Note: This document has been translated from 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.

January 26, 2023

Consolidated Financial Results for the Nine Months Ended December 31,
2022 (Under Japanese GAAP)
Company name:
DKS Co. Ltd.
Listing:
Tokyo Stock Exchange
Security code:
4461
URL:
https://www.dks-web.co.jp
Representative:
YAMAJI Naoki, President COO
Inquiries:
SHIMIZU Shinji, Director and Administrative Supervisor
TEL:+81-75-323-5822
Scheduled date to file quarterly securities report:
February 7, 2023
Scheduled date to commence dividend payments:–
Preparation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results briefing:
Yes (for individual and institutional
investors)(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the nine months ended December 31, 2022 (from April 1, 2022,
to December 31, 2022)(1) Consolidated operating results (cumulative)
Net sales
Nine months ended
December 31, 2022
December 31, 2021

Millions of yen

5.1
7.6

% Millions of yen

988
3,725

Profit attributable toowners of parent

Ordinary income(73.5)
25.0

1,079
3,290

For the nine months ended December 31, 2022
For the nine months ended December 31, 2021

Basic earnings per
share
Nine months ended
December 31, 2022
December 31, 2021

Operating income% Millions of yen

49,09846,697

Note: Comprehensive income(Percentages indicate year-on-year changes)% Millions of yen(67.2)
17.0

(395)
1,860

%

–
12.0

¥997 million [(63.1)%]¥2,705 million [(1.6)%]

Diluted earnings
per share

Yen

Yen

(40.33)182.77––(2) Consolidated financial position
Total assets
As ofDecember 31, 2022
March 31, 2022
Reference:

Net assets

Equity-ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

87,86886,46938,91840,38339.6
42.5

3,641.24
3,610.31

EquityAs of December 31, 2022
As of March 31, 2022

¥34,803 million¥36,767 million

2. Cash dividends
Annual dividends per shareFirst quarter-end

Second quarterend

Yen

Yen

Fiscal year ended March 31,
2022
Fiscal year ending March 31,
2023

Third quarterend
Yen

–

35.00

–

–

40.00

–

Fiscal year ending March 31,
2023 (Forecast)

Note:

Fiscal year-end

Total

Yen

Yen

45.00

80.00

40.00

80.00

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

3. Consolidated earnings forecasts for the fiscal year ending March 31, 2023 (from April 1, 2022, toMarch 31, 2023)
Net sales

Full year

Note:

Operating income(Percentages indicate year-on-year changes.)
Basic
Profit attributable toOrdinary income
earnings perowners of parent
shareMillions ofyen%Millions ofyen%Millions ofyen%Millions ofyen

64,0002.1

1,400(69.7)

1,400(66.6)

(200)

%

Yen

–

(20.54)

Revisions to the earnings forecasts most recently announced: Yes
Regarding the revisions to the consolidated earnings forecasts, please refer to the “Notice Concerning Revisions
to Earnings Forecasts” published on January 26, 2023.

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in thechange in scope of consolidation): None
Newly included: – companies
Excluded:– companies(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: Yes(ii) Changes in accounting policies due to reasons other than (i): None(iii) Changes in accounting estimates: None(iv) Restatement: None
Note: For details, kindly refer to “2. Quarterly Consolidated Financial Statements and Notes, (3)Notes to Quarterly Consolidated Financial Statements (Changes in accounting policies)” inpage 9 of attached materials.
(4) Number of issued shares (ordinary shares)(i) Total number of issued shares at the end of the period (including treasury shares)
As of December 31, 2022

10,684,321 shares

As of March 31, 2022

10,684,321 shares(ii) Number of treasury shares at the end of the period
As of December 31, 2022
As of March 31, 2022

1,126,163 shares
500,351 shares

(iii) Average number of shares outstanding during the period (cumulative from the beginning of the
fiscal year)
Nine months ended December 31, 2022

9,797,236 shares

Nine months ended December 31, 2021

10,180,936 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(Notice concerning forward-looking statements)
Forward-looking statements, including the consolidated forecasts stated in these materials, are based on
information currently available to the Company and certain assumptions deemed reasonable. Consequently,
no statements herein constitute assurances regarding actual results by the Company. Results may differ
materially from the consolidated forecasts due to various factors.

