SANIX INCORPORATED
Summary of Consolidated Financial Statements
For the First Quarter Ended June 30, 2020
[Japanese Standards]

The financial figures in this document are based on Japanese Accounting Standards and accompanying laws. Amounts are rounded
off to 1 decimal place. This document is an English translation of the Japanese-language original.

Consolidated Financial Statements for the First Quarter ended June 30, 2020

SANIX INCORPORATED
Stock Listed:Tokyo Stock Exchange First Section, Fukuoka Stock Exchange

Code No;

4651

URL:

https://sanix.jp

President and CEO:

Hiroshi Munemasa

Contact:

Kozo Inoue, Director, Management Corporate Officer,
General Manager of Corporate Planning Division, Administration Division andManagement & Planning Division

1. Business Results – Operating results for the First Quarter ended June 30, 2020 (April
1, 2020 to June 30, 2020)(1) Consolidated Operating Results(In Millions of Yen)First Quarter
From April 1 to June 30
FY2020%change

FY2019%change

Net Sales······························································

11,893

2.5%

11,603(1.1%)

Operating Income ··················································

784

26.0%

623

499.7％

Ordinary Income ····················································

755

25.8%

600

287.8％Net Income ···························································

663

52.2%

436

291.5％Net Income per Share (¥) ········································¥13.89

－

¥9.12

－

Net Income per Share, Diluted(¥)······························

－

－

－

－

(Note) Comprehensive Income ································

653

63.5％

399

336.1％(2) Consolidated Financial Position(In Millions of Yen)
As of June 30

As of March 31
FY2019FY2020Total Assets ···························································

30,83932,514

Net Assets ····························································

6,710

6,056

Shareholders’ Equity Ratio (%) ·······························

21.7%

18.5%

Net assets per share(¥) ···········································¥139.81¥126.15(Reference) Equity Capital ·······································

6,683

6,083

2. Dividends
Quarterly Period
1st

2nd

3rd

4th

Quarter

Quarter

Quarter

Quarter

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Annual(Dividends per Share)
FY2019 ended March 31, 2020

0.00

FY2020 ended March 31, 2021

0.00

FY2020 ended March 31, 2021(Forecast)

3. Forecasts for Consolidated Business Results (April 1, 2020 to March 31, 2021)(In Millions of Yen)
Fiscal Year 2020
From April 1 to March 31
First Half%change

Full Year%change

Net Sales······························································

24,180(1.5%)

50,343(4.2%)

Operating Income ··················································

1,306(15.8%)

1,940(30.5%)

Ordinary Income ····················································

1,197(16.2%)

1,785(31.1%)Net Income ···························································

982(13.8%)

1,345(27.3%)Net Income per Share (¥) ········································¥20.56¥28.14* Notes(1) Changes in significant subsidiaries during the period(Change in scope of consolidations resulting from change in subsidiaries): None
Number of subsidiaries newly consolidated－
Name of subsidiaries newly consolidated－
Number of subsidiaries excluded from consolidation－
Name of subsidiaries excluded from consolidation－(2) Adoption of special quarterly accounting methods: None
(3) Changes in accounting policies and accounting estimates retrospective restatementⅰ) Changes in accounting policies based on revisions of accounting standard: Noneⅱ) Changes in accounting policies other than ones based on revisions of accounting standard: Noneⅲ) Changes in accounting estimates: Noneⅳ) Retrospective restatement: None
(4) Number of Issued and Outstanding Shares (Common Stock)(Shares)
End of term
June 30, 2020

March 31, 2020

48,919,396

48,919,396

Number of treasury stock ,end of period

1,114,443

1,114,443

Average number of shares during the fiscal term

47,804,953

Number of issued and outstanding shares ,end of period (including treasury stock)*47,805,223* June 30, 2019

* This summary of financial statements is exempt from audit procedure required by Financial instruments and Exchange Act.
* Note to ensure appropriate use of forecasts:
The forward-looking statements, including results forecasts, included in this material are based on the information that the Company
has obtained and certain assumptions that the Company considers reasonable. Actual results may differ significantly for a range offactors. The assumptions for the results forecasts and cautions in the use of the forecasts are described in 1. Qualitative Information
for the First Quarter Ended June 30, 2020, (3) Information on the Future Outlook, Including the Forecasts of Consolidated BusinessResults on page 3 of the Attachment.

