News Releases

Consolidated Financial Results for the 3rd Quarter of the FY2011

(Rounded down to the nearest million)

Business results for the third 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 %
Third quarter, year
ending March 31, 2012
39,318 49.3 3,904 563.7 3,892 472.0 1,940
Third quarter, year
ending March 31, 2011
26,342 -35.5 588 -86.6 680 -85.2 47 -98.0

(Note) Comprehensive income
Third quarter of the year ended March 31, 2012: ¥1,961 million (−%)
Third quarter of the year ended March 31, 2011: ¥50 million (−%)

  Net income per share Diluted net income per share
Yen Yen
Third quarter, year
ending March 31, 2012
131.27
Third quarter, year
ending March 31, 2011
3.24

Financial position

  Total assets Net assets Shareholders’ equity ratio
Million yen Million yen %
Third quarter, year
ending March 31, 2012
52,169 27,390 52.3
Year ended March 31, 2011 49,015 26,020 52.9

(Reference) Shareholders’ equity
Third quarter of the year ended March 31, 2012: ¥27,302 million
Third 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 30 40
Year ended March 31, 2012 10    
Year ended March 31, 2012
(Forecast)
      30 40
(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 45,800 32.8 2,100 827.0 2,100 489.5 700 47.35
(Note) Revision of the most recently released performance forecasts: No

 

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 a tough situation, especially in employment conditions and personal consumption, although there were signs of gradual recovery in manufacturers’ production in the wake of the Great East Japan Earthquake.

In the pachinko business, a part 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 in some regions to respond to the shortage of 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. On the other hand, 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 implementationin 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 third quarter were ¥39,318 million in net sales(up 49.3% year-on-year), ¥3,904 million in operating income (up 563.7% year-on-year), and ¥3,892 million in ordinary income (up 472.0% year-on-year).Consolidated net income for the period amounted to ¥1,940 million (up ¥1,892 million year-on-year).

Business results by segment are as follows.

Information System Segment

During the cumulative consolidated third 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 ¥21,054 million (up 8.6% year-on-year, and segment income was ¥4,506 million (up 39.5% 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 in which t the Control System Segment were engaged received positive reviews in the market, the unit sales continues to surge.
As a result, sales in the segment were ¥17,564 million (up 201.5%year-on-year), and segment income was ¥1,087 million (compared with segment loss of ¥1,357 for the same period of the previous year).

Amusement Content Segment

During the cumulative consolidated third 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 ¥708 million (down 39.3% year-on-year), and segment loss amounted to ¥208 million (compared with segment income of ¥52 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 third quarter were ¥52,169 million, an increase of ¥3,154 million from the end of the previous consolidated fiscal year. The main factors for the increase were an increase in cash and deposits reflecting stronger sales compared to the same period of the previous consolidated fiscal year an increase in property, plants, and equipment resulting from the construction of the new head office building, although inventories assets decreased because the sale of the products originally scheduled to be sold during the previous consolidated fiscal year, was finally realized during this cumulative consolidated third quarter.

Net assets at the end of the consolidated fiscal year were ¥27,113 million yen, an increase of ¥1,093 million from the end of the previous consolidated fiscal year, due mainly to an increase in retained earnings thanks to net income generated during the period, while dividends were paid. Consequently, total assets at the end of the consolidated fiscal year were ¥49,087 million, an increase of ¥71 million from the end of the previous consolidated fiscal year, and the Group’s equity ratio was 55.1% (up 2.2 percentage point compared to the end of the previous consolidated year).

Liabilities at the end of the third quarter were ¥24,779 million, an increase of ¥1,784 million from those at 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 favorable sales during the consolidated third quarter.

Total net assets at the end of the third quarter were ¥27,390 million, an increase of ¥1,369 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, although dividends were paid. The Group’s equity ratio was 52.3% (down of 0.6 percentage point compared to the end of the previous consolidated fiscal year).