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 Year Ended March 31, 2018
(Based on Japanese GAAP)
April 27, 2018
Company name:SMS CO., LTD.

Stock exchange listing: Tokyo
Stock code:
2175
Representative:
Inquiries:

URL

http://www.bm-sms.co.jp/CEOCFO

Natsuki Goto
Masato Sugizaki

Scheduled date of ordinary general meeting of shareholders:
Scheduled date to file Securities Report:

June 21, 2018
June 21, 2018

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

June 22, 2018
Yes

Holding of 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 year ended March 31, 2018 (from April 1, 2017 to March 31, 2018)(1) Consolidated operating results
Percentages indicate year-on-year changes
Profit attributable toNet salesOperating profit
Ordinary profit
owners of parent
Millions of yen% Millions of yen% Millions of yen% Millions of yen%
Year ended March 31, 2018
26,611
15.4
4,021
10.3
5,007
13.0
3,361
20.0
Year ended March 31, 201723,054
20.9
3,646
32.3
4,430
26.2
2,801
23.6

Earnings per share

Profit attributable toOrdinary profit/total Operating profit/net
owners ofassets
sales
parent/equity
Yen%%%
77.14
18.5
11.2
15.1
67.28
21.8
10.4
15.8

Diluted earnings pershare

Yen
77.43
67.49

Year ended March 31, 2018Year ended March 31, 2017(2) Consolidated financial position

Total assets
As of March 31, 2018
As of March 31, 2017

Net assets

Equity ratio

Millions of yen
46,087
43,231Millions of yen
23,641
21,583

Cash flows fromoperating activities
Millions of yen
4,811
3,919

Cash flows frominvesting activities
Millions of yen(2,095)(1,033)

Net assets per share%
41.8
39.6

Yen
443.44394.76(3) Consolidated cash flows

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

Cash flows from
Cash and cash equivalents
at end of period
financing activities
Millions of yen
Millions of yen(1,107)
8,768
(875)
7,140

2. Cash dividends
Annual dividends per share
1st quarter-end 2nd quarter-end 3rd quarter-end Fiscal year-end

Year ended March 31, 2017
Year ended March 31, 2018Year ending March 31, 2019
(Forecast)of dividends
Total cash
Dividend payout Ratio
to net assets
dividends (Total) ratio (Consolidated) (Consolidated)

Total

Yen

Yen

Yen

Yen

Yen

Millions of yen

%%

–
–

0.00
0.00

––

11.00
13.00

11.00
13.00

477
564

16.3
16.8

3.6
3.1

–

0.00

–––

1–

3. Forecast of consolidated financial results for the year ending March 31, 2019 (from April 1, 2018 to March 31, 2019)
Net sales
Millions of yen
Six months ending
September 30, 2018
Full year

Percentages indicate year-on-year changes
Profit attributable toOperating profit
Ordinary profit
Earnings per shareowners of parent% Millions of yen% Millions of yen% Millions of yen%Yen

15,688

19.2

1,919

(10.6)

2,609

(3.0)

1,852

(0.4)

42.67

32,273

21.3

4,827

20.0

5,803

15.9

3,905

16.2

89.96

4. Notes(1) Changes in significant subsidiaries during the year ended March 31, 2018(changes in specified subsidiaries resulting in the change in scope of consolidation):No(2) 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:No
Changes in accounting policies due to other reasons:
Changes in accounting estimates:

No
No

Restatement of prior period financial statements:

No(3) Number of issued shares (common shares)
Total number of issued shares at the end of the period (including treasury shares)
As of March 31, 2018

43,421,000 shares As of March 31, 2017

43,382,600 shares

Number of treasury shares at the end of the period
As of March 31, 2018155 shares As of March 31, 2017

113 shares

Average number of shares during the period
Year ended March 31, 2018

43,407,666 shares Year ended March 31, 2017

241,504,114 shares

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

As of March 31, 2018

AssetsCurrent assets
Cash and deposits
Accounts receivable - trade

7,829
3,932

9,515
4,308

81
18

50
29

36
2,491

20
3,474

Prepaid expenses
Deferred tax assets

722
239

571
353

Other
Allowance for doubtful accounts

11(128)12(224)

