)

Second quarterof the year
ending March
31, 2009
Second quarterof the year
ended
March
31, 2008

Net sales
millionyen%

42,813-

3,101

41,874

0.8

2.494

yen

Fully diluted
net income per
share
yen

86.19

-

79.05

-

Net income
per share
Second quarterof the year
ending March
31, 2009
Second quarterof the year
ended
March
31, 2008

Operating income
million%yen-1-Ordinary income
million%yen

Net income
million
%
yen

-

3,166

-

1,658

-

(12.8)

2,511(15.1)

1,520

(0.7)

(2) Consolidated financial situation

million yen

million yen

Shareholders’ equity
ratio%

99,18374,20374.8

3,854.61

99,58573,83374.1

3,835.32

Total assets
Secondquarter oftheyear
endingMarch 31,2009
Year ended
March 2008

Net assets

Net assets per shareyen(Reference) Shareholders’ equity:
Second quarter of the year ending March 31, 2009: 74,193 million yen
Year ended March 2008: 73,821 million yen

2.

Dividends

Record date

End of theFirst Quarteryen

End of theSecondQuarter
yen

-

Year
ended
March 2008
Year
endingMarch 2009
Year
endingMarch
2009(estimate)

Dividends per share
End of theThird QuarterEnd of theTerm

Annual

yen

yen

yen

40.00

-

40.00

80.00

-

40.00

-

-

-

-

-

-

40.00

80.00

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

3.

Forecast of consolidated financial results for fiscal 2008 (April 1, 2008 through March 31, 2009)(Percentages represent increases or decreases from the previous year for the full-year figures.)
Net sales

Full-year

millionyen
90,000%1.6

Operatingincomemillion%yen
5,300 (1.3)%

Net income
per share
yen

(4.9)

156.94

Ordinary income

Net income

millionyen
5,500

million
yen
3,020

%
(3.2)

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

-2-4.

Others(1) Change in significant subsidiaries during the term (change in specific subsidiaries involving change
in the scope of consolidation): None
(2) Application of simplified accounting method and accounting principles specific to the preparation of
consolidated quarterly financial statements: Yes
Note: For details, please refer to 4. Others in the “Qualitative Information and Financial Statements”
section on page 6.
(3) Change in accounting principles and procedures, presentation related to the preparation of
consolidated quarterly financial statements (described in changes in basic significant mattersregarding the preparation of consolidated quarterly financial statements)(i) Changes owning to adoption of revised accounting standards or such like: Yes(ii) Changes other than (i) above: Yes
Note: For details, please refer to 4. Others in the “Qualitative Information and Financial Statements”
section on page 6.
(4) Number of outstanding issues (common stock)1) Number of outstanding shares at the end of the period (including treasury stock)
Second quarter of the year ending March 31, 2009: 19,588,000 sharesYear ended March 31, 2008:

19,588,000 shares

2) Number of treasury shares at the end of the period
Second quarter of the year ending March 31, 2009: 340,079 sharesYear ended March 31, 2008:

340,139 shares

3) Average number of shares during the period (accumulated consolidated quarterly period)
Second quarter of the year ending March 31, 2009: 19,247,875 shares
Second quarter of the Year ended March 31, 2008: 19,238,059 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 ofNovember 5, 2008. Actual results may differ from the results projected and presented hereby for a varietyof reasons.
2.

With respect to the preconditions for the forecasts of financial results, please refer to “3.

Qualitative information about consolidated earnings forecast for the fiscal year ending March 2009” inthe “Qualitative Information and Financial Statements” section on page 6.
3.

Effective from the consolidated fiscal year ending March 2009, the Company adopted the“Accounting Standard for Quarterly Financial Reporting” (Accounting Standards Board of Japan Report
No. 12) and the “Implementation Guidance on the Accounting Standard for Quarterly Financial
Reporting” (ASBJ Implementation Guidance No. 14). Consolidated quarterly financial statements areprepared in conformity with the “Regulations of Consolidated Quarterly Financial Statements.”

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4.

Pursuant to the provision of Article 7, Paragraph 1, Item 5 of the Supplementary Provisions of the“Cabinet Office Ordinance on Partial Amendment of the Regulations on Terminology, Format andPreparation Method of Financial Statements, etc.” (Cabinet Office Ordinance No. 50, August 7, 2008),
the Company adopted the revised Regulations of Consolidated Quarterly Financial Statements for the
consolidated second quarter under review (from July 1, 2008 to September 30, 2008) and theaccumulated period up to the consolidated second quarter under review (from April 1, 2008 to September
30, 2008).

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Qualitative Information and Financial Statements
1.

