Summary of Consolidated Financial Results for the Third Quarter Ended December 2007

Transcription

1 February 12, 2008 Summary of Consolidated Financial Results for the Third Quarter Ended December 2007 Name of Company: KAGA ELECTRONICS CO., LTD. Stock Code: 8154 Stock Exchange Listing: Tokyo Stock Exchange, First Section URL: Representative Tomohisa Tsukamoto, President & COO Contact Waichiro Shimoyama, Senior Managing Director, Finance & Administration Headquarters Tel: +81-(0) Financial results for the third quarter ended December 2007 (April 1, 2007 December 31, (1) Result of operations (Consolidated) (Yen in millions, rounded down) Net sales Operating income Ordinary income Million yen YoY% Million yen YoY% Million yen YoY% Third Quarter ended December , , , Third Quarter ended December , , , Fiscal year ended March ,014 6,915 7,404 Net income Net income per share (basic) Net income per share (diluted) Million yen YoY% Yen Yen Third Quarter ended December , Third Quarter ended December , Fiscal year ended March , (2) Financial Position (Consolidated) (Yen in millions, rounded down) Total assets Net assets Equity ratio Net assets per share Million yen Million yen % Yen As of December 31, ,801 53, , As of December 31, ,055 51, , As of March 31, ,812 53, ,846.48

2 (3) Cash flow position (Consolidated) Net cash provided by (used in) operating activities Net cash provided by (used in) investing activities (Yen in millions, rounded down) Net cash provided by (used in) financing activities Cash and cash equivalents at end of period Million yen Million yen Millione yen Million yen Third Quarter ended December ,605 1,380 14,065 Third Quarter ended December ,878-1, ,512 Fiscal year ended March ,120-2,141-2,586 14, Forecast for the fiscal year ending March 2008 (Consolidated, April 1, 2007 to March 31, 2008) Net sales Operating income Ordinary income Net income Net income per share Million yen Million yen Million yen Million yen Yen Full year 290,000 (7.8) 7,500 (8.5) 7,300 (-1.4) 3,700 (-14.8) The figures in parentheses accompanying net sales, operating income, ordinary income, and net income represent year-on-year changes. 3. Others (1) Changes in significant subsidiaries (Changes in specific subsidiaries accompanied by changes in the scope of consolidation): None (2) Use of the simple method in accouting procedures: Yes (3) Changes in accounting treatment from the most recent consolidated fiscal year: Yes Note: For details, see 4. Others in the section on Qualitative Information and Financial Statements (Page 4) Notes: Forecasts regarding future performance in these materials are based on judgments made in accordance with information available at the time this report was prepared. Forecasts therefore embody risks and uncertainties. Actual results may differ significantly from these forecasts for a number of factors. Qualitative Information and Financial Statements 1. Consolidated results of operations During the third quarter of the current fiscal year, signs of uncertainty appeared in the global economy in the aftermath of the U.S. subprime loan problem, including turmoil in financial markets and rising crude oil prices. However, the overall global economy remained healthy, bolstered by the booming economies of East Asia, particularly China, and also the emerging economies, such as Russia. In Japan, the economy continued to grow at a slow pace, as steady private-sector capital expenditures and strong exports to Asian countries outweighed the negative effects of the stagnating U.S. economy and the rising cost of crude oil. In the electronics industry, sales in digital consumer electronics such as LCD televisions and digital cameras remain strong. However, the operating environment in the electronic components and semiconductor sectors continues to be challenging, as the rising cost of raw materials and intense price competition exert pressure on earnings. In this environment, the KAGA ELECTRONICS Group concentrated on conducting efficient sales activities by strengthening ties among group companies and quickly addressing customer needs. As a result, sales of electronic parts and semiconductors showed steady growth, and sales were also strong for info-communication devices, including personal computers manufactured by major U.S. companies and a new line of portable music players. Third quarter consolidated net sales increased 9.3% to 214,598 million yen, operating income increased 23.2% to 5,543 million yen, ordinary income increased 19.6% to 5,537 million yen and net income fell 17.2% to 2,496 million yen. 2. Consolidated financial condition

