38th interim

MEIKO REPORT(April 1, 2012 to September 30, 2012)
CONTENTS
Explanation of Financial Results

P01

Interview with the President

P03

Corporate Data

P05

MEIKO NEWS

Back Cover

Securities code: 6787

Explanation of Consolidated Financial Results for the Second Quarter

Key Points
Positive Factor(Year-on year)

1. Start of full operations at Vietnam Plant
Negative Factors(Year-on year)

1.	Delay in smartphone orders, further reduction in TV orders
2.	Reduced production due to anti-Japanesedemonstrations in China
3.	C urrency conversion loss due to thestrong yen

Looking at sales composition by PCB
type, sales was strong for PCBs for automobiles with the composition ratio risingfrom 34% to 49%, compared to the six
months ended September 30, 2011.
Sales of PCBs for flat-screen TVs,
however, fell from 16% to 7% mainly due tothe shrinkage of television business forJapanese television manufacturers.
With regards to sales composition by
product, the impact of reduced sales offlat-screen TVs, in particular, has resulted ina decrease in the amount of sales accounted for by double-sided PCBs andfour-layer PCBs, and an increase in sales
composition for six-layer PCBs.

Net sales / operating income / net income (loss)

Net sales

Sales of PCBs for automobiles were strong,

29,400mainly due to a global recovery in automobile
demand, and increased interest in eco-cars.
However, due to the slump in the electronics

were down compared to the previous year.
MEIKO REPORT49%

PC and HDD

9%9%Communication

8%

8%

Office equipment

6%7%

Flat-screen TVs

16%

7%

Flat-screen TVs 7%

DSC and AV

6%

5%

Office equipment 7%

Amusement

4%4%Communication 8%

Others7%

4%

Non-PCB

10%

7%

Non-PCB 7%
Others 4%
Amusement

FY2011 in terim

FY2012 in terim

40%

37%

Module PCB 1%

Six-layer PCB

14%

19%

Heat Dissipation PCB 2%

HDI PCB

16%

17%

Double-sided PCB

13%

12%

FPC and F/R 2%

Heavy Copper PCB

2%

3%

FPC and F/R

1%

2%

Heat Dissipation PCB

2%2%Module PCB

2%

1%

Others10%

7%

Others 7%
Four-layer PCB 37%
29,400
million yen

Heavy Copper PCB 3%
Double-sided PCB 12%
HDI PCB 17%

Six-layer PCB 19%

Net income (loss) /Net margin(2,700)

million yen

InterimInterim

Full-year
Full-year
(%)

8

30

6

400

20

4

200

10

(forecast)

0
March March March March2010 2011 2012 2013

PC and HDD 9%

Four-layer PCB40

029,400
million yen

By PCB type(100 million yen)(forecast)

Automobiles 49%

4%

DSC and AV 5%

million yen

800

lay in smartphone orders, and the impact of

FY2012 in terim

34%

Full-year(100 million yen)visions and computer related equipment, de-

FY2011 in terim
Automobiles

70

million yen

600

By application

Operating income /Operating margin

Interimindustry led by declining performance of tele-

the exchange rate, both net sales and income

01

Sales Composition by PCB(Printed Circuit Board) Type20March March March March2010 2011 2012 2013

InterimInterim(100 million yen)

200Full-year
Full-year(%)

20(forecast)

-20

0

-20
-40

-40
March March March March2010 2011 2012 2013

Assets

Liabilities and net assets(100 million yen)(100 million yen)

Total assets

911

Cash and deposits
39
Notes and accounts
receivable-trade
126
Work in process27
Property, plantand equipment
564

Total liabilities
and net assets

Total assets

911

891

Current
assetsCurrent
assets284

310

Noncurrent
assetsNoncurrent
assets626

581

Cash and deposits
54
Notes and accounts
receivable-trade
125
Work in process
20

Short-termloans payable30
Long-termloans payable
267

Property, plantand equipment
523

Current
liabilities

266

Noncurrent
liabilities

Retained earnings
155
Foreign currencytranslation adjustment
△28

294

Net
assets350

Cash Flows(100 million yen)