Qualitative information about consolidated operating results
During the accumulated period up to the consolidated second quarter under review, concerns about thehealth of the financial system, originating in the subprime mortgage problem in the U.S., caused a credit
crunch and started affecting the real economy. In Japan, the domestic economy began showing signs of aslowdown, including decreases in the amount of exports, price hikes in raw materials and other items, andcontrol on capital investment.
In the medical equipment industry, medical treatment fees were preponderantly allocated to the
obstetrics and pediatrics under the revision of reimbursement rates of national health insurance in April
2008. Meanwhile, medical system reforms were pushed forward with, including expansion of the
adoption of the comprehensive medical fee payment system, called DPC (diagnosis procedure
contribution), at medical institutions, which led to further division of functions between hospitals andclinics, aimed at the improvement of efficiency, and expansion in the field of home medical treatment.
Under such circumstances, the Group posted consolidated net sales of 42,813 million yen (up 2.2%
from the previous year), operating income of 3,101 million yen (up 24.4%), ordinary income of 3,166
million yen (up 26.1%) and quarterly net income of 1,658 million (up 9.1 %) yen in the accumulated
period up to the second quarter under review.

(1) Physiological diagnostic equipment segment
Sales of electrocardiographs and retinal cameras continued to increase partly due to the influenceof compulsory specific medical checkups. Sales of ultrasound diagnostic imaging systems and
Vascular Screening System increased overseas, but fell in Japan.
As a result, consolidated sales were 11,618 million yen (up 1.7% from the preceding year).
(2) Patient monitoring equipment segment
Sales of this segment declined both domestically and overseas.
As a result, consolidated sales were 2,333 million yen (down 23.4%).
(3) Medical treatment equipment segment
Turnover of pacemakers dropped due to the influence of the reduction of official reimbursement
rates which is reflected in the actual sales value of pacemakers, though their sales volume grew. On
the other hand, the business of renting medical equipment for home treatment (including
oxygen-concentrator devices, equipment used to treat sleep apnea syndrome and homecare
ventilators) and automated external defibrillators (AEDs) remained steady.
As a result, sales were 18,339 million yen (up 8.1%).
(4) Other products and accessories segment
In this segment, we mainly handle recording paper, disposable electrodes and accessories andconsumables used for devices handled by the other segments.
Sales of this segment were 10,522 million yen (up 0.8%).

-5-

2.

Qualitative information about consolidated financial situation
Total assets were 99,183 million yen at the end of the second quarter under review, down 401 million

yen from the end of the previous fiscal year.
The decrease is mainly due to a decline of 3,218 million yen in trade notes and accounts receivable, adrop of 536 million yen in raw materials and supplies, a decrease of 373 million yen in intangible fixed
assets and a fall of 254 million yen in investments and other assets despite an increase of 2,554 million
yen in cash and deposits and an increase of 1,203 million yen in tangible fixed assets.
Liabilities amounted to 24,980 million yen, down 772 million yen from the end of the previous fiscal
year.
The decrease is mainly due to a decrease of 288 million yen in trade notes and accounts payable and adrop of 664 million yen in current liabilities and others despite an increase of 344 million yen in income
tax payable, etc.
Net assets were 74,203 million yen in total, up 370 million yen from the end of the previous fiscal
year.
The increase is primarily attributable to an increase of 878 million yen in retained earnings despite adecline of 438 million yen in evaluation difference on other securities.

3.

Qualitative Information about consolidated earnings forecast for the fiscal year ending March 2009
There are misgivings about declines in capital investment due to a downturn of the domestic
business, as factors of uncertainty are actualized, including the effect of concerns about the health of
the financial system, arising from the U.S., and risk of foreign exchange fluctuations. In addition,
while the environment surrounding the medical service is getting harsher, exemplified by control on
national medical expenses and worsening in hospital management, medical system reforms continue
to be proceeded with.
In consideration of this situation, there is no change in the forecast of financial results for the full
fiscal year, released on May 19, 2008, though earnings took an upturn in the period up to the second
quarter under review.

4.

Others(1) Change in significant subsidiaries during the term (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-6-

consolidated quarterly financial statements
1)

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 the statementof income of the previous fiscal year.
Corporate tax adjustments are included in corporate, inhabitants’ and enterprise taxes.
2)