3 Total assets were 136,801 million yen, 10,989 million yen more than at the end of the previous fiscal year, mainly because of an increase in notes and accounts receivable and inventory assets. Net assets amounted to 53,640 yen, and the shareholder s equity ratio was 39.2%. (Consolidated cash flows) Cash and cash equivalents at the end of the third quarter totaled 14,065 million yen, a decline of 1,447 million yen compared with the third quarter of the previous fiscal year. A summary of third quarter cash flows and major components follows. a. Operating activities Net cash used in operating activities was 179 million yen compared with 2,878 million yen in the third quarter of the previous year. The major reason was an increase in notes and accounts receivable and inventory assets. b. Investing activities Net cash used in investing activities was 1,605 million yen, against 1,149 million yen in the third quarter of the previous year. The primary uses of cash were payments for the purchase of property, plant and equipment and for the purchase of investment securities. c. Financing activities Net cash provided by financing activities was 1,380 million yen. One year earlier, net cash used in financing activities was 781 million yen. Cash was provided mainly by proceeds from short-term bank loans. 3. Outlook for fiscal 2008 The consolidated forecast of net sales remains unchanged at 290,000 million yen. However, the consolidated forecast for operating income is now 7,500 million yen, a decrease from the 7,850 million yen of the last forecast. We have also revised down the consolidated forecasts for ordinary income, from 8,100 million yen in the last forecast to 7,300 million yen, and for net income from 4,200 million yen to 3,700 million yen. These changes reflect increased spending on research and development and on operating labor costs, undertaken with the aim of increasing the range of business content and expanding the scale of operations. Net assets Operating income Ordinary income Net income Previous forecast (A) Present corrected forecast (B) Change (B-A) Change per cent (5%) YoY change (5%) Million yen 290, , Million yen 7,850 7, Million yen 8,100 7, Million yen 4,200 3, Others (1) Changes in important subsidiaries during the period (changes in specific subsidiaries that require change in the scope of consolidation): None (2) Use of the simple method of accounting Thw simple accounting method is used for certain small-ticket items. (3) Changes in accounting treatment from the most recent consolidated fiscal year: Effective from the current consolidated fiscal year, KAGA ELECTRONICS and its domestic consolidated subsidiaries calculate depreciation on plant, property and equipment acquired on and after April 1, 2007 in accordance with the revised Corporation Tax Law. In addition, effective from the current consolidated fiscal year, the residual book value (after maximum permissible depreciation) of plant, property and equipment acquired prior to March 31, 2007 is calculated by the straight-line method over five years. The effect of this change on operating income, ordinary income and net income is insignificant.

4 4. Interim Consolidated Financial Statements (1) Balance sheets Third quarter 2007 (As of December 31, 2006) Third quarter 2008 (As of December 31, Change FY 2007 (As of March 31, Account Amount % Amount % Amount % Amount % Assets 1. Current assets 1. Cash and cash equivalents 15,524 14,075-1, , Notes and accounts receivable 63,435 72,447 9, ,464 trade 3. Marketable securities Inventories 20,009 24,503 4, , Deferred tax assets Others 5,084 7,379 2, ,637 Allowance for doubtful receivables Total current assets 104, , , , Fixed assets (1) Property, plant and equipment 1. Buildings and structures 1,566 1, , Machinery, equipment and 1,318 2, ,597 vehicles 3. Molding dies and furniture Land 1,871 1, , Construction in progress , Total Property, plant and equipment 5, , , (2) Intangible assets 1. Goodwill Software Others Total intangible assets 1, , , (3) Investments and other assets 1. Investment securities 6,726 7, , Deferred tax assets Others 5,071 4, ,615 Allowance for doubtful receivables Total investments and other assets 10, , , Total fixed assets 17, , , Total assets 122, , , ,

