FY2016 Consolidated Financial Results (April 1, 2016 to March 31, 2017) (PDF:241KB)

FY 2016 CONSOLIDATED FINANCIAL RESULTS‌‌‌‌‌‌‌‌

(April 1, 2016 to March 31, 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. [phone]

1. FINANCIAL RESULTS FOR THE FISCAL YEAR 2016 (April 1, 2016 to March 31, 2017)

2. Consolidated Results of Operations (Millions of yen)

   Net sales (percentage change from the previous year)		Operating income (percentage change from the previous year)		Ordinary income (percentage change from the previous year)		Profit attributable to owners of parent (percentage change from the previous year)
   Fiscal Year 2016	158,772	(1.8%)	5,930	(-12.8%)	5,026	(32.6%)	1,739	(914.0%)
   Fiscal Year 2015	155,919	(-3.0%)	6,803	(-39.3%)	3,791	(-63.3%)	171	(-97.8%)

   Note: Comprehensive income: FY 2016: 788 million yen ( － %) / FY 2015: -8,196 million yen ( － %)

   Net income per share	Diluted net income per share	Net income to shareholders' equity	Ordinary income to total assets	Operating income to net sales
   Fiscal Year 2016 Fiscal Year 2015	14.35yen 1.41yen	- -	3.2% 0.3%	2.7% 2.0%	3.7% 4.4%

   Reference: Equity in net income/loss non-consolidated subsidiaries and/or affiliates: FY 2016:－yen / FY 2015: －yen

3. Consolidated Financial Position (Millions of yen)

   Total assets	Net assets	Shareholders' equity ratio	Net assets per share
   Fiscal Year 2016 Fiscal Year 2015	182,700 184,711	54,736 53,959	29.8% 29.0%	448.87 yen 441.96 yen

   Reference: Shareholders' equity: Mar./2017: 54,401 million yen / Mar./2016: 53,572 million yen

4. Consolidated Results of Cash Flows (Millions of yen)

5. Net cash provided by (used in) operating activities	Net cash provided by (used in) Investing activities	Net cash provided by (used in) financing activities	Balance of cash and cash equivalents at the end of year
   Fiscal Year 2016 Fiscal Year 2015	19,237 7,799	-10,931 -11,344	-3,360 5,044	22,237 17,646

6. DIVIDEND INFORMATION

   Dividend per share					Total amount of annual dividend (millions of yen)	Dividend payout ratio (consolidated)	Dividend to total net assets (consolidated)
   First quarter	Second quarter	Third quarter	Fiscal-year- end	Annual
   Fiscal year 2015	-	3.50yen	-	0.00yen	3.50yen	424	247.4%	0.7%
   Fiscal year 2016	-	0.00yen	-	3.50yen	3.50yen	424	24.4%	0.8%
   Fiscal year 2017(forecast)	-	3.00yen	-	3.00yen	6.00yen	-

   Note1: The breakdown of the year end dividend for FY 2016 (Ordinary dividend of 3yen Commemorative dividend of 0.5yen)

   Note2: For the details, please refer to "Notice of Difference between the Forecasted Consolidated Business Results and the Actual Business Results for the Fiscal Year and Distribution of Surplus (Resumed Dividend and Commemorative Dividend)" disclosed on May 10, 2017.

7. 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 income (percentage change from the previous year)		Ordinary income (percentage change from the previous year)		Profit attributable to owners of parent (percentage change from the previous year)		Net income per share
   Second quarter (cummulative)	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

8. OTHER

10. Changes in significant subsidiaries during the fiscal year (changes in particular subsidiaries accompanying the change in scope of consolidation): No

11. Changes in accounting policies, changes in accounting estimates, restatement of revisions

    • Changes in accounting policies according to revision of accounting standards, etc. : No

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

    • Changes in accounting estimates : No

    • Restatement of revisions : No

      Mar./2017:	125,490,302	Mar./2016:	125,490,302
      Mar./2017:	4,293,460	Mar./2016:	4,275,417
      Mar./2017:	121,209,587	Mar./2016:	121,225,653

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 the fiscal year

(Reference) SUMMARY OF NON-CONSOLIDATED FINANCIAL RESULTS 1. NON-CONSOLIDATED FINANCIAL RESULTS FOR THE FISCAL YEAR 2016 (April 1, 2016 to March 31, 2017)

