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 27, 2023

Consolidated Financial Results for the Three Months Ended June 30, 2023
(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
TEL:+81-75-323-5955
Scheduled date to file quarterly securities report:
Scheduled date to commence dividend payments:
Preparation of supplementary material on quarterly financial results:
Holding of quarterly financial results briefing:

August 8, 2023
–
Yes
No

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the three months ended June 30, 2023 (from April 1, 2023 toJune 30, 2023)(1) Consolidated operating results (cumulative)
Net sales
Three months ended
June 30, 2023
June 30, 2022

Operating income

Millions of yen% Millions of yen

13,884
15,441

Notes: Comprehensive income(10.1)
7.1% Millions of yen

(572)
291

Profit attributable toowners of parent

Ordinary income–(73.4)For the three months ended June 30, 2023
For the three months ended June 30, 2022

Basic earnings per
share
Three months ended
June 30, 2023
June 30, 2022

(Percentages indicate year-on-year changes)

(557)
377

% Millions of yen–(58.3)¥16 million¥595 million

(477)
98

%

–
(79.9)[(97.2)%][(18.5)%]

Diluted earnings
per share

Yen

Yen

(49.96)
9.66––(2) Consolidated financial position
Total assets
As ofJune 30, 2023
March 31, 2023
Reference:

Net assets

Equity ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

90,02985,02537,83838,29637.6
40.4

3,544.83
3,593.49

EquityAs of June 30, 2023
As of March 31, 2023

¥33,880 million¥34,346 million

2. Cash dividends
Annual dividends per shareFirst quarter-end

Second quarterend

Yen

Yen

Fiscal year ended March 31,
2023
Fiscal year ending March 31,
2024–

Fiscal year-end

Yen

Total

Yen

Yen

40.00

–

40.00

80.00

20.00

–

30.00

50.00

–

Fiscal year ending March 31,
2024 (Forecast)

Note:

Third quarterend

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

3. Consolidated earnings forecasts for the fiscal year ending March 31, 2024 (from April 1, 2023 toMarch 31, 2024)
Net sales

Half year
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

30,00068,000

(8.4)
4.5

400
2,500

(44.2)
110.8

300
2,300

(65.6)
91.7

100
1,200

%

–
–

Yen

10.46
125.55

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:None(ii) Changes in accounting policies due to reasons other than (i): None(iii) Changes in accounting estimates: None(iv) Restatement: None
(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, 2023

10,684,321 shares

As of March 31, 2023

10,684,321 shares(ii) Number of treasury shares at the end of the period
As of June 30, 2023

1,126,550 shares

As of March 31, 2023

1,126,227 shares(iii) Average number of shares outstanding during the period (cumulative from the beginning of the
fiscal year)
Three months ended June 30, 2023

9,557,771 shares

Three months ended June 30, 2022

10,183,970 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(Segment information, etc.) ................................................................................................................ 9(Notes on revenue recognition) .......................................................................................................... 9-1-

DKS Co. Ltd. (4461)

