August 1, 2011

Summary of Consolidated Financial Results
For the First Quarter Ended June 30, 2011 [Japan GAAP]
Name of Company:
Stock Code:
Stock Exchange Listing:
URL:
Representative
Title:
Name:
Contact Person
Title:Name:
Phone:
Date of quarterly securities report (tentative):
Date of commencement of dividend payment (tentative):
Quarterly earnings supplementary explanatory documents:
Quarterly earnings presentation:

KAGA ELECTRONICS CO., LTD.
8154
Tokyo Stock Exchange, First Section
http://www.taxan.co.jp/
President & COO
Tomohisa Tsukamoto
Senior Managing Director, Finance & Administration Headquarters
Waichiro Shimoyama+81-(0)3-4455-3111
August 11, 2011
None
None
(Yen in millions, rounded down)

1.

Financial results for the first quarter of the fiscal year ending March 2012 (April 1, 2011 – June 30, 2011)(1) Result of operations (Consolidated, year-to-date)(Percentage figures represent year on year changes)
Net sales

Operating income

Ordinary income

Net income

Million yen% Million yen%
Million yen% Million yen%
First quarter ended June 2011
55,002-7.9
247 -73.0
373 -62.4
115 -79.1
First quarter ended June 2010
59,692
10.4
916
993
552
Note: Comprehensive income: First quarter of FY3/2012: -406 million yen (-%), First quarter of FY3/2011: -155 million yen (-%)
Net income per share

Net income per share fully diluted
Yen
-

Yen
4.18
20.02

First quarter ended June 2011
First quarter ended June 2010
(2) Financial Position (Consolidated)
Total assets
As of June 30, 2011
As of March 31, 2011
Notes: Shareholders’ equity
As of June 30, 2011:
2.

Million yen
111,352
114,686
46,107 million yen

Net assets
Million yen
47,657
48,598
As of March 31, 2011

%
41.4
40.9
46,934 million yen

Dividends
End of 1Q
Yen-

End of 2Q
Yen
15.00

Dividend per share
End of 3Q
Yen-

Fiscal year ended March 2011
Fiscal year ending March 2012
Fiscal year ending March 2012 (est.)
15.00
Note: Change in the estimation of dividend for the fiscal year in this period: Yes
3.

Equity ratio-

End of FY
Yen
15.00

Full year
Yen
30.00

15.00

30.00

Forecast for the fiscal year ending March 2012 (Consolidated, April 1, 2011 to March 31, 2012)(Percentage figures represent year on year changes)
Net income
Net sales
Operating income
Ordinary income
Net income
per share
Million yen% Million yen% Million yen% Million yen%
Yen
First Half
110,000
-8.7
100
-96.1
400
-84.9
150
-89.4
5.44
Full year
238,000
0.0
2,100
-41.1
2,600
-30.5
1,300
-29.9
47.11
Note: Change in the forecast made in this period: Yes

4.

Others(1) Changes in significant subsidiaries (Changes in specific subsidiaries accompanied by changes in the scope of
consolidation): None
(2) Use of of accounting methods specifically for the preparation of the quarterly consolidated financial statements: None
(3) Changes in accounting principles and estimates, and retrospective restatement(a) Changes due to revision of accounting standards: None(b) Changes other than in (a): None(c) Changes in accounting estimates: None(d) Retrospective restatement: None
(4) Number of shares outstanding (common stock)(a) Shares outstanding (including treasury stock)
As of June 30, 2011:

28,702,118

As of March 31, 2011:

28,702,118

As of June 30, 2011:

1,104,656

As of March 31, 2011:

1,104,656

Period ended June 30, 2010:

27,598,187(b) Treasury stock(c) Average number of shares (quarterly consolidated cumulative period)
Period ended June 30, 2011:

27,597,462*Description of quarterly review procedure implementation status
It is under the quarterly review procedure process based upon the Financial Instruments and Exchange Act at the time of disclosureof this report.
*Cautionary statement regarding forecasts of operating results and special notes
1. Forward-looking statements in these materials are based on information available to management at the time this report was
prepared and assumptions that management believes are reasonable. Actual results may differ significantly from thesestatements for a number of reasons.
2. For information about the dividend forecasts, please refer “Notice of Forecasts for Fiscal Year Ending March 2012” announced
on August 1, 2011.

Index for Supplementary Information
1.

