October 30, 2009

Summary of Consolidated Financial Results
For the First Half Ended September 2009
Name of Company:
Stock Code:
Stock Exchange Listing:
URL:
Representative
Title:
Name:
Contact Person
Title:Name:
Phone:
Date of quarterly securities report:
Date of commencement of dividend payment:

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
November 9, 2009
December 4, 2009
(Yen in millions, rounded down)

1. Financial results for the first half ended September 2009 (April 1, 2009 ‐ September 30, 2009)(1) Result of operations (Consolidated, year-to-date)(Percentage figures represent year on year changes)

First half ended September 2009First half ended September 2008

Net sales
MillionYoY
yen Change %113,926(19.3)
141,192-

Operating income
MillionYoY
yen Change %367(88.6)
3,224-

Net income
per share

Net income
per share
fully diluted

Yen(33.77)
33.95

First half ended September 2009First half ended September 2008

Ordinary income
MillionYoY
yen Change %201(94.1)
3,444-

Net income
MillionYoY
yen Change %
(931)
952
-

Yen
-

(2) Financial Position (Consolidated)
Total assets

Net assets

Million yen
First half ended September 2009
106,764
Fiscal year ended March 2009
117,251
Note: Shareholders’ equity
As of September 30, 2009 : 46,579 million yen
As of March 31, 2009 :47,770 million yen

Equity ratio

Million yen
48,28849,560Net assets per share

%
43.6
40.7

Yen
1,687.87
1,730.98

2. Dividends
End of 1Q
Yen-

End of 2Q
Yen
25.00
15.00

Dividend per share
End of 3Q
Yen-

Fiscal year ended March 2009
Fiscal year ending March 2010
Fiscal year ending March 2010
(est.)
Notes: Change in the estimation of dividend for the fiscal year in this period: None1-

End of FY
Yen
15.00

Full year
Yen
40.00

15.00

30.00

3. Forecast for the fiscal year ending March 2010 (Consolidated, April 1, 2009 to March 31, 2010)
Net sales

Operating income

Ordinary income

Net income

Net income
per share
Yen
10.87

Million yen% Million yen% Million yen% Million yen%
Full year
250,000(8.6)
1,600(28.9)
2,000
(9.4)
300
Note: Change in the forecast made in this period: None
(The percentage figures accompanying net sales, operating income, ordinary income, and net income represent year-on-year changes.)

4. Others(1) Changes in significant subsidiaries (Changes in specific subsidiaries accompanied by changes in the scope of
consolidation): None
(2) Use of simple method in accounting procedures and application of accounting procedures specific to the quarterly
consolidated financial statements: None
(3) Changes in accounting principles and procedures, presentation methods and other items in the preparation of thequarterly consolidated financial statements (Presented in the section on Changes to the Basis of Presenting theQuarterly Consolidated Financial Statements)(a) Changes due to revision of accounting standards: None(b) Changes other than in (a): None
(4) Number of shares outstanding (common stock)(a) Shares outstanding (including treasury stock)
As of September 30, 2009: 28,702,118
As of March 31, 2009: 28,702,118(b) Treasury stock
As of March 31, 2009: 1,105,038
As of September 30, 2009: 1,105,828(c) Average number of shares (consolidated half cumulative)
Period ended September 30, 2008: 28,058,396
Period ended September 30, 2009: 27,596,910*Cautionary statement regarding forecasts of operating results and special notes
Forward-looking statements in these materials are based on information available to management at the time thisreport was prepared and assumptions that management believes are reasonable. Actual results may differ significantly
from these statements for a number of reasons.

