Disclaimer: This document is an English translation of the original document in Japanese and has been
prepared solely for reference purposes. In the event of any discrepancy between this English
translation and the original in Japanese, the original shall prevail in all respects.

Consolidated Financial Results
for the Nine Months Ended December 31, 2022
[Japanese GAAP]
January 27, 2023
Company name: KANEMATSU ELECTRONICS LTD.
Stock exchange listing: Tokyo Stock Exchange
Code number: 8096
URL: https://www.kel.co.jp/english/
Representative: Akira Watanabe, Representative Director, President & CEO
Contact: Yasuhiro Okazaki, Executive Officer, Manager of Accounting Department
Phone: +81-3-5250-6823
Scheduled date of filing quarterly securities report: February 3, 2023
Scheduled date of commencing dividend payments: –Availability of supplementary explanatory materials on quarterly financial results: Available
Schedule of quarterly financial results briefing session: None
(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Nine Months Ended December 31, 2022 (April 1, 2022 - December 31,
2022)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Nine months ended
Million yen%
Million yen%
Million yen%
Million yen%
December 31, 2022
57,182
20.5
8,940
18.9
8,969
18.3
5,886
14.5
December 31, 2021
47,447
9.2
7,516
21.0
7,579
19.4
5,141
20.1
Note: Comprehensive income: Nine months ended December 31, 2022: ¥4,730 million [(16.6) %]Nine months ended December 31, 2021: ¥5,674 million [31.9 %]DilutedBasic earnings
earnings
per shareper share
Nine months ended
Yen
Yen
205.71
December 31, 2022–
December 31, 2021
179.72–(2) Consolidated Financial Position
Total assets
Million yen

Net assets

Equity ratio

Million yen%

80,329As of December 31, 2022
62,11082,446
As of March 31, 2022
61,928Reference: Equity: As of December 31, 2022: ¥62,066 million
As of March 31, 2022: ¥61,885 million

77.3
75.1

2. Dividends
Annual dividends
1st quarter-end

2nd quarter-end

3rd quarter-end

Yen

Yen

Yen

Yen

–

80.00

155.00

0.00

80.00

Yen

Fiscal year ended–
75.00
March 31, 2022
Fiscal year
ending–80.00
March 31, 2023
Fiscal year ending
March 31, 2023
(Forecast)
Note: Revision to the forecast for dividends announced most recently: Yes

Year-endTotal–

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2023 (April 1, 2022 - March
31, 2023)(% indicates changes from the previous corresponding period.)
Profit attributable
Basic earnings
Net sales
Operating profit
Ordinary profit
to owners ofper share
parentMillion yen%

Million yen%

Million yen%

Full year
77,0007.9
13,400 5.6
13,5005.6
Note: Revision to the forecast for dividends announced most recently: None

Million yen

9,100

%

3.6

* Notes:(1) Changes in significant subsidiaries during the period under review: No(Changes in specified subsidiaries resulting in changes in scope of consolidation)
Newly included: – ( )Excluded: – ( )(2) Accounting methods adopted particularly for the preparation of quarterly consolidated financial statements: No(3) Changes in accounting policies, changes in accounting estimates and retrospective restatement
1) Changes in accounting policies due to the revision of accounting standards: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None
(4) Total number of shares issued and outstanding (common shares)
1) Total number of shares issued and outstanding at the end of the period (including treasury shares):December 31, 2022:
28,633,952 shares
March 31, 2022:
28,633,952 shares2) Total number of treasury shares at the end of the period:
December 31, 2022:
13,354 shares
March 31, 2022:
20,992 shares
3) Average number of shares during the period:
Nine months ended December 31, 2022:
Nine months ended December 31, 2021:

28,617,992 shares
28,610,192 shares

Yen

318.00* These quarterly consolidated financial results are outside the scope of quarterly review by certified public accountants
or an audit firm.
* Explanation on the proper use of financial results forecasts and other notes
The financial results forecasts and other forward-looking statements herein are based on information currently available
to the Company and certain assumptions deemed reasonable, and are not intended to be a promise by the Company toachieve them. As such, actual results may differ significantly from these forecasts due to a wide range of factors. For
the assumptions used as the basis for the financial results forecast and notes on their use, please refer to “1. Qualitative
Information on Quarterly Financial Results (3) Explanation of Consolidated Financial Results Forecast and Other
Forward-looking Information” on page 3 of the Attachments.