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) Effective from the consolidated fiscal year ending March 2009, the Company adopted the“Accounting Standard for Quarterly Financial Reporting” (Accounting Standards Board of Japan
Report No. 12, March 14, 2007) and the “Implementation Guidance on the Accounting Standard
for Quarterly Financial Reporting” (ASBJ Implementation Guidance No. 14, March 14, 2007).
Consolidated quarterly financial statements are prepared in conformity with the “Regulations ofConsolidated Quarterly Financial Statements.”
Pursuant to the proviso of Article 7, Paragraph 1, Item 5 of the Supplementary Regulationsof the “Cabinet Office Ordinance on Partial Amendment of the Regulations on Terminology,
Format and Preparation Method of Financial Statements, etc.” (Cabinet Office Ordinance No. 50,
August 7, 2008), the Company adopted the revised Regulations of Consolidated Quarterly
Financial Statements for the consolidated second quarter under review (from July 1, 2008 to
September 30, 2008) and the accumulated period up to the consolidated second quarter underreview (from April 1, 2008 to September 30, 2008).
(ii) Change in valuation standards and methods for inventories
Previously, ordinary inventories held for the purpose of sales were mainly stated at cost
determined by the first-in, first-out method. With the application of the “Accounting Standards
for Measurement of Inventories” (ASBJ Report No. 9, July 5, 2006), inventories are primarily
stated at cost determined by the first-in first-out method (with regard to the amounts stated in thebalance sheets, the method of book value devaluation based on decline in profitability is used),effective from the first quarter.
The effect of this change on operating income, ordinary income and quarterly net income
before taxes in the accumulated period up to the second quarter under review is insignificant.
(iii) Application of the “Practical Solution on Unification of Accounting Policies Applied to Foreign
Subsidiaries for Consolidated financial Statement”
Effective from the first quarter, the Company adopted the “Practical Solution on Unificationof Accounting Policies Applied to Foreign Subsidiaries for Consolidated financial Statement”-7-

(ASBJ Practical Solution No. 18, May 17, 2006), and made revisions necessary for consolidated
settlement of accounts.
The effect of this change on operating income, ordinary income and quarterly net income
before taxes in the accumulated period up to the second quarter under review is insignificant.
(iv) Application of accounting standard for lease transactions
Previously, finance lease transactions in which the ownership of the leased properties did
not transfer to the lessees underwent the same accounting treatment as ordinary leasetransactions. Since the “Accounting Standard for Lease Transactions” (ASBJ Report No. 13,
June 17, 1993 (First Sectional Committee of the Business Accounting Council), amended on
March 30, 2007) and the “Implementation Guidance on the Accounting Standard for Lease
Transactions” (ASBJ Implementation Guidance No. 16, January 18, 1994 (Accounting
Committee of the Japanese Institute of Certified Public Accountants), amended on March 30,2007) became applicable from the consolidated quarterly financial statements concerning theconsolidated fiscal years starting on or after April 1, 2008, the Company adopted theseaccounting standards and used the accounting method for ordinary lease transactions, effectivefrom the first quarter under review.
Depreciation of leased assets concerning finance lease transactions in which the ownershipof the leased properties does not transfer to the lessees is calculated using the straight-line
method over the lease terms without residual value.
Finance lease transactions in which the ownership of the leased properties does not transfer
to the lessees and that started before the first year of the application of the lease accounting
standards and similar regulations, undergo the same accounting treatment as ordinary leasetransactions, the same as they did before.
The effect of this change on operating income, ordinary income and quarterly net income
before taxes in the accumulated period up to the second quarter under review is insignificant.

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5.

Consolidated Quarterly Financial Statements(1) Consolidated quarterly balance sheets
In million yen
End of the consolidated second
quarter under review(As of September 30, 2008)

Summarized balance sheets
related to the previous fiscal year
(As of March 31, 2008)

25,095
20,492

22,54023,710998
10,525
2,109
112
3,470
(285)

999
10,655
2,646
84
3,168
(308)

62,51863,497

19,7002,922
14,090(47)

18,496
3,295
14,345(49)

14,042

14,296

36,66599,18336,08899,585

12,177

12,465

3,366
1,229
1,682

3,500
884
1,666

161
1,956
20,572210
2,620
21,347

83
3,174

183
3,097

178
0
970
4,408
24,980

197
1
925
4,404
25,752

AssetsCurrent assets
Cash and deposits
Trade notes and accounts
receivable
Securities
Merchandise and products
Raw materials and supplies
Work in progress
Other
Allowance for doubtful
accounts
Total current assets
Fixed assets
Tangible fixed assets
Intangible fixed assets
Investments and other assets
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 allowance
Other
Total current liabilities
Fixed liabilities
Long-term loans borrowings
Allowance for retirement
benefits
Other allowance
Negative goodwill
Other
Total fixed liabilities
Total liabilities-9-In million yen
End of the consolidated second
quarter under review(As of September 30, 2008)

Summarized balance sheets
related to the previous fiscal year
(As of March 31, 2008)

4,621
9,982
60,352(766)
74,1904,621
9,982
59,473(766)
73,311

8

447

(5)

