Consolidated Operating Results for the Year Ended March 31, 2015
RESULTS OF CONSOLIDATED OPERATIONS
Net sales |
Operating income |
Ordinary income |
Net income |
|||||
---|---|---|---|---|---|---|---|---|
Million yen | % | Million yen | % | Million yen | % | Million yen | % | |
Year ended March 31, 2015 |
54,043 | -5.1 | 1,425 | -73.3 | 1,566 | -71.4 | 874 | -73.3 |
Year ended March 31, 2014 |
56,954 | -3.2 | 5,338 | -24.0 | 5,474 | -24.4 | 3,278 | -21.2 |
(Note) Comprehensive income
Year ended March 31, 2015: ¥862 million (-73.8%)
Year ended March 31, 2014: ¥3,290 million (-21.0%)
Net income per share |
Diluted net income per share |
Net income to shareholders’ equity ratio |
Ordinary income to total assets ratio |
Operating income to net sales ratio |
|
---|---|---|---|---|---|
Yen | Yen | % | % | % | |
Year ended March 31, 2015 |
59.19 | − | 2.7 | 2.9 | 2.6 |
Year ended March 31, 2014 |
221.80 | − | 10.5 | 9.9 | 9.4 |
(Reference) Equity in earnings of affiliates:
Year ended March 31, 2015: ¥− million
Year ended March 31, 2014: ¥− million
CONSOLIDATED FINANCIAL POSITION
Total assets | Net assets | Shareholders’ equity ratio |
Net assets per share |
|
---|---|---|---|---|
Million yen | Million yen | % | Yen | |
Year ended March 31, 2015 |
53,528 | 32,138 | 60.0 | 2,173.98 |
Year ended March 31, 2014 |
53,929 | 32,260 | 59.8 | 2,182.23 |
(Reference) Shareholders’ equity
Year ended March 31, 2015: ¥32,138 million
Year ended March 31, 2014: ¥32,260 million
CONSOLIDATED CASH FLOWS
Cash flows from operating activities |
Cash flows from investing activities |
Cash flows from financing activities |
Cash and equivalents, end of period |
|
---|---|---|---|---|
Million yen | Million yen | Million yen | Million yen | |
Year ended March 31, 2015 |
817 | -2,142 | -1,441 | 12,515 |
Year ended March 31, 2014 |
340 | -1,655 | -1,809 | 15,281 |
Dividends
Annual dividends | |||||
---|---|---|---|---|---|
First quarter-end |
Second quarter-end |
Third quarter-end |
Year-end | Annual | |
Yen | Yen | Yen | Yen | Yen | |
Year ended March 31, 2014 |
− | 20 | − | 60 | 80 |
Year ended March 31, 2015 |
− | 10 | − | 60 | 70 |
Year ended March 31, 2016 (Forecast) |
− | 10 | − | 40 | 50 |
Total dividends paid (annual) |
Payout ratio (Consolidated) |
Dividends paid to net assets (Consolidated) |
|
---|---|---|---|
Million yen | % | % | |
Year ended March 31, 2014 |
1,182 | 36.1 | 3.8 |
Year ended March 31, 2015 |
1,034 | 118.3 | 3.2 |
Year ended March 31, 2016 (Forecast) |
52.8 |
Forecast earnings for the year ending March 31, 2016
Net sales | Operating income |
Ordinary income |
Net income attributable to owners of parent |
Net income per share |
|||||
---|---|---|---|---|---|---|---|---|---|
Million yen | % | Million yen | % | Million yen | % | Million yen | % | Yen | |
First half ending September, 2015 |
27,000 | -3.2 | 1,500 | -30.9 | 1,500 | -32.9 | 1,000 | -32.1 | 67.64 |
Entire – year | 60,000 | 11.0 | 2,000 | 40.3 | 2,000 | 27.7 | 1,400 | 60.0 | 94.70 |
Others
Material changes in subsidiaries during this period (Changes in scope of consolidations resulting from change is subsidiaries)
No(Number of subsidiaries excluded from consolidation: −, Name of subsidiaries excluded from consolidation: −)
Changes in accounting policies and accounting estimates, retrospective restatement
Changes in accounting policies based on revisions of accounting standard: Yes
Changes in accounting policies other than ones based on revisions of accounting standard: No
Changes in accounting estimates: No
Retrospective restatement: No
Number of shares outstanding (common stock)
1. Number of issued and outstanding shares at the end of fiscal year (including treasury stock)
March 31, 2015: 14,783,900
March 31, 2014: 14,783,900
2. Number of treasury stock at the end of fiscal year
March 31, 2015: 628
March 31, 2014: 578
3.Average number of shares
March 31, 2015: 14,783,278
March 31, 2014: 14,783,397
Analysis of Operating Results
Operating results for this period
During the consolidated fiscal year ended March 31, 2015 (April 1, 2014 to March 31, 2015), economic recovery seemed stagnant with rising prices due to weaker yen and growing saving consciousness after the consumption tax hike. Nonetheless, the Japanese economy remained at a moderate recovery as brisk capital investment and improvement of employment environment show, supported by rise in stock prices due to the monetary policy by the Bank of Japan and the economic policy of the government.
