Mitsubishi Pencil : Summary of Consolidated Financial Results for the Year Ended December 31, 2021(Based on Japanese GAAP)

Translation

Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results

for the Year Ended December 31, 2021

(Based on Japanese GAAP)

																				February 17, 2022
Company name:	Mitsubishi Pencil Co., Ltd.
Stock exchange listing:	Tokyo
Stock code:	7976	URL https://www.mpuni.co.jp/
Representative:	Representative Director,President	Shigehiko Suhara
Inquiries:	General Manager of Financial Resources and Hisashi Jagawa	TEL [phone]
	Accounting Department
Scheduled date of ordinary general meeting of shareholders:	March 30, 2022
Scheduled date to file Securities Report:			March 30, 2022
Scheduled date to commence dividend payments:			March 31, 2022
Preparation of supplementary material on financial results:	Yes
Holding of financial results meeting:							No
												(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the year ended December 31, 2021 (from January 1, 2021 to December 31, 2021)
(1) Consolidated operating results													Percentages indicate year-on-year changes
			Net sales			Operating profit	Ordinary profit	Profit attributable to
					owners of parent
			Millions of yen		%	Millions of yen		%	Millions of yen	%		Millions of yen		%
Year ended December 31, 2021		61,894		12.2	7,520		36.9		8,309	38.8		5,658		49.1
Year ended December 31, 2020		55,180		(11.0)	5,493		(23.7)		5,988	(21.0)	3,794		(14.5)
			Earnings per share		Diluted earnings per	Profit attributable to		Ordinary profit/total	Operating profit/net
					share			owners of				assets			sales
									parent/equity
				Yen			Yen			%						%				%
Year ended December 31, 2021		100.96			-			6.1						7.0				12.2
Year ended December 31, 2020		67.57			-			4.2						5.1				10.0
(2) Consolidated financial position
			Total assets			Net assets		Equity ratio	Net assets per share
			Millions of yen	Millions of yen					%						Yen
As of December 31, 2021		123,792					97,673					77.5				1,715.15
As of December 31, 2020		114,882					91,855					78.4				1,604.90
(3) Consolidated cash flows
			Cash flows from	Cash flows from	Cash flows from	Cash and cash equivalents
			operating activities	investing activities	financing activities		at end of period
			Millions of yen	Millions of yen	Millions of yen		Millions of yen
Year ended December 31, 2021					8,369					(3,936)					(2,754)					44,498
Year ended December 31, 2020					4,735					(4,555)					(3,913)					42,078
2. Cash dividends
							Annual dividends per share					Total cash		Dividend payout	Ratio of dividends
																	to net assets
			1st quarter-end	2nd quarter-end	3rd quarter-end	Fiscal year-end	Total			dividends (Total)	ratio (Consolidated)	(Consolidated)
			Yen			Yen	Yen		Yen	Yen	Millions of yen		%			%
Year ended December 31, 2020		-		15.50	-		15.50	31.00		1,809		45.9			1.9
Year ended December 31, 2021		-		16.00	-		16.00	32.00		1,866		31.7			1.9
Year ending December 31, 2022		-			16.50	-				16.50	33.00				31.3
(Forecast)

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3. Forecast of consolidated financial results for the year ending December 31, 2022 (from January 1, 2022 to December 31, 2022)

Percentages indicate year-on-year changes

Net sales

Operating profit

Ordinary profit

Profit attributable to

Earnings per share

owners of parent

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Yen

Full year

64,000

3.4

8,320

10.6

8,700

4.7

5,900

4.3

105.54

4. Notes

(1) Changes in significant subsidiaries during the year ended December 31, 2021

No

(changes in specified subsidiaries resulting in the change in scope of consolidation):

(2) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements

Changes in accounting policies due to revisions to accounting standards and other regulations:

No

Changes in accounting policies due to other reasons:

No

Changes in accounting estimates:

No

Restatement of prior period financial statements:

No

(3) Number of issued shares (common shares)

Total number of issued shares at the end of the period (including treasury shares)

	As of December 31, 2021	64,286,292	shares	As of December 31, 2020	64,286,292	shares
Number of treasury shares at the end of the period
	As of December 31, 2021	8,382,346	shares	As of December 31, 2020	8,163,308	shares
Average number of shares during the period
	Year ended December 31, 2021	56,051,850	shares	Year ended December 31, 2020	56,157,624	shares

