Note: This document has been translated from the Japanese original for reference purposes only. In the event of any
discrepancy between this translated document and the Japanese original, the original shall prevail.

November 11, 2022

Summary of Consolidated Financial Results
For the Second Quarter of the Year Ending March 2023
(Under Japanese GAAP)
Company name: LEC, Inc.
Stock exchange listing: Tokyo Stock Exchange, Prime Market
Stock code:
7874
URL:
https://www.lecinc.co.jp/en
Representative:
Takaki Nagamori, President
Inquiries:
Hideo Masuda, Director, Managing Executive Officer
Telephone:+81-3-3527-2150
Scheduled date for filing quarterly securities report:
November 14, 2022
Scheduled date for Commencement of dividend payments:
December 05, 2022
Supplementary information for the quarterly financial statements to be prepared: None
Meeting to explain the quarterly financial statements to be held: Yes (for institutional investors and analysts)(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated Financial Results for the Second Quarter of the Year Ending March 2023
(April 01, 2022 - September 30, 2022)(1) Consolidated Results of Operations (cumulative)(Percentage figures denote change from the same period in the previous year)
Sales

Operating Income

Net income attributableto owners of parent

Ordinary Income

Yen in million%

Yen in million%

Yen in million%

Yen in million%

2nd Quarter of the YearEnding March, 2023
2nd Quarter of the Year
Ended March, 2022

26,8193.6

1,385(43.2)

1,298(48.4)

1,290(14.8)

25,8811.2

2,440(30.8)

2,518(30.0)

1,514(20.7)

Note: Comprehensive income

Second Quarter of the Year ending March 2023:
Second Quarter of the Year ended March 2022:

Net income per share
Yen

2nd Quarter of the YearEnding March, 2023
2nd Quarter of the Year
Ended March, 2022

37.39
44.16

Diluted net income
per share
Yen

37.04
43.71

¥1,249 million¥1,870 million[(33.2)%][(22.4)%]

(2) Consolidated Financial Position
Total assets

Net assets

Equity ratio

Yen in millions

Yen in millions

2nd Quarter of the YearEnding March 2023

80,63436,677

43.2

Year Ended March 2022

74,60235,753

45.5

Reference:

Shareholders’ Equity
Second Quarter of the Year Ending March 2023:
Year Ended March 2022%

¥34,831 million¥33,977 million

2. Dividends
Annual dividends per shareFirst quarter-end

Second quarter-end

Third quarter-end

Yen

Yen

Yen

Yen

Yen

Year Ended March 2022

―

17.00

―

13.00

30.00

Year Ending March 2023

―

10.00
―

10.00

20.00

Year Ending March 2023
(Estimate)Year-end

Total

Note: Changes from the latest forecasts released: None

3．Forecast for the Year Ending March 31, 2023 (April 1, 2022 – March 31, 2023)(Percentage figures denote change from the same period in the previous year)
Sales

Full Year

Operating Income

Yen in millions%

Yen in millions

56,0008.9

2,000

Note: Changes from the latest forecasts released: None

Net income attributableto owners of parent

Ordinary Income% Yen in millions(37.6)

2,000

Net income
per share%

Yen in millions%

Yen(39.5)

1,700(25.5)

49.30

* Notes(1) Changes in significant subsidiaries during the period(Changes in specified subsidiaries resulting in the change in scope of consolidation): Yes
NEW :

0

Excluded :1（LEC Home Products Co.,Ltd）(2) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements:
None(3) Changes in accounting policies, changes in accounting estimates, and restatement(i) Changes in accounting policies due to revisions of accounting standards and other regulations: None(ii) Changes in accounting policies other than (ⅰ): None(iii) Changes in accounting estimates: None(iv) Retrospective restatements: None
(4) Number of issued shares (common shares)(i)

Total number of issued shares at the end of the period (including treasury stock)
2nd Quarter of the Year Ending March 2023

38,165,340 sharesYear Ended March 2022

38,165,340 shares(ii) Number of treasury stock at the end of the period
2nd Quarter of the Year Ending March 2023

3,501,447 sharesYear Ended March 2022

3,686,447 shares(iii) Average number of issued shares during the period (cumulative from the beginning of the fiscal year)
2nd Quarter of the Year Ending March 2023

34,515,286 shares

2nd Quarter of the Year Ended March 2022

34,297,523 shares* Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants
or an audit corporation.
* Explanation of the appropriate use of business forecasts and other remarks
Business forecasts contained in this report are based on information available to the Company and on a certain
assumption the Company considers reasonable on the date of this report’s announcement, and it does notconstitute the Company’s intention to promise the accomplishment of the forecasts. Due to unforeseen
circumstances, however, actual results may differ significantly from such forecasts due to various risks anduncertainties. For more information regarding assumptions made when formulating earnings projections andmatters to note when using these projections, please see “1.Qualitative Information on Quarterly Financial
Performance (3)Explanation of Consolidated Earnings Forecasts and Other Projections” on page three of theaccompanying materials.
In addition, the Company has introduced ESOP, and the Company shares owned by ESOP are included intreasury stock.