Results of Operations.................................................................................................................................................................2(1)
Overview on consolidated business performance .............................................................................................................2(2)
Overview of financial condition .......................................................................................................................................3(3)
Forecast for fiscal year ending in March 2012 .................................................................................................................3
2. Other Information ......................................................................................................................................................................3(1)
Changes in significant subsidiaries:..................................................................................................................................3(2)
Use of of accounting methods specifically for the preparation of the quarterly consolidated financial statements: .........3(3)
Changes in accounting principles and estimates, and retrospective restatement: .............................................................3
3. Quarterly Consolidated Financial Statements............................................................................................................................4(1)
Quarterly consolidated balance sheet ...............................................................................................................................4(2)
Quarterly consolidated statements of income ...................................................................................................................6(3)
Notes to ongoing concern assumptions ............................................................................................................................8(4)
Segment information ........................................................................................................................................................8(5)
Notes on significant change in shareholders’ equity: .......................................................................................................91

1.

Results of Operations(1)

Overview on consolidated business performance
In the first quarter, the U.S. economy lost momentum as consumer spending began to decline due to the rising cost ofenergy as the price of crude oil rose. This downturn along with the U.S. government debt problem makes the U.S.
economic outlook unclear. In Europe, there are worries about the economy because of the debt crisis at EU member nations.
In China, India and other emerging countries that have been driving global economic growth as well, economic growth
rates are slowing as countries take steps to hold down inflation. Overall, economic growth is declining amid instability inthe global economy.
In Japan, exports plunged at first after the Great East Japan Earthquake of March 11 as domestic manufacturing activity
fell. In addition, consumer spending declined because of the electricity shortage, unfounded rumors and other problems
and there was an increase in unemployment. The result was economic stagnation. Recently, though, there have been
recoveries in some business sectors as government programs and corporate activities restored supply chains. However,Japan’s economy is still sluggish overall.
In the electronics industry, demand for electronic components increased because of strong sales of smartphones, tablet
computers and other products. But the Great East Japan Earthquake made it difficult to procure components and finishedproducts. Despite these difficulties, the ability of manufacturers to supply goods is improving as progress with earthquake
recovery and reconstruction activities continues.
The KAGA ELECTRONICS Group, while strengthening ties among group companies, worked on adding new products,
increasing sales of environmental products like LED illumination products and enlarging the product lineup. However, firstquarter performance reflected the impact of interruptions in the production of products and components caused by theGreat East Japan Earthquake. Net sales decreased 7.9% from one year earlier to 55,002 million yen, operating income fell
73.0% to 247 million yen, ordinary income was down 62.4% to 373 million yen and net income dropped 79.1% to 115
million yen.
Business segment performance was as follows.
(a) Electronic components (Development, manufacture and sale of semiconductors, general electronic components andother products, electronic manufacturing service (EMS)*, and other activities)
The KAGA ELECTRONICS Group took steps to secure procurement channels to quickly meet the demands ofcustomers as cuts in the production of products and components following the Great East Japan Earthquake createdshortages of many items. In addition, sales activities focused on increasing sales of LED products, expanding EMS
operations outside Japan and increasing sales in China to Chinese companies. However, performance in this segment
was impacted by lower manufacturing output, weak consumer spending and other effects of the March earthquake.
Falling orders for semiconductors used in automobiles and consumer products, EMS operations for amusement devices,and other products and services caused sales to decrease 12.0% to 39,429 million yen and operating income to drop
82.4% to 184 million yen.
*Electronics manufacturing service is a term used for the provision of product development and manufacturingservices on an outsourcing basis.
(b) Information equipment (Sales of PCs, PC peripherals, photograph and imaging products, original-brand products, andother products)
There were declines in sales in some product categories due to the Great East Japan Earthquake. But segment
performance benefited from activities to increase sales of PCs, PC peripherals and other existing products, higher
demand for products for conserving electricity, and growth in orders for terrestrial digital TV broadcast tuners leading
up to the July end of terrestrial analog TV broadcasts in Japan. Segment sales increased 7.1% to 12,547 million yen
and operating income was up 545.1% to 54 million yen.
(c) Software (Production of computer graphics, planning and development of amusement products, and other activities)
Group companies concentrated on the production of visual content using computer graphics and the planning,development and sale of game software and application software. Segment sales increased 25.9% to 717 million yen
and operating income was 35 million yen compared with a 229 million yen loss one year earlier.
(d) Others (Electronic device repairs and support, sales of sporting goods, and other activities)
Sales of amusement-related products (finished products) were higher but golf product sales were weak because of theGreat East Japan Earthquake and orders declined in the recycling business. Segment sales decreased 11.0% to 2,308
million yen and operating income fell 90.4% to 13 million yen.

