Consolidated Financial Results for the First Quarter of
the Fiscal Year Ending March 31, 2022 (JGAAP)
July 30, 2021
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, Director and 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 6, 2021—
No
No

1. Consolidated financial results for the first quarter of the fiscal year ending March 31, 2022
(April 1, 2021, to June 30, 2021)(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
24,821
5.0%
(262)
(230)
(244)
—
March 31, 2022
First quarter,—year ended
23,642
7.2%
(869)
(841)
—
(672)
—
March 31, 2021
Note: Comprehensive income was (75) million yen (—%) in first quarter of year ending March 31, 2022; (421)
million yen (—%) in first quarter of year ended March 31, 2021.
Earnings per share
Diluted earnings per(yen)share (yen)First quarter,year ending(13.89)—March 31, 2022
First quarter,year ended(38.53)—
March 31, 2021
(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
72,77430,58241.7%
1,725.07
March 31, 2022
Year ended
76,20031,17140.6%
1,760.87
March 31, 2021
Reference: Shareholders’ equity at first quarter, year ending March 31, 2022; 30,365 million yen; in year ended
March 31, 2021; 30,934 million yen.

1

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

End ofsecondquarter

End ofthird
quarterYearendTotal

Year ended
—
15.00
—
31.00
March 31, 2021
Year ending—
March 31, 2022
Year ending
March 31, 2022
23.00
—
24.00
(forecast)
Note: Revisions to most recent dividend forecast: None

46.00

47.00

3. Forecast of consolidated financial results for the fiscal year ending March 31, 2022
(April 1, 2021, to March 31, 2022)% 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

122,000

1.7%

4,000

24.9%

4,050

Note: Revisions to most recent earnings forecast: None

2

20.5%

2,700

15.1%

153.43

*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:

Yes
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, 2021
March 31, 2022
First quarter,
2. Number of shares at year end
Year ended
year ending
2,575,444
2,610,056(treasury stock)
March 31, 2021
March 31, 2022
First quarter,
First quarter,
3. Average number of shares overyear ending
17,582,961
year ended
17,439,953
the period
March 31, 2022
March 31, 2021
Note: The number of treasury shares includes those held in the Employee Stock Ownership Plan (ESOP) trust
account (186,300 in first quarter, year ending March 2022; 210,100 in year ended March 2021), Directors’Compensation Board Incentive Plan (BIP) trust account (377,196 in first quarter, year ending March 2022;
380,905 in year ended March 2021); and Stock-grant ESOP trust account (479,500 in first quarter, year ending
March 2022; 486,750 in year ended March 2021).
*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(Changes in accounting policies) ....................................................................................................................13(Segment and other information).....................................................................................................................15

