Kaga Electronics : Earnings Release FY2025/3

About this update from Kaga Electronics Co., Ltd.

May 14, 2026 Summary of Consolidated Financial Results for the Year Ended March 2026 [Japan GAAP] Name of Company: KAGA ELECTRONICS CO., LTD. Stock Code: 8154 URL: https://www.taxan.co.jp/ Stock Exchange Listing: Tokyo Stock Exchange, Prime Market Representative Title: Representative Director, President & COO Name: Ryoichi Kado Contact Person Title: Director, Senior Executive Officer Head of Administration Headquarters Name: Yasuhiro Ishihara Phone: +81-(0)3-5657-0111 Date of regular general meeting of shareholders: June 25, 2026 (tentative) Date of commencement of dividend payment: June 10, 2026 (tentative) Date of filing of securities report: June 30, 2026 (tentative) Earnings supplementary explanatory documents: Yes Earnings presentation: Yes (For institutional investors and analysts) (Yen in millions, rounded down) Financial results for the current fiscal year (April 1, 2025 - March 31, 2026) Result of operations (Consolidated) (Percentage figures represent year on year changes) Net sales Operating income Ordinary income Profit attributable to owners of parent Million yen % Million yen % Million yen % Million yen % Fiscal year ended March 2026 658,941 20.3 27,824 17.9 29,930 32.5 31,099 82.0 Fiscal year ended March 2025 547,779 0.9 23,601 (8.7) 22,593 (13.0) 17,083 (16.0) Note: Comprehensive income: FY ended March 31, 2026: 37,711 million yen [81.8%] FY ended March 31, 2025: 20,744 million yen [(23.8)%] Earnings per share Earnings per share (diluted) Return on equity Ratio of ordinary income to assets Ratio of operating income to net sales Yen Yen % % % Fiscal year ended March 2026 627.71 — 17.8 8.4 4.2 Fiscal year ended March 2025 325.08 — 10.8 7.6 4.3 Ref.: Share of profit/loss of entities accounted for using equity method: FY ended March 2026: 39 million yen FY ended March 2025: (90) million yen Notes: The Company conducted a two-for-one stock split of its common stock effective October 1, 2024. Earnings per share is calculated on the assumption that the stock split was conducted at the beginning of the fiscal year ended March 2024.Note that diluted earnings per share is indicated as “-” because there are no diluted shares. Financial Position (Consolidated) Total assets Net assets Equity ratio Net assets per share Million yen Million yen % Yen As of March 31, 2026 403,694 183,516 45.5 3,850.35 As of March 31, 2025 305,671 166,379 54.4 3,162.68 Ref.: Shareholdersʼ equity︓FY ended March 2026: 183,503 million yen FY ended March 2025: 166,218 million yen Cash flow position (Consolidated) Net cash provided by (used in) operating activities Net cash provided by (used in) investing activities Net cash provided by (used in) financing activities Cash and cash equivalents at end of period Million yen Million yen Million yen Million yen Fiscal year ended March 2026 (2,471) (3,466) 20,329 88,292 Fiscal year ended March 2025 25,047 (9,967) (7,343) 72,681 Dividends Dividend per share Annual aggregate amount Payout ratio (Consolidated) Dividends/ net assets (Consolidated) 1Q 2Q 3Q Year- end Full year Yen Yen Yen Yen Yen Million yen % % Fiscal year ended March 2025 — 110.00 — 55.00 — 5,781 33.8 3.7 Fiscal year ended March 2026 — 60.00 — 80.00 140.00 6,672 22.3 4.0 Fiscal year ending March 2027 (Forecast) — 70.00 — 70.00 140.00 33.4 Notes:1. Breakdown of interim dividend for 2026/3: Ordinary dividend: 55.00 yen; Extraordinary dividend: 5.00 yen Breakdown of year-end dividend for 2026/3: Ordinary dividend: 55.00 yen; Extraordinary dividend: 25.00 yen 2. The Company conducted a two-for-one stock split of its common stock effective October 1, 2024. The amount of the year-end dividend per share presented above for the fiscal year ended March 2025 takes into account the effect of the stock split, and the full-year dividend amount is indicated as “-”. Assuming that the stock split was conducted at the beginning of the previous fiscal year, the interim dividend would be 55.00 yen, and the full year dividend per share would be 110.00 yen. Forecast for the fiscal year ending March 2027 (Consolidated, April 1, 2026 - March 31, 2027) (Percentage figures represent year on year changes) Net sales Operating income Ordinary income Profit attributable to owners of parent Earnings per share Full year Million yen % Million yen % Million yen % Million yen % Yen 645,000 (2.1) 28,500 2.4 28,000 (6.5) 20,000 (35.7) 419.65 Notes Significant changes in the scope of consolidation during the period : Yes New: 8 (Company Name): Kyoei Sangyo Co., Ltd. and seven other companies Changes in accounting policies, estimates, and retrospective restatement Changes due to revision of accounting standards: None Changes other than (a): None Changes in accounting estimates: None Retrospective restatement: None Number of shares outstanding (common stock) (a) Shares outstanding (including treasury shares) As of March 31, 2026: 52,486,836 As of March 31, 2025: 57,404,236 (b) Treasury shares As of March 31, 2026: 4,827,804 As of March 31, 2025: 4,847,842 (c) Average number of shares outstanding during the year As of March 31, 2026: 49,544,258 As of March 31, 2025: 52,549,881 Notes: 1. The Company conducted a two-for-one stock split of its common stock effective October 1, 2024. The average number of shares was calculated on the assumption that the stock split was conducted at the beginning of the previous fiscal year. 2. As a result of the cancellation of treasury shares on August 18, 2025, the number of shares issued at the end of the fiscal year decreased by 4,917,400 shares. (Reference) Non-consolidated