FY11/2022
First Quarterly
Supplementary Material
on Financial Results 2022.4.14

T&S inc.
TSE Growth: 4055

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Table of Contents

FY11/2022 First Quarterly
Highlights

p. 3

Financial Results Overview

p. 4

Operating Income

p. 6

Net Sales by Categoryp. 7

Net Sales by Customer

p. 8

Net Sales by Quarterp. 9

Trend of Major Customers

p. 10

Status of increase in engineers

p. 11Statements of Income

p. 12

Balance Sheets

p. 13

FY Earnings Forecast

p. 14

Capital and Business alliancep. 16

Shareholder Returns

p. 18

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2

Highlights (FY2022/First Quarterly)(Theme of current term)

Accelerated Growth
１ Record-high revenues achieved (Compared to the same period of the previous year)
Net sales： 733 million yen（25.0% increased ↑、+146 million yen）

Operating income： 126 million yen（77.0% increased ↑、 +55 million yen）

(ditto)Ordinary income： 126 million yen（76.3% increased ↑、 +54 million yen）

(ditto)（74.4% increased ↑、 +37 million yen）

(ditto)Quarterly net income ：88 million yen

YoY

Advanced Technology Solutions made a significant leap forward.
２ Other categories also performed well.
 Sales in the advanced technology solutions category increased 174.3% YoY. Sales increased
due to stable orders for development support projects from existing clients and an increase in
new clients.
 Sales in the solutions category increased 18.4% YoY. Sales increased due to the continuationof large-scale development projects that began in the second half of the previous fiscal year.
 Sales in the semiconductor category increased 23.9% YoY. Sales increased due to an increasein the number of engineers dispatched to semiconductor factories.

Q1 sales progress rate exceeded the average year, and３ performance-linked bonuses were also reserved There is a seasonal fluctuation trend that sales do not grow much in 1Q every year, in theprevious 1Q the ratio was only 21.5%, but in the current period, it was 23.6% of the full-year
forecast.
 Continuing from the previous year, a portion of operating profit was returned to employees,
achieving an operating profit margin of 17.3% despite the provision of 15 million yen in
performance-linked bonuses for 1Q (up 5.1 percentage points YoY)
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3

Financial Results Overview
FY11/2022 First Quarterly

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4

Financial Results Overview (FY2022/First Quarterly)
Record-high revenues achieved(Compared to the same period of the previous year)

Net sales: 733 million yen(Up 25.0%↑, +146million yen)

Operating income: 126 million yen(Up 77.0%↑, +55million yen) (ditto)

Ordinary income: 126 million yen(Up 76.3%↑, +54million yen) (ditto)

Quarterly net income :88 million yen

Net Sales(million yen)

Up
25.0%

800

600

Operating Income

200

900

700

(Up 74.4%↑, +37million yen) (ditto)(million yen)

1,000

YoY

733

150

Up
77.0%

586

500

126 ※

100

71

400
300

50

200
100
0

0
FY2021/1Q

FY2022/1Q

FY2021/1Q

FY2022/1Q※ In view of the strong performance, theCompany performance-linked bonuses for
employees allocated 15 million yen.
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5

Operating Income (FY2022/First Quarterly)
Absorbed performance-linked bonuses andincreased operating income by 55 million yen.
(million yen)

Increase

Decrease(YoY)

Operating income

In addition to the usual bonus,
a performance-linked bonus
was given to the employees

Operatingincome rate
17.3%
Operatingincome rate
12.2%

Mainly due to the increase in
the number of engineers,
increase in labor andsubcontracting costs

FY2021/Q1
OperatingincomeIncreased
sales

Provisionfor bonusesin cost of
sales

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Other
increase incost ofsales

Provisionfor bonusesin SG&A
expenses

Other
decrease in
SG&A
expenses

FY2022/1Q
Operatingincome6

Net Sales by Category (FY2022/First Quarterly)
Sales increase in all categories
Up 174.3% in Advanced Technology Solution Category(YoY)

Net Sales (by category)(million yen)

Sales proportion(by category)

Solution
454

FY2021/1Q+83
538

FY2022/1Q
400

450

500

Up
18.4%

111

7.8%
Semi
conductor

Up
23.9%

+26
137

FY2022/1Q
100

110

120

130

140

20

137
million yen

18.8%

FY2022/1Q

150

Advanced Technology Solution
FY2021/1Q

57
million yen

550

Semiconductor
FY2021/1Q

Advanced
Technology Solution

SolutionUp
174.3%+36

538
million yen

73.4%

57

FY2022/1Q
0

20

40

60

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80

100

(Note) Our business segment is a single segment, so only
Net sales of each category could be calculated.

