FY3/22 1Q Consolidated Financial Statements[J-GAAP]

August 11, 2021
Tokyo Stock Exchange (First Section)
https://www.matsuda-sangyo.co.jp

Company name:Company code:
Representative:

Matsuda Sangyo Co., Ltd.
Exchanges listed on:
7456
URL:
President
Yoshiaki Matsuda
Executive Officer/
Inquiries:
Yoshinori Tanaka
General Manager of IR Dept.
Filing date of quarterly report:
August 12, 2021
Date to start dividends distribution:－
Supplementary quarterly materials prepared:
None
Results briefing for quarterly financial results
None
held:
1. FY3/22 1Q consolidated results (April 1, 2021 – June 30, 2021)(1) Consolidated results
Net sales(millions of yen)

FY3/22 1Q

70,120FY3/21 1Q

53,540(Note) Comprehensive income:(Percentages are year-on-year changes)

Profit attributable toowners of parent

Ordinary profit(%) (millions of yen)

31.0

4,189

156.4

7.6

1,634

2.8

FY3/22 1Q: ¥3,622 million (+323.0%)

Earnings per share+81-3-5381-0728(Figures are rounded down to the nearest million yen)

Operating profit(%) (millions of yen)

TEL:(%) (millions of yen)

(%)

4,311

155.9

2,987

165.7

1,684

3.9

1,124

2.3

FY3/21 1Q: ¥856 million (-1.3%)

Diluted earnings per share
(yen)

(yen)

FY3/22 1Q

114.51－

FY3/21 1Q

42.70

－

(Note) Effective from the start of the first quarter of FY3/22, the Company has applied the “Accounting Standard for Revenue
Recognition” (ASBJ Guidance No. 29), etc. The above amounts for FY3/22 1Q reflect the new accounting standard.

(2) Consolidated financial position
Total assets

Shareholders’ equity ratio(millions of yen)(millions of yen)(%)

101,780

68,93667.6

65,605

62.8

End-FY3/22 1Q
End-FY3/21(Reference) Shareholders’ equity:

Net assets

104,265
End-FY3/22 1Q: ¥68,814 million

End-FY3/21: ¥65,494 million

2. Dividends
1Q
FY3/21－

FY3/22－

FY3/22 (Projections)

(yen)

2Q

(yen)

Annual dividends
3Q
(yen)

4Q

(yen)

Annual

(yen)

18.00

－

20.00

38.00

21.00

－

21.00

42.00

(Note) Revisions to the most recently announced projections of dividends: None

3. Consolidated earnings projections for FY3/22 (April 1, 2021 – March 31, 2022)(Percentages are year-on-year changes)

Net sales
1H FY3/22
FY3/22(millions of yen)

Operating profit(%) (millions of yen)

Profit attributable to Earnings perowners of parent
share

Ordinary profit(%) (millions of yen)(%) (millions of yen)

(%)

(yen)

130,000

16.4

6,500

77.2

6,700

81.9

4,600

68.2

176.33250,000

8.0

10,70033.1

11,100

32.6

7,700

26.3

295.17(Note) Revisions to the most recently announced projections of consolidated earnings: Yes* Notes(1) Material changes in subsidiaries during the period (changes in specified subsidiaries resulting fromchanges in scope of consolidation): No(2) Application of special accounting treatment in preparing the quarterly consolidated financial statements: No(3) Changes in accounting policies, changes in accounting estimates and restatement of revisions
1) Changes in accounting policies with revision of accounting standards: Yes
2) Changes in accounting policies other than the above:No3) Changes in accounting estimates:
No4) Restatement of revisions:No(4) Number of issued shares (common shares)
1) Number of issued shares(including treasury shares)
2) Number of treasury shares
3) Average number of shares
during the period

