SMS : Summary of Consolidated Financial Results for the Nine Months 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 Nine Months Ended December 31, 2021
		(Based on Japanese GAAP)
					January 31, 2022
Company name:	SMS CO., LTD.
Stock exchange listing:	Tokyo
Stock code:	2175	URL https://www.bm-sms.co.jp/
Representative:	CEO		Natsuki Goto
Inquiries:	CFO		Masato Sugizaki	TEL [phone]
Scheduled date to file Quarterly Securities Report:	February 10, 2022
Scheduled date to commence dividend payments:	-
Preparation of supplementary material on quarterly financial results:	Yes
Holding of quarterly financial results meeting:	Yes	(for institutional investors and analysts)

(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the nine months ended December 31, 2021 (from April 1, 2021 to December 31, 2021)

(1) Consolidated operating results (cumulative)								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		%
Nine months ended December 31, 2021	28,315		7.4		3,895	21.0		5,119		20.6			3,649		27.2
Nine months ended December 31, 2020	26,366		4.2		3,220	54.2		4,245		24.5			2,868		14.0
	Earnings per share		Diluted earnings per share
			Yen					Yen
Nine months ended December 31, 2021			41.88					41.68
Nine months ended December 31, 2020			32.94					32.79
(2) Consolidated financial position
	Total assets				Net assets	Equity ratio
	Millions of yen			Millions of yen				%
As of December 31, 2021		54,981					27,545				49.5
As of March 31, 2021		49,444					22,658				45.3
2. Cash dividends
						Annual dividends per share
	1st quarter-end	2nd quarter-end		3rd quarter-end	Fiscal year-end	Total
	Yen				Yen			Yen				Yen			Yen
Year ended March 31, 2021		-			0.00			-				9.50			9.50
Year ending March 31, 2022		-			0.00			-
Year ending March 31, 2022 (Forecast)														-			-

3. Forecast of consolidated financial results for the year ending March 31, 2022 (from April 1, 2021 to March 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	40,043	11.4	6,205	13.4	7,352	10.5	5,281	10.0	60.62

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4. Notes

1. Changes in significant subsidiaries during the nine months ended December 31, 2021 (changes in specified subsidiaries resulting in the change in scope of consolidation):
2. Application of special accounting methods for preparing quarterly consolidated financial statements:

No

Yes

(3) 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:	Yes
Changes in accounting policies due to other reasons:	No
Changes in accounting estimates:	No
Restatement of prior period financial statements:	No

(4) 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	87,130,600	shares	As of March 31, 2021	87,109,600	shares
Number of treasury shares at the end of the period
	As of December 31, 2021	561	shares	As of March 31, 2021	491	shares
Average number of shares during the period (cumulative from the beginning of the fiscal year)
	Nine months ended December 31, 2021	87,126,584	shares	Nine months ended December 31, 2020	87,077,811	shares

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Quarterly consolidated financial statements

Consolidated balance sheets

			(Millions of yen)
		As of March 31, 2021	As of December 31, 2021
Assets
Current assets
Cash and deposits	10,538	14,540
Accounts receivable - trade	4,933	4,338
Work in process	16	18
Supplies	31	25
Accounts receivable - other	6,324	7,325
Income taxes receivable	598	-
Prepaid expenses	808	801
Other	156	79
Allowance for doubtful accounts	(188)	(153)
Total current assets	23,218	26,975
Non-current assets
Property, plant and equipment
Buildings	619	726
Accumulated depreciation	(324)	(379)
Buildings, net	295	347
Tools, furniture and fixtures	792	846
Accumulated depreciation	(552)	(608)
Tools, furniture and fixtures, net	239	237
Machinery, equipment and vehicles	36	26
Accumulated depreciation	(20)	(16)
Machinery, equipment and vehicles, net	16	9
Right-of-use assets	618	669
Accumulated depreciation	(230)	(348)
Right-of-use assets,net	387	320
Total property, plant and equipment	939	914
Intangible assets
Goodwill	8,834	8,872
Software	2,355	2,843
Trademark right	8,621	9,322
Customer-related assets	1,502	1,443
Other	0	0
Total intangible assets	21,313	22,483
Investments and other assets
Investment securities	1,975	2,551
Deferred tax assets	879	957
Leasehold and guarantee deposits	1,110	1,099
Other	7	-
Total investments and other assets	3,972	4,608
Total non-current assets	26,225	28,006
Total assets		49,444	54,981

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			(Millions of yen)
		As of March 31, 2021	As of December 31, 2021
Liabilities
Current liabilities
Accounts payable - trade	258	211
Current portion of long-term borrowings	2,479	2,043
Accounts payable - other	7,750	9,515
Accrued expenses	438	974
Income taxes payable	374	925
Accrued consumption taxes	505	355
Advances received	869	-
Contract liabilities	-	1,155
Deposits received	147	123
Provision for bonuses	669	463
ProvisionForRepayment	233	-
Lease obligations	115	94
Other	33	230
Total current liabilities	13,875	16,092
Non-current liabilities
Long-term borrowings	10,644	9,004
Retirement benefit liability	149	160
Deferred tax liabilities	1,830	1,935
Lease obligations	281	243
Other	3	0
Total non-current liabilities	12,909	11,344
Total liabilities	26,785	27,436
Net assets
Shareholders' equity
Share capital	2,281	2,298
Capital surplus	85	102
Retained earnings	23,140	25,939
Treasury shares	(0)	(1)
Total shareholders' equity	25,506	28,339
Accumulated other comprehensive income
Valuation difference on available-for-sale securities	0	493
Foreign currency translation adjustment	(3,107)	(1,618)
Total accumulated other comprehensive income	(3,107)	(1,124)
Share acquisition rights	259	330
Total net assets	22,658	27,545
Total liabilities and net assets		49,444	54,981

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Consolidated statements of income (cumulative) and consolidated statements of comprehensive income (cumulative)

Consolidated statements of income (cumulative)

			(Millions of yen)
		Nine months ended	Nine months ended
		December 31, 2020	December 31, 2021
Net sales	26,366	28,315
Cost of sales	2,801	3,184
Gross profit	23,564	25,130
Selling, general and administrative expenses	20,344	21,235
Operating profit	3,220	3,895
Non-operating income
Share of profit of entities accounted for using equity method	1,095	1,312
Other	68	36
Total non-operating income	1,163	1,348
Non-operating expenses
Foreign exchange losses	56	51
Interest expenses	70	62
Other	11	10
Total non-operating expenses	138	124
Ordinary profit	4,245	5,119
Extraordinary income
Gain on sale of non-current assets	0	1
Total extraordinary income	0	1
Extraordinary losses
Loss on sale and retirement of non-current assets	71	15
Loss on valuation of investment securities	3	-
Loss on termination of retirement benefit plan	121	-
Event cancellation loss	11	-
Total extraordinary losses	207	15
Profit before income taxes	4,038	5,105
Income taxes	1,169	1,456
Profit	2,868	3,649
Profit attributable to owners of parent		2,868	3,649

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