Consolidated Financial Results for the First Quarter of
the Fiscal Year Ending March 31, 2023 (JGAAP)
July 29, 2022
Company name:
Tsuzuki Denki Co., Ltd.
Listing Stock Exchange: Tokyo
Stock code:
8157
URL: https://www.tsuzuki.co.jp/
Representative (title): Isao Emori, Representative Director, President and CEO
Contact (title):
Toshihiro Hirai, Managing Executive Officer
Tel: +81-50-3684-7780
Scheduled date for quarterly report submission:
Scheduled date for dividend payment:
Preparation of supplemental explanatory materials:
Results briefing to be held:

August 3, 2022—
No
No

1. Consolidated financial results for the first quarter of the fiscal year ending March 31, 2023
(April 1, 2022, to June 30, 2022)(1) Consolidated operating results

Net sales

Millions of yen (rounded down), % figures are year-on-year change
Quarterly profit
Operating income
Ordinary income
attributable toowners of parent

First quarter,——year ending
24,609
(0.9)
(202)
(109)
(147)
—
March 31, 2023
First quarter,—year ended
24,821
5.0%
(262)
(230)
—
(244)
—
March 31, 2022
Note: Comprehensive income was (100) million yen (—%) in first quarter of year ending March 31, 2023; (75)
million yen (—%) in first quarter of year ended March 31, 2022.
Earnings per share
Diluted earnings per(yen)share (yen)First quarter,year ending(8.30)—March 31, 2023
First quarter,year ended(13.89)—March 31, 2022
(2) Consolidated financial position
Total assets
Net assets
Shareholders’
Net assets per share(millions of yen)(millions of yen)equity ratio(yen)First quarter,year ending
73,24332,55844.1%
1,818.21
March 31, 2023
Year ended
79,22633,19941.5%
1,853.68
March 31, 2022
Reference: Shareholders’ equity at first quarter, year ending March 31, 2023; 32,280 million yen; in year ended
March 31, 2022; 32,847 million yen.

1

2. Dividends
Dividends per share for the fiscal year (yen)End offirstquarter

End ofsecondquarter

End ofthird
quarterYearendTotal

Year ended
—
23.00
—
25.00
48.00
March 31, 2022
Year ending—
March 31, 2023
Year ending
March 31, 2023
25.00
—
25.00
50.00
(forecast)
Note:
1.Revisions to most recent dividend forecast: None
2.The interim dividend for the year ended March 31, 2023 included a commemorative dividend of 2.0 yen per
share to celebrate 90th Anniversary of its founding.
3. Forecast of consolidated financial results for the fiscal year ending March 31, 2023
(April 1, 2022, to March 31, 2023)% figures are year-on-year change
Profit attributable to Earnings
Net sales
Operating income Ordinary income
owners of parent
per share(millions of yen)(millions of yen)(millions of yen)(millions of yen)
(yen)
Full year

120,000

0.6%

4,000

(0.3%)

4,130

Note: Revisions to most recent earnings forecast: None2

(2.3%)

2,760(1.4%)

155.49

*Notes(1) Changes in significant subsidiaries (which affected scope of consolidation) during the quarter: None
Newly added ___ companies (names)
No longer consolidated ___ companies (names)(2) Special accounting methods used in preparation of quarterly consolidated financial statements: Yes
Note: For details, please refer to Attachment page 13: “2. Consolidated financial statements and notes (3)Notes to quarterly consolidated financial statements (Application of special accounting methods in the
preparation of quarterly consolidated financial statements)."(3) Changes in accounting policies, changes in accounting estimates, and restatements
1. Changes in accounting policies due to changes in accounting standards:
2. Changes in accounting policies not due to changes in accounting standards:
3. Changes in accounting estimates:
4. Restatements:

