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 Three Months Ended June 30, 2018
(Based on Japanese GAAP)
July 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
August 10, 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 three months ended June 30, 2018 (from April 1, 2018 to June 30, 2018)(1) Consolidated operating results (cumulative)
Net sales
Three months ended June 30, 2018
Three months ended June 30, 2017

Millions of yen8,067
7,073

Percentages indicate year-on-year changes
Profit attributable toOperating profit
Ordinary profit
owners of parent% Millions of yen% Millions of yen% Millions of yen%
14.1
1,376 (13.1)
2,090
3.7
1,644
13.8
6.9
1,584(5.1)
2,015(6.9)
1,444(8.0)

Earnings per share

Diluted earnings per share

Yen
18.94
16.65

Three months ended June 30, 2018
Three months ended June 30, 2017

Yen
18.85
16.58

(2) Consolidated financial position
Total assets
As of June 30, 2018
As of March 31, 2018

Net assets

Millions of yen46,656
46,087

Equity ratio

Millions of yen
23,411
23,641

%
41.5
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

Yen–

Yen
6.50

Yen
6.50

0.00

–––

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 salesOperating profit
Ordinary profit
Earnings per shareowners of parent
Millions of yen% Millions of yen% Millions of yen% Millions of yen%
Yen
Six months ending
15,68819.2
1,919 (10.6)
2,609
(3.0)
1,852
(0.4)
21.33
September 30, 2018
Full year
32,273
21.3
4,827
20.0
5,803
15.9
3,905
16.2
44.97

1

4. Notes(1) Changes in significant subsidiaries during the three months ended June 30, 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:

NoNo

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 June 30, 2018

86,842,000 shares As of March 31, 2018

86,842,000 shares

Number of treasury shares at the end of the period
As of June 30, 2018

310 shares As of March 31, 2018

310 shares

Average number of shares during the period (cumulative from the beginning of the fiscal year)
Three months ended June 30, 2018

86,841,690 shares Three months ended June 30, 2017286,764,974 shares

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

As of June 30, 2018

AssetsCurrent assets
Cash and deposits
Accounts receivable - tradeMerchandise and finished goods
Work in process
Supplies
Accounts receivable - otherPrepaid expenses
Other
Allowance for doubtful accounts

9,515
4,308

11,495
3,791

50
29

43
22

20
3,474

41
4,148

571
12705
14(224)(183)

17,75920,079413

427

Accumulated depreciation

(252)

(260)

Buildings, net

160

166

Total current assets
Non-current assets
Property, plant and equipment
Buildings

Tools, furniture and fixtures

687

458

Accumulated depreciation

(454)

(283)

Tools, furniture and fixtures, net

233

174

Machinery, equipment and vehicles

39295

Accumulated depreciation

(27)

(194)

Machinery, equipment and vehicles, net

11100

405

441

Total property, plant and equipment
Intangible assets
Goodwill

11,53910,723

SoftwareTrademark right

1,382
9,412

1,409
8,849

Customer-related assets
Other

2,368
0

2,169
0

Total intangible assets

24,70323,152

Investments and other assets
Investment securities

1,721

1,413

Deferred tax assets
Lease and guarantee deposits

730
746

769
785

Other

20

13

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

3

3,219

2,983

28,32826,57746,08746,656

(Millions of yen)
As of March 31, 2018

As of June 30, 2018

Liabilities
Current liabilities
Accounts payable - trade

292

262

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

8
1,395

–
1,387

Accounts payable - otherAccrued expenses

5,061
289

5,800
572

Income taxes payable
Accrued consumption taxes

1,068
406

319
416

Advances received
Deposits received

1,183
70

1,380
534

Provision for bonuses
ProvisionForRepayment

445
153

250
277

Other22132

10,40011,333Long-term loans payable
Net defined benefit liability

9,690
160

9,622
237

Deferred tax liabilities
Other

2,175
19

2,031
19

Total non-current liabilities

12,046

11,911

22,44623,244

Shareholders' equity
Capital stock

2,167

2,167

Capital surplus
Retained earnings

3,965
14,545

3,965
15,628

Total current liabilities
Non-current liabilities

Total liabilities
Net assets

Treasury shares

00

20,677

21,760

Valuation difference on available-for-sale securities
Foreign currency translation adjustment0(1,423)0(2,409)

Total accumulated other comprehensive income(1,423)(2,409)

Share acquisition rights
Non-controlling interests

135
4,252

144
3,915

Total net assets

23,641

23,411

46,08746,656

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)

Net sales
Cost of sales

Three months ended

Three months ended

June 30, 2017

June 30, 2018
7,073
762

8,067
823

Gross profit6,311

7,244

Selling, general and administrative expenses

4,727

5,867

Operating profit

1,584

1,376

Share of profit of entities accounted for using equity method
Other418
23719
9

Total non-operating income

442

728

1013

Non-operating income

Non-operating expenses
Interest expenses
Other

01

Total non-operating expenses

1014

2,015

2,090

0

10

128–

Other

00

Total extraordinary losses

280

1,987

2,092

599

539

1,387

1,553

Ordinary profit
Extraordinary income
Other
Total extraordinary income
Extraordinary losses
Loss on sales of shares of subsidiaries and associates

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

5(57)

(91)

1,444

1,644

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

Three months ended

Three months ended

June 30, 2017June 30, 2018
1,387

1,553

(0)
(941)

(0)
(1,221)

(6)

(9)

(948)

(1,230)

439

322

956

658

(517)

(336)

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

6