Total liabilities
and net assets

Net cash used
in investing activities

891

Current
liabilities

313

Noncurrent
liabilities

273

Net
assets304

38th fiscal term

37th fiscal term

38th fiscal term

(As of September 30, 2012)(As of March 31, 2012)(As of September 30, 2012)

89,100

million yen(100 million yen)

1,000

Full-year

30,400

million yen

400

Interim

Full-year

yen

200

Full-year

100

500

200

0

250

100

-100

March
2011

March September
2012
2012

InterimMarch March March September
2010 2011 2012 2012

Cash and cash equivalents
at end of period

Dividend per share

0

(yen)

20
15

(forecast)

10
5

-200

0
March
2010

52

Main changes: For the six months ended September 30, 2012,
cash and cash equivalents rose by 1,470 million yen comparedto the previous consolidated fiscal year to 5,221 million yen.

(146.34)

300

△1

△27

3

Cash and cash equivalents
at beginning of period

(yen)

750

0

37

Net income (loss) per share(100 million yen)Interim

39

Main changes: Looking at liabilities, with respect to current liabilities,
short-term loans payable rose by 3,289 million yen. With respect tononcurrent liabilities, long-term loans payable fell by 1,996 million yen.
In terms of net assets, retained earnings fell by 2,841 million yen, andforeign currency translation adjustment fell by 1,640 million yen.

Net assets

Effect of exchange ratechange on cash
and cash equivalents

Retained earnings
126
Foreign currencytranslation adjustment△44

37th fiscal term

Total assets

Net cash provided
by operating activities

Short-termloans payable63
Long-termloans payable247(As of March 31, 2012)

Main changes: With respect to current assets, cash and deposits
increased by 1,470 million yen, notes and accounts receivable-tradefell by 114 million yen, and work in process fell by 701 million yen.
With respect to noncurrent assets, property, plant and equipment fell
by 4,035 million yen.

Net cash provided
by financing activities

Interimyen

Full-year

No interim dividend
will be paid for the
fiscal year ending
March 31, 2013.
End-of-the-year
dividend amount has
yet to be decided.

0

March March March March2010 2011 2012 2013

March March March March2010 2011 2012 2013

MEIKO REPORT

02

Interview with the President

Meiko Group Business Principles
Provide the best quality and service to customers
and contribute to betterment of society.

However, this recovery came to a standstill in the latter half of the period
under review.
The automotive industry, one of the Meiko Group’s main business
partners, saw strong sales as a result of global automobile demand
recovery, increased interest in eco-cars, and increases in inventory

Strive to create “the best”.

in order to strengthen supply chains. On the other hand, conditions
were harsh for the electronics industry with a decline in demand for

Elevate our corporate value to improve
the well-being of our employees and society.

Please describe the business environmentand operating results for the six months ended September 30, 2012.

computer related devices, and shrinkage of television business by
Japanese companies due to intensifying international competition.
The anti-Japanese demonstrations occurred in China in September
and accompanying boycotts have also begun to gradually cast theirshadows on the Japanese economy.

I would like to express my sincere gratitude

We strove to expand and strengthen our
production facilities, but the decline in orders had an impact on business results

to all shareholders and investors for your out-

The global economy during the six months ended September 30, 2012 was par-expected to grow in the future. We are also working to strengthen the fa-

standing support of our business.

ticularly stagnant, with a large amount of negative growth in southern European

cilities in the Vietnam Plant, which has begun full-fledged manufacturing

countries due to the worsening monetary and fiscal crisis in Europe, as well as aof PCBs for mobile phones and smartphone from this fiscal year. Howev-

decline in the economy of Germany, which had been remaining strong. Althougher, due to the stagnation of the electronics industry, delays in orders of

production and employment are gradually recovering in the United States, thePCBs for smartphones, as well as the yen remaining strong, both net

future outlook remains uncertain with little cause for optimism, with stagnant

sales and income were down compared to the previous year.

I would like to take the opportunity offeredby our interim MEIKO REPORT for the 38th fiscal term (ending March 31, 2013) to explain the

Under such circumstances, the Group has begun productions of
PCBs for automobiles at the Wuhan Plant in China, alongside the Guangzhou Plant in China and Yamagata Factory, in order to meet the demandbusiness conditions for the six months ended

personal spending and a decline in capital investment. The economic growth of

As a result of the above, with respect to the business results for the

September 30, 2012 and our future business

Asia including China has slowed compared to what it was once, due to falling

six months ended September 30, 2012, net sales was 29,473 million yen

strategy in an interview format.

exports and sluggish growth of capital investment.