2

(2)

Overview of financial condition
Assets totaled 111,352 million yen at the end of the first quarter, 3,333 million yen less than at the end of the previous
fiscal year mainly because of a decrease in notes and accounts receivable-trade.
Liabilities decreased 2,392 million yen to 63,694 million yen mainly because of a decrease in notes and accounts payabletrade.
Net assets decreased 940 million yen to 47,657 million yen. This was attributable primarily to a decrease in valuationdifferences on available-for-sale securities resulting from changes in fair values of these securities.

(3)

Forecast for fiscal year ending in March 2012(a) Consolidated forecast for the first half ending September 2011 (April 1, 2011 – September 30, 2011)

Previous forecast (A)Million yen-

OperatingincomeMillion yen-

Revised forecast (B)Net Sales

Ordinary
incomeMillion yen-

Million yen-

Net income
per share
Yen-

Net income

110,000

100

400

150

5.44

Difference (B-A)

-

-

-

-

-

Pct. change (%)

-

-

-

-

-

120,470

2,594

2,644

1,412

51.18

(Ref.) Previous fiscal year(b) Consolidated forecast for fiscal year ending March 2012 (April 1, 2011 – March 31, 2012)

Previous forecast (A)Million yen-

OperatingincomeMillion yen-

Revised forecast (B)Net Sales

Ordinary
incomeMillion yen-

Million yen-

Net income
per share
Yen-

Net income

238,000

2,100

2,600

1,300

47.11

Difference (B-A)

-

-

-

-

-

Pct. change (%)

-

-

-

-

-

237,951

3,563

3,738

1,854

67.20

(Ref.) Previous fiscal year(c) Reason for revisions

The operating environment is recovering slowly from the effects of the Great East Japan Earthquake. There are
expectations for an economic recovery as companies resume manufacturing activity and consumer spending increases.
However, the outlook is still uncertain because of concerns about slowing exports due to the yen’s strength, highunemployment and other issues.
Due to uncertainty concerning the effects of the Great East Japan Earthquake, the KAGA ELECTRONICS Group was
unable to determine a forecast for the fiscal year ending in March 2012. However, the forecast shown above has now
been established based on a thorough examination of the effects of the earthquake.
Group companies will work closely together to benefit from synergies and operate efficiently while aiming for growthin the volume of products handled by increasing sales of existing products, adding new products and business activities,
and taking other actions.

2.

Other Information(1)

Changes in significant subsidiaries:
None

(2)

Use of of accounting methods specifically for the preparation of the quarterly consolidated financial statements:
None

(3)

Changes in accounting principles and estimates, and retrospective restatement:
None

3

3.

Quarterly Consolidated Financial Statements(1)

Quarterly consolidated balance sheet(million yen)
Fiscal year ended March 2011
(As of March 31, 2011)ASSETS
Current assets
Cash and cash equivalents
Notes and accounts receivable-tradeMarketable securities
Merchandize and finished goods
Work in process
Raw materials and other supplies
Deferred tax assets
OthersAllowance for doubtful receivables

First quarter ended June 2011
(As of June 30, 2011)

11,92654,17371
15,775
555
3,189
975
6,392
(182)

10,94450,89669
17,809
674
3,301
935
5,685
(190)

92,876

90,126

Fixed assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Tools, furniture and fixtures, net
LandConstruction in progress

2,494
1,601
1,016
4,099
511

2,408
1,512
1,087
4,099
487

Total property, plant and equipment

9,724

9,595

464
790
1,344

410
704
1,319

2,599

2,433

4,493
619
6,000
(1,627)

4,411
414
5,973
(1,602)

9,485

9,196

Total current assets

Intangible assets
Goodwill
Software
OthersTotal intangible assets
Investments and other assets
Investment securities
Deferred tax assets
OthersAllowance for doubtful receivables
Total investments and other assets
Total fixed assets
Total assets

4

21,81021,225

114,686

111,352

(million yen)
Fiscal year ended March 2011
(As of March 31, 2011)
LIABILITIESCurrent liabilities
Notes and accounts payable-trade
Short-term bank loans
Income taxes payable
Allowance for directors’ and corporate auditors’ bonuses
OthersTotal current liabilities
Long-term liabilities
Long-term bank loans
Allowance for retirement benefits for employees
Allowance for retirement benefits for directors andcorporate auditors
Asset removal obligations
OthersFirst quarter ended June 2011
(As of June 30, 2011)

40,790
8,505
1,511
138
6,041

39,333
9,759
523
104
5,344

56,98755,065

4,636
1,556

4,182
1,561

1,294
226
1,385

1,315
227
1,341

9,099

8,628

Total liabilities

66,087

63,694

NET ASSETS
Shareholder’s equity
Paid-in capital
Capital surplus
Retained earnings
Treasury stock