End-FY3/22 1Q

28,908,581 shares End-FY3/21

28,908,581 shares

End-FY3/22 1Q

2,822,141 shares End-FY3/21

2,821,968 shares

FY3/22 1Q

26,086,501 shares FY3/21 1Q

26,324,546 shares* This quarterly kessan tanshin document is outside the scope of audit procedures conducted by certified public
accountants and the independent auditor.
* Explanation of the proper use of earnings projections and other notes
This document contains earnings projections and other information that constitute forward-looking statements. Thesestatements are based on reasonable assumptions and information currently available to the Company and provide
no guarantee of future performance. Actual results may differ materially from forward-looking statements due to anumber of factors. For more information about earnings projections, please refer to “1. Qualitative information on
consolidated results during the period, (3) Qualitative information on consolidated earnings projections” on page 3 ofthe attached documents.

Contents of Attached Document
None ................................................................................................................................................................... 1
None ................................................................................................................................................................... 1

1. Qualitative information on consolidated results during the period ................................................ 2(1) Qualitative information on consolidated results ......................................................................................... 2(2) Qualitative information on consolidated financial position......................................................................... 2(3) Qualitative information on consolidated earnings projections ................................................................... 3

2. Quarterly consolidated financial statements and related notes...................................................... 4(1) Quarterly consolidated balance sheets ....................................................................................................... 4(2) Quarterly consolidated statements of income and comprehensive income ............................................... 6(3) Quarterly consolidated statements of cash flows ....................................................................................... 8(Notes on premise of a going concern)............................................................................................................ 10(Notes on significant changes in the amount of shareholders’ equity) ............................................................... 10(Changes in accounting policy) ....................................................................................................................... 10(Segment information, etc.) ............................................................................................................................ 111

1. Qualitative information on consolidated results during the period(1) Qualitative information on consolidated results
In the first three months of the fiscal year ending March 31, 2022, conditions in the Japanese economy remained
challenging due to the impact of the COVID-19 pandemic. Despite some signs of a pickup in production activity andcorporate earnings, consumer spending and other indicators remained weak.
Against that backdrop, the Matsuda Sangyo Group (the Group) worked to prevent the spread of infection in Japanand overseas by prioritizing the health and safety of employees and all people associated with the Group, while also
working to expand the Group’s businesses to support sustained growth and increased corporate value. The precious
metals business segment stepped up marketing activities and actively used production sites in Japan and overseas
to secure precious metals materials, boost sales of products such as precious metal chemical products and expand
its industrial waste treatment outsourcing business. In addition, the food business segment worked to increase sales
volume by sourcing products that meet increasingly diverse customer needs and by ensuring stable supplies of safeand reliable food products.
As a result of the above, for the first three months of the fiscal year ending March 31, 2022, consolidated net sales
were ¥70,120 million (up 31.0% year on year), operating profit was ¥4,189 million (up 156.4% year on year), ordinary
profit was ¥4,311 million (up 155.9% year on year), and profit attributable to owners of parent was ¥2,987 million (up165.7% year on year).
Effective from the start of the first quarter of FY3/22, the Company has applied the “Accounting Standard for
Revenue Recognition” (ASBJ Guidance No. 29, March 31, 2020; “Revenue Recognition Standard”), etc. In the firstquarter, the application of the accounting standard reduced net sales by ¥4,008 million and increased operating profit,
ordinary profit and profit before income taxes by ¥114 million. For more details, please refer to “2. Quarterly
consolidated financial statements and related notes, (4) Notes on consolidated financial statements, (Changes inaccounting policy) and (Segment information, etc.).”Performance in the Matsuda Sangyo Group’s business segments was as follows.
Precious metals business segment
In the electronics sector, the key market for the precious metals business segment, conditions improved from theslump in 1Q last year caused by the COVID-19 pandemic, with production activity rebounding sharply in the electronicparts and devices field, spurred by a recovery in the autos and smartphone markets and growth in telecom
infrastructure due to the rollout of 5G. Against that backdrop, sales and operating profit both increased comparedwith the same period of the previous fiscal year, reflecting higher volumes for precious metal recycling and industrial
waste treated on an outsourcing basis, as well as an increase in sales volume for gold and silver products and higher
prices for precious metals in general.
As a result, net sales for the precious metals business segment totaled ¥49,752 million (up 47.2% year on year),and operating profit was ¥3,410 million (up 155.6% year on year).
Food business segment
In the food processing sector, the key market for the food business segment, stay-at-home demand remained firm
amid a continued impact from the COVID-19 pandemic, but conditions were still challenging overall due to weak
demand for commercial-use food products. In addition, ongoing disruption to global supply chains remained a risk tostable supplies of food ingredients. Against that backdrop, the food business segment reported higher sales andoperating profit compared with the same period of the previous fiscal year, supported by an increase in sales volumes
for seafood products, livestock products and agricultural products.
As a result, net sales for the food business segment were ¥20,386 million (up 3.2% year on year), and operating
profit was ¥779 million (up 159.9% year on year).

