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 1st Quarter Financial Statement [Japan Standard] (Consolidated)
May 13th, 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 subPlanned starting date of payment
mission of quarterly
May 13th, 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 1st Quarter Financial Statement (January 1st 2022 through March 31th, 2022)(1) Consolidated management performance (total) (% refers to rate of change over the same quarter in the previous year)
Sales

December 2022
1st quarter
December 2021
1st quarter(Note) Comprehensive income

Operating profits

Millionsof yen
3,985

%
21.0

Millionsof yen
679

3,294

－

322

December
2022 1st
Quarter

586

Millions ofyen%

Ordinary profits
Millionsof yen
824

83.5

－

449

－

299

－

(83.7)

December
2021 1st
Quarter

319

Millions of
yen

(－)

110.3

%

Quarterly net income
belonging to parent
company shareholders
Millions of
%
yen
88.2
563

Quarterly net income per share after
potential stock adjustment
Yen 100ths of a yen
Yen 100ths of a yen
December 2022 1st quarter
7.93
7.91
December 2021 1st quarter
4.22
4.21
(Note) Due to a change in fiscal period, the fiscal year ending on December 31, 2020 is calculated as a 9-month accounting
period from April 1, 2020 to December 31, 2020. As a result of this change in fiscal period, the 1st quarter of the fiscal year
ending on December 31, 2021 (January 31, 2021 to March 31, 2021) and the 1st quarter of the fiscal year ending on December
31, 2020 (April 1, 2020 to June 30, 2020) are different periods of time. Accordingly, this document does not list the year-onyear quarterly ratio of increase/decrease for the 1st quarter of the fiscal year ending on December 31, 2021.
Quarterly net income per share(2) Consolidated financial position
Total assets
December 2022 1st
Millions of yen
quarter
24,572
December 2021
24,809December(Refer to) Net
2022 1st
18,707
capitalQuarter

Net assets

Capital adequacy
ratio

net assets per share

%
76.1
75.5

Yen 100ths of a yen
263.26263.12Millions of yen
18,782
18,826
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–
December 2022
December 2022
4.00
(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 salesFirst half

Millionsof yen7,493

Full year

15,682

Operating profit

12.3

Millionsof yen
896

8.6

2,003

％

Ordinary profit

53.8

Millionsof yen
1,172

14.6

7.1

2,635

1.1

％

％

Profit attributable to own- Net income
ers of parent
per share
Millions of
Yen 100ths％
yenof a yen
797
15.9
11.20
1,817

(0.6)

25.53

(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
1st quarter
December 2022
1st quarter
December 2022
1st quarter

