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 Third Quarter Ended December 31, 2022
[Japanese GAAP]
January 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: 03-3491-1141
Scheduled date of filing quarterly securities report: February 13, 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 Third quarter Ended December 31, 2022 (April 01, 2022 to December 31, 2022)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Profit attributable toNet sales
Operating profitOrdinary profit
shareholders of theparent company
Million yen%
Million yen%
Million yen%
Million yen%
Third quarter ended
December 31, 2022
14,528(12.4)(1,161)(891)(651)
December 31, 2021
16,583
7.5
15
215
48
(Note) Comprehensive income:Third quarter ended December 31, 2022: ¥(368) million [-%]
Third quarter ended December 31, 2021: ¥89 million [-%]
Basic earnings
per share
Third quarter ended
December 31, 2022
December 31, 2021

Diluted earnings pershare
YenYen(25.72)
1.91-(2) Consolidated Financial Position
Total assets
Million yen
As ofDecember 31, 2022
36,007
March 31, 2022
37,443(Reference) Equity: As of December 31, 2022:
As of March 31, 2022:

Net assets

Capital adequacy ratio

Million yen¥¥

28,51829,08928,518 million
29,089 million

%

79.2
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

Year-end

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

TotalNo

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 shareparent 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 yen350(5.5)

Million yen%

Yen

400 145.8

15.79

No

* Notes:(1) Changes in significant subsidiaries during the third quarter ended December 31, 2022
(changes in specified subsidiaries resulting in changes in scope of consolidation):
NoNew(Company name:(Company name:
Exclusion:(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):December 31, 2022:
26,687,955 shares
March 31, 2022:
26,687,955 shares2) Total number of treasury shares at the end of the period:
December 31, 2022:
1,356,004 shares
March 31, 2022:
1,355,908 shares
3) Average number of shares during the period:
Third quarter ended December 31, 2022:
Third quarter ended December 31, 2021:

25,331,999 shares
25,332,314 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) Notes to Quarterly Consolidated Financial Statements .........................................................................8(Notes on going concern assumption) ................................................................................................8(Notes in case of significant changes in shareholders’ equity) ...........................................................8(Accounting policies adopted specially for the preparation of quarterly consolidated financialstatements) ........................................................................................................................................8(Changes in accounting policies) .......................................................................................................81

1. Qualitative Information on Quarterly Financial Results(1) Explanation of Operating Results
During the third quarter ended December 31, 2022 (from April 1, 2022 to December 31, 2022), the Japanese economy wasaffected by the depreciation of the yen, which started the period at 122 yen to the dollar but hit the 150-yen level in October for thefirst time in 32 years. Increases in raw material prices driven by the cheap yen and rising resource prices weighed on business
confidence. Accordingly, the Short-Term Economic Survey of Enterprises in Japan (Tankan) conducted by the Bank of Japan for
December showed that the diffusion index (DI) of large companies in the manufacturing industry had deteriorated for four
consecutive terms.
Meanwhile, turning our attention to the global economy, the US and Europe saw an apparent economic slowdown as the globallyrising cost of living continued to put pressure on household budgets, despite a recovery in consumption of services and strong demandfor capital investment. In China, the zero-COVID policy was relaxed in December, but with its real GDP growing by 2.9% year on year
in the three months to December, its real GDP growth of 3.0% for the full year of 2022 was well below the government’s target ofaround 5.5%.
Within the context of this economic environment, the Group focused on correcting the undershooting of the plan up to the secondquarter by deepening existing businesses while seeking new businesses. However, net sales declined significantly year on year as theGroup was seriously impacted by the sluggish demand in the Chinese market, one of our target sales markets.
We improved profitability through price hikes and cost reductions, mainly in selling, general and administrative expenses, and haveoffered the prospect of clearing long-term non-moving inventory. The profit situation, however, proved extremely challenging,
impacted mainly by the depreciating yen and the ensuing rise in raw material prices, further increases in fuel costs. Also, the cost ofsales remained high as a reduction in production volume due to the lower-than-targeted operating rate of the new production line, as
well as the declining net sales, made it difficult to recover the fixed costs.
As a result, net sales for the third quarter ended December 31, 2022 were 14,528 million yen (down 12.4% year on year).
Operating loss was 1,161 million yen (operating profit of 15 million yen in the same period of the previous fiscal year). Ordinary
loss was 891 million yen (ordinary profit of 215 million yen in the same period of the previous fiscal year) despite foreign exchange
gains from monetary claims denominated in foreign currencies of 176 million yen recorded under non-operating income. Loss
attributable to shareholders of the parent company was 651 million yen (profit attributable to shareholders of the parent companyof 48 million yen in the same period of the previous fiscal year).
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 1,958 million yen (down 9.4% year on year).
(Electrical insulation and electronic equipment tapes)
Unfavorable market conditions stemming from China’s COVID policy, etc. and an associated decline in exports to China, as wellas to inventory adjustments for lower production of automobiles accompanying the global semiconductor IC chip supply shortage
and other factors resulted in sluggish sales of electronic equipment tapes. As a result, the category’s net sales were 7,217 million
yen (down 20.4% year on year).
(Other industrial tapes)
Despite contributions of increases in office mail order sales, as well as sales of polyethylene cloth tapes for construction and civilengineering, the category’s net sales were 5,352 million yen (down 0.1% year on year).
(Reference) Sales performance
For the third quarter ended
Adhesive tape
December 31, 2021
business
Composition
by category
Net sales
ratio
[196]
Packing tapes
13.0%
2,160
Electrical insulationand electronicequipment tapes[4,295]
9,065(Million yen)
For the third quarter ended
December 31, 2022
Composition
Net sales
ratio
[135]
13.5%
1,958

54.7%

Other industrial
tapes

[193]
32.3%
5,357
[4,685]Total
100.0%
16,583(Note) Figures in brackets [ ] indicate overseas net sales.