7

Net Sales by Customer (FY2022/First Quarterly)
Toshiba G, Hitachi G, Kioxia G

Major customers maintaining steady level
Sales to Kioxia G significantly increased（Up 48.6％ (YoY) 25.3% of the total）
OthersIncrease in new customers（Up 39.2％ (YoY) 25.0% of the total）
Sales proportion(by customer)

Net Sales (by customer) (million yen)ToshibaG
東芝G

HitachiG
日立G

Kioxia G
キオクシアG

190

FY2021/1Q
FY2022/1Q

FY2022/1Q

FY2021/1Q

Up
7.5%

139
150

FY2021/1Q

124
185

FY2022/1QUp
214 12.6%

Up
48.6%

Others25.0%

FY2022/1Q
Kioxia G
25.3%

Others
その他

FY2021/1Q

131
183

FY2022/1Q

100

150

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200

Up
39.2%

Toshiba G
29.2%

Hitachi G
20.5%

250

8

Net Sales by Quarter (FY2022/First Quarterly)

Q1 cumulative sales: 733 million yen
Increase: +146 million yen 25.0%.

(million yen)

Progress rate: 23.6%(Percentage of progress toward full-year forecast)

(YoY)

3,500

3,100mil yen+367mil yen

3,000

2,500

2,732mil yen
4Q

757mil yen
27.7%

3Q

688 mil yen
25.2%

2Q

700 mil yen
25.6%+ 13.4%

2,000
Net
sales

1,500

1,000

500

1Q
0

586 mil yen
21.5%
2021/11(actual)Copyright ⓒ 2022 T&S inc. All rights reserved.

Progressrate+146mil yen+ 25.0%1Q

23.6%
733 mil yen
23.6%
2022/11(forecast)※The Company's businessperformance is subject toslight seasonal fluctuations
due to the increase in thenumber of engineers and thedelivery date of projects.

9Trend of Major Customers(Overall) Trend of Major Customers (As of April 14, 2022)
Our orders continue to be strong, as well as our major clients as a whole. While all companies
are overcoming the effects of the covid-19 pandemic, they are still facing challenges indealing with geopolitical risks.

Toshiba G

Hitachi G

Kioxia G

OthersOrders increased significantly YoY due to strong sales of power semiconductors
and HDDs for data centers. The power plant-related energy system solutions
segment, in which we are engaged in system development, is also performing
well. We see the mid-term business plan centered on infrastructure and devicerelated businesses as favorable for the Company.
Highest profits due to market recovery and reorganization of power grid andautomotive-related businesses. In particular, the IT and energy segments are
expanding rapidly, and capital expenditures related to our operations are
expected to increase, reversing the trend of Covid-19.
Production of 3D flash memory at the domestic plant was suspended at the
beginning of the year, but has now been resumed. There was no particularimpact on the Company. Shipment for data center SSD and enterprise SSD wasstrong due to strong demand for semiconductors. In addition to the constructionof a new manufacturing building at the Yokkaichi Plant, the start of constructionof a new manufacturing building at the Kitakami Plant has been announced,
which is expected to lead to increased orders for the Company.
In the field of R&D for AI algorithm development, automotive-related
manufacturers, precision machinery manufacturers, and telecommunication
infrastructure companies have a strong appetite for research investment. The
trend toward DX (conserving the amount of manpower) accelerated during
Covid-19 pandemic, and this has led to an increase in inquiries to the Company.
(Compiled from each company's published data and newspaper reports)

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10

Status of increase in engineers

Personnel increase rate 103% ※Recruitment policyca. 10% of total engineers(number of engineers)

372

400
338

350

305

300

+29 people

274

250
200
150
248

277

286
※

100
50
0
FY11/20202020年11月期

FY11/2021
2021年11月期

FY11/2022
2022年11月期

実績
actualFY11/2023
2023年11月期

FY11/2024
2024年11月期

目標
goal※ As of April 14, 2022

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Statements of Income (FY2022/1Q)
Statements of Income (FY2022/1Q)(thousand yen)

FY2021/1Q

FY2022/1Q+/- amount+/- %Net sales

586,564

733,145

146,581

25.0%

Cost of sales

413,845514,309

100,464 ※24.3%

Gross profit

172,718

218,835

46,116

26.7%

SG&A expenses

101,210

92,232

Operating income

71,508

126,602（Operating income rate)（12.2%）（17.3%）

Ordinary income

71,781

126,552（Ordinary income rate）（12.2%）（17.3%）

Quarterly net income

50,896

88,767（Quarterly net income rate）（8.7%）（12.1%）△ 8,977 ※ △ 8.9%
55,09377.0%

54,771

76.3%

37,871

74.4%※ The above figures include performance-linked bonuses of 15,000 thousand yen to
employees due to good performance.
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12Balance Sheets (FY2022/1Q)

Balance sheets (FY2022/1Q)(thousand yen)2021/11 End

FY2022/1QEnd+/- amount

1,869,946

1,735,761△ 134,184

Fixed assets

117,500

91,077△ 26,422

Total assets

1,987,447

1,826,839△ 160,607

440,851

271,952△ 168,898

Fixed liabilities

51,51352,401

888

Total liabilities

492,364

324,354△ 168,010

Total shareholders’equity1,495,082

1,502,485

7,402

Total net assets

1,495,082

1,502,485

7,402

Total liabilities & net
assets

1,987,447

1,826,839△ 160,607

Current assets

Current liabilities

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FY Earnings Forecast
FY2022 Full-Year

