Toyo Denki Seizo K K : Consolidated Financial Results for the Three Months Ended August 31, 2023

October 13, 2023

Consolidated Financial Results for the Three Months Ended August 31, 2023

(Under Japanese GAAP)

Company name:	Toyo Denki Seizo K.K.
Listing:	Tokyo Stock Exchange
Securities code:	6505
URL:	https://www.toyodenki.co.jp
Representative:	Akira Watanabe, President, Representative Director
Inquiries:	Jun Nukina, Operating Officer, General Manager, Management Planning Division
Tel.:	[phone]

Scheduled date to file quarterly securities report:	October 13, 2023
Scheduled date to commence dividend payments:	-
Preparation of supplementary material on quarterly financial results:	Yes
Holding of quarterly financial results briefing:	Yes

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the three months ended August 31, 2023 (from June 1, 2023, to August 31, 2023)

(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	%
Three months ended		6,658		5.6	(62)		-	176		-	148	(24.6)
August 31, 2023
August 31, 2022		6,305		(6.6)	(266)		-	(3)		-	196	72.2
Note: Comprehensive income	For the three months ended August 31, 2023: ¥906 million [0.7%]
		For the three months ended August 31, 2022: ¥900 million [-%]
	Basic earnings per share	Diluted earnings per
	share
				Ye n			Ye n
Three months ended				15.70			-
August 31, 2023
August 31, 2022				21.98			-

(2) Consolidated financial position

	Total assets	Net assets	Equity-to-asset ratio
	Millions of yen	Millions of yen	%
As of	49,714	25,205	50.7
August 31, 2023
May 31, 2023	49,682	24,582	49.5
Reference: Equity	As of August 31, 2023: ¥25,205 million
	As of May 31, 2023: ¥24,582 million

2. Cash dividends

		Annual dividends per share
	First quarter-end	Second quarter-end	Third quarter-end		Fiscal year-end	Total
	Ye n	Ye n	Ye n		Ye n	Ye n
Fiscal year ended	-	0.00	-		30.00	30.00
May 31, 2023
Fiscal year ending	-
May 31, 2024
Fiscal year ending
May 31, 2024		0.00	-		30.00	30.00
(Forecast)

Note: 1. Revisions to the forecast of cash dividends most recently announced: None

3. Consolidated financial results forecast for the fiscal year ending May 31, 2024 (from June 1, 2023, to May 31, 2024)

(Percentages indicate year-on-year changes.)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Basic earnings per
		owners of parent	share
	Millions		%	Millions of	%	Millions of	%	Millions of	%	Ye n
	of yen			yen		yen		yen
Six months ending	15,900		15.0	(120)	-	50	(74.7)	180	575.2	19.08
November 30, 2023
Fiscal year ending	34,500		11.2	600	15.9	950	(3.8)	800	(3.0)	84.81
May 31, 2024
Note: Revisions to the financial results forecast most recently announced: None

* Notes

(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope

of consolidation):	None
Newly included:	- companies (Company name)
Excluded:	- companies (Company name)
(2) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements	:
None
(3) Changes in accounting policies, changes in accounting estimates, and restatement
(i) Changes in accounting policies due to revisions to accounting standards and other regulations	: None
(ii) Changes in accounting policies due to other reasons	: None

1. 1. Changes in accounting estimates : None
   2. Restatement : None
2. Number of issued shares (common shares)
3. 1. Total number of issued shares at the end of the period (including treasury shares)

As of August 31, 2023

As of May 31, 2023

9,735,000 shares

9,735,000 shares

(ii) Number of treasury shares at the end of the period

As of August 31, 2023

As of May 31, 2023

301,943 shares

301,843 shares

(iii) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)

Three months ended August 31, 2023

Three months ended August 31, 2022

9,433,129 shares

8,940,317 shares

• Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.
• Proper use of earnings forecasts, and other special matters (Note on forward-looking statements)
  The above forecasts are based on information available as of the date of publication of this document, and actual results may differ from the forecasts due to various factors in the future. Please refer to "Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information" on page 3 of the Attachment for details of the financial results forecast (available in Japanese only).
• This document has been translated from a part of the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

Toyo Denki Seizo K.K. (6505) Financial Results for the Three Months Ended August 31, 2023

