SANIX INCORPORATED
Summary of Consolidated Financial Statements
For the Third Quarter Ended December 31, 2020
[Japanese Standards]

The financial figures in this document are based on Japanese Accounting Standards and accompanying laws. Amounts arerounded off to 1 decimal place. This document is an English translation of the Japanese-language original.

Consolidated Financial Statements for the Third Quarter ended December 31, 2020
SANIX INCORPORATED
Stock Listed:Tokyo Stock Exchange First Section, Fukuoka Stock Exchange

Code No;

4651

URL:

https://sanix.jp

President and CEO:

Hiroshi Munemasa

Contact:

Kozo Inoue, Director, Management Corporate Officer,
General Manager of Corporate Planning Division, Administration Division andManagement & Planning Division

1. Business Results – Operating results for the Third Quarter ended December 31,
2020 (April 1, 2020 to December 31, 2020)(1) Consolidated Operating Results(In Millions of Yen)
Third Quarter
From April 1 to December 31
FY2020%change

FY2019%change

Net Sales ······························································

35,812(5.5%)

37,893

2.3%

Operating Income ··················································

2,381

4.2%

2,284

133.5%

Ordinary Income ····················································

2,224

6.6%

2,087

122.4%Net Income ···························································

1,915

25.1%

1,531

692.7%Net Income per Share (¥) ········································¥40.07－¥32.03－Net Income per Share, Diluted(¥)······························

－

－

－

－

(Note) Comprehensive Income ································

1,937

28.4%

1,508

976.3%(2) Consolidated Financial Position(In Millions of Yen)
As of December 31

As of March 31

FY2020FY2019Total Assets···························································

32,68932,514

Net Assets ····························································

7,994

6,056

Shareholders’ Equity Ratio (%) ·······························

24.4%

18.5%

Net assets per share(¥)···········································¥166.67¥126.15(Reference) Equity Capital ·······································

7,967

6,030

2. Dividends
End of Quarterly Period
1st

2nd

3rd

4th

Quarter

Quarter

Quarter

Quarter
0.00

0.00

0.00

0.00

Annual(Dividends per Share)
FY2019 ended March 31, 2020 (¥) ···························

0.00

0.00

0.00

FY2020 ended March 31, 2021 (¥) ···························

0.00

0.00

0.00

FY2020 ended March 31, 2021(¥) (Forecast) ·············(Note) Revision from the most recently announced dividend forecast: None

0.00

3. Forecasts for Consolidated Business Results (April 1, 2020 to March 31, 2021)(In Millions of Yen)
Fiscal Year 2020
Full Year%change

Net Sales······························································

49,127(6.5%)

Operating Income ··················································

1,840(34.0%)

Ordinary Income ····················································

1,610(37.9%)Net Income ···························································

1,199(35.2%)Net Income per Share (¥) ········································¥25.10(Note) Revision from the most recently announced forecast of consolidated business results: Exist* Notes(1) Changes in significant subsidiaries during the period(Change in scope of consolidations resulting from change in subsidiaries): None
Number of subsidiaries newly consolidated－
Name of subsidiaries newly consolidated－
Number of subsidiaries excluded from consolidation－
Name of subsidiaries excluded from consolidation－(2) Adoption of special quarterly accounting methods: None
(3) Changes in accounting policies and accounting estimates retrospective restatementⅰ) Changes in accounting policies based on revisions of accounting standard: Noneⅱ) Changes in accounting policies other than ones based on revisions of accounting standard: Noneⅲ) Changes in accounting estimates: Noneⅳ) Retrospective restatement: None
(4) Number of Issued and Outstanding Shares (Common Stock)(Shares)
End of term
December 31,

March 31,

2020

2020

Number of issued and outstanding shares ,end of period (including treasury stock)48,919,396

48,919,396

Number of treasury stock ,end of period··································································

1,114,693

1,114,443

Average number of shares during the fiscal term ······················································

47,804,903*

47,805,182* December 31, 2019

* This summary of financial statements is exempt from audit procedure required by Financial instruments and Exchange Act.
* Note to ensure appropriate use of forecasts:
Forecasts in this document are based on assumptions, prospects and plans as of the date of this document. Actual results may
differ significantly from these forecasts, due to various factors affecting the Company’s business performance, such as change ineconomical conditions. For details of these assumptions, prospects and plans, and for notes appropriate use of forecasts for thebusiness results, please see page 5 of the Attachment.