(decreased 8.8% over the same period of the previous year), operating

President & CEO

03

MEIKO REPORT

Yuichiro Naya

The Japanese economy, on the other hand, began to show signs of recovery

income was 71 million yen (decreased 84.0% over the same period ofwith strong personal spending backed by recovery demand, and a shift backthe previous year), ordinary loss was 1,826 million yen (ordinary loss forfrom the budget-mindedness that followed the Great East Japan Earthquake.

the same period of the previous year was 1,021 million yen), and quar-terly net loss was 2,747 million yen (net loss for the same period of theyear), ordinary loss of 1,800 million yen (compared to ordinary income of 222

production volume of PCBs for the large-scale mobile phone manu-

previous year was 828 million yen).

million yen for the previous fiscal year), and net loss of 2,400 million yen (com-facturing plants that foreign companies have established in Vietnam.

pared to net income of 1,158 million yen for the previous fiscal year).

In the future, we also plan to perform mass production of automo-

Please describe prospects for the
full-year.

tive PCBs for Asia and Europe.

Please describe the current production system conditions and its future

New products will be launched,but the slowing global economy
will have an influence

Please share a word with the shareholders and investors.

Due mainly to the launch of new models in the smartphone and tablet

We will proactively invest in
Vietnam with an eye towards
expanding markets

computer fields, which will continue growing, new component demandTwo of our factories in Japan stopped manufacturing activities as a result of theWe will strive to expand
internal reserves and toreturn profits

is expected. However, the worsening European economic climate andearthquake and nuclear power plant disaster, but the Fukushima Factory re-

We will carefully consider the balance of profits returned to ourthe slowdown of emerging economies such as China will continue tosumed operation in the summer of 2011. Preparations are underway to reopen

shareholders and investors and the expansion of internal re-

cloud future economic prospects. In addition, the impact of poor sales

the Miyagi Factory, which suffered the loss of all production facilities. We re-serves in order to maintain and strengthen our competitiveof electronics including televisions and the decline in automobile sales

newed the concept of the factory as a new development and mass production

market position. Our basic policy is to distribute dividends

as a result of anti-Japanese demonstrations and boycotts in China aresite consolidating various cutting edge technologies. This is planned for April

linked to our business results.

expected to negatively impact our business results.

2013.

Taking into account results of the six months ended September

As a result, with respect to the full-year, we forecast net sales ofWith respect to overseas production bases, we will begin manufacturing30, 2012 and the future outlook, regrettably, we have decided not to

63,000 million yen (increased 0.0% over the previous fiscal year), operat-

PCBs for automobiles in our 1st Factory of Wuhan Plant in China, in addition to

distribute interim dividends. We thank for your understanding. We

ing income of 700 million yen (decreased 13.8% over the previous fiscal

the Guangzhou Plant in China, to service the needs of the automobile market,

appreciate the support of all stakeholders including shareholders

which is expected to grow globally, and we will proactively increase the number

and investors amidst the increasingly severe business climate andof overseas automobile-manufacturer clients. PCB orders have been delayed

are dedicated to doing our utmost to meet your expectations and tofrom the schedule at the 2nd Factory of Wuhan Plant in China, which handles

increase business results and corporate value. We look forward tomass production of cutting-edge PCBs for smartphones, etc., but production

your continuing support in the future.

Full-Year Consolidated Forecast
Net sales
Operating income
Ordinary loss
Net loss

63,000 million yen
700 million yen
1,800 million yen
2,400 million yen

has been resumed, and we plan to expand our dealings with global mobile
phone manufacturers. We will also invest in the Vietnam Plant, which just began
full-fledged operation, in order to turn it into a major production base, equivalent
to the two plants in China. We are currently reinforcing facilities to increase the
MEIKO REPORT

04

Corporate Data (As of September 30, 2012)
Corporate Profile

Base List

Name

Meiko Electronics Co., Ltd.

