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 Six Months Ended September 30, 2023
[Japanese GAAP]
October 30, 2023
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: +81-3-3491-1141
Scheduled date of filing quarterly securities report: November 14, 2023
Scheduled date of commencing dividend payments: 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 Six Months Ended September 30, 2023 (April 1, 2023 to September 30, 2023)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Millions of yen% Millions of yen% Millions of yen% Millions of yen%
Six months ended
September 30, 2023
9,170
(3.5)
(581)
(201)
325
September 30, 2022
9,503
(12.8)
(805)
(487)
(346)
(Note) Comprehensive income:Six months ended September 30, 2023:¥
768 million [381.1%]
Six months ended September 30, 2022:¥
159 million [218.6%]
Basic earnings
per share
Six months ended
September 30, 2023
September 30, 2022

Diluted earnings per
share
Yen

Yen

12.87
(13.69)-(2) Consolidated Financial Position
Total assets
Millions of yen
As ofSeptember 30, 2023
32,502
March 31, 2023
32,630(Reference) Equity: As of September 30, 2023:
As of March 31, 2023:

Net assets

Capital adequacy ratio

Millions of yen¥¥

26,40025,70826,400 million
25,708 million

%

81.2
78.8

2. Dividends
Annual dividends
1stquarter-end

2ndquarter-end

3rdquarter-end

Yen

Yen

Yen

Yen

Yen

Fiscal year ended March 31, 2023

-

3.00

-

3.00

6.00

Fiscal year ending March 31, 2024

-

0.00
-

0.00

0.00

Fiscal year ending March 31, 2024
(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, 2024(April 1, 2023 to March 31, 2024)(% indicates changes from the previous corresponding period.)
Profit attributable to Basic earnings
Net sales
Operating profit
Ordinary profit
owners of parent
per share
Millions of yen% Millions of yen% Millions of yen

Full year
21,0008.7
250(Note) Revision to the financial results forecast announced most recently:

330% Millions of yen

%

Yen

-

-

23.29

590

No

* Notes:(1) Changes in significant subsidiaries during the six months ended September 30, 2023
(changes in specified subsidiaries resulting in changes in scope of consolidation):(Company name:New
Exclusion:(Company name:No(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: No
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, 2023:
26,687,955 shares
March 31, 2023:
26,687,955 shares
2) Number of treasury shares at the end of the period:
September 30, 2023:
1,356,201 shares
March 31, 2023:
1,356,004 shares
3) Average number of shares outstanding during the period:
Six months ended September 30, 2023:
Six months ended September 30, 2022:

25,331,815 shares
25,332,011 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 ...................................................................................................... 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) Quarterly Consolidated Statements of Cash Flows ........................................................................... 8(4) Notes to Quarterly Consolidated Financial Statements ..................................................................... 9(Notes on going concern assumption) ............................................................................................ 9(Notes in case of significant changes in shareholders’ equity) ....................................................... 9(Accounting policies adopted specially for the preparation of quarterly consolidated financial
statements) .................................................................................................................................... 9

1

1. Qualitative Information on Quarterly Financial Results(1) Explanation of Operating Results
During the six months ended September 30, 2023 (from April 1, 2023 to September 30, 2023), the Japanese economy was on an
improving trend in both the manufacturing and non-manufacturing sectors. In particular, the recovery in the retail and wholesaleindustries has been remarkable, due in part to the recovery of inbound tourism demand. However, the outlook for the manufacturingsector continues to be unpredictable due to concerns about sluggish overseas demand, rising prices, including soaring fuel prices,and the prolonged depreciation of the yen.
Meanwhile, turning our attention to the global economy, prolonged inflation and tightening financial conditions in the US andEurope are gradually slowing down the economy, while in China, one of our major markets, the sense of economic slowdown isintensified due to sluggish real estate sales, declining personal consumption, and a prolonged slump in exports.
Within the context of this business environment, the Group saw sales decrease year on year, as sales of electrical insulation andelectronic equipment tapes declined significantly due to sluggish market conditions in China and prolonged inventory adjustmentsin the electronic components market, although sales of packing tapes and other industrial tapes were strong. On the other hand,operating loss decreased year on year due to an improvement in costs through the measures we had taken since the beginning of the
fiscal year to reduce long-term immovable inventories and pass some of the increases in raw material prices to product prices. The
decrease in operating loss was also due to a decrease in factory expenses and SG&A expenses, which resulted from group-wide
efforts for exhaustive cost reduction. The Group, however, failed to return to profitability due to sluggish market conditions anddefects in some of its products, which led to a decline in sales of electrical insulation and electronic equipment tapes.
As a result, net sales for the six months ended September 30, 2023 were 9,170 million yen (down 3.5% year on year). Operating
loss was 581 million yen (operating loss of 805 million yen in the same period of the previous fiscal year). Ordinary loss was 201
million yen (ordinary loss of 487 million yen in the same period of the previous fiscal year), primarily due to foreign exchange
gains of 356 million yen recorded under non-operating income as a result of the valuation of monetary claims denominated inforeign currencies amid the depreciation of the yen. Profit attributable to owners of parent was 325 million yen (loss attributable toowners of parent of 346 million yen in the same period of the previous fiscal year) due to a gain on sale of investment securities of
369 million yen and a gain on sale of non-current assets of 135 million yen.
The Group engages in the manufacture and sale of adhesive tapes. Net sales by product category are as presented below.
(Packing tapes)
As a result of the acquisition of new trade areas through new products and the spread of price increases, the category’s net sales
were 1,506 million yen (up 22.1% year on year).
(Electrical insulation and electronic equipment tapes)
Sales of electrical insulation and electronic equipment tapes were sluggish, mainly due to prolonged inventory adjustments in theelectronic components market. As a result, the category’s net sales were 4,067 million yen (down 15.6% year on year).
(Other industrial tapes)
Sales of automotive bundling tapes and steel frame masking tapes increased year on year. As a result, the category’s net sales
were 3,597 million yen (up 4.2% year on year).
(Reference) Sales performance
Adhesive tapebusinessby category
Packing tapes
Electrical insulationand electronicequipment tapes
Other industrial
tapes(Million yen)Six months ended
September 30, 2022
Composition
Net sales
ratio
1,233
13.0%
[69]
4,816
[2,610]Six months ended
September 30, 2023
Composition
Net sales
ratio
1,506
16.4%
[204]
4,067
[1,986]