DKS Co. Ltd. (4461)

Attached Material
Index
1. Qualitative Information on Quarterly Financial Results ........................................................................... 2(1) Explanation of Operating Results ....................................................................................................... 2(2) Explanation of Financial Position ...................................................................................................... 4(3) Explanation of Consolidated Earnings Forecast and Other Forward-Looking Information............... 4
2. Quarterly Consolidated Financial Statements and Notes .......................................................................... 5(1) Quarterly consolidated balance sheet ................................................................................................. 5(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement ofComprehensive Income ...................................................................................................................... 7
Quarterly consolidated statement of income (cumulative) ................................................................. 7
Quarterly consolidated statement of comprehensive income (cumulative) ........................................ 8(3) Notes to Quarterly Consolidated Financial Statements ...................................................................... 9(Notes on premise of going concern) ................................................................................................. 9(Notes when there are significant changes in amounts of equity) ...................................................... 9(Changes in accounting policies)........................................................................................................ 9(Notes on quarterly consolidated statement of income) ................................................................... 10(Segment information, etc.) .............................................................................................................. 11(Notes on revenue recognition) ........................................................................................................ 11-1-

DKS Co. Ltd. (4461)

1. Qualitative Information on Quarterly Financial Results(1) Explanation of Operating Results
During the nine months ended December 31, 2022, the Japanese economy showed signs ofnormalization of socioeconomic activities while the relaxation of restricting movement to combat
COVID-19 made progress. At the same time, risks that provide downward pressure on the domestic
economy, such as the prolonged Russia-Ukraine conflict, the continuing depreciation of the yen, andthe pressure on household budgets due to higher prices, have not yet been dispelled.
Under this environment, the Group was struggling to secure profits due to the shortage of materials andcomponents, such as semiconductors, a delay in efforts to adjust product prices in response to soaring
energy and raw material prices, and other factors. The Company plans to focus its management
resources to realize the targets of the medium-term management plan, “FELIZ 115,” i.e., the expansionof income in the fields of electronics and information, and environment and energy, and the early
achievement of the target in the Life Sciences business. DKS will thoroughly conduct its Uni-Top
strategy of providing unique products (without pursuit of scale) and its customer-oriented stance in abid to strengthen its earning power.
Concerning the results for the nine months ended December 31, 2022, net sales were ¥49,098 million(up 5.1% year on year), thanks to significant sales growth of flame retardants for overseas markets in
the Functional Materials segment.
Operating income was ¥988 million (down 73.5% year on year). Profit decreased mainly in the
Surfactants and Functional Materials segments due primarily to an increase in R&D expenses for the
future and a sharp rise in raw material prices that exceeded price pass-on measures. In addition,
ordinary income was ¥1,079 million (down 67.2% year on year), despite recovery of non-operating
income and expenses. On top of this, an impairment loss was recorded for non-current assets in the
Polyurethane Materials segment as an extraordinary loss, so the loss attributable to owners of parent
after deducting income tax expenses came to ¥395 million (profit of ¥1,860 million in the same periodof the previous year).
Results by segment are as follows.
Surfactants
Net sales in the Surfactants segment were generally firm.
In Japan, sales were sluggish in IT and electronics applications, and paint and coloring agent
applications, but remained firm in machinery and metal applications. Sales for soap and detergent
applications grew significantly.
Overseas, sales for rubber and plastic applications were sluggish, but sales remained firm in textile
applications.
As a result, net sales in this segment were ¥14,454 million (up 3.8% year on year).
Operating income was ¥1,375 million (down 31.7% year on year) due to the impact of soaring raw
materials prices.
Amenity Materials
Net sales in the Amenity Materials segment were generally firm.
In Japan, sales of cellulose polymers were sluggish in energy and environmental applications. Salesof sucrose fatty acid esters remained firm for food applications, and sales of vinyl polymers werealso firm for rubber and plastic applications.
Overseas, sales of sucrose fatty acid esters were robust in food applications and personal care(cosmetics) applications.
As a result, net sales in this segment were ¥6,134 million (up 3.0% year on year).

