Consolidated Financial Results for the Third Quarter of
the Fiscal Year Ending March 31, 2023 (JGAAP)
January 27, 2023
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:

February 3, 2023
—
None
None

1. Consolidated financial results for the Third quarter of the fiscal year ending March 31, 2023
(April 1, 2022, to December 31, 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

Third quarter,
5.1 %
6.3 %
3.4 %
year ending
82,545
2.0 %
1,407
1,642
973
March 31, 2023
Third quarter,year ended
80,941
1.4 %
1,339 389.6 %1,545 268.4 %941 367.0 %March 31, 2022
Note: Comprehensive income was 1,348 million yen (+10.6 %) in the third quarter of year ending March 31, 2023;
1,218 million yen (+62.1%) in third quarter of year ended March 31, 2022.
Earnings per share
Diluted earnings per(yen)share (yen)Third quarter,year ending
54.68—
March 31, 2023
Third quarter,year ended
53.38—
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)Third quarter,year ending
79,80633,73841.8 %
1,863.52
March 31, 2023
Year ended
79,22633,19941.5 %
1,853.68
March 31, 2022
Reference: Shareholders’ equity at the third quarter of year ending March 31, 2023; 33,351 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—
25.00
March 31, 2023
Year ending
March 31, 2023
—
25.00
50.00
(forecast)
Note: Revisions to most recent dividend forecast: None
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

121,000

1.4%

4,500

12.2%

4,630

Note: Revisions to most recent earnings forecast: None

2

9.5%

3,090

10.4%

173.34

*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)
1. Number of shares outstanding at
Third quarter,Year ended
year end (including treasury
year ending
20,177,894
20,177,894
March 31, 2022
stock)March 31, 2023
Third quarter,
2. Number of shares at year end
Year ended
year ending
2,280,617
2,457,908(treasury stock)
March 31, 2022
March 31, 2023
Third quarter,
Third quarter,
3. Average number of shares overyear ending
17,803,153
year ended
17,637,843
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 (25,800 in the third quarter of year ending March 2023; 121,000 in year ended March 2022), Directors’Compensation Board Incentive Plan (BIP) trust account (290,547 in the third quarter of year ending March 2023;
346,034 in year ended March 2022); and Stock-grant ESOP trust account (431,416 in the third quarter of 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 make. Actual results may vary materially from forecasts due to avariety of factors.

3

Content of attachment
1. Qualitative information on quarterly results ..............................................................................................5(1) Earnings ..............................................................................................................................................................5(2) Financial position ...............................................................................................................................................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).....................................................................................................................14(Significant subsequent events) ......................................................................................................................15