Index of the attachment
1. Qualitative Information for the first quarter ended June 30, 2020 .......................

2(1) Information of Consolidated Business Results ...........................................................................

2(2) Information of Consolidated Financial Position ..........................................................................
(3) Information on the Future Outlook,
Including the Forecasts of Consolidated Business Results ......................................................

4
4

2. Quarterly Consolidated Financial Statements and the Primary Notes for the
first quarter ended June 30, 2020 .............................................................................................

6(1) Quarterly Consolidated Balance Sheets ......................................................................................

6(2) Quarterly Consolidated Statements of Income and Comprehensive Income ........................

8

Quarterly Consolidated Statements of Income
for the first quarter of the fiscal year ending March 31,2021 ................................................

8

Quarterly Consolidated Statements of Comprehensive Income
for the first quarter of the fiscal year ending March 31,2021 ................................................

9(3) Notes regarding the Quarterly Consolidated Financial Statements ........................................

10

Notes regarding to the Assumption of a Going Concern .....................................................

10

Notes to Remarkable Changes in the amount of Shareholders’ Equity ............................

10

Segment Information, etc. ......................................................................................................

11

3. Others...................................................................................................................................................

12

Consolidated Net Sales by Division ................................................................................................

12

2

1. Qualitative Information for the first quarter ended June 30, 2020
(1) Information of Consolidated Business Results
During the first quarter of the fiscal year ending March 31, 2021 (April 1, 2020 to June 30,2020), the Japanese economy faced an extremely challenging situation due to the spreadof COVID-19. Although economic activity is gradually resuming, the economy has beensignificantly affected by the curbing of capital expenditure, deterioration in employment andincome conditions and a sharp fall in consumer spending. As a consequence, the outlook
for the economy remains extremely uncertain.
In this social situation, the Group continued its business, prioritizing the prevention of the
spread of the coronavirus.
Sales increased in the Solar Engineering (SE) Division, reflecting steady progress in the
installation of solar electric power systems with land. Sales rose year on year also in the
Establishment Sanitation (ES) Division and the Environmental Resources Development(ERD) Division. In the Home Sanitation (HS) Division, the Group voluntarily refrained fromstarting new operations in the areas subject to the state of emergency as the coronavirus
spread. Sales in the Energy Business (EB) Division fell chiefly due to a decrease in power
supply per high-voltage power supply destination and a fall in wholesale electric power. Net
sales at the entire Group stood at ¥11,893 million (up 2.5% year on year).
Profit increased in the SE Division and in the ERD Division, reflecting the increase insales. Profit fell in the HS Division and in the EB Division, where sales dropped. Profit
declined also in the ES Division due to an increase in cost resulting chiefly from an increasein the number of personnel. For the entire Group, operating income came to ¥784 million(up 26.0% year on year) and ordinary income was ¥755 million (up 25.8% year on year).
Net income attributable to owners of the parent company stood at ¥663 million (up 52.2%
year on year).
Consolidated results of individual divisions for the first quarter were as follows:a. SE (Solar Engineering) Division
Sales from solar electric power systems rose, reflecting good progress made in the
installation of solar electric power system with land as in the previous fiscal year. Net sales inthis segment increased to ¥3,024 million (up 28.4% year on year).
The segment posted operating income of ¥263 million (operating income of ¥20 million in thesame period of the previous fiscal year) primarily due to the rise in sales and also because ofa reduction in selling, general and administrative expenses.

