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Business results for the second 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 | % | |
| Second quarter, year ending March 31, 2011 |
16,510 | -44.0 | 612 | -84.6 | 682 | -83.6 | 241 | -89.4 |
| Second quarter, year ending March 31, 2010 |
29,473 | 45.8 | 3,988 | 151.9 | 4,156 | 150.5 | 2,272 | 211.8 |
| Net income per share | Diluted net income per share | |
|---|---|---|
| Yen | Yen | |
| Second quarter, year ending March 31, 2011 |
16.31 | − |
| Second quarter, year ending March 31, 2010 |
153.75 | − |
Financial position
| Total assets | Net assets | Shareholders’ equity ratio | Net assets per share |
|
|---|---|---|---|---|
| Million yen | Million yen | % | Yen | |
| Second quarter, year ending March 31, 2011 |
45,049 | 26,727 | 59.2 | 1,805.02 |
| Year ended March 31, 2010 | 49,641 | 27,380 | 55.1 | 1,848.74 |
(Reference) Shareholders’ equity
Second quarter of the year ended March 31, 2011: ¥26,684 million
Second 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 | − | 10.00 | − | 60.00 | 70.00 |
| Year ended March 31, 2011 | − | 10.00 | |||
| Year ended March 31, 2011 (Forecast) |
− | 30.00 | 40.00 | ||
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 | 46,000 | -11.3 | 2,900 | -37.3 | 3,000 | -38.8 | 1,200 | -48.9 | 81.17 |
Qualitative Information for the Consolidated Results for the Second Quarter
Qualitative Information Regarding Consolidated Operating Results
During the cumulative consolidated second 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.
Under these market environments, the Information System Segment promoted proposals to utilize at halls, “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 second quarter were ¥16,510 million in net sales(down 44.0% year-on-year), ¥612 million in operating income (down 84.6% year-on-year), and ¥682 million in ordinary income (down 83.6% year-on-year).Consolidated net income for the period amounted to ¥241 million (down 89.4% year-on-year).
Business results by segment are as follows.
Information System Segment
During the consolidated second 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 segment were ¥11,379 million (down 16.7% year-on-year), and operating income was ¥1,954 million (down 30.6%year-on-year).
Control System Segment
During the consolidated second quarter, the Control System Segment strove to project proposals of hardware and software of game machines. However, the unit sales decreased significantly, due to a delay in the launch of new models from the originally planned second quarter to the third quarter or later.
As a result, sales in the Control System Segment were ¥4,318 million (down 71.6% year-on-year), and operating loss amounted to ¥488 million (down ¥2,774 million year-on-year).
Amusement Content Segment
During the consolidated second 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 Yahoo! Mobage, following the provision for mixi.
As a result, sales in the segment increased to ¥815 million (up 28.8% year-on-year), and operating income amounted to ¥41 million (up ¥118 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 consolidated second quarter were ¥45,049 million, a decrease of ¥4,592 million from the end of the previous consolidated fiscal year, due mainly to payments of taxes and dividends.
Current assets were ¥29,088 million, a decrease of ¥5,494 million from the end of the previous consolidated fiscal year, due mainly to a decrease in cash and deposits and trade receivables.
Noncurrent assets were ¥15,960 million, an increase of ¥902 million from the end of the previous consolidated fiscal year, due mainly to investments in facilities.
Liabilities as of September 30, 2010 were ¥18,321 million, a decrease of ¥3,939 million from the end of the previous consolidated fiscal year, due mainly to a decrease in trades payable and income taxes payable.
Net assets were ¥26,727 million yen, a decrease of ¥652 million from the end of the previous consolidated fiscal year, due mainly to a decrease in retained earnings. The Group’s equity ratio was 59.2% (up4.1 percentage points compared to the end of the previous consolidated fiscal year).