63

3

510

10
74,20399,183

11
73,833
99,585

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- 10 -

(2) Consolidated quarterly statements of income(Consolidated second quarter)
In million yen

Net sales
Cost of sales
Gross profit
Selling,
generalandadministrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary gains
Gains on sale of fixed assets
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
Losses on devaluation of
investment securities
Impairment losses
Other
Total extraordinary losses
Quarterly net income before
taxes
Corporate,
inhabitants’ andenterprise taxes
Corporate tax adjustments
Total corporate taxes, etc.
Minority interests in earnings ofconsolidated subsidiaries
Quarterly net income

Consolidated second quarter
under review(April 1, 2008 to September 30,
2008)
42,81324,121
18,691
15,590
3,101
11
91
149
251
31
120
35
187
3,166
5
100
21
1
128
3
111
139
13
1
270
3,024
1,448
(83)
1,364
1
1,658

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Effective from the fiscal year ending March 2009, the Company adopted the “Standard for Quarterly
Financial Reporting” (ASBJ Report No. 12, March 14, 2007) and the “Implementation Guidance on theStandard for Quarterly Financial Reporting” (ASBJ Implementation Guidance No. 14, March 14, 2007).
Consolidated quarterly financial statements are prepared in conformity with the “Regulations ofConsolidated Quarterly Financial Statements.”
Pursuant to the provision of Article 7, Paragraph 1, Item 5 of the Supplementary Regulations of the“Cabinet Office Ordinance on Partial Amendment of the Regulations on Terminology, Format andPreparation Method of Financial Statements, etc.” (Cabinet Office Ordinance No. 50, August 7, 2008), theCompany adopted the revised Regulations of Consolidated Quarterly Financial Statements for the
consolidated second quarter under review (from July 1, 2008 to September 30, 2008) and the accumulated
period up to the consolidated second quarter under review (from April 1, 2008 to September 30, 2008).

(3) Note concerning premise of going concern
Not applicable.

(4) Segment informationa.

Segment information by business type
Consolidated second quarter under review (from April 1 to September 30, 2008)
Segment information by business type is omitted because the amounts of sales and operating

income of the medical electronic equipment business account for over 90 percent of the total sales
and total operating income of all segments.

b.

Segment information by geographic area
Consolidated second quarter under review (from April 1 to September 30, 2008)
Segment information by geographic area is omitted because the amount of sales in Japanaccounts for over 90 percent of the total sales of all segments.

c.

Overseas sales
Consolidated second quarter under review (from April 1 to September 30, 2008)
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
Not applicable.

- 12 -

Reference
Financial statements related to the corresponding quarter of the previous fiscal year
(1) Consolidated interim statement of income
CategoryI
II

Net sales
Cost of sales
Gross profit
III Selling, general andadministrative
expenses
Operating income
IV Non-operating income
1. Interest income
2. Dividend income
3. Commissionforinsurance office work
4. Other
V Non-operating
expenses
1. Interest expenses
2. Foreignexchange
losses3. OtherOrdinary income
VI Extraordinary gains
1. Gains on sale of fixed
investment securities
2. Gains on sale of fixed
assets
3. Gains on insurance
surrender
4. Gains on reversal of
allowance for doubtful
accounts
VII Extraordinary losses
1. Losses on sale of fixed
assets
2. Losses on disposal of
fixed assets
3. Impairment losses
4. Loss on sales of stocks
of subsidiaries andaffiliates
Interim net income
before taxes
Corporate, inhabitants’and enterprise taxes
Corporatetax
adjustments
Minority interests inincomeInterim net income

Consolidated interim period of the previous fiscal year
(April 1, 2007 to September 30, 2007)
AmountPercentage(million yen)
41,874100.0
23,65356.5
18,221
43.5
15,726
37.5

2,494

6.0

161

0.4

144
2,511

0.4
6.0

627

1.5

255

0.6

2,883

6.9

1,362

3.3

0

0.0

1,520

3.6

7
68
23
61

44
77
22

427
0
139
59

0
69
2
182

770
591

- 13 -

(2) Segment information[Segment information by business type]Previous consolidated interim period (from April 1, 2007 to September 30, 2007)
Segment information by business type is omitted because the amounts of sales and operating income of
the medical electronic equipment business account for over 90 percent of the total sales and total
operating income of all segments.

[Segment information by geographic area]
Previous consolidated interim period (from April 1, 2007 to September 30, 2007)
Segment information by geographic area is omitted because the amounts of sales and assets in Japanaccount for over 90 percent of the total sales and total assets of all segments.

[Overseas sales]
Previous consolidated interim period (from April 1, 2007 to September 30, 2007)
Overseas sales are omitted because such sales accounted for less than 10 percent of consolidated sales.

6. Other information
Not applicable.

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