4

1. Qualitative information on quarterly results(1) Earnings
In the first nine months of the fiscal year ending March 31, 2023, the Japanese economy continued to recovergradually amid the ongoing normalization of economic and social activity. That being said, the outlook continued
to remain uncertain, as the global economic downturn caused by monetary tightening among other factors
weighed on the domestic economy, and as this was further exacerbated by rising prices, supply-side constraints,
and fluctuations in financial and capital markets.
In the information and communications services industry where the Group operates, digital transformation (DX)in the corporate sector accelerated propelled by the COVID-19 pandemic, and capital investments in ICT
continued to grow.
As for the electronic device industry, while the supply-demand balance for semiconductors was moving towardnormalization, the market showed signs of slowing down due to changes in the operating environment, including adecline in personal consumption as prices rose globally.
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 the management base to tap into growing DX needs with a view tosustainable growth and enhanced corporate value.
In the first nine months of the fiscal year ending March 31, 2023, the final year of the medium-term management
plan, net sales were ¥82,545 million (up 2.0% year-on-year), operating income was ¥1,407 million (up 5.1% yearon-year), ordinary income was ¥1,642 million (up 6.3% year-on-year), and profit attributable to owners of parent
was ¥973 million (up 3.4% year-on-year).
In the Information Network Solution segment, development and construction projects declined due to the shift tothe cloud, but service contracts increased. Equipment installation projects, despite robust demand, were affectedby extended delivery periods caused by semiconductor shortages. As a result, net sales were down year-on-year,
but orders and order backlog grew sharply. Profit fell below the year-ago level due to a rise in SG&A expenses.
The rise in the SG&A expenses was attributed to an increase in sales activities (to win orders) amid brisk
business negotiations.
In the Electronic Devices segment, advanced order placements and other arrangements by clients, a trend which
had continued since the previous fiscal year, abated thanks to normalization of some production activities andimproved supply and demand balance amid protracted global semiconductor shortages. Sales of semiconductors
and electronic devices for factory automation equipment and industrial markets were robust, as were sales ofpower semiconductors for use in decarbonization/energy-saving products. As a result, while orders were down
year-on-year, net sales and order backlog exceeded year-ago levels. Profit grew substantially year-on-year owing
to higher net sales, notwithstanding an increase in SG&A expenses.
The following section discusses earnings by segment in the third quarter.
*Note regarding quarterly earnings for the Group
Many of the Group’s customers have business years from April through March of 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 nine months of the fiscal year ending March 31, 2023, orders totaled ¥75,244 million (up 5.5% yearon-year), net sales were ¥60,454 million (down 0.2% YoY), and operating income was ¥640 million (down 26.2%
year-on-year). Versus the same period of the previous fiscal year, orders grew but net sales and operating profit
declined.
Results by business model
Equipment: Large orders accumulated, including those for smartphone for the financial industry and PCs for thetelecommunications industry and medical institutions, but some projects were affected by extendeddelivery periods caused by semiconductor shortages. As a result, orders amounted to ¥32,359 million(up 12.9% year-on-year) and net sales were ¥20,922 million (down 1.8% year-on-year). While orders
grew sharply versus the same period of the previous fiscal year, sales declined slightly.
Development and construction: Network construction projects for various clients operating in a range of industries,
including the manufacturing and wholesale industries, continued to hold firm, but large orders for
system development and IT infrastructure construction declined. Some orders were also affected by
the shift to the cloud (transition to the service model). As a result, both orders and sales fell sharply
versus the same period of the previous fiscal year, with orders at ¥10,306 million (down 10.3% yearService:

on-year) and net sales ¥8,781 million (down 10.7% year-on-year).
Despite the impact of the expiration of large service contracts for some clients in Q1, results were
buoyed by growth in equipment maintenance services owing to an increase in equipment installation
projects and strong performance of cloud services overall. As a result, orders and net sales grew
versus the same period of the previous fiscal year, with orders amounting to ¥32,578 million (up 4.4%
year-on-year) and net sales ¥30,750 million (up 4.4% year-on-year).

Profit declined year-on-year, due to higher SG&A expenses. The rise in the SG&A expenses was attributed to
an increase in sales activities since the second quarter of the fiscal year under review accompanied by brisk
business negotiations.
Electronic Devices
In the first three months of the fiscal year under review, orders were ¥25,331 million (down 6.7% year-on-year),net sales were ¥22,091 million (up 8.5% year-on-year), operating income was ¥740 million (up 63.2% year-onyear). Orders declined year-on-year, but net sales and operating income exceeded year-ago levels.
In the devices business, advanced order placements and other arrangement by clients, a trend which had
continued since the previous fiscal year, abated as electronic devices for consumer products normalized and the
supply and demand balance improved amid ongoing global semiconductor shortages. Meanwhile, sales ofsemiconductors and electronic components for factory automation equipment and the industrial market, as well as
those of power semiconductors for battery equipment used in decarbonization/energy-saving products (electricvehicles, etc.), were robust. As a result, while orders fell below the year-ago levels, net sales grew substantiallyyear-on-year.
In the systems business, orders held firm backed by increased demand for servers for industrial equipment.
Sales of electronic components for servers and PCs were brisk, while sales of LCD panels for automotive
equipment and SSDs declined due to the discontinuation of some products and production adjustments causedby semiconductor shortages. As a result, orders were up but net sales were down versus the same period of theprevious fiscal year.
Profit grew sharply on the back of higher net sales, despite a rise in personnel expenses aimed at expanding
existing businesses and establishing new business models.

6

The following tables show sales and orders by segment in the third quarter of the fiscal year ending March, 2023.
(1) Net sales by segment (millions of yen)
Third quarter,year ended
March 2022
Information Network Solutions
60,574Equipment
21,295Development and construction
9,833
Service
29,446
Electronic Devices
20,366
Total
80,941
Note: Inter-segment transactions are offset and eliminated.