15,235

18,113375(185)413(252)189

160

573(418)

687
(454)

Tools, furniture and fixtures, net

154

233

Machinery, equipment and vehicles
Accumulated depreciation

43(19)

39(27)

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

11368

405

Goodwill
Software

11,166
1,544

11,5391,382

Trademark right
Customer-related assets

9,703
2,692

9,412
2,368

Total property, plant and equipment
Intangible assets

Other
Total intangible assets

00

25,107

24,703

1,665
209

1,721
377

612
33

746
20

2,521

2,865

27,99627,974

43,231

46,087

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

(Millions of yen)
As of March 31, 2017

As of March 31, 2018

Liabilities
Current liabilities
Accounts payable - trade

311

292

Short-term loans payable
Current portion of long-term loans payable

–
1,201

8
1,395

Accounts payable - otherAccrued expenses

4,236
182

5,061
289

Income taxes payable
Accrued consumption taxes

1,139
242

1,068
406

Advances received
Deposits received

1,077
52

1,183
70315
143445
153

8

22

8,910

10,400Long-term loans payable
Net defined benefit liability10,210
135

9,690
160

Deferred tax liabilities
Other

2,374
17

2,175
19

Total non-current liabilities

12,737

12,046

21,64822,446

Shareholders' equity
Capital stock

2,153

2,167

Capital surplus
Retained earnings

4,148
11,662

3,965
14,545

Provision for bonuses
ProvisionForRepayment
Other
Total current liabilities
Non-current liabilities

Total liabilities
Net assets

Treasury shares

(0)

(0)

17,963

20,677

Valuation difference on available-for-sale securities
Foreign currency translation adjustment

0(838)

0(1,423)

Total accumulated other comprehensive income(838)(1,423)

Share acquisition rights
Non-controlling interests

110
4,347

135
4,252

Total net assets

21,58323,641

43,231

46,087

Total shareholders' equity
Accumulated other comprehensive income

Total liabilities and net assets

4Consolidated statements of income and consolidated statements of comprehensive income
Consolidated statements of income(Millions of yen)
Fiscal year ended
March 31, 2017
Net sales

Fiscal year ended
March 31, 2018

23,054

26,611

Cost of sales

3,727

4,338

Gross profit

19,327

22,273

Selling, general and administrative expenses

15,681

18,251

Operating profit

3,646

4,021

–

29

Interest income
Share of profit of entities accounted for using equity method

9863

8950

Other

3158

Total non-operating income

904

1,047

Foreign exchange losses
Interest expenses

1147

–
48

Share issuance cost
Other

29
31–
13

Non-operating income
Foreign exchange gains

Non-operating expenses

Total non-operating expenses

120

61

4,430

5,007

Gain on sales of non-current assets
Gain on sales of shares of subsidiaries and associates

–
55

5–

Total extraordinary income555Ordinary profit
Extraordinary income

Extraordinary losses
Impairment loss

203

Loss on sales and retirement of non-current assets
Loss on sales of shares of subsidiaries and associates

–
151

3128

Loss on valuation of investment securities
Loss on sales of investment securities

–
2019–

Loss on business withdrawal–

14

Total extraordinary losses

192

98

Profit before income taxes

4,294

4,914

Income taxes - current

1,384

1,707

Income taxes - deferred

(93)

(299)

Total income taxes

1,290

1,408

Profit

3,004

3,506

Profit attributable to non-controlling interests
Profit attributable to owners of parent

5203

145

2,801

3,361

Consolidated statements of comprehensive income(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

Fiscal year ended

Fiscal year ended

March 31, 2017

March 31, 2018
3,004

3,506

(9)
(1,263)

(0)
(800)

(5)

(25)

(1,278)

(825)

1,725

2,680

1,816

2,776(91)(95)

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

6

Consolidated statements of changes in equity
Fiscal year ended March 31, 2017
(Millions of yen)
Shareholders' equity
Capital stock
Balance at beginning of current
periodCapital surplus

Retained earnings

304–

Total shareholders'equityTreasury shares

9,145(1,036)

