February 4, 2011 Nihon Dempa Kogyo Co., Ltd. Consolidated Financial Results Tokyo, February 4, 2011 – Nihon Dempa Kogyo Co., Ltd. today announced its consolidated business results for the nine months ended December 31, 2010, the 3rd quarter of the fiscal year ending March 31, 2011. The following summary of the business results and the attached financial statements are unaudited and prepared in accordance with International Financial Reporting Standards (IFRS). 1. Consolidated Financial Results for the Nine Months Ended December 31, 2010 (April 1, 2010 - December 31, 2010) (Millions of Yen, Figures less than a million yen are omitted) December 31, 2010 (1) Results of Operations Net sales Operating income Income before income tax Net income for the period Net income attributable to owners of the parent Total comprehensive income for the period Basic earnings per share (Yen) Diluted earnings per share (Yen) December 31, 2009 41,991 2,171 1,891 1,836 1,836 612 93.57 93.54 (2) Financial Position Total assets Total equity Total equity attributable to owners of the parent Total equity attributable to owners of the parent to total assets Total equity attributable to owners of the parent per share (Yen) December 31, 2010 39,443 3,993 4,341 4,285 4,285 3,848 218.33 196.87 March 31, 2010 66,566 24,413 24,413 36.7% 1,243.71 64,558 24,193 24,193 37.5% 1,232.50 2. Conditions of Dividends Year ended Year ending Year ending March 31, 2010 March 31, 2011 March 31, 2011 (Forecast) Interim dividend per share (Yen) Year-end dividend per share (Yen) Total annual dividend per share (Yen) 10.00 10.00 20.00 1 10.00 - 10.00 20.00 February 4, 2011 Nihon Dempa Kogyo Co., Ltd. 3. Consolidated business forecast for the Fiscal Year Ending March 31, 2011 (April 1, 2010 - March 31, 2011) (Millions of Yen) Forecast of Operations Year ending March 31, 2011 Net sales 55,000 Operating income 3,500 Income before income tax 3,200 Net income 3,000 Net income attributable to owners of the parent 3,000 Basic earnings per share (Yen) 152.83 Note: The estimates showing above are based on information available to the Company on the date of the report's announcement. Due to the unforeseen circumstances, actual results may differ from such estimates. 4. Others (1) Change in Scope of Consolidation There was no significant change in scope of consolidation for the nine months ended December 31, 2010. (2) Number of outstanding shares (Ordinary shares) Number of shares December 31, March 31, 2010 2010 Class of shares Ordinary shares Ordinary shares 20,757,905 20,757,905 Number of outstanding shares at end of period 1,127,984 1,128,432 Number of treasury shares at end of period *19,630,328 19,629,814 Average number of shares for the period Note: *This figure shows average number of shares from April 1, 2009 to December 31, 2009. 2 February 4, 2011 Nihon Dempa Kogyo Co., Ltd. 5. Financial Statements (1) Consolidated Statements of Financial Position (Millions of Yen, Figures less than a million yen are omitted) December 31, March 31, 2010 2010 ASSETS Current assets: Cash and cash equivalents Trade receivables Inventories Income taxes refundable Others Total current assets 10,834 13,896 9,437 96 2,393 36,659 8,722 13,318 9,356 133 2,110 33,641 25,128 1,110 254 1,018 1,313 1,080 29,907 66,566 25,668 1,155 254 1,297 3 1,378 1,158 30,916 64,558 Non-current assets: Property, plant and equipment Intangible assets Investment property Investment securities Derivatives Deferred tax assets Others Total non-current assets Total assets 3 February 4, 2011 Nihon Dempa Kogyo Co., Ltd. (Millions of Yen, Figures less than a million yen are omitted) December 31, March 31, 2010 2010 LIABILITIES AND EQUITY Current liabilities: Short-term loans Current portion of long-term debt Current portion of Convertible bonds Trade and other payables Provisions for settlement for products sold Income taxes payable Others Total current liabilities 2,641 4,762 245 9,642 314 268 738 18,613 6,991 4,359 10,224 1,016 144 663 23,400 18,664 997 2,935 39 168 212 522 23,539 42,153 240 11,848 1,157 2,658 38 311 147 560 16,963 40,364 10,649 9,899 (3,432) 7,297 24,413 24,413 66,566 10,649 9,899 (2,208) 5,853 24,193 24,193 64,558 Non-current liabilities: Convertible bonds Long-term debt, net of current portion Deferred tax liabilities Employee benefits Provisions for asset retirement obligation Provisions for settlement for products sold Deferred government