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.

July 28, 2022

Consolidated Financial Results for the Three Months Ended June 30, 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:
August 5, 2022
Scheduled date to commence dividend payments:–
Preparation of supplementary material on quarterly financial results: Yes (planned to be published inJapanese on the website of theCompany)
Holding of quarterly financial results briefing:
No(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the three months ended June 30, 2022 (from April 1, 2022 toJune 30, 2022)(1) Consolidated operating results (cumulative)
Net sales
Three months ended
June 30, 2022
June 30, 2021

Operating income

Millions of yen% Millions of yen

15,441
14,413

Note: Comprehensive income

7.1
5.7

% Millions of yen

291
1,094

Profit attributable toowners of parent

Ordinary income(73.4)
54.8

For the three months ended June 30, 2022
For the three months ended June 30, 2021

Basic earnings per
share
Three months ended
June 30, 2022
June 30, 2021

(Percentages indicate year-on-year changes)

377
903

% Millions of yen(58.3)
44.8¥595 million¥730 million

98
490

%

(79.9)
43.9[(18.5)%][10.3%]

Diluted earnings per
share

Yen

Yen

9.66
48.21

–
–

(2) Consolidated financial position
Total assets
As ofJune 30, 2022
March 31, 2022
Reference:

Net assets

Equity- ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

85,85086,46940,37840,38342.7
42.5

3,602.49
3,610.31

EquityAs of June 30, 2022 ¥36,687 million
As of March 31, 2022 ¥36,767 million

2. Cash dividends
Annual dividends per shareFirst quarter-end

Second quarterend

Third quarter-end

Fiscal year-end

Yen

Yen

Yen

Yen

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

–

Total
Yen

35.00

–

45.00

80.00

40.00

–

40.00

80.00

–

Fiscal year ending
March 31, 2023 (Forecast)

Note: 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

Half year
Full year

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

%

Yen

32,00065,000

5.3
3.7

2,200
4,700

(10.1)
1.6

2,000
4,300

(7.1)
2.6

1,100
2,500

(5.2)
0.3

108.01245.48

Note: Revisions to the earnings forecasts most recently announced: None

* 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 other reasons: 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 June 30, 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 June 30, 2022

500,351 shares

As of March 31, 2022

500,351 shares(iii) Average number of shares outstanding during the period
Three months ended June 30, 2022

10,183,970 shares

Three months ended June 30, 2021

10,174,852 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 ...................................................................................................... 3(3) Explanation of Consolidated Earnings Forecast and Other Forward-looking Information ................ 4
2. Quarterly Consolidated Financial Statements and Notes .......................................................................... 5(1) 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) ..................................................................... 9(Segment information, etc.) .............................................................................................................. 10(Notes on revenue recognition) ........................................................................................................ 10(Significant events after reporting period)........................................................................................ 10-1-

DKS Co. Ltd. (4461)

1. Qualitative Information on Quarterly Financial Results(1) Explanation of Operating Results
During the three months ended June 30, 2022, the Japanese economy showed signs of recovery due tothe resumption of economic activities, although the effects of COVID-19 have not yet been wiped out.
Meanwhile, the outlook for the economy remains uncertain due to the fluctuations in the foreignexchange rates caused by the sharp depreciation of the yen, and the soaring prices of various raw
materials stemming from reasons such as the prolonged situation in Russia and Ukraine.
Under such circumstances, the Group is now in the third year of its medium-term management plan,“FELIZ 115,” which has been executed since April 2020. At present, although the impact of surging
prices of raw materials such as crude oil and naphtha, as well as energy, is making it difficult to secure
profits, we have been putting every effort into securing raw materials and proceeding price pass-on
measures. We will steadily proceed with increasing the operating rate of the Kasumi Plant, in which weinvested in advance, and achieving results in the Life Sciences business.
Concerning the results for the three months ended June 30, 2022, net sales were ¥15,441 million (up7.1% year on year), thanks to significant growth of flame retardants for overseas markets in the
Functional Materials segment.
Operating income was ¥291 million (down 73.4% year on year). Although efforts were made to correct
product prices, soaring raw material prices placed pressure on profits, mainly in the Surfactants andFunctional Materials segments, and expenditures such as R&D expenses for future growth increased. In
addition, ordinary income was ¥377 million (down 58.3% year on year), despite recovery of nonoperating income and expenses. With tax expenses and other costs posted, profit attributable to ownersof parent was ¥98 million (down 79.9% year on 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 agriculture and agro-chemical applications. Sales for soap anddetergent applications grew significantly.
Overseas, sales for rubber and plastic applications were sluggish.
As a result, net sales in this segment were ¥4,567 million (up 3.9% year on year).
Operating income was ¥389 million (down 36.0% 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 sucrose fatty acid esters were sluggish in food applications. Sales of cellulose
polymer materials were sluggish in agricultural and agro- chemical applications, but were firm inenergy and environmental applications.
Overseas, sucrose fatty acid esters were robust in personal care (cosmetics) applications and foodapplications.
As a result, net sales in this segment were ¥1,945 million (up 1.6% year on year).
Operating income was ¥6 million (down 93.0% year on year) due to the impact of soaring raw
materials prices and increased operating expenses.