PlantsEstablished

November 25, 1975

Kanagawa Factory

5-14-15, Ogami, Ayase, Kanagawa 252-1104, Japan

Headquarters

5-14-15, Ogami, Ayase,
Kanagawa 252-1104, Japan

Fukushima Factory

1-2, Iwasawa, Kamikitaba, Hirono-cho, Futaba-gun, Fukushima 979-0401, Japan

Yamagata Factory

250, Maki, Yachi, Kahoku-cho, Nishimurayama-gun, Yamagata 999-3511, Japan

10,545.63 million yen

MEIKO Research and Development Center

3-35-6, Sugikubo-minami, Ebina, Kanagawa 243-0414, Japan

Capital

9,977 (consolidated)(Japan: 802)
(Overseas: 9,175)
Outline of Business Design, manufacturing, and sales of PCBs
Development, manufacturing, and sales ofelectronic equipment
No. of Employees

Executives

Yamato Technology Center

1-2-1, Shibuya, Yamato, Kanagawa 242-0023, Japan

Guangzhou Plant in China

No.2 Guangsheng Road, Western Industrial District, Nansha Economic and Technological Development Zone,
Guangzhou, Guangdong Province, P. R. China

Wuhan Plant in China

No.9 Shenlong Road, Wuhan Economic and Technological Development Zone, Hubei Province, P. R. China

Vietnam Plant

Lot LD4, Thach That -Quoc Oai Industrial Zone., Hanoi, Vietnam

Sales Bases

President & CEO

Yuichiro Naya

Director and Senior Managing Executive Officer

Seiichi Naya

Director and Senior Managing Executive Officer

Takahide Hirayama

Director and Senior Managing Executive Officer

Masakuni Shinozaki

Director and Managing Executive Officer

Haruyuki Naya

Director and Managing Executive Officer

Tetsuro Suzuki

Director

Kunihiko Sato

Audit & Supervisory Board Member

Hitoshi Iyomoto

Audit & Supervisory Board Member

Hiroshi Tsukii

Audit & Supervisory Board Member

Yasunobu Koshimura

1st PCB Sales Dept.

5-14-15, Ogami, Ayase, Kanagawa 252-1104, Japan

2nd PCB Sales Dept.

5-14-15, Ogami, Ayase, Kanagawa 252-1104, Japan

3rd PCB Sales Dept.

5-14-15, Ogami, Ayase, Kanagawa 252-1104, JapanEMS Dept.

5-14-15, Ogami, Ayase, Kanagawa 252-1104, Japan

International Sales Dept.

5-14-15, Ogami, Ayase, Kanagawa 252-1104, Japan

Nagoya Sales Office

Sanko Marunouchi Bldg. 6F, 3-18-1, Marunouchi, Naka-ku, Nagoya, Aichi 460-0002, Japan

Osaka Sales Office

Shin-Osaka Doi Bldg. 10F, 7-5-25, Nishinakajima, Yodogawa-ku, Osaka, Osaka 532-0011, Japan

Omiya Sales Office

OZ Bldg. 2F, 1-124-2, Naka-cho, Omiya-ku, Saitama, Saitama 330-0845, Japan

Ebina Office1012, Kamigo, Ebina, Kanagawa 243-0434, Japan

Sales Headquarters (Guangzhou, China)

No.2 Guangsheng Road, Western Industrial District, Nansha Economic and Technological Development Zone,
Guangzhou, Guangdong Province, P. R. China
No.2 Guangsheng Road, Western Industrial District, Nansha Economic and Technological Development Zone,
Guangzhou, Guangdong Province, P. R. China
No.2 Guangsheng Road, Western Industrial District, Nansha Economic and Technological Development Zone,
Guangzhou, Guangdong Province, P. R. China

International Sales Dept. (Guangzhou, China)

Affiliated Companies
Yamagata Meiko Electronics Co., Ltd. Manufacturing of PCBs
M.D. Systems Co., Ltd.
Design of PCBs
Meiko Tech Co., Ltd.
Sales of PCBs
Manufacturing and sales of video
device and industrial device
Meiko Electronics (Guangzhou Nansha) Co., Ltd. Manufacturing of PCBs
Meiko Electronics (Wuhan) Co., Ltd. Manufacturing of PCBs
Meiko Elec. Hong Kong. Co., Ltd. Sales of PCBs
Meiko Electronics Vietnam Co., Ltd. Manufacturing of PCBs and EMSMDS Circuit Technology, Inc.
Design of PCBs
Meiko Electronics America, Inc. Sales of PCBs
Meiko Electronics Europe GmbH Sales of PCBs05

