Summary Report on Financial Results for the Third Quarter of the Year Ending March 2010
February 2, 2010
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:

February 9, 2010

Scheduled date for commencement of dividend payment:－(Amounts less than one million yen are discarded)
1.

Consolidated financial results for the Third quarter of the year ending March 2010 (April 1, 2009
through December 31, 2009)(1) Consolidated operating results (cumulative)(Percentages represent increases or decreases from the previous year)
Net sales

Third quarter of the year
ending March 2010
Third quarter of the year
ended March 2009

Operatingincomemillion%yen

millionyen%

millionyen%

Ordinary income

Net income

millionyen%

61,030

(2.4)

4,030

(8.4)

4,222

(3.2)

2,105

(13.8)

62,507

―

4,401

―

4,364

―

2,443

―

yen

Fully diluted net income
per shareyen

111.67―126.93―

Net income per share
Third quarter of theyear ending March 2010
Third quarter of theyear ended March 2009
(2) Consolidated financial situation

million yen

million yen

Shareholders'equity ratio％

Third quarter of theyear ending March 2010

96,781

74,49077.0

4,033.46

Year ended March 2009

101,200

74,79573.9

3,885.41

Total assets

Net assets(Reference) Shareholders' equity:
Third quarter of the year ending March 2010: 74,490 million yen
Year ended March 2009:

74,786 million yen-1-

Net assets per
share
yen

2

Dividends
End of the firstquarteryen

Record dateYear ended March
2009
Year ending March
2010
Year ending March2010 (estimate)

End of the second
quarteryen

Dividends per share
End of the third
quarter
yen

―

40.00

―

―

40.00

―

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 through March
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)

148.48Net 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): Yes
New: None
Exclusion: 1 (Fukuda Cardiac Laboratory Co., Ltd)
Note: For details, please refer to 4. Others, under the “Qualitative Information and Financial
Statements” section on pages 5 through 6.
(2) Application of a simplified accounting method and accounting principles specific to the preparation of
consolidated quarterly financial statements: Yes
Note: For details, please refer to 4. Others, under 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
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, under the “Qualitative Information and Financial
Statements” section on pages 5 through 6.

-2-

(4) Number of outstanding issues (common stock)(i) Number of outstanding shares at the year-end (including treasury stock)
Third 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:
Third quarter of the year ending March 2010: 1,119,965 sharesYear ended March 2009: 339,945 shares(iii) Average number of shares during the period (accumulated consolidated quarter)
Third quarter of the year ending March 2010: 18,858,007 shares
Third quarter of the year ended March 2009: 19,247,894 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 February 2, 2010.
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” under the “Qualitative
Information and Financial Statements" section on page 5.

-3-

Qualitative Information and Financial Statements
1.

Qualitative Information about consolidated operating results
During the third quarter of the consolidated term, although there is a sense of expectations in theJapanese economy towards recovery due to a change in the government; the on going rise of the JapaneseYen, deterioration of the employment conditions and income environment, and also the deflationary trend
has been increasing.
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 61,030 million yen (down 2.4%
year-on-year), operating income of 4,030 million (down 8.4%), ordinary income of 4,222 million yen(down 3.2%) and a net income of 2,105 million yen (down 13.8 %) in the third quarter to date.
(i) Physiological diagnostic equipment segment
Sales of vascular screening systems, blood cell counters, and air sterilization and deodorizationequipment continued to increase, but sales of electrocardiographs and ultrasound diagnostic imaging
systems declined.
As a result, consolidated net sales were 15,234 million yen (down 6.7% year-on-year).
(ii) Patient monitoring equipment segment
Sales declined both domestically and abroad.
As a result, consolidated net sales were 3,455 million yen (down 10.1% year-on-year).
(iii) Medical treatment equipment segment
The business of renting medical equipment for home treatment and the sales of pacemakers
remained sturdy. The ventilators during the third quarter of consolidated term have recovered due tothe demand caused by the new types of influenza, but did not compensate for the decrease indemand up to the second quarter of the consolidated term. Sales of Automated External
Defibrillators (AEDs) declined, affected by the business downturn.
As a result, consolidated net sales were 26,179 million yen (down3.2% 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 other segments.
Consolidated net sales for this segment were 16,160 million yen (up 5.6% year-on-year).

2.

Qualitative information about consolidated financial situation
Total assets were 96,781 million yen at the end of the third quarter under review, down 4,418 million-4-yen from the end of the previous fiscal year.
The main factors are a decrease of 1,436 million yen in cash and deposits and a decrease of 4,940
million yen in trade notes and account receivable despite an increase of 1,167 million yen in investments
and other assets.
Liabilities amounted to 22,291 million yen, down 4,112 million yen from the end of the previous fiscal
year.
This is primarily because of a decrease of 892 million yen in trade notes and account payable, adecrease of 799 million yen in short-term borrowings, a decrease of 1,176 million yen in income tax
payable etc., and a decrease of 870 million yen in allowance for bonuses to employees despite an increaseof 176 million yen in allowance for retirement benefits.
Net assets were 74,490 million yen, down 305 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 588 million yen in retained earnings and an increase of 853 million yen in evaluationdifference on other securities.

