FY2016 SECOND Quarter Consolidated Financial Results (April 1, 2016 to September 30, 2016) (PDF:113KB)

FY 2016 SECOND QUARTER (CUMULATIVE) CONSOLIDATED FINANCIAL RESULTS‌‌‌‌

(April 1, 2016 to September 30, 2016)

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 SIX MONTHS ENDED SEPTEMBER 30, 2016

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)
   Six months ended Sep.30,2016	76,055	(-1.6%)	2,161	(-26.4%)	1,425	(-6.6%)	-72	( - )
   Six months ended Sep.30,2015	77,328	(-0.1%)	2,937	(-43.2%)	1,525	(-69.3%)	109	(-96.8%)

   Note: Comprehensive income: -5,610 million yen ( －%) for the six months ended Sep.30, 2016 / -293 million yen ( －%) for the six months ended Sep.30, 2015

   Net income per share (yen)	Diluted net income per share (yen)
   Six months ended Sep.30,2016 Six months ended Sep.30,2015	-0.60 0.90	－ －

3. Consolidated Financial Position (Millions of yen)

4. Total assets	Net assets	Shareholders' equity ratio
   As of September 30, 2016 As of March 31, 2016	171,008 184,711	48,345 53,959	28.1% 29.0%

   Reference: Shareholders' equity: 48,028 million yen as of Sep.30, 2016 / 53,572 million yen as of Mar.31, 2016

5. DIVIDEND INFORMATION

   Dividend per share
   First quarter	Second quarter	Third quarter	Fiscal-year-end	Annual
   Fiscal year 2015 Fiscal year 2016	- -	3.50yen 0.00yen	-	0.00yen	3.50yen
   Fiscal year 2016 (forecast)	-	-	-

   Note1: Revision to recently disclosed dividend forecast: No

   Note2: Fiscal-year-end dividend for FY 2016 is not yet determined.

6. FISCAL YEAR 2016 CONSOLIDATED FINANCIAL FORECAST (April 1, 2016 to March 31, 2017)

   (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
   Full Year	156,000	(0.1%)	7,000	(2.9%)	5,500	(45.0%)	2,500	－	20.62yen

   Note: Revision to recently disclosed financial forecast: No

7. OTHER

9. Changes in significant subsidiaries during the six months ended September 30, 2016 (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 according to the revision of accounting standards, etc. : No

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

    • Changes in accounting estimates : No

    • Restatements : No

      Sep./2016:	125,490,302	Mar./2016:	125,490,302
      Sep./2016:	4,278,436	Mar./2016:	4,275,417
      Apr./2016-Sep./2016	121,213,464	Apr./2015-Sep./2015	121,231,798

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 six months ended September 30

* 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 forecast. For assumptions and notes regarding the forecasts, refer to "Qualitative Information of Consolidated Financial Forecast ".

1. QUALITATIVE INFORMATION ABOUT CONSOLIDATED BUSINESS RESULTS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2016
1. QUALITATIVE INFORMATION OF CONSOLIDATED OPERATING RESULTS

   During the six months ended September 30, 2016, there were favorable indications in the global economy, including the continued steady expansion of the US economy and increased personal consumption in Europe. The Japanese economy also continued its gradual recovery, as employee compensation increased progressively, and there were signs of a recovery in individual consumer confidence. On the other hand, the economic recovery of China was still sluggish, but the overall economy continued on its gradual recovery track, despite some bearish tendencies.

   Under these circumstances, the Company maintained a basic policy stressing activities to "Focus on growing markets" and "Enhance financial performance," strove to improve profitability by changing the composition of its product lineups, and worked to reduce inventory. In the six months ended September 30, 2016, sales of automotive products and products for white goods increased, while sales in the power systems segment remained stagnant. As a result, net sales were ¥76,055 million, a decrease of ¥1,273 million (1.6%) as compared to the same period in the previous year. In terms of income, affected by factors such as a stronger yen, operating income was ¥2,161 million, a decrease of

   ¥776 million (26.4%) year on year, and ordinary income was ¥1,425 million, a decrease of ¥100 million (6.6%) year on year. In addition, we recorded loss attributable to owners of parent of ¥72 million (profit attributable to owners of parent of ¥109 million in the same period in the previous year).