4

1. Qualitative information on quarterly results(1) Earnings
In the first quarter of the fiscal year ending March 2022, economic conditions in Japan remained severe, despitesome recovery from the impact of the COVID-19 pandemic. While there are prospects for an economic recovery
as vaccine administration progresses, development in the pandemic have a significant impact on the Japaneseand overseas economies, and the outlook remains uncertain.
Our group belongs to the information and communications services industry. While growing ICT demand is inprospect as factors such as changing work styles due to COVID-19 accelerate moves toward digitaltransformation (DX), some companies continue to constrain their ICT capex due to deteriorating earnings, so
optimism is unwarranted. In the electronic device industry, conditions are strong as semiconductor demand is
growing further due to a recovery in the automobile industry and growing investment in data centers.
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 initiatives ofclient companies and become more competitive by becoming an innovation service provider. We see the COVID19 pandemic as a turning point, and are continuing with initiatives aimed at sustainable growth and enhancing
corporate value by reforming our business structure and strengthening our management base.
In the first quarter of the second year of our plan, the Group posted net sales of ¥24,821 million (up 5.0% yearon-year), operating loss of ¥262 million (operating loss of ¥869 million in year earlier), ordinary loss of ¥230 million(ordinary loss of ¥841 million in year earlier), and loss attributable to owners of parent of ¥244 million (loss of¥672 million in year earlier).
In the Information Network Solutions segment, orders and net sales were below the year-earlier levels. Service
sales increased, and we won projects to strengthen networks, enhance security, and build contact centers due to
growing demand during the pandemic. However, large projects that contributed in the previous year dropped out,
and computer orders declined as demand associated with remote working ran its course. On the profit front, we
exceeded year-earlier levels as gross profit grew due to improved cost of sales for equipment orders andimproved utilization rate for engineers as development and construction projects increased. Results also benefited
from the consolidation of ComDesign Inc., which became a subsidiary on September 30, 2020.
In the Electronic Devices segment, both orders and net sales significantly exceeded year-earlier levels. In
addition to growing demand for onboard automotive information devices and semiconductors, the businessbenefited from special Olympics-related demand. Profit also increased on the year earlier due to sales growth andcost cuts.
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
The Information Network Solutions business booked orders of ¥25,007 million (down 1.7% year-on-year), net
sales of ¥18,376 million (down 4.8% year-on-year), and operating loss of ¥359 million (operating loss of ¥872
million in year earlier). While orders and net sales were down on the year earlier, the operating loss narrowed
significantly.
Results by business model
Equipment: Although the business won orders for PCs for the public sector and financial industry, there was areactionary drop-off compared to first quarter of the year ended March 2021, which featured several
large orders. Furthermore, a sharp upswing in PC orders driven by remote working demand during the
pandemic ran its course last year. Therefore, orders significantly declined over the year earlier. Orders
totaled ¥10,073 million (down 12.7% year-on-year) and net sales ¥6,027 million (down 30.0% year-onyear).
Development and construction: Many customers made progress in remote working arrangements (moving online),leading to increased demand for expanded networks and enhanced security, and negotiations for
associated projects increased. Work had been delayed and orders had been postponed due to thepandemic last year, but progressed smoothly in the latest quarter, contributing to net sales. However,orders for large projects received in the first quarter last year for systems development andinfrastructure building dropped out. Orders also declined due to a shift to the life cycle management(LCM) service model for some customers. As a result, orders totaled ¥2,815 million (down 22.8% yearon-year) and net sales ¥2,474 million (up 9.4% year-on-year).
Service: In addition to growth in LCM service and cloud service business, the consolidation of ComDesign Inc.
contributed to significant growth in orders and net sales. Orders totaled ¥12,119 million (up 18.2%
year-on-year) and net sales ¥9,874 million (up 17.0% year-on-year).
Profit exceeded year-earlier levels. The cost of sales for equipment orders improved (in the year ended March
2021, large equipment orders accepted for strategic purposes pushed up the cost of sales) and gross profit
increased on improved utilization rate for engineers thanks to growth in development and construction projects.
Profit also benefited from the consolidation of ComDesign Inc., which was consolidated in October 2020.
Electronic Devices
The Electronic Devices segment booked orders of ¥8,349 million (up 86.6% year-on-year), net sales of ¥6,444
million (up 48.7% year-on-year), and operating income of ¥95 million (operating loss of ¥42 million in year earlier).
Orders, sales, and operating income all improved significantly on the year earlier. Orders in particular posted asignificant increase amid an ongoing acceleration in efforts to secure products during the global semiconductor
shortage.
In the devices business, following recoveries in the factory automation (FA) equipment and automotive
industries, the Group saw increased demand for semiconductors and other electronic components amongcustomers. Amid a global semiconductor shortage, net sales in Japan and overseas were strong as we focused tosecure supplies.
In the systems business, there was increased demand for LCD panels for on-board automotive information
devices and SSD products. The Olympics sparked a sharp increase in demand for HDDs used in Blu-ray discrecorders and other consumer electronics. Orders and net sales were strong.
Profit grew sharply on the year earlier due to higher sales and lower costs as the Company used teleworking
and curtailed business trips in Japan and overseas during the pandemic.

6

The following tables show sales and orders by segment in the first quarter of the fiscal year ending March, 2022.
(1) Net sales by segment (millions of yen)First quarter,year ended
March 2021
Information Network Solutions
19,309Equipment
8,608
Development and construction
2,262
Service
8,437Electronic Devices
4,333
Total
23,642Note:
1 Inter-segment transactions are offset and eliminated.
2 The above figures do not include consumption tax.