1. Qualitative Information on Quarterly Financial Results(1) Explanation of Operating Results
During the three months ended June 30, 2023, the Japanese economy showed a trend of gentle recovery
as restrictions to combat COVID-19 were gradually relaxed. On the other hand, the economic outlook
remains uncertain due to concerns about the impact of the sharp depreciation of the yen and soaring
resource and energy prices on consumption, as well as other factors such as overseas economic andprice trends and future developments in the situation in Ukraine.
Under these circumstances, we revised our medium-term management plan, “FELIZ 115,” which wehave been implementing since April 2020, to reflect the external environment surrounding theCompany and market conditions in our focus areas, adjusting the targets to align with the actual
situation on June 12, 2023. First, we will put our collective strength into improving profitability bysteadily promoting price pass-on. We will also accelerate product development, increase production ofcompetitive products, and improve our declining plant operating rates. In the Life Sciences business,
we aim to quickly return to profitability by expanding our business through sales promotions of newly
registered functional food products and Life Science materials, as well as OEM tasks and otheropportunities.
Concerning the results for the three months ended June 30, 2023, net sales were ¥13,884 million (down
10.1% year on year), due to a significant decline in sales of flame retardants for overseas markets in the
Functional Materials segment.
As for profit and loss, there was an operating loss of ¥572 million (operating income of ¥291 million in
the same period of the previous fiscal year), was an ordinary loss of ¥557 million (ordinary income of¥377 million in the same period of the previous fiscal year), and a loss attributable to owners of parent
was ¥477 million (profit attributable to owners of parent of ¥98 million in the same period of theprevious fiscal year) due to soaring raw material prices and a significant drop in sales in the Functional
Materials and Electronic Device Materials segments.
Results by segment are as follows.
Surfactants
Net sales in the Surfactants segment were generally weak.
In Japan, sales were sluggish in IT and electronics applications, and rubber and plastic applications,but remained firm in paint and coloring agent applications. Sales for soap and detergent
applications fell significantly.
Overseas, sales for rubber and plastic applications and paint and coloring agent applications werefirm.
As a result, net sales in this segment were ¥4,287 million (down 6.1% year on year).
Operating income was ¥229 million (down 41.1% year on year) due to the impact of soaring raw
materials prices on top of a drop in sales.
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 sluggish in food applications, while those for
personal care (cosmetics) applications were firm.
As a result, net sales in this segment were ¥1,969 million (up 1.3% year on year).

-2-

DKS Co. Ltd. (4461)

The Company posted an operating loss of ¥25 million for the period (recorded ¥6 million in
operating income for the same period of the previous year) due to the impact of soaring raw
material prices.
Polyurethane Materials
Net sales in the Polyurethane Materials segment generally increased significantly.
Sales of environmentally friendly synthetic lubricants related to CFC regulations were strong, andsales of civil engineering chemicals related to public works grew significantly.
As a result, net sales in this segment were ¥2,151 million (up 21.8% year on year).
The Company posted an operating loss of ¥152 million for the period (recorded a ¥126 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 fell significantly overall.
In Japan, sales of waterborne polyurethane for textile applications were sluggish, as were sales ofradcure resin materials for IT and electronics applications.
Overseas, sales of radcure resin materials for IT and electronics applications were weak, and salesof flame retardants for rubber and plastic applications fell significantly.
As a result, net sales in this segment were ¥3,961 million (down 27.8% year on year).
Operating loss was ¥333 million (operating income of ¥144 million in the same period of theprevious fiscal year) due to the impact of soaring raw material prices on top of a significant drop insales.
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 weresluggish.
As a result, net sales in this segment were ¥1,423 million (down 8.2% year on year).
Due to the significant drop in net sales, operating loss was ¥36 million (operating income of ¥107
million in the same period of the previous fiscal year).
Life Sciences
Net sales in the Life Sciences segment decreased by ¥34 million (27.8%) year on year to ¥89
million.
The OEM business for pharmaceutical additives and health foods made through the concentrationand pulverization of extracts from natural materials was sluggish.
As for operating income, net sales fell significantly, and there was an operating loss of ¥253 million(operating loss of ¥230 million in the same period of the previous fiscal year) due to an increase inoperating expenses, primarily driven by R&D expenditures.
In the fiscal year ending March 31, 2025, we aim to make our Life Sciences business profitablethrough (1) B-to-C, focusing on “Kainou Tochukasou (original Japanese name),” for which thenotification for food with functional claims in the cognitive function field was completed in
February 2023, (2) B-to-B, targeting sales of materials such as I. Japonica-Bombyx Fungus powder-3-