LEC, Inc. (7874) Financial Results for the Second Quarter of FY3/23

Accompanying Materials ― Contents

1． Qualitative Information on Quarterly Financial Performance…………………………………………………2(1) Explanation of Operating Results…………………………………………………………………………2(2) Explanation of Financial Position ………………………………………………………………………...2(3) Explanation of Consolidated Earnings Forecasts and Other Projections……….…………………………3
2. Quarterly Consolidated Financial Statements and Primary Notes……………………………………………...4(1) Quarterly Consolidated Balance Sheet ….…………………………………………………………………4(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income...…………...6(3) Quarterly Statement of Cash Flows………………………………………………………………………..8(4) Notes to Quarterly Financial Statements…………………………………………………………………10(Notes to going concern assumptions)……………………………………………………………………10(Notes in the event of significant changes in shareholders’ equity)………………………………………10

1

LEC, Inc. (7874) Financial Results for the Second Quarter of FY3/23

1. Qualitative Information on Quarterly Financial Performance(1) Explanation of Operating Results
During 2Q of the fiscal year ending March 31, 2023, although there was a sudden spread of the COVID-19
caused by the omicron variant in the summer, the Japanese economy continued to recover as the government lifted
its restrictions on movement. On the other hand, future prospects remain uncertain due to factors such as supply
chain disruptions caused by the lockdown in China, increases in raw material costs due to higher resource prices
caused by Russia's military invasion of Ukraine, and fluctuations in the financial and capital markets amidtightening monetary policy amid global inflationary pressure.
In the Household Products Business, the Lec Group belonging to, there are signs of a slight recovery in
employment and income conditions. On the other hand, the business environment remained severe due to growing
concerns about inflation caused by the sharp depreciation of the yen in the foreign exchange market and the rise invarious costs raw materials and sea freight.
In this environment, the LEC Group focused on new product development and expanded its business by holding
a new product presentation. We have made concerted efforts to reduce costs and products renewal to cope withrising procurement costs due to the depreciation of the yen and soaring raw material prices, as well as risingtransportation costs.
As a result of the above, net sales for 2Q of the fiscal year ending March 31, 2023 amounted to 26,819 million
yen, (up 3.6% year on year), due to growth in sales of new products. Operating income was 1,385 million yen(down 43.2% year on year) due to the depreciation of the yen and increases in various costs including raw
materials and import expenses, and ordinary income was 1,298 million yen (down 48.4% year on year). Net
income attributable to owners of parent was 1,290 million yen (down 14.8% year on year) due to subsidy income.
Results by product category are as follows.
(Millions of yen)
Product Category
Household products
Cleaning･Sanitary consumables
OthersPrevious period
Jun.1, 2021 - Sep.30, 2021

Current period
Jun.1, 2022 – Sep.30, 2022

11,207
9,619
5,054

11,342
10,383
5,093

Year-over-year
1.2%
7.9%
0.8%

Total
25,881
26,819
3.6%
Notes: Representative products of each product category are as follows
Household products…Plastic products, Chemical synthetic products, Metal products, Textile products, etc.
Cleaning･Sanitary consumables…Paper･Water･Urethane cleaning consumables, Nonwoven fabric sanitary consumables,
Detergents, etc.
Others…Anti-insect, Anti-virus products, Cosmetics, Home appliances, Food, etc.

(2) Explanation of Financial Position(1) Assets, Liabilities and Net Assets
As of September 30, 2022, total assets to 6,032 million yen from the end of the previous fiscal year to 80,634
million yen.
Current assets increased 5,760 million yen to 47,411 million yen. This was mainly due to an increase 3,668
million yen in cash and deposits, 1,300 million yen in securities, and 699 million yen in notes and accounts
receivable - trade.
Non-current assets increased 325 million yen to 33,223 million yen. This was mainly due to an increase 399
million yen increase in property, plant and equipment.
Liabilities increased 5,190 million yen to 43,957 million yen.
Current liabilities increased 1,640 million yen from the end of the previous fiscal year to 13,710 million yen.
This was mainly due to an increase 1,000 million yen in short-term borrowings, and 762 million yen increase incurrent portion of long-term loans payable.
Non-current liabilities increased 3,468 million yen from the end of the previous fiscal year to 30,256 million yen
mainly due to an increase 2,425 million yen in long-term borrowings and other (increase in lease obligations, etc.)
1,060 million yen.
Net assets increased 923 million yen from the end of the previous fiscal year to 36,677 million yen. This was
mainly due to an increase 832 million yen in retained earnings.