First quarter, year ending March 2022
Versus first quarter of previous
year
18,376
6,027
2,474
9,874
6,444
24,821(932)(2,581)
212
1,436
2,111
1,178

95.2%
70.0%
109.4%
117.0%
148.7%
105.0%(2) Orders by segment (millions of yen)First quarter,year ended
March 2021
Information Network Solutions
25,444Equipment
11,541Development and construction
3,645
Service
10,256
Electronic Devices
4,473
Total
29,918Note:
1 Inter-segment transactions are offset and eliminated.
2 The above figures do not include consumption tax.

First quarter, year ending March 2022
Versus first quarter of previous
year
25,007
10,073
2,815
12,1198,349
33,357(436)(1,468)
(830)
1,862
3,875
3,439

98.3%
87.3%
77.2%
118.2%
186.6%
111.5%(3) Order backlog by segment (millions of yen)First quarter,year ended
March 2021
21,434
12,304
5,107
4,022
5,656
27,091

Information Network Solutions
Equipment
Development and construction
ServiceElectronic Devices
Total
Note:
1 Inter-segment transactions are offset and eliminated.
2 The above figures do not include consumption tax.

7

First quarter, year ending March 2022
Versus first quarter ofprevious year
21,216(217)
99.0%
12,871567
104.6%
3,971(1,136)
77.8%
4,373
350
108.7%
9,787
4,130
173.0%
31,003
3,912
114.4%

(2) Financial position
Assets totaled ¥72,774 million at the end of the quarter under review, down by ¥3,426 million from the end of
the previous fiscal year. The main factors were a ¥9,935 million decline in trade notes and accounts receivableand contract assets, a ¥5,175 million increase in cash and deposits, and a ¥579 million increase in inventory
assets.
Liabilities totaled ¥42,191 million at the end of the quarter, down by ¥2,837 million from the end of the previous
year. The main factor was a ¥5,745 million decline in trade notes and accounts payable.
Net assets totaled ¥30,582 million at the end of the quarter, down by ¥589 million from the end of the previous
year, and the shareholders’ equity ratio was 41.7% (40.6% at the end of the previous year). The main factor in the
decline was a reduction in retained earnings of ¥578 million due to the payment of dividends from surplus.

(3) Consolidated earnings forecasts and other information concerning the outlook
Emergency declarations and measures to prevent the spread of COVID-19 are being issued continuously,
raising concerns that extended self-restraint on going out will continue to constrain marketing activities. However,
events have unfolded largely in line with expectations at the beginning of the fiscal year, so there is no change tothe consolidated earnings outlook for the year ending March 2022 announced on May 14, 2021. The Company
will promptly inform our stakeholders if material matters arise due to a change in the coronavirus situation or otherfactors.

8

2. Consolidated financial statements and notes(1) Quarterly consolidated balance sheet(Millions of yen)
As of March 31, 2021
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable – trade
Notes and accounts receivable – tradeand contract assets
Electronically recorded monetary claims
Inventories
Income taxes receivable
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, 2021

15,94427,94821,120－－18,013

3,817
7,619
98
1,390
(77)
56,740

3,947
8,198
163
1,633
(77)
52,999

1,696
(891)
805
7
(6)

1,947
(906)
1,040
7
(6)

1

1

1,769
5,777
(3,240)
2,536
821
1,006
(676)
329
6,264

1,769
6,083
(3,504)
2,579
143
1,149
(717)
432
5,965

226
549
2,191
2,967

203
930
2,269
3,403

4,766
34
4,131
1,377
(81)
10,22819,46076,200

4,874
33
4,225
1,329
(56)
10,405
19,77572,774

(Millions of yen)
As of March 31, 2021
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

15,875
4,894
161
1,428
241
2,415
5,020

10

As of June 30, 2021

30,037

10,130
5,198
161
1,510
73
1,271
8,385
26,730

4,443
1,921
7
7,959
26
548
82
14,99145,029

4,370
2,256
6
8,065
26
614
121
15,46042,1919,812
2,581
21,150(2,472)
31,0729,812
2,581
20,405(2,422)30,376

1,485

1,574

(3)
52
(1,672)(2)
52(1,635)

(137)

(11)

236
31,171
76,200216
30,582
72,774

(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, 2020
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
Foreign exchange losses
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, 2021

23,642
20,080
3,561
4,431
(869)

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

0
45
－
15
61

0
48
4
13
67

31
0
1
32
(841)

32
－
3
35
(230)

3
62
66
(907)
(235)
(672)
－
(672)

－
29
29
(260)
(58)
(201)
42
(244)