Financial Results Financial results for the fiscal year ended March 2026 (April 1, 2025 - March 31, 2026) Result of operations (Non-consolidated) (Percentage figures represent year on year changes) Net sales Operating income Ordinary income Profit Million yen % Million yen % Million yen % Million yen % Fiscal year ended March 2026 128,164 9.1 5,793 9.2 21,521 45.6 19,894 56.5 Fiscal year ended March 2025 117,513 0.5 5,306 (11.4) 14,782 (10.7) 12,713 (17.8) Earnings per share Earnings per share (diluted) Yen Yen Fiscal year ended March 2026 401.52 — Fiscal year ended March 2025 241.92 — Notes: The Company conducted a two-for-one stock split of its common stock effective October 1, 2024. Earnings per share is calculated on the assumption that the stock split was conducted at the beginning of the fiscal year ended March 2024. Note that diluted earnings per share is indicated as “-” because there are no diluted shares. Financial Position (Non-consolidated) Total assets Net assets Equity ratio Net assets per share Million yen Million yen % Yen As of March 31, 2026 153,035 67,464 44.1 1,415.43 As of March 31, 2025 137,381 67,372 49.0 1,281.80 Ref.: Shareholdersʼ equity Fiscal year ended March 2026: 67,464 million yen Fiscal year ended March 2025: 67,372 million yen *The audit procedures by certified public accountant or auditing firm are not applicable to this Financial Results report. *Cautionary statement regarding forecasts of operating results and special notes (Caution regarding forward-looking statements) Forward-looking statements in these materials are based on information available to management at the time this report was prepared and assumptions that management believes are reasonable. Actual results may differ significantly from these statements for a number of reasons. For information about the forecasts, please see “1. Results of Operations (4) Future outlook” on page 9 of Supplementary Information. (Materials for financial results and how to obtain details of the financial results meeting) We plan to hold an earnings briefing for institutional investors and analysts on Thursday, May 28, 2026. Materials for the earnings presentation (Japanese and English) will be posted on TDnet and our website today (Thursday, May 14th). We plan to post a video of the earnings briefing, together with the briefing materials used on that day, on our website on May 28th. (A video of the earnings briefing in English will be posted at a later date.) （Japanese） https://www.taxan.co.jp/jp/ir/event/event_01.html （English） https://www.taxan.co.jp/en/ir/event/event_01.html Index for Supplementary Information Results of Operations 2 Overview of consolidated business performance 2 Overview of financial condition 8 Cash flows 8 Future outlook 9 Basic policy for earnings allocations and dividends in the current and next fiscal years 10 Basic Approach to the Selection of Accounting Standards 10 Consolidated Financial Statements and Major Notes 11 Consolidated balance sheet 11 Consolidated statements of income and comprehensive income 13 Consolidated statement of changes in equity 15 Consolidated statement of cash flows 17 Notes to consolidated financial statements 19 (Notes to going concern assumptions) 19 (Notes to Segment information, etc.) 19 (Per-share information) 21 (Subsequent events) 21 ‌Results of Operations ‌Overview of consolidated business performance FY 2025/3 (April 1, 2024 - March 31, 2025) FY 2026/3 (April 1, 2025 - March 31, 2026) YoY Net sales （ Million yen） 547,779 （ Million yen） 658,941 （ Million yen） 111,162 20.3% Gross profit （Margin） 71,665 13.1％ 85,350 13.0％ 13,684 (0.1pt) 19.1% — SG&A 48,064 57,525 9,460 19.7% Operating income （Margin） 23,601 4.3% 27,824 4.2% 4,223 (0.1pt) 17.9% — Ordinary income 22,593 29,930 7,336 32.5% Profit before income taxes 23,709 40,376 16,666 70.3% Profit attributable to owners of parent 17,083 31,099 14,016 82.0% EPS (yen) 325.08 627.71 302.63 — ROE 10.8% 17.8% 7.0pt — Exchange Rate (Average rate during the year) USD (yen) 152.58 150.77 (1.81) — Notes: The Company conducted a two-for-one stock split of its common stock effective October 1, 2024. Earnings per share is calculated on the assumption that the stock split was conducted at the beginning of the fiscal year ended March 2024. Business Environment Surrounding the Group During the consolidated fiscal year under review, the global economy faced heightened uncertainty due to factors such as the impact of U.S. tariff policies, the prolonged situation in Ukraine, and elevated resource prices and supply chain disruptions driven by tensions in the Middle East. In the electronics industry to which the Group belongs, while inventory adjustments in the supply chain were easing, automotive applications maintained a solid performance, supported by a recovery in demand driven by the continued advancement of vehicle electrification and technological sophistication. Meanwhile, against the backdrop of expanding demand for AI servers, the tight supply-demand conditions for memory products have led to rising procurement costs and difficulties in sourcing across a broad range of industries. The following is an overview of consolidated business performance during the consolidated fiscal point under review. Net Sales In the electronic components business, while as inventory adjustments in the supply chain gradually eased, spot sales were actively conducted in response to the tight supply-demand conditions for memory products. In the EMS(*) business, capacity expansion at overseas production sites contributed to increased sales. In the information equipment