2Results of Operations
1. Analysis of results of operations
In the first half of the fiscal year, the U.S. economy and financial system began to stabilize due to economic stimulus
measures under the new Obama administration. However, there is still no full-scale economic recovery because ofhigh unemployment. In Europe as well, there are signs of a recovery because of the benefits of monetary easing andstimulus measures. But market conditions remain challenging due to the weakness of the recovery. In East Asia,
government economic stimulus measures in China and India are supporting a recovery that is driving expansion of the
global economy.
The Japanese economy weakened further despite some positive developments. One is an improvement in exports toEast Asia, mainly China. Another is higher demand for some environmental products because of a tax reduction andother measures to encourage people to buy environmentally responsible automobiles as part of the economic stimulus
program. However, capital expenditures are declining because of falling corporate earnings and worsening
employment and personal income statistics are holding down consumer spending.
In the electronics industry, the core area of our operations, manufacturers in all categories of electronic products havecompleted inventory reductions. Although demand is recovering in some sectors as a result, the operating
environment in the industry remains difficult.
The companies of the KAGA ELECTRONICS Group are working even more closely together and improving
operating efficiency to overcome these challenges. Group companies are also working on handling more new
products in the environmental sector and expanding sales routes. First half consolidated net sales decreased 19.3% to113,926 million yen. Operating income fell 88.6% to 367 million yen, ordinary income was down 94.1% to 201
million yen and there was a net loss of 931 million yen compared with net income of 952 million yen one year earlier.
Performance by geographic segment was as follows.
1) Japan
In Japan, there was an upturn in demand for some environmental products because of government measures, such as
the eco-point system and eco-car tax reduction, to encourage purchases of these products. But the operating
environment in Japan is still challenging because of lower capital expenditures as corporate earnings weaken andlackluster consumer spending caused by high unemployment and low incomes.
Performance in Japan benefited from the addition of new products and the contribution to sales of companies thatwere newly consolidated during the previous fiscal year. However, sales were brought down by declines in EMS*
orders at the overseas office equipment and amusement equipment factories of Japanese companies and by lower
sales of semiconductors. The result was a 17.8% decrease in sales to 99,913 million yen and a 94.7% decrease inoperating income to 128 million yen.
*Electronics Manufacturing Service is a term used for companies that design, test, manufacture, distribute, andprovide return/repair services.
2) North America
Although the U.S. financial system is stabilizing due to the economic measures of the Obama administration, the U.S.
economy is still weak because unemployment remains high. This difficult environment caused declines in orders forsemiconductors used in digital home electronics and parts used in amusement equipment. The result was a 25.8%
decrease in sales to 231 million yen and an operating loss of 56 million yen compared with a 52 million yen loss one
year earlier.
3) Europe
Signs of an economic upturn are emerging in Europe because of the benefits of monetary easing and othergovernment actions to stimulate the economy. The overall economic picture remains difficult, though, as highunemployment holds down consumer spending. The difficult market conditions caused a decline in orders in the EMS
business for circuit boards and other components as manufacturers of electronic products cut production. As a result,sales decreased 54.4% to 1,212 million yen and there was an operating loss of 91 million yen compared with
operating income of 20 million yen one year earlier.

34) East Asia
In China, consumer spending and exports are increasing because of the government’s economic stimulus measures. This
growth is supporting expansion of the global economy. Despite these signs of an economic rebound, there was a decline
in orders in the EMS business from Japanese manufacturers of office equipment, climate control equipment and otherproducts. The result was a 25.9% decrease in sales to 22,791 million yen and a 72.7% decrease in operating income to
223 million yen.
Net sales by product category
Product category

Information equipment
EMS
Semiconductors
General electronic components
OthersTotal

For the first half ended Sept. 2008
(April 1, 2008 – September 30, 2008)

For the first half ended Sept. 2009
(April 1, 2009 – September 30, 2009

Amount (million yen)

Proportion

Amount (million yen)

Proportion

31,32344,02930,00919,611
16,218141,192

22.2%
31.1%
21.3%
13.9%
11.5%
100.0%

29,054
27,41826,02915,682
15,741
113,926

25.5%
24.1%
22.8%
13.8%
13.8%
100.0%

Information equipment
One goal of the first half was increasing sales of PCs and peripherals. Group companies also worked on increasing
sales of new products and services such as network construction and security systems to companies, schools and the
public sector. However, performance in this sector was impacted by the decline in corporate capital expenditures dueto the economic downturn. A decrease in the volume of products handled at KAGA COMPONENTS CO., LTD.
resulting from the reorganization of its projector business also brought down segment sales. The result was a 7.2%
decrease in sales to 29,054 million yen.
EMS
There was a sharp decline in orders along with cuts in production volume at EMS client companies. In Japan, orders
were lower for LCD units used by amusement equipment manufacturers. Overseas, there was a decline in orders forcircuit boards used by Japanese manufacturers of office equipment and climate control equipment. As a result, sales
were down 37.7% to 27,418 million yen.
Semiconductors
There was a contribution to sales from ADM Inc., a semiconductor trading company that became a consolidated
subsidiary in August 2008. Despite this contribution, sales decreased 13.3% to 26,029 million yen because of declines
in the handling volume of image processing ICs for amusement equipment and signal conversion ICs for digitalaudio-visual products.
General electronic components
Activities were focused on increasing sales of electronic components used in PCs and sales of products to major
manufacturers of finished products. But there was a decline in sales of electronic components to manufacturers ofoffice equipment, climate control equipment and amusement equipment. The result was a 20.0% decrease in sales to
15,682 million yen.
OthersSales decreased 2.9% to 15,741 million yen as the handling volume of photographic products declined because ofchanges in market conditions.