Table of Contents - Attachments
1. Qualitative Information on Quarterly Financial Results .........................................................................2(1) Explanation of Operating Results .......................................................................................................2(2) Explanation of Financial Position for the Third Quarter under Review................................................3(3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information .....3
2. Quarterly Consolidated Financial Statements and Principal Notes .........................................................4(1) Quarterly Consolidated Balance Sheets .............................................................................................. 4(2) Quarterly Consolidated Statements of Income and Comprehensive Income ......................................6(3) Notes to Quarterly Consolidated Financial Statements .......................................................................8(Notes on going concern assumption) ............................................................................................8(Notes in case of significant changes in shareholders’ equity) .......................................................8(Segment information, etc.) ............................................................................................................9(Significant subsequent events) ...................................................................................................... 111

1. Qualitative Information on Quarterly Financial Results(1) Explanation of Operating Results
During the nine months ended December 31, 2022, the Japanese economy continued to show signs ofrecovery thanks to the effects of various policies such as easing immigration restrictions in Japan amid thecontinued impact of the COVID-19 pandemic. Meanwhile, with a series of rises in policy interest rates by
central banks around the world, compounded with concerns for the international situation including the
protracted conflict in Ukraine, the outlook of the Japanese economy remained uncertain.
In the Japanese IT industry, amid the sense of increasing uncertainty due to the restrictions on supply
brought on by the shortage of semiconductors and other components and the disrupted supply chain as wellas the impact of the depreciating yen on procurement costs, the new normal under the COVID-19 pandemic
has firmly established itself facilitating changes in lifestyles and work styles, which, in turn, has accelerated
corporate efforts toward digital transformation (DX). Furthermore, in addition to the rising demand for
security measures to combat increasingly sophisticated and varied cyberattacks, such as those by
ransomware, strategic IT investments for promoting operational efficiency and automation amid manpower
shortages have acquired added significance.
In such an environment, KANEMATSU ELECTRONICS LTD. (the “Company”) and its consolidated
subsidiaries (collectively, the “Group”) continued to focus on developing its infrastructure construction
business pivoting on the technological capability it has accumulated, as well as its solutions business mainlyin the areas of virtualization and security, which are the foundation of its business. The Group also worked
on building remote working environments for its customers, among others.
Specifically, the Group worked on workstyle reform and COVID-19 countermeasures through theconstruction of robust environments for virtual desktop infrastructure (VDI) and security solutions in linewith the era of zero trust networks. At the same time, the Group further expanded sales of its businesses
offering our unique “as a Service.” Furthermore, in October 2022, the Company made GLOBALSECURITY EXPERTS Inc. an equity method affiliate and, in November the same year, made NIHONACCESS CO., LTD. a consolidated subsidiary, aiming to increase the corporate value of the Company overthe medium- to long-term and further expand the business.
As a result of the above, in the nine months ended December 31, 2022, net sales increased by 9,734
million yen year on year to 57,182 million yen (up 20.5% year on year). Operating profit increased by 1,423
million yen year on year to 8,940 million yen (up 18.9% year on year), and ordinary profit increased by
1,389 million yen year on year to 8,969 million yen (up 18.3% year on year), while profit attributable toowners of parent increased by 745 million yen year on year to 5,886 million yen (up 14.5% year on year).
The status of reportable segments was as follows:(IT Systems Business)
Net sales in the IT Systems Business increased by 9,308 million yen year on year to 42,010 million yen (up28.5% year on year), mainly due to strong performances in the server-related business for the manufacturingindustry.
(Services and Support Business)
Net sales in the Services and Support Business increased by 425 million yen year on year to 15,171 million yen(up 2.9% year on year), mainly due to an increase in sales related to the cloud services for the manufacturingindustry.

