News Releases

Consolidated financial Results for the 1st Quarter of the FY2011

(Rounded down to the nearest million)

Business results for the first 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 %
First quarter, year
ending March 31, 2012
12,145 52.6 185 201.6 214 127.7 -48
First quarter, year
ending March 31, 2011
7,961 -44.8 61 -96.5 94 -94.9 -22

(Note) Comprehensive income
First quarter of the year ended March 31, 2012: ¥-46 million (−%)
First quarter of the year ended March 31, 2011: ¥-26 million (−%)

  Net income per share Diluted net income per share
Yen Yen
First quarter, year
ending March 31, 2012
-3.28
First quarter, year
ending March 31, 2011
-1.55

Financial position

  Total assets Net assets Shareholders’ equity ratio
Million yen Million yen %
First quarter, year
ending March 31, 2012
49,720 25,530 51.2
Year ended March 31, 2011 49,015 26,020 52.9

(Reference) Shareholders’ equity
First quarter of the year ended March 31, 2012: ¥25,461 million
First 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        
Year ended March 31, 2012
(Forecast)
  10.00
(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
First half endin
September, 2012
21,500 30.2 -900 -900 -900 -60.87
Entire – year 38,000 10.2 -1,500 -1,500 -1,500 -101.46
(Note) Revision of the most recently released performance forecasts: No

 

Qualitative Information Regarding the Consolidated Results for the First Quarter

Qualitative Information Regarding Consolidated Operating Results

During the consolidated first quarter, the Japanese economy remained in a tough situation with a severe employment problem and slumping personal consumption in addition to the impact of the Great East Japan Earthquake on March 11, 2011 and subsequent power supply restrictions.

In the pachinko business in which Daikoku Denki Group (“the Group”) is engaged, our DK-SIS data indicates that the number of customers to play game recovered to the normal level after a temporary drop following the earthquake, but the industry held back from opening new halls and making large-scale investments due to a delay in the launch of new models of pachinko and pachislot game machines, resulting from an uncertainty in distribution of semiconductors as well as the shortage of power supply.

Under these market environments, facing the continuous replacement of pachinko game machines by pachislot ones, 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 for innovations in manufacturing and strove to propose hardware and software projects in game machines.

As a result, the Company’s cumulative consolidated results for the first quarter were ¥12,145 million in net sales (up 52.6% year-on-year), ¥185 million in operating income (up 201.6% year-on-year), and ¥214 million in ordinary income (up 127.7% year-on-year).Consolidated net income for the period amounted to ¥48 million (compared with net loss of ¥22 million for the same period of the previous year).

Business results by segment are as follows.

Information System Segment

During the consolidated first quarter, the Information System Segment additionally reinforced “C II Desk,” a service desk for supporting hall management with the help of the MIRAIGATE network. In addition, the segment also proposed a utilization of “C II-SIS,” a strategic tool for marketing using DK-SIS data and promoted MIRAIGATE service and “BiGMO(a data display tool) and etc. Furthermore, the segment commenced providing hall environmental monitoring services designed for energy saving in pachinko halls and the creation of comfortable amusement spaces for pachinko fans.
As a result, sales in the segment were ¥5,595 million (up 8.7% year-on-year), and segment income was ¥815 million (up 19.3% year-on-year).

Control System Segment

During the consolidated first quarter, the unit sales of pachinko game machines decreased in the pachinko game machine market as a whole due to a shortage in supplies of semiconductors affected by the earthquake. However, as the Control System Segment made efforts to propose projects of hardware and software in game machines, the models of the segment sold well in the market. On the other hand, expense increased due to the advanced development.
As a result, sales in the segment were ¥6,263 million (up 163.8% year on year), and the segment loss amounted to ¥38 million (compared with segment loss of ¥212 million for the same period of the previous year).

Amusement Content Segment

During the consolidated first 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 amounted to ¥286 million (down 35.2% year-on-year), and segment loss amounted to ¥61 million (compared with segment income of ¥47 million 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 first quarter, 2012 were ¥49,720 million, an increase of ¥704 million from t 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 first 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 assets decreased because the sale of the products, originally scheduled to be sold during the previous consolidated fiscal year, was finally realized during the consolidated first quarter.

Liabilities at the end of the first quarter were ¥24,189 million, an increase of ¥1,194 million from the end of the previous consolidated fiscal year. The main factor for the increase was an increase in trade payables, although income taxes payable decreased as a result of the payment of income taxes.

Total net assets at the end of the first quarter were ¥25,530 million, a decrease of ¥489 million from the end of the previous consolidated fiscal year, due mainly to a decrease in retained earnings resulting from payment of dividends. The Group’s equity ratio was 51.2% (down 1.7 percentage points compared to the end of the previous consolidated fiscal year).