5 Third quarter 2007 (As of December 31, 2006) Third quarter 2008 (As of December 31, Change FY 2007 (As of March 31, Account Amount % Amount % Amount % Amount % Liabilities 1. Current liabilites 1. Notes and accounts payable trade 51,062 61,894 10, , Short-term bank loans 8,326 11,215 2, , Income taxes payable 905 1, , Allowance for directors bonuses Others 3,713 4,920 1, ,965 Total current assets 64, , , , Long-term liabilities 1. Long-term debt 3, , , Allowance for employees 1,103 1, ,075 retirement benefits 3. Allowance for retirement benefits for 1, ,148 directors and corporate audiotrs 4. Defrred tax liabilities Others Total long-term liabilities 6, , , , Total liabilities 70, , , , Net Assets I. Owners equity 1. Paind-in capital 12, , , Capital surplus 13, , , Earned surplus 23, , , , Treasury stock Total owners equity 49, , , , II. Valuation and translation adjustments 1. Valuation differences on Available-for sales securities 2. Deferred gain or losses on hedges Translation adjustments , Total valuation and translation 1, , , adjustments III. Minority interests Total net assets 51, , , , Total liabilities and net assets 122, , ,

6 (2) Statements of income Third Quarter 2007 (For the three quarters ended December 31, 2006) Third Quarter 2008 (For the three quarters ended December 31, Change FY2007 (For the year ended March 31, Account Amount % Amount % Amount % Amount % I Net sales 196, , , , II Cost of sales 172, , , , Gross profit 23, , , , III Selling, general and administrative expenses 19, , , , Operating income 4, , , , IV Non-operating income V Non-operating expenses Ordinary income 4, , , VI Extraordinary income VII Extraordinary losses Income before income taxes and 4, , , minority interests Income, Inhabitants and enterprise 1,921 2, ,270 taxes Deferred income taxes Minority interest in income/loss of consolidated subsidiaries Net income 3, , ,

7 (3) Statement of changes in consolidated net assets Present third quarter period (April 1, 2007 December 31, Net assets Owners equity Capital surplus Earned surplus Treasury stock Total net assets Balance as of March 31, ,133 13,912 25, ,127 Changes of items during interim period Dividends (Appropriation of retained earnings) Dividends (interim) Interim net income 2,496 2,496 Acquisition of treasury stock -3-3 Sale of treasury stock Net changes of items other than shareholders equitynet Total changes of items during interim period 0 1, ,059 Balance as of December 31, ,133 13,912 26, ,187 Valuation difference on available-for sale securities Valuation and translation adjustments Deferred Translation gains on adjustments losses on hedges Total valuation and translation adjustments Minority interests Total net assets Balance as of March 31, ,029 1, ,049 Changes of items during interim period Dividends (Appropriation of retained earnings) -716 Dividends (interim) -716 Interim net income 2,496 Acquisition of treasury stock -3 Sale of treasury stock 0 Net changes in items other than shareholders equitynet Total changes in items during interim period Balance as of December 31, , ,640

8 (4) Consolidated statements of cash flows Third quarter 2007 (Third quarter ended December 31, 2006) Third quarter 2008 (Third quarter ended December 31, FY2007 (For the year ended March 31, Account Amount Amount Amount I. Operating activities Income before income taxes and minority interest 4,910 5,123 7,410 Increase in notes and accounts receivable-trade -1,381-4,927-5,254 Increase in inventories -4,780-4,828-4,331 Increase (decrease) in notes and accounts payabletrade 2,303 7,649 5,315 Others Sub-total 1,057 2,882 2,959 Income taxes paid -4,049-3,166-4,557 Others Net cash provided by (used in) operating activities -2, ,120 II. Investing activities Payment for purchase of property, plant and ,042-1,111 equipment Proceeds from sale of investment securities ,259-1,589 Others Net cash provided by (used in) investing activities -1,149-1,605-2,141 III. Financing activities Change in short-term bank loans - net 2,617 4,740 1,359 Repayment of long-term bank loans -1,910-1,980-2,570 Payment of dividends by parent company -1,483-1,349-1,436 Others Net cash provided by (used in) financing activities ,380-2,586 IV. Effect of exchange rate changes on cash and cash equivalents V. Decrease in cash and cash equivalents -4, ,573 VI. Cash and cash quivalents, beginning of 20,131 14,558 20,131 period VII. Cashand cash equivalents, end of period 15,512 14,065 14,558