2. Quarterly Consolidated Financial Statements and Significant Notes Thereto

(1) Quarterly Consolidated Balance Sheets

				(Millions of yen)
			As of May 31, 2023	As of August 31, 2023
	Assets
	Current assets
	Cash and deposits		5,520	4,494
	Notes and accounts receivable - trade, and contract assets	13,236	12,444
	Electronically recorded monetary claims - operating		1,116	1,464
	Merchandise and finished goods	376	511
	Work in process		3,106	3,359
	Raw materials and supplies	2,836	3,010
	Advance payments to suppliers		22	23
	Accounts receivable	162	190
	Other		370	379
	Allowance for doubtful accounts	(10)	(40)
	Total current assets		26,738	25,838
	Non-current assets
	Property, plant and equipment
	Buildings and structures	9,952	9,953
	Accumulated depreciation		(6,340)	(6,409)
	Buildings and structures, net		3,611	3,544
	Machinery, equipment and vehicles		8,208	8,217
	Accumulated depreciation	(7,860)	(7,875)
	Machinery, equipment and vehicles, net		348	341
	Land	1,269	1,269
	Construction in progress		11	14
	Other	5,138	4,989
	Accumulated depreciation		(4,678)	(4,538)
	Other, net	459	450
	Total property, plant and equipment		5,701	5,621
	Intangible assets
	Software		63	62
	Other	13	13
	Total intangible assets		77	75
	Investments and other assets
	Investment securities		14,288	15,279
	Deferred tax assets	108	-
	Other		2,775	2,901
	Allowance for doubtful accounts	(7)	(2)
	Total investments and other assets		17,165	18,178
	Total non-current assets	22,943	23,875
	Total assets		49,682	49,714

Toyo Denki Seizo K.K. (6505) Financial Results for the Three Months Ended August 31, 2023 (Millions of yen)

			As of May 31, 2023	As of August 31, 2023
	Liabilities
	Current liabilities
	Notes and accounts payable - trade		2,060	1,974
	Electronically recorded obligations - operating	4,768	4,511
	Short-term borrowings		885	1,065
	Accrued expenses	589	574
	Income taxes payable		128	38
	Accrued consumption taxes	94	164
	Contract liabilities		84	107
	Deposits received	189	259
	Provision for bonuses for directors (and other officers)		39	7
	Provision for bonuses	673	340
	Provision for loss on orders received		989	776
	Provision for product warranties	70	110
	Other		127	106
	Total current liabilities	10,699	10,037
	Non-current liabilities
	Long-term borrowings	10,288	10,084
	Long-term accounts payable - other		30	34
	Deferred tax liabilities	-	271
	Retirement benefit liability		4,075	4,076
	Other	4	4
	Total non-current liabilities		14,399	14,471
	Total liabilities	25,099	24,508
	Net assets
	Shareholders' equity
	Share capital		4,998	4,998
	Capital surplus	3,177	3,177
	Retained earnings		11,347	11,212
	Treasury shares	(486)	(486)
	Total shareholders' equity		19,036	18,901
	Accumulated other comprehensive income
	Valuation difference on available-for-sale securities		5,370	6,091
	Foreign currency translation adjustment	202	233
	Remeasurements of defined benefit plans		(26)	(20)
	Total accumulated other comprehensive income	5,546	6,304
	Total net assets		24,582	25,205
Total liabilities and net assets		49,682	49,714

Toyo Denki Seizo K.K. (6505) Financial Results for the Three Months Ended August 31, 2023

(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income

Quarterly Consolidated Statement of Income

Three months ended August 31, 2023

		(Millions of yen)
	Three months ended	Three months ended
	August 31, 2022	August 31, 2023
Net sales	6,305	6,658
Cost of sales	4,937	4,962
Gross profit	1,368	1,696
Selling, general and administrative expenses	1,634	1,758
Operating profit (loss)	(266)	(62)
Non-operating income
Interest income	0	0
Dividend income	116	117
Share of profit of entities accounted for using the equity	48	90
method
Foreign exchange gains	106	36
Miscellaneous income	8	8
Total non-operating income	280	252
Non-operating expenses
Interest expenses	13	12
Miscellaneous losses	3	1
Total non-operating expenses	17	14
Ordinary profit (loss)	(3)	176
Extraordinary income
Gain on sale of investment securities	138	109
Gain on sale of non-current assets	150	-
Total extraordinary income	289	109
Extraordinary loss
Business structural reform expenses	-	56
Total extraordinary loss	-	56
Profit before income taxes	286	228
Income taxes - current	16	12
Income taxes - deferred	72	67
Total income taxes	89	80
Profit	196	148
Profit attributable to owners of parent	196	148

Toyo Denki Seizo K.K. (6505) Financial Results for the Three Months Ended August 31, 2023

Quarterly Consolidated Statement of Comprehensive Income

Three months ended August 31, 2023

			(Millions of yen)
	Three months ended		Three months ended
	August 31, 2022		August 31, 2023
Profit		196	148
Other comprehensive income
Valuation difference on available-for-sale		616	721
securities
Remeasurements of defined benefit plans, net of	6	5
tax
Share of other comprehensive income of entities		81	31
accounted for using the equity method
Total other comprehensive income	703	758
Comprehensive income		900	906
Comprehensive income attributable to:
Owners of parent		900	906
Non-controlling interests	-	-

Toyo Denki Seizo K.K. (6505) Financial Results for the Three Months Ended August 31, 2023

(3) Notes to Quarterly Consolidated Financial Statements

(Notes on Going Concern Assumption) Not applicable

(Notes on Significant Changes in Shareholders' Equity) Not applicable

Toyo Denki Seizo K.K. (6505) Financial Results for the Three Months Ended August 31, 2023

(Segment Information, etc.)