In our pachinko industry, in which the Daikoku Denki Group(“the Group”) is engaged, although reduction of the ability to attract customers due to the consumption tax hike was not seen, pachinko operation based on rental balls at ¥4 is still on a slight declining trend. Pachislot operation since September, when a change of test method was reported, became downward. Thus, the business environment of our customers, pachinko halls, is in a tough situation.
According to the 2014 White Paper on Adult Entertainment Business issued by the Community Safety Bureau of the National Police Agency, the total number of installed game machines was 4,597,819 units, as a result of a decrease of 55,029 units in pachinko game machines and an increase of 41,142 units in pachislot game machines. Consequently, the average number of installed game machines per store was increased by 7.6 units to 395.4 units.
Under these market environments, the Information System Segment promoted sales of “BiGMO Type?” and “IL-X2,”(a call-out lamp) with a focus on “VEGASIA” (a CR unit with enhanced functions) and “BiGMO PREMIUM” (data display terminal which provides fans with clear information of the game machine). The Control System Segment promoted basic development and research activity for new product development to improve business performance. The segment also fortified the planning and development structure by restructuring development line with the Group companies and consolidating project management.
As a result of the above, during the consolidated fiscal year, consolidated net sales amounted to ¥54,043 million, down 5.1% from the previous consolidated fiscal year. Consolidated operating income was ¥1,425 million (down 73.3% year on year), consolidated ordinary income was ¥1,566 million (down 71.4% year on year), and consolidated net income amounted to ¥874 million (down 73.3% year on year).
Business results by segment are as follows.
Information System Segment
During the consolidated fiscal year, the Information System Segment reached record-high sales due to the high evaluation of “VEGASIA” (a CR unit) for its convenience and capability for the consumption tax adjustment, which led to its new installations and replacements from other companies. Also, “BiGMO PREMIUM” (a data display terminal) was evaluated highly fulfilling the display contents and maintained strong sales. Meanwhile, research and development cost increased due to the active investment for next-generation product development.
As a result, sales in the Information System Segment were ¥37,104 million (up 2.9% from the previous consolidated fiscal year), and segment operating income was ¥4,244 million (down 30.3% year on year).
Control System Segment
During the consolidated fiscal year, the Control System Segment worked on new proposals and sales activities; however, the sales of the display units and the control units resulted in lower than the previous consolidated fiscal year due to a decline in the number of models sold. As for the sales of the display units, the ratio of reused products increased along with the trend of cost reduction of the game machine manufacturers.
In addition, the segment recorded a loss, such as allocation of allowance for doubtful accounts for accounts receivable from bankruptcy proceedings of a trading game machine manufacturer and revaluation of exclusive material which we have received an order.
As a result, net sales in the Control System Segment were ¥16,950 million (down 18.9% from the previous consolidated fiscal year), and segment operating loss amounted to ¥1,105 million (segment operating income of ¥1,127 million in the previous consolidated fiscal year).
(Note) Business segment sales and income figures include intersegment transactions.
Future outlook
The impact of the reaction of the last-minute demand by the consumption tax hike has eased, and improvement of corporate performance will lead to improvements in employment and personal income; accordingly, growth in consumer expenditure is expected in the Japanese economy.
In our pachinko industry, in which the Group is engaged, self-regulation of pachinko game machines is scheduled in November 2015, likewise, that of pachislot game machines is scheduled in December 2015. The impact on the market and our company is unpredictable and requires caution.
Given such market environment, the Group forecasts the Information System Segment to achieve sales of ¥35 billion, down 5.7% from the previous consolidated fiscal year. The Segment will continuously promote the sales of “VEGASIA” (a CR unit) following the previous consolidated fiscal year, improve the function of data display tools so that the fans could enjoy pachinko and pachislot more, and extend the sales as a tool to attract customers to pachinko halls. Furthermore, we will enhance the proposal of “C?-FACE”(the next-generation data management that combines face authentication data and game machine data, which is expected as new analysis method). We will also keep enhancing the active investment for next-generation product development in order to build future business model.
