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 Nine Months Ended December 31, 2022
(Based on Japanese GAAP)
January 31, 2023
Company name:SMS CO., LTD.
Stock exchange listing: Tokyo
Stock code:
Representative:

2175
CEOURLhttps://www.bm-sms.co.jp/Natsuki Goto

Inquiries:
CFO
Scheduled date to file Quarterly Securities Report:Masato Sugizaki
February 10, 2023

Scheduled date to commence dividend payments:
Preparation of supplementary material on quarterly financial results:–Yes

Holding of quarterly financial results meeting:

Yes

TEL

03-6721-2400(for institutional investors and analysts)(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the nine months ended December 31, 2022 (from April 1, 2022 to December 31, 2022)(1) Consolidated operating results (cumulative)
Net sales
Nine months ended December 31, 2022
Nine months ended December 31, 2021

Millions of yen
33,432
28,315Percentages indicate year-on-year changes
Profit attributable toOperating profit
Ordinary profit
owners of parent% Millions of yen% Millions of yen% Millions of yen%
18.1
5,043
29.5
6,398
25.0
4,562
25.0
7.4
3,895
21.0
5,119
20.6
3,649
27.2

Earnings per share

Diluted earnings per share

Yen
52.35
41.88

Nine months ended December 31, 2022
Nine months ended December 31, 2021

Yen
52.12
41.68

(2) Consolidated financial position
Total assets
As of December 31, 2022
As of March 31, 2022

Net assets

Millions of yen
66,33356,585Equity ratio

Millions of yen
38,581
29,991

%
57.5
52.4

2. Cash dividends
Annual dividends per share

Year ended March 31, 2022
Year ending March 31, 2023

1st quarter-end

2nd quarter-end

3rd quarter-end

Fiscal year-end

Yen––

Yen
0.00
0.00

Yen––

Yen
10.50

Yen
10.50

–

–

Year ending March 31, 2023 (Forecast)Total

3. Forecast of consolidated financial results for the year ending March 31, 2023 (from April 1, 2022 to March 31, 2023)
Percentages indicate year-on-year changes
Profit attributable toNet sales
Operating profit
Ordinary profit
Earnings per shareowners of parent
Millions of yen% Millions of yen% Millions of yen% Millions of yen%
Yen
Full year
46,063
18.4
7,238
14.6
8,499
10.0
5,984
10.6
68.66

14. Notes(1) Changes in significant subsidiaries during the nine 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:

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, 2022

87,151,400 shares As of March 31, 2022

87,147,800 shares

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

641 shares As of March 31, 2022

561 shares

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

87,147,977 shares Nine months ended December 31, 2021

287,126,584 shares

Quarterly consolidated financial statements
Consolidated balance sheets(Millions of yen)
As of March 31, 2022

As of December 31, 2022

AssetsCurrent assets
Cash and deposits
Accounts receivable - trade

14,6405,842

17,3945,353

28254726

Accounts receivable - otherPrepaid expenses

6,757
665

8,563
753

Other
Allowance for doubtful accounts

27(163)89(223)27,82332,005

746
(396)

845
(450)

Work in process
Supplies

Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net

350

395

864
(642)

1,064
(819)

Tools, furniture and fixtures, net

222

244

Machinery, equipment and vehicles
Accumulated depreciation

28(18)

33(24)

Tools, furniture and fixtures
Accumulated depreciation

99

Right-of-use assets
Accumulated depreciation

Machinery, equipment and vehicles, net

688
(394)

829
(520)

Right-of-use assets,net

294

309

876

958

Goodwill
Software

8,907
3,013

11,1663,877

Trademark right
Customer-related assets

9,581
1,421

12,062
1,556

00

22,923

28,663

Investment securities
Deferred tax assets

2,825
975

2,464
1,044

Leasehold and guarantee deposits

1,160

1,197

Total investments and other assets

4,962

4,706

28,762

34,32856,58566,333

Total property, plant and equipment
Intangible assets

Other
Total intangible assets
Investments and other assets

Total non-current assets
Total assets3

(Millions of yen)
As of March 31, 2022

As of December 31, 2022

Liabilities
Current liabilities
Accounts payable - trade

307

270

Current portion of long-term borrowings
Accounts payable - other

1,999
8,933

1,901
10,646

Accrued expenses
Income taxes payable

577
1,674

1,123
600

Accrued consumption taxes
Contract liabilities

460
1,004

570
1,462

Deposits received
Provision for bonuses

169
704

175
592

Lease liabilities
Other131244

120347

Total current liabilities

16,207

17,811

Non-current liabilities
Long-term borrowings

8,054

7,103

173
1,973

198
2,428

185
0210
0

10,387

9,941

26,59427,752

Shareholders' equity
Share capital

2,310

2,313

Capital surplus
Retained earnings

114
27,699118
31,346(1)(1)

30,123

33,776567(1,052)

377
3,976

(484)

4,354

352

450

29,991

38,581

56,58566,333Retirement benefit liability
Deferred tax liabilities
Lease liabilities
Other
Total non-current liabilities
Total liabilities
Net assets

Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total accumulated other comprehensive income
Share acquisition rights
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)(Millions of yen)
Nine months ended

Nine months ended

December 31, 2021

December 31, 2022

Net sales
Cost of sales

28,315
3,184

33,432
3,920

Gross profit

25,13029,512

Selling, general and administrative expenses

21,23524,469Operating profit

3,895

5,043

Share of profit of entities accounted for using equity method
Other

1,312
36

1,363
48

Total non-operating income

1,348

1,411

51

0

Interest expenses
Other

62
1052
2

Total non-operating expenses

124

55

5,119

6,398

Gain on sale of non-current assets

10

Total extraordinary income

10

Loss on sale and retirement of non-current assets
Loss on sale of investment securities

15–

121

Loss of reversal of foreign currency translation adjustment–33

Non-operating income

Non-operating expenses
Foreign exchange losses

Ordinary profit
Extraordinary income

Extraordinary losses

1547

Profit before income taxes

Total extraordinary losses

5,105

6,351

Income taxes

1,456

1,789

Profit

3,649

4,562

Profit attributable to owners of parent

3,649

4,562

5

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

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Share of other comprehensive income of entities accounted
for using equity method
Total other comprehensive income
Comprehensive income

Nine months ended

Nine months ended

December 31, 2021

December 31, 2022

3,649

4,562

0
1,472

0
4,989

510

(150)

1,982

4,838

5,631

9,401

5,631

9,401

–

–

Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

6