3.

Qualitative information about consolidated earnings forecast for the fiscal year ending March2010
The economic situation will likely remain stagnant in the foreseeable future as there are deterioration of
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 a consolidationof public hospitals and refraining patients from visiting hospitals for medical advice because of therecession.
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):
During the Board of Director’s meeting on August 31, 2009, it was decided that Fukuda Denshi would
liquidate one of its subsidiaries, Fukuda Cardiac Laboratory Co., Ltd., and since the liquidation wascompleted on November 2, 2009, it has been excluded from the scope of consolidation.
(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-5-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.
(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 aretreated 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 research anddevelopment as it involves the development of new technologies and new mechanisms.
As a result of this change, cost of sales decreased 1,038 million yen and gross profit increased by
the same amount for the third quarter under review compared with the figures under the previous
method, while operating income and ordinary income each declined 33 million yen due to an increaseof 1,072 million yen in selling, general and administrative expenses.
Quarterly net income before taxes decreased 163 million yen, since 129 million yen, equivalent toresearch and development expenses in indirect manufacturing cost, which were included in beginninginventories, was posted as extraordinary losses.
(ii)

Loss on investment in partnership, which was included in other under non-operating expenses in theprevious third quarter, is recorded as an independent item in the third quarter under review since theamount of such loss exceeded 20% of the total non-operating expenses. In addition, the amount of loss
on investment in partnership included in other under non-operating expenses in the previous third
quarter was 33 million yen.
(iii) (Additional information)
Fukuda Denshi revised the retirement pension system on October 1, 2009, and moved from theapproved retirement annuity system to the defined benefit corporate pension system (contract-type)based on the relevant act.
The company applied the “Accounting methods related to shift between retirement pension schemes”(ASBJ Guidance No.1 for applying corporate standards) for the accounting operations associated withthis move.
In addition, the influence according to this revision is negligible.

-6-5. Consolidated Quarterly Financial Statements(1) Consolidated quarterly balance sheets(Million yen)
End of the consolidated second
third under review(as of December 31, 2009)

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

26,78828,224

18,37923,319

999
8,542
59
1,774
3,456

999
8,483
44
1,642
2,951

(185)

(243)

59,81465,421

20,192
2,473

19,975
2,668

14,31813,151(17)(16)

14,301

13,13436,967
96,78135,778101,200

11,50912,401

2,066
521

2,866
1,697

869

1,739

84
2,578
17,629116
3,043
21,865

-

50

3,407

3,230

176
－
1,077
4,662
22,291

192
0
1,065
4,538
26,404

AssetsCurrent assets
Cash and deposits
Trade notes and accountreceivable
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 accountpayableShort-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 third
quarter under review(as of December 31, 2009)

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

4,621
9,982
62,282(2,501)
74,384

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

258

(595)

(152)

(149)

105

(745)

－
74,49096,781

974,795
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(Third 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
Gains on reversal of allowance
for losses on restructuring
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

Third quarter of the previous
consolidated term(from April 1, 2008 to
December 31, 2008)
62,50734,35828,149

Third quarter of theconsolidated term(from April 1, 2009 to
December 31, 2009)
61,03032,39728,632

23,747

24,602

4,401

4,030

15
155
－
161
332

15
151
17
95
279

45
282
－
42
369
4,364

22
－
54
10
87
4,222

7
－
590

4
33
270

27

56

59

－

1
685

2
367

16
114

0
14

767

665

14
－
1
913
4,136

5
129
51
866
3,723

1,678

1,598

13
1,691

18
1,617

1

0

2,443

2,105

-9-

(3) Note concerning premise of going concern
Not applicable.
(4) Segment information(Segment information by business type)
Third quarter of the consolidated term under review (from April 1, 2009 to December 31, 2009)
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 geographical area)
Third quarter of the consolidated term under review (from April 1, 2009 to December 31, 2009)
Segment information by geographical area is omitted because the amount of sales in Japan accounts forover 90 percent of the total sales of all segments.
(Overseas sales)
Third quarter of the consolidated term under review (from April 1, 2009 to December 31, 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 on the acquisition of Fukuda Denshi’s own shares under the Article 156of the Corporation Law of Japan applied as mutatis mutandis stipulated under the Article 165 (3) of thesame Law during its meeting held on August 19, 2009, and as of August 25, 2009, 779,700 commonshares have been acquired through a fixed price trading, which amounted to 1,734 million yen.

6.

Other information
Not applicable.

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