Notice: This document has been translated from Japanese original for reference purpose only, without any warranty as to its accuracy or as tothe completeness of the information. The Japanese original version is the sole official version.

December 2022 3rd Quarter Financial Statement [Japan Standard] (Consolidated)
November 10th, 2022
Listed on: Tokyo
Stock Exchange

Listed company name

EM Systems Co., Ltd.

Code No.

4820

URL: http://www.emsystems.co.jp

Representative:(Job title)

President&Representative
Director(Name)
Hiromasa Kunimitsu

Representative for inquiries(Job title)

Managing director in the company,
General Manager of Administration Headquarters(Name)
Megumi Seki

Planned date of subNovember 10th,
Planned starting date of payment
mission of quarterly
2022
of dividends
reportSupplementary explanatory materials created for quarterly financial statement
Quarterly financial results briefing held (For Use by Analysts)

TEL:+81(0)6-6397-1888

–
: No
: No

(Amounts of less than 1 million yen rounded down)
1. Consolidated results of December 2022 3rd Quarter Financial Statement (January 1st 2022 through September 30th, 2022)(1) Consolidated management performance (total) (% refers to rate of change over the same quarter in the previous year)
Sales

December 2022
3rd quarter
December 2021
3rd quarter(Note) Comprehensive income

Millionsof yen12,491
10,386
December
2022 3rd
Quarter

Operating profits%
20.3

Millionsof yen
2,113

–

1,172

1,688

Millions ofyen%

Ordinary profits

80.3

Millionsof yen
2,457

39.5

–

1,762

–

(32.2)

December
2021 3rd
Quarter

Quarterly net income per share
Yen 100ths of a yen
23.21
17.60

December 2022 3rd quarter
December 2021 3rd quarter

%

1,277

Quarterly net income
belonging to parent
company shareholders
Millions of
%
yen
31.4
1,644
1,251

–

Millions ofyen–

Quarterly net income per share after
potential stock adjustment
Yen 100ths of a yen
23.13
17.55

(Note)Following the approval of the "Partial Amendment to the Articles of Incorporation" at the 37th Ordinary General Meeting of Shareholders held on June 16, 2020, as of the year ending December 2020, the company has changed the settlement
date from March 31st to December 31st. Due to the change of the settlement date, the company did not prepare consolidated
financial statements for the 3rd Quarter, 2021. Therefore, the year-on-year rate of change is not listed for the entire fiscal period of 3rd Quarter, 2021.
(2) Consolidated financial position
Total assets
December 2022 3rdMillions of yen
quarter
25,044
December 2021
24,809December(Refer to) Net
2022 3rd
19,120capitalQuarter

Net assets

Capital adequacy
ratio

Millions of yen
19,203
18,826

%
76.3
75.5

Millions ofyen

December
2021 period

118,728Millions ofyen2. State of dividends
End of 1st quarter
Yen 100ths of a yen

End of 2nd quarter
Yen 100ths of a yen

Annual dividends
End of 3rd quarter
Yen 100ths of a yen

December 2021
–
4.00
–
4.00
December 2022
December 2022
(estimate)(Note)1. Revisions from the last published dividend estimates: None––

End of term
Yen 100ths of a
yen
7.00

Total
Yen 100ths of a
yen
11.00

7.00

11.00

3. Estimated consolidated results of December 2022 period (January 1st, 2022 through December 31st, 2022)(% refers to rate of change over the previous term)
Net sales

Full year

Millionsof yen16,436

Operating profit％
13.9

Millionsof yen2,431

Ordinary profit
Millionsof yen
2,977

％
30.0

％
14.2

Profit attributable to own- Net income
ers of parent
per share
Millions of
Yen 100ths％
yenof a yen
2,063
12.8
29.07

(Note) 1. Revisions from the last published forecast of financial results: None
* Addendums(1) Changes in major subsidiaries during cumulative quarterly consolidated period (changes in designated subsidiaries accompanied by changes within the scope of consolidation): None
(2) Application of special accounts processing in the creation of the quarterly consolidated financial statement: Yes(Note) For details, please see the attached document P.9 "2. Quarterly consolidated financial statement and major explanatory
notes (3) Addendums relating to quarterly consolidated financial statement (application of special accounts processing in thecreation of the quarterly consolidated financial statement)".
(3) Changes to accounting policy, changes to estimates in accounting, revised restatements
1. Changes to accounting policies accompanying revision to accounting standards, etc. : Yes
2. Changes to accounting policies other than 1.