None
None
None
None

(4) Number of shares outstanding (common stock)
First quarter,
1. Number of shares outstanding at
Year ended
year ending
20,177,894
20,177,894
year end (including treasury stock)
March 31, 2022
March 31, 2023
First quarter,
2. Number of shares at year end
Year ended
year ending
2,423,670
2,457,908(treasury stock)
March 31, 2022
March 31, 2023
First quarter,
First quarter,
3. Average number of shares overyear ending
17,737,271
year ended
17,582,961
the period
March 31, 2023
March 31, 2022
Note: The number of treasury shares includes those held in the Employee Stock Ownership Plan (ESOP) trust
account (92,800 in first quarter, year ending March 2023; 121,000 in year ended March 2022), Directors’Compensation Board Incentive Plan (BIP) trust account (346,034 in first quarter, year ending March 2023;
346,034 in year ended March 2022); and Stock-grant ESOP trust account (452,018in first quarter, year ending
March 2023; 458,056 in year ended March 2022).
*The financial information in this quarterly report is not subject to review by certified public accountants or auditing
firms.
*Appropriate use of earnings forecast and other special notes.
(Note on forward-looking statements)
The earnings forecasts and other forward-looking statements contained in this document are based on
information currently available to the Company, and certain assumptions it considers reasonable, but are notintended to be a promise that the Company will achieve. Actual results may vary materially from forecasts due toa variety of factors.

3

Content of attachment
1. Qualitative information on quarterly results ..............................................................................................5(1) Earnings ..............................................................................................................................................................5(2) Financial position ...............................................................................................................................................8(3) Consolidated earnings forecasts and other information concerning the outlook .....................................8
2. Consolidated financial statements and notes ...........................................................................................9(1) Quarterly consolidated balance sheet ............................................................................................................9(2) Quarterly consolidated statements of income and comprehensive income ...........................................11(3) Notes to quarterly consolidated financial statements .................................................................................13(Notes on premise of going concern)..............................................................................................................13(Notes on significant changes in the amount of shareholders equity.) ......................................................13(Application of special accounting methods in the preparation of quarterly consolidated financial
statements) .........................................................................................................................................................13(Segment and other information).....................................................................................................................144

1. Qualitative information on quarterly results(1) Earnings
In the first quarter of the fiscal year ending March 2023, while the Japanese economy continued to recover fromthe impact of the COVID-19 pandemic, uncertainty about the outlook persisted as the extended Ukraine conflictand constraints on economic activities in China led to rises in raw material prices and supply bottlenecks.
Our group belongs to the information and communications (ICT) services industry. We expect ICT demand toremain strong as companies step up their digital transformation (DX) initiatives in the wake of the pandemic, butsome companies continued to curtail their ICT capex due to the delay in recovery in business performance. The
electronic device industry performed well as semiconductor demand continued to expand, driven by growing
investment in data centers and accelerated efforts in decarbonization and use of renewable energy in theautomotive, industrial, and infrastructure sectors.
In these circumstances, our group is carrying out the initiatives outlined in our medium-term management plan
ending in the year ending March 2023, titled Innovation 2023, as part of our aim to support the DX efforts of clientcompanies and to be more competitive by becoming an innovation service provider. We are reforming ourbusiness structure and strengthening our management base to tap into growing digital transformation needs witha view to sustainable growth and improvements in corporate value.
In the first quarter of the final year of our plan, the Group posted net sales of ¥24,609 million (down 0.9% yearon-year), operating loss of ¥202 million (operating loss of ¥262 million in year earlier), ordinary loss of ¥109
million(ordinary loss of ¥230 million in year earlier), and loss attributable to owners of parent of ¥147 million (lossof ¥244 million in year earlier).
In the Information Network Solutions segment, while orders were strong and above year-earlier levels, sales
were lower than the first quarter of the previous year as the semiconductor shortage delayed project deliveries.
However this also caused an increase in order backlog, which was significantly above year-earlier levels. Profit
declined slightly due to an increase in SG&A expenses and lower sales.
In the Electronic Devices segment, orders and sales were above year-earlier levels, driven by continued
frontloading of orders from customers accompanying the semiconductor shortage and strong demand from thefactory automation (FA) equipment and industrial equipment industries and electric vehicle industry, aimed at
decarbonization. The order backlog increased significantly as many orders were aimed at securing parts from alonger term perspective. Despite an increase in SG&A expenses, profit increased significantly on the year earlier
due to higher sales.
The following section discusses earnings by segment in the first quarter.
*Note regarding quarterly earnings for the Group
Many of the Group’s customers have business years from April through March the following year. Further,fulfilment obligations for many transactions are judged to be satisfied at a certain point, so the Group’s sales andprofit tend to be concentrated in September and March, the halfway and endpoints of the fiscal year