-2-

DKS Co. Ltd. (4461)

Operating income was ¥88 million (down 79.2% year on year) due to the impact of soaring raw
materials prices and increased operating expenses.
Polyurethane Materials
Net sales in the Polyurethane Materials segment were generally firm.
Sales of civil engineering chemicals related to public works fell significantly, but sales ofenvironmentally friendly synthetic lubricants related to CFC regulations grew significantly.
Demand for functional polyurethane was firm for IT and electronics applications.
As a result, net sales in this segment were ¥6,499 million (up 2.6% year on year).
The Company posted an operating loss of ¥226 million for the period (recorded ¥41 million
operating income for the same period of the previous year) due to the impact of soaring raw
materials prices.
Functional Materials
Net sales in the Functional Materials segment generally increased significantly.
In Japan, sales of waterborne polyurethane for IT and electronics applications were sluggish, but
sales of radcure resin materials for IT and electronics applications grew significantly. Sales offlame retardants for rubber and plastic applications also grew significantly.
Overseas, sales of flame retardants for rubber and plastics grew significantly, and sales of radcure
resin materials for IT and electronics applications also grew significantly.
As a result, net sales in this segment were ¥16,942 million (up 17.8% year on year).
Operating income was ¥208 million (down 80.1% year on year) due to an increase in operating
expenses, mainly R&D expenses, in addition to the impact of soaring raw material prices.
Electronic Device Materials
Net sales in the Electronic Device Materials segment fell significantly overall.
Sales of ionic liquids for display applications and conductive pastes for solar cell applications fellsignificantly.
As a result, net sales in this segment were ¥4,693 million (down 18.4% year on year).
Due to the significant drop in net sales, operating income was ¥147 million (down 74.8% year onyear).
Life Sciences
Net sales in the Life Sciences segment increased by ¥25 million (7.3%) year on year to ¥374
million. We launched our new brand “TENCHUKASOU” and are promoting brand recognition.
Improvement of cognitive function has been confirmed for intake of I. Japonica-Bombyx Fungus
containing “Naturido” in clinical trials targeting healthy adults and persons with mild cognitive
impairment. Based on the results of this research, we will move on to the notification phase forfood with functional claims and work on new product development.
The OEM business for pharmaceutical additives and health foods made through the concentrationand pulverization of extracts from natural materials was firm.
As for operating income, although net sales increased, with upfront operating expenses forestablishment of brand image, the result was an operating loss of ¥605 million (operating loss of¥387 million in the same period of the previous year).

-3-

DKS Co. Ltd. (4461)(2) Explanation of Financial Position(Assets)
Current assets as of December 31, 2022, were ¥48,385 million, up ¥1,850 million from the end of theprevious fiscal year. This was primarily due to an increase of ¥2,169 million in notes and accounts
receivable - trade and an increase in inventories such as merchandise and finished goods of ¥1,893
million, despite a decrease of ¥3,890 million in cash and deposits. Non-current assets totaled ¥39,483
million, down ¥452 million from the end of the previous fiscal year. This was primarily due to adecrease of ¥636 million in property, plant and equipment.
As a result, total assets amounted to ¥87,868 million, up ¥1,398 million from the end of the previous
fiscal year.
(Liabilities)
Current liabilities as of December 31, 2022, were ¥23,489 million, up ¥1,762 million from the end of
the previous fiscal year. This was primarily due to a ¥1,517 million increase in notes and accounts
payable-trade and a ¥383 million increase in short-term borrowings. Non-current liabilities totaled¥25,460 million, up ¥1,101 million from the end of the previous fiscal year. This was primarily due toan increase of ¥1,603 million in long-term borrowings.
As a result, total liabilities at the end of the period under review were ¥48,949 million, up ¥2,863
million from the end of the previous fiscal year.
(Net assets)
Total net assets as of December 31, 2022, were ¥38,918 million, down ¥1,465 million from the end of
the previous fiscal year. This was primarily due to an increase in treasury shares of ¥1,466 million due
to purchase of treasury shares and a decrease in retained earnings of ¥1,235 million resulting from loss
attributable to owners of parent of ¥395 million and dividend of surplus of ¥840 million, despite anincrease in foreign currency translation adjustment of ¥566 million and an increase in non-controllinginterests of ¥498 million.
As a result, the equity ratio came to 39.6% (42.5% as of the end of the previous fiscal year).
(3) Explanation of Consolidated Earnings Forecast and Other Forward-Looking Information
The consolidated earnings forecast for the fiscal year ending March 31, 2023 has been revised in lightof our recent operating results. For details, please refer to the “Notice Concerning Revisions to
Earnings Forecasts” published on January 26, 2023.