Index of the attachment
1. Qualitative Information for the Third Quarter ended December 31, 2020 .............
(1) Information of Consolidated Business Results .............................................................................
(2) Information of Consolidated Financial Position ............................................................................

224(3) Information on the Future Outlook,
Including the Forecasts of Consolidated Business Results ........................................................

5

2. Quarterly Consolidated Financial Statements and the Primary Notes for theThird Quarter ended December 31, 2020.................................................................................

6(1) Quarterly Consolidated Balance Sheets ........................................................................................

6(2) Quarterly Consolidated Statements of Income and Comprehensive Income ..........................

8

Quarterly Consolidated Statements of Income
for the Third Quarter of the fiscal year ending March 31,2021 ...............................................

8

Quarterly Consolidated Statements of Comprehensive Income
for the Third Quarter of the fiscal year ending March 31,2021 ...............................................

9(3) Notes regarding the Quarterly Consolidated Financial Statements ..........................................

10

Note to the Assumption of a Going Concern ...........................................................................

10

Notes to Remarkable Changes in the amount of Shareholders’ Equity ..............................

10

Segment Information, etc. ........................................................................................................

11

3. Others ....................................................................................................................................................

12

Consolidated Net Sales by Division ................................................................................................

12

2

1. Qualitative Information for the Third Quarter ended December 31, 2020
(1) Information of Consolidated Business Results
In the first nine months under review (April 1, 2020 to December 31, 2020), the Japanese
economy remained in a difficult condition with the lingering effects of the COVID-19 pandemic
and no prospects for its resolution, despite the observed signs of recovery reflecting factors,
such as measures for resuming economic activities in stages.
In this social situation, SANIX INCORPORATED and its consolidated subsidiaries(hereinafter the “Group”) continued their respective operations, prioritizing prevention of theinfection’s spread.
Looking at net sales, the Solar Engineering (SE) Division started selling photovoltaic
systems for self-consumption in the current fiscal year following a feed-in tariff (FIT) systemrevision. However, the Division failed to absorb a decrease posted for the installation ofphotovoltaic systems with land attached, a business category where performance was strong
in the previous fiscal year. As a result, net sales declined ¥2,162 million year on year. In
addition, the spread of COVID-19 affected the respective business divisions, mainly in theirsales to corporate customers, including the stagnation of those customers’ economic
activities in general. Meanwhile, the pandemic’s impact on sales to individual customers was
insignificant thanks to an increase in the number of customers introduced by partnercompanies and organizations whose number has been growing for several years, though
self-restraint on sales activities produced effects. As a result, the Group's consolidated net
sales for the first nine months under review came to ¥35,812 million (down 5.5% year onyear).
Profits rose year on year, reflecting a relative fall in repair expenses due to the periodic
repair of the Tomakomai Power Plant in the previous fiscal year, in addition to net sales
growth in the Environmental Resources Development (ERD) Division, which offset a profit
decline in the SE Division. As a result, the Group posted operating income of ¥2,381 million(up 4.2% year on year), ordinary income of ¥2,224 million (up 6.6% year on year), and net
income attributable to owners of the parent company of ¥1,915 million (up 25.1% year onyear). Operating results by segment for the first three quarters under review are as follows.
a. SE (Solar Engineering) Division
In the SE Division, SANIX INCORPORATED (hereinafter the “Company”) began sellingphotovoltaic systems for self-consumption for developing a new market in the current fiscal
year, anticipating a decline in the installation of photovoltaic systems with land attached, abusiness category where performance was strong in the previous fiscal year, following therevision of the FIT system. However, sales of those systems did not progress according to theCompany’s plan due to factors including the effects of the COVID-19 pandemic. Under thesecircumstances, the Company focused on gaining small projects. Thanks to the strategy, the3number of installation cases in surplus projects grew 131.5% year on year. As a result, net
sales in this segment decreased to ¥7,706 million (down 21.9% year on year).
Operating income for the segment amounted to ¥219 million (down 70.4% year on year) due
to substantial effects caused by a sales decline, despite a fall in the ratio of materials
expenses and a reduction in selling, general and administrative expenses.
b. HS (Home Sanitation) Division
In the Home Sanitation (HS) Division, the spread of COVID-19 significantly affected sales
activities, including self-restraint on sales to new customers under a state of emergency
declared in April 2020. Despite these conditions, the number of new customers acquired by
the Division grew 18.1% year on year. Reasons for the increase included 39.9% year-on-year
growth in the number of customers introduced by partner companies with which the Division
has worked to strengthen alliances for some time. As a result, net sales for the segment
totaled ¥8,658 million (up 1.5% year on year).
Operating income for the segment came to ¥1,639 million (up 0.4% year on year), reflecting
rises in personnel and other expenses attributable to a staff expansion, which were less than
the figures forecasted for the Division.
c. ES (Establishment Sanitation) Division
The Establishment Sanitation (ES) Division experienced severe conditions due to the spreadof COVID-19, including self-restraint on sales activities to new customers and difficulties incontacting partners, such as building and condominium owners, and companies that manage
those properties. Under these conditions, the Division cultivated new customers by expanding
operating areas through initiatives, including staff expansion and the establishment of two
new stores in the Kanto area. With increased net sales at new stores, net sales for thesegment’s key anti-rust equipment installation product (brand name: Daelman Shock), grew
14.6% year on year, despite severe results at older stores. Therefore, net sales in thissegment decreased to ¥1,712 million (up 8.1% year on year).
Operating income for the segment amounted to ¥180 million (up 15.8% year on year) withthe effects of the net sales increase offsetting rises in personnel and other expenses caused
by a staff expansion.
d. Environmental Resources Development (ERD) Division
In the ERD Division, the volume of plastic waste accepted fell 7.1% year on year under theeffects of the stagnation of economic activities in general caused by the COVID-19 pandemic.
However, net sales for plastic fuel rose 5.5% year on year with the close inspection of
accepted waste and the like. Net sales for power plants also grew 5.5% year on year,
reflecting an increase in the volume of power generated. Meanwhile, net sales for final