MEIKO REPORT

Asia Sales Dept. (Guangzhou, China)
Shanghai Sales Office

Hua Ning international Plaza , South Building 22F, 2201 Xuan Hua Road #300, ChangNing Area, Shanghai, P.R. China

Tianjin Sales Office

Room 3502, Golden Crown Bldg., No.20 Nanjing Road, Hexi District, Tianjin, P.R. China

Taiwan Branch

8F-3, No.15 Jin-Guo Road, Tayuan, Taiwan

Meiko Elec. Hong Kong. Co., Ltd.

Unit 2107A, Tower II, Metroplaza, 223 Hing Fong Road, Kwai Chung N. T. Hong Kong

Meiko Electronics America, Inc.

5050 El Camino Real Suite 108, Los Altos, CA 94022

Meiko Electronics Europe GmbHAm Soldnermoos 17 85399 Hallbergmoos, Germany

Meiko Tech Osaka Head Office

Shin-Osaka Doi Bldg. 2F, 7-5-25, Nishinakajima, Yodogawa-ku, Osaka, Osaka 532-0011, Japan

Meiko Tech Yokohama Branch Office

Shin-Yokohama AK Bldg. 7F, 3-23-3, Shin-yokohama, Kohoku-ku, Yokohama, Kanagawa
222-0033, Japan

Stock Information

Shareholders’ Information
63,200,000 shares

Number of Shares Authorized
Number of Shares Issued

18,774,076 shares(excluding 629,244 shares of treasury stock)

Number of shareholders

6,807

Principal Shareholdersof total
Number of shares held Percentage(thousands of shares) number of sharesissued (%)

Name of Shareholder

4,696

25.0

PLEASANT VALLEY

631

3.4

Meiko Kosan Co., Ltd.

608

3.2

Yuho, Ltd.

521

2.8

Haruyuki Naya

488

2.6

Japan Trustee Services Bank, Ltd.
(trust account)

477

2.5

Seiichi Naya

439

2.3

HILLCREST, L. P.

379

2.0

Sumitomo Mitsui Banking Corporation

377

2.0

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

375

2.0

Yuichiro Naya*	The Company owns 629,244 shares of treasury stock, which is excluded
from the above list of principal shareholders.
The percentages of total number of shares issued have been calculated
after excluding treasury stock.

Fiscal Year

April 1 to March 31 of the following year

Annual Shareholders’Meeting

June

Record dateEnd-of-the-year dividends: March 31
Interim dividends: September 30

Method of public notice Electronic public notice.
In the event of accidents or other unforeseen
events that prevent publication of the electronic
public notice, it will be published in The Nikkei.
Official page:
http://www.meiko-elec.com/ir/pa.shtml
JASDAQ (Standard), Osaka Securities Exchange

Stock exchange

58.5%

Financial institutions

15.8%

Foreign institutions and others

12.3%

Other institutions

8.1%

Treasury stock

3.2%

Financial instruments
business operators

2.1%

Top page

Administrator of shareholders 1-4-1, Marunouchi, Chiyoda-ku, Tokyo, Japan
register and special account Sumitomo Mitsui Trust Bank, Limited
management institution
Handling office ofadministrator ofshareholders register

1-4-1, Marunouchi, Chiyoda-ku, Tokyo, Japan
Stock Transfer Agency Business Planning Dept.
Sumitomo Mitsui Trust Bank, Limited(Mailing Address)

1-10, Nikko-cho, Fuchu-shi, Tokyo, Japan 183-8701
Stock Transfer Agency Business Planning Dept.
Sumitomo Mitsui Trust Bank, Limited(Inquiries by telephone)(URL)

CSR Report

0120-176-417

http://www.smtb.jp /personal/agency/index.html

Distribution of Ownership among Shareholders
Individuals and others

Introduction of Meiko Website[Notices and inquiries concerning shareholdings]
Shareholders with securities company accounts are advised tocontact the securities company that manages their accounts
with regard to notices such as a change of address or inquiries
concerning their shareholdings.
Shareholders who do not hold accounts with a securities
company are advised to contact the above telephone number
for inquiries.

