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Business results for the third quarter of the year ending March 31, 2011
Operating results
| Net sales | Operating income | Ordinary income | Net income | |||||
|---|---|---|---|---|---|---|---|---|
| Million yen | % | Million yen | % | Million yen | % | Million yen | % | |
| Third quarter, year ending March 31, 2011 |
26,342 | -35.5 | 588 | -86.6 | 680 | -85.2 | 47 | -98.0 |
| Third quarter, year ending March 31, 2010 |
40,814 | 21.6 | 4,383 | 55.9 | 4,598 | 58.5 | 2,346 | -3.7 |
| Net income per share | Diluted net income per share | |
|---|---|---|
| Yen | Yen | |
| Third quarter, year ending March 31, 2011 |
3.24 | − |
| Third quarter, year ending March 31, 2010 |
158.73 | − |
Financial position
| Total assets | Net assets | Shareholders’ equity ratio |
Net assets per share |
|
|---|---|---|---|---|
| Million yen | Million yen | % | Yen | |
| Third quarter, year ending March 31, 2011 |
45,652 | 26,396 | 57.7 | 1,782.01 |
| Year ended March 31, 2010 | 49,641 | 27,380 | 55.1 | 1,848.74 |
(Reference) Shareholders’ equity
Third quarter of the year ended March 31, 2011: ¥;26,344 million
Third quarter of the year ended March 31, 2010: ¥;27,331 million
Dividends
| Annual dividends | |||||
|---|---|---|---|---|---|
| First quarter-end |
Second quarter-end |
Third quarter-end |
Year-end | Annual | |
| Yen | Yen | Yen | Yen | Yen | |
| Year ended March 31, 2010 | − | 10 | − | 60 | 70 |
| Year ended March 31, 2011 | − | 10 | − | ||
| Year ended March 31, 2011 (Forecast) |
30 | 40 | |||
Forecast earnings for the year ending March 31, 2011
| Net sales | Operating income |
Ordinary income |
Net income | Net income per share |
|||||
|---|---|---|---|---|---|---|---|---|---|
| Million yen | % | Million yen | % | Million yen | % | Million yen | % | Yen | |
| Entire – year | 38,400 | -26.0 | 800 | -82.7 | 900 | -81.6 | -100 | − | -6.76 |
Qualitative Information Regarding the Consolidated Results for the Third Quarter
Qualitative Information Regarding Consolidated Operating Results
During the cumulative consolidated third quarter, the Japanese economy remained in an unfavorable situation due to a mild deflation in prices, while corporate earnings had been back on the recovery track.
In the pachinko business in which the Daikoku Denki Group (“the Group”) is engaged, pachinko hall operators, our customers, have been struggling with low revenues due to sluggish personal consumption. Under these market environments, the business results of pachislot game machines continued to exceed those of the same period of the previous year. This stable business performance attracted pachinko hall operators’ attention and they stared to switch from pachinko to pachislot. On the other hand, low-priced rental ball services, such as 1-yen pachinko, have now spread all over Japan, and pachinko hall operators are trying to differentiate their services. In addition, the unit sales of pachinko game machines have developed unfavorably due mainly to a change in the distribution system of used game machines and self-restraint of replacing pachinko machines during APEC Summit held in November 2010.
Under these market environments, the Information System Segment promoted proposals for hall utilization of , “BiGMO” for boosting the performance of pachislot games, and “Raku-pass” for differentiating amid the trend of a low-priced rental ball service.
The Control System Segment sought to improve the quality and efficiency of development operations aiming at reforms in manufacturing and strove to promote projects hardware and software of game machines.
As a result, the Company’s cumulative consolidated results for the third quarter were 26,342 million in net sales(down 35.5% year-on-year), ¥588 million in operating income (down 86.6% year-on-year), and ¥680 million in ordinary income (down 85.2% year-on-year).Consolidated net income for the period amounted to ¥47 million (down 98.0% year-on-year).
Business results by segment are as follows.
Information System Segment
During the consolidated third quarter, the Information System Segment enhanced values of the “C II Desk,” a service desk for supporting hall management utilizing the MIRAIGATE Network and the “Maintenance Desk” for quick and appropriate maintenance, and also presented proposals on an installation of the “C II”, hall computing system. In addition, the segment also promoted proposals to utilize at halls, including “BiGMO,” a data display tool with added functions for displaying contents and sound effects to enjoy game machines more for boosting the performance of pachislot games, and “Raku-pass”, a counting system per machine that sought to enhance fans conveniences for differentiating amid the trend of low-priced rental ball services, and facilitated spread of the MIRAIGATE Network. However, large-scale capital investment, such as the opening of new halls, remained low.
As a result, sales in the Information System Segment were ¥19,388 million (down 8.6% year-on-year), and operating income was ¥3,230 million (down 21.0% year-on-year).
Control System Segment
During the consolidated third quarter, the Control System Segment strove to project proposals of hardware and software of game machines. However, the number of models and the unit sales decreased significantly, due to self-restraint of replacing pachinko machines during APEC Summit, and extension of development period to address the revision of internal rules on pachinko game machines, etc.
As a result, sales in the segment were ¥5,826 million (down 68.9% year-on-year), and operating income was ¥1,357 million (down ¥3,307 million year-on-year).
Amusement Content Segment
During the consolidated third quarter, orders for development increased due to the Group’s highly rated development capability. The segment also released “SPI Test Perfect Exercise Book Containing Most-Frequently Questioned Issues (DS software for 2012 version) under the supervision of Takahashi Shoten Co., Ltd.” as the Genki original game, and its sales showed favorable results. The segment also started to provide mobile contents to GREE, following the provision for mixi and Yahoo! Mobage.
As a result, sales in the Amusement Content Segment amounted to ¥1,168 million (up 26.7% year-on-year), and operating income amounted to ¥52 million (up ¥230 million year-on-year).
(Note) Figures of segment results include intersegment transactions.
Qualitative Information Regarding Consolidated Financial Position
Total assets at the end of the third quarter were ¥45,652 million, a decrease of ¥3,988 million from those at the end of the previous consolidated fiscal year, due to poor business results and payments of taxes and dividends.
Current assets were ¥28,929 million, a decrease of ¥5,653 million from t the end of the previous consolidated fiscal year, due mainly to a decrease in cash and deposits exceeding an increase in inventories.
Noncurrent assets were ¥16,722 million, an increase of ¥1,664 million from the end of the previous consolidated fiscal year, due mainly to investments in facilities.
Liabilities were ¥19,256 million, a decrease of ¥3,004 million from the end of the previous consolidated fiscal year, due mainly to a decrease in trade payables and income taxes payable.
Total net assets were ¥26,396 million yen, a decrease of ¥984 million from the end of the previous consolidated fiscal year, due mainly to a decrease in retained earnings. The Group’s equity ratio was 57.7% (up 2.6 percentage points compared to the end of the previous consolidated fiscal year).