4

disposal dropped 19.0% year on year in reaction to the acceptance of wastes fromearthquake damages in the previous fiscal year. As a result, net sales in this segment
decreased to ¥12,647 million (up 2.9% year on year).
Operating income for the segment came to ¥2,998 million (up 29.4% year on year), mainlyreflecting profitability improvement with the close inspection of accepted plastic waste and a
relative decrease in repair expenses attributable to the periodic repairs of the TomakomaiPower Plant in the previous fiscal year.
e. Energy Businees Division
In the Energy Business Division, the number of electric power retailing contracts increased
64.9%, supported by a substantial growth in low-voltage contracts. At the same time, theCompany reduced the volume of power procured on a negotiated basis to reduce the surplus
power it had sold in the electricity wholesale market (JEPX) to improve profitability. The
operation caused the volume of power sold in the JEPX to decrease. As a result, net sales forthe segment amounted to ¥6,790 million (down 4.4% year on year).
Operating income for the segment was ¥28 million (up 180.0% year on year), reflecting theimproved profitability of the new electric power business achieved with a decrease in thevolume of power procured on a negotiated basis, despite rises in personnel and otherexpenses due to a sales staff expansion for promoting a third party-owned photovoltaic power
generation model for detached houses.

(2) Information of Consolidated Financial Positiona. Information on the status of Assets, of Liabilities, and of Net Assets
Total assets at the end of the first nine months under review amounted to ¥32,689 million,
an increase of ¥174 million from the end of the previous fiscal year. The main cause of theirincrease was a growth in property, plant and equipment of ¥1,369 million, offsetting adecrease in notes and accounts receivable-trade of ¥553 million, a decline in raw materials
and supplies of ¥512 million and a fall in cash and deposits of ¥220 million.
Total liabilities stood at ¥24,695 million, a decrease of ¥1,762 million from the end of theprevious consolidated fiscal year. The decrease was primarily attributable to a reduction in
short-term loans payable of ¥1,101 million and a fall in income taxes payable of ¥626 million.
Net assets totaled ¥7,994 million, a rise of ¥1,937 million from the end of the previous
consolidated fiscal year. The key contributions to the increase included the posting of net
income attributable to the owners of the parent company of ¥1,915 million.
Consequently, the capital-to-asset ratio came to 24.4% at the end of the first nine months
under review, compared with 18.5% at the end of the previous fiscal year.