-2-

DKS Co. Ltd. (4461)

Polyurethane Materials
Net sales in the Polyurethane Materials segment were generally sluggish.
Sales of environmentally friendly synthetic lubricants related to CFC regulations were firm. Salesof civil engineering chemicals related to public works fell sharply.
Demand for functional polyurethane was firm for IT and electronics applications.
As a result, net sales in this segment were ¥1,766 million (down 2.7% year on year).
The Company posted an operating loss of ¥126 million for the period (recorded ¥25 million
operating loss 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 radcure resin materials for IT and electronics applications were sluggish.
However, the sales of waterborne polyurethane for textile applications were firm. Sales of flame
retardants for rubber and plastic applications were firm.
Overseas, sales of radcure resin materials for IT and electronics applications were firm, and sales offlame retardants for rubber and plastic applications grew significantly.
As a result, net sales in this segment were ¥5,487 million (up 20.6% year on year).
Operating income was ¥144 million (down 66.2% 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 were generally sluggish.
Sales of ionic liquids for display applications and conductive pastes for solar cell applications weresluggish.
As a result, net sales in this segment were ¥1,550 million (down 5.2% year on year).
Due to the sluggish trend of net sales, operating income was ¥107 million (down 10.5% year onyear).
Life Sciences
Net sales in the Life Sciences business segment increased by ¥19 million (18.7%) year on year, to¥123 million. In the I. Japonica-Bombyx Fungus business, we started sales of our new brand“TENCHUKASOU” and promoted thorough brand image recognition. The OEM business forpharmaceutical additives and health foods made through the concentration and pulverization of
extracts from natural materials was steady.
As for operating income, although net sales increased, with upfront operating expenses forestablishment of brand image, the result was an operating loss of ¥230 million (operating loss of¥134 million in the same period of the previous year).
(2) Explanation of Financial Position(Assets)
Current assets as of June 30, 2022 were ¥45,390 million, down ¥1,143 million from the end of theprevious fiscal year. This was primarily due to a decrease of ¥2,481 million in cash and deposits,
despite an increase of ¥862 million in inventories such as merchandise and finished goods. Non-current-3-

DKS Co. Ltd. (4461)

assets totaled ¥40,459 million, up ¥524 million from the end of the previous fiscal year. This wasprimarily due to an increase of ¥401 million tangible fixed assets.
As a result, total assets amounted to ¥85,850 million, down ¥619 million from the end of the previous
fiscal year.
(Liabilities)
Current liabilities as of June 30, 2022 were ¥22,062 million, up ¥335 million from the end of theprevious fiscal year. This was primarily due to a ¥427 million increase in notes and accounts payable trade. Non-current liabilities totaled ¥23,409 million, down ¥949 million from the end of the previous
fiscal year. This was primarily due to a decrease of ¥797 million in long-term loans payable.
As a result, total liabilities at the end of the period under review were ¥45,472 million, down ¥613
million from the end of the previous fiscal year.
(Net assets)
Total net assets as of June 30, 2022 were ¥40,378 million, down ¥5 million from the end of theprevious fiscal year. This was primarily due to a decrease in retained earnings of ¥359 million, resulting
from profit attributable to owners of parent of ¥98 million and dividend of surplus of ¥458 million,
despite an increase in foreign currency translation adjustment of ¥199 million and an increase invaluation difference on available-for-sale securities of ¥93 million.
As a result, the equity ratio came to 42.7% (42.5% as of the end of the previous fiscal year).
(3) Explanation of Consolidated Earnings Forecast and Other Forward-looking Information
Consolidated financial results forecast has not changed from the forecast for the full year announced asof May 16, 2022.
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, the actual results for the Company may significantly differ due to various factors.

