Note:This document is a translation of a part of the original Japanese version and provided for reference purposes only. In the event of any discrepancy
between the Japanese original and this English translation, the Japanese original shall prevail.

Consolidated Financial Results
for the Second Quarter Ended September 30, 2022
[Japanese GAAP]
October 28, 2022
Company name: TERAOKA SEISAKUSHO CO.,LTD.
Stock exchange listing: Tokyo
Code number: 4987
URL: https://www.teraokatape.co.jp
Representative: Kenichi Tsuji
Representative Director & President
Contact: Nobuhisa Ishizaki
Director
Phone: 03-3491-1141
Scheduled date of filing quarterly securities report: November 14, 2022
Scheduled date of commencing dividend payments: December 01, 2022
Availability of supplementary briefing material on quarterly financial results: Yes
Schedule of quarterly financial results briefing session: No(Amounts of less than one million yen are rounded down)
1. Consolidated Financial Results for the Second Quarter Ended September 30, 2022 (April 01, 2022 to September 30, 2022)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
shareholders of theparent company
Million yen%
Million yen%
Million yen%
Million yen%
Second quarter ended
September 30, 2022
9,503
(12.8)
(805)
(487)
(346)
September 30, 2021
10,902
12.7
122
204
57
(Note) Comprehensive income:Second quarter ended September 30, 2022: ¥159 million [218.6%]
Second quarter ended September 30, 2021: ¥50 million [-%]Basic earnings
per share
Second quarter ended
September 30, 2022
September 30, 2021

Diluted earnings per
share
Yen

Yen

(13.69)2.27-(2) Consolidated Financial Position
Total assets
As of
September 30, 2022
36,305
March 31, 2022
37,443(Reference) Equity: As of September 30, 2022:
As of March 31, 2022:

Net assets

Million yen

Capital adequacy ratio

Million yen¥¥

29,122
29,08929,122 million
29,089 million

%

80.2
77.7

2. Dividends
Annual dividends
1stquarter-end

2ndquarter-end

3rdquarter-end

Yen

Yen

Yen

Yen

Yen

Fiscal year ended March 31, 2022

-

5.00

-

5.00

10.00

Fiscal year ending March 31, 2023

-

3.00
-

5.00

8.00

Fiscal year ending March 31, 2023
(Forecast)(Note) Revision to the forecast for dividends announced most recently:

Year-end

Total

Yes

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2023(April 01, 2022 to March 31, 2023)(% indicates changes from the previous corresponding period.)
Profit attributable to
Basic earnings
Net sales
Operating profit
Ordinary profit
shareholders of theper share
parent company%

Million yen%

Full year
22,200(1.4)
100 (25.9)(Note) Revision to the financial results forecast announced most recently:

Million yen%

Million yen

350

(5.5)

Million yen%

Yen

400 145.8

15.79

No

* Notes:(1) Changes in significant subsidiaries during the second quarter ended September 30, 2022
(changes in specified subsidiaries resulting in changes in scope of consolidation):
No(Company name:New
Exclusion:(Company name:(2) Accounting policies adopted specially for the preparation of quarterly consolidated financial statements:(3) Changes in accounting policies, changes in accounting estimates and retrospective restatement
1) Changes in accounting policies due to the revision of accounting standards: Yes
2) Changes in accounting policies other than 1) above: No
3) Changes in accounting estimates: No4) Retrospective restatement: No(4) Total number of issued shares (common shares)
1) Total number of issued shares at the end of the period (including treasury shares):
September 30, 2022:
26,687,955 shares
March 31, 2022:
26,687,955 shares2) Total number of treasury shares at the end of the period:
September 30, 2022:
1,355,970 shares
March 31, 2022:
1,355,908 shares
3) Average number of shares during the period:
Second quarter ended September 30, 2022:
Second quarter September 30, 2021:

25,332,011 shares
25,332,396 shares

)
)
Yes

Table of Contents - Attachments
1. Qualitative Information on Quarterly Financial Results ...........................................................................2(1) Explanation of Operating Results ..........................................................................................................2(2) Explanation of Financial Position ..........................................................................................................4(3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information ......4
2. Quarterly Consolidated Financial Statements and Principal Notes ...........................................................5(1) Quarterly Consolidated Balance Sheets .................................................................................................5(2) Quarterly Consolidated Statements of Income and Comprehensive Income ........................................7(3) Quarterly Consolidated Statements of Cash Flows .................................................................................9(4) Notes to Quarterly Consolidated Financial Statements .......................................................................10(Notes on going concern assumption) ..............................................................................................10(Notes in case of significant changes in shareholders’ equity) .........................................................10(Accounting policies adopted specially for the preparation of quarterly consolidated financial
statements) ......................................................................................................................................10(Changes in accounting policies) .....................................................................................................10

