Translation
Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any
discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results
for the Six Months Ended December 31, 2023
(Based on Japanese GAAP)
February 7, 2024
Company name:
System Support Inc.
Stock exchange listing: Tokyo
Stock code:
Representative:

4396
URL https://www.sts-inc.co.jp
Representative Director
Ryoji Koshimizu

Inquiries:

General Manager of Management
Headquarters

Naoyuki Morita

TEL

Scheduled date to file Quarterly Securities Report:
Scheduled date to commence dividend payments:

February 8, 2024
March 15, 2024

Preparation of supplementary material on quarterly financial results:
Holding of quarterly financial results meeting:

Yes
Yes

076-265-5151(for institutional investors and analysts)(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the six months ended December 31, 2023 (from July 1, 2023 to December 31, 2023)(1) Consolidated operating results (cumulative)
Percentages indicate year-on-year changes
Profit attributable toNet sales
Operating profit
Ordinary profit
owners of parent
Millions of yen% Millions of yen% Millions of yen% Millions of yen%
Six months ended December 31, 2023
10,635
15.5
883
19.0
899
18.7
614
20.9
Six months ended December 31, 2022
9,211
18.2
743
26.4
757
27.8
508
29.4
Earnings per share

Diluted earnings per share

Yen
59.37
49.11

Six months ended December 31, 2023
Six months ended December 31, 2022

Yen
59.26
49.02

(2) Consolidated financial position
Total assets

Net assets

Millions of yen
9,569
8,870

As of December 31, 2023
As of June 30, 2023

Equity ratio

Millions of yen
4,624
4,124%
48.3
46.5

2. Cash dividends
Annual dividends per share

Year ended June 30, 2023
Year ending June 30, 2024

1st quarter-end

2nd quarter-end

3rd quarter-end

Fiscal year-end

Yen––Yen
15.00
18.00

Yen–

Yen
17.00

Yen
32.00

–

18.00

36.00

Year ending June 30, 2024 (Forecast)Total

3. Forecast of consolidated financial results for the year ending June 30, 2024 (from July 1, 2023 to June 30, 2024)
Net sales
Full year

Millions of yen
21,784

Percentages indicate year-on-year changes
Profit attributable toOperating profit
Ordinary profit
Earnings per shareowners of parent% Millions of yen% Millions of yen% Millions of yen%
Yen
13.1
1,763
21.0
1,755
19.8
1,167
15.6
112.751

4. Notes(1) Changes in significant subsidiaries during the six months ended December 31, 2023
(changes in specified subsidiaries resulting in the change in scope of consolidation):No(2) Application of special accounting methods for preparing quarterly consolidated financial statements:

Yes(3) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
Changes in accounting policies due to revisions to accounting standards and other regulations:
Changes in accounting policies due to other reasons:

No
No

Changes in accounting estimates:
Restatement of prior period financial statements:

NoNo(4) Number of issued shares (common shares)
Total number of issued shares at the end of the period (including treasury shares)
As of December 31, 2023

10,380,000 shares As of June 30, 2023

10,380,000 shares

Number of treasury shares at the end of the period
As of December 31, 2023

25,026 shares As of June 30, 2023

25,026 shares

Average number of shares during the period (cumulative from the beginning of the fiscal year)
Six months ended December 31, 2023

10,354,974 shares Six months ended December 31, 2022

2

10,357,303 shares

Quarterly consolidated financial statements
Consolidated balance sheets(Thousands of yen)
As of June 30, 2023

As of December 31, 2023

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade, and contract assets

3,568,9783,249,469

4,102,854
3,406,108

Merchandise and finished goods
Work in process

41,076
25,611

42,95922,765

Supplies
Other

3,050
252,5832,894
316,207

Allowance for doubtful accounts(827)(1,005)

7,139,941

7,892,784

474,225

447,155

Goodwill
Other

170,561
130,026

155,941
121,226

Intangible assets

300,588277,168

956,086

952,885

1,730,900

1,677,209

8,870,841

9,569,994

Total current assets
Non-current assets
Property, plant and equipment
Intangible assets

Investments and other assets
Total non-current assets
Total assets3

(Thousands of yen)
As of June 30, 2023

As of December 31, 2023

Liabilities
Current liabilities
Accounts payable - trade596,108

631,968

Short-term borrowings
Current portion of long-term borrowings

695,000
60,866

1,525,000
48,020

Lease liabilities
Income taxes payable

52,376
235,660

50,830344,805

Provision for bonuses
Reserve for quality assurance

10,77812,73925,61813,239Other

2,208,524

1,681,552

Total current liabilities

3,872,054

4,321,034

Long-term borrowings
Lease liabilities

253,274
146,348

165,388
121,777

Provision for retirement benefits for directors (and otherofficers)