business, sales of PCs to educational institutions and mass retailers performed well. In the others business, the amusement equipment business for the U.S. market sustained sales growth throughout the year. Furthermore, as a result of the tender offer conducted in July 2025, Kyoei Sangyo Co., Ltd. became a consolidated subsidiary of the Company from the 2nd quarter. As a result, net sales increased by 111,162 million yen year on year to 658,941 million yen. Note: Electronics Manufacturing Service: Provision of product development and manufacturing services on an outsourcing basis. Gross Profit Gross profit increased by 13,684 million yen year on year to 85,350 million yen, driven by higher sales. Operating income Selling, general and administrative expenses increased, driven by higher sales-related costs associated with overall sales growth, and increased fixed costs arising from a corporate acquisition, among other factors. Nevertheless, higher gross profit more than offset these increases, resulting in operating income rising by 4,223 million yen year on year to 27,824 million yen Ordinary income Non-operating income and expenses improved as foreign exchange losses recorded in the previous fiscal year turned into gains, partly due to exchange rate fluctuations in the second half of the fiscal year under review. As a result, ordinary income increased by 7,336 million yen year on year to 29,930 million yen. Profit before income taxes Profit before income taxes increased by 16,666 million yen year on year to 40,376 million yen, driven by the recognition of extraordinary income, including a gain on bargain purchase from a corporate acquisition (7,797 million yen) and gains on sales of investment securities resulting from the reduction of cross-shareholdings (1,663 million yen). Profit attributable to owners of parent Profit attributable to owners of parent increased by 14,016 million yen year on year to 31,099 million yen, due to the recognition of income taxes – current. Progress in the first year (FY2026/3) of the “Medium-Term Management Plan 2027” From a financial performance perspective, results remained solid throughout the fiscal year, with the earnings forecast revised upward three times during the period. In addition, year-on-year increases were recorded in net sales, gross profit, and all profit levels, including profit attributable to owners of parent. In addition, net sales and profit attributable to owners of parent achieved record highs for the first time in three fiscal years since the fiscal year ended March 2023. Meanwhile, the Company pursued bold and swift initiatives under the basic policy set forth in the Medium-Term Management Plan 2027, which is to “enhance corporate value through management that emphasizes profitability and capital efficiency.” With regard to “M&A Challenges,” which we identified as one of our priority measures, in July 2025 we acquired Kyoei Sangyo Co., Ltd. through a tender offer, making it a consolidated subsidiary. Regarding the “Implementation of Capital Strategies,” in August 2025, we acquired all shares (4.92 million shares, representing 9.4% of total issued shares) held by our four principal banking partners for a total of 14.4 billion yen and subsequently cancelled all such shares. This represents the largest share repurchase in the Companyʼs history in terms of volume, and marks our first-ever cancellation of treasury shares. Thus, we recognize that we have achieved a solid start in the first year of our Medium-Term Management Plan 2027. Business segment performance FY 2025/3 (April 1, 2024 - March 31, 2025) FY 2026/3 (April 1, 2025 - March 31, 2026) YoY Electronic components Net sales Segment income （ Million yen） 472,910 16,927 （ Million yen） 568,834 19,304 （ Million yen） 95,924 2,377 20.3％ 14.0％ Information equipment Net sales Segment income 42,652 3,307 54,182 4,444 11,529 1,137 27.0％ 34.4％ Software Net sales Segment income 3,387 509 3,307 365 (80) (143) (2.4％) (28.2％) Others Net sales Segment income 28,829 2,707 32,617 3,487 3,788 780 13.1％ 28.8％ Total Net sales Segment income 547,779 23,601 658,941 27,824 111,162 4,223 20.3％ 17.9％ Note: “Segment income” shows unadjusted figures for each business segment and adjusted figures for the total. (a) Electronic components (Development, manufacture and sale of semiconductors, general electronic components and other products, the electronics manufacturing service EMS, and other activities) In the components sales business, while supply chain inventory adjustments were easing, spot sales were actively pursued, leveraging procurement strengths as an independent trading company (approximately 41,100 million yen). This was in response to tightening supply-demand conditions for certain semiconductor products, primarily including commodity memory, driven by growing memory demand for AI server applications, which became evident in the second half of the previous fiscal year. In addition, the sales of Kyoei Sangyo Co., Ltd., which became a consolidated subsidiary, have been included in the results from the 2nd quarter onward. In the EMS business, a slowdown in demand was observed among certain customers in the automotive sector. However, aggressive capital expenditures focused on overseas production sites proved effective, and sales to medical and air-conditioning equipment sectors remained robust. As a result, net sales increased 20.3% year on year to 568,834 million yen and segment income increased 14.0% year on year to 19,304 million yen. (b) Information equipment (Sales of finished products such as PCs, PC peripherals, home electric appliances, photograph