The Group forecasts the Control System Segment to achieve sales of ¥25 billion (up 47.5% year on year). We will engage in “the model development aiming to improve operating performance” following the previous consolidated fiscal year. Additionally, the segment will strengthen the development system and increase market valuation by carrying out human resources reinforcement and a change of management system.
Consequently, the Group anticipates consolidated net sales of ¥60 billion (up 11.0% year on year), consolidated operating income of ¥2 billion yen (up 40.3%), consolidated ordinary income of ¥2 billion (up 27.7%), and consolidated net income of ¥1.4 billion (up 60.0%).
Note on the outlook:
Forecasts in this report are judged based on information available at the time when this report was prepared and may therefore contain potential risks and uncertainties.
As for future outlook, the Group will continuously collect and analyze the data. If the earnings forecast needs to be revised, the Group will announce the revision immediately.
Analysis of Financial Position
Status of Assets, Liabilities and Net Assets
Current assets at the end of the consolidated fiscal year were ¥35,935 million, a decrease of ¥1,109 million from the end of the previous consolidated fiscal year. The main factor was a great decrease in cash and deposits, as well as a decrease in accounts receivable-other resulting from a smaller collection of development contributions and payment of material supplied to subcontractors, which offset an increase in notes and accounts receivable-trade and inventory assets planned to be sold during the next consolidated fiscal year.
Non-current assets at the end of the consolidated fiscal year were ¥17,592 million, an increase of ¥707 million from the end of the previous consolidated fiscal year, attribute to an increase in land and construction in progress which accompanied with expansion of distribution bases and an increase in software associated with the product improvement and building in-house system.
As a result, total assets at the end of the consolidated fiscal year were ¥53,528 million, a decrease of ¥401 million from the end of the previous consolidated fiscal year.
Current liabilities at the end of the consolidated fiscal year amounted to ¥20,473 million, an increase of ¥314 million from the end of the previous consolidated fiscal year. The main factors for the increase attribute to allocation of allowance for construction loss and an increase in accounts payable due to a larger amount of development expenses and acquisition of non-current assets posted during the fourth quarter of the consolidated fiscal year, which offset a decrease in notes and accounts payable-trade due to a smaller amount of purchases in the second half of the consolidated fiscal year as compared to the previous consolidate fiscal year.
Non-current liabilities at the end of the consolidated fiscal year amounted to ¥915 million, a decrease of ¥593 million from the end of the previous consolidated fiscal year mainly due to a decrease in long-term loans payable compared to the previous consolidate fiscal year.
Accordingly, total liabilities at the end of the consolidated fiscal year amounted to ¥21,389 million, a decrease of ¥279 million from the end of the previous consolidated fiscal year.
Net assets at the end of the consolidated fiscal year were ¥32,138 million yen, a decrease of ¥122 million from the end of the previous consolidated fiscal year, due mainly to decreased retained earnings by larger payment of dividends than the reported net income.
Consequently, the Group’s equity ratio was 60.0% (a rise of 0.2% percentage points as compared to that at the end of the previous consolidated fiscal year).
Status of Cash Flows
Cash and cash equivalents (“cash”) at the end of the consolidated fiscal year were ¥12,515 million, a decrease of ¥2,766 million from the end of the previous consolidated fiscal year.
The situation of each cash flow for the consolidated fiscal year is as follows:
(Cash flows from operating activities)
Cash obtained from operating activities for the consolidated fiscal year totaled ¥817 million yen, for a ¥477 million increase year on year. The primarily components of the proceeds were net income before income taxes of ¥1,552 million, depreciation of ¥1,569 million, and a decrease in accounts receivable-other of ¥736 million. The primarily expenditures were an increase of ¥1,791 million in inventory assets and notes and accounts receivable-trade, and income taxes paid was ¥1,211 million.
(Cash flows from investing activities)
Cash used in investing activities for the consolidated fiscal year was ¥2,142 million, for a ¥487 million increase year on year. The main factor was due to an increase in expenditure by acquisition of non-current assets.
(Cash flows from financing activities)
Cash used for financing activities for the consolidated fiscal year was ¥1,441 million (for a ¥368 million decrease year on year). The main factor of the decrease was due to repayment of debts and payment of dividends.