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, 2018
(Based on Japanese GAAP)
January 31, 2019
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, 2019

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, 2018 (from April 1, 2018 to December 31, 2018)(1) Consolidated operating results (cumulative)
Net sales
Nine months ended December 31, 2018
Nine months ended December 31, 2017

Millions of yen
22,024
19,228Percentages indicate year-on-year changes
Profit attributable toOperating profit
Ordinary profit
owners of parent% Millions of yen% Millions of yen% Millions of yen%
14.5
2,282(1.1)
3,363
11.6
2,390
17.1
15.0
2,306
(1.1)
3,014
(1.0)
2,040
13.0

Earnings per share

Diluted earnings per share

Yen
27.51
23.51

Nine months ended December 31, 2018
Nine months ended December 31, 2017

Yen
27.38
23.42

(2) Consolidated financial position
Total assets
As of December 31, 2018
As of March 31, 2018Net assets

Millions of yen
47,881
46,087

Equity ratio

Millions of yen
14,13023,641

%
29.2
41.8

2. Cash dividends
Annual dividends per share

Year ended March 31, 2018Year ending March 31, 2019

1st quarter-end

2nd quarter-end

3rd quarter-end

Fiscal year-end

Yen
––Yen
0.00
0.00

Yen
––

Yen
6.50

Yen
6.50

––

Year ending March 31, 2019 (Forecast)Total

3. Forecast of consolidated financial results for the year ending March 31, 2019 (from April 1, 2018 to March 31, 2019)
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
32,273
21.3
4,827
20.0
5,803
15.9
3,905
16.2
44.93

1

4. Notes(1) Changes in significant subsidiaries during the nine months ended December 31, 2018(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, 2018

86,998,800 shares As of March 31, 2018

86,842,000 shares

Number of treasury shares at the end of the period
As of December 31, 2018372 shares As of March 31, 2018

310 shares

Average number of shares during the period (cumulative from the beginning of the fiscal year)
Nine months ended December 31, 2018

86,913,833 shares Nine months ended December 31, 2017

286,807,612 shares

Quarterly consolidated financial statements
Consolidated balance sheets(Millions of yen)
As of March 31, 2018

As of December 31, 2018

AssetsCurrent assets
Cash and deposits
Accounts receivable - trade

9,515
4,308

10,674
3,63550
2950
23Supplies
Accounts receivable - other

20
3,474

48
4,602

Income taxes receivable
Prepaid expenses

–
571

236
735

Other
Allowance for doubtful accounts

12(224)24(92)

17,75919,938413(252)

468(252)

160

216

687
(454)

753
(518)

Tools, furniture and fixtures, net

233

235

Machinery, equipment and vehicles
Accumulated depreciation

39(27)

41(33)

Merchandise and finished goods
Work in process

Total 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

11

7405

460

Goodwill
Software

11,539
1,382

10,9831,262

Trademark right
Customer-related assets

9,412
2,368

9,460
2,197

Total property, plant and equipment
Intangible assets

Other
Total intangible assets

00

24,70323,904

1,721
730

1,879
774

746
20

891
33

3,219

3,578

28,32827,94346,08747,881

Investments and other assets
Investment securities
Deferred tax assets
Lease and guarantee deposits
Other
Total investments and other assets
Total non-current assets
Total assets

3(Millions of yen)
As of March 31, 2018

As of December 31, 2018

Liabilities
Current liabilities
Accounts payable - trade

292

254

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

8
1,395

–
2,493

Accounts payable - otherAccrued expenses

5,061
289

6,490
674

Income taxes payable
Accrued consumption taxes

1,068
406

231
304

Advances received
Deposits received

1,183
70

1,390
42

Provision for bonuses
ProvisionForRepayment

445
153

387
193

Other2218

10,40012,480Long-term loans payable
Net defined benefit liability

9,690
160

18,844
262

Deferred tax liabilities
Other

2,175
19

2,141
21

Total non-current liabilities

12,046

21,27022,44633,751

Shareholders' equity
Capital stock

2,167

2,208

Capital surplus
Retained earnings

3,965
14,54513
13,148

Total current liabilities
Non-current liabilities

Total liabilities
Net assets

Treasury shares

(0)

(0)

20,677

15,370

Valuation difference on available-for-sale securities
Foreign currency translation adjustment0(1,423)0(1,398)

Total accumulated other comprehensive income(1,423)(1,397)

Share acquisition rights
Non-controlling interests

135
4,252

157
–

Total net assets

23,641

14,13046,08747,881

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, 2017

December 31, 2018

Net sales
Cost of sales

19,2282,337

22,0242,532

Gross profit

16,89019,491

Selling, general and administrative expenses

14,583

17,209Operating profit

2,306

2,282

Share of profit of entities accounted for using equity method
Other723
23

1,176
40

Total non-operating income

747

1,217–

3536–

45
46

Non-operating income

Non-operating expenses
Foreign exchange losses
Interest expenses
Arrangement fee
Other

29

Total non-operating expenses

39

136

Ordinary profit

3,014

3,363

Extraordinary income
Gain on sales of non-current assets

41

Gain on liquidation of subsidiaries–

3

Total extraordinary income

45

Loss on sales of shares of subsidiaries and associates
Loss on sales and retirement of non-current assets

282–49Loss on business withdrawal

12158

Extraordinary losses

Total extraordinary losses
Profit before income taxes
Income taxes
ProfitLoss attributable to non-controlling interests
Profit attributable to owners of parent

543

208

2,976

3,160

970

795

2,006

2,365

(34)

(25)

2,040

2,390

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

ProfitOther comprehensive income

Nine months ended

Nine months ended

December 31, 2017

December 31, 2018

2,006

2,365

Valuation difference on available-for-sale securities
Foreign currency translation adjustment0(723)

033

Share of other comprehensive income of entities accounted
for using equity method

(26)

(0)

Total other comprehensive income

(749)

33

1,256

2,398

1,560

2,416

(303)

(17)

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

6