Third quarter, year ending March 2023
Versus third quarter ofprevious year
60,45420,922
8,781
30,75022,09182,545(120)(373)(1,051)
1,304
1,725
1,604

99.8%
98.2%
89.3%
104.4%
108.5%
102.0%(2) Orders by segment (millions of yen)
Third quarter,year ended
March 2022
Information Network Solutions
71,335Equipment
28,653Development and construction
11,484Service
31,196
Electronic Devices
27,145
Total
98,480Note: Inter-segment transactions are offset and eliminated.

Third quarter, year ending March 2023
Versus third quarter ofprevious year
75,24432,35910,30632,57825,331
100,576

3,909
3,705
(1,178)
1,381(1,813)
2,096

105.5%
112.9%
89.7%
104.4%
93.3%
102.1%(3) Order backlog by segment (millions of yen)
Third quarter,year ended
March 2022
Information Network Solutions
25,345Equipment
16,183Development and construction
5,282
Service
3,878Electronic Devices
14,661
Total
40,006
Note: Inter-segment transactions are offset and eliminated.

7

Third quarter, year ending March 2023
Versus third quarter ofprevious year
32,064
6,719
126.5%
21,755
5,571
134.4%
5,997
714
113.5%
4,312
433
111.2%
19,676
5,015
134.2%
51,741
11,734129.3%

(2) Financial position
As of December 31, 2022, assets totaled ¥79,806 million, up ¥580 million from the end of the previous fiscal
year. The main factors were increases of ¥8,508 million in inventory assets, ¥994 million in other current assets,and ¥199 million in electronically recorded monetary claims, partially offset by declines of ¥8,195 million in tradenotes and accounts receivable and contract assets and ¥920 million in cash and deposits.
As of December 31, 2022, liabilities totaled ¥46,068 million, up ¥41 million from the end of the previous fiscal
year. The decline was primarily attributed to decreases of ¥1,124 million in provision for bonuses and ¥987 million
in income taxes payable, partially offset by an increase of ¥1,990 million in trade notes and accounts payable.
As of December 31, 2022, net assets totaled ¥33,738 million, up ¥538 million from the end of the previous fiscal
year, and the shareholders’ equity ratio was 41.8% (41.5% at the end of the previous fiscal year). The main
factors were an increase in retained earnings due to the recording of ¥973 million in profit attributable to owners ofparent, the disposal of treasury shares worth ¥252 million to grant shares to directors and employees under thestock benefit trust plan, and an increase of ¥121 million in remeasurements of defined benefit plans. These
factors were partially offset by a decline in retained earnings due to the payment of dividends from surplus of ¥932
million.

(3) Consolidated earnings forecasts and other information concerning the outlook
The Company has maintained the consolidated earnings forecast announced on October 28, 2022, as earnings
were largely in line with plan in the first nine months of the fiscal year under review.

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 – tradeand contract assets
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 December 31, 2022

19,162

18,241

28,113

19,918

4,645
7,483
1,861
(70)
61,195

4,845
15,9922,855(7)61,847

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

2,140
(998)
1,142
7
(6)

1

1

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

1,804
5,318
(3,475)
1,842
142
1,196
(829)
366
5,299

135
883
2,053
3,072

67
890
2,061
3,020

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

4,103
29
4,381
1,176
(50)
9,640
17,95979,806

(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

10

As of December 31, 2022

15,307
5,137
4,291
1,267
1,268
2,303
5,310
34,886

17,298
5,159
141
1,178
280
1,179
6,152
31,388

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

4,114
1,726
7
7,999
28
647
155
14,67946,0689,812
2,581
23,018(2,257)33,155

9,812
2,581
23,060(2,010)33,443

1,343

1,335

(37)
145
(1,760)37
172(1,638)

(307)

(91)