2

LEC, Inc. (7874) Financial Results for the Second Quarter of FY3/23(2) Cash Flows
As of September 30, 2022, cash and cash equivalents (below, “cash”) to 5,668 million yen from the end of theprevious fiscal year to 17,151 million yen.
The status of each cash flow and their factors are as follows.
Cash flows from operating activities
Net cash provided by operating activities amounted to 3,136 million yen (net cash provided by operating
activities amounted to 1,782 million yen in the same period of the previous year). The major factors were an
increase in profit before income taxes 2,190 million yen, depreciation of 2,170 million yen and decrease due to anincrease in accounts receivable 656 million yen.
Cash flows from investing activities
Net cash used in investing activities was 1,348 million yen ( Net cash used in investing activities was 4,915
million yen in the same period of the previous year). The major factors were an increase 1,999 million yen of net
decrease in time deposits, a decrease 1,812 million yen of payments for purchase of securities and investment
securities, 1,528 million yen of payments for purchase of property, plant and equipment.
Cash flows from financing activities
Net cash provided by financing activities amounted to 3,671 million yen (Net cash provided by financing
activities amounted to 1,556 million yen in the same period of the previous year). The major factors were an
increase in net increase in long-term borrowings of 3,188 million yen, in net increase in short-term borrowings of
1,000 million yen and a decrease in cash dividend paid of 458 million yen.

(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
The Company has made no changes to its full-year earnings forecast for the financial year ending March 31,
2023, which was announced on August 05, 2022.

3

LEC, Inc. (7874) Financial Results for the Second Quarter of FY3/23

2. Quarterly Consolidated Financial Statements and Primary Notes(1) Quarterly Consolidated Balance Sheet
FY3/22(As of Mar. 31, 2022)(Millions of yen)
2Q of FY3/23(As of Sep. 30, 2022)

Cash and deposits

21,21024,879Notes and accounts receivable - trade

8,055

8,755

-

1,300

7,582

7,949

592

588

Raw materials and supplies

2,299

2,467

Other

2,004

1,485

Allowance for doubtful accounts

(40)

(14)

41,70447,411

Buildings and structures, net

8,416

8,240

Machinery, equipment and vehicles, net

8,912

8,100

Other, net

8,350

9,737

Total property, plant and equipment

25,67926,078Goodwill

265

191

Other

688

632

Total intangible assets

953

823

Investment securities

4,188

4,726

Other

2,081

1,597

Allowance for doubtful accounts

（6）

（1）

Total investments and other assets

6,264

6,321

32,89733,22374,60280,634

AssetsCurrent assets

Securities
Merchandise and finished goods
Work in process

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

Intangible assets

Investments and other assets

Total non-current assets
Total assets

4LEC, Inc. (7874) Financial Results for the Second Quarter of FY3/23

FY3/22(As of Mar. 31, 2022)(Millions of yen)
2Q of FY3/23(As of Sep. 30, 2022)

2,477

2,506

200

1,200

6,376

7,139

Income taxes payable

362

254

Provision for bonuses

387

384

Provision for disaster losses

35

35

Other

2,221

2,181

Total current liabilities

12,06013,701Long-term borrowings

25,204

27,629Reserve for stock benefits

274

274

Retirement benefit liability

386

368

Asset retirement obligations

27

27

Other

895

1,955

26,78830,256

38,84843,957

Share capital

5,491

5,491

Capital surplus

7,232

7,233

Liabilities
Current liabilities
Notes and accounts payable – trade
Short-term borrowings
Current portion of long-term borrowings

Non-current liabilities

Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity

Retained earnings

21,44522,277

Treasury shares(2,240)(2,108)

Total shareholders' equity

31,92932,894

Valuation difference on available-for-sale
Securities
Deferred gains or losses on hedges

1,077

1,119

222

-

Foreign currency translation adjustment

784

849

Remeasurements of defined benefit plans

(35)

(33)

Total accumulated other comprehensive income

2,048

1,936

Subscription rights to shares

206

206

Non-controlling interests

1,570

1,639

Total net assets

35,75336,67774,60280,634

Accumulated other comprehensive income

Total liabilities and net assets

5LEC, Inc. (7874) Financial Results for the Second Quarter of FY3/23(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Quarterly Consolidated Statements of Income
For the Six-month Period
First six months of FY3/22(Apr. 1, 2021 – Sep. 30, 2021)(Millions of yen)First six months of FY3/23(Apr. 1, 2022 – Sep. 30, 2022)

