Translation
Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any
discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results
for the Three Months Ended June 30, 2017
(Based on Japanese GAAP)
July 28, 2017
Company name:SMS CO., LTD.
Stock exchange listing: Tokyo
Stock code:
Representative:

2175
CEOURLhttp://www.bm-sms.co.jp/Natsuki Goto

Inquiries:
CFO
Scheduled date to file Quarterly Securities Report:

Masato Sugizaki
August 14, 2017

Scheduled date to commence dividend payments:
Preparation of supplementary material on quarterly financial results:–Yes

Holding of quarterly financial results meeting:

Yes

TEL

03-6721-2400(for institutional investors and analysts)(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the three months ended June 30, 2017 (from April 1, 2017 to June 30, 2017)(1) Consolidated operating results (cumulative)
Net sales
Three months ended June 30, 2017
Three months ended June 30, 2016

Millions of yen7,073
6,618

Percentages indicate year-on-year changes
Profit attributable toOperating profit
Ordinary profit
owners of parent% Millions of yen% Millions of yen% Millions of yen%
6.9
1,584(5.1)
2,015(6.9)
1,444
(8.0)
22.1
1,668
14.6
2,165
15.8
1,570
21.5

Earnings per share

Diluted earnings per share

Yen
33.30
38.73

Three months ended June 30, 2017
Three months ended June 30, 2016

Yen
33.17
38.60

(2) Consolidated financial position
Total assets
As of June 30, 2017
As of March 31, 2017

Net assets

Millions of yen43,700
43,231Equity ratio

Millions of yen
21,46821,583

%
39.8
39.6

2. Cash dividends
Annual dividends per share

Year ended March 31, 2017
Year ending March 31, 2018

1st quarter-end

2nd quarter-end

3rd quarter-end

Fiscal year-end

Yen
––

Yen
0.00

Yen–

Yen
11.00

Yen
11.00

0.00

–––

Year ending March 31, 2018 (Forecast)Total

3. Forecast of consolidated financial results for the year ending March 31, 2018 (from April 1, 2017 to March 31, 2018)
Percentages indicate year-on-year changes
Profit attributable toNet sales
Operating profitOrdinary profit
Earnings per shareowners of parent
Millions of yen% Millions of yen% Millions of yen% Millions of yen%
Yen
Six months ending
13,484
12.5
2,311
0.0
2,793
(4.7)
2,009
9.0
46.32
September 30, 2017
Full year
27,804
20.6
4,378
20.1
5,137
15.9
3,396
21.3
78.30

1

4. Notes(1) Changes in significant subsidiaries during the three months ended June 30, 2017(changes in specified subsidiaries resulting in the change in scope of consolidation):No(2) Application of special accounting methods for preparing quarterly consolidated financial statements:

No(3) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
Changes in accounting policies due to revisions to accounting standards and other regulations:
Changes in accounting policies due to other reasons:

No
No

Changes in accounting estimates:
Restatement of prior period financial statements:

NoNo(4) Number of issued shares (common shares)
Total number of issued shares at the end of the period (including treasury shares)
As of June 30, 2017

43,382,600 shares As of March 31, 2017

43,382,600 shares

Number of treasury shares at the end of the period
As of June 30, 2017

113 shares As of March 31, 2017

113 shares

Average number of shares during the period (cumulative from the beginning of the fiscal year)
Three months ended June 30, 2017

43,382,487 shares Three months ended June 30, 2016

2

40,556,928 shares

Quarterly consolidated financial statements
Consolidated balance sheets(Millions of yen)
As of March 31, 2017

As of June 30, 2017

AssetsCurrent assets
Cash and deposits
Accounts receivable - trade

7,829
3,932

9,7703,259

81
18

74
24

36
2,491

30
3,057

Prepaid expenses
Deferred tax assets

722
239

685
246

Other
Allowance for doubtful accounts

11(128)8(121)

15,235

17,036375(185)410(212)189

198

573(418)

597
(407)

Tools, furniture and fixtures, net

154

190

Machinery, equipment and vehicles
Accumulated depreciation

43(19)

42(25)

Merchandise and finished goods
Work in process
Supplies
Accounts receivable - otherTotal current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Tools, furniture and fixtures
Accumulated depreciation

Machinery, equipment and vehicles, net

23

16368

405

Goodwill
Software

11,166
1,544

10,603
1,670

Trademark right
Customer-related assets

9,703
2,692

9,345
2,532

Total property, plant and equipment
Intangible assets

Other
Total intangible assets

00

25,10724,151

1,665
209

1,199
234

612
33

619
53

2,521

2,107

27,996

26,664

43,231

43,700Investments and other assets
Investment securities
Deferred tax assets
Lease and guarantee deposits
Other
Total investments and other assets
Total non-current assets
Total assets3

(Millions of yen)
As of March 31, 2017

As of June 30, 2017

Liabilities
Current liabilities
Accounts payable - trade

311

252

Current portion of long-term loans payable
Accounts payable - other

1,201
4,236

1,201
4,731

Accrued expenses
Income taxes payable

182
1,139

174
704

Accrued consumption taxes
Advances received

242
1,077

386
1,330

Deposits received
Provision for bonuses

52315

306
210

ProvisionForRepayment
Other

143
8

20147

Total current liabilities

8,910

9,548

Non-current liabilities
Long-term loans payable

10,21010,210

135
2,374

139
2,316

Net defined benefit liability
Deferred tax liabilities
Other1717

12,737

12,684

21,64822,232

Capital stock
Capital surplus

2,153
4,148

2,153
3,950

Retained earnings
Treasury shares

11,662(0)

12,630(0)Total shareholders' equity

17,963

18,733

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

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

00

Foreign currency translation adjustment(838)(1,326)

Total accumulated other comprehensive income(838)(1,326)

110

121

Subscription rights to shares
Non-controlling interests

4,347

3,940

Total net assets

21,583

21,46843,231

43,700Total liabilities and net assets

4Consolidated statements of income (cumulative) and consolidated statements of comprehensive income(cumulative)
Consolidated statements of income (cumulative)(Millions of yen)Three months ended

Three months ended

June 30, 2016

June 30, 2017

Net sales
Cost of sales

6,618
891

7,073
929

Gross profit

5,727

6,143

Selling, general and administrative expenses

4,0594,559

Operating profit

1,668

1,584

Share of profit of entities accounted for using equity method
Other

501
12418
23

Total non-operating income

514

442

1110

Non-operating income

Non-operating expenses
Interest expenses
Other

60

Total non-operating expenses

18

10

2,165

2,015

56

–

56–

–

28

Ordinary profit
Extraordinary income
Gain on sales of shares of subsidiaries and associates
Total extraordinary income
Extraordinary losses
Loss on sales of shares of subsidiaries and associates
Other

–

0

Total extraordinary losses

–

28

2,221

1,987695599

1,526

1,387

Profit before income taxes
Income taxes
ProfitLoss attributable to non-controlling interests
Profit attributable to owners of parent

5(44)

(57)

1,570

1,444

Consolidated statements of comprehensive income (cumulative)(Millions of yen)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Share of other comprehensive income of entities accounted
for using equity method
Total other comprehensive income
Comprehensive income

Three months ended

Three months ended

June 30, 2016

June 30, 2017
1,5261,387(0)(1,846)

(0)
(941)

(9)

(6)

(1,856)

(948)

(329)

439

100

956

(429)

(517)

Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

6