1

1. Qualitative Information on Quarterly Financial Results(1) Explanation of Operating Results
During the second quarter ended September 30, 2022 (from April 1, 2022 to September 30, 2022), the Japanese economy, between
April to June, witnessed a recovery in consumer spending, centering on the restaurant industry and retail and leisure facilities,
backed by the easing of behavioral restrictions after new cases of COVID-19 plateaued. However, from July onward, stifled by the
rapidly-spreading “Seventh wave” of COVID-19, consumption of services lagged and the pace of recovery slowed down.
Additionally, in September, the US dollar soared to historic highs against the Japanese yen, reaching 140 yen to the dollar. As aresult, while exporting companies benefited from increased exports and profit improvement, for the majority of companies a weak
yen has become a factor for increasing costs reflecting the soaring prices of imports. Accordingly, the Short-Term Economic Surveyof Enterprises in Japan (Tankan) conducted by the Bank of Japan showed that the diffusion index (DI) of large companies in the
manufacturing industry had deteriorated for three consecutive terms.
Meanwhile, turning our attention to the global economy, following the concerns for the energy supply stemming from Russia’s
invasion of Ukraine, the US Consumer Price Index (CPI) increased by 8.2% year on year in September, putting pressure on householdincome. In China, the slowdown of the smartphone market continued and the number of smartphones shipped during the six months
from January to June 2022 fell 20 percent year on year, as a result of which, a ten-year low is forecasted for the full year of 2022.
Furthermore, with China’s continuing zero-COVID policy and tensions running high in Taiwan, the outlook has become increasingly
uncertain.
Various geopolitical risks, including the unexpected fluctuations in foreign exchange, are becoming more prevalent and in such abusiness environment, the Group entered the second year of its third medium-term business plan, which spans five years (from April
2021 to March 2026) and ends in fiscal 2025. Despite our efforts, namely, to partially revise our strategies, strengthen the coordination
between the sales, research, and production divisions, and focus on deepening existing businesses while seeking new businesses, net
sales declined significantly year on year due to the effects of the sluggish demand in the Chinese market, one of our target sales market.
Additionally, while we made efforts to improve profitability through price hikes and cost reductions, mainly in selling, general andadministrative expenses, the rapidly-depreciating yen and the ensuing rise in raw material prices, further increases in fuel costs andpurchased goods, declining net sales, as well as the delays in the stable operation of the new production line and the resulting reductionin production volume caused manufacturing costs to rise. Moreover, the profit situation also proved extremely challenging, as a resultof the significant rise in cost of sales, due in part to our failure to eliminate valuation losses on long-term non-moving inventory.
As a result, net sales for the second quarter ended September 30, 2022 were 9,503 million yen (down 12.8% year on year).
Operating loss was 805 million yen (operating profit of 122 million yen in the same period of the previous fiscal year). Ordinary
loss was 487 million yen (ordinary profit of 204 million yen in the same period of the previous fiscal year) despite foreign exchange
gains from monetary claims denominated in foreign currencies of 264 million yen recorded under non-operating income. Loss
attributable to shareholders of the parent company was 346 million yen (profit attributable to shareholders of the parent companyof 57 million yen in the same period of the previous fiscal year) despite a gain on sale of non-current assets of 150 million yen recorded
under extraordinary income.
The Group engages in the manufacture and sale of adhesive tapes. Net sales by product category are as presented below.
(Packing tapes)
Sales at home improvement stores were sluggish due to conservative spending by consumers in light of the rising cost of living.
As a result, the category’s net sales were 1,233 million yen (down 13.2% year on year).
(Electrical insulation and electronic equipment tapes)
Despite foreign exchange gains due to a weak yen being a positive factor for export products, production adjustments ofautomobiles, smartphones, and other products accompanying the Chinese lockdowns and global IC chip supply shortage resulted
in sluggish sales of electronic equipment tapes. As a result, the category’s net sales were 4,816 million yen (down 18.3% year onyear).
(Other industrial tapes)
Similar to the situation with packing tapes, home improvement store and office mail order sales, as well as sales of polyethylene
cloth tapes for construction and civil engineering were sluggish due to conservative spending by consumers in light of the risingcost of living. As a result, the category’s net sales were 3,453 million yen (down 3.8% year on year).

2

(Reference) Sales performance
For the second quarter ended
Adhesive tape
September 30, 2021
business
Composition
by category
Net sales
ratio
[132]
Packing tapes
13.0%
1,420
Electrical insulationand electronicequipment tapes[2,799]5,893(Million yen)
For the second quarter ended
September 30, 2022
Composition
Net sales
ratio
[69]
13.0%
1,233
[2,610]
4,816

54.1%

Other industrial
tapes

[147]
32.9%
3,588
[3,079]Total
100.0%
10,902(Note) Figures in brackets [ ] indicate overseas net sales.