352
33,19979,226386
33,73879,806

(2) Quarterly consolidated statements of income and comprehensive income(Quarterly consolidated statement of income)(Millions of yen)
Nine months ended
December 31, 2021
Net sales
Cost of sales
Gross profit
Selling, general, and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Insurance income
Dividends income of insurance
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Total extraordinary income
Extraordinary loss
Loss on retirement of noncurrent assets
Loss on sale of investment securities
Loss on valuation of investment securities
Total extraordinary losses
Income before income taxes and others
Income taxes
Net income
Profit attributable to noncontrolling interests
Profit attributable to owners of parent

11

Nine months ended
December 31, 2022

80,941
65,92715,013
13,674
1,339

82,54566,934
15,61014,203
1,407

3
103
33
58
67
50
317

4
97
40
42
73
78
336

94
16
111
1,545

87
13
101
1,642

62
62

0
0

1
0
28
30
1,576
510
1,066
124
941

4
－
－
4
1,638
506
1,132
158
973

(Quarterly consolidated statement of comprehensive income)(Millions of yen)
Nine months ended
December 31, 2021
Net income
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

Nine months ended
December 31, 2022

1,066

1,132

18

(7)

(13)
35
111
152
1,218

74
27
121
215
1,348

1,093

1,189

124

158

(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 third 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 Fair Value Measurement)
The Company applied the Implementation Guidance on Accounting Standard for Fair Value Measurement(ASBJ Statement No. 30, July 4, 2019, “Implementation Guidance of fair value standard” below) from the start of
the first quarter. In accordance with the transitional treatment prescribed 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.

13

(Segment and other information)
Segment information
I Third quarter of previous year (April 1, 2021, to December 31, 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

60,574

20,36680,941－80,941

25

122

148

(148)

－

60,60020,48981,089(148)

80,941

867

453

1,321

18

1,339

Notes:
1 Adjustments to segment profit are elimination of intersegment transactions.
2 Segment profit is adjusted with operating income in the quarterly consolidated income statements.
II Third quarter in current year (April 1, 2022, to December 31, 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

60,45422,09182,545－82,545

19

140

160

(160)

－

60,473

22,23282,705(160)

82,545

640

740

1,380

26

1,407

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

14

(Significant subsequent events)
At a meeting held on January 27, 2023, the Company’s board of directors resolved to transfer noncurrent
assets of consolidated subsidiary Tsuzuki Embedded Solutions Co., Ltd. as below.
1. Overview of consolidated subsidiary(1) Trade name(2) Address(3) Title and name of representative(4) Business(5) Capital

Tsuzuki Embedded Solutions Co., Ltd.
2-5-3 Nishishinbashi, Minato-ku, Tokyo
President and Representative Director Masato Tozawa
Sales, maintenance, and support of ICT products, electronic
devices, electronic components and other embedded products;
sales of office supplies¥350 million

2. Reason for transfer
The Company decided to transfer noncurrent assets of Tsuzuki Embedded Solutions to effectively utilize
management resources and increase asset efficiency.
3. Overview of noncurrent assets to be transferred(1) Address(2) Land area
(3) Building floor area(4) Gain on transfer *(5) Current status

2-5-3 Nishishinbashi, Minato-ku, Tokyo
476.47sqm
1,792.62sqm
About ¥1,609 million
Tokyo Office, Tsuzuki Embedded Solutions Co., Ltd.

The Company has not disclosed the transfer price, book value, etc. based on an agreement with the buyer,
but will transfer the assets at an appropriate price reflective of the market price.
*Gain on transfer was calculated by subtracting the estimate of various expenses from the transfer price.
4. Overview of transferee (buyer)
The buyer is a corporation in Japan, but we have refrained from disclosing the identity of the buyer due to anagreement reached with the latter.
There is no capital, personal, or business relationship between the Group and the buyer, nor any related party
to be disclosed of.
5. Timeline of transfer(1) Date of board resolution(2)Contract signing date (scheduled)(3) Asset transfer date (scheduled)

January 27, 2023
January 30, 2023
September 29, 2023

6. Outlook
As a result of the transfer of noncurrent assets, the Company expects to record a gain on sales of noncurrent
assets of ¥1,609 million as an extraordinary gain in the second quarter of the fiscal year ending March 31, 2024.
Because the asset transfer is scheduled for September 2023, the transaction will have no impact on the
consolidated earnings forecast for the fiscal year ending March 31, 2023.

15