(2) Qualitative information on consolidated financial position(1) Assets, liabilities and net assets
AssetsTotal assets as of the end of the first three months were ¥101,780 million, a decrease of ¥2,485 million from theprevious fiscal year end. This mainly reflected the difference between increases for cash and deposits and notes andaccounts receivable – trade and decreases for inventories and other current assets.
Liabilities
Total liabilities as of the end of the first three months were ¥32,844 million, a decrease of ¥5,815 million from theprevious fiscal year end. This primarily reflected the difference between an increase for accounts payable – tradeand decreases for short-term and long-term loans payable, income taxes payable, provision for bonuses and othercurrent liabilities.

2

Net assets
Net assets as of the end of the first three months were ¥68,936 million, an increase of ¥3,330 million from the previous
fiscal year end. This mainly reflected an increase in retained earnings, which outweighed year-end cash dividends
paid of ¥521 million. The increase in retained earnings includes an adjustment of ¥229 million at the start of the firstquarter related to the application of the Revenue Recognition Standard.
(2) Cash flows status
As of the end of the first three months under review, the balance of cash and cash equivalents (hereafter, “cash”)
stood at ¥9,716 million, an increase of ¥912 million from the previous fiscal year end.
Cash flows from operating activities
Operating activities provided net cash of ¥8,353 million. This mainly reflected the difference between cash provided
from profit before income taxes, depreciation, increase in accounts payable – trade, and decrease in inventories on
the one hand, and cash used for increase in notes and accounts receivable – trade and income taxes paid on theother. Compared with the same period in the previous fiscal year, when operating activities provided net cash of ¥347
million, cash from operating activities increased by ¥8,005 million.
Cash flows from investing activities
Investing activities used net cash of ¥551 million. This was mainly due to the purchase of property, plant andequipment related to the installation and upgrade of production equipment and machinery. Compared with the same
period in the previous fiscal year, when investing activities used net cash of ¥1,218 million, cash used by investing
activities decreased by ¥666 million.
Cash flows from financing activities
Financing activities used net cash of ¥7,050 million. This mainly reflected a decrease in short-term loans payable,
repayments of long-term loans payable and payment of year-end dividends. Compared with the same period in theprevious fiscal year, when financing activities provided net cash of ¥87 million, cash from financing activities
decreased by ¥7,138 million.