42. Analysis of financial condition
Total assets decreased 10,486 million yen from the end of the previous fiscal year to 106,764 million yen. This was
attributable mainly to a decrease in notes and accounts receivable-trade.
Net assets decreased 1,272 million yen to 48,288 million yen, but the equity ratio was up 2.9 points to 43.6%.
(Cash flows)
There was a net increase of 122 million yen in cash and cash equivalents from the end of the previous fiscal year to
11,491 million yen.
Net cash provided by operating activities was 3,936 million yen. A decrease in notes and accounts receivable-trade
was a major source of cash.
Net cash used in investing activities was 2,093 million yen. Cash was used mainly for payments for the purchase ofproperty, plant and equipment.
Net cash used in financing activities was 1,655 million yen. The main reason was a net decrease in short-term bankloans.
3. Forecast for fiscal year ending March 2010
There are no changes to the forecast for consolidated performance that was announced on September 15, 2009.
4. Others(1) Changes in significant subsidiaries (Changes in specific subsidiaries accompanied by changes in the scope of
consolidation): None
(2) Use of simple method in accounting procedures and application of accounting procedures specific to the quarterly
consolidated financial statements: None
(3) Changes in accounting principles and procedures, presentation methods and other items in the preparation of thequarterly consolidated financial statements: None5

5. Quarterly Consolidated Financial Statements(1) Quarterly Balance sheet(million yen)First half ended September 2009 Fiscal year ended March 2009
(As of September 30, 2009)(As of March 31, 2009)ASSETS
Current assets
Cash and cash equivalents
Notes and accounts receivable-tradeMarketable securities
Merchandize and furnished goods
Goods in progress
Raw materials and other supplies
Deferred tax assets
OthersAllowance for doubtful receivables

11,49153,75478
12,789
816
2,896
722
6,077
(178)

11,37861,05358
13,969
577
3,749
994
8,017
(159)

88,44999,639Fixed assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Tools and office furniture, net
LandConstruction in progress

2,653
1,454
1,242
1,297
12

2,321
1,486
1,029
1,324
6

Total property, plant and equipment

6,660

6,168

627
792
338

884
878
152

1,757

1,914

5,756
213
5,225
(1,298)

4,854
346
5,675
(1,347)

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

6

9,896

9,528

18,314

17,612

106,764

117,251

(million yen)First half ended September 2009 Fiscal year ended March 2009
(As of September 30, 2009)(As of March 31, 2009)
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
Others37,679
8,508
696
75
4,563

44,772
9,291
949
9
5,499

51,52360,521

3,050
1,439

3,620
1,342

1,175

1,122

1,288

1,084

6,953

7,168

Total liabilities

58,476

67,690

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

12,133
13,912
23,813(1,333)

12,133
13,91225,158(1,331)

48,52549,87337(1)(1,981)(364)(0)(1,737)

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(1,946)(2,103)

Minority interests

1,709

1,790

Total net assets

48,28849,560106,764

117,251

Total valuation and translation adjustments

Total liabilities and net assets

7

(2) Quarterly statements of income
For the first half ended September 2009
(million yen)First half ended September 2008
First half ended September 2009
(April 1, 2008 – September 30, 2008) (April 1, 2009 – September 30, 2009)
Net sales
Cost of sales

141,192
124,297

113,926
100,265

Gross profit

16,895

13,661

Selling, general and administrative expenses

13,67013,293Operating income

3,224

367

81
58
13
250

33
41
288

404

363

68
117

67
324
136

Non-operating income
Interest income
Dividend income
Gain in foreign exchange
OthersTotal non-operating income
Non-operating expenses
Interest expense
Loss in foreign exchange
OthersTotal non-operating expenses
Ordinary income
Extraordinary income
Gain on sale of investment securities
Compensation income
Gain on forgiveness of debt
Gain on 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
OthersTotal extraordinary losses