and imaging products, original brand products, and other products) In the PC sales business, initiatives were undertaken to increase the number of partner schools in sales to educational institutions. As a result, sales remained strong, supported in part by demand from the second phase of the GIGA School program. Sales to mass retailers performed well throughout the year, driven by launches of new products, such as AI PCs, from major PC manufacturers, replacement demand following the end of Windows 10 support, and front-loaded demand in anticipation of rising memory prices. In addition, sales of security software for mobile devices also contributed to the growth in this business segment, supported by factors such as replacement demand driven by the introduction of new products. As a result, net sales increased 27.0% year on year to 54,182 million yen and segment income increased 34.4% year on year to 4,444 million yen. (c) Software (Production of computer graphics, planning and development of amusement products, and other activities) In computer graphics production for games and amusement equipment, proactive initiatives were undertaken to secure new orders. However, net sales decreased due to a reactionary effect from large-scale orders recognized in the second half of the previous fiscal year. Although profitability stabilized from Q2 onward, the operating loss incurred in Q1 continued to weigh on performance, resulting in a year-on-year decline in full-year profits. As a result, net sales decreased 2.4% year on year to 3,307 million yen and segment income decreased 28.2% year on year to 365 million yen. (d) Others (Repair and supports for electronics equipment, manufacture and sales of amusement equipment, and sales of sports goods, and other activities) The recycling and reuse business for PC products and PC peripherals performed well, supported by demand driven by the transition from Windows 10 to Windows 11, as well as price increases in new PC products due to rising memory prices. Furthermore, the amusement equipment business, which had benefited from robust front-loaded shipments for the U.S. market since the second half of the previous fiscal year, began to level off in the second half of the fiscal year. However, net sales maintained year-on-year growth on a full-year basis. As a result, net sales increased 13.1% year on year to 32,617 million yen and segment income increased 28.8% year on year to 3,487 million yen. Financial results Financial highlights(3months) FY 2025/3 Q4 FY 2026/3 Q4 (3months) (January 1, 2025 - (3months) (January 1, 2026 - YoY March 31, 2025) March 31, 2026) Net sales （ Million yen） 151,536 （ Million yen） 213,466 （ Million yen） 61,930 40.9％ Gross profit （Margin） 19,475 12.9％ 25,388 11.9％ 5,912 (1.0pt) 30.4％ — SG&A 13,930 17,013 3,083 22.1％ Operating income 5,545 8,374 2,829 51.0％ （Margin） 3.7% 3.9% 0.2pt — Ordinary income 4,214 9,164 4,950 117.5％ Profit before income taxes 5,247 9,058 3,811 72.6％ Profit attributable to owners of parent 4,368 6,790 2,422 55.5％ By segment FY 2025/3 Q4 (3months) (January 1, 2025 - March 31, 2025) FY 2026/3 Q4 (3months) (January 1, 2026 - March 31, 2026) YoY Electronic Components Net sales Segment income （ Million yen） 126,697 3,358 （ Million yen） 184,942 5,536 （ Million yen） 58,244 2,177 46.0％ 64.8％ Information Equipment Net sales Segment income 15,699 1,353 20,530 1,944 4,830 590 30.8％ 43.6％ Software Net sales Segment income 1,316 201 781 131 (535) (69) (40.7％) (34.5％) Others Net sales Segment income 7,822 610 7,212 740 (610) 130 (7.8％) 21.3％ Total Net sales Segment income 151,536 5,545 213,466 8,374 61,930 2,829 40.9％ 51.0％ ‌Note: “Segment income” shows unadjusted figures for each business segment and adjusted figures for the total. Overview of financial condition Assets, liabilities and net assets Total assets as of March 31, 2026 increased by 98,022 million yen from the previous fiscal year-end to 403,694 million yen. Current assets increased by 85,204 million yen compared to the end of the previous fiscal year, to 342,368 million yen. This is primarily due to increases of 57,243 million yen in trade receivables-trade and 13,596 million yen in merchandise and finished goods, driven by large-scale spot sales concentrated in the fourth quarter and the consolidation of Kyoei Sangyo Co., Ltd. as a Group company. Non-current assets increased by 12,818 million yen compared to the end of the previous fiscal year, to 61,325 million yen. This is primarily due to an increase of 3,179 million yen in property, plant and equipment, and 6,846 million yen in investment securities that partly reflected the consolidation of Kyoei Sangyo Co., Ltd. as a Group company. Liabilities increased by 80,885 million yen compared to the end of the previous fiscal year, to 220,177 million yen. This is primarily due to increases of 53,507 million yen in short-term loans payable and 21,033 million yen in notes and accounts payable - trade, driven by working capital associated with large-scale spot sales concentrated in the fourth quarter and the consolidation of Kyoei Sangyo Co., Ltd. as a Group company. Net assets increased by 17,136 million yen from March 31, 2025, to 183,516 million yen. This increase was primarily due to the recognition of profit attributable to owners of parent of 31,099 million yen, which led to an increase in retained earnings of 15,402 million yen. ‌Cash flows Cash and cash equivalents as of March 31, 2026 increase 15,611 million yen from March 31, 2025 to 88,292 million yen. (Operating activities) Net cash used in operating activities was 2,471 million yen (25,047 million