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, 2017
(Based on Japanese GAAP)
January 30, 2018
Company name:SMS CO., LTD.
Stock exchange listing: Tokyo
Stock code:
Representative:

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

Inquiries:
CFO
Scheduled date to file Quarterly Securities Report:

Masato Sugizaki
February 13, 2018

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, 2017 (from April 1, 2017 to December 31, 2017)(1) Consolidated operating results (cumulative)
Net sales
Nine months ended December 31, 2017
Nine months ended December 31, 2016

Millions of yen
19,228
16,713

Percentages indicate year-on-year changes
Profit attributable toOperating profit
Ordinary profit
owners of parent% Millions of yen% Millions of yen% Millions of yen%
15.0
2,306
(1.1)
3,014
(1.0)
2,040
13.0
30.1
2,332
48.4
3,045
40.3
1,805
31.6

Earnings per share

Diluted earnings per share

Yen
47.02
44.18

Nine months ended December 31, 2017
Nine months ended December 31, 2016

Yen
46.84
44.04

(2) Consolidated financial position
Total assets
As of December 31, 2017
As of March 31, 2017Net assets

Millions of yen
45,00843,231Equity ratio

Millions of yen
22,20821,583

%
40.1
39.6

2. Cash dividends
Annual dividends per share

Year ended March 31, 2017
Year ending March 31, 2018

1st quarter-end

2nd quarter-end

3rd quarter-end

Fiscal year-end

Yen
––

Yen
0.00
0.00

Yen
––

Yen
11.00

Yen
11.00

––

Year ending March 31, 2018 (Forecast)Total

3. Forecast of consolidated financial results for the year ending March 31, 2018 (from April 1, 2017 to March 31, 2018)
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
27,804
20.6
4,378
20.1
5,137
15.9
3,396
21.3
78.26

1

4. Notes(1) Changes in significant subsidiaries during the nine months ended December 31, 2017(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, 2017

43,416,200 shares As of March 31, 2017

43,382,600 shares

Number of treasury shares at the end of the period
As of December 31, 2017

155 shares As of March 31, 2017

113 shares

Average number of shares during the period (cumulative from the beginning of the fiscal year)
Nine months ended December 31, 2017

43,403,806 shares Nine months ended December 31, 2016

240,878,346 shares

Quarterly consolidated financial statements
Consolidated balance sheets(Millions of yen)
As of March 31, 2017

As of December 31, 2017

AssetsCurrent assets
Cash and deposits
Accounts receivable - trade

7,829
3,932

9,255
3,297

81
1855
26

36
2,491

29
3,503

Prepaid expenses
Deferred tax assets

722
239

915
250

Other
Allowance for doubtful accounts

11(128)18(132)

15,235

17,220375(185)427(248)

189

179

573
(418)

690
(450)

Tools, furniture and fixtures, net

154

239

Machinery, equipment and vehicles
Accumulated depreciation

43(19)

41(26)

Merchandise and finished goods
Work in process
Supplies
Accounts receivable - otherTotal current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Tools, furniture and fixtures
Accumulated depreciation

Machinery, equipment and vehicles, net

23

14368

432

Goodwill
Software

11,166
1,544

11,7151,404

Trademark right
Customer-related assets

9,703
2,692

9,390
2,423

Total property, plant and equipment
Intangible assets

Other
Total intangible assets

00

25,107

24,934

1,665
209

1,509
215

612
33

687
8

2,521

2,420

27,99627,787

43,23145,008Investments and other assets
Investment securities
Deferred tax assets
Lease and guarantee deposits
Other
Total investments and other assets
Total non-current assets
Total assets3

(Millions of yen)
As of March 31, 2017

As of December 31, 2017

Liabilities
Current liabilities
Accounts payable - trade

311

286

Short-term loans payable
Current portion of long-term loans payable

–
1,201

8
1,393

Accounts payable - otherAccrued expenses

4,236
182

5,269
345

Income taxes payable
Accrued consumption taxes

1,139
242

624
328

Advances received
Deposits received

1,077
52

1,357
43

315
143

341
133

8

15

8,910

10,147Long-term loans payable
Net defined benefit liability

10,210135

10,325
150

Deferred tax liabilities
Other

2,374
172,160
17

Total non-current liabilities

12,737

12,65321,64822,800Shareholders' equity
Capital stock

2,153

2,165

Capital surplus
Retained earnings

4,148
11,662

3,963
13,226

Provision for bonuses
ProvisionForRepayment
Other
Total current liabilities
Non-current liabilities

Total liabilities
Net assets

Treasury shares

(0)

(0)

17,963

19,354

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

0(838)

0(1,318)

Total accumulated other comprehensive income(838)(1,318)Subscription rights to sharesNon-controlling interests

110
4,347

127
4,043

Total net assets

21,583

22,20843,23145,008

Total shareholders' equity
Accumulated other comprehensive income

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, 2016

December 31, 2017

Net sales
Cost of sales

16,7132,650

19,2283,078

Gross profit

14,062

16,149Selling, general and administrative expenses

11,72913,842

Operating profit

2,332

2,306

Share of profit of entities accounted for using equity method
Other709
92

723
23

Total non-operating income

Non-operating income

801

747

Non-operating expenses
Interest expenses

3736

Share issuance cost
Other

29
22–
2

Total non-operating expenses

89

39

3,045

3,014

Gain on sales of non-current assets
Gain on sales of shares of subsidiaries and associates

–
56

4–

Total extraordinary income

56

420–

Loss on sales of shares of subsidiaries and associates
Other

146
–

28
14

Total extraordinary losses

166

43

Profit before income taxes

2,935

2,976

Income taxes

1,036

970

Profit

1,899

2,006

Ordinary profit
Extraordinary income

Extraordinary losses
Loss on sales of investment securities

Profit (loss) attributable to non-controlling interests
Profit attributable to owners of parent593(34)

1,805

2,040

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 accountedfor using equity method
Total other comprehensive income
Comprehensive income

Nine months ended

Nine months ended

December 31, 2016

December 31, 2017

1,899

2,006

(9)
(4,184)0(723)(25)(26)(4,218)(749)(2,319)1,256(1,540)

1,560

(779)

(303)

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

6