185

529

3,444

201

34
16
15

51
40
16

66

107

79
864
37
106

4
182
106
8

1,087

301

Income before income taxes and minority interests

2,423

8

Income, inhabitants and enterprise taxes
Income tax adjustment

1,680
(191)

620
370

Total taxes
Minority interests in income (loss) of consolidated
subsidiaries
Net income (loss)

1,489

990

(18)
952

(50)
(931)

8

For the second quarter ended September 2009
(million yen)
Second quarter ended September 2008 Second quarter ended September 2009
(July 1, 2008 – September 30, 2008)(July 1, 2009 – September 30, 2009)
Net sales
Cost of sales

76,752
67,95959,86452,650Gross profit

8,793

7,213

Selling, general and administrative expenses

6,936

6,593

Operating income

1,857

620

44
10
141

18
9
191

196

219

31
36
29

34
249
73

Non-operating income
Interest income
Dividend income
OthersTotal non-operating income
Non-operating expenses
Interest expense
Loss in foreign exchange
OthersTotal non-operating expenses
Ordinary income
Extraordinary income
Gain on sale of fixed assets
Gain on forgiveness of debt
Gain on 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
Others

96

357

1,957

483

34
16
6

15
(21)

57

(6)

10
742
37
32

3
94
106
6

823

211

Income before income taxes and minority interests

1,191

265

Income, inhabitants and enterprise taxes
Income tax adjustment

966
(268)

356
208

Total taxes
Minority interests in income (loss) of consolidated
subsidiaries
Net income (loss)

697

565

16
476

(8)
(291)

Total extraordinary losses9(3) Quarterly statements of cash flows(million yen)First half ended September 2008

First half ended September 2009

(April 1, 2008 – September 30, 2008) (April 1, 2009 – September 30, 2009)

Operating activities
Income before income taxes and minority interest
Depreciation and amortization
Amortization of goodwill
Increase (decrease) in allowance for doubtful receivables
Interest and dividend income
Interest expenses
Loss (gain) on revaluation of investment securities
Decrease (increase) in notes and accounts receivabletrade
Decrease (increase) in inventories
Decrease (increase) in accounts receivable-other
Increase (decrease) in notes and accounts payable-trade
Others

2,423
745
128
83
(140)
68
864

8
965
119
0
(74)
67
182

3,318

7,317

(1,621)(1,286)
533
1,099

1,679
1,566
(6,933)169

Sub-total

6,216

5,068

Decrease (increase) in advance payments
Interest and dividend received
Interests paid
Income taxes-paid
Others

(178)
132
(61)
(2,271)
(31)

(197)
76
(69)
(919)
(22)

Net cash provided by (used in) operating activities

3,806

3,936

(1,509)
127
(379)
-

(1,735)
56
(252)
(441)
205

(441)

-

(667)
358
(56)
-

164
(388)
239
(483)
692
(212)
62

Net cash provided by (used in) investing activities(2,568)(2,093)Financing activities
Increase (decrease) in short-term bank loans, net
Payment of dividends
Others

(377)
(700)
(33)

(1,205)(414)(35)(1,111)(1,655)

(147)

(64)

Investing activities
Payment for purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Payment for purchase of intangible assets
Payment for purchase of investment securities
Proceeds from sale of investment securities
Payment for acquisition of securities of subsidiaries,
which changed the scope of consolidation
Proceeds from acquisition of securities of subsidiaries,
which changed the scope of consolidation
Short term loans provided
Short-term loans collected
Security deposits provided
Security deposits collected
OthersOther payments
Other proceeds

Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Increase (decrease) in cash and cash equivalents

(20)

122

Cash and cash equivalents, beginning of period

14,011

11,368Cash and cash equivalents, end of period

13,99011,49110

(4) Notes to ongoing concern assumptions
None(5) Segment Information
Operating segment information
For the second quarter ended September 2008 (July 1, 2008 – September 30, 2008) and the second quarter ended
September 2009 (July 1, 2009 – September 30, 2009) ; the first half ended September 2008 (April 1, 2008 – September
30, 2008) and the first half ended September 2009 (April 1, 2009 – September 30, 2009)
Operating segment information is not presented since the KAGA ELECTRONICS Group has been engaged in a single
sector generally described as the manufacturing and sale of electronics merchandise and products.
Geographical segment information
For the second quarter ended September 2008 (July 1, 2008 – September 30, 2008)
Japan
Net sales(1) (of which to outside customers)(2) (of which inter-segment)
Total
Operating income (loss)

