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, 2022
(Based on Japanese GAAP)
February 9, 2023
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 10, 2023
March 15, 2023

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, 2022 (from July 1, 2022 to December 31, 2022)(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, 2022
9,211
18.2
743
26.4
757
27.8
508
29.4
Six months ended December 31, 2021
7,790
12.6
587
15.6
592
14.5
393
14.2
Earnings per share

Diluted earnings per share

Yen
49.11
37.97

Six months ended December 31, 2022
Six months ended December 31, 2021

Yen
49.02
37.86

(2) Consolidated financial position
Total assets

Net assets

Millions of yen
8,164
7,815

As of December 31, 2022
As of June 30, 2022

Equity ratio

Millions of yen
3,796
3,421%
46.5
43.8

2. Cash dividends
Annual dividends per share

Year ended June 30, 2022
Year ending June 30, 2023

1st quarter-end

2nd quarter-end

3rd quarter-end

Fiscal year-end

Yen––Yen
12.00
15.00

Yen–

Yen
13.00

Yen
25.00

–

15.00

30.00

Year ending June 30, 2023 (Forecast)Total

3. Forecast of consolidated financial results for the year ending June 30, 2023 (from July 1, 2022 to June 30, 2023)
Net sales
Full year

Millions of yen
18,093

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
11.7
1,456
21.7
1,452
22.0
982
25.1
94.88

1

4. Notes(1) Changes in significant subsidiaries during the six months ended December 31, 2022
(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:

Yes
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, 2022

10,380,000 shares As of June 30, 2022

10,380,000 shares

Number of treasury shares at the end of the period
As of December 31, 2022

23,191 shares As of June 30, 2022

22,123 shares

Average number of shares during the period (cumulative from the beginning of the fiscal year)
Six months ended December 31, 2022

10,357,303 shares Six months ended December 31, 2021

210,350,982 shares

Quarterly consolidated financial statements
Consolidated balance sheets(Thousands of yen)
As of June 30, 2022

As of December 31, 2022

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

3,254,220
2,700,261

3,164,642
3,131,947

Merchandise and finished goods
Work in process

41,24826,60949,75746,081

Supplies
Other

2,807
278,733

2,814
230,481

Allowance for doubtful accounts–(685)

6,303,881

6,625,040

307,195

361,519

Goodwill
Other

199,800
180,182

185,181
162,236

Intangible assets

379,983

347,417824,244830,047

1,511,422

1,538,984

7,815,303

8,164,025

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, 2022

As of December 31, 2022

Liabilities
Current liabilities
Accounts payable - trade

520,771570,500

Short-term borrowings
Current portion of long-term borrowings

825,000
78,2091,365,000
62,001

Lease liabilities
Income taxes payable

20,063332,826

22,811
285,243

9,543
103

22,359–Reserve for quality assurance
Other

7,585
1,892,307

8,306
1,359,331

Total current liabilities

3,686,410

3,695,553

Non-current liabilities
Long-term borrowings

245,800204,892

40,601

44,957233,137

246,917

182,533

169,736

5,320

5,964

Provision for bonuses
Provision for loss on orders received

Lease liabilities
Provision for retirement benefits for directors (and otherofficers)
Retirement benefit liability
Other
Total non-current liabilities

707,393

672,468

4,393,803

4,368,021

Share capital
Capital surplus

723,323549,837

723,323549,837

Retained earnings
Treasury shares

2,203,584(18,655)

2,577,555(18,747)

Total shareholders' equity

3,458,091

3,831,969

Accumulated other comprehensive income
Foreign currency translation adjustment

6,255

3,493

Remeasurements of defined benefit plans(42,846)(39,459)

Total accumulated other comprehensive income(36,591)(35,965)

3,421,500

3,796,004

7,815,303

8,164,025

Total liabilities
Net assets
Shareholders' equity

Total net assets
Total liabilities and net assets

4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, 2021

December 31, 2022

Net sales
Cost of sales

7,790,042
5,740,454

9,211,538
6,711,597

Gross profit

2,049,588

2,499,940

Selling, general and administrative expenses

1,461,693

1,756,890

587,894

743,049

Interest income
Commission income

12316

30
9,308

Subsidy income
Foreign exchange gains

10,624
–

5,783
5,164

Dividend income of insurance
Other

1,480
2,408

972
2,089

Total non-operating income

14,842

23,348Operating profit
Non-operating income

Non-operating expenses
Interest expenses

7,163

8,565

Foreign exchange lossesOther

3,018
1–553

Total non-operating expenses

10,183

9,118

Ordinary profit

592,554757,279

Profit before income taxes

592,554757,279

Income taxes

199,529

248,656

Profit393,024508,623

Profit attributable to owners of parent

393,024508,6235

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

ProfitOther comprehensive income

Six months ended

Six months ended

December 31, 2021

December 31, 2022

393,024508,623

Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax324
1,125(2,761)
3,386

Total other comprehensive income

1,449

625

394,474

509,248

394,474

509,248

Comprehensive income
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

Six months ended

Six months ended

December 31, 2021

December 31, 2022

592,554757,279

Depreciation
Amortization of goodwill

87,327
2,037

84,534
14,619

Share-based payment expenses
Increase (decrease) in allowance for doubtful accounts

23,275–

21,334
723

Increase (decrease) in provision for retirement benefits for
directors (and other officers)

12,611

13,779

Increase (decrease) in retirement benefit liability
Increase (decrease) in provision for bonuses

3,759
19,782(7,906)
13,055

Increase (decrease) in provision for loss on orders received
Increase (decrease) in reserves for quality assurance(3,994)
6,150

(103)
720

Interest and dividend income
Interest expenses(12)
7,163(30)8,565

Decrease (increase) in trade receivables
Decrease (increase) in inventories(377,919)
101,625(432,338)(27,988)

Increase (decrease) in trade payables
Increase (decrease) in accrued expenses

17,741(420,441)

50,126(554,402)

Increase (decrease) in accounts payable - other
Increase (decrease) in accrued consumption taxes(23,419)(58,160)(25,081)(38,361)

Other, net

120,387

120,054

Subtotal

110,469(1,418)1230(7,114)(181,410)(8,615)(294,089)

–

5,319

(78,043)(298,773)

Payments into time deposits
Proceeds from withdrawal of time deposits(39,900)
54,700(39,300)
55,200Purchase of insurance funds
Purchase of property, plant and equipment(6,348)(7,352)(6,348)(93,204)

Purchase of intangible assets
Payments of leasehold and guarantee deposits(37,977)–(23,177)(7,146)393–(36,484)(113,976)

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

540,000(49,042)

540,000(57,116)

Repayments of lease liabilities
Dividends paid

(11,802)(216,387)(10,209)(134,423)–(92)

262,768

338,158573(3,294)

Interest and dividends received
Interest paid
Income taxes paid
Income taxes refund
Net cash provided by (used in) operating activities
Cash flows from investing activities

Proceeds from refund of leasehold and guarantee deposits
Net cash provided by (used in) investing activities
Cash flows from financing activities

Purchase of treasury shares
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

148,813(77,886)

Cash and cash equivalents at beginning of period

2,199,873

2,702,034Cash and cash equivalents at end of period

2,348,686

2,624,1487