9 (5) Segment information Operating segment information The operating segment information is not presented since the Kaga electronics group was engaged in a single sector generally described as the manufacturing of electronics merchandise and products. Geographical segment information Previous third quarter period (April 1, 2006 December 31, 2006) Japan N. America Europe E. Asia Total Eliminations or Consolidated Corporate Net sales (1) (of which to outside customers) 153,058 1, , , ,389 (2) (of which inter-segment) 13, ,965 19,907-19,907 - Total 166,460 1, , ,296-19, ,389 Operating expenses 164,078 1, , ,816-19, ,890 Operating income 2, ,077 4, ,499 Current third quarter period (April 1, 2007 December 31, Japan N. America Europe E. Asia Total Eliminations or Consolidated Corporate Net sales (1) (of which to outside customers) 171, ,095 41, , ,598 (2) (of which inter-segment) 12, ,430 19,241-19,241 - Total 183,545 1,227 1,189 47, ,840-19, ,598 Operating expenses 179,807 1,330 1,417 45, ,207-19, ,055 Operating income 3, ,226 5, ,543 Previous consolidated fiscal year (April 1, 2006 March 31, Japan N. America Europe E. Asia Total Eliminations or Consolidated Corporate Net sales (1) (of which to outside customers) 213,510 1, , , ,014 (2) (of which inter-segment) 17, ,805 25,933-25,933 Notes: Total 230,892 2,264 1,125 60, ,948-25, ,014 Operating expenses 226,374 2,272 1,100 58, ,946-25, ,099 Operating income 4, ,465 7, , 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, Russia (3) East Asia: Hong Kong, Singapore, Taiwan, Korea, China, Malaysia, and Thailand

10 Overseas sales Previous third quarter period (April 1, 2006 December 31, 2006) North America Europe East Asia Total I. Overseas sales 1,895 1,811 55,429 59,135 II. Consolidated sales ,389 III. Share of overseas sales in total sales (%) Current third quarter period (April 1, 2007 December 31, North America Europe East Asia Total I. Overseas sales 1,992 2,578 49,727 54,298 II. Consolidated sales ,598 III. Share of overseas sales in total sales (%) Previous consolidated fiscal year (April 1, 2006 March 31, North America Europe East Asia Total I. Overseas sales 2,416 2,429 71,012 75,858 II. Consolidated sales ,014 III. Share of overseas sales in total sales (%) Notes: 1. Countries and regions are classified according to geographical proximity. 2. Countries and regions outside Japan are broken into the following geographical area: (1) North America: United States (2) Europe: United Kingdom, Czech Republic, Russia (3) East Asia: Hong Kong, Singapore, Taiwan, Korea, China, Malaysia, and Thailand 3. Overseas sales refer to sales posted by KAGA ELECTRONICS CO., LTD. and its consolidated subsidiaries in countries and regions outside Japan.

11 6. Sales and Orders Information Segmental sales information Segment Previous third quarter (ended December 31, 2006) Current third quarter (ended December 31, FY2007 (For the year ended March 31, Amount % Amount % Amount % Electronics 137, , , Information devices 58, , , Total 196, , , Notes: 1. Electronics include semiconductors, common electronic parts, EMS among others 2. Information devices include personal computers, peripherals, films, optical equipments among others. Product sales information Product Previous third quarter (ended December 31, 2006) Current third quarter (ended December 31, FY2007 (For the year ended March 31, Amount % Amount % Amount % Information devices 42, , , EMS 60, , , Semiconductors 44, , , Common electronic parts 21, , , Others 27, , , Total 196, , , Product orders information Product Previous third quarter (ended December 31, 2006) Current third quarter (ended December 31, FY2007 (For the year ended March 31, Received amount Backlog amount Received amount Backlog amoun Received amount Backlog amoun Information devices 42, ,803 1,959 58, EMS 64,778 9,065 66,248 10,628 87,171 7,995 Semiconductors 46,779 9,010 49,141 6,931 61,325 7,075 Common electronic parts 22,323 3,475 24,181 2,957 30,139 3,697 Others 27, ,373 1,646 36,419 1,217 Total 203,682 23, ,748 24, ,792 20,972