5

Information Network Solutions
In the first quarter of the fiscal year ending March 2023, the Information Network Solutions business bookedorders of ¥26,620 million (up 6.4% year-on-year), net sales of ¥17,851 million (down 2.9% year-on-year), andan operating loss of ¥392 million (loss of ¥359 million in the same quarter a year earlier).
Results by business model
Equipment: Orders totaled ¥11,630 million (up 15.5% year-on-year) as network enhancement orders remained
brisk and the Company won large orders for smartphones used by salespeople in the financial
industry. Net sales came to ¥5,540 million (down 8.1% year-on-year) despite large PC orders for
local governments and PBX installation orders for financial institutions owing to a significant impact
from delayed deliveries of PCs, servers, and network equipment due to the global semiconductor
shortage.
Development and construction: Orders for small and medium-sized systems and network development andconstruction projects increased, and on the sales side, we made steady progress in booking sales
from the order backlog outstanding at the end of the previous fiscal year, including small andmedium-sized systems development projects and major cloud PBX construction projects for thefinancial sector. Orders came to ¥2,881 million (up 2.3% year-on-year) and net sales came to ¥2,576
million (up 4.2% year-on-year).
Service:
Following on from the fiscal year ended March 2022, the business posted significant growth incontracts for cloud-based contact center services and other cloud services, but it was impacted by
the end of major contracts for LCM services for some customers. As a consequence, results wereflat on the year earlier with orders of ¥12,108 million (down 0.1% year-on-year) and net sales of¥9,734 million (down 1.5% year-on-year).
On the profit front, margins for the equipment, development and construction, and service businesses
improved following our efforts to improve expense ratios. However profit declined due to an increase inpersonnel and SG&A expenses and lower sales.
Electronic Devices
In the first quarter of the fiscal year ending March 2023, the Electronic Devices segment booked orders of¥10,596 million (up 26.9% year-on-year), net sales of ¥6,758 million (up 4.9% year-on-year), and operating
income of ¥179 million (up 88.5% year-on-year). Orders, net sales, and operating income all increased year-onyear.
In the devices business, following on from the fiscal year ended March 2022, there was strong demand inJapan and overseas from the FA equipment and industrial equipment industries and growing demand from theelectric vehicle industry for decarbonization, driving strong sales of custom LSIs and power semiconductors. At
our overseas locations, orders and sales were both strong despite interrupted economic activities and disrupted
logistics due to lockdowns in China (Shanghai) during the pandemic.
The systems business put in a solid performance as we worked to secure supplies amid an ongoing shortageof electronic parts for servers and PCs. However, orders and net sales declined on the year earlier as
production adjustments accompanying the switchover to new products saw lower demand for LCD panels and
SSD products used in on-board automotive information devices.
Despite an increase in SG&A expenses, profit rose significantly on the year earlier due to higher sales.

6The following tables show sales and orders by segment in the first quarter of the fiscal year ending March, 2023.
(1) Net sales by segment (millions of yen)First quarter,year ended
March 2022
Information Network Solutions
18,376Equipment
6,025
Development and construction
2,472
Service
9,879Electronic Devices
6,444
Total
24,821
Note:Inter-segment transactions are offset and eliminated.

First quarter, year ending March 2023
Versus first quarter of previous
year
17,851
5,540
2,576
9,734
6,758
24,609

(525)
(485)
104
(144)
313
(211)

97.1%
91.9%
104.2%
98.5%
104.9%
99.1%(2) Orders by segment (millions of yen)First quarter,year ended
March 2022
Information Network Solutions
25,007Equipment
10,073Development and construction
2,815
Service
12,119
Electronic Devices
8,349
Total
33,357
Note:Inter-segment transactions are offset and eliminated.