50.7%

3,453
36.3%
[100]
9,503
Total
100.0%[2,780](Note) Figures in brackets [ ] indicate overseas net sales.

3,597
[456]
9,170
[2,647]2

Year-on-year change
Net saleschangePercentagechange

272

22.1%

44.4%

(749)

(15.6%)

39.2%

143

4.2%

100.0%(332)(3.5%)

(2) Explanation of Financial Position
1) Assets, Liabilities and Net Assets
Total assets at the end of the second quarter under review were 32,502 million yen, down 0.4% from the end of the previous
fiscal year.
Current assets were 15,871 million yen, down 1.9% from the end of the previous fiscal year. This was primarily due to a decrease
in inventories.
Non-current assets were 16,631 million yen, up 1.0% from the end of the previous fiscal year. This was primarily due to anincrease in construction in progress.
Total liabilities at the end of the second quarter under review were 6,101 million yen, down 11.9% from the end of the previous
fiscal year.
Current liabilities were 4,246 million yen, down 16.1% from the end of the previous fiscal year. This was primarily due to adecrease in electronically recorded obligations - operating.
Non-current liabilities were 1,855 million yen, down 0.3% from the end of the previous fiscal year. This was primarily due to adecrease in long-term borrowings.
Total net assets at the end of the second quarter under review were 26,400 million yen, up 2.7% from the end of the previous
fiscal year. This was primarily due to increases in retained earnings and foreign currency translation adjustment.
As a result of the above, the capital adequacy ratio was 81.2% (78.8% 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 5,190 million yen, up 550
million yen from the end of the previous fiscal year.
(Cash flows from operating activities)
Net cash provided by operating activities was 219 million yen (865 million yen provided in the same period of the previous fiscal
year). This was primarily due to a decrease in inventories.
(Cash flows from investing activities)
Net cash provided by investing activities was 187 million yen (670 million yen used in the same period of the previous fiscal
year). This was primarily due to proceeds from sale of investment securities.
(Cash flows from financing activities)
Net cash used in financing activities was 96 million yen (60 million yen used in the same period of the previous fiscal year). Thiswas primarily due to dividends paid.

(3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information
There is no change to the financial results forecast for the fiscal year ending March 31, 2024, which was announced on May 10,2023. This is because an increase in sales is expected in the second half of the fiscal year due to the expansion of new products ofpacking tapes, which is likely to contribute to the sales in the second half of the fiscal year, and due also to the steady expansion ofsales of automotive bundling tapes and steel frame masking tapes. It is also because we have strongly promoted cost reduction
measures, such as an improvement in costs through the reduction of long-term immovable inventories, which we have been pushing
forward since the beginning of the fiscal year, and the implementation of group-wide efforts for exhaustive cost reduction.
The financial results forecast is based on currently available information. Actual performance may differ from forecasted results
due to a variety of factors going forward.