[Segment Information]

Three months ended August 31, 2022

Information regarding net sales and profit (loss) by reporting segment

									(Millions of yen)
		Reporting segments						Amount
							recorded on
								Adjustment		quarterly
						Other			consolidated
		Transportation	Industry		ICT Solution	Total	s		statement of
			(Note 1)
		Business	Business		Business		(Note 2)		income
										(Note 3)
Net sales
Net sales to external	4,017	1,983		302	1	6,305	-		6,305
customers
Intersegment sales	3	0		-	72	76	(76)		-
and transfers
	Total	4,021	1,983		302	73	6,381	(76)		6,305
Segment profit (loss)	353	(56)		83	(5)	374	(641)		(266)
Notes: 1	"Other" is a business segment that is not included in reporting segments, and includes the worker dispatching business.

1. Adjustments to segment profit (loss) of ¥(641) million are the elimination of intersegment transactions of ¥0 million and corporate expenses of ¥(641) million that are not attributable to reporting segments. Corporate expenses are primarily general and administrative expenses as well as research and development expenses that are not attributable to reporting segments.
2. Segment profit (loss) has been adjusted with operating loss recorded on the quarterly consolidated statement of income.

Three months ended August 31, 2023

1. Information regarding net sales and profit (loss) by reporting segment

(Millions of yen)

	Reporting segments					Amount
					recorded on
							Adjustment	quarterly
					Other		consolidated
	Transportation	Industry		ICT Solution	Total	s	statement of
		(Note 1)
	Business	Business		Business		(Note 2)	income
								(Note 3)
Net sales
Net sales to external	4,300	2,120		234	2	6,658	-	6,658
customers
Intersegment sales	0	0		-	80	80	(80)	-
and transfers
Total	4,300	2,121		234	82	6,738	(80)	6,658
Segment profit (loss)	495	51		60	(1)	606	(669)	(62)

Notes: 1 "Other" is a business segment that is not included in reporting segments, and includes the worker dispatching business.

1. Adjustments to segment profit (loss) of ¥(669) million are the elimination of intersegment transactions of ¥(0) million and corporate expenses of ¥(669) million that are not attributable to reporting segments. Corporate expenses are primarily general and administrative expenses as well as research and development expenses that are not attributable to reporting segments.
2. Segment profit (loss) has been adjusted with operating loss recorded on the quarterly consolidated statement of income.

Toyo Denki Seizo K.K. (6505) Financial Results for the Three Months Ended August 31, 2023

3. Other

(1) Status of Production, Orders, and Sales

(i) Production status

	Three months ended August 31, 2022		Three months ended August 31, 2023
Business segment	Amount	Share		Amount	Share
	(Millions of yen)	(%)		(Millions of yen)	(%)
Transportation Business	4,202		68.6	4,538	69.4
Industry Business	1,830		29.9	1,933	29.6
ICT Solution Business	91		1.5	65	1.0
Other	-		-	-	-
Total	6,124		100.0	6,537	100.0

Note: Amounts are based on sales prices.

(ii) Status of orders received

	Three months ended August 31, 2022	Three months ended August 31, 2023
Business segment	Orders	Order backlog	Orders	Order backlog
received	received
	(Millions of yen)	(Millions of yen)
	(Millions of yen)	(Millions of yen)
Transportation Business	5,334	22,126	6,097	23,712
Industry Business	2,840	7,057	2,018	7,048
ICT Solution Business	277	239	270	465
Other	1	-	2	-
Total	8,453	29,423	8,389	31,227

Note: Amounts are based on sales prices.

(iii) Sales status

	Three months ended August 31, 2022	Three months ended August 31, 2023
Business segment	Amount	Share	Amount	Share
	(Millions of yen)	(%)	(Millions of yen)	(%)
Transportation Business	4,017	63.7	4,300	64.6
Industry Business	1,983	31.5	2,120	31.9
ICT Solution Business	302	4.8	234	3.5
Other	1	0.0	2	0.0
Total	6,305	100.0	6,658	100.0