First quarter, year ending March 2023
Versus first quarter of previous
year
26,620
11,6302,881
12,108
10,596
37,216

1,612
1,557
66
(10)
2,246
3,859

106.4%
115.5%
102.3%
99.9%
126.9%
111.6%(3) Order backlog by segment (millions of yen)First quarter,year ended
March 2022
Information Network Solutions
21,216Equipment
12,871Development and construction
3,971
Service
4,373Electronic Devices
9,787
Total
31,003
Note: Inter-segment transactions are offset and eliminated.

7

First quarter, year ending March 2023
Versus first quarter ofprevious year
26,043
4,827
122.8%
16,4083,536
127.5%
4,777
805
120.3%
4,857
484
111.1%
20,274
10,487207.2%
46,31815,314149.4%

(2) Financial position
Assets totaled ¥73,243 million at the end of the quarter under review, down by ¥5,982 million from the end of
the previous fiscal year. The main factors were a ¥10,799 million decline in trade notes and accounts receivableand contract assets, a ¥3,279 million increase in cash and deposits, and a ¥1,504 million increase in inventory
assets.
Liabilities totaled ¥40,684 million at the end of the quarter, down by ¥5,341 million from the end of the previous
year. The main factor was a ¥4,421 million decline in trade notes and accounts payable.
Net assets totaled ¥32,558 million at the end of the quarter, down by ¥641 million from the end of the previous
year, and the shareholders’ equity ratio was 44.1% (41.5% at the end of the previous year). The main factor in the
decline was a reduction in retained earnings of ¥466 million due to the payment of dividends from surplus.

(3) Consolidated earnings forecasts and other information concerning the outlook
Progress has been largely in line with our expectations at the beginning of the year, and we have an ample
order backlog, but the environment surrounding the Japanese economy is constantly changing, as seen in rising
raw material prices due to the extended conflict in Ukraine and the weakening of the yen. We are thus
concerned that customers affected may curtail their ICT investments. Furthermore, the impact of delayeddeliveries of a range of equipment due to the global semiconductor shortage is notable, and it remains unclear
when the situation will be resolved, so there is no change to the consolidated earnings forecast for the year
ending March 2023 that we announced on May 13, 2022. The Company will promptly inform our stakeholders ifmaterial matters arise due to a change in circumstances or other factors.

8

2. Consolidated financial statements and notes(1) Quarterly consolidated balance sheet(Millions of yen)
As of March 31, 2022
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable – trade
Electronically recorded monetary claims
Inventories
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures (net)
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles
(net)
Land
Lease assets
Accumulated depreciation
Lease assets (net)
Construction in progress
Other
Accumulated depreciation
Other (net)Total property, plant and equipment
Intangible assets
Goodwill
Lease assets
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Other
Allowance for doubtful accounts
Investments and other assets
Total noncurrent assets
Total assets

9

As of June 30, 2022

19,162
28,113
4,645
7,483
1,861
(70)
61,19522,441
17,314
4,677
8,988
1,861
(71)
55,210

2,145
(933)
1,212
7
(6)

2,126
(937)
1,189
7
(6)

1

1

1,804
5,150
(3,330)
1,820
126
1,177
(713)
463
5,428

1,804
5,179
(3,523)
1,655
159
1,188
(755)
433
5,242

135
883
2,053
3,072

113
843
2,100
3,056

4,096
32
4,204
1,247
(52)
9,528
18,03079,226

3,964
31
4,527
1,261
(52)
9,733
18,032
73,243

(Millions of yen)
As of March 31, 2022
Liabilities
Current liabilities
Notes and accounts payable – trade
Short-term loans payable
Current portion of long-term loans payable
Lease obligations
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Lease obligations
Deferred tax liabilities
Net defined benefit liability
Long-term accounts payable – other
Other provision
Other
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeNoncontrolling interests
Total net assets
Total liabilities and net assets