2(2) Explanation of Financial Position for the Third Quarter under Review(Assets)
Current assets decreased by 5.3% from the end of the previous fiscal year to 71,075 million yen. This was
mainly attributable to a decreases in cash and deposits of 6,786 million yen.
Non-current assets increased by 24.8% from the end of the previous fiscal year to 9,254 million yen.
This was mainly attributable to an increase in goodwill of 806 million yen.
(Liabilities)
Current liabilities decreased by 13.1% from the end of the previous fiscal year to 15,606 million yen. Thiswas mainly attributable to a decrease in income taxes payable of 2,243 million yen.
Non-current liabilities increased by 2.4% from the end of the previous fiscal year to 2,613 million yen.
This was mainly attributable to an increase in retirement benefit liability of 32 million yen.
(Net assets)
Net assets increased by 0.3% from the end of the previous fiscal year to 62,110 million yen. This was mainly
attributable to an increase in retained earnings by 1,308 million yen due to the recording of profit attributableto owners of parent of 5,886 million yen and the payment of dividends of 4,578 million yen. As a result, theequity ratio rose to 77.3% from 75.1% at the end of the previous fiscal year.
(3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information
As for the consolidated financial results forecast for the fiscal year ending March 31, 2023, there have been
no changes to the financial results forecast announced on October 28, 2022.

3

2. Quarterly Consolidated Financial Statements and Principal Notes(1) Quarterly Consolidated Balance Sheets(Thousand yen)
As of March 31, 2022
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Inventories
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

4

As of December 31, 2022

49,668,376
17,808,143
3,146,103
4,409,190
75,031,813

42,882,202
17,243,831
6,435,770
4,513,357
71,075,162

1,089,297
749,512
1,838,810

1,210,638
762,603
1,973,241–
758,842
758,842806,058
946,470
1,752,529

2,770,787
1,035,525
1,018,745(7,644)
4,817,413
7,415,067
82,446,880

3,360,543
1,138,980
1,036,782(7,644)
5,528,663
9,254,434
80,329,596

(Thousand yen)
As of March 31, 2022
Liabilities
Current liabilities
Notes and accounts payable - trade
Income taxes payable
Contract liabilities
Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Other
Total current liabilities
Non-current liabilities
Retirement benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
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

5

As of December 31, 2022

8,198,715
2,576,420
3,463,319
1,235,705

8,153,403
332,677
3,724,534
529,488

144,200

106,729

2,348,371
17,966,731

2,759,437
15,606,272

1,947,931
585,572
17,8872,551,390
20,518,122

1,980,213
615,560
17,4992,613,273
18,219,546

9,031,257
7,159,524
44,439,446(20,208)
60,610,020

9,031,257
7,181,969
45,747,674(12,990)
61,947,910

1,179,326(512)
94,9981,222
1,275,035
43,702
61,928,758
82,446,880

41,727(2,814)
112,808(33,104)
118,617
43,522
62,110,050
80,329,596

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income
Nine Months Ended December 31(Thousand yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Subsidy income
Compensation for forced relocation
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity
methodMiscellaneous expenses
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of golfclub membership
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on sale of investment securities
Loss on change in equity
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitLoss attributable to non-controlling interests
Profit attributable to owners of parent

For the nine months ended
December 31, 2021
47,447,788
33,122,646
14,325,141
6,808,506
7,516,634

For the nine months ended
December 31, 2022
57,182,177
40,913,898
16,268,278
7,327,796
8,940,482

3,680
18,874
19,61815,6496,679
64,502

3,866
27,831
1,362–
18,17051,2300––17,184

1,285
1,285
7,579,851

5,388
22,572
8,969,140

1,571
4,417
5,989

1,224
–
1,224

2,985
1,113
–
4,099
7,581,741
2,118,950
329,6292,448,579
5,133,161(8,675)
5,141,836

2,084
90,00091,206
183,291
8,787,074
2,456,278
445,497
2,901,775
5,885,299(1,614)
5,886,913

