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The amusement device market, the primary market for the Company’s business, performed relatively solidly even after the worldwide recession stemming from the global financial turmoil that triggered the slowdown of the Japanese economy. However, manufacturing trends of amusement devices on the whole stagnated into the end of the fiscal year, due to such factors as the continued sluggishness of the pachislot machines market and the pronounced tendency among customers to be discerning upon introducing pachinko machines, in addition to the impact of the ongoing harsh conditions in the domestic economy, which has started to become evident.
Under such circumstances, the Company concentrated its efforts on promoting the sale of various products, focusing on "AG301", a high-resolution graphics-rendering LSI product for larger LCDs installed in amusement devices (primarily pachinko machines), followed by "AG333", a strategic product with integrated graphics-rendering, sound-generating and LED driver functions for which mass production was launched in fiscal 2009, as well as sound-generating LSI products, LED driver LSI products and memory-module products. During fiscal 2009, the Company posted record-high annual sales volume for its graphics-rendering LSI products, totaling more than 2.6 million units, driven by such factors as the launch of mass production of "AG333", a product with integrated functions, and the increase in demand for "AG-2" series in pachislot machines, in addition to the solid demand trend for "AG301". On the other hand, the sales volume of sound-generating LSI products targeted at the amusement device market has been falling, due to the commencement of sale of products with integrated functions and the impact of customers’ demand trends. The sales volume of LED driver LSI products targeted at the amusement device market was more or less at the same level as in the previous fiscal year, but the sales volume of memory-module products struggled at approx. 70% of the level in the previous fiscal year due to the impact of customers’ demand trends.
Other than the amusement device market, the embedded system market started the fiscal year under tough conditions due to such factors as the stagnation of capital investments since the worldwide recession. According to our analysis, however, the market has been recovering gradually since the second half of fiscal 2009, due in part to the completion of the inventory adjustment cycle for various embedded systems, especially industrial equipment. During fiscal 2009, the Company completed "AG10", a graphics-rendering LSI product supporting various devices based on the configuration of personal computers (hereinafter referred to as "PCs") targeted at the embedded system market, and focused its efforts in sales activities for "AG10", together with its existing "AG-9" series. Despite such efforts, the volume of products sold decreased approx. 27% year-on-year to just under 50,000 units, especially due to the huge impact of the stagnant demand up until the first half of the fiscal year.
As a result, for fiscal 2009, the Company recorded net sales of 15,495 million yen, up 0.5 % year-on-year, primarily due to the increase in the sales volume of its mainstay graphics-rendering LSI products. |
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The gross margin ratio decreased by 0.9 percentage points compared to the previous fiscal year, due to such factors as the increase in purchasing costs stemming from the launch of mass production and sale of "AG333", an LSI product designed based on cutting-edge processes, and the strategic pricing aimed at expanding future sales of LED driver LSI products.
Selling, general and administrative expenses on the whole decreased 5.1% year-on-year, while R&D expenditures decreased 7.1% year-on-year due in part to the change in the timing of accounting for prototype development expenses for various LSI products. Consequently, for fiscal 2009, the Company posted operating income of 6,211 million yen (up 1.0% year-on-year), ordinary income of 6,224 million yen (up 0.9% year-on-year), and net income of 3,840 million yen (up 1.1% year-on-year). |
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| Income Statement |
(¥1 million) |
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2009/3 |
Sales ratio |
2010/3 |
Sales ratio |
yoy |
| Net sales |
15,417 |
100% |
15,495 |
100% |
1% |
| Gross profit |
8,952 |
60% |
8,873 |
57% |
-1% |
| Operating income |
6,147 |
40% |
6,211 |
40% |
1% |
| Ordinary profit |
6,168 |
40% |
6,224 |
40% |
1% |
| Net profit |
3,800 |
25% |
3,840 |
25% |
1% |
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| Balance Sheet |
(¥1 million) |
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2009/3 |
Compo
-nent ratio |
2010/3 |
Compo
-nent ratio |
yoy |
| Current assets |
13,198 |
95% |
15,178 |
96% |
15% |
| Fixed assets |
761 |
5% |
672 |
4% |
-12% |
| Current liabilities |
2,226 |
16% |
2,288 |
14% |
3% |
| Long-term |
- |
- |
- |
- |
- |
| Net assets |
11,734 |
84% |
13,562 |
86% |
16% |
| LIabilities and Net assets |
13,960 |
100% |
15,850 |
100% |
14% |
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The performance of the Company’s flagship products, namely, graphics LSI products targeted at the amusement devices market, was characterized by the strong sales of “AG301”, which is adapted to the increasing size of built-in LCD of amusement devices, especially pachinko machines. When combined with the Company’s previous flagship product “AG-2”, sales volume increased by 100,000 units year-on-year to 2,420,000 units. Sales volume of various products other than graphics LSI targeted at the amusement devices market decreased from the previous year due to the demand trend of manufacturers who adopt the Company’s products. Graphics LSI targeted at embedded systems other than for amusement devices showed a gradual decreasing trend, reflecting the downturn in manufacturing associated with the deterioration of the economic climate, and full-year product sales volume slightly decreased from the previous year. As a result, net sales for the period under review totaled 15,417 million yen (up 12% year-on-year). |
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Given the smooth progress in the development of “AG401”, our next-generation LSI product targeted at the amusement devices market, part of the prototype development expenses were recorded in the period under review. As a result, research and development expenses increased by 488 million yen year-on-year to 1,708 million yen. While the ratio of the burden of selling, general and administrative expenses to gross profit on sales rose primarily due to the increase in research and development expenses, the increase in gross profit on sales absorbed the rise in the selling, general and administrative expenses. As a result, the Company managed to increase both revenue and profit for ten consecutive periods, with operating profit in the amount of 6,147 million yen, ordinary income of 6,168 million yen and net income of 3,800 million yen. |
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| Income Statement |
(¥1 million) |
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2008/3 |
Sales ratio |
2009/3 |
Sales ratio |
yoy |
| Net sales |
13,794 |
100% |
15,417 |
100% |
12% |
| Gross profit |
8,218 |
60% |
8,952 |
58% |
9% |
| Operating income |
5,969 |
43% |
6,147 |
40% |
3% |
| Ordinary profit |
5,998 |
43% |
6,168 |
40% |
3% |
| Net profit |
3,629 |
26% |
3,800 |
25% |
5% |
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| Balance Sheet |
(¥1 million) |
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2008/3 |
Compo
-nent ratio |
2009/3 |
Compo
-nent ratio |
yoy |
| Current assets |
13,429 |
96% |
13,198 |
95% |
-2% |
| Fixed assets |
620 |
4% |
761 |
5% |
23% |
| Current liabilities |
3,279 |
23% |
2,226 |
16% |
-32% |
| Long-term |
- |
- |
- |
- |
- |
| Net assets |
10,770 |
77% |
11,734 |
84% |
9% |
| LIabilities and Net assets |
14,049 |
100% |
13,960 |
100% |
-1% |
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