15,307
5,137
4,291
1,267
1,268
2,303
5,310

10

As of June 30, 2022

34,886

10,886
5,060
4,286
1,185
212
1,118
7,001
29,751

152
1,658
7
8,531
29
629
130
11,13946,026

83
1,510
7
8,501
28
657
142
10,93340,6849,812
2,581
23,018(2,257)33,155

9,812
2,581
22,405(2,207)32,592

1,343

1,245

(37)
145
(1,760)(75)
237(1,719)

(307)

(311)

352
33,19979,226277
32,55873,243

(2) Quarterly consolidated statements of income and comprehensive income(Quarterly consolidated statement of income)Consolidated income statement for the first quarter(Millions of yen)Three months ended
June 30, 2021
Net sales
Cost of sales
Gross profit
Selling, general, and administrative expenses
Operating income (loss)
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary income (loss)
Extraordinary loss
Loss on retirement of noncurrent assets
Loss on valuation of investment securities
Total extraordinary losses
Income (loss) before income taxes and others
Income taxes
Profit (loss)
Profit attributable to noncontrolling interests
Profit (loss) attributable to owners of parent

11

Three months ended
June 30, 2022

24,821
20,659
4,161
4,424
(262)

24,60920,082
4,527
4,730
(202)

0
48
4
13
67

1
42
45
38
127

32
3
35
(230)

29
5
34
(109)

－
29
29
(260)
(58)
(201)
42
(244)

1
－
1
(111)
(13)
(97)
49
(147)

(Quarterly consolidated statement of comprehensive income)First quarter(Millions of yen)Three months ended
June 30, 2021
Profit (loss)
Other comprehensive income
Valuation difference on available for salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Other comprehensive income
Comprehensive income
BreakdownComprehensive income attributable to ownersof parent
Comprehensive income attributable tononcontrolling interests

12

Three months ended
June 30, 2022

(201)

(97)

88

(97)

0
(0)
37
126
(75)

(38)
91
40
(3)
(100)

(118)

(150)

42

49

(3) Notes to quarterly consolidated financial statements(Notes on premise of going concern)
Not applicable.

(Notes on significant changes in the amount of shareholders equity.)
Not applicable.
(Application of special accounting methods in the preparation of quarterly consolidated financial statements)(Calculation of tax expense)
Tax expenses are calculated by reasonably estimating the effective tax rate after applying tax effect accounting
to income before income taxes for the fiscal year, including the first quarter, and multiplying quarterly income
before income taxes by the estimated effective tax rate.
Note: Income taxes – deferred are included in income taxes.

13

(Segment and other information)
Segment information
I First quarter of previous year (April 1, 2021, to June 30, 2021)
1. Information on net sales and profit or loss by reporting segment(Millions of yen)Amountrecorded inquarterly
Adjustments
consolidated(Note 1)
financialstatements(Note 2)

Reporting segment
Information
Network
SolutionsElectronic
Devices

Total

Net sales
Net sales from externalcustomers
Intersegment net sales andtransfers
Total
Segment profit (loss)

18,376

6,444

24,821－

24,821

3

39

43

(43)

－

18,3796,484

24,864(43)

24,821

(359)

95

(264)

1

(262)

Notes:
1 Adjustments to segment profit (loss) are elimination of intersegment transactions.
2 Segment profit (loss) is adjusted with operating income (loss) in the quarterly consolidated income statements.
II First quarter in current year (April 1, 2022, to June 30, 2022)
1. Information on sales and profit or loss by reporting segment(Millions of yen)Amountrecorded inquarterly
Adjustments
consolidated(Note 1, 2, 3)
financialstatements(Note 2)

Reporting segment
Information
Network
SolutionsElectronic
Devices

Total

Net sales
Net sales from externalcustomers
Intersegment net sales andtransfers
Total
Segment profit (loss)

17,851

6,758

24,609－24,609

1

60

62

(62)

－

17,852

6,819

24,671(62)

24,609

(392)

179

(212)

10

(202)

Notes:
1 Adjustments to segment profit (loss) are elimination of intersegment transactions.
2 Segment profit (loss) is adjusted with operating income (loss) in the quarterly consolidated income statements.

14