grants Others Total non-current liabilities Total liabilities Equity: Share capital Share premium Other components of equity Retained earnings Total equity attributable to owners of the parent Total equity Total liabilities and equity 4 February 4, 2011 Nihon Dempa Kogyo Co., Ltd. (2) Consolidated Statements of Comprehensive Income for the Nine Months Ended December 31, 2010 (Millions of Yen, Figures less than a million yen are omitted) December 31, December 31, 2009 2010 39,443 27,683 11,759 5,574 1,492 748 1,447 3,993 652 304 4,341 55 4,285 Net sales Cost of sales Gross profit Selling, general and administrative expenses Research and development expenses Other operating income Other operating expenses Operating income Finance income Finance expenses Income before income tax Income tax benefits Net income for the period 41,991 32,147 9,843 5,691 1,804 276 452 2,171 45 325 1,891 55 1,836 Other comprehensive income: Foreign currency translation differences for foreign operations Change in fair value of available-for-sale financial assets Change in fair value of available-for-sale financial assets transferred to profit or loss Income tax on other comprehensive income Other comprehensive loss for the period, net of income tax Total comprehensive income for the period (464) 46 - (1,065) (272) 5 (18) (437) 3,848 107 (1,224) 612 4,285 4,285 4,285 1,836 1,836 1,836 3,848 3,848 612 612 218.33 196.87 93.57 93.54 218.33 196.87 93.57 93.54 Net income attributable to: Owners of the parent Net income from continuing operations Net income attributable to owners of the parent Net income for the period Total comprehensive income attributable to: Owners of the parent Total comprehensive income for the period Earnings per share: Basic earnings per share (Yen) Diluted earnings per share (Yen) Earnings per share (Continuing operations) : Basic earnings per share (Yen) Diluted earnings per share (Yen) 5 February 4, 2011 Nihon Dempa Kogyo Co., Ltd. (3) Consolidated Statements of Changes in Equity (Millions of Yen, Figures less than a million yen are omitted) Share premium Share Capital Balance at April 1, 2009 Additional paid-in capital 10,649 11,353 Treasury shares (2,784) Convertible bonds 1,739 Reserve for share-based payments 35 Total share premium 10,344 Total comprehensive income for the period Net income Other comprehensive income/(loss), net of income tax Foreign currency translation differences for foreign operations Net change in fair value of available-for-sale financial assets Total comprehensive income for the period Transactions with owners, recorded directly in equity Contributions by and distributions to owners - - Changes in treasury shares, net - - (0) (0) Dividends declared Redemption of convertible bonds Total contributions by and distributions to owners Total transactions with owners Balance at December 31, 2009 10,649 (0) (0) 11,353 (0) (0) (2,785) - (443) (443) (443) 1,296 - 35 - (0) (443) (444) (444) 9,900 Other components of equity Balance at April 1, 2009 Availablefor-sale financial assets Translation differences for foreign operations Total other components of equity Retained earnings Attributable to owners of the parent 108 (2,147) (2,039) 1,712 20,667 20,667 4,285 4,285 4,285 Total equity Total comprehensive income for the period Net income Other comprehensive income/(loss), net of income tax Foreign currency translation differences for foreign operations Net change in fair value of available-for-sale financial assets Total comprehensive income for the period Transactions with owners, recorded directly in equity Contributions by and distributions to owners - (464) 27 27 Balance at December 31, 2009 6 27 27 27 3,848 3,848 (0) (196) (443) (640) (640) 23,875 (0) (196) (443) (640) (640) 23,875 (2,612) (2,476) Redemption of convertible bonds 136 (464) (437) Dividends declared Total transactions with owners (464) (464) Changes in treasury shares, net Total contributions by and distributions to owners (464) 4,285 (196) (196) (196) 5,802 February 4, 2011 Nihon Dempa Kogyo Co., Ltd. (Millions of Yen, Figures less than a million yen are omitted) Share premium Share Capital Balance at April 1, 2010 Additional paid-in capital 10,649 11,353 Treasury shares (2,785) Convertible bonds 1,296 Reserve for share-based payments Total share premium 35 9,899 Total comprehensive income for the period - Net income Other comprehensive loss, net of income tax Foreign currency