DKS Co. Ltd. (4461)

and sudachi fruit peel extract, and (3) expanding the OEM business of IKEDA YAKUSOU CO.,LTD., our group company.
(2) Explanation of Financial Position(Assets)
Current assets as of June 30, 2023 were ¥49,534 million, up ¥4,122 million from the end of theprevious fiscal year. This was primarily due to an increase of ¥5,817 million in cash and deposits,
despite a decrease of ¥1,075 million in notes and accounts receivable - trade. Non-current assets totaled¥40,495 million, up ¥880 million from the end of the previous fiscal year. This was primarily due to anincrease of ¥485 million in investment securities and an increase of ¥354 million in total property, plantand equipment.
As a result, total assets amounted to ¥90,029 million, up ¥5,003 million from the end of the previous
fiscal year.
(Liabilities)
Current liabilities as of June 30, 2023 were ¥19,887 million, down ¥752 million from the end of theprevious fiscal year. This was primarily due to a decrease of ¥1,819 million in notes and accounts
payable – trade despite an increase of ¥1,116 million in other (current liabilities) such as accounts
payable - facilities. Non-current liabilities totaled ¥32,304 million, up ¥6,215 million from the end of
the previous fiscal year. This was primarily due to an increase of ¥6,308 million in long-termborrowings.
As a result, total liabilities at the end of the period under review were ¥52,191 million, up ¥5,462
million from the end of the previous fiscal year.
(Net assets)
Total net assets as of June 30, 2023 were ¥37,838 million, down ¥458 million from the end of theprevious fiscal year. This was primarily due to a decrease in retained earnings of ¥859 million, resulting
from loss attributable to owners of parent of ¥477 million and dividend of surplus of ¥382 million,
despite an increase in valuation difference on available-for-sale securities of ¥332 million.
As a result, the equity ratio came to 37.6% (40.4% 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 15, 2023.
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) Quarterly Consolidated Balance Sheet(Millions of yen)
As of March 31, 2023
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
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, 2023

9,128
15,105

14,946
14,029

2,218

2,297

13,131
16
3,489
369
1,956
(3)
45,411

12,480
17
3,321
482
1,962
(3)
49,534

12,834
4,650
800
9,748
2,338
2,369
32,743341

12,642
4,474
882
9,783
2,273
3,040
33,097
343

4,274
14
512
299
1,063
371
(6)
6,529
39,61485,025

4,759
14
459
358
1,091
376
(6)
7,053
40,49590,029

DKS Co. Ltd. (4461)(Millions of yen)
As of March 31, 2023
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 June 30, 2023

9,972
379
6,516
474
308
232
41
712
2,002
20,639

8,152
390
6,766
477
292
200
10
476
3,118
19,8876,000
17,348
2,131
196
79
74
259
26,08946,7296,000
23,657
2,049
178
81
74
264
32,30452,191

8,895
7,276
19,250(2,488)32,9338,895
7,271
18,390(2,488)32,068

467

799

765
180
1,413
3,949
38,29685,025

839
172
1,812
3,957
37,83890,029

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, 2022
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income (loss)
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodRental income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Corporate bond interest
Share of loss of entities accounted for using equity
methodOther
Total non-operating expenses
Ordinary income (loss)
Extraordinary losses
Loss on disposal of non-current assets
Total extraordinary losses
Profit (loss) 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-

Three months ended
June 30, 2023

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

13,884
11,583
2,300
2,872
(572)

2
7

1
8

17

–

8
109
39
184

8
72
21
113

45
9

53
9

–

1

44
99
377

34
99
(557)

35
35
341
119
2
122
219
120
98

19
19
(577)
63
(218)
(155)
(422)
55
(477)

DKS Co. Ltd. (4461)

Quarterly consolidated statement of comprehensive income (cumulative)(Millions of yen)Three months ended
June 30, 2022
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-

Three months ended
June 30, 2023

219

(422)

93
266
(13)

332
106
(8)

29

8

376
595

438
16

378

(78)

217

95

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.
(Segment information, etc.)
Segment information
I

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 contracts
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.

II First three months ended June 30, 2023 (from April 1, 2023 to June 30, 2023)
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

4,287

1,969

2,151

3,961

1,423

89

13,884

Revenues from externalcustomers

4,287

1,969

2,151

3,961

1,423

89

13,884

Transactions with othersegments

–

–

–

–

–

–

–

4,287

1,969

2,151

3,961

1,423

89

13,884

229

(25)

(152)

(333)

(36)

(253)

(572)

Total

Net sales

Total
Segment profit (loss)
operating income (loss)

Note: Total amount of profit or loss in reportable segments and operating loss 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.).

-9-