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 Six Months Ended September 30, 2021
(Based on Japanese GAAP)
October 29, 2021
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
November 12, 2021

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 six months ended September 30, 2021 (from April 1, 2021 to September 30, 2021)(1) Consolidated operating results (cumulative)
Net sales
Six months ended September 30, 2021
Six months ended September 30, 2020

Millions of yen
19,927
18,638Percentages indicate year-on-year changes
Profit attributable toOperating profit
Ordinary profit
owners of parent% Millions of yen% Millions of yen% Millions of yen%
6.9
3,682
24.8
4,700
22.0
3,404
22.7
5.7
2,949
42.2
3,852
23.5
2,775
19.6

Earnings per share

Diluted earnings per share

Yen
39.07
31.88

Six months ended September 30, 2021
Six months ended September 30, 2020

Yen
38.89
31.74

(2) Consolidated financial position
Total assets
As of September 30, 2021
As of March 31, 2021

Net assets

Millions of yen
54,11449,444Equity ratio

Millions of yen
26,67622,658

%
48.7
45.3

2. Cash dividends
Annual dividends per share

Year ended March 31, 2021
Year ending March 31, 2022

1st quarter-end

2nd quarter-end

3rd quarter-end

Fiscal year-end

Yen
––

Yen
0.00
0.00

Yen–

Yen
9.50

Yen
9.50

–––

Year ending March 31, 2022 (Forecast)Total

3. Forecast of consolidated financial results for the year ending March 31, 2022 (from April 1, 2021 to March 31, 2022)
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
40,043
11.4
6,205
13.4
7,352
10.5
5,281
10.0
60.62

1

4. Notes(1) Changes in significant subsidiaries during the six months ended September 30, 2021
(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 September 30, 2021

87,129,100 shares As of March 31, 2021

87,109,600 shares

Number of treasury shares at the end of the period
As of September 30, 2021

561 shares As of March 31, 2021

491 shares

Average number of shares during the period (cumulative from the beginning of the fiscal year)
Six months ended September 30, 2021

87,125,207 shares Six months ended September 30, 2020

287,065,555 shares

Quarterly consolidated financial statements
Consolidated balance sheets(Millions of yen)
As of March 31, 2021

As of September 30, 2021

AssetsCurrent assets
Cash and deposits
Accounts receivable - trade

10,538
4,933

13,864
5,070

16313238

6,324
598

7,131
–

Prepaid expenses
Other808
156

773
71

Allowance for doubtful accounts

(188)

(170)

23,21826,813619

707

Accumulated depreciation

(324)

(365)

Buildings, net

295

342

Work in process
Supplies
Accounts receivable - other
Income taxes receivable

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

Tools, furniture and fixtures

792

841

Accumulated depreciation

(552)

(589)

Tools, furniture and fixtures, net

239

252

Machinery, equipment and vehicles

36

27

Accumulated depreciation

(20)

(17)

Machinery, equipment and vehicles, net

16

9

Right-of-use assets

618

669

Accumulated depreciation

(230)

(319)

Right-of-use assets,net

387

349

939

954

Total property, plant and equipment
Intangible assets
Goodwill

8,834

8,983

SoftwareTrademark right

2,355
8,621

2,746
9,211

Customer-related assets
Other

1,502
0

1,485
0

Total intangible assets

21,31322,427

Investments and other assets
Investment securities

1,975

1,852

879
1,110

950
1,116

7–

Deferred tax assets
Leasehold and guarantee deposits
Other
Total investments and other assets
Total non-current assets
Total assets

3

3,972

3,919

26,22527,30049,444

54,114

(Millions of yen)
As of March 31, 2021

As of September 30, 2021

Liabilities
Current liabilities
Accounts payable - trade

258

213

2,479
7,750

2,092
9,116

Accrued expenses
Income taxes payable

438
374

587
1,286

Accrued consumption taxes
Advances received

505
869

527
–

Contract liabilities
Deposits received

–
147

1,130
131

Provision for bonuses
Provision for repayment

669
233

582
–

Lease obligations
Other115
33

106309Total current liabilities

13,87516,084Non-current liabilities
Long-term borrowings

10,644

9,004

149
1,830

159
1,926

281
3261
0

12,90911,353

26,78527,437

Shareholders' equity
Share capital

2,281

2,296

Capital surplus
Retained earnings

85
23,140101
25,695(0)(1)

