FY11/2021
Third Quarter
Supplementary Material
on Financial Results

2021.10.15

T&S inc.
TSE Mothers: 4055

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Table of Contents

FY11/2021 Third QuarterHighlights

p. 3

Financial Results Overview

p. 4

Operating Income

p. 6

Net Sales by Categoryp. 7

Net Sales by Customer

p. 8

Net Sales by Quarterp. 9

Trend of Major Customers

p. 10

Recruitment of Engineers

p. 11Statements of Income

p. 12

Balance Sheets

p. 13

Revision of FY Earnings Forecast

p. 14

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2Highlights (FY2021/3Q)(Theme of the current term)First Step towards Proof
１

Record-high revenues achieved
Net Sales
Operating income
Ordinary income
Net income(Compared to the previous 3Q)

1,975 million yen (Up 19.6%↑, + 323 million yen)
278 million yen (Up 28.9%↑, + 62 million yen)
284 million yen (Up 31.6%↑, + 68 million yen)
199 million yen (Up 34.0%↑, + 50 million yen)

(YoY)
(ditto)(ditto)(ditto)Net Sales: All categories significantly grew.
２ Provision for performance-linked bonuses to employees.
Sales increased 57.2% in the advanced technology solution category.
A portion of operating income went to the employees. 45 million yen was set aside as
an additional amount to the regular bonus.
This increase in cost of sales and SG&A expenses was offset by an increase inoperating income of 62 million yen YoY.

３

Upward Revision of Full-year Earnings Forecasts
The full-year forecast has been revised upward in consideration of the strong
business performance.
Net sales: 2,720 million yen (20.0% up YoY change, increase: 453 million yen)
Ordinary income: 410 million yen (34.7% up YoY change, increase: 105 million yen)

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3

Financial Results Overview
FY11/2021 Third Quarter

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4

Financial Results Overview (FY2021/3Q)

Record-high revenues achieved(compared to the previous 3Q)

Net sales: 1,975 million yen (Up 19.6%↑, + 323 million yen)

(YoY)

Operating income: 278 million yen (Up 28.9%↑, + 62 million yen)（ditto）

Ordinary income: 284 million yen (Up 31.6%↑, + 68 million yen)（ditto）

Net income: 199 million yen (Up 34.0%↑, + 50 million yen)（ditto）

Net sales(million yen)

2,500

2,000

Up
19.6%

(million yen)

Operating income

350

1,975

Up
28.9%

300

1,652
1,500278 *250

215
1,000

200

500

150

0100
FY2020/3Q

FY2021/3Q

FY2020/3Q

FY2021/3Q* In view of strong business performance,performance-linked bonuses for employees of 45 million yen.
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5

Operating Income (FY2021/3Q)
Including SG&A expenses,
62 million yen increase in operating income
Increase(million yen)

Decrease(YoY)

Operating income

In addition to the usual bonus,
a performance-linked bonus wasgiven to the employees

Operatingincome rate
14.1%

Operatingincome rate
13.1%

Mainly due to the increasein the number of engineers
Increase in labor andsubcontracting costs

FY2020/3Q
OperatingincomeIncreased
sales

Provisionfor bonusesin cost ofsales

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Other
Increase incost ofsales

Provisionfor bonusesin SG&A
expenses

Decreasein otherSG&A
expenses

FY2021/3Q
Operatingincome6Net Sales by Category (FY2021/3Q)

Sales increase in all categories
Up 57% Advanced Technology Solution category(YoY)

Net sales (by category) (million yen)

Sales proportion (by category)

Solution

1,321

FY2020/3Q+197

Up
15%

1,518

FY2021/3Q
1,200

1,300

1,400

1,500

1,600

259+85

FY2021/3Q

Up
33%

345

200

250

300

350

111mil yen
６%
Semiconductor

Semiconductor
FY2020/3Q

Advanced
Technology Solution

345mil yen
17%

FY2021/ 3Q

1,518
mil yen77%

400

Advanced Technology Solution

FY2020/3Q

71+40Up
57%

111

FY2021/3Q
507090110

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130150

Solution(NOTE) Our business segment is a single
segment, so only Net sales of each category
could be calculated.

7

Net Sales by Customer (FY2021/3Q)

Toshiba G, Hitachi G, Kioxia G

Major customers maintaining steady level
Sales to Kioxia G significantly increased(Up 47% （YoY） 21% of the total)v

Net Sales
東芝GToshiba
GHitachiG
日立G

Kioxia G
キオクシアG(million yen)534

FY2020/3Q

624

FY2021/3Q

438
432

FY2020/3Q
FY2021/3Q

FY2020/3Q

Others
25%418FY2021/3Q

499FY2021/3Q

100200

HitachiG

22%394

FY2020/3Q

32%

KioxiaG

21%Others
その他NetSales

FY2021/3Q

Up
47%

284

ToshibaG

300

400

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5006007008Net Sales by Quarter (FY2021/3Q)

Net sales in 3Q：1,975 million yen
Additions: +323 million yen, Up 19.6%(YoY)(million yen)

3,000
2,750
2,500

2,720 mil yen+197mil yen 2,464 mil yen+453 mil yen+8.7%+20.0%
2,266 mil yen

2,250
2,000

4Q

1,750Net Sales

Progress rate: 73%(Achievement rate of full year performance forecast)

1,500

3Q

1,250
1,000

2Q
750

614
27%

mil yen541
24%

mil yen605
27%

mil yen

500
250
0

1Q

505
22%

mil yen+323 mil yen+19.6%

Progressrate

Progress
rate

81%

73%

688mil yen
28%

3Q

688mil yen
25%

700mil yen
28%

2Q

700mil yen
26%

586mil yen

24%

1Q

586 mil yen
22%

2020/112021/112021/11

actualoriginal forecast

revised forecast

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* Our businessperformance is subject
to slight seasonal
fluctuations, such as
the results forFY2020/11, which was
due to the increase in
the number ofengineers and thedelivery schedule ofprojects.
* Please refer to page
14 for the revision of
the earnings forecast.