translation differences for foreign operations Net change in fair value of available-for-sale financial assets Total comprehensive income for the period Transactions with owners, recorded directly in equity Contributions by and distributions to owners - - - Total transactions with owners Balance at December 31, 2010 - (0) Changes in treasury shares, net Dividends declared Total contributions by and distributions to owners - 10,649 11,353 (0) (0) (2,786) 1,296 35 - (0) (0) (0) 9,899 Other components of equity Balance at April 1, 2010 Availablefor-sale financial assets Translation differences for foreign operations Total other components of equity Retained earnings Attributable to owners of the parent 240 (2,448) (2,208) 5,853 24,193 24,193 1,836 1,836 1,836 (1,065) (1,065) (1,065) (158) (158) (158) 612 612 Total equity Total comprehensive income for the period - Net income Other comprehensive loss, net of income tax Foreign currency translation differences for foreign operations Net change in fair value of available-for-sale financial assets Total comprehensive income for the period Transactions with owners, recorded directly in equity Contributions by and distributions to owners (1,065) (158) (158) (1,065) (1,224) 1,836 (3,514) (3,432) (392) (392) (392) 7,297 Changes in treasury shares, net Dividends declared Total contributions by and distributions to owners Total transactions with owners Balance at December 31, 2010 81 7 (0) (392) (393) (393) 24,413 (0) (392) (393) (393) 24,413 February 4, 2011 Nihon Dempa Kogyo Co., Ltd. (4) Consolidated Statements of Cash Flows for the Nine Months Ended December 31, 2010 (Millions of Yen, Figures less than a million yen are omitted) December 31, December 31, 2009 2010 Operating activities: Income before income tax Depreciation and amortisation Loss on impairment of property, plant and equipment Settlement for products sold Reversal of provisions for settlement for products sold Gain on redemption of convertible bonds Increase in trade receivables Increase in inventories Decrease in consumption tax/value-added tax receivables Increase in trade payables Interest and dividends income Interest expense Interest and dividends received Interest paid Income taxes refund, net Payment for settlement for products sold Other, net Net cash provided by operating activities 4,341 2,261 9 1,118 (102) (572) (2,614) (3,815) 491 2,074 (34) 291 35 (269) 802 (386) (260) 3,369 1,891 2,448 18 205 (57) (1,210) (382) 137 35 (28) 238 27 (231) 25 (932) (524) 1,661 (3,847) (55) (56) 96 28 388 0 (3,444) (1,843) (91) (483) 21 17 203 (0) (2,175) (4,036) 1,509 (126) (3,050) (0) (5,705) (5,780) 15,617 (128) 9,707 11,500 (4,210) (4,023) (329) (0) 2,936 2,421 8,722 (309) 10,834 Investing activities: Purchase of property, plant and equipment Purchase of intangible assets Purchase of investments and other assets Proceeds from sales of property, plant and equipment Proceeds from grant of subsidies Proceeds from sales of investments and other assets Other, net Net cash used in investing activities Financing activities: Proceeds from issue of long-term debt Repayment of long-term debt Net increase / (decrease) in short-term loans Cash dividends paid Payment for redemption of convertible bonds Purchase and sales of treasury shares, net Net cash (used in) / provided by financing activities Net (decrease) / increase in cash and cash equivalents Cash and cash equivalents at beginning of period Net effect of currency translation on cash and cash equivalents Cash and cash equivalents at end of period 8 February 4, 2011 Nihon Dempa Kogyo Co., Ltd. 6. Segment Information (1) General information The main activities of the Group are the integrated manufacture and sale of quartz crystal units, crystal oscillators, optical devices, ultrasonic transducers and synthetic quartz crystals and there are no separate operating segments. Therefore, the Group has a single reportable segment. (2) Information about products and services Sales by type of products for the nine months ended December 31, 2010 are as follows: (Millions of Yen, Figures less than a million yen are omitted) December 31, 2009 Amount Quartz crystal units Crystal devices Others Total 17,596 16,113 5,732 39,443 December 31, 2010 Composition (%) Amount 44.6 40.9 14.5 100.0 21,408 15,674 4,908 41,991 9 Increase/(decrease) Composition (%) 51.0 37.3 11.7 100.0 Amount 3,811 (438) (824) 2,548 (%) 21.7 (2.7) (14.4) 6.5