FY2017 1st Quarter Consolidated Financial Results (April 1, 2017 to June 30,2017) (PDF:139KB)

FY 2017 FIRST QUARTER CONSOLIDATED FINANCIAL RESULTS‌‌‌‌

(April 1, 2017 to June 30, 2017)

1. Company Name : SANKEN ELECTRIC CO., LTD.

2. Code NO :

   6707

3. Headquarters : 3-6-3 Kitano, Niiza-shi, Saitama 352-8666, Japan 4.URL : http://www.sanken-ele.co.jp/

5.Contact : Finance and Investor Relations Division Tel. 81-48-487-6121

1. FINANCIAL RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 2017

2. Consolidated Results of Operations (Millions of yen)

   Net sales (percentage change from the previous year)		Operating profit (percentage change from the previous year)		Ordinary profit (percentage change from the previous year)			Profit attributable to owners of parent (percentage change from the previous year)
   Three months ended Jun.30,2017	41,452	(12.3%)	2,036	(538.2%)	1,514	(	-	)	547	(	-	)
   Three months ended Jun.30,2016	36,899	(1.9%)	319	(61.0%)	-594	(	-	)	-1,182	(	-	)

   Note: Comprehensive income: 897 million yen ( -%) for three months ended June 30, 2017 / -5,672 million yen ( -%) for three months ended June 30, 2016

   Net income per share (yen)	Diluted net income per share (yen)
   Three months ended Jun.30,2017 Three months ended Jun.30,2016	4.52 -9.76	- -

3. Consolidated Financial Position (Millions of yen)

4. Total assets	Net assets	Shareholders' equity ratio
   As of June 30, 2017 As of March 31, 2017	186,211 182,700	55,205 54,736	29.5% 29.8%

   Reference: Shareholders' equity: 54,861 million yen as of June 30, 2017 / 54,401 million yen as of March 31, 2017

5. DIVIDEND INFORMATION

   Dividend per share
   First quarter	Second quarter	Third quarter	Fiscal-year-end	Annual
   Fiscal year 2016 Fiscal year 2017	- -	0.00yen	-	3.50yen	3.50yen
   Fiscal year 2017(forecast)	3.00yen	-	3.00yen	6.00yen

   Note: Revision to recently disclosed dividend forecast: No

6. FISCAL YEAR 2017 CONSOLIDATED FINANCIAL FORECAST (April 1, 2017 to March 31, 2018) (Millions of Yen)

   Net sales (percentage change from the previous year)		Operating profit (percentage change from the previous year)		Ordinary profit (percentage change from the previous year)		Profit attributable to owners of parent (percentage change from the previous year)		Net income per share
   Second quarter (cumulative)	78,500	(3.2%)	2,700	(24.9%)	2,100	(47.3%)	200	－	1.65yen
   Full Year	159,000	(0.1%)	7,300	(23.1%)	6,000	(19.4%)	2,500	(43.8%)	20.63yen

   Note: Revision to recently disclosed financial forecast: No

7. OTHER

9. Changes in significant subsidiaries during the three months ended June 30, 2017 (changes in particular subsidiaries accompanying the change in scope of consolidation): No

10. Application of particular accounting method for quarterly consolidated financial statements: Yes

11. Changes in accounting policies, changes in accounting estimates, restatements

    • Changes in accounting policies due to the amendment of accounting standards, etc. : No

    • Changes in accounting policies due to reasons other than above : No

    • Changes in accounting estimates : No

    • Restatements : No

      Jun./2017:	125,490,302	Mar./2017:	125,490,302
      Jun./2017:	4,296,506	Mar./2017:	4,293,460
      Apr./2017-Jun./2017	121,195,754	Apr./2016-Jun./2016	121,214,409

12. Number of shares outstanding (common share)

    • Number of shares outstanding at the end of the period (including treasury stock)

    • Number of treasury stocks at the end of the period

    • Average number of shares outstanding during three months ended June 30

• This quarterly financial report is not subject to quarterly reviews.

• The above description about future matters including financial forecast is based upon information available as of the present time and assumptions we considered valid, and we do not promise that these forecasts will be accomplished. Due to various factors, our actual performance could greatly differ from the forecast.For assumptions and precautions to use the forecasts, refer to following "DESCRIPTION OF CONSOLIDATED FINANCIAL FORECAST, etc".