3b. HS (Home Sanitation) Division
In the HS Division, the Group voluntarily refrained from starting new operations in the areas
subject to the state of emergency declared following the spread of the coronavirus and limited
operations to answering inquiries from customers. As a result, termite extermination fell 7.0%
year on year and basic repair work and home reinforcement decreased 14.5% year on year.
The division’s sales dropped to ¥2,854 million (down 3.2% year on year).
Operating income stood at ¥545 million (down 16.8% year on year) chiefly due to the fall insales and an increase in costs, including a rise in personnel expenses due to an increase instaff.
c. ES (Establishment Sanitation) Division
ES Division strengthened its relationships with the owners of buildings and condominiums
and partner companies, including management companies for years, actively increasing
personnel and opening offices. Sales of anti-rust equipment installation (brand name:
Daelman Shock), our main product, fell 2.8% year on year, but sales of repair of building
water-works and building waterproof paint repair rose 23.7% year on year and 52.5% year on
year, respectively. The division’s net sales rose to ¥520 million (up 6.8% year on year).
Operating income fell to ¥29 million (down 27.5% year on year) due to an increase in costs
such as a rise in personnel expenses associated with an increase in staff, which more thanoffset the effect of the increase in sales.
d. ERD (Environmental Resources Development) Division
Plastic fuel sales increased 8.8% year on year due to the thorough acceptance inspection ofwaste plastic articles although the acceptance volume declined. Power plant sales dropped
9.7% year on year, and organic waste water recycle fell 5.9% year on year, reflecting adecrease in the acceptance volume. Final disposal decreased 24.9% year on year. Net sales
in this division stood at ¥4,131 million (up 0.9% year on year).
Operating income stood at ¥942 million (up 8.7% year on year), chiefly reflecting an increasein profitability attributable to thorough acceptance inspection of waste plastic, among otherfactors.
e. Energy Business Division
Net sales stood at ¥1,963 million (down 16.2% year on year), chiefly reflecting a decline inretail sales of high-voltage power due to a fall in the number of contracts and a fall inwholesale supply to the electricity market as a result of cancellation of part of procurement
through negotiations.
An operating loss of ¥80 million (an operating loss of ¥41 million in the same period of theprevious fiscal year) was posted due to the significant effect of the decrease in net sales.

4(2) Information of Consolidated Financial Position
Total assets as of the end of the first quarter under review amounted to ¥30,839 million, adecrease of ¥1,675 million from the end of the previous fiscal, which was caused chiefly by afall in notes and accounts receivable-trade of ¥1,202 million and a decrease in cash anddeposits of ¥494 million. Total liabilities stood at ¥24,129 million, a decline of ¥2,329 million
from the end of the previous fiscal year, which was attributable largely to decreases in notes
and accounts payable-trade of ¥884 million, accounts payable-other of ¥674 million, accrued
income taxes of ¥494 million and short-term loans payable of ¥403 million. Net assets totaled¥6,710 million, an increase of ¥653 million from the end of the previous fiscal year. The key
contributions to the increase included the posting of net income attributable to the owners of
the parent company of ¥663 million.
Consequently, the capital-to asset ratio for the first quarter of the fiscal year under review
came to 21.7%, an increase from 18.5% at the end of the previous fiscal year.

(3) Information on the Future Outlook, Including the Forecasts of Consolidated BusinessResults
Forecasts for consolidated business results for the fiscal year ending March 31, 2021 havenot been determined because it is difficult to rationally assess the impact that the spread of
COVID-19 will have. On the assumption that there will be no big second wave and thatcompanies and households will voluntarily continue striving to prevent infections until thecoronavirus subsides worldwide and economic activities will recover only modestly, theCompany is making its earnings forecasts for the fiscal year ending March 31, 2021 from a
conservative perspective.
In this social situation, the Group will prioritize building a stable profit structure based on theexisting businesses. In the second year of the Medium-Term Management Plan (FY2019FY2021), where the Group will aim to achieve growth by developing new businesses andservices, the Group will prioritize also building a stable earnings base in each business.
Forecasts for each business division are as follows:
In the SE Division, the FIT system has changed from a system where all electricity
generated is sold to a system that promotes self-consumption. Responding to the change,
the Group will shift the focus of its sales strategy to self-consumption. It will take some time
before the change in strategy produces results. In addition, the Group cannot expect any
projects to install and sell new solar power electric systems with land, which had solid sales
in the same period of the previous year. The Group thus forecasts a year-on-year fall insales.
The HS Division will continue to execute the strategy that it has pursued for the last several