1. Non-consolidated Results of Operations (Millions of yen)

   Net sales (percentage change from the previous year)		Operating income (percentage change from the previous year)		Ordinary income (percentage change from the previous year)		Net income (percentage change from the previous year)
   Fiscal Year 2016	102,824	(3.6%)	-2,448	-	2,793	-	2,711	-
   Fiscal Year 2015	99,241	(-7.3%)	-344	-	-1,043	-	-1,178	-

   Net income per share	Diluted net income per share
   Fiscal Year 2016 Fiscal Year 2015	22.37yen -9.72yen	- -

2. Non-consolidated Financial Position (Millions of yen)

Total assets	Net assets	Shareholders' equity ratio	Net assets per share
Fiscal Year 2016 Fiscal Year 2015	139,803 137,134	30,323 27,447	21.7% 20.0%	250.20yen 226.44yen

Reference: Shareholders' equity: Mar./2017: 30,323 million yen / Mar./2016: 27,447 million yen

• This financial report is not subject to the audit procedure.

• The above description about future matters including financial forecast is based upon information available as of the present time and assumptions we considered valid. Due to various factors, our actual performance could greatly differ from the forcast. For assumptions and notes regarding the forcasts, refer to "Qualitative Information concerning the Forecast of Consolidated Business Results ".

1. OPERATING RESULTS

1. ANALYSIS OF OPERATING RESULTS GENERAL REVIEW

   Economic conditions remained on a moderate recovery trend as a whole during the current consolidated fiscal year. The US economy continued to recover, Europe saw an increase in consumption, and the Chinese economy also recovered. The Japanese economy continued on a moderate recovery track, as well, backed by increased overseas demand. In the electronics market the Company mainly services with its products, the market expanded globally and sales remained brisk as a whole. These trends were driven by growing demand for energy-saving white goods with built-in inverters in China and other Asian countries, recovery in the automotive markets in Europe, and support from the extended subsidy policy in China, factors that together outweighed the decreased sales of audio and other AV related products and sluggish sales in the market for office equipment, including printers.

   Under these circumstances, the Company established a basic policy stressing activities to "Focus on growing markets" and "Enhance financial performance" and concentrated its efforts on the development of new products with a focus on strategic markets related to the environment, energy saving, and green energy. Through these efforts, we strove to expand sales and enhance profitability while focusing on measures to reduce inventory and reduce interest-bearing debt.

   For the business results of the consolidated fiscal year, consolidated net sales were ¥158,772 million, an increase of ¥2,852 million (1.8%) compared to the previous fiscal year. These results were a consequence of favorable sales of products for white goods and automotive products mainly in overseas markets in the semiconductor devices segment. For income, we recorded consolidated operating income of

   ¥5,930 million, a decrease of ¥873 million (12.8%) compared to the previous fiscal year due to the exchange rate influenced by a stronger yen. However, we recorded consolidated ordinary income of ¥5,026 million, an increase of ¥1,234 million (32.6%) compared to the previous fiscal year, because non-operating income and expenses improved and extraordinary losses decreased as compared to the previous fiscal year. Profit attributable to owners of parent was ¥1,739 million, an increase of ¥1,567 million (914.0%) compared to the previous fiscal year.

   OVERVIEW OF THE BUSINESS BY SEGMENTS

   Semiconductor Devices

   In this segment, sales of products for white goods such as air conditioners and washing machines and automotive products increased favorably, while sales of AV-related products and products for printers and other office equipment fell. As a result, consolidated net sales for this segment were ¥129,322 million, an increase of ¥4,205 million (3.4%) as compared to the previous fiscal year. For income, consolidated operating income remained ¥9,251 million, almost unchanged from the previous year due to the exchange rate influenced by a stronger yen.

   Power Modules

   In this segment, sales of automotive products increased. As a result, consolidated net sales for this segment were ¥16,153 million, an increase of ¥230 million (1.5%) as compared to the previous fiscal year. For income, however, we recorded consolidated operating loss of

   ¥384 million (consolidated operating loss of ¥973 million in the same period in the previous year), mainly because the Company's structural reform, which centers on conversion of product portfolios and reducing fixed expenses, was still in progress.

   Power Systems

   Sales in this segment declined, chiefly due to sluggish sales of products in the new energy market, in addition to ongoing declines in the sales of products in the telecommunication market. As a result, consolidated net sales were ¥13,296 million, a decrease of ¥1,583 million (10.6%) as compared to the previous fiscal year. For income, consolidated operating loss was ¥180 million (consolidated operating income of ¥973 million in the previous fiscal year), stemming from decreased net sales.