-4-

DKS Co. Ltd. (4461)

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly consolidated balance sheet(Millions of yen)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Electronically recorded monetary claims operating
Merchandise and finished goods
Work in process
Raw materials and supplies
Prepaid expenses
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Tools, furniture and fixtures, net
Land
Leased assets, net
Construction in progress
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Long-term prepaid expenses
Deferred tax assets
Retirement benefit asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets-5-

As of March 31, 2022

As of December 31, 2022

12,224
14,9598,333
17,128

1,532

2,632

11,582
21
3,905
317
1,996
(4)
46,534

13,386
19
3,996
470
2,422
(4)
48,385

13,541
5,555
730
9,638
2,800
1,091
33,35813,158
4,881
788
9,914
2,465
1,513
32,721

213
405
618

–
342
342

4,004
16
231
172
1,228
310
(6)
5,958
39,93586,469

4,352
15
207
148
1,315
385
(6)
6,419
39,48387,868

DKS Co. Ltd. (4461)(Millions of yen)

Liabilities
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating
Short-term borrowings
Lease liabilities
Accrued expenses
Income taxes payable
Accrued business office taxes
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Corporate bonds
Long-term borrowings
Lease liabilities
Deferred tax liabilities
Retirement benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets-6-

As of March 31, 2022

As of December 31, 2022

10,204
429
6,711
558
348
576
41
816
2,040
21,726

11,722
488
7,094
498
357
147
31
520
2,627
23,4896,000
15,051
2,551
318
107
74
255
24,35946,0866,000
16,654
2,234
126
106
74
264
25,46048,9498,895
7,278
20,498(1,021)35,6508,895
7,276
19,262(2,488)32,946

181

398

507
427
1,116
3,616
40,38386,469

1,073
384
1,857
4,115
38,91887,868

DKS Co. Ltd. (4461)(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement ofComprehensive Income
Quarterly consolidated statement of income (cumulative)(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
Share of profit of entities accounted for using equity
methodForeign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Corporate bond interest
Inactive facility expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Reversal for provision for waste disposal costs
Total extraordinary income
Extraordinary losses
Impairment losses
Amortization of goodwill
Loss on disposal of non-current assets
Loss on valuation of investment securities
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit (loss)
Profit attributable to non-controlling interests
Profit (loss) attributable to owners of parent-7-

Nine months ended December
31, 2022

46,69734,741
11,9558,230
3,725

49,09839,216
9,881
8,893
988

5
39

8
53

43

45

22
67
178

183
97
388

140
28
333
110
613
3,290

144
28
–
125
298
1,079

139
139

–
–

–
–
164
33
198
3,231
759
158
918
2,312
452
1,860

786
137
70
–
994
84
322
(183)
139
(55)
340
(395)

DKS Co. Ltd. (4461)

Quarterly consolidated statement of comprehensive income (cumulative)(Millions of yen)
Nine months ended December
31, 2021
Profit (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to noncontrolling interests-8-

Nine months ended December
31, 2022

2,312

(55)

(284)
522
121

217
822
(42)

32

55

392
2,705

1,052
997

2,024

345

680

651

DKS Co. Ltd. (4461)(3) Notes to Quarterly Consolidated Financial Statements(Notes on premise of going concern)
Not applicable.
(Notes when there are significant changes in amounts of equity)
Purchase of treasury shares
The Company purchased treasury shares as outlined below under the provisions of Article 156 of theCompanies Act, which is applied after replacing the applicable words under the provisions of Article
165, paragraph (3) of the Companies Act. The purchase of treasury shares based on the resolution at theboard of directors meeting held on June 24, 2022, has been completed with purchases made throughAugust 22, 2022.
(1) Classes of shares subject to acquisition
Ordinary shares of the Company(2) Total number of shares acquired
641,700 shares(3) Total acquisition cost of shares
1,499,961,900 yen(4) Acquisition period
July 1–August 22, 2022 (contract basis)(Changes in accounting policies)
Application of Implementation Guidance for Accounting Standard for Fair Value Measurement
We have applied the “Implementation Guidance on Accounting Standard for Fair Value Measurement”(ASBJ Guidance No. 31, June 17, 2021; “Fair Value Measurement Implementation Guidance”) fromthe beginning of the first quarter and decided to apply new accounting standards set forth in the Fair
Value Measurement Implementation Guidance prospectively in accordance with the transitional
treatment provided for in Section 27-2 of the Fair Value Measurement Implementation Guidance.
There is no impact of application of this implementation guidance on the quarterly consolidated
financial statements.