   Overview of business by segment is as follows.

   In the semiconductor devices segment, although sales of automotive products and products for white goods such as air conditioners and washing machines increased, affected by the stronger yen, consolidated net sales from this segment were ¥62,645 million, a decrease of ¥222 million (0.4%) as compared to the same period in the previous year. Due to the decrease in net sales, consolidated operating income was

   ¥4,376 million, a decrease of ¥40 million (0.9%) as compared to the same period in the previous year.

   For the power modules segment, though sales of automotive products, the product category of focus for the Company, increased, sales of products for multi-function printers and audio products decreased. As a result, consolidated net sales from this segment were ¥8,199 million, a decrease of ¥147 million (1.8%) as compared ttoo tthhe saamme peerriiod iinn tthhee pprreevviiouuss yeeaar.. FFor income, we recorded connsooliddaatted opeerraatting llooss of

   ¥323 million (consolidated operating loss of ¥374 million in the same period in the previous year), mainly because the Company's structural reform, which centers on establishing high value-added business portfolios and reducing fixed expenses, was still in progress.

   For the power systems segment, regarding sales of products for the telecommunication market, sales of products for mobile phone base stations remained weak, and sales of products for the new energy market were sluggish as well. As a result, consolidated net sales from this segment were ¥5,210 million, a decrease of ¥903 million (14.8%) as compared to the same period in the previous year, and we recorded consolidated operating loss of ¥388 million (consolidated operating income of ¥237 million in the same period in the previous year).

2. QUALITATIVE INFORMATION OF CONSOLIDATED FINANCIAL POSITION
3. Status of Assets, Liabilities and Net Assets

   Assets as of the end of September 30, 2016 were ¥171,008 million, a decrease of ¥13,703 million from the end of the previous consolidated fiscal year. This was mainly due to a decrease in property, plant and equipment of ¥5,253 million, inventories of ¥3,718 million and notes and accounts receivable - trade of ¥2,045 million.

   Liabilities were ¥122,663 million, a decrease of ¥8,088 million from the end of the previous consolidated fiscal year. This was mainly due to a decrease in commercial papers of ¥2,000 million, short-term loans payable of ¥1,839 million and net defined benefit liability of ¥1,202 million.

   Net Assets were ¥48,345 million, a decrease of ¥5,614 million from the end of the previous consolidated fiscal year. This was mainly due to a decrease in foreign currency translation adjustment of ¥5,936 million, and an increase in remeasurements of defined benefit plans of

   ¥465 million.

4. Status of Cash Flows

   Balance of cash and cash equivalents at the end of the six months ended September 30, 2016 was ¥17,427 million, a decrease of ¥218 million as compared to the end of the previous consolidated fiscal year.

   Net cash provided by operating activities was ¥9,205 million, an increase of ¥9,415 million as compared to the same period in the previous fiscal year. This was mainly due to an increase in income by a decrease in inventories, and a decrease in cash outflow by an increase in notes and accounts payable-trade.

   Net cash used in investing activities was ¥4,920 million, a decrease of ¥3,067 million as compared to the same period in the previous fiscal year. This was mainly due to a decrease in cash outflow by purchase of property, plant and equipment.

   Net cash used in financing activities was ¥3,198 million, an increase of ¥9,118 million as compared to the same period in the previous fiscal year. This was mainly due to an increase in cash outflow by redemption of bonds.

5. QUALITATIVE INFORMATION OF CONSOLIDATED FINANCIAL FORECAST

6. Uncertainty about the future of the global economy has been growing due to factors such as uncertainty about the direction in the US monetary policy, the effects of the UK's decision to depart from the EU, as well as concerns over trends in the Chinese financial market due to issues including its problem of excessive debt. Concern over the future of the Japanese economy has also been increasing despite improvements in the employment and income environment, stemming from signs of weakness in overseas economies such as those of emerging countries. Under these circumstances, the Company will continue working as one to achieve the enhancement of our financial conditions and secure profits. To accomplish this, the Company will strive to increase net sales of its strategic fields by developing new products, not only in automotive products and products for white goods, but also by focusing on fields related to the environment, energy saving, and green energy. The Company will also work on improving its product mix to better fit the markets that merit its focus.