yen provided by the previous fiscal year) mainly due to an increase in notes and accounts receivable driven by spot sales concentrated in the fourth quarter. (Investing activities) Net cash used in investing activities was 3,466 million yen (9,967 million yen used in the previous fiscal year) mainly due to Purchase of shares of subsidiaries resulting in change in scope of consolidation. (Financing activities) ‌Net cash used in financing activities was 20,329 million yen (7,343 million yen used in the previous fiscal year) mainly due to an increase in short-term loans payable. Future outlook The global economic outlook for the fiscal year ending March 2027 is expected to remain highly uncertain due to various factors, including the uncertainty over U.S. tariff policies, the protracted situation in Ukraine, escalating geopolitical tensions in the Middle East, and the consequent rise in resource prices. In the electronics industry, expanding demand for AI servers for data centers continues to drive the semiconductor market. Meanwhile, the outlook is expected to remain uncertain amid tight supply-demand conditions and rising prices for memory, as well as concerns over the supply of raw materials and related inputs due to the situation in the Middle East. Under these business circumstances, consolidated net sales for the fiscal year ending March 2027 are projected to be 645,000 million yen (a decrease of 13,941million yen, or 2.1% year on year). The primary factor behind the expected decrease in net sales is the absence of spot sales (approximately 41,100 million yen) recorded in the previous fiscal year in response to tight supply-demand conditions for certain semiconductor products. From a profit perspective, operating income is expected to increase slightly year on year to 28,500 million yen (an increase of 675 million yen, or 2.4% year on year), reflecting improvements in the gross profit margin and efforts to maintain strict cost control. Ordinary income is projected to be 28,000 million yen (a decrease of 1,930 million yen, or 6.5% year on year), incorporating the absence of foreign exchange gains recorded in the previous fiscal year. Profit attributable to owners of parent is expected to be 20,000 million yen (a decrease of 11,099 million yen, or 35.7% year on year). This reflects the absence of extraordinary income and loss recorded in the previous fiscal year (10,445 million yen in gains), including gains on bargain purchase from a corporate acquisition completed in the previous fiscal year and gains on sales of investment securities. On an underlying basis, excluding these special factors in the previous fiscal year, net sales and income are expected to continue to grow in the fiscal year ending March 2027. Forecast for the fiscal year ending March 2027 (Consolidated, April 1, 2026 – March 31, 2027) FY 2026/3 (April 1, 2025 - March 31, 2026) FY 2027/3 (April 1, 2026 - March 31, 2027) (Forecast) Difference Net Sales （ Million yen） 658,941 （ Million yen） 645,000 （ Million yen） (13,941) (2.1％) Operating income （Margin） 27,824 4.2％ 28,500 4.4％ 675 0.2pt 2.4％ — Ordinary income 29,930 28,000 (1,930) (6.5％) Profit attributable to owners of parent 31,099 20,000 (11,099) (35.7％) EPS(Yen) 627.71 419.65 (208.06) — ROE 17.8% 10.5％ (7.3pt) — Basic policy for earnings allocations and dividends in the current and next fiscal years With the aim of enhancing returns to our shareholders, the Company has revised its shareholder return policy as outlined in its “Medium-Term Management Plan 2027,” which commenced in the fiscal year ended March 2026. ・Medium-to long-term dividend growth guideline: increased the consolidated dividend payout ratio to 30% - 40% (from 25% - 35% in the previous Medium-Term Management Plan) ・Guideline for stable dividends: introduced “consolidated DOE (dividend on shareholdersʼ equity ratio) of 4%” as a new guideline ・Flexible and strategic returns: flexibly and strategically implement extraordinary dividends and acquisition of treasury shares in line with profit levels and capital efficiency In accordance with this policy, the dividends for the current and next fiscal years will be as follows. Dividend per share Consolidated dividend payout ratio DOE Q2 Year-end Full year Dividends for the current fiscal year Yen 60.00 （Results） (Ordinarydividend55.00) (Extraordinarydividend5.00) Yen 80.00 (Ordinarydividend55.00) (Extraordinarydividend25.00) Yen 140.00 (Ordinarydividend110.00) (Extraordinarydividend30.00) 22.3％ (Adjusted payout ratio) 30.3％ *2 4.5％ Previous forecast (Announced on February 12, 2026) 60.00 （Results） (Ordinarydividend55.00) (Extraordinarydividend5.00) 70.00 (Ordinarydividend55.00) (Extraordinarydividend15.00) 130.00 (Ordinarydividend110.00) (Extraordinarydividend20.00) 22.6％ (Adjusted payout ratio) 30.8％ *2 4.2％ Dividends for the previous fiscal year (Fiscal year ended March 31, 2025) 55.00 *1 55.00 110.00 33.8％ 4.2％ Fiscal year ending March 2027 (Forecast) 70.00 70.00 140.00 33.4％ 4.2％ Notes: 1. The Company conducted a two-for-one stock split of its common stock effective October 1, 2024. Dividend per share is calculated on the assumption that the stock split was conducted at the beginning of the fiscal year ended March 2024. This includes a gain on bargain purchase of 7,797 million yen in connection with the consolidation of Kyoei Sangyo Co., Ltd. in July 2025 and related gains and losses arising from step acquisitions (385 million yen). Since these items represent purely accounting gains and losses without any cash inflows, the consolidated payout ratio are presented on an adjusted basis excluding such