: None3. Changes to estimates in accounting: None4. Revised restatement: None(4) Number of shares outstanding (ordinary stock)
1. Number of shares outstanding at endof term (including own stock)
2. Number of own shares at end of term
3. Average number of shares outstanding
during term (quarterly total)

December 2022
3rd quarter
December 2022
3rd quarter
December 2022
3rd quarter

74,514,800 shares
3,906,949 shares
70,851,772 shares

December 2021
periodDecember 2021
periodDecember 2021
2nd quarter

74,514,800 shares
3,335,617 shares
71,089,094 shares* The quarter financial statement is not subject to quarterly review by certified public accountants or auditors.
* The descriptions of the future such as estimated results contained in this document are based on information possessed bythis company at the present time and certain assumptions this company deems reasonable, and they may differ greatly toactual results due to a variety of factors.

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○Table of contents of attached materials
1. QUALITATIVE INFORMATION RELATING TO THIS QUARTER'S FINANCIAL RESULTS ---------------------------------------- 4(1) Explanation regarding operating results ----------------------------------------------------------------------------------------------------------- 4(2) Explanation regarding financial position----------------------------------------------------------------------------------------------------------- 5(3) Explanation regarding information on future prospects such as forecast of consolidated financial results ------------------ 5
2. QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS AND MAJOR EXPLANATORY NOTES--------------------------- 6(1) Quarterly consolidated balance sheet --------------------------------------------------------------------------------------------------------------- 6(2) Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income ---------- 8(3) Addendums relating to quarterly consolidated financial statement ----------------------------------------------------------------------- 9(Explanatory notes regarding prerequisites of going concern) --------------------------------------------------------------------------------9(Explanatory notes for cases of considerable changes in amounts of shareholder's equity) -----------------------------------------9(Application of special accounts processing in the creation of the quarterly consolidated financial statement) --------------93

1. Qualitative information relating to this quarter's financial results(1) Explanation regarding operating results
Although Japan experienced a temporary surge in infections due to emergence of variant strains of the
COVID-19 virus, economic and social activities are gradually returning to normal during this 3rd quarter consolidated period owing to the progression of COVID-19 vaccinations and other factors. On the other hand, thesituation remains unpredictable due to escalating risks bearing down on the economy, such as the prolonged
situation in Ukraine, the rising prices of goods due to higher resource costs across the board and the rapid depreciation of the yen in foreign exchange markets, among other risks.
In the pharmacy industry, our main clients, the introduction of systems that enable online verification of eligibility information using one’s Individual Number or health insurance card at the reception counter of medical
institutions, etc., which will, in principle, become mandatory from April 2023, is accelerating due to revisions to
the medical system enacted in April 2022. In addition, use of these online eligibility verification systems, beginning in January 2023, will further strengthen the trend toward digitization of the medical field, including thecommencement of electronic processing of prescriptions, which are currently paper-based.
Against this backdrop, we have been securing the materials and personnel necessary to install online eligibility verification systems, and expanding the scope of installations to encompass customers who plan to initialize
the system.
Our group has also launched MAPs for NURSING CARE, a business support system for long-term care/welfare providers. This cloud-based system will feature better functions than the current product, and due to thefact that it can be installed in any location and at a low price, providers have been steadily adopting it following
its release. With the release of MAPs for NURSING CARE, our group’s entire MAPs series of next-generation
products is now available, and we intend to conduct further promotional activities to expand our market share,with the aim of supporting the digital transformation of the medical and long-term care fields moving forward.
As a result, our business results for this 3rd quarter consolidated cumulative period was 12,491 million yen insales (a 20.3% increase compared to the same period in the previous year), 2,113 million yen in operating profits(a 80.3% increase), 2,457million yen in ordinary profits (a 39.5%increase), and 1,644 million yen in this quarterly net income belonging to parent company shareholders (a 31.4% increase).
By segment results are as follows.
(ITS Systems and Related Business for Pharmacies)
In regard to IT systems and related business for pharmacies, in addition to the increase of initial sales, billing
sales have also increased accompanying an increase in the number of customers due to expanded incorporationof the online eligibility verification system and MAPs for PHARAMCY, as well as due to an increase in the number of existing systems sold.
Consequently, IT Systems and Related Business for Pharmacies for this 3rd quarter consolidated cumulative
period resulted in 9,975million yen in sales (a 24.4% increase compared with the same period in the previousyear) and 2,370 million yen in operating profits (a 98.0% increase).
(IT Systems and Related Business for Clinics)
Regarding IT systems and related business for Clinics, in order to expand the sales channels nationwide, weare taking a wide range of approaches by utilizing web marketing in addition to the conventional method of developing the clinic market.
In addition to an increase in initial sales due to expanded incorporation of the online eligibility verification
system, billing sales have also been bullish due to an increase in sales of existing systems, as well as due to asteady increase in the number of billing customers who installed MAPs for CLINIC, etc. At the same time, selling and administrative expenses have also increased due to initiatives aimed at expanding our share of the market for clinic systems.
Consequently, IT Systems and Related Business for Clinics for this 3rd quarter consolidated cumulative period resulted in 1,623 million yen in sales (a 13.7% increase compared to the same period in the previous year)and 210 million yen in operating losses (previous period: 20million yen in operating profits).