5years. The division will strive to increase the number of customers by boosting the number ofstaff to gain new customers and expanding services to the existing customers.
The ES Division will expand sales channels for anti-rust equipment installation (brand
name: Daelman Shock), its main product, through the cultivation of partners such as
management companies, introductions from existing partners with whom it has built close
relationships and increasing opportunities for direct business talks with real estate owners.
The ERD Division will increase the profit margin percentage and efficiency by conducting
close examinations of articles to be accepted to improve the quality of plastic fuels. There isincreasing momentum to reuse waste plastic as resources and growing interest in theappropriate treatment of waste plastic. In this environment, the Group will take advantage of
its experience to contribute to building a resource recycling society.
The EB division posted a significant loss in the previous fiscal year. The division will review
its electric power procurement policy and will increase the ratio of procurement from markets
where transaction prices are on a downward trend to improve profitability.
The Company forecasts net sales of ¥50,343 million (down 4.2 % year on year), operating
income of ¥1,940 million (down 30.5% year on year) and ordinary income of ¥1,785 million(down 31.1% year on year). Net income attributable to the owners of the parent company isforecast to be ¥1,345 million (down 27.3% year on year).

6

2. Quarterly Consolidated Financial Statements and the Primary Notes for the
first quarter ended June 30, 2020
(1) Quarterly Consolidated Balance Sheets(In Millions of Yen)

As of March 31

As of June 30

FY2019FY2020Assets :Current Assets :Cash and deposits

5,919

5,424

Notes and accounts receivable-trade

5,453

4,251

Merchandise and finished goods

56

54

Work in process-construction

333

188

Raw materials and supplies

3,354

3,338

Other

1,362

1,148

(202)

(202)

16,277

14,204

Buildings and structures (net of depreciation)

1,732

1,698

Machinery, Equipment and Vehicles(net of depreciation)

2,071

2,139

Land

8,053

8,091

Allowance for doubtful accounts
Total Current Assets
Fixed Assets:
Property, Plant and Equipment :Other, net

1,882

2,103

Total Property, Plant and Equipment

13,73914,003450534

Investments and Other Assets :

2,047

2,066

Total Fixed Assets

16,237

16,63432,51430,839Intangible Fixed Assets

Total Assets

7(In Millions of Yen)

As of March 31

As of June 30

FY2019FY2020Liabilities :Current Liabilities :Notes and accounts payable-trade

3,716

2,831

Short-term loans payable

9,525

9,122

928

903

3,471

2,796

Accrued income taxes

687

192

Provision for bonuses

256

386

Current portion of long-term loans payable
Accounts payable

5

7

Other

2,986

2,642

Total Current Liabilities

21,576

18,882

Bond Payable

500

500

Long-term loans payable

262

389

9

9

Allowance for resource-recycling expenses

Non-Current Liabilities :Provision for directors’ retirement benefits

637

652

Liability Related to Retirement Benefits

1,727

1,756

Other

1,744

1,938

Total Non-Current Liabilities

4,881

5,246

26,45824,12914,041

14,0411

1Retained earnings(6,506)(5,842)

Treasury stock(1,481)(1,481)

Total Shareholders’ Equity

6,055

6,719

Provision for disposal site closing expenses

Total Liabilities
Net Assets :Shareholders’ Equity :Capital stock
Capital surplus

Valuation and translation adjustments :31

37

Foreign currency translation adjustment

(90)

(98)

Adjustment for Retirement Benefits (Cumulative)

34

25

Total Other comprehensive income

(25)

(35)

26

26

Valuation difference on available-for-sale securities

Non-controlling Interests
Total Net Assets

6,056

6,710

Total Liabilities and Assets

32,51430,8398(2) Quarterly Consolidated Statements of Income and Comprehensive Income(Quarterly Consolidated Statements of Income)(For the first quarter of the fiscal year ending March 31, 2021)(In Millions of Yen)First Quarter
From April 1 to June 30
FY2020FY2019Net sales

11,603

11,893

Cost of sales

7,339

7,388

Gross profit

4,263

4,505

Selling, general and administrative expenses

3,640

3,720

623

784

3

4

Operating income (loss)
Non-operating income :Interest income
Dividends income

1

1Land and house rent revenue

15

15

Foreign exchange gains

1

1

Other

12

11

Total non-operating expenses

33

34

Interest expenses

50

45Commission expenses

2

0

Other

2

18

Non-operating expenses :56

64

Ordinary income (loss)

600

755

Income (loss) before income taxes and minority interests

600

755

Income taxes-current

136

82

Income taxes-deferred

29

8

Total income taxes

165

91

Net Income

434

663

Net Income (loss) attributable to the non-controlling shareholders
Net income (loss) attributable to the shareholders of the parent
company