25,50628,092

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

0(3,107)0(1,723)

Total accumulated other comprehensive income(3,107)(1,723)259

307

22,65826,67649,444

54,114Current portion of long-term borrowings
Accounts payable - other

Retirement benefit liability
Deferred tax liabilities
Lease obligations
Other
Total non-current liabilities
Total liabilities
Net assets

Treasury shares
Total shareholders' equity
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)Six months ended

Six months ended

September 30, 2020

September 30, 2021

Net sales
Cost of sales

18,638
1,831

19,9272,046

Gross profit

16,806

17,881

Selling, general and administrative expenses

13,857

14,198Operating profit

2,949

3,682

Share of profit of entities accounted for using equity method
Other

942
34

1,113
17

Total non-operating income

976

1,130

2459

Interest expenses
Other

47
142
10

Total non-operating expenses

74

112

3,852

4,700

Gain on sale of non-current assets

01

Total extraordinary income

01

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

52314–

Event cancellation loss

10–

Non-operating income

Non-operating expenses
Foreign exchange losses

Ordinary profit
Extraordinary income

Extraordinary losses

66

14

Profit before income taxes

Total extraordinary losses

3,786

4,687

Income taxes

1,010

1,283

Profit

2,775

3,404

Profit attributable to owners of parent

2,775

3,404

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

Six months ended

Six months ended

September 30, 2020

September 30, 2021

2,775

3,404(0)(375)

01,394(1)

(10)

(376)

1,384

2,398

4,788

2,398

4,788

–

–

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

6

Consolidated statements of cash flows(Millions of yen)

Cash flows from operating activities
Profit before income taxes

Six months ended

Six months ended

September 30, 2020

September 30, 2021

3,786

4,687

Depreciation
Amortization of goodwill

657
407

792
415

Loss (gain) on sale and retirement of non-current assets
Loss (gain) on valuation of investment securities

52313–

Share of loss (profit) of entities accounted for using equity
method539

133

Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses

6(32)

(25)
(103)

IncreaseDecreaseInProvisionForRepaymentOpeCF
Increase (decrease) in retirement benefit liability

2516–0Foreign exchange losses (gains)
Interest expenses

2447

5942

Decrease (increase) in trade receivables
Increase (decrease) in accrued consumption taxes

728
30(51)
21

Decrease (increase) in accounts receivable - other
Decrease (increase) in prepaid expenses

(94)
(184)

(805)
41

Increase (decrease) in advances received
Increase (decrease) in contract liabilities

289
––
208

Increase (decrease) in accounts payable - other
Other, net

616
(30)

1,357
258

6,891

7,046

4(48)

3(42)

Income taxes refund (paid)(1,282)101

Net cash provided by (used in) operating activities

5,565

7,108

Payments into time deposits
Proceeds from withdrawal of time deposits

(200)
158

(122)
42

Purchase of property, plant and equipment
Purchase of intangible assets

(159)
(717)

(168)
(888)

0

7(918)(1,129)(1,266)(57)(2,026)
(55)

12

7

40

27

(732)

(849)

–

(0)

Net cash provided by (used in) financing activities(2,003)(2,897)

Effect of exchange rate change on cash and cash equivalents

(28)

162

SubtotalInterest and dividends received
Interest paid

Cash flows from investing activities

Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Repayments of long-term borrowings
Repayments of lease obligations
Proceeds from issuance of share acquisition rights
Proceeds from issuance of shares resulting from exercise ofshare acquisition rights
Dividends paid
Other, net

Net increase (decrease) in cash and cash equivalents

2,614

3,244

Cash and cash equivalents at beginning of period

10,493

10,144

Cash and cash equivalents at end of period

13,10813,3897