4

(IT Systems and Related Business for Long-term Care/Welfare)In our long-term care/welfare system business, billing sales remain bullish due to an increase in the numberof licenses, while initial sales decreased due to initialization of a large project during the same period in the previous year. In addition, depreciation associated with the release of MAPs for NURSING CARE has commenced,
and our sales and administrative expenses have also risen due to our efforts in expanding sales channels.
Consequently, IT Systems and Related Business for Long-term Care/Welfare for this 3rd quarter consolidated
cumulative period resulted in 401 million yen in sales (a 6.7% decrease compared with the same period in theprevious year) and 33 million yen in operating losses (previous period: 35 million yen in operating losses)(Other businesses)
Sales have increased due to the expansion of our subsidiary cashless business. However, both sales and operating profits have decreased in the pharmacy segment due to the effects of the COVID-19 pandemic.
Consequently, other business for this 3rd quarter consolidated cumulative period resulted in 528 million yen
in sales (a 1.6% increase compared to the same period in the previous year) and 35million yen in operating
losses (previous period: 33 million yen in operating losses).
（Segmented sales and operating profits and losses are the amounts before elimination of internal transactions
between segments.）(2) Explanation regarding financial position(Assets)
Current assets at the end of this 3rd quarter consolidated accounting period came to 12,516 million yen, a decrease of 58 million yen compared to the end of the previous consolidated fiscal year. Primarily, this is due to a
54 million yen decrease in notes and accounts receivable and a 51 million yen decrease in other assets resulting
from a corporation tax, etc. refund, coupled with a 63 million yen increase in cash on hand and in banks. Fixed
assets came to 12,527 million yen, an increase of 293 million yen compared to the end of the previous consolidated fiscal year. Primarily, this is due to an increase of 623 million yen in investment securities resulting fromacquisition of shares in Good Cycle System Inc., coupled with an increase of 122 million yen in software accompanying the release of MAPs for NURSING CARE, a decrease of 233 million yen in software in progress, and adecrease of 163 million yen in investment real estate depreciation.
As a result, total assets were 25,044 million yen, an increase of 235 million yen from the end of the previous
consolidated fiscal year
(Liabilities)
Current liabilities during this 3rd quarter consolidated accounting period came to 3,911 million yen, a decrease of 255 million yen compared to the end of the previous consolidated fiscal year. Primarily, this is due to adecrease of 183 million yen in income taxes payable, etc. resulting from payment. Fixed liabilities came to 1,929
million yen, an increase of 113 million yen compared to the end of the previous consolidated fiscal year. Primarily, this is due to a 73 million yen increase in lease obligations and a 47 million yen increase in net defined benefit liability.
As a result, total liabilities were 5,840 million yen, an increase of 142 million yen from the end of the previous
consolidated fiscal year.
(Net assets)
Net assets at the end of this 3rd quarter consolidated accounting period came to 19,203 million yen, an increase of 377 million yen compared to the end of the previous consolidated fiscal year. This was primarily due toacquisition of 499 million yen in treasury stock, 781 million yen in dividend payment, while retained earnings
increased by 1,644 million yen.
As a result, equity ratio was 76.3% (75.5% at the end of the previous consolidated fiscal year).
(3) Explanation regarding information on future prospects such as forecast of consolidated financial results
Estimated consolidated results for the full year ending December 2022 remain unchanged from those announced on August 9, 2022 in the December 2022 2nd Quarter Financial Statement.