9Trend of Major Customers(Overall) Trend of Major customers(As of 15 October, 2021)

Our orders continue to increase, and our major customers as a whole are also
doing well. Although each company has been affected by the covid-19, they
will recover in the future and the outlook is positive.

Toshiba G

Hitachi G
Kioxia G

Sales and profits continued to increase, mainly in semiconductors
for automotive applications and HDDs for data centers. Orders
increased significantly year on year, with a large sum quantity perorder. The Energy System Solutions segment, in which we areengaged in system development, also performed well. Capital
investment in each segment expects an increase significantly yearon year.
Significant increase in sales and profit due to recovery in market
conditions, restructuring of power grid and automotive-relatedbusinesses. In particular, the IT and energy segments areexpanding rapidly, and capital investment related to our businessexpects to increase, reversing the restraint trend in Covid-19.
Shipment volume for various SSDs recovered, and unit sales prices
also increased due to the improved supply-demand balance in theNAND flash memory market. In addition to expanding existing
plants, Kioxia announced to expand its Technology Development
Building at its Yokohama Technology Campus and to establish its
new Shin-Koyasu Advanced Research Center. As a result, we
anticipate an increase in new system development andmaintenance and operation work for the Company.
(Compiled from each company's published data and newspaper reports)

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10

Recruitment of Engineers

As of October 15, 2021

Recruitment achieved

157%

Already achieved 157% of the target number of recruits for this fiscal year
(as of October 15, 2021)

Recruitment object

ca. 10% of total employees(Annual new recruits)

Total employees: ca. 300
Recruitment goal: 30(FY11/2021)

Number of recruits

Recruitment goal
(annual)Actual (3Q end)3045
2(4Q., to date)Total(as of October 15, 2021)

47* Number of retired employees: 18

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11

Statements of Income (FY2021/3Q)

Statements of Income (FY2021/3Q)(thousand yen)

FY2020/3Q

FY2021/3Q+/- amount+/- %Net sales

1，652，086

１，975,571

323,485

19.6%

Cost of sales

1,153，694

1,414,880

261.185 *22.6%

Gross profit

498,391

560,691

62,299

12.5%

SG&A expenses

282,568

282,481

△86 *

△0.0%

Operating income

215,823

278,20962,385

28.9%（Operating income rate）（13.1%）（14.1%）

Ordinary income

216,061

284,274

68,212

31.6%（Ordinary income rate）（13.1%）（14.4%）

Quarterly net income

148,905

199,544

50,63834.0%（9.0%）（10.1%）（Quarterly net income rate）* Includes 45,000 thousand yen in performance-linked bonuses to employees due to strong
business performance.
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12Balance Sheets (FY2021/3Q)

Balance Sheets (FY2021/3Q)(thousand yen)

2020/11 end

FY2021/3Q end+/- amount

1,407,497

1,663,170

255,673

95,425103,204

7,779

1,502,923

1,766,375

263,452

243,604

316,432

72,828Non-current liabilities

46,96649,883

2,917

Total liabilities

290,571366,316

75,745

Total shareholders’ equity

1,212,351

1,400,058

187,707

Total net assets

1,212,351

1,400,058

187,707

Total liabilities &Net assets

1,502,923

1,766,375

263,452

Current assets

Non-current assets
Total assets
Current liabilities

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13

Revision of FY Earnings Forecast
FY11/2021 Full-year

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14

Revision of FY Earnings Forecast
Compared to the initial forecast, the result ofthe fourth quarter was taken in accountUpward revision of full year forecast(million yen)

Initialforecast

Current
forecast

Amount ofchange

Percentagechange

2,464

2,720

256＋ 10.4%(Before performance-linkedbonuses)322

405(465)

83(143)＋ 25.8%(+44.4%)

Ordinary income

328

410

81＋ 24.8%

Net income

229

287

58＋ 25.5%

Net sales

Operating income

CompanyAs we expect to secure an operating profit margin of 17% before performance-linked bonuses, torecord a portion of the increase in profit as additional bonuses for employees (operating profit
margin after performance-linked bonuses: 14.1%).
As a result, net sales are expected to increase by 20.0% YoY, operating income by 33.0% YoY(operating income before performance-linked bonuses is expected to increase by 52.7% year onyear), and ordinary income 34.7% YoY.

Solution- Orders for contracted system development projects from major client companies increased.
- Received an order for a large-scale development project for an in-plant system from one of ourmajor clients, Kioxia Corporation.

Semiconductor- Steady increase in the number of dispatched engineers for maintenance and operation services
at semiconductor factories.

AdvancedTechnology
Solution- Increased AI-related orders, mainly for AI algorithm R&D support services and technical treatise
survey support.
- Business with NEC Corporation, which began in the previous fiscal year, expanded.
- Development of new business partners contributed to sales.

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15

Contact
T&S inc.
IR Planning and Public Relation Dept.
Email / pr@tecsvc.co.jp
URL / https://www.tecsvc.co.jp/

Information contained in this material include those related to future prospects. Such information is based on those available tous at the present moment and certain assumptions that may be considered reasonable, and therefore we do not guarantee any
realization thereof and any future business performance. Various factors such as changes in economic climate, industries ingeneral, customersʼ needs, and legislative change, may possibly bring about some situation substantially different from thecurrent forecasts. In the future, even if some new information and some event occur, we have no obligation to carry out any
update or revision concerning any information about the future contained in this material.

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16