74,514,800 shares
3,521,917 shares
71,092,683 shares

December 2021
periodDecember 2021
periodDecember 2021
1st quarter

74,514,800 shares
3,335,617 shares
71,033,316 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
The Japanese economy during this 1st quarter consolidated cumulative period is expected to remain harsh
due to impediments to the recovery of economic activities throughout society, including temporary re-applicationof Focused Anti-infection Measures due to the spread of COVID-19, rising prices of resources around the world
due to the situation in Ukraine, and the rising prices of goods due to the further weakening of the yen in foreignexchange markets.
In the pharmacy industry, our main clients, prescriptions are being issued for longer periods of time due tothe influence of COVID-19, which has reduced the overall number of prescription slips issued. Although drug
prices have been revised negatively due to revisions to the medical system conducted in April 2022, there havebeen efforts to promote and enhance systems to transition from drug-focused services to patient-focused services
at pharmacies, including the establishment of new evaluation items such as utilization of ICT and integration ofdigitalization.
Against this backdrop, as a way of promoting ICT in healthcare and other fields, the government commenced
development in October 2021 of a system that enables online confirmation of eligibility information using one’s
Individual Number or health insurance card at the reception counter of medical institutions, etc. Since last fiscal year, we have been sequentially providing service to customers scheduled to install the online eligibility verification system in time for full-scale operation.
In addition to existing systems, our billing sales volume has also increased due to expanded sales of MAPs for
PHARMACY and MAPs for CLINIC.
As a result, our business results for this 1st quarter consolidated cumulative period was 3,985 million yen insales (a 21.0% increase compared to the same period in the previous year), 679 million yen in operating profits(a 110.3% increase), 824million yen in ordinary profits (a 83.5%increase), and 563 million yen in this quarterly
net income belonging to parent company shareholders (a 88.2% 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 1st quarter consolidated cumulative
period resulted in 3,148 million yen in sales (a 26.6% increase compared with the same period in the previousyear) and 751 million yen in operating profits (a 173.9% increase).
We also released MAPs Option | Prescription Reader, which we jointly developed with NeoX, Inc. with theaim of reducing the workload at pharmacy counters to support our customers’ shift to patient-focused services.
(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 1st quarter consolidated cumulative period resulted in 538 million yen in sales (a 16.5% increase compared to the same period in the previous year)
and 95 million yen in operating losses (previous period: 3 million yen in operating profits).
(IT Systems and Related Business for Long-term Care/Welfare)4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.
Consequently, IT Systems and Related Business for Long-term Care/Welfare for this 1st quarter consolidated
cumulative period resulted in 136 million yen in sales (a 18.2% decrease compared with the same period in theprevious year ) and 27 million yen in operating profits (a 38.7% decrease )(Other businesses)
Both sales and operating profits in our pharmacy business decreased due to the impact of the spread of
COVID-19.
Consequently, other business for this 1st quarter consolidated cumulative period resulted in 179 million yen
in sales (a 8.9% decrease compared to the same period in the previous year) and 9million yen in operating losses(previous period: 0 million yen in operating profits ).
（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 1st quarter consolidated accounting period came to 11,954 million yen, a decrease of 620 million yen compared to the end of the previous consolidated fiscal year. Primarily, this is due to a
439million yen decrease in other current assets resulting from a lag in the month of receipt of accounts receivable. Fixed assets came to 12,617 million yen, an increase of 383 million yen over the end of the previous consolidated fiscal year. This was primarily due to an increase of 460 million yen in investment securities resulting
from the acquisition of shares of Good Cycle Systems Inc.
As a result, total assets were 24,572 million yen, a decrease of 236 million yen from the end of the previous
consolidated fiscal year
(Liabilities)
Current liabilities during this 1st quarter consolidated accounting period came to 3,872 million yen, a decrease of 294 million yen compared to the end of the previous consolidated fiscal year. This was primarily due todecreases of 352 million yen in corporate tax payable resulting from the payment of corporate tax as well as anincrease of 138 million yen in reserves for bonuses. Fixed liabilities came to 1,916 million yen, an increase of 100
million yen compared to the end of the previous consolidated fiscal year. This was primarily due to an increaseof 74 million yen in lease debt resulting from a new lease of a computer server.
As a result, total liabilities were 5,789 million yen, a decrease of 193 million yen from the end of the previous
consolidated fiscal year.
(Net assets)
Net assets at the end of this 1st quarter consolidated accounting period came to 18,782 million yen, a decreaseof 43 million yen compared to the end of the previous consolidated fiscal year. This was primarily due to an increase of 65 million yen in earned surplus resulting from dividend payments, etc. of 498 million yen, and a decrease of 131 million yen resulting from the acquisition of treasury shares, while quarterly net income belonging
to parent company shareholders totaled 563 million yen.
As a result, equity ratio was 76.1% (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 2021 are unchanged from the information
provided in estimated Consolidated Results for the Full Year announced via the Summary of Accounts that was
released on February 9, 2022. In the future, if it becomes necessary to revise estimated results, we plan to disclose said revisions immediately.

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 1st quarter consolidated fiscal period(March 31st, 2022)

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

8,206
2,421
725
0
601
(1)
11,954

604
474
4
2
72
174
1,333

594
474
124
1
71
159
1,425

1,393
732
285
109
2,521

1,301
805
261
106
2,475

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

1,138
6,669
30
893
(14)
8,717
12,617
24,572

(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
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 1st quarter consolidated fiscal period(March 31st, 2022)

852
465
4
663
403
4
－
1,773
4,167

809
525
37
311
542
－
4
1,640
3,872

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

75
1,056
49
734
1,916
5,789

2,785
3,347
14,116(1,539)18,7082,785
3,347
14,181(1,671)
18,642

69
(49)
19
55
42
18,82624,809

92
(46)
46
55
37
18,782
24,572

(2) Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income(Quarterly consolidated statements of income)(1wt 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
Real estate rental income
OthersTotal non-operating profits
Non-operating expenses
Interest expense
Real estate rental expenses
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 1st quarter consolidated cumulative period(From January 1st, 2021
To March 31st, 2021)
3,294
1,666
1,628
1,305
322

This 1st quarter consolidated
cumulative period(From January 1st, 2022
To March 31st, 2022)
3,985
1,930
2,054
1,375
679

0
244
6
251

0
258
3
263

0
120
4
125
449

4
110
2
117
824

1
1
447
149
297
(1)
299

0
0
824
265
559
(4)
563

(Quarterly consolidated statements of comprehensive income)(1st quarter consolidated cumulative period)(Units: millions of yen)

Quarterly net income
Other comprehensive income
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 1st quarter consolidated cumulative period(From January 1st, 2021
To March 31st, 2021)
297

This 1st quarter consolidated
cumulative period(From January 1st, 2022
To March 31st, 2022)
559

16
5
21
319

23
3
27
586

321

591

(1)

(4)

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 1st 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