items. ‌Basic Approach to the Selection of Accounting Standards The KAGA ELECTRONICS Group prepares consolidated financial statements based on Japanese accounting standards. Going forward, we will consider adopting IFRS standards with due consideration to financial market trends, share of foreign investors, and the organizational costs resulting from the adoption of IFRS standards. ‌Consolidated Financial Statements and Major Notes ‌Consolidated balance sheet (Million yen) FY 2025/3 (As of March 31, 2025) FY 2026/3 (As of March 31, 2026) ASSETS Current assets Cash and deposits 80,188 89,706 Notes receivable – trade 892 306 Electronically recorded monetary claims -operating 7,155 9,714 Accounts receivable – trade 106,091 163,335 Securities 150 141 Merchandise and finished goods 35,906 49,503 Work in process 1,973 1,574 Raw materials and supplies 13,893 16,926 Other 11,148 11,532 Allowance for doubtful accounts (236) (370) Total current assets 257,164 342,368 Non-current assets Property, plant and equipment Buildings and structures 20,588 24,051 Accumulated depreciation (10,748) (12,211) Buildings and structures, net 9,839 11,839 Machinery, equipment and vehicles 24,933 28,822 Accumulated depreciation (13,898) (16,923) Machinery, equipment and vehicles, net 11,034 11,898 Tools, furniture and fixtures 5,998 6,505 Accumulated depreciation (4,780) (5,222) Tools, furniture and fixtures, net 1,217 1,282 Land 5,940 6,237 Construction in progress 413 366 Total property, plant and equipment 28,445 31,624 Intangible assets Software 1,694 1,873 Other 44 38 Total intangible assets 1,738 1,911 Investments and other assets Investment securities 12,556 19,403 Deferred tax assets 1,344 1,383 Distressed receivables 4,815 4,662 Other 4,481 7,125 Allowance for doubtful accounts (4,873) (4,785) Total investments and other assets 18,323 27,789 Total non-current assets 48,507 61,325 Total assets 305,671 403,694 (Million yen) FY 2025/3 (As of March 31, 2025) FY 2026/3 (As of March 31, 2026) LIABILITIES Current liabilities Notes and accounts payable - trade 73,340 94,373 Short-term loans payable 14,890 68,398 Current portion of bonds payable 5,000 200 Accrued expenses 8,145 10,170 Income taxes payable 4,018 6,429 Provision for directorsʼ bonuses 428 499 Other 11,881 15,373 Total current liabilities 117,704 195,444 Non-current liabilities Bonds payable 5,000 5,200 Long-term loans payable 5,500 6,571 Deferred tax liabilities 4,115 4,833 Provision for directorsʼ retirement benefits 99 79 Net defined benefit liability 2,572 2,788 Asset retirement obligations 698 922 Other 3,601 4,339 Total non-current liabilities 21,587 24,733 Total liabilities 139,292 220,177 NET ASSETS Shareholdersʼ equity Capital stock 12,133 12,133 Capital surplus 14,885 14,767 Retained earnings 121,553 136,955 Treasury shares (5,579) (9,908) Total shareholdersʼ equity 142,993 153,948 Accumulated other comprehensive income Valuation difference on available-for-sale securities 3,263 4,626 Deferred gains or losses on hedges (28) (1) Foreign currency translation adjustment 18,959 23,636 Remeasurements of defined benefit plans 1,031 1,293 Total accumulated other comprehensive income 23,225 29,555 Non-controlling interests 160 12 Total net assets 166,379 183,516 Total liabilities and net assets 305,671 403,694 ‌Consolidated statements of income and comprehensive income (Million yen) FY 2025/3 (April 1, 2024 - March 31, 2025) FY 2026/3 (April 1, 2025 - March 31, 2026) Net sales 547,779 658,941 Cost of sales 476,113 573,591 Gross profit 71,665 85,350 Selling, general, and administrative expenses 48,064 57,525 Operating income 23,601 27,824 Non-operating income Interest income 1,300 1,060 Dividends income 249 399 Commission fee 120 148 Share of profit of entities accounted for using equity method — 39 Foreign exchange gain — 180 House rent income 131 136 Increase in cash and cash equivalents resulting from inclusion of subsidiaries in consolidation — 569 Other 768 850 Total non-operating income 2,569 3,384 Non-operating expenses Interest expenses 769 910 Loss from equity method investments 90 — Foreign exchange losses 2,336 — Other 379 368 Total non-operating expenses 3,576 1,278 Ordinary income 22,593 29,930 Extraordinary income Gain on sales of non-current assets 42 27 Gain on sales of investment securities 754 1,663 Gain on bargain purchase — 7,797 Gain on step acquisitions — 466 Gain on reversal of impairment loss 642 — Other — 962 Total extraordinary income 1,439 10,918 Extraordinary loss Impairment loss — 2 Loss on retirement of non-current assets 42 7 Loss on sales of investment securities 4 12 Loss on valuation of investment securities 241 109 Loss on step acquisitions — 80 Extra retirement payments — 235 Other 35 25 Total extraordinary loss 324 472 Profit before income taxes 23,709 40,376 Income taxes - current 6,778 10,096 Income taxes - deferred 209 (884) Total income taxes 6,988 9,212 Profit 16,721 31,163 Profit attributable to owners of parent 17,083 31,099 Profit (loss) attributable to non-controlling interests (361) 64 (Million yen) FY 2025/3 (April 1, 2024 - March 31, 2025) FY 2026/3 (April 1, 2025 - March 31, 2026) Other comprehensive income Valuation difference on available-for-sale securities 183 1,573 Deferred gains or losses on hedges (50) 27 Foreign currency translation adjustment 3,034 4,698 Remeasurements of defined benefit plans, net of tax 727 261 Share of other comprehensive income of entities accounted for using equity method 127 (14) Total other comprehensive income 4,023 6,547 Comprehensive income 20,744 37,711 Comprehensive income attributable to owners of parent 21,104 37,428 