5(3) Information on the Future Outlook, Including the Forecasts of Consolidated BusinessResults
The Company revised its consolidated results forecasts for the fiscal year ending March 31,
2021 as follows as of February 12, 2021, considering the results for the first nine months
under review and factors stated below.
Net sales for the Energy Business Division is expected to grow ¥1,224 million year on year,
supported by weather factors in winter, and a rise in the volume of electricity sold and a steep
market price increase attributable to factors such as an LNG shortage. Meanwhile, operating
income for the segment is predicted to drop ¥433 million year on year and move into thenegative range.
Net sales for the SE Division is set to decline ¥1,744 million year on year, reflecting
slower-than-planned progress in photovoltaic systems for self-consumption, sales of whichbegan this fiscal year under the effects of factors such as the spread of COVID-19.
As a result, consolidated net sales for the fiscal year ending March 31, 2021 are predicted
to fall ¥610 million from the previous forecast.
The forecast of Consolidated Business Results for the full fiscal year ending March 31, 2021
(From April 1, 2020 to March 31, 2021)

Net Sales

Operating
IncomeOrdinary
Income(In Millions of Yen)
Net Income
Net Income
per Share/¥Previous Forecast(A)

49,738

1,940

1,785

1,345

¥28.14

Revised Forecast(B)

49,127

1,840

1,610

1,199

¥25.10Changes
Rate of Change
Reference:
Results for FY2019(ended March 31,2020)

(B－A)

-610

-99

-174

-145

－

(％)

(1.2)

(5.1)

(9.8)

(10.8)－

52,531

2,791

2,592

1,850

¥38.726

2. Quarterly Consolidated Financial Statements and the Primary Notes for theThird Quarter ended December 31, 2020
(1) Quarterly Consolidated Balance Sheets(In Millions of Yen)

As of Mar. 31

As of Dec. 31

FY2019FY2020Assets :Current Assets :Cash and deposits

5,919

5,699

Notes and accounts receivable-trade

5,453

4,899

56

39

Merchandise and finished goods
Work in process-construction

333

307

Raw materials and supplies

3,354

2,842

Other

1,362

1,288

Allowance for doubtful accounts

(202)

(212)

16,277

14,864

Buildings and structures (net of depreciation)

1,732

1,676

Machinery, Equipment and Vehicles(net of depreciation)

2,071

2,660

Land

8,053

8,091

Other (net of depreciation)

1,882

2,680

13,73915,109450745

Total Current Assets
Fixed Assets:
Property, Plant and Equipment :Total Property, Plant and Equipment
Intangible Fixed Assets
Investments and Other Assets :

2,047

1,969

Total Fixed Assets

16,237

17,824

Total Assets

32,51432,689

7(In Millions of Yen)

As of Mar. 31

As of Dec. 31

FY2019FY2020Liabilities :Current Liabilities :Notes and accounts payable-trade

3,716

3,234

Short-term loans payable

9,525

8,423

Current portion of long-term loans payable
Accounts payable

928

906

3,471

3,110

Accrued income taxes

687

61

Provision for bonuses

256

125

Allowance for resource-recycling expenses

5

11

Other

2,986

3,361

Total Current Liabilities

21,576

19,236

Bonds

500

500

Long-term loans payable

262

274

9

9

Non-Current Liabilities :Provision for directors’ retirement benefits
Provision for disposal site closing expenses

637

667

Liability related to retirement benefits

1,727

1,825

Other

1,744

2,181

Total Non-Current Liabilities

4,881

5,458

26,45824,695

14,041

14,041

Total Liabilities
Net Assets :Shareholders’ Equity :Capital stock
Capital surplus

1

1

Retained earnings(6,506)(4,590)Treasury stock(1,481)(1,481)

Total Shareholders’ Equity

6,055

7,971

Valuation difference on available-for-sale securities

31

44

Foreign currency translation adjustment

(90)

(56)

Accumulated other comprehensive income :Adjustment for retirement benefits (cumulative)

34

8

Total Accumulated other comprehensive income

(25)

(3)

Non-controlling Interests

26

26

Total Net Assets

6,056

7,994

Total Liabilities and Assets

32,51432,6898(2) Quarterly Consolidated Statements of Income and Comprehensive Income(Quarterly Consolidated Statements of Income)(for Third Quarter of the fiscal year ending March 31, 2021)(In Millions of Yen)

Third Quarter
From April 1 to December 31
FY2019FY2020Net sales

37,89335,812

Cost of sales

24,632

22,258Gross profit

13,26013,553

Selling, general and administrative expenses

10,976

11,172

Operating income

2,284

2,381

13

12

Non-operating income :Interest income
Dividends income22Land and house rent revenue

47

47

Subsidy income

8

10

Other

34

40

Total non-operating income

105

113

Interest expenses

153

155

Commission paid

901Foreign exchange losses

4

7

Impairment losses on fixed assets

35

63

Other

17

41

Non-operating expenses :

302

269

Ordinary income

Total non-operating expenses

2,087

2,224

Income before income taxes and minority interests

2,087

2,224

Income taxes-current

477

159

Income taxes-deferred

83

150

Total income taxes

560

309

Net Income (loss)