12,133
13,91225,038(1,332)

12,133
13,912
24,740(1,332)49,75249,453(246)
0(2,571)(601)
0(2,744)(2,817)(3,346)

Subscription rights to shares
Minority interests

0
1,664

0
1,550

Total net assets

48,59847,657

114,686

111,352

Total long-term liabilities

Total shareholder’s equity
Valuation and translation adjustments
Valuation differences on available-for-sales securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Total valuation and translation adjustments

Total liabilities and net assets

5

(2)

Quarterly consolidated statements of income and consolidated statements of comprehensive income
For the first quarter (April 1, 2011 – June 30, 2011)(million yen)First quarter ended June 2010
(April 1, 2010 – June 30, 2010)

First quarter ended June 2011
(April 1, 2011 – June 30, 2011)

Net sales
Cost of sales

59,692
51,90055,002
47,954Gross profit

7,792

7,047

Selling, general and administrative expenses

6,875

6,799

Operating income

916

247

Non-operating income
Interest income
Dividend income
Commission income
Others

15
31
50
99

18
38
48
94

196

200

25
55
38

34
16
24

119

75

993

373

1
140

3
-

109
-

0

250

3

10
90
-

3
32
3
16

38
21

8

160

64

Total non-operating income
Non-operating expenses
Interest expense
Foreign exchange losses
OthersTotal non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Compensation income
Gain on foreign currency translation adjustments
for liquidation of subsidiaries
OthersTotal extraordinary income
Extraordinary losses
Loss on retirement of fixed assets
Loss on revaluation of investment securities
Loss on impairment of fixed assets
Loss on valuation of golf club membership
Loss on adjustment for changes of accounting
standard for asset retirement obligations
OthersTotal extraordinary losses
Income before income taxes and minority interests

1,083

312

Income, inhabitants and enterprise taxes
Income tax adjustment

386
127

223
(33)

Total taxes
Income (loss) before minority interests

514
568

190
121

Minority interests in income (loss)
Net income (loss)

16

6

552

115

Minority interests in income (loss)

16

6

Income (loss) before minority interests

568

121

6

First quarter ended June 2010
(April 1, 2010 – June 30, 2010)
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of
the parent
Comprehensive income attributable to minority
interests

7

First quarter ended June 2011
(April 1, 2011 – June 30, 2011)

(178)
(26)
(518)

(354)
(0)
(172)

(724)

(528)

(155)

(406)

(164)

(412)

8

6

(3)

Notes to ongoing concern assumptions
None

(4)

Segment information
For the first quarter ended June 2010 (Apr. 1, 2010 – June 30, 2010)
1. Information about sales and income (loss) by reportable segments(million yen)
Reporting segments
Others*

Total

Electronic
components

Informationequipment

Software44,811

11,716569

57,0972,594

59,692

322

160

261

744

825

1,569

45,133

11,877831

57,842

3,419

61,262Total

Net salesof which to outside customersof which inter-segment
Total

Segment income (loss)
1,048
8
(229)
827
143
971
* Others is a business segment which is including sporting goods business etc., but this segment is not included in thereporting segments.

2. Reconciliation of difference between total income (loss) for reportable segments and in quarterly consolidated statementof income (Item concerning adjustment for difference)(million yen)
IncomeAmountTotal for reportable segments

827

Income (loss) of “Others”

143

Intersegment eliminations(3)

Amortization of goodwill(50)

Operating income on quarterly consolidated statement of income

9168For the first quarter ended June 2011 (Apr. 1, 2011 – June 30, 2011)
1. Information about sales and income (loss) by reportable segments(million yen)
Reporting segments
Others*

Total

Electronic
components

Informationequipment

Software39,42912,547717

52,6932,308

55,002

336

159

704

1,199

348

1,548

39,765

12,706

1,421

53,8932,656

56,550Total

Net salesof which to outside customersof which inter-segment
Total

Segment income (loss)
184
54
35
274
13
288
* Others is a business segment which is including sporting goods business etc., but this segment is not included in thereporting segments.

2. Reconciliation of difference between total income (loss) for reportable segments and in quarterly consolidated statementof income (Item concerning adjustment for difference)(million yen)
Income(5)

AmountTotal for reportable segments

274

Income (loss) of “Others”

13

Intersegment eliminations(20)

Amortization of goodwill(19)

Operating income on quarterly consolidated statement of income

247

Notes on significant change in shareholders’ equity:None9