-9-

DKS Co. Ltd. (4461)(Notes on quarterly consolidated statement of income)
Inactive facility expenses
Expenses related to inactive equipment in the nine months ended December 31, 2021, are fixed costs
related to the period during which production of radcure resin material manufacturing equipment in the
Chitose Plant of the Yokkaichi Branch was suspended, etc.
Impairment losses
First nine months ended December 31, 2022 (from April 1, 2022, to December 31, 2022)(1) The Group recorded impairment losses on the asset group(s) below.
Location
DKS Co., Ltd. Yokkaichi
Branch(Yokkaichi City, Mie)

Use

Class

Polyurethane material
manufacturing equipment
Total

Amount(Millions of yen)

Buildings and structures

67

Machinery, equipment andvehicles

718
786(2) Background behind recognition of impairment loss
The above assets are non-current assets belonging to the asset group of the Company’s Polyurethane
Materials segment.
During the nine months ended December 31, 2022, the profitability of the above assets declined due
to delays in product price adjustments in response to soaring raw material prices and new
development activities. In conjunction with this, the book value of the above assets was reduced to
the recoverable amount, and that amount was recorded under extraordinary losses as an impairment
loss.
The recoverable amount of this asset group is measured by utility value, which is zero because no
future cash flows are expected.
(3) Method of asset grouping
Categories corresponding to product composition and manufacturing method are the smallest units
for grouping assets. Idle assets are grouped individually.
Amortization of goodwill
Amortization of goodwill recorded under extraordinary losses for the nine months ended December 31,
2022, was calculated based on the provisions of paragraph (32) of the “Practical Guidelines on
Accounting Standards for Capital Consolidation Procedures in Preparing Consolidated Financial
Statements” (final revision of JICPA Accounting Practice Committee Statement No. 7, February 16,2018).

- 10 -

DKS Co. Ltd. (4461)(Segment information, etc.)
Segment information
I

First nine months ended December 31, 2021 (from April 1, 2021, to December 31, 2021)
Disclosure of sales and profit (loss) for each reportable segment and information on breakdownof revenues(Millions of yen)
Surfactants

Amenity
Materials

Polyurethane
Materials

Functional
Materials

Electronic
Life Sciences
Device Materials

Revenue from contracts
with customers

13,919

5,958

6,334

14,3865,750

348

46,697

Revenues from externalcustomers

13,919

5,958

6,334

14,3865,750

348

46,697

Transactions with othersegments

–

–

–

–

–

–

–

13,919

5,958

6,334

14,3865,750

348

46,697

2,014

427

41

1,044

585

(387)

3,725

Total

Net sales

Total
Segment profit (loss)
operating income (loss)

Note: Total amount of profit or loss in reportable segments and operating income in the quarterly consolidated statement ofincome coincide.

II First nine months ended December 31, 2022 (from April 1, 2022, to December 31, 2022)
Disclosure of sales and profit (loss) for each reportable segment and information on breakdownof revenues(Millions of yen)
Surfactants

Amenity
Materials

Polyurethane
Materials

Functional
Materials

Electronic
Life Sciences
Device Materials

Revenue from contracts
with customers

14,454

6,134

6,499

16,942

4,693

374

49,098

Revenues from externalcustomers

14,454

6,134

6,499

16,942

4,693

374

49,098Transactions with othersegments

–

–

–

–

–

–

–

14,454

6,134

6,499

16,942

4,693

374

49,098

1,375

88

(226)

208

147

(605)

988

Total

Net sales

Total
Segment profit (loss)
operating income (loss)

Note: Total amount of profit or loss in reportable segments and operating income in the quarterly consolidated statement ofincome coincide.

(Notes on revenue recognition)
Information on revenue from contracts with customers is as stated in Notes (Segment information, etc.)- 11 -