6

Quarterly Consolidated Statements of Comprehensive Income
Nine Months Ended December 31(Thousand yen)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Share of other comprehensive income of entities
accounted for using equity method
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

For the nine months ended
December 31, 2021
5,133,161

For the nine months ended
December 31, 2022
5,885,299

588,476
(386)
5,955

(1,136,186)(2,302)
19,245―(1,412)(52,256)
541,788
5,674,950(34,327)(1,154,983)
4,730,315

5,685,345

4,730,495(10,395)(179)

7

(3) Notes to Quarterly Consolidated Financial Statements(Notes on going concern assumption)
Not applicable.
(Notes in case of significant changes in shareholders’ equity)
For the nine months ended December 31, 2022 (from April 1, 2022 to December 31, 2022)
Not applicable.

8

(Segment information, etc.)[Segment information]
I. For the nine months ended December 31, 2021 (from April 1, 2021 to December 31, 2021)
1. Information on net sales and profit or loss
(Thousand yen)
Services and Support
IT Systems Business
Total
Business
Net sales
Net sales to external
32,701,582
14,746,205
47,447,788
customers
Inter-segment sales or
93,509239,823
333,333transfers
Total
32,795,092
14,986,028
47,781,121
Segment profit
4,626,273
2,795,972
7,422,246
2. Reconciliation between the total amount of profit or loss of reportable segments and the amount recorded in
the quarterly consolidated statements of income and the main details of adjustments(Thousand yen)
ProfitTotal of reportable segments
Elimination of inter-segment transactions
Operating profit in the quarterly consolidated
statements of income

Amount7,422,246
94,3887,516,634

3. Information on losses on impairment or goodwill of non-current assets by reportable segment
Not applicable.

9II. For the nine months ended December 31, 2022 (from April 1, 2022 to December 31, 2022)
1. Information on net sales and profit or loss
(Thousand yen)
Services and Support
IT Systems Business
Total
Business
Net sales
Net sales to external
42,010,318
15,171,859
57,182,177
customers
Inter-segment sales or
43,971
259,307
303,278transfers
Total
42,054,289
15,431,167
57,485,456
Segment profit
6,092,707
2,749,708
8,842,416
2. Reconciliation between the total amount of profit or loss of reportable segments and the amount recorded in
the quarterly consolidated statements of income and the main details of adjustments(Thousand yen)
ProfitTotal of reportable segments
Elimination of inter-segment transactions
Operating profit in the quarterly consolidated
statements of income

Amount
8,842,416
98,066
8,940,482

3. Information on losses on impairment or goodwill of non-current assets by reportable segment(Significant changes in amount of goodwill)In the “Services and Support Business” segment, we have made NIHON ACCESS CO., LTD. a consolidated
subsidiary by acquiring its shares. This event has resulted in an 819,720 thousand yen increase in goodwill
for the nine months ended December 31, 2022.
The allocation of the acquisition cost was not completed as of December 31, 2022 and therefore, theamount of goodwill was provisionally calculated based on rational information available at that time.

10

(Significant subsequent events)(Tender offer for the Company’s shares by KANEMATSU CORPORATION, the controlling shareholder)
The Company, at the Board of Directors meeting held on January 27, 2023, has resolved to express its opinion
in favor of the tender offer (hereinafter, the “Tender Offer”) for the Company’s common shares (hereinafter,
the “Company’s Shares”) to be conducted by KANEMATSU CORPORATION, the controlling shareholder(hereinafter, the “Tender Offeror”), and to recommend that the Company’s shareholders apply for the Tender
Offer.
The aforementioned resolution of the Board of Directors was made on the assumption that the Company’s
Shares are planned to be delisted through the Tender Offer and a subsequent series of procedures by the Tender
Offeror.
For details, please refer to “Announcement Concerning Expression of Opinion in Favor of Tender Offer
for the Company’s Shares by KANEMATSU CORPORATION, the Controlling Shareholder, andRecommendation of Application for Tender Offer” disclosed on January 27, 2023.

11