Introduction of our products(A Lot of MEIKO around You)For our latest IR news releases and other information,
including details on our products and CSR activities,
please visit the Company website.
You can visit the Company website to find otheruseful information as well.
Meiko

Searchhttp://www.meiko-elec.com/

MEIKO REPORT

06

Bringing You Today’s MeikoM e ik o ’s CS R

Meiko recognizes that CSR is central to every aspect of our business activity and carries
out its duties at the local level with the aim of establishing trust in the company.

Our Green Society Initiatives

NEWS
Cutting copper and electric power usage to 1/4!

Successful Development and
TOPICS Mass Production of High Precision Flexible PCBs
Meiko succeeded in development and mass production of highprecision flexible PCBs which require only 1/4 of the amount ofcopper used in conventional PCBs and 1/4 of the amount of electric power used in their production. This greatly reduces manufacturing costs and energy usage, as well as makes significant
contributions to resource conservation and the environment.
This product was made possible by using molecular junction
technology developed by Sulfur Chemical Institute Inc. and by developing copper foil-free, direct metalizing technology, which canbe used to directly apply copper wiring to resin surfaces.
This newly developed technology can be used not only in flexible PCBs, but also in a variety of products, such as rigid PCBs
and HDI PCBs; therefore, we are engaging in further research anddevelopment in order to increase its commercial viability.

Junction Face of Conventional Products

Junction Face Produced with This
Technology

Initiatives Taken by Our Vietnam Plant (Meiko Electronics Vietnam Co., Ltd.)● Processing of copper chloride etching waste liquid

Recycling copper chloride etching waste liquid
In the circuit forming process for PCBs, circuits are formed by using copper chlo-

Copper chloride etching waste liquidride solution to dissolve copper foil (etching). At Vietnam Plant, we have acted as apioneer in our industry by installing a dedicated plant to recycle the copper chloride

Reaction tanketching waste liquid that is generated in the circuit forming process into a valuable
Slurry tankEtching waste liquid processing plant

Filtering equipment

Electrolysis equipment➊Copper oxide➋Sodium hypochlorite

resource that can be collected. At this plant copper chloride etching waste liquid isrecycled into two valuable resources (❶ copper oxide and ❷ sodium hypochlorite)
after filtration through filtering equipment and electrolysis equipment. The facility
does not generate any hazardous substance as a by-product, with the only re-

Meiko
A Lot ofM E I K O
a r o u n d Yo u

VOL.8

sidual product being common salt, making it a very safety-conscious system.

Te c h n o l o g i e s A r e U s e d i n a W i d e R a n g e o f A p p l i c a t i o n sHigh Electric Current PCBs Contribute to the Popularization of Environmentally Friendly Products such as Eco-cars

High Electric Current PCBs are PCBs with particularly thick patterns for use in products such as hybrid carsand electric vehicles, which use power currents that far exceed those of conventional products.
The feature of the High Electric Current PCBs which have been researched and developed by Meiko isthat they do not use the conventional etching used in circuit formation, but instead a new technique, developed in-house, that greatly reduces the amount of sewage water produced and makes the manufacturing
process more ecologically friendly. In recent years, demand has risen among customers not only for highelectric current support, but also for heat dissipation performance and size reductions, and we conduct further research and development activities in order to meet these needs.
Meiko will continue to develop and advance the High Electric Current PCBs that work behind the scenes
to support environmentally friendly products such as hybrid cars and electric vehicles in order to achieve a low
carbon society.

High Electric Current PCB (Cross-Section)

Notes on Forecasts
Headquarters

URL:

5-14-15, Ogami, Ayase,
Kanagawa 252-1104, Japan
Tel: 0467(76)6001(switchboard)
http: //w w w. me iko-e le c.c om/

The information in this report contains future forecasts, such as plans and business results of theCompany. These forecasts are based on information available at the time when these forecasts
were made and certain preconditions that the Company believes to be reasonable. Please notethat actual business results may differ from the forecasts herein due to a variety of factors.

This pamphlet was made using environmentally friendly vegetableoil-based inks and FSC® certified paper.