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Consolidated financial statements

Consolidated balance sheets

			(Millions of yen)
		As of December 31, 2020	As of December 31, 2021
Assets
Current assets
Cash and deposits	42,779	44,931
Notes and accounts receivable - trade	15,142	16,567
Inventories	16,401	18,831
Other	1,724	2,483
Allowance for doubtful accounts	(1,347)	(1,400)
Total current assets	74,700	81,413
Non-current assets
Property, plant and equipment
Buildings and structures	20,884	23,599
Accumulated depreciation	(8,389)	(8,748)
Buildings and structures, net	12,494	14,850
Machinery, equipment and vehicles	22,883	23,493
Accumulated depreciation	(19,142)	(19,754)
Machinery, equipment and vehicles, net	3,740	3,739
Land	3,952	3,782
Construction in progress	2,915	1,515
Other	13,507	13,477
Accumulated depreciation	(12,772)	(12,732)
Other, net	735	744
Total property, plant and equipment	23,837	24,633
Intangible assets	1,153	1,395
Investments and other assets
Investment securities	13,413	14,175
Deferred tax assets	302	337
Retirement benefit asset	435	758
Other	1,038	1,080
Allowance for doubtful accounts	(0)	(0)
Total investments and other assets	15,189	16,350
Total non-current assets	40,181	42,379
Total assets		114,882	123,792

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			(Millions of yen)
		As of December 31, 2020	As of December 31, 2021
Liabilities
Current liabilities
Notes and accounts payable - trade	6,342	8,314
Short-term borrowings	1,528	1,516
Income taxes payable	645	1,849
Provision for bonuses	490	564
Reserve for returned goods	35	41
Accounts payable - other	2,067	2,468
Other	2,567	2,877
Total current liabilities	13,677	17,631
Non-current liabilities
Long-term borrowings	4,018	3,298
Deferred tax liabilities	604	474
Retirement benefit liability	3,808	3,817
Provision for retirement benefits for directors (and other	115	101
officers)
Other	802	796
Total non-current liabilities	9,349	8,487
Total liabilities	23,026	26,119
Net assets
Shareholders' equity
Share capital	4,497	4,497
Capital surplus	3,725	3,976
Retained earnings	83,807	87,708
Treasury shares	(6,764)	(6,953)
Total shareholders' equity	85,266	89,229
Accumulated other comprehensive income
Valuation difference on available-for-sale securities	4,199	4,557
Foreign currency translation adjustment	473	1,793
Remeasurements of defined benefit plans	132	303
Total accumulated other comprehensive income	4,805	6,654
Non-controlling interests	1,783	1,789
Total net assets	91,855	97,673
Total liabilities and net assets		114,882	123,792

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Consolidated statements of income and consolidated statements of comprehensive income Consolidated statements of income

			(Millions of yen)
		Fiscal year ended	Fiscal year ended
		December 31, 2020	December 31, 2021
Net sales	55,180	61,894
Cost of sales	27,870	31,226
Gross profit	27,310	30,667
Selling, general and administrative expenses	21,817	23,146
Operating profit	5,493	7,520
Non-operating income
Interest income	19	18
Dividend income	309	324
Rental income from land and buildings	59	63
Insurance claim income	55	37
Subsidy income	255	87
Foreign exchange gains	-	349
Other	86	67
Total non-operating income	786	949
Non-operating expenses
Interest expenses	46	31
Foreign exchange losses	111	-
Commission for syndicated loans	57	57
Sales discounts	60	62
Other	15	10
Total non-operating expenses	291	160
Ordinary profit	5,988	8,309
Extraordinary income
Gain on sale of non-current assets	182	102
Gain on sale of investment securities	-	195
Compensation income	-	83
Total extraordinary income	182	381
Extraordinary losses
Loss on sale and retirement of non-current assets	16	15
Loss on valuation of investment securities	12	48
Factory restructuring loss	277	341
Impairment losses	81	156
loss on cancellation of agency agreement	171	-
Other	-	33
Total extraordinary losses	559	594
Profit before income taxes	5,612	8,095
Income taxes - current	1,529	2,546
Income taxes - deferred	121	(364)
Total income taxes	1,650	2,182
Profit	3,961	5,912
Profit attributable to non-controlling interests	166	254
Profit attributable to owners of parent		3,794	5,658

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