62,322
4,454
66,777
1,429

NorthAmerica

Europe

77
65
143
(23)

1,175
23
1,199
(5)

(million yen)

East
Asia

Total

13,177
2,996
16,173479

76,752
7,540
84,293
1,880

For the second quarter ended September 2009 (July 1, 2009 – September 30, 2009)
Japan
Net sales(1) (of which to outside customers)(2) (of which inter-segment)
Total
Operating income (loss)

48,5293,878
52,408431

North
America

Europe

32
41
73
(35)

578
8
586
(51)

Net sales(1) (of which to outside customers)(2) (of which inter-segment)
Total
Operating income (loss)

113,585
7,952
121,537
2,407

North
America

Europe

179
131
311
(52)

2,608
50
2,659
20

East
Asia

Total

10,723
2,016
12,739186

59,864
5,944
65,808531

Net sales(1) (of which to outside customers)(2) (of which inter-segment)
Total
Operating income (loss)

93,542
6,370
99,913
128

North
America

Europe

129
101
231
(56)

1,202
9
1,212
(91)

11

(7,540)(7,540)(22)76,75276,752
1,857

Eliminations
or
Corporate

Consolidated(5,944)(5,944)89

59,864
59,864620(million yen)

East
Asia

Total

24,8195,948
30,767818

141,192
14,083
155,276
3,194

For the first half ended September 2009 (April 1, 2009 – September 30, 2009)
Japan

Consolidated(million yen)

For the first half ended September 2008 (April 1, 2008 – September 30, 2008)
Japan

Eliminations
or
Corporate

Eliminations
or
Corporate

Consolidated(14,083)(14,083)30

141,192
141,192
3,224(million yen)

East
Asia

Total

19,051
3,739
22,791
223

113,926
10,221
124,148
203

Eliminations
or
Corporate

Consolidated(10,221)(10,221)164

113,926
113,926367

Notes:1. Countries and regions are classified according to geographical proximity.
2. Countries and regions outside Japan are broken down into the following geographical areas:(1) North America: United States(2) Europe: United Kingdom, Czech Republic, and Russia(3) East Asia: Hong Kong, Singapore, Taiwan, Korea, China, Malaysia, and Thailand
3. Change in accounting method
The first half of the previous fiscal year
(Accounting standard for inventories)
Effective from the current fiscal year, the Company has adopted Accounting Standard for Measurement of Inventories(ASBJ Statement No. 9, July 5, 2006). As a result, first half operating income decreased by 68 million yen in Japan
compared with the figure that would have been reported if the previous accounting standard had been appliedconsistently.
Overseas sales
For the second quarter ended September 2008 (July 1, 2008 – September 30, 2008)(million yen)
North America
I Overseas sales
II Consolidated sales
III Share of overseas sales in total sales (%)

609
0.8

EuropeEast Asia

1,383
1.8

Total

20,05826.1

22,05176,75228.7

For the second quarter ended September 2009 (July 1, 2009 – September 30, 2009)(million yen)
North America
I Overseas sales
II Consolidated sales
III Share of overseas sales in total sales (%)

EuropeEast Asia

610
1.0

663
1.1

Total

13,95523.3

15,22959,86425.4

For the first half ended September 2008 (April 1, 2008 – September 30, 2008)(million yen)
North America
I Overseas sales
II Consolidated sales
III Share of overseas sales in total sales (%)

Europe1,011
0.7

East Asia
3,143
2.2

Total

36,10025.6

40,255
141,192
28.5

For the first half ended September 2009 (April 1, 2009 – September 30, 2009)(million yen)
North America
I Overseas sales
II Consolidated sales
III Share of overseas sales in total sales (%)

1,231
1.1

EuropeEast Asia
1,370
1.2

Total

26,17423.0

Notes:
1. Countries and regions are classified according to geographical proximity.
2. Countries and regions outside Japan are broken down into the following geographical areas:(1) North America: United States(2) Europe: United Kingdom, Czech Republic, and Russia(3) East Asia: Hong Kong, Singapore, Taiwan, Korea, China, Malaysia, and Thailand
3. Overseas sales refer to sales posted by the Company and its consolidated subsidiaries in countries and regions
outside Japan.
(6) Notes on significant change in shareholders’ equity
None

12

28,775
113,926
25.3