Comprehensive income attributable to non-controlling interests (359) 283 ‌Consolidated statement of changes in equity ‌For the fiscal year ended March 2025 (April 1, 2024 – March 31, 2025) (Million yen) Shareholdersʼ equity Capital stock Capital surplus Retained earnings Treasury shares Total shareholdersʼ equity Balance at the beginning of current period 12,133 14,849 110,250 (5,603) 131,629 Changes of items during period Dividends of surplus (5,780) (5,780) Profit attributable to owners of parent 17,083 17,083 Purchase of treasury shares (1) (1) Disposal of treasury shares 36 25 62 Net changes of items other than shareholdersʼ equity Total changes of items during period — 36 11,302 23 11,363 Balance at the end of current period 12,133 14,885 121,553 (5,579) 142,993 Accumulated other comprehensive income Non-controlling interests Total net assets Valuation difference on available-for-sale securities Deferred gains or losses on hedges Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulate d other comprehen sive income Balance at the beginning of current period 3,075 21 15,803 303 19,204 396 151,231 Changes of items during period Dividends of surplus (5,780) Profit attributable to owners of parent 17,083 Purchase of treasury shares (1) Disposal of treasury shares 62 Net changes of items other than shareholdersʼ equity 187 (49) 3,155 727 4,021 (236) 3,784 Total changes of items during period 187 (49) 3,155 727 4,021 (236) 15,148 Balance at the end of current period 3,263 (28) 18,959 1,031 23,225 160 166,379 For the fiscal year ended March 2026 (April 1, 2025 – March 31, 2026) (Million yen) Shareholdersʼ equity Capital stock Capital surplus Retained earnings Treasury shares Total shareholdersʼ equity Balance at the beginning of current period 12,133 14,885 121,553 (5,579) 142,993 Changes of items during period Dividends of surplus (5,750) (5,750) Profit attributable to owners of parent 31,099 31,099 Purchase of treasury shares (14,448) (14,448) Disposal of treasury shares 30 23 54 Cancellation of treasury shares (149) (9,947) 10,096 — Net changes of items other than shareholdersʼ equity Total changes of items during period — (118) 15,402 (4,328) 10,955 Balance at the end of current period 12,133 14,767 136,955 (9,908) 153,948 Accumulated other comprehensive income Non-controlling interests Total net assets Valuation difference on available-for-sale securities Deferred gains or losses on hedges Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulate d other comprehen sive income Balance at the beginning of current period 3,263 (28) 18,959 1,031 23,225 160 166,379 Changes of items during period Dividends of surplus (5,750) Profit attributable to owners of parent 31,099 Purchase of treasury shares (14,448) Disposal of treasury shares 54 Cancellation of treasury shares — Net changes of items other than shareholdersʼ equity 1,362 27 4,677 261 6,329 (148) 6,181 Total changes of items during period 1,362 27 4,677 261 6,329 (148) 17,136 Balance at the end of current period 4,626 (1) 23,636 1,293 29,555 12 183,516 Consolidated statement of cash flows (Million yen) FY 2025/3 (April 1, 2024 - March 31, 2025) FY 2026/3 (April 1, 2025 - March 31, 2026) Cash flows from operating activities Profit before income taxes 23,709 40,376 Depreciation 4,464 5,307 Impairment loss — 2 Amortization of goodwill 16 — Increase (decrease) in provision for directorsʼ bonuses (8) 70 Increase (decrease) in allowance for doubtful accounts (183) (62) Interest and dividend income (1,549) (1,460) Interest expenses 769 910 Share of (profit) loss of entities accounted for using equity method 90 (39) Loss (gain) on sales of investment securities (750) (1,651) Loss (gain) on valuation of investment securities 241 109 Loss (gain) on step acquisitions — (385) Gain on bargain purchase — (7,797) Gain on reversal of impairment loss (642) — Decrease (increase) in notes and accounts receivable - trade (1,036) (38,871) Decrease (increase) in inventories 2,356 (6,960) Increase (decrease) in notes and accounts payable - trade 2,040 10,111 Decrease (increase) in accounts receivable - other (283) (89) Increase (decrease) in accrued expenses (270) 1,066 Decrease (increase) in advance payments (128) (368) Decrease (increase) in consumption taxes refund receivable (1,354) 1,660 Decrease (increase) in other current assets 241 (46) Increase (decrease) in other current liabilities 61 1,935 Other, net 17 738 Subtotal 27,800 4,554 Interest and dividend income received 1,555 1,472 Interest expenses paid (784) (919) Income taxes paid (3,523) (7,578) Net cash provided by (used in) operating activities 25,047 (2,471) (Million yen) FY 2025/3 (April 1, 2024 - March 31, 2025) FY 2026/3 (April 1, 2025 - March 31, 2026) Cash flows from investing activities Payments into time deposits (19,811) (330) Proceeds from withdrawal of time deposits 16,579 7,564 Purchase of property, plant and equipment (5,245) (3,789) Proceeds from sales of property, plant and equipment 105 124 Purchase of intangible assets (425) (758) Proceeds from purchase of shares of Purchase of shares of subsidiaries resulting in change in scope of consolidation — (7372) Purchase of investment securities (2,553) (4,971) Proceeds from sales of investment securities 1,445 6,023 Payments of short-term loans receivable (30) (0) Long-term loan advances (10) (2) Other payments (359) (176) Other proceeds 338 223 Net cash provided by (used in) investing activities (9,967) (3,466) Cash flows from financing activities Increase (decrease) in short-term loans payable (629) 53,492 Proceeds from long-term borrowings — 100 Repayments of long-term loans