Consolidated Financial Results for the nine months ended December 31, 2023
(Japanese Accounting Standards)
February 2, 2024
Company name:
SHOFU INC.
Listing:
Tokyo Stock Exchange (Prime Market)
Code number:
7979
URL:
https://www.shofu.co.jp/
Representative:
Tetsuo Takami, Representative Director, President & Chief Operating Officer
Contact:
Takashi Morimoto, General Manager of Finance Department
Scheduled date for filing of quarterly securities report: February 7, 2024
Scheduled commencement date of dividend payment:－
Supplementary materials for quarterly financial results: Yes
Quarterly financial results briefing held: No(All amounts are rounded down to the nearest million yen)
1．Consolidated Financial Results for the nine months ended December 31, 2023(April 1, 2023 –December 31,2023)(1) Consolidated Operating Results(% indicates changes from previous fiscal year)
Net sales

Operating income

Net income attributableto owners of parent

Ordinary income

Millions of yen％

Millions of yen％

Millions of yen％

Millions of yen％

25,403

7.0

3,409

3.6

3,692

0.8

2,747

-1.7

23,742

13.0

3,290

10.4

3,664

11.9

2,796

19.2

Nine months ended
December 31, 2023
Nine months ended
December 31, 2022

(Note) Comprehensive income:Nine Months ended December 31, 2023 4,259 million yen （32.9％）
Nine Months ended December 31, 2022 3,206 million yen （30.3％）
Third quarter
net income (loss)
per share

Third quarter
fully diluted
net income (loss) per share

Yen

Yen

154.97154.25156.89156.23Nine months ended
December 31, 2023
Nine months ended
December 31, 2022

(2) Consolidated Financial Position
Total assets

As ofDecember 31, 2023
As ofMarch 31, 2023

Net assets

Equity ratio

Net assets per share

Millions of yen

Millions of yen％

Yen

45,72438,71284.3

2,173.06

43,72735,51580.8

1,996.64(Reference) Shareholder’s equity: Nine Months ended December 31, 2023 38,557 million yen
Year ended March 31, 2023
35,342 million yen
2．Dividends
End offirst quarter
Yen

Annual dividends per share
End of
End ofYear-end
second quarter third quarter
Yen

Year ended March 31,2023

―

15.00

Year ending March 31,2024

―

20.00

Year ending March 31,2024(Forecasts)

Yen

Total

Yen

Yen

―

42.00

57.00

―

38.00

58.00

(Notes) Revision to the dividend forecast during the current quarter: Yes(Notes) Year-end dividends for the fiscal year ended March 31, 2023 include commemorative dividend of 10.00 yen.
(The 100th anniversary of the Company’s founding)3．Estimate of Consolidated Operating Results for Fiscal Year Ending March 31, 2024 (April 1, 2023 – March 31, 2024)(% indicates changes from previous fiscal year)
Net salesYear ending
March 31,2024

Operating income

Net income
attributable toowners of parent

Ordinary income

Net income
per share

Millions of yen％

Millions of yen％

Millions of yen％

Millions of yen％

Yen

34,888

10.1

4,308

12.6

4,572

7.9

3,204

2.2

180.70(Notes) Revision during the current quarter to previously disclosed consolidated forecasts: None
*Notes(1) Changes in significant subsidiaries during the period (Changes in Specified Subsidiaries resulting in change in scope of
consolidation):
None(2) Adoption of accounting methods specific to the preparation of quarterly financial statements:

Yes(3) Changes in accounting policies, procedures, or indication methods:(a) Changes in accounting policies: None(b) Changes in accounting policies due to other reasons:None(c) Changes in accounting estimates: None(d) Retrospective restatements:
None(4) Number of shares outstanding (common stock)(a) Number of shares outstanding at end of period (including treasury stock).
As of December 31, 2023: 17,894,089 shares
As of March 31, 2023:
17,894,089 shares(b) Number of treasury stock at end of period
As of December 31, 2023: 150,924 shares
As of March 31, 2023:
192,907 shares(c) Average number of shares during the period (cumulative from the beginning of the year)
As of December 31, 2023: 17,728,277 shares
As of December 31, 2022: 17,822,476 shares* These quarterly earnings reports are not subject to quarterly review by a certified public accountant or an audit firm.
*Explanation about the appropriate use of earnings forecasts, and other special matters
Consolidated earnings forecasts and other statements regarding the future included in this report are based on currently
available information and certain assumptions. Actual results may differ from forecasts due to known or unknown factors.
With regards assumptions behind the forecasts, please refer to the “Future Forecasts including Consolidated BusinessResults Forecasts” section on page 3.