3

2.Quarterly Consolidated Financial Statements and Principal Notes(1) Quarterly Consolidated Balance Sheets(Millions of yen)
As of March 31, 2023

As of September 30, 2023

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

4,820
1,188

5,387
753

1,684

2,127

2,753

2,889

Merchandise and finished goods
Work in process

2,327
1,585

1,731
1,498

Raw materials and supplies
Other

1,469
348

1,148
340

(7)

(7)

16,17015,871

Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation

15,04815,462(11,025)(11,343)

Buildings and structures, net

4,022

4,118

Machinery, equipment and vehicles

23,06323,637

Accumulated depreciation(20,230)(20,797)

2,832

2,839

4,108
269

4,135
269

Accumulated depreciation

(112)

(121)

Leased assets, net

157

148

Construction in progress

464

883

2,388
(2,013)

2,427(2,104)

Machinery, equipment and vehicles, net
Land
Leased assets

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

374

323

11,96012,448323

298

Investments and other assets
Investment securities

3,055

2,742

Retirement benefit asset
Other

947
173

934
206

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

4

4,176

3,883

16,460

16,631

32,63032,502

(Millions of yen)
As of March 31, 2023

As of September 30, 2023

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

1,047
2,563

978
1,903

Short-term borrowings
Lease liabilities

21
19

21
19

Income taxes payable
Accrued expenses

40
365

7
501

Other

1,002

813

Total current liabilities

5,060

4,246

Non-current liabilities
Long-term borrowings

703

692

Lease liabilities
Deferred tax liabilities

151
291

142
287

Provision for repairs
Retirement benefit liability

6
64

8
75

Asset retirement obligations
Long-term accounts payable - other

512
56

512
56

Other

74

79

1,861

1,855

6,922

6,101

Share capital
Capital surplus

5,057
4,643

5,057
4,643

Retained earnings
Treasury shares

13,822(462)

14,072(463)

Total shareholders' equity

23,06023,310

1,252

1,283

1,012
383

1,458
347

2,647

3,090

25,70826,40032,63032,502

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 assets5(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income (For the six months)(Millions of yen)
For the six months
ended September 30, 2022

For the six months
ended September 30, 2023

Net sales
Cost of sales

9,503
8,037

9,170
7,564

Gross profit

1,466

1,606

Selling, general and administrative expenses

2,272

2,188

Operating loss

(805)

(581)

Non-operating income
Interest income

18Dividend income
Foreign exchange gains

44
264

45
356

Rent revenue of real estate
Other

27
35

35
23

Total non-operating income

373

468

Non-operating expenses
Consulting fee

-

35

23
21

24
-

Other

9

28

Total non-operating expenses

54

88

Ordinary loss

(487)

(201)

Extraordinary income
Gain on sale of non-current assets

150

135

-

369

Total extraordinary income

150

504

Profit (loss) before income taxes

Rental expenses on real estate
Cost to deal with COVID

Gain on sale of investment securities

(336)

302

Income taxes

10

(23)

Profit (loss)

(346)

325

Profit attributable to non-controlling interests--

Profit (loss) attributable to owners of parent

(346)

325

6

Quarterly Consolidated Statements of Comprehensive Income (For the six months)(Millions of yen)
For the six months
ended September 30, 2022
Profit (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment

For the six months
ended September 30, 2023

(346)

325

(122)
679

31
446

Remeasurements of defined benefit plans, net of tax

(50)

(36)

Total other comprehensive income

506

442

Comprehensive income

159

768

Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to non-controllinginterests

159

768

-

-

7

(3) Quarterly Consolidated Statements of Cash Flows(Millions of yen)
For the six months
ended September 30, 2022
Cash flows from operating activities
Profit (loss) before income taxes

For the six months
ended September 30, 2023

(336)

302

Depreciation
Increase (decrease) in retirement benefit liability

686
(71)

493
(28)

Interest and dividend income
Interest expenses

(45)
4

(53)
2

Foreign exchange losses (gains)
Decrease (increase) in trade receivables

(100)
1,204

(383)
(97)

Decrease (increase) in inventories
Increase (decrease) in trade payables

(372)
(304)

1,094
(783)

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

(150)

(369)
(135)

318

6

159

48

Subtotal

992

97Interest and dividends received
Interest paid

45
(4)

53
(2)

Income taxes refund (paid)

(168)

70

Net cash provided by (used in) operating activities

865

219

Cash flows from investing activities
Purchase of property, plant and equipment(1,407)(682)

Proceeds from sale of property, plant and equipment
Purchase of intangible assets

162
-

160
(4)

Purchase of investment securities
Proceeds from sale of investment securities

(15)
-

(2)
716

Decrease (increase) in time deposits

590-

Net cash provided by (used in) investing activities

(670)

187

Net increase (decrease) in short-term borrowings
Repayments of long-term borrowings

85
(10)

(10)

Dividends paid
Purchase of treasury shares

(126)
(0)

(75)
(0)

Cash flows from financing activities

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

(8)

(9)

(60)

(96)

84

239

217

550

Cash and cash equivalents at beginning of period

4,813

4,640

Cash and cash equivalents at end of period

5,031

5,190

8

(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)
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.

9