payable (100) (6,712) Redemption of bonds — (5,200) Purchase of treasury shares (1) (14,448) Cash dividends paid (5,773) (5,741) Proceeds from share issuance to non-controlling shareholders 113 — Other, net (953) (1,160) Net cash provided by (used in) financing activities (7,343) 20,329 Effect of exchange rate change on cash and cash equivalents 2,527 885 Net increase (decrease) in cash and cash equivalents 10,263 15,277 Cash and cash equivalents at beginning of period 62,417 72,681 Increase (decrease) in cash and cash equivalents resulting from change in scope of consolidation — 333 Cash and cash equivalents at end of period 72,681 88,292 ‌ Notes to consolidated financial statements (Notes to going concern assumptions)‌ Not applicable ‌(Notes to Segment information, etc.) a. Segment information Description of reportable segments The Groupʼs reportable segments are those for which separate financial information is available and regular evaluation by the Companyʼs management is being performed in order to decide how resources are allocated among the Group. The Company classifies subsidiaries and associates according to their products and services, and implements comprehensive strategies in Japan and overseas. Consequently, the Group has four reportable segments that are made of different categories of products and services: electronic components, information equipment, software and others. The electronic components segment includes the development, manufacture and sale of semiconductors, general electronic components and other products, the electronics manufacturing service (EMS), and other activities. The information equipment segment includes sales of finished products such as PCs, PC peripherals, home electric appliances, photograph and imaging products, original brand products, and other products. The software segment includes the production of computer graphics, planning and development of amusement products, and other activities. The others segment includes the repair and supports for electronics equipment, and sales of amusement equipment and sports goods, and others. Information about net sales, profit (loss), assets, and other items is as follows: For the fiscal year ended March 2025 (April 1, 2024 – March 31, 2025) (Million yen) Reporting segments Adjustment *1 Consolidated *2 Electronic components Information equipment Software Others Total Net sales: Sales to external customers 472,910 42,652 3,387 28,829 547,779 — 547,779 Inter-segment sales or transfers 3,717 11,050 1,271 5,876 21,915 (21,915) — Total 476,627 53,703 4,658 34,706 569,695 (21,915) 547,779 Segment income 16,927 3,307 509 2,707 23,451 149 23,601 Segment assets 281,610 26,091 2,310 16,522 326,534 (20,862) 305,671 Others Depreciation 3,831 81 87 482 4,482 (18) 4,464 Increase in property, plant and equipment and intangible assets 5,044 35 71 547 5,698 (27) 5,671 For the fiscal year ended March 2026 (April 1, 2025 – March 31, 2026) (Million yen) Reporting segments Adjustment *1 Consolidated *2 Electronic components Information equipment Software Others Total Net sales: Sales to external customers 568,834 54,182 3,307 32,617 658,941 — 658,941 Inter-segment sales or transfers 3,958 15,495 1,137 5,751 26,342 (26,342) — Total 572,793 69,678 4,444 38,369 685,284 (26,342) 658,941 Segment income 19,304 4,444 365 3,487 27,603 221 27,824 Segment assets 372,659 31,674 2,159 16,729 423,223 (19,529) 403,694 Others Depreciation 4,570 95 108 546 5,320 (13) 5,307 Increase in property, plant and equipment and intangible assets 3,912 75 142 412 4,542 5 4,547 Notes: 1. The adjustment is as follows: Segment income (Million yen) Fiscal year ended March 2025 Fiscal year ended March 2026 Elimination of inter-segment 149 221 Total 149 221 Segment assets (Million yen) Fiscal year ended March 2025 Fiscal year ended March 2026 Elimination of inter-segment (23,268) (21,392) Corporate * 2,406 1,863 Total (20,862) (19,529) * Total corporate assets principally consist of surplus funds of the Company under management (cash and securities, etc.). Depreciation (Million yen) Fiscal year ended March 2025 Fiscal year ended March 2026 Elimination of inter-segment (18) (13) Total (18) (13) Increase in property, plant and equipment and intangible assets (Million yen) Fiscal year ended March 2025 Fiscal year ended March 2026 Elimination of inter-segment (27) 5 Total (27) 5 2. Segment income is adjusted with operating income on the consolidated statements of income and comprehensive income. (Per-share information) (Yen) FY 2025/3 (April 1, 2024 - March 31, 2025) FY 2026/3 (April 1, 2025 - March 31, 2026) Net assets per share 3,162.68 3,850.35 Earnings per share 325.08 627.71 Notes: 1. The Company conducted a two-for-one stock split of its common stock effective October 1, 2024. Net assets per share and Earnings per share are calculated on the assumption that the stock split was conducted at the beginning of the fiscal year ended March 2024.Earnings per share (diluted) have not been disclosed because there were no potentially dilutive shares. 2. The basis of calculation of earnings per share is as follows. FY 2025/3 (April 1, 2024 - March 31, 2025) FY 2026/3 (April 1, 2025 - March 31, 2026) Earnings per share Profit attributable to owners of parent (million yen) 17,083 31,099 Profit not attributable to common shareholders (million yen) — — Profit attributable to owners of parent allocated to common stock (million yen) 17,083 31,099 Average number of common stock outstanding during the fiscal year 52,549,881 49,544,258 (Subsequent events) Not applicable

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