Accompanying Materials－Contents
1．Qualitative information related to financial results for the period under review ...................................................................2(1) Business Results................................................................................................................................................2(2) Financial Position .............................................................................................................................................. 2(3) Future Forecasts including Consolidated Business Results Forecasts ...................................................................3
2．Quarterly Consolidated Financial Statements and Notes .......................................................................................................4(1) Quarterly Consolidated Balance Sheets ..............................................................................................................4(2) Quarterly Consolidated Statements of Income and Comprehensive Income ......................................................... 6(3) Quarterly Consolidated Financial Statements ......................................................................................................7(Notes on Assumptions for Going Concern) ...........................................................................................................7(Notes on Material Changes in the Amount of Shareholders’ Equity) .................................................................... 7(Application of Special Accounting Processing in the Compilation of Quarterly Financial Statements) ................... 7(SEGMENT INFORMATION)................................................................................................................................. 7

1

1. Qualitative information related to financial results for the period under review(1) Business Results
During the nine months of the consolidated fiscal year under review, the global economy showed signs of arecovery as a result of economic policies of various countries, but the outlook remained uncertain due to concerns
about accelerating global inflation and prolonged monetary tightening in the US and European countries. The
domestic economy also showed a gradual recovery as socio-economic activities normalized. However, lingering
uncertainty remained regarding the outlook owing to downside risks in overseas economies and the impact of rising
prices.
The Company Group posted net sales of ¥25,403 million for the nine months under review, an increase of ¥1,661
million (7.0%) from the corresponding period in the previous consolidated fiscal year. The overseas portion of net
sales increased by ¥1,621 million (12.5%) to ¥14,590 million (57.4% of net sales).
Operating income increased by ¥119 million (3.6%) year-on-year to ¥3,409 million, due to the effect of higher
sales, despite an increase in selling, general, and administrative expenses.
Ordinary income increased by ¥28 million (0.8%) year-on-year to ¥3,692 million despite a decline in net
non-operating items as a result of a decrease in foreign exchange gains and an increase in club membership costs.
Despite an extraordinary gain of ¥285 million booked on the sale of investment securities, net income attributableto owners of parent fell by ¥48 million (1.7%) year-on-year to ¥2,747 million due to a rise in tax expenses.
(Dental Business)
In Japan, the intraoral digital camera “EyeSpecial C-V”, the self-adhesive resin cement “BeautiLinkSA” launchedin the period under review, and CAD/CAM-related products contributed to sales, but demand for machinery andequipment hit a lull, resulting in lower sales compared to the same period last year. Overseas, sales increased
year-on-year due to solid sales expansion of existing products, especially in Europe and Asia, as well as the positive
impact of exchange rate fluctuations.
As a result, net sales for the nine months under review increased by ¥1,600 million (7.3%) year-on-year to ¥23,550
million, and operating income increased by ¥161 million (5.0%) to ¥3,384 million, despite a rise in selling, general,and administrative expenses.
(Nail Care Business)
In Japan, the domestic professional market, especially for exhibitions, is recovering to levels prior to thecoronavirus pandemic, and sales of mainstay gel nail products increased, resulting in an increase in sales compared tothe corresponding period of the previous fiscal year. Overseas, although sales in the US decreased year-on-year due tothe decline in consumption stemming from inflation, sales in Taiwan rose year-on-year thanks to strong sales ofconsumer products.
Overall, net sales for the nine months under review increased by ¥75 million (4.4%) year-on-year to ¥1,795 million,
but operating income decreased by ¥45 million (79.2%) year-on-year to ¥11 million due to a rise in the cost of sales
ratio and an increase in selling, general, and administrative expenses.