-4-

DKS Co. Ltd. (4461)

2. Quarterly Consolidated Financial Statements and Notes(1) 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 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
Tangible fixed assets
Buildings and structures, net
Machinery, equipment and vehicles, net
Tools, furniture and fixtures, net
Land
Leased assets, net
Construction in progress
Total tangible fixed assets
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 June 30, 2022

12,224
14,9599,743
15,068

1,532

1,681

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

12,362
20
3,987
413
2,117
(5)
45,39013,541
5,555
730
9,638
2,800
1,091
33,35813,411
5,546
751
9,721
2,682
1,646
33,760

213
405
618

175
397
573

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

4,132
16
208
136
1,256
382
(6)
6,126
40,45985,850DKS Co. Ltd. (4461)(Millions of yen)
As of March 31, 2022
Liabilities
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating
Short-term loans payable
Lease obligations
Accrued expenses
Income taxes payable
Accrued business office taxes
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Corporate bonds
Long-term loans payable
Lease obligations
Deferred tax liabilities
Net defined 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 June 30, 2022

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

10,632
453
6,600
538
473
228
10
615
2,509
22,062

6,000
15,051
2,551
318
107
74
255
24,35946,0866,000
14,254
2,441
275
104
74
259
23,40945,472

8,895
7,278
20,498(1,021)35,6508,895
7,278
20,138(1,021)35,290

181

275

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

707
413
1,396
3,690
40,37885,850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)Three months ended June 30,
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
methodRent income
Foreign 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 losses
Loss on disposal of non-current assets
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent-7-

Three months ended June 30,
2022

14,413
10,654
3,758
2,663
1,094

15,441
12,187
3,253
2,961
291

1
3

2
7

10

17

8
0
23
48

8
109
39
184

49
9
147
33
239
903

45
9
–
44
99
377

30
30
873
127
134
261
611
120
490

35
35
341
119
2
122
219
120
98

DKS Co. Ltd. (4461)

Quarterly consolidated statement of comprehensive income (cumulative)(Millions of yen)Three months ended June 30,
2021
ProfitOther 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-

Three months ended June 30,
2022

611

219

(366)
318
143

93
266
(13)

23

29

119
730

376
595

477

378

253

217

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)
Not applicable.
(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 under review, and decided to apply new accounting standards set forthin the Fair Value Measurement Implementation Guidance prospectively in accordance with thetransitional 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.
(Notes on quarterly consolidated statement of income)Expenses related to inactive equipment in the three months ended June 30, 2021 are fixed costs related
to the period during which production of photopolymer material manufacturing equipment in the
Chitose area of the Yokkaichi Plant was suspended.

-9-

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

First three months ended June 30, 2021 (from April 1, 2021 to June 30, 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 contacts
with customers

4,395

1,914

1,815

4,549

1,635

103

14,413

Revenues from externalcustomers

4,395

1,914

1,815

4,549

1,635

103

14,413

Transactions with othersegments

–

–

–

–

–

–

–

4,395

1,914

1,815

4,549

1,635

103

14,413

609

99

(25)

426

119

(134)

1,094

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 three months ended June 30, 2022 (from April 1, 2022 to June 30, 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 contacts
with customers

4,567

1,945

1,766

5,487

1,550

123

15,441

Revenues from externalcustomers

4,567

1,945

1,766

5,487

1,550

123

15,441

Transactions with othersegments

–

–

–

–

–

–

–

4,567

1,945

1,766

5,487

1,550

123

15,441

389

6

(126)

144

107

(230)

291

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.)(Significant events after reporting period)
Purchase of treasury shares
At the board of directors meeting of the Company held on June 24, 2022, the Company resolved onmatters related to the acquisition of treasury shares 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, and started the acquisition on July 1, 2022.
1. Reasons for purchase of treasury sharesThis is to improve capital efficiency of the Company as well as enable flexible capital policy
according to the business environment.
2. Information about acquisition(1) Classes of shares subject to acquisition- 10 -

DKS Co. Ltd. (4461)

Ordinary share of the Company(2) Total number of shares authorized to be acquired
850,000 shares (maximum)(Percentage of total number of issued shares excluding treasury shares: 8.35%)(3) Total acquisition cost of shares¥1,500,000,000 (maximum)(4) Acquisition period
July 1, 2022–December 23, 2022

- 11 -