(1)

0

436

663

Total non-operating expenses

9(Quarterly Consolidated Statements of Comprehensive Income)(For the first quarter of the fiscal year ending March 31, 2021)(In Millions of Yen)First Quarter
From April 1 to June 30
FY2020FY2019434

663

Share of other comprehensive income of associates accounted forusing equity method

(10)

5

Foreign currency translation adjustment

(46)

(7)

Income before minority interests
Other comprehensive income :Retirement benefit adjustment

21

(8)

Total other comprehensive income

(34)

(10)

399

653

401

653

(1)

0

Comprehensive net income
Comprehensive net income attributable toComprehensive net income (loss) attributable to non-controllingshareholders
Comprehensive net income (loss) attributable to the shareholdersof the parent company

10(3) Notes regarding the Quarterly Consolidated Financial Statements(Notes regarding the Assumption of Going Concern): None(Notes to Remarkable Changes in the amount of Shareholders’ Equity): None11(Segment Information, etc.)
Ⅰ The previous first quarter (From April 1, 2019 to June 30, 2019)
Information concerning the Amount of Net Sales and Operating Income (loss) by
Segment(In Millions of Yen)

Segments

Sales:
Sales
to customers
Internal sales among
segments

Operating income

Consolidated(note 2)

SE

HS

ES

ERD

Energy

Total

2,355

2,948

487

3,469

2,342

11,603-

11,603

-

-

-

624

-

624

(624)

-

2,355

2,948

487

4,093

2,342

12,227(624)

11,603

20

655

40

867

(41)

1,542

(919)

623

And transfer accounts
Total

Elimination
or Group(note 1)

(note 1)
Negative ¥919 million for adjustments of Operating income (loss) represents corporate expenses not allocated toreportable segments. Corporate expenses are mainly general and administrative expenses note attributable toreportable segments.
(note 2)
Operating income is adjusted to operating loss of quarterly consolidated statements of income.

Ⅱ The first quarter (From April 1, 2020 to June 30, 2020)
1.Information concerning the Amount of Net Sales and Operating Income (loss) by
Segment(In Millions of Yen)

Segments

Sales:
Sales to customers
Internal sales among
segments
And transfer accounts
Total
Operating income (loss)

Elimination
or Group(note 1)

Consolidated(note 2)

SE

HS

ES

ERD

Energy

Total

3,024

2,854

520

3,529

1,963

11,893-

11,893

-

-

-

602

-

602

(602)

-

3,024

2,854

520

4,131

1,963

12,495(602)

11,893

263

545

29

942

(80)

1,700

(915)

784

(note 1)
Negative ¥915 million for adjustments of Operating income (loss) represents corporate expenses not allocated toreportable segments. Corporate expenses are mainly general and administrative expenses note attributable toreportable segments.
(note 2)
Operating income (loss) is adjusted to operating loss of quarterly consolidated statements of income.

12

3. OtherConsolidated Net Sales by Division(In Millions of Yen)

From April 1 to June 30
FY2020FY2019Changes

2,262

2,956

693

Wholesale of PV components

61

41

(20)

Others

31

26

(4)

2,355

3,024

669

1,024

953

(71)

Under-Roof/Roof Ventilation System

557

725

168

Foundation Repairing/Home Reinforcement
System

517

442

(74)

Others

848

733

(115)

Home Sanitation Division Total

2,948

2,854

(93)

Anti-rust equipment installation

250

243

(6)

Repair of building water-woks

108

133

25

Water proofing of building

32

49

16

Commercial PV system

Solar Engineering Total
Termite Eradication Service

96

94

(2)

487

520

33

2,367

2,575

207

868

784

(84)

475

447

(27)

248

186

(61)

134

138

4

4,093

4,131

38

2,338

1,850

(488)

3

113

110

Energy Business Division Total:

2,342

1,963

(378)

Adjustment of inter-segment sales

(624)

(602)

21

Total Net Sales

11,603

11,893290

OthersEstablishment Sanitation Division Total
Plastic fuelPower Stations
Industrial waste
Recycle)(Organic

Waste

Water

Final disposal
OthersEnvironmental
Division Total :Resources

Electricity sales
OthersDevelopment