8,413

Changes of items during period
Issuance of new shares

1,848

1,848––

3,697

Dividends of surplus––(283)–(283)

Profit attributable to ownersof parent–

–

2,801

–

2,801

Net increase (decrease) insurplus by change ofconsolidated scope

––––

–

Change in ownership interestof parent due to transactions
with non-controlling interests

–(3)

––

(3)

Purchase of treasury shares–––(0)(0)

Disposal of treasury shares

–

2,302

–

1,036

3,339

Net changes of items otherthan shareholders' equity

––––

–

Total changes of items during
period

1,848

4,148

2,517

1,036

9,550

Balance at end of current period

2,153

4,148

11,662(0)

17,963

Accumulated other comprehensive income

Balance at beginning of current
periodValuationdifference on
available-for-salesecurities

Foreign currencytranslation
adjustment

9135

Total accumulated
Share acquisition
otherrights
comprehensive
income14580

Non-controllinginterests

Total net assets

4,518

13,157

Changes of items during period
Issuance of new shares

–––––

3,697

Dividends of surplus

–––––

(283)

Profit attributable to ownersof parent–––––

2,801

Net increase (decrease) insurplus by change ofconsolidated scope––––––

Change in ownership interestof parent due to transactions
with non-controlling interests–––––(3)Purchase of treasury shares–––––(0)Disposal of treasury shares

–––––

3,339

Net changes of items otherthan shareholders' equity

(9)

(974)

(983)

30

(171)

(1,124)

Total changes of items duringperiod

(9)

(974)

(983)

30

(171)

8,425

Balance at end of current period0(838)

(838)

110

4,347

21,583

7

Fiscal year ended March 31, 2018
(Millions of yen)
Shareholders' equity
Capital stock
Balance at beginning of current
periodCapital surplus

Retained earnings

Total shareholders'equityTreasury shares

2,153

4,148

11,662(0)

17,963Issuance of new shares

1414

––

29

Dividends of surplus––(478)–(478)

Profit attributable to ownersof parent

–

–

3,361

–

3,361

Net increase (decrease) insurplus by change ofconsolidated scope–(197)––(197)

Change in ownership interestof parent due to transactions
with non-controlling interests

––––

–

Changes of items during period

Purchase of treasury shares–––(0)(0)

Disposal of treasury shares

––––

–

Net changes of items otherthan shareholders' equity

–

––

–

–

Total changes of items during
period14(183)2,882(0)2,713Balance at end of current period

2,167

3,965

14,545(0)20,677

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities

Foreign currencytranslation
adjustment

Total accumulated
Share acquisition
otherrights
comprehensive
income0(838)(838)

Issuance of new shares––

Dividends of surplus–

Profit attributable to ownersof parentNon-controllinginterests

Total net assets

110

4,347

21,583

–––

29

––––

(478)

–––––

3,361

Net increase (decrease) insurplus by change ofconsolidated scope–––––(197)

Change in ownership interestof parent due to transactions
with non-controlling interests

–––––

–

Purchase of treasury shares

–––––

(0)

Disposal of treasury shares––––––Net changes of items otherthan shareholders' equity

(0)

(584)

(584)

25(95)(655)

Total changes of items during
period(0)(584)(584)25(95)2,058Balance at end of current period0(1,423)(1,423)

135

4,252

23,641

Balance at beginning of current
periodChanges of items during period8Consolidated statements of cash flows(Millions of yen)
Fiscal year ended
March 31, 2017

Fiscal year ended
March 31, 2018

Cash flows from operating activities
Profit before income taxes
Depreciation

4,294
876

4,914965

Amortization of goodwill
Loss (gain) on sales and retirement of non-current assets

640–741
26

Impairment loss
Loss (gain) on sales of investment securities

2020

3–Loss (gain) on valuation of investment securities
Loss (gain) on sales of shares of subsidiaries and–1995

28(681)(106)

associates
Share of loss (profit) of entities accounted for using equity
methodIncrease (decrease) in allowance for doubtful accounts

(37)

95

Increase (decrease) in provision for bonuses
IncreaseDecreaseInProvisionForRepaymentOpeCF

(46)
13126
10

Increase (decrease) in net defined benefit liability