(Other Businesses)
Group company SHOFU PRODUCTS KYOTO INC. uses dental abrasives manufacturing technology to
manufacture and sell industrial abrasives. Net sales in the “Other Businesses” segment for the nine months underreview decreased by ¥14 million (20.6%) year-on-year to ¥57 million, but operating income increased by ¥3 million(62.5%) to ¥9 million.

(2) Financial Position
Total assets at the end of the third quarter under review increased by ¥1,997 million from the previous fiscal year
end to ¥45,724 million. This was primarily due to a rise in merchandise and finished goods, as well as higher
2market prices for investment securities.
Liabilities fell by ¥1,199 million from the previous fiscal year end to ¥7,011 million. This was primarily due to adecrease in current liabilities such as current portion of long-term loans payable and accounts payable - facilities.
Net assets increased by ¥3,197 million from the previous fiscal year end to ¥38,712 million. This was primarily due
to rises in retained earnings, valuation difference on securities and foreign currency translation adjustment.
As a result, the equity ratio rose to 84.3%, an increase of 3.5 points from the end of the previous consolidated fiscal
year.

(3) Future Forecasts including Consolidated Financial Forecasts
We have not revised our earnings forecast announced on October 24, 2023 for the fiscal year ending March 31,
2024.

3

2. Quarterly Consolidated Financial Statements and Primary Notes(1)Quarterly Consolidated Balance Sheets（Millions of yen）
End of Third Quarter of
Fiscal 2024
(as of December 31, 2023)

Previous fiscal year
(as of March 31, 2023)
AssetsCurrent assets
Cash and deposits

9,578

8,668

Notes and accounts receivable-trade

3,493

3,742

Merchandise and finished goods

5,854

7,153

Work in process
Raw materials and supplies
Other

1,413
1,124
775

1,662
1,227
885

Allowance for doubtful accounts
Total current assets

(19)

(50)

22,22023,289Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net

11,501

11,718(6,249)(6,518)

5,252

5,200

12,46313,005

Accumulated depreciation(7,720)(8,060)

Other, net

4,743

4,944

9,995

10,144462

483

Investment securities

9,049

9,793

Net defined benefit asset

1,316

1,308

Other

686

711

Allowance for doubtful accounts

(5)

(6)

Other

Total property, plant and equipment
Intangible assets
Investments and other assets

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

4

11,047

11,80721,50622,43443,72745,724

（Millions of yen）
End of Third Quarter of
Fiscal 2024
(as of December 31, 2023)

Previous fiscal year
(as of March 31, 2023)
Liabilities
Current liabilities
Accounts payable-trade

1,011

1,116

Current portion of long-term loans payable

907

162

Income taxes payable

780

805

Provision for directors' bonuses

64

46

Other

3,185

2,482

Total current liabilities

5,949

4,613

Long-term loans payable

281

200

Net defined benefit liability

207

208

Other

1,773

1,989

Total non-current liabilities

2,262

2,398

8,211

7,011

Capital stock

5,968

5,968

Capital surplus

6,142

6,134

Retained earnings

18,406

20,055

Treasury shares

(379)

(297)

Total shareholders' equity

30,13831,861

Valuation difference on securities

3,201

3,875

Foreign currency translation adjustment

1,348

2,228

Remeasurements of defined benefit plans

655

591

5,204

6,695

99

79

Non-current liabilities

Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income

Total accumulated other comprehensive income
Subscription rights to shares

73

76

Total net assets

35,51538,712

Total liabilities and net assets

43,72745,724Non-controlling interests5(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income（Millions of yen）
Third Quarter of Fiscal 2023
(from April 1, 2022
to December 31, 2022)

Net sales
Cost of sales
Gross profit
Selling, general, and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Club membership income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Club membership costs
Share of loss of entities accounted for using equity method
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Settlement income
Total extraordinary income
Net income before income taxes
Income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent

Third Quarter of Fiscal 2024
(from April 1, 2023
to December 31, 2023)

23,742
9,734
14,008
10,7173,290

25,403
10,184
15,21911,809
3,409

28
139
78
168
119
535

43
167
108
128
157
606

9
124
1
26
161
3,664

16
242
11
53
323
3,692

59
112
171
3,836
1,020
2,815
19
2,796

285
285
3,977
1,212
2,765
18
2,747

Quarterly Consolidated Statements of Comprehensive Income（Millions of yen）
Third Quarter of Fiscal 2023
(from April 1, 2022
to December 31, 2022)

Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

6

Third Quarter of Fiscal 2024
(from April 1, 2023
to December 31, 2023)

2,815

2,765

(214)
676
(71)
390
3,206

674
883
(63)
1,496
4,259

3,186
19

4,238
21

(3) Quarterly Consolidated Financial Statements(Notes on Assumptions for Going Concern)
Not applicable.
(Notes on Material Changes in the Amount of Shareholders’ Equity)
Not applicable.
(Application of Special Accounting Processing in the Compilation of Quarterly Financial Statements)(Calculation of tax expenses)
To calculate tax expenses, we make a reasonable estimate of the effective tax rate after the application of tax
accounting to current net income before tax for the current consolidated fiscal year and then multiply the current
net income before tax for the period under review by this estimated effective tax rate. However, where use ofthis estimated effective tax rate to calculate tax expenses results in an unreasonable figure, we use the legal
effective tax rate instead.
(Segment Information)
1． Information regarding sales, profits (losses) by reportable segment and revenue breakdown
For the nine months ended December 31, 2022 (From April 1, 2022 to December 31, 2022)

Reporting segments(Millions of yen)
Consolidated
Adjustment
financial*1statements*2

DentalBusiness

Nail Care
Business

Other
Businesses

Total

21,9491,719

72

23,742-

23,742

-

-

3

3

(3)

-

Total

21,9491,719

76

23,746(3)

23,742

Segment income

3,222

57

5

3,286

4

3,290

Net sales
Sales to external customers
Internal sales or transfers*1. The ¥4 million adjustment to segment income/loss serves to cancel out transactions between segments.
*2. Segment income equals the operating income on quarterly consolidated financial statements.

(Millions of yen)
Reporting segments

Domestic
North and Latin America
EuropeAsia
Revenue from contracts with customers

DentalBusiness
10,310
2,753
4,718
4,166

Nail Care
Business
981
207
530

Other
Businesses
72-

21,949

1,719

72

-

Other revenue
Sales to external customers

21,949
7

1,719

72

11,365
2,961
4,718
4,697
23,742

-

-

Total

23,742

(Note) Sales to external customers are divided into countries and regions according to the location of the Company
and its consolidated subsidiaries.
For the nine months ended December 31, 2023 (From April 1, 2023 to December 31, 2023)

Reporting segments(Millions of yen)
Consolidated
Adjustment
financial*1statements*2

DentalBusiness

Nail Care
Business

Other
Businesses

Total

23,5501,795

57

25,403-25,403

4

4

(4)

-

Net sales
Sales to external customers
Internal sales or transfers

-

-

Total

23,5501,795

6225,408(4)

25,403

Segment income

3,384

11

9

3,405

4

3,409

*1. The ¥4 million adjustment to segment profit/loss serves to cancel out transactions between segments.
*2. Segment profit equals the operating income on quarterly consolidated financial statements.

(Millions of yen)
Reporting segments

Domestic
North and Latin America
EuropeAsia
Revenue from contracts with customers

DentalBusiness
10,255
2,946
5,473
4,874

Nail Care
Business
1,042
171
581

Other
Businesses
57-

23,550

1,795

57

-

Other revenue
Sales to external customers

23,5501,795

57

11,355
3,117
5,473
5,456
25,403

-

-

Total

25,403(Note) Sales to external customers are divided into countries and regions according to the location of the Company
and its consolidated subsidiaries.

8