News Releases

Consolidated Financial Results for the 2nd Quarter of the FY2011

(Rounded down to the nearest million)

Business results for the second quarter of the year ending March 31, 2012

Operating results

(Percentage figures denote year-over-year changes.)
  Net sales Operating income Ordinary income Net income
Million yen % Million yen % Million yen % Million yen %
Second quarter, year
ending March 31, 2012
28,100 70.2 2,118 245.7 2,067 203.1 1,076 346.6
Second quarter, year
ending March 31, 2011
16,510 -44.0 612 -84.6 682 -83.6 241 -89.4

(Note) Comprehensive income
Second quarter of the year ended March 31, 2012: ¥1,088 million (364.8%)
Second quarter of the year ended March 31, 2011: ¥234 million (−%)

  Net income per share Diluted net income per share
Yen Yen
Second quarter, year
ending March 31, 2012
72.83
Second quarter, year
ending March 31, 2011
16.31

Financial position

  Total assets Net assets Shareholders’ equity ratio
Million yen Million yen %
Second quarter, year
ending March 31, 2012
51,039 26,665 52.1
Year ended March 31, 2011 49,015 26,020 52.9

(Reference) Shareholders’ equity
Second quarter of the year ended March 31, 2012: ¥26,586 million
Second quarter of the year ended March 31, 2011: ¥25,953 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, 2011 10.00 30.00 40.00
Year ended March 31, 2012 10.00      
Year ended March 31, 2012
(Forecast)
     −
(Note) Revision of the most recently released dividend forecasts: No

 

Forecast earnings for the year ending March 31, 2012

  Net sales Operating
income
Ordinary
income
Net income Net income
per share
Million yen % Million yen % Million yen % Million yen % Yen
Entire – year 43,000 24.7 700 209.0 800 124.6 100 6.76
(Note) Revision of the most recently released performance forecasts: No

 

 

Qualitative Information for Regarding the Consolidated Results for the Second Quarter

Qualitative Information Regarding Consolidated Operating Results

During the cumulative consolidated second quarter, the Japanese economy remained in a tough situation, especially in employment conditions and personal consumption, although there were signs of a gradual recovery in manufacturers’ production in the wake of the Great East Japan Earthquake.

In the pachinko business, art of the amusement industry in which the Daikoku Denki Group (“the Group”) is engaged, there was a growing concern over a decrease in visitors and operations of pachinko halls because pachinko hall operators suspended operations by rotation basis in some regions to respond to the shortage of the power supply after the earthquake . However, no major impact was seen in the pachinko business in May and afterward. Some pachinko hall operators made capital investments in small-sized facilities during their non-business days, which led to a continuous shift from pachinko game machines to popular pachislot game machines. Also, since the “Revision of Administration Policy on Advertisement Regulations” issued by the Community Safety Bureau, the National Police Agency became effective in August 2011, operators showed a reluctant movement toward advertisement and event implementation in the hall operations.

Under these market environments, the Information System Segment promoted several proposals including “BiGMO,” a data display tool, which can effectively represent pachislot, “IL-AW,” a call-out lamp and “C II,” a hall computing system that serves as a core system.

The Control System Segment sought to improve the quality and efficiency of development operations and strove to propose hardware and software projects in game machines.

As a result, the Company’s cumulative consolidated results for the second quarter were ¥28,100 million in net sales(up 70.2% year-on-year), ¥2,118 million in operating income (up 245.7% year-on-year), and ¥2,067 million in ordinary income (up 203.1% year-on-year).Consolidated net income for the period amounted to ¥1,076 million (up 346.6% year-on-year).

Business results by segment are as follows:

Information System Segment

During the cumulative consolidated second quarter, the Information System Segment promoted expansion of “C II Standard,” a hall management service system using the MIRAIGATE network. “BiGMO,” a data display tool, was highly regarded along with the introduction of large-sized models of pachislot game machines, which also contributed to the introduction of “C II,” a hall computing system.
As a result, sales in the segment were ¥11,553 million (up 1.5% year-on-year), and segment income was ¥1,765 million (down 9.7% year-on-year).

Control System Segment

During the cumulative consolidated third quarter, the number of models and unit sales of pachinko game machines decreased until September 2011 in the pachinko game machines market, due to shortage in the supply of semiconductors affected by the Great East Japan Earthquake. However, as the models of the segment received very positive reviews, the unit sales continues to surge. In addition, as a model originally planned to launch in the second half of the year launched in the second quarter, the Control System Segment achieved good business results.
As a result, sales in the segment were ¥16,016 million (up 270.9% year-on-year), and segment income was ¥1,435 million (compared with segment loss of ¥488 for the same period of the previous year).

Amusement Content Segment

During the cumulative consolidated second quarter, the Amusement Content Segment was mainly engaged in the development of large-sized models in consumer games that were ordered in the previous consolidated fiscal year.
As a result, sales in the segment were ¥536 million (down 34.2% year-on-year), and segment loss amounted to ¥110 million (compared with segment income of ¥41 for the same period of the previous year).

(Note) Figures of segment results include intersegment transactions.

Qualitative Information Regarding Consolidated Financial Position

Total assets at the end of the second quarter were ¥51,039 million, an increase of ¥2,024 million from the end of the previous consolidated fiscal year. The main factors for the increase were an increase in cash and deposits and trade receivables reflecting stronger sales during the consolidated second quarter compared to the consolidated fourth quarter of the previous fiscal year, and an increase in property, plants, and equipment resulting from the construction of the new head office building, although inventories decreased because sale of the products, originally scheduled to be sold during the previous consolidated fiscal year, was finally realized during the cumulative consolidated second quarter.

Liabilities at the end of the second quarter were ¥24,374 million, an increase of ¥1,379 million from the end of the previous consolidated fiscal year. The main factor for the increase was an increase in trade payables and income taxes payable resulting from strong sales during the cumulative consolidated second quarter.

Total net assets at the end of the second quarter were ¥26,665 million, an increase of ¥644 million from the end of the previous consolidated fiscal year, due mainly to an increase in retained earnings resulting from net income for the quarter, while dividends were paid. The Group’s equity ratio was 52.1% (down 0.9 percentage point% compared to the end of the previous consolidated fiscal year).