[100]
3,453
[2,780]9,503

3Year-on-year change
Net saleschangePercentagechange(187)-13.2%

50.7%(1,077)-18.3%

36.3%

(134)

-3.8%

100.0%(1,398)-12.8%

(2) Explanation of Financial Position
1) Assets, Liabilities and Net Assets
Total assets at the end of the second quarter under review were 36,305 million yen, down 3.0% from the end of the previous
fiscal year.
Current assets were 16,961 million yen, down 6.8% from the end of the previous fiscal year. This was primarily due to a decreasein trade receivables accompanying the decrease in net sales.
Non-current assets were 19,344 million yen, up 0.5% from the end of the previous fiscal year. This was primarily due to anincrease in construction in progress due to capital investment.
Total liabilities at the end of the second quarter under review were 7,182 million yen, down 14.0% from the end of the previous
fiscal year.
Current liabilities were 5,224 million yen, down 17.6% from the end of the previous fiscal year. This was primarily due to adecrease in liabilities related to facilities.
Non-current liabilities were 1,958 million yen, down 2.7% from the end of the previous fiscal year. This was primarily due to adecrease in deferred tax liabilities.
Total net assets at the end of the second quarter under review were 29,122 million yen, up 0.1% from the end of the previous
fiscal year. This was primarily due to an increase in foreign currency translation adjustment.
As a result of the above, the capital adequacy ratio was 80.2% (77.7% at the end of the previous fiscal year).
2) Cash Flows
Cash and cash equivalents (hereinafter “cash”) at the end of the second quarter under review were 5,031 million yen, up 217
million yen from the end of the previous fiscal year.
(Cash flows from operating activities)
Net cash provided by operating activities was 865 million yen (87 million yen provided in the previous fiscal year). This wasprimarily due to the collection of trade receivables.
(Cash flows from investing activities)
Net cash used in investing activities was 670 million yen (1,197 million yen used in the previous fiscal year). This was primarily
due to the purchase of property, plant and equipment.
(Cash flows from financing activities)
Net cash used in financing activities was 60 million yen (47 million yen used in the previous fiscal year). This was primarily due
to the payment of dividends.

(3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information
The financial results forecast for the fiscal year ending March 31, 2023, which was announced on May 26, 2022 has been revised.
For details, please refer to the “Notice Regarding Revision to the Consolidated Financial Results Forecast,” which was announced
on October 21, 2022.

4

2.Quarterly Consolidated Financial Statements(1)Quarterly Consolidated Balance Sheets(Million yen)
As of March 31,2022

As of September 30,2022

AssetsCurrent assets
Cash and deposits
Notes receivable - trade
Electronically recorded monetary claims operating
Accounts receivable - trade

5,470
1,450

5,222
1,259

1,426

1,551

4,176

3,122

Merchandise and finished goods
Work in process

2,470
1,322

2,463
1,636

Raw materials and supplies
Other

1,165
728

1,429
284

Allowance for doubtful accounts
Total current assets

(9)

(9)

18,202

16,961

Non-current assets
Property, plant and equipment
Buildings and structures

14,735

15,344

Accumulated depreciation(9,132)(9,634)

Buildings and structures, net

5,603

5,710

Machinery, equipment and vehicles
Accumulated depreciation

23,008(18,646)

23,692(19,394)

4,361

4,298

4,098
269

4,144
269

Accumulated depreciation

(94)

(103)

Leased assets, net

175

166

Construction in progress

177

372

2,303
(1,865)2,350(1,968)438

381

14,854

15,074397

362

Investments and other assets
Investment securities

2,870

2,727

Deferred tax assets
Retirement benefit asset

5
979

5
974

Other

133

200

Machinery, equipment and vehicles, net
Land
Leased assets

Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets

Total investments and other assets
Total non-current assets
Total assets

5

3,988

3,907

19,24019,34437,44336,305

(Million yen)
As of March 31,2022

As of September 30,2022

Liabilities
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating

1,250
2,456

1,243
2,274

Short-term borrowings
Lease liabilities

60
19

123
19

Income taxes payable
Accrued expenses

159
485

46
446

Other

1,909

1,070

Total current liabilities

6,341

5,224

Non-current liabilities
Long-term borrowings

724

713

Lease liabilities
Deferred tax liabilities

171
407

161
352

Provision for repairs
Retirement benefit liability

1
77

3
88

Asset retirement obligations
Long-term accounts payable - other

508
56

508
56

Other

65

72

2,012

1,958

8,353

7,182

Share capital
Capital surplus

5,057
4,643

5,057
4,643

Retained earnings
Treasury shares

17,632(462)

17,158(462)