2Year-on-year change
Net saleschangePercentagechange

(202)

-9.4%

[3,759]
7,217

49.7%

(1,848)-20.4%

[361]
5,352

36.8%

(4)

-0.1%

[4,256]
14,528100.0%(2,055)-12.4%

(2) Explanation of Financial Position
Assets, Liabilities and Net Assets
Total assets at the end of the third quarter under review were 36,007 million yen, down 3.8% from the end of the previous fiscalyear.
Current assets were 17,148 million yen, down 5.8% from the end of the previous fiscal year. This was primarily due to a decreasein trade receivables.
Non-current assets were 18,859 million yen, down 2.0% from the end of the previous fiscal year. This was primarily due to therecording of depreciation.
Total liabilities at the end of the third quarter under review were 7,488 million yen, down 10.4% from the end of the previousfiscal year.
Current liabilities were 5,658 million yen, down 10.8% from the end of the previous fiscal year. This was primarily due to adecrease in liabilities related to facilities.
Non-current liabilities were 1,830 million yen, down 9.0% 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 third quarter under review were 28,518 million yen, down 2.0% from the end of the previous
fiscal year. This was primarily due to the recording of loss attributable to shareholders of the parent company and dividends ofsurplus.
As a result of the above, the capital adequacy ratio was 79.2% (77.7% at the end of the previous fiscal year).

(3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information
Given unfavorable market conditions in China and uncertainties about the future trends of raw material and fuel prices, we willrevise the financial results forecast for the fiscal year ending March 31, 2023, which was announced on October 21, 2022, as soon
as we have reexamined our outlook for the fourth quarter, taking into consideration the financial results for the first nine months of
the fiscal year.

32.Quarterly Consolidated Financial Statements and Principal Notes
Quarterly Consolidated Balance Sheets(Million yen)
As of March 31,2022

As of December 31,2022

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

5,470
1,450

4,607
1,479

1,426

1,888

4,176

2,944

Merchandise and finished goods
Work in process

2,470
1,322

2,462
1,683

Raw materials and supplies
Other

1,165
728

1,665
427

Allowance for doubtful accounts
Total current assets

(9)

(9)

18,202

17,148Non-current assets
Property, plant and equipment
Buildings and structures

14,73515,019Accumulated depreciation(9,132)(9,579)Buildings and structures, net

5,603

5,439

Machinery, equipment and vehicles
Accumulated depreciation

23,008(18,646)

23,259(19,256)

4,361

4,002

4,098
269

4,106
269

Accumulated depreciation

(94)

(107)

Leased assets, net

175

161

Construction in progress

177

446

2,303
(1,865)

2,335(1,981)438

354

14,854

14,511

397

345

Investments and other assets
Investment securities

2,870

2,843

Deferred tax assets
Retirement benefit asset

5979

5971

Other133

182

Machinery, equipment and vehicles, net
Land
Leased assets

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

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

43,988

4,002

19,24018,85937,44336,007

(Million yen)
As of March 31,2022

As of December 31,2022

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

1,250
2,456

1,356
2,739

Short-term borrowings
Lease liabilities

60
1978
19

Income taxes payable
Accrued expenses

15948592363

Other

1,909

1,008

Total current liabilities

6,341

5,658

Non-current liabilities
Long-term borrowings

724

708

Lease liabilities
Deferred tax liabilities

171
407

156
260

Provision for repairs
Retirement benefit liability

177

4
62

Asset retirement obligations
Long-term accounts payable - other508
56

508
56

Other

65

72

2,012

1,830

8,353

7,488

Share capital
Capital surplus

5,057
4,643

5,057
4,643

Retained earnings
Treasury shares

17,632(462)

16,777(462)

Total shareholders' equity

26,87026,016

1,098

1,096622497

984
422

2,219

2,502

29,08928,51837,44336,007

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Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income (For the third quarter)(Million yen)
For the third quarterended December 31,2021

For the third quarter
ended December 31,2022

Net sales
Cost of sales

16,58313,024

14,52812,268Gross profit

3,559

2,259

Selling, general and administrative expenses

3,543

3,420

15(1,161)

Operating profit (loss)
Non-operating income
Interest income

24

Dividend income
Foreign exchange gains

67
93

77176

Other6890

Total non-operating income

233

349

Non-operating expenses
Office relocation expenses

10-Rental expenses on real estate
Cost to deal with COVID

935
26

Other

1317

Total non-operating expenses

3279215(891)-150

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

33

Total extraordinary income

3154

Profit (loss) before income taxes

219

(737)

Income taxes

171

(86)

Profit (loss)

48(651)

Profit attributable to non-controlling interests
Profit (loss) attributable to shareholders of the parent
company--48(651)

6

Quarterly Consolidated Statements of Comprehensive Income (For the third quarter )(Million yen)
For the third quarter
ended December 31,2021
Profit (loss)
Other comprehensive incomeFor the third quarter
ended December 31,2022
48(651)

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

(39)
169

(2)
361

Remeasurements of defined benefit plans, net of tax

(88)

(75)

Total other comprehensive income

41283

Comprehensive income

89(368)Comprehensive income attributable toComprehensive income attributable to shareholders of
the parent company
Comprehensive income attributable to non-controllinginterests

89(368)--7

(3) 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 third 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 of thecurrent consolidated fiscal year and will prospectively apply the new accounting policies stipulated by the Fair Value
Measurement Guidance in accordance with the transitional treatment provided in Paragraph 27-2 of the Fair Value Measurement
Guidance. This does not affect the quarterly consolidated financial statements.

8