2. ANALYSIS OF FINANCIAL CONDITIONS

   Assets as of the end of the current consolidated fiscal year were ¥182,700 million, a decrease of ¥2,011 million from the end of the previous consolidated fiscal year. This was mainly due to an increase in cash and deposits of ¥4,624 million, and a decrease in total non- current assets of ¥2,222 million, raw materials and supplies of ¥920 million, work in process of ¥759 million and other current assets of

   ¥2,555 million.

   Total liabilities were ¥127,963 million, a decrease of ¥2,788 million from the end of the previous consolidated fiscal year. This was mainly due to an increase in commercial papers of ¥11,000 million, in the mean time, a decrease of ¥15,900 million which was the net result of an increase in bonds payable and a decrease in current portion of bonds payable.

   Net assets were ¥54,736 million, an increase of ¥776 million from the end of the previous consolidated fiscal year. This was mainly due to an increase in retained earnings of ¥1,739 million, and a decrease in foreign currency translation adjustment of ¥934 million.

3. STATUS OF CASH FLOW

   Balance of cash and cash equivalents as of the end of the current consolidated fiscal year was ¥22,237 million, an increase of ¥4,591 million as compared with the end of the previous consolidated fiscal year.

   Net cash provided by operating activities was ¥19,237 million, an increase of ¥11,437 million as compared with the previous year. This was mainly due to an increase in profit before income taxes, and a decrease in cash outflow by an increase in notes and accounts payable- trade.

   Net cash used in investing activities was ¥10,931 million, a decrease of ¥413 million as compared with the previous year. This was mainly due to purchase of property, plant and equipment.

   Net cash used in financing activities was ¥3,360 million, a decrease of ¥8,405 million as compared with the previous year. This was mainly due to redemption of bonds.

   Balance of cash and cash equivalents as of the end of the current consolidated fiscal year was ¥22,237 million, an increase of ¥4,591 million as compared with the end of the previous consolidated fiscal year.

   Net cash provided by operating activities was ¥19,237 million, an increase of ¥11,437 million as compared with the previous year. This was mainly due to an increase in profit before income taxes, and a decrease in cash outflow by an increase in notes and accounts payable- trade.

   Net cash used in investing activities was ¥10,931 million, a decrease of ¥413 million as compared with the previous year. This was mainly due to purchase of property, plant and equipment.

   Net cash used in financing activities was ¥3,360 million, a decrease of ¥8,405 million as compared with the previous year. This was mainly due to redemption of bonds.

   Our index trend concerning the financial conditions of the Company Group is as follows.

   FY 2012	FY 2013	FY 2014	FY 2015	FY 2016
   Equity ratio	26.4%	29.6%	32.4%	29.0%	29.8%
   Equity ratio on the basis of market price	30.7%	53.7%	52.2%	22.2%	32.4%
   Redemption years for liabilities	11.8 years	7.6 years	8.9 years	12.1 years	4.7 years
   Interest coverage ratio	9.4 times	14.9 times	12.7 times	9.5 times	23.8 times

   Equity ratio:

   Equity ratio on the basis of market price: Redemption years for liabilities:

   Interest coverage ratio:

   Equity / Total assets

   Total amount of market price of stocks / Total assets Interest-bearing debts / Cash flow from operating activities Cash flow from operating activities / Interest paid

4. FORECAST FOR THE FUTURE

In the markets the Company mainly services with its products, stable demand chiefly for products for white goods and automotive products is expected to continue throughout the next fiscal year, though uncertainties persist over the outlook for overseas economies. Under these circumstances, the Company will make concerted efforts to achieve goals towards improvements in performance and enhancement of our financial conditions in accordance with the "2015 Mid-term Business Plan." For the consolidated business results of fiscal 2017, we expect net sales of ¥159,000 million, operating income of ¥7,300 million, ordinary income of ¥6,000 million, and profit attributable to owners of parent of ¥2,500 million. These figures are based on an exchange rate of 1US$=¥105 for the fiscal year ending March 31, 2018.

(Note)

The forecast described above is based upon information available as of the present time and assumptions we considered valid. Please be advised that there is a host of uncertain factors that could greatly impact actual performance, including global economic trends, the introduction of new products and their acceptance or lack thereof, and the impact of fair-market-value accounting.