Sales

25,881

26,819

Cost of sales

16,81918,782Gross profit

9,061

8,037

Selling, general and administrative expenses

6,620

6,651

Operating income

2,440

1,385

Interest income

55Dividend income

3142

Foreign exchange gains

27-

Business Commissioning Fee

33-

Reversal of allowance for doubtful accounts

-

29

Other

61

39

Total non-operating income

158

117

Interest expenses

44

60

Share of loss of entities accounted for using equity method

18

37

Foreign exchange losses

-

102

Other

17

4

Total non-operating expenses

81

204

2,518

1,298

Subsidy income-

564

Gain on reversal of foreign currency translation adjustment-249

Total extraordinary income-

813

Loss on retirement of non-current assets

42

Total extraordinary losses

4

2

2,513

2,109

Income taxes-current

879

186

Income taxes – deferred

45

561

Total income taxes

924

747

1,588

1,362

74

71

1,514

1,290

Non-operating income

Non-operating expenses

Ordinary income
Extraordinary income

Extraordinary losses

Net income before income taxes

Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent

6

LEC, Inc. (7874) Financial Results for the Second Quarter of FY3/23

Quarterly Consolidated Statement of Comprehensive Income
For the Six-month Period(Millions of yen)First six months of FY3/22
First six months of FY3/23(Apr. 1, 2021 – Sep. 30, 2021) (Apr. 1, 2022 – Sep. 30, 2022)
Net income

1,588

1,362

Valuation difference on available-for-sale securities

148

42

Deferred gains or losses on hedges

(82)

(223)

Foreign currency translation adjustment

211

65

4

2

281

(113)

1,870

1,249

1,797

1,179

73

69

Other comprehensive income

Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive
interests

incomeattributabletonon-controlling

7

LEC, Inc. (7874) Financial Results for the Second Quarter of FY3/23(3) Quarterly Consolidated Statements of Cash FlowsFirst six months of FY3/22(Apr. 1, 2021 – Sep. 30, 2021)(Millions of yen)First six months of FY3/23(Apr. 1, 2022 – Sep. 30, 2022)

Cash flows from operating activities
Profit before income taxes

2,513

2,109

Depreciation

1,261

2,107

Amortization of goodwill

74

74

Share-based compensation expenses

108

77

Increase (decrease) in allowance for doubtful accounts

19

(30)

Increase (decrease) in allowance for employees’ bonuses

50

(2)

Increase (decrease) retirement benefit liabilities

(14)

(18)

Increase (decrease) in allowance for stock benefit(1)-

Interest and dividend income

(37)

(48)

Interest expenses

44

60

Losses (gain) on foreign exchange

(37)

(50)

Gain on reversal of foreign currency translation adjustment

-

(249)

Subsidy income

-

(564)

(1,028)(656)

Decrease (increase) in inventories

(226)

(368)

Decrease (increase) in other current assets

115

(11)

Increase (decrease) in trade payables

(350)

(58)

Increase (decrease) in other current assets

367

153

Other

51

69

Subtotal

2,909

2,592

49

54

Decrease (increase) in trade receivables

Interest and dividends received
Interest paid

(41)

(61)

(1,133)(285)

Receipt of enterprise invitation subsidies-

241

Subsidy received

-

564

Other

0

31

1,782

3,136

Payments into time deposits(4,212)(4,212)

Proceeds from withdrawal of time deposits

5,212

6,212

Purchase of property, plant and equipment(5,581)(1,528)

Income taxes paid

Net cash provided by (used in) operating activities
Cash flows from investing activities

Purchase of intangible assets

(173)

(21)

Purchase of securities and investment securities(110)(1,812)

Other

(50)

14

(4,915)(1,348)Net cash provided by (used in) investing activities

8LEC, Inc. (7874) Financial Results for the Second Quarter of FY3/23

First six months of FY3/22(Apr. 1, 2021 – Sep. 30, 2021)(Millions of yen)First six months of FY3/23(Apr. 1, 2022 – Sep. 30, 2022)

Cash flows from financing activities
Proceeds from short-term borrowings

1,400

2,400

Repayments of short-term borrowings(400)(1,400)

Proceeds from long-term borrowings

1,200

5,750

Repayments of long-term borrowings(7)(2,561)

Repayments of finance lease obligations

(38)

(58)

Dividends paid

(597)

(458)

0

-

1,556

3,671

195

207

Net increase (decrease) in cash and cash equivalents(1,381)

5,668

Cash and cash equivalents at beginning of period

13,921

11,483

Cash and cash equivalents at end of period

12,53917,151Other
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

9LEC, Inc. (7874) Financial Results for the Second Quarter of FY3/23(4) Notes to Quarterly Financial Statements(Notes to going concern assumptions)None to be reported.

(Notes in the event of significant changes in shareholders’ equity)
None to be reported.

10