Total shareholders' equity

26,87026,396

1,098

976

622
497

1,301
447

2,219

2,725

29,08929,12237,44336,305

Total non-current liabilities
Total liabilities
Net assets
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
Total net assets
Total liabilities and net assets

6

(2)Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income (For the second quarter)(Million yen)
For the second quarter
ended September 30,2021

For the second quarter
ended September 30,2022

Net sales
Cost of sales

10,902
8,414

9,503
8,037

Gross profit

2,487

1,466

Selling, general and administrative expenses

2,364

2,272

Operating profit (loss)

122

(805)

Non-operating income
Interest income

1

1

Dividend income
Foreign exchange gains

37
33

44
264

Other

29

63

Total non-operating income

103

373

Office relocation expenses
Rental expenses on real estate

9
-

23

Cost to deal with COVID
Other

4
7

21
9

Total non-operating expenses

21

54

204

(487)

3

150
-

Non-operating expenses

Ordinary profit (loss)
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Total extraordinary income

3150

Profit (loss) before income taxes

208

(336)

Income taxes

151

10

Profit (loss)

57

(346)

Profit attributable to non-controlling interests
Profit (loss) attributable to shareholders of the parent
company

-

-

57

(346)

7

Quarterly Consolidated Statements of Comprehensive Income (For the second quarter)(Million yen)
For the second quarter
ended September 30,2021
Profit (loss)
Other comprehensive income

For the second quarter
ended September 30,2022
57

(346)

Valuation difference on available-for-sale securities
Foreign currency translation adjustment

1
50

(122)
679

Remeasurements of defined benefit plans, net of tax

(59)

(50)

(7)

506

Comprehensive income

Total other comprehensive income

50

159

Comprehensive income attributable toComprehensive income attributable to shareholders of
the parent company
Comprehensive income attributable to non-controllinginterests

50

159

-

-

8

Quarterly Consolidated Statements of Cash Flows(Million yen)
For the second quarter
ended September 30,2021
Cash flows from operating activities
Profit (loss) before income taxes

For the second quarter
ended September 30,2022

208

(336)

Depreciation
Loss on retirement of non-current assets

462
3

686
0

Increase (decrease) in retirement benefit liability
Interest and dividend income

(77)
(39)

(71)
(45)

Interest expenses
Foreign exchange losses (gains)

1
12

4
(100)

Decrease (increase) in trade receivables
Decrease (increase) in inventories

274
(492)

1,204
(372)

Increase (decrease) in trade payables
Loss (gain) on sale of investment securities

(91)
(3)

(304)
-

Loss (gain) on sale of non-current assets
Increase/decrease in consumption taxes
payable/consumption taxes refund receivable
Other, net

-

(150)

(140)

318

(15)

159

Subtotal

102992Interest and dividends received

39

45Interest paid
Income taxes refund (paid)

(1)
(53)

(4)
(168)

Net cash provided by (used in) operating activities

87

865

(1,352)-(1,407)162

Purchase of intangible assets
Purchase of investment securities

(320)
(1)

(15)

Proceeds from sale of investment securities
Decrease (increase) in time deposits

17
459

590

Net cash provided by (used in) investing activities(1,197)(670)

Cash flows from financing activities
Net increase (decrease) in short-term borrowings

80

85

Proceeds from long-term borrowings
Repayments of long-term borrowings

110
-

(10)

Dividends paid
Purchase of treasury shares

(227)
(0)

(126)
(0)

(9)

(8)

(47)

(60)

Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment

Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents

33

84(1,124)

217

Cash and cash equivalents at beginning of period

7,780

4,813

Cash and cash equivalents at end of period

6,656

5,031

9

(4) Notes to Quarterly Consolidated Financial Statements(Notes on going concern assumption)
Not applicable.

(Notes in case of significant changes in shareholders’ equity)
Not applicable.
(Accounting policies adopted specially for the preparation of quarterly consolidated financial statements)(Calculation of tax expenses)
Tax expenses are calculated by reasonably estimating the effective tax rate expected to be imposed on profit before income
taxes (after tax effect accounting) for the consolidated fiscal year, in which the second quarter under review is included, andmultiplying this estimated effective tax rate by the quarterly profit before income taxes. However, in cases where the estimatedeffective tax rate cannot be used, the statutory effective tax rate is used. Income taxes – deferred is included under income taxes.
(Changes in accounting policies)
The Company has applied the “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ
Guidance No. 31, June 17, 2021; hereinafter “Fair Value Measurement Guidance”) from the beginning of the first quarter underreview and will prospectively apply the new accounting policies stipulated by the Fair Value Measurement Guidance inaccordance with the transitional treatment provided in Paragraph 27-2 of the Fair Value Measurement Guidance. This does notaffect the quarterly consolidated financial statements.

10