1,526

1,915

(4)
1,531

0
1,915

Net Income (loss) belonging to the non-controlling shareholders
Net income (loss) belonging to the shareholders of the parent

company9(Quarterly Consolidated Statements of Comprehensive Income)(for Third Quarter of the fiscal year ending March 31, 2021)(In Millions of Yen)

Third Quarter
From April 1 to December 31
FY2019Net Income (loss)
Other comprehensive income :Valuation difference on available-for-sale securities

FY2020

1,526

1,915

(10)

13

Foreign currency translation adjustment

(50)

34

Adjustment for retirement benefit adjustment

42

(25)

Total other comprehensive income
Comprehensive net income

(18)

21

1,508

1,937

1,513

1,937

(4)

0

(Breakdown)Comprehensive income belonging to the shareholders of the parent
company
Comprehensive income belonging to non-controlling shareholders

10(3) Notes regarding the Quarterly Consolidated Financial Statements(Notes to the Assumption of a Going Concern): None(Notes to Remarkable Changes in the amount of Shareholders’ Equity): None11(Segment Information, etc.)
Ⅰ The previous third Quarter (From April 1, 2019 to December 31, 2019)ⅰ) Information concerning the Amount of Net Sales and Operating Income (loss)
by Segment(In Millions of Yen)

Segments

Elimination
or Group(note 1)

Consolidated(note 2)

SE

HS

ES

ERD

Energy

Total

9,869

8,529

1,584

10,805

7,103

37,893-37,893

-

-

-

1,488

-

1,488

(1,488)

-

9,869

8,529

1,584

12,294

7,103

39,381(1,488)37,893

741

1,633

155

2,317

10

4,858

(2,574)

2,284

Sales:
Sales to customers
Internal sales
Among segments andtransfer accounts
Total
Operating income (loss)(note 1)
Negative ¥2,574 million for adjustments of Operating income (loss) represents corporate expenses not allocatedto reportable segments. Corporate expenses are mainly general and administrative expenses note attributable toreportable segments.
(note 2)
Operating income (loss) is adjusted to operating loss of quarterly consolidated statements of income.

Ⅱ The Third Quarter (From April 1, 2020 to December 31, 2020)ⅰ) Information concerning the Amount of Net Sales and Operating Income (loss) by
Segment(In Millions of Yen)

SE

HS

ES

ERD

EnergyTotal

Elimination
or Group(note 1)

7,706

8,658

1,712

10,9506,785

35,812-35,812

-

-

-

1,696

5

1,702

(1,702)

-

7,706

8,658

1,712

12,647

6,790

37,514(1,702)35,812

219

1,639

180

2,998

28

5,067

(2,686)

2,381

Segments

Consolidated(note 2)

Sales:
Sales to customers
Internal sales
Among segments andtransfer accounts
Total
Operating income (loss)(note 1)
Negative ¥2,686 million for adjustments of Operating income (loss) represents corporate expenses not allocatedto reportable segments. Corporate expenses are mainly general and administrative expenses note attributable toreportable segments.
(note 2)
Operating income (loss) is adjusted to operating loss of quarterly consolidated statements of income.

12

3. Others
Consolidated Net Sales by Division(In Millions of Yen)

From April 1 to December 31
FY2019Commercial PV system
Wholesale of PV components
Others

FY2020Changes

9,581

7,481

(2,100)

186

153

(32)

101

71

(30)

Solar Engineering Division Total

9,869

7,706

(2,162)

Termite Eradication Service

2,762

2,756

(5)

Under-Floor/Roof Ventilation System

1,843

2,233

390

Foundation Repairing/Home Reinforcement
System

1,388

1,273

(114)

Others

2,535

2,394

(141)

Home Sanitation Division Total

8,529

8,658

128

Anti-rust equipment installation

763

875

111

Repair of building water-woks

329

426

97

Water proofing of building

213

127

(85)

Others

278

282

4

1,584

1,712

127

7,484

7,897

412

2,211

2,334

122

1,473

1,408

(64)

Final disposal

722

584

(137)

OthersEnvironmental
Division Total :

402

422

20

Establishment Sanitation Division Total
Plastic fuelPower Stations
Industrial waste
Recycle)(Organic

Resources

Waste

Water

Development
12,294

12,647353

Electricity sales
OthersEnergy Business Division Total:

7,032
71
7,103

6,372
417
6,790

(659)
346
(313)

Adjustment of inter-segment sales(1,488)(1,702)(213)

Total Net Sales

37,89335,812(2,080)