260,754

271,048

Retirement benefit liability
Other

197,617
16,14824,981
41,153

Total non-current liabilities

874,142624,348

4,746,197

4,945,383

Shareholders' equity
Share capital

723,323

723,323

Capital surplus
Retained earnings

549,837
2,923,524

549,837
3,362,291

Treasury shares(18,826)(18,826)

4,177,860

4,616,626

9,402(62,617)

7,984–

Non-current liabilities

Total liabilitiesNet assets

Total shareholders' equity
Accumulated other comprehensive income
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets

4(53,215)

7,984

4,124,644

4,624,610

8,870,841

9,569,994

Consolidated statements of income (cumulative) and consolidated statements of comprehensive income(cumulative)
Consolidated statements of income (cumulative)(Thousands of yen)Six months ended

Six months ended

December 31, 2022

December 31, 2023

Net sales
Cost of sales

9,211,538
6,711,597

10,635,011
7,734,771

Gross profit

2,499,940

2,900,240

Selling, general and administrative expenses

1,756,890

2,016,265

743,049

883,974

Interest income
Commission income

30
9,308

63
7,761

Subsidy income
Foreign exchange gains

5,783
5,164

9,236
823

Operating profit
Non-operating income

Other

3,061

7,873

Total non-operating income

23,34825,758Interest expenses
Other

8,565
553

10,211
345

Total non-operating expenses

9,118

10,557757,279

899,175

Gain on termination of retirement benefit plan–

22,988

Total extraordinary income–

22,988

Profit before income taxes

757,279

922,163

Income taxes

248,656

307,398

Profit508,623

614,765

Profit attributable to owners of parent

508,623

614,765

Non-operating expenses

Ordinary profit
Extraordinary income

5Consolidated statements of comprehensive income (cumulative)(Thousands of yen)

ProfitOther comprehensive income
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income

Six months ended

Six months endedDecember 31, 2022

December 31, 2023

508,623

614,765(2,761)
3,386(1,417)62,617625

61,199509,248

675,965

509,248

675,965

Comprehensive income attributable toComprehensive income attributable to owners of parent

6

Consolidated statements of cash flows(Thousands of yen)

Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Share-based payment expenses
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for retirement benefits for
directors (and other officers)
Increase (decrease) in retirement benefit liability
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for loss on orders received
Increase (decrease) in reserves for quality assurance
Interest and dividend income
Gain on termination of retirement benefit planInterest expenses
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Increase (decrease) in accrued expenses
Increase (decrease) in accounts payable - other
Increase (decrease) in accrued consumption taxes
Other, net

Six months ended

Six months ended

December 31, 2022

December 31, 2023

757,279
84,534
14,61921,334723

922,163
89,483
14,619–225

13,77910,294(7,906)
13,055
(103)
720
(30)
–
8,565
(432,338)(27,988)
50,126(554,402)(25,081)(38,361)
120,054(1,669)15,102–499(64)(22,988)
10,211(157,085)
1,117
36,008(643,111)(234)(24,354)
54,362(1,418)

304,580

Interest and dividends received
Interest paid
Income taxes paid
Income taxes refund

30(8,615)(294,089)
5,319

64(10,629)(200,922)–

Net cash provided by (used in) operating activities(298,773)

93,093(39,300)
55,200(6,348)(93,204)(23,177)(7,146)–(41,800)
32,700(6,348)(30,806)(25,666)(16,410)2,777

Net cash provided by (used in) investing activities(113,976)(85,553)

Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Repayments of lease liabilities
Dividends paid
Purchase of treasury shares

540,000–(57,116)(10,209)(134,423)(92)

830,000
27,464(128,196)(26,117)(176,214)–

Net cash provided by (used in) financing activities

338,158

526,935(3,294)(1,905)

Subtotal

Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of insurance funds
Purchase of property, plant and equipment
Purchase of intangible assets
Payments of leasehold and guarantee deposits
Other, net

Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents(77,886)

532,569

Cash and cash equivalents at beginning of period

2,702,034

2,987,081

Cash and cash equivalents at end of period

2,624,148

3,519,651

7