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FY Earnings Forecast
Steady progress against full-year forecasts(No change in the full-year forecast)(million yen)

FY2021/11(actual)FY2022/11(prediction)

FY2022/11
Q1 (actual)

Progress rate

Net sales

2,732

3,100

733

23.6%

Operating income

412

550

126

23.0%

Ordinary income

419

557

126

22.7%

Net income(Quarterly)

294

391

88

22.7%

Company

Sales increased 25.0% YoY. Strong performance in all categories. Development projects from major customers
such as Toshiba G, Hitachi G, and Kioxia G were strong. There is a seasonal fluctuation trend that sales do not
grow much for due to client delivery deadlines and the number of days of engineer dispatched in 1Q every
year, in the previous 1Q the ratio was only 21.5%, but in the current period, it was 23.6% of the full-year
forecast.
The company has been outsourcing more to compensate for its technical personnel resources, but shifting tomore profitable projects has been successful, and gross profit margin was 29.8%. Absorbing a 15 million yen
provision for performance-linked bonuses, the company posted operating income of 126 million yen, up 77.0%
YoY. Operating income rate was 17.3%.

Solution

Increased by 18.4% YoY. Sales increased due to steady acquisition of engineers and the continuation of largescale development projects that began in the second half of the previous fiscal year.

Semiconductor

Increased by 23.9% YoY. The number of engineers dispatched to semiconductor plants increased 20.9% YoY,
which led to an increase in revenue. In addition to recurring requests from semiconductor plants for moreworkers, contract terms and conditions are being revised as needed, contributing to the increase in sales andprofit.

Advanced
Technology
Solution

The company made a significant leap forward with a 174.3% increase YoY. Orders from NEC remained strong as
in the previous period. In addition to stable development support projects from existing clients, new clients
also increased, and the sales composition of this category expanded to 7.8% of total company sales from 3.6%in the same period of the previous fiscal year.

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Capital and Business alliance

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16

Capital and business alliance on edge AI with Intelligence Design Inc.
Outline ofShare
Acquisition

Intelligence Design Inc. to underwrite a third-party allotment of new shares and agreed to acquire
shares of; Total amount of shares acquired: 50,400,000 yen Number of shares/voting rights ratio of the share acquisition : 63 shares of common stock/2.53%

Outline of
Capital andBusiness
Alliance

The Company and Intelligence Design Inc. entered into a business alliance agreement.
The main measures are as follows
 Joint development of AI products
 To provide our company with the AI analysis platform owned by Intelligence Design
 Mutual provision of engineering resources

FutureProspects

We believe that this transaction will contribute to improving our business performance and corporate
value from a mid-term business plan and will have a negligible impact on our business performance forthe current fiscal year.
Intelligence Design Inc. is developing AI products using
image recognition libraries to provide social implementationof cutting-edge technologies.

Joint Development of AI Products
IDEA counter (Edge type AI camera)
IDEA generator (AI engine development tool)
IDEA platform (real-time AI analysis)

Provide license
AI System Integration
AI Software Development

Resource
engineering
AI R&D Acceleration
Research Paper Algorithm Implementation/Evaluation
Machine Learning R&D Support
Annotation Services

Customer
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Consulting
Contractdevelopment

17

Shareholder Returns

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Shareholder Returns
Total return ratio for the FY11/2022
is expected to be a maximum of 70.5%.
Basic Policy on Dividends
The Company considers it an important management task to increase corporate value throughinvestment in the acquisition of new technologies in fields where future growth is expected,
and believes that the return of profits to shareholders is the key to achieving this goal.
Our basic policy for profit distribution is to continue to pay appropriate dividends inconsideration of business performance, while giving priority to securing the internal reserves
necessary to improve our corporate value.
For the fiscal year ending November 30, 2022, we plan to pay a dividend of 5.00 yen per share(an increase of 1.00 yen in real terms), aiming for a dividend payout ratio of around 10% in linewith the policy mentioned above.
In addition to this, the Company has been repurchasing its own shares since January 2022.
(up to a maximum of 250 million yen)
The financial indicators, taking into account the above measures, are as follows

FY11/2022 (forecast)

Dividend per share

Total return ratio (*)

Return on equity（ROE)

5.00yen

70.5%

25.1%

※ The above figures assume that the maximum number of shares to be acquired had been purchased.

The status of treasury stock acquisition as of the end of March, 2022 is as follows.
Total number of sharesacquired

Total amount of purchased
price of shares

Acquisition period (contract base)58,200 shares

76,154,900 yen

January 14, 2022 - March 31, 2022

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19

Contact

T&S inc.
Corporate Administration Dept.
Email / pr@tecsvc.co.jp
URL / https://www.tecsvc.co.jp/

Information contained in this material includes those related to prospects. Such information is based on thoseavailable to us at the present moment and certain assumptions that may be considered reasonable. Therefore
we do not guarantee any realization thereof and any future business performance. Various factors such aschanges in the economic climate, industries in general, customers' needs, and legislative changes may bringabout some situations substantially different from the current forecasts. In the future, even if some new
information and some event occur, we have no obligation to carry out any update or revision concerning any
information about the future contained in this material.
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20