5

2. Quarterly consolidated financial statements and major explanatory notes(1) Quarterly consolidated balance sheet(Units: millions of yen)Previous consolidated
fiscal year
(December 31st, 2021)
AssetsCurrent assets
Cash on hand and in banks
Notes and accounts receivable
Merchandise and products
Raw materials and supplies
OthersAllowance for bad debts
Total current assets
Fixed assets
Tangible fixed assets
Buildings and structures (net)Land
Lease assets (net)
Rental assets (net)
Construction in progress
Others (net)Total tangible fixed assets
Intangible fixed assets
Software
Software in progress
Reputation
OthersTotal intangible fixed assets
Investments and other assets
Investment securities
Investment real estate (net)
Net defined benefit asset
OthersAllowance for bad debts
Total investments and other assets
Total fixed assets
Total assets

6This 3rd quarter consolidated fiscal period(September 30th, 2022)

8,289
2,555
688
0
1,040
(0)
12,574

8,353
2,501
674
0
988
(1)
12,516

604
474
4
2
72
174
1,333

578
474
106
1
71
149
1,382

1,393
732
285
109
2,521

1,515
498
212
101
2,328

677
6,733
29
955
(15)
8,380
12,23424,809

1,301
6,569
31
925
(11)
8,816
12,52725,044

(Units: millions of yen)Previous consolidated
fiscal year
(December 31st, 2021)
Liabilities
Current liabilities
Notes and accounts payable
Accounts payable-other
Lease obligations
Income taxes payable, etc.
Provision for bonuses
Provision for points card certificatesContract liability
OthersTotal current liabilities
Fixed liabilities

Lease obligations
Net defined benefit liability
Provision for product warranties
Long-term guarantee deposits
Total fixed liabilities
Total liabilities
Net assets
Shareholder's equity
Capital stock
Capital surplus balance

Retained earnings
Treasury stock
Total shareholder's equity
Cumulative amount of other comprehensive income
valuation difference on available-for-sale securities
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total other cumulative comprehensive income
Subscription rights to shares
Minority interests
Total net assets
Total liabilities and net assets

7This 3rd quarter consolidated fiscal period(September 30th, 2022)

852
465
4
663
403
4
－
1,773
4,167

900
519
36
480
429
973
571
3,911

1
1,039
50
724
1,815
5,983

74
1,086
22
745
1,929
5,840

2,785
3,347
14,116(1,539)18,7082,785
3,347
14,949(2,039)19,042

－
69
(49)
19
55
42
18,82624,809

2
114
(38)
78
55
27
19,20325,044

(2) Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income(Quarterly consolidated statements of income)(3rd quarter consolidated cumulative period)(Units: millions of yen)

Sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profits
Non-operating profits
Interest income
Dividend income
Real estate rental income
OthersTotal non-operating profits
Non-operating expenses
Interest expense
Real estate rental expenses
Equity Losses of Affiliated Companies
OthersTotal non-operating expenses
Ordinary profits
Special losses
Losses on disposal of fixed assets
Total special losses
Quarterly net income before adjustment for taxes, etc.
Corporation tax, etc.
Quarterly net income
Loss attributable to non-controlling interests
Profit attributable to owners of parent

Previous 3rd quarter consolidated cumulative period(From January 1st, 2021
To September 30th, 2021)
10,386
5,367
5,018
3,845
1,172

This 3rd quarter consolidated
cumulative period(From January 1st, 2022
To September 30th, 2022)
12,491
6,230
6,260
4,147
2,113

1
190
754
7
953

2
－
783
12
798

0
349
－
14
363
1,762

4
307
132
10
454
2,457

1
1
1,760
522
1,237
(13)
1,251

0
0
2,457
828
1,629
(14)
1,644

(Quarterly consolidated statements of comprehensive income)(3rd quarter consolidated cumulative period)(Units: millions of yen)

Quarterly net income
Other comprehensive income
valuation difference on available-for-sale securities
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total other comprehensive income
Quarterly comprehensive income(Breakdown)
Quarterly comprehensive income concerning parent company shareholders
Quarterly comprehensive income concerning
non-controlling shareholders

Previous 3rd quarter consolidated cumulative period(From January 1st, 2021
To September 30th, 2021)
1,237This 3rd quarter consolidated
cumulative period(From January 1st, 2022
To September 30th, 2022)
1,629

－
24
15
39
1,277

2
45
10
58
1,688

1,290

1,702

(13)

(14)

8

(3) Addendums relating to quarterly consolidated financial statement(Explanatory notes regarding prerequisites of going concern)
There is no applicable information.
(Explanatory notes for cases of considerable changes in amounts of shareholder's equity)
There is no applicable information.
(Application of special accounts processing in the creation of the quarterly consolidated financial statement)
We have calculated tax expenses by multiplying quarterly net income before taxes and effective tax ratethat were reasonably estimated, following application of tax effect accounting for the income before taxes of
the consolidated accounting period including this 3rd quarter consolidated cumulative period.

This financial report is solely a translation of the Company’s Kessan Tanshin (including attachments) in Japanese, which has been prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience of readers who prefer an English translation.

9