1. QUALITATIVE INFORMATION ABOUT CONSOLIDATED BUSINESS RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 2017
1. DESCRIPTION OF CONSOLIDATED OPERATING RESULTS

   During the current first quarter consolidated fiscal period, the US economy and the European economy continued to recover thanks to expanded personal consumption, while the Chinese economy showed signs of recovery due to the effects of government policies. The Japanese economy remained on a moderate recovery track mainly due to improvement of corporate earnings and steady capital investment. Under these circumstances, the Company maintained a basic policy for realizing growth by stressing activities to "Focus on growing markets" and "Enhance financial performance." Under the policy, we strove to expand sales of new products in the key strategic markets related to the environment, energy saving, and green energy, while focusing on measures to reduce fixed expenses. In the first quarter consolidated fiscal period, sales of products for white goods and automotive products in the semiconductor devices segment remained favorable. As a result, net sales were ¥41,452 million, an increase of ¥4,553 million (12.3%) as compared to the same period in the previous year. For income, operating profit was ¥2,036 million, an increase of ¥1,717 million (538.2%) year on year resulting from increased net sales. Ordinary profit was ¥1,514 million (ordinary loss of ¥594 million in the same period in the previous year) and profit attributable to owners of parent was was ¥547 million (loss attributable to owners of parent of ¥1,182 million in the same period in the previous year), and both increased year on year.

   Overview of business by segment is as follows. From the first quarter consolidated fiscal period, the former power module business and power systems business are integrated into the power systems business, and reportable segments are changed into two segments, namely, the semiconductor devices segment and power systems segment. The following descriptions of financial performance for each reportable segment in comparison to the same period in the previous year are stated according to the segment after the change.

   In the semiconductor devices segment, sales of products for white goods such as air conditioners, washing machines and refrigerators expanded, and sales of automotive products also remained favorable with the progress of electrification. As a result, consolidated net sales from this segment were ¥35,192 million, an increase of ¥4,271 million (13.8%) as compared to the same period in the previous year. For income, consolidated operating profit was ¥3,087 million, an increase of ¥1,379 million (80.8%) as compared to the same period in the

   previous year, resulting from increased net sales and the exchange rate influenced by a weaker yen.

   For the power systems segment, sales of products for the AV and OA markets, including unprofitable adapters for TVs, decreased due to sales controls while sales of products for the telecommunication market showed a sign of recovery. As a result, consolidated net sales from this segment were ¥6,259 million, an increase of ¥281 million (4.7%) compared to the same period in the previous year. For income, we recorded consolidated operating loss of ¥305 million (consolidated operating loss of ¥640 million in the same period in the previous year) due to decreased sales of unprofitable products. Consolidated operating loss was reduced to half.

2. DESCRIPTION OF CONSOLIDATED FINANCIAL POSITION

   Assets as of the end of the three months ended June 30, 2017 were ¥186,211 million, an increase of ¥3,511 million from the end of the previous consolidated fiscal year. This was mainly due to an increase in cash and deposits of ¥1,204 million, inventories of ¥1,565 million and property, plant and equipment ¥690 million.

   Liabilities were ¥131,005 million, an increase of ¥3,042 million from the end of the previous consolidated fiscal year. This was mainly due to an increase in notes and accounts payable-trade of ¥1,315 million and commercial papers of ¥1,500 million.

   Net Assets were ¥55,205 million, an increase of ¥468 million from the end of the previous consolidated fiscal year. This was mainly due to an increase in foreign currency translation adjustment of ¥183 million and retained earnings of ¥123 million.

3. DESCRIPTION OF CONSOLIDATED FINANCIAL FORECAST, etc.

The future global economy is expected to remain on a gradual recovery trend. However, there is growing uncertainty due mainly to a concern about trends in the US policy and the effects of the Brexit issue in Europe, as well as a sense of overheating in the Chinese financial market. The Japanese economy is expected to recover mildly, but uncertainty in overseas economies may adversely affect corporate earnings. Under these circumstances, the Company will expand sales by launching new products in strategically-focused markets, such as global markets for automotive products, white goods, and industrial machinery, and the emerging markets related to the environment and energy saving. The Company will also make efforts to strengthen financial conditions by ensuring profits through cost reduction activities and curtailing inventories and interest-bearing debt. Through these initiatives, the Company will move ahead to achieve the plan for the fiscal year ending March 31, 2018.

As disclosed on July 18, 2017, the Company plans to take a series of actions to accomplish restructuring of the Group, and thereby we will record extraordinary losses resulting from the restructuring in the current consolidated fiscal year. Amendments to the financial forecast are