(Quarterly consolidated statement of comprehensive income)First quarter(Millions of yen)Three months ended
June 30, 2020
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, 2021

(672)

(201)

249

88

(0)
(5)
6
250
(421)

0
(0)
37
126
(75)

(421)

(118)

－

42

(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.
(Changes in accounting policies)(Application of Accounting Standard for Revenue Recognition)
The Company began applying the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29,
March 31, 2020, “revenue recognition standard” below) from the start of the quarter under review. The Company
recognizes revenue when control of promised goods or services is transferred to the customer, in the amount
expected to be received in exchange for the goods or services.
Previously, the Company applied the percentage of completion method for systems development contracts
when the outcome was deemed certain. However the Company has changed its revenue recognition method.
Now, when control over goods or services is transferred to the customer over a certain period, the Company
recognizes revenue for that period as its obligation to transfer the goods or services to the customer is satisfied.
To measure the progress toward fulfilling obligations for each reporting period, costs incurred until the last day ofthe period as a percentage of total expected costs are calculated. Also, when it is not possible to reasonably
estimate progress in the initial phase of a contract, but the Company expects to recover costs incurred, theCompany recognizes revenue under the cost recovery method. For contracts with a very short period from thestart of the transaction until the obligation is expected to be fully satisfied, the Company applies an alternative
treatment under which revenue is not recognized for a set period but only when the obligation is fully satisfied.
The Company has applied the revenue recognition standard in accordance with transitional treatmentprescribed in the proviso to paragraph 84 of the Accounting Standard for Revenue Recognition. The cumulative
effect of retroactively applying the new accounting policy prior to the beginning of the quarter under review wasadded to or deducted from retained earnings at the beginning of the quarter, and the new accounting policy wasapplied from the opening balance at the start of the quarter. However, the Company has followed the treatmentprescribed in paragraph 86 of the Accounting Standard for Revenue Recognition, and did not retrospectively
apply the new accounting policy to contracts for which almost all of the revenue was recognized under theprevious treatment before the start of the quarter under review. In addition, the Company has applied thetreatment prescribed in proviso 1 of paragraph 86 of the Accounting Standard for Revenue Recognition andaccounted for contract changes made before the beginning of the quarter under review based on the contract
terms after reflecting all contract changes, and added or subtracted the cumulative effect of such changes toretained earnings at the beginning of the first quarter.
As a result, first quarter net sales increased by ¥134 million, cost of sales increased by ¥116 million, andoperating income, ordinary income, and income before income taxes each increased by ¥18 million. Retained
earnings at the start of the year increased by ¥76 million. Because the Company applied the revenue recognition
standard, what was displayed as “Notes and accounts receivable – trade” under the current assets section of theprevious year’s balance sheet is “Notes and accounts receivable – trade, and contract assets” in the current year.
Further, in accordance with the transitional treatment prescribed in paragraph 89-2 of the Accounting Standard for13

Revenue Recognition, the prior year's consolidated financial statements have not been reclassified to conform to
the new presentation.
(Application of Accounting Standard for Fair Value Measurement)
The Company applied the Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30, July 4,
2019, “fair value standard” below) from the start of the first quarter. In accordance with the transitional treatmentprescribed in paragraph 19 of the fair value standard and paragraph 44-2 of the Accounting Standard for Financial
Instruments (ASBJ Statement No. 10, July 4, 2019), the new accounting policy prescribed in the fair value
standard will be applied prospectively. There is no impact on the quarterly consolidated financial statements.

14

(Segment and other information)
Segment information
I First quarter of previous year (April 1, 2020, to June 30, 2020)
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)

19,3094,333

23,642－

23,642

0

63

63

(63)

－

19,3094,396

23,705(63)

23,642

(827)

(42)

(870)

0

(869)

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, 2021, to June 30, 2021)
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)

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.
3 Notes relating to changes in reporting segments, etc.
As noted in the section on accounting policy changes, the Company changed its accounting policy and applied
the Accounting Standard for Revenue Recognition from the start of the first quarter, and segment profit and loss
calculation methods have changed accordingly.
2. Notes relating to changes in reporting segments, etc.
Due to the above changes, compared with the previous accounting treatment, Information Network Solutions
net sales increased by ¥134 million and segment profit by ¥18 million.

15