(3) Qualitative information on consolidated earnings projections
For details about the Group’s earnings projections, please refer to the press release issued on August 11, 2021,“Revisions to Earnings Projections.”3

2. Quarterly consolidated financial statements and related notes(1) Quarterly consolidated balance sheets(millions of yen)
End-FY3/21(As of March 31, 2021)

End-FY3/22 1Q(As of June 30, 2021)

AssetsCurrent assets
Cash and deposits

8,803

9,716

Notes and accounts receivable – trade23,901

26,458Merchandise and finished goods

26,578

22,108Work in process

536

595

Raw materials and supplies

11,266

11,576

Accounts receivable - other

1,449

1,398

Others

4,073

2,396

Allowance for doubtful accounts

(128)

(70)

76,482

74,179Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures

12,182

12,285

Accumulated depreciation(5,729)(5,872)

Buildings and structures, net

6,452

6,413

Machinery, equipment and vehicles

11,46911,708

Accumulated depreciation(8,288)(8,551)

Machinery, equipment and vehicles, net

3,180

3,157

Land

8,736

8,763

Leased assets

1,814

1,821

Accumulated depreciation

(858)

(931)

Leased assets, net

955

889

Construction in progress

612

752

1,458

1,504

(1,188)(1,232)270

271

20,20920,249Others515

495

Total intangible assets

515

495

Investment securities

4,947

5,060

Deferred tax assets

499

161

Others
Accumulated depreciation
Others, net
Total property, plant and equipment
Intangible assets

Investments and other assets

Others

1,642

1,664

Allowance for doubtful accounts

(30)

(30)

Total investments and other assets

7,058

6,855

Total non-current assets

27,78327,600Total assets

104,265

101,7804

(millions of yen)
End-FY3/21(As of March 31, 2021)

End-FY3/22 1Q(As of June 30, 2021)

Liabilities
Current liabilities
Accounts payable – trade

9,744

12,041

Short-term loans payable

9,007

3,014

Current portion of long-term loans payable

1,488

1,388

407

366

1,708

1,382

Lease obligations
Income taxes payable
Provision for bonuses

976

563

Accounts payable - other

1,564

1,455

Others

4,448

3,660

Total current liabilities

29,34323,872

Non-current liabilities
Long-term loans payable

5,827

5,480

Lease obligations

566

534

Deferred tax liabilities

36

93

Provision for directors’ retirement benefits

701

709

18

20

2,137

2,103

28

29

9,315

8,971

38,65932,844

3,559

3,559

Provision for executive officers’ retirement
benefits
Net defined benefit liability
OthersTotal non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus

4,008

4,008

Retained earnings

61,24863,943

Treasury shares(3,411)(3,411)

Total shareholders’ equity

65,40468,099Valuation difference on available-for-salesecurities

617

609

Deferred gains or losses on hedges

(70)

109

Foreign currency translation adjustment

671

1,052

(1,127)(1,056)

Accumulated other comprehensive income

Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

5

89

715

111

121

65,60568,936104,265

101,780

(2) Quarterly consolidated statements of income and comprehensive income[Quarterly consolidated statements of income](millions of yen)
FY3/21 1Q(April 1, 2020 –June 30, 2020)

FY3/22 1Q(April 1, 2021 –June 30, 2021)

Net sales

53,54070,120

Cost of sales

47,97861,751Gross profit

5,561

8,368

Selling, general, and administrative expenses

3,926

4,178

Operating profit

1,634

4,189

Interest income

1

2

Dividend income

11

12

Share of profit of entities accounted for using
equity method

3

114

Purchase discounts

2

3

Insurance claim income

07Foreign exchange gains

53-

Others8

11

Total non-operating income

82

152

Non-operating income

Non-operating expenses
Interest expenses

19

15

Foreign exchange losses-

6

Loss on retirement of non-current assets

90

Others38

Total non-operating expenses

32

30

Ordinary profit

1,684

4,311

Profit before income taxes

1,684

4,311

Income taxes – current

236

1,132

Income taxes – deferred

321

186

Total income taxes

558

1,319

1,126

2,992

2

5

1,124

2,987

ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

6

[Quarterly consolidated statements of comprehensive income](millions of yen)
FY3/21 1Q(April 1, 2020 –June 30, 2020)
ProfitFY3/22 1Q(April 1, 2021 –June 30, 2021)
1,126

2,992

Valuation difference on available-for-salesecurities

25

(7)

Deferred gains or losses on hedges

Other comprehensive income

87

182

Foreign currency translation adjustment

(447)

377

Remeasurements of defined benefit plans

78

70

Share of other comprehensive income (loss) ofentities accounted for using equity method

(14)

7

Total other comprehensive income (loss)

(270)

630

856

3,622

Comprehensive income attributable to ownersof parent

855

3,612

Comprehensive income attributable to noncontrolling interests

09Comprehensive income
Comprehensive income attributable to7(3) Quarterly consolidated statements of cash flows(millions of yen)
FY3/21 1Q(April 1, 2020 –June 30, 2020)

FY3/22 1Q(April 1, 2021 –June 30, 2021)

Cash flows from operating activities
Profit before income taxes

1,684

4,311

Depreciation

411

502

Increase (decrease) in allowance for doubtful accounts

(41)

(58)

Increase (decrease) in provision for bonuses

(383)

(412)

Increase (decrease) in net defined benefit liability

72

67

Increase (decrease) in provision for directors’ retirement benefits

10

10Increase (decrease) in provision for executive officers’ retirement
benefits

1

1

Interest and dividend income

(13)

(14)

Interest expenses

19

15

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

(3)

(114)

(2,686)(2,441)

939

4,209

1,689

2,205

Others

(46)

1,486

Subtotal

Decrease (increase) in notes and accounts receivable – trade
Decrease (increase) in inventories
Increase (decrease) in accounts payable – trade

1,652

9,770

Interest and dividend income received

13

14Interest paid

(19)

(15)

(1,298)(1,416)

347

8,353

Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment(1,172)(525)

Purchase of intangible assets

(33)

(7)

Purchase of investment securities

(1)

(1)

Others(10)(16)(1,218)(551)

Net cash provided by (used in) investing activities8

(millions of yen)
FY3/21 1Q(April 1, 2020 –June 30, 2020)

FY3/22 1Q(April 1, 2021 –June 30, 2021)

Cash flows from financing activities
Net increase (decrease) in short-term loans payable(486)(5,992)

Proceeds from long-term loans payable

1,500

-

Repayments of long-term loans payable

(317)

(447)

Cash dividends paid

(447)

(521)

Purchase of treasury shares

(60)

(0)

Others

(100)

(88)

87

(7,050)

(241)

161

Net increase (decrease) in cash and cash equivalents(1,024)912

Cash and cash equivalents at beginning of period

11,652

8,803

Cash and cash equivalents at end of period

10,627

9,716

Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents9(4) Notes on quarterly consolidated financial statements(Notes on premise of a going concern)
There is nothing to report.

(Notes on significant changes in the amount of shareholders’ equity)
There is nothing to report.

(Changes in accounting policy)(Application of Accounting Standard for Revenue Recognition, etc.)
The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31,
2020; “Revenue Recognition Standard”), etc. from the beginning of the first quarter of the fiscal year ending March 31,
2022. Under the new standard, the Company recognizes revenue when control of promised goods or services istransferred to a customer, with the amount expected to be received upon exchange of the goods or services recognized
as revenue. Previously, revenue in the precious metals business segment and the food business segment wasrecognized as an aggregate amount. However, as a result of the application of the accounting standard, goods orservices for which the Group is deemed to have performed a role in supplying them to customers (directly or as anagent), net amounts are recognized for revenue for goods and services provided as an agent. In addition, the timing of
the transfer of goods and services in the precious metals business segment and the food business segment has beenaligned with contracts. Furthermore, in paid supply transactions in the food business segment, paid supply goods wererecognized as extinguished under previous accounting treatment. However, for paid supply transactions with buyback
obligations, paid supply goods are not recognized as extinguished.
The application of the Revenue Recognition Standard is subject to the transitional treatment provided for in the
supplementary provisions of Paragraph 84 of the Revenue Recognition Standard. The cumulative effect of theretroactive application, if the new accounting policy is applied prior to the beginning of the first quarter, is added to or
subtracted from retained earnings at the beginning of the first quarter and the new accounting policy is applied tobalances at the beginning of said period. However, the method stipulated in Paragraph 86 of the Revenue Recognition
Standard has been applied, and the new accounting policy has not been retroactively applied to contracts for whichalmost all revenue had been recognized prior to the beginning of the first quarter, in accordance with the previous
accounting policy. In addition, the method stipulated in provision (1) of Paragraph 86 of the Revenue Recognition
Standard has been applied. After conducting accounting procedures based on contract conditions and reflecting allchanges in contracts made prior to the beginning of the first quarter, the cumulative effect has been added to or
subtracted from retained earnings at the beginning of the first quarter.
As a result, in the first quarter, the application of the accounting standard reduced net sales by ¥4,008 million andincreased operating profit, ordinary profit and profit before income taxes by ¥114 million. In addition, the balance ofretained earnings at the start of the period increased by ¥229 million.
In accordance with the transitional treatment stipulated in Paragraph 28-15 of the Accounting Standard for Quarterly
Financial Reporting (ASBJ Statement No. 12, March 31, 2020), information on the breakdown of revenue generated
from contracts with customers in the first quarter of the previous fiscal year is not shown.
(Application of Accounting Standard for Fair Value Measurement, etc.)
The Company has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4,
2019; “Fair Value Measurement Standard”), etc. from the beginning of the first quarter of the fiscal year ending March
31, 2022. In accordance with the transitional treatment stipulated in Paragraph 19 of the Fair Value Measurement
Standard and Paragraph 44-2 of the “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4,2019), the Company has decided to apply the new accounting policies in the Fair Value Measurement Standard going
forward. These changes had no impact on the quarterly consolidated financial statements.

10

(Segment information, etc.)
I. FY3/21 1Q (April 1, 2020 – June 30, 2020)
1. Information for net sales and profit/loss for each reportable segment(millions of yen)Amountrecorded onquarterly
consolidated
statements ofincomeReportable Segments
Precious
metalsbusinesssegment

Food businesssegment

Adjustments
Note 1

Total

Note 2

Net sales
Net sales to external
parties
Net sales &remittances between
segments

33,797

19,74253,540-53,540

-

19

19

(19)

-

Total

33,797

19,76253,559(19)53,540

Segment profit

1,334

299

1,634

-

1,634

(Notes)1. Adjustments correspond to the elimination of transactions and remittances between segments.
2. Total segment profit matches operating profit recorded on the quarterly consolidated statements
of income.

II. FY3/22 1Q (April 1, 2021 – June 30, 2021)
1. Information for net sales and profit/loss for each reportable segment(millions of yen)Amountrecorded onquarterly
consolidated
statements ofincomeReportable Segments
Precious
metalsbusinesssegment
Net sales
Net sales to external
parties
Net sales &remittances between
segments

Food businesssegment

Adjustments
Note 1

Total

Note 249,752

20,367

70,120-70,120

-

18

18

(18)

-

Total

49,752

20,386

70,139(18)

70,120

Segment profit

3,410

779

4,189

-

4,189

(Notes) 1. Adjustments correspond to the elimination of transactions and remittances between segments.
2. Total segment profit matches operating profit recorded on the quarterly consolidated statements
of income.
2. Changes in reportable segments
As explained in “Changes in accounting policy,” the Company has applied the Accounting Standard for Revenue
Recognition, etc. from the beginning of the first quarter of the fiscal year ending March 31, 2022. As result, the methodof calculation for profit and loss in business segments has also changed.
Compared with the previous method, in the first quarter, the new method reduced sales in the precious metals
business segment by ¥1,830 million and increased segment profit by ¥114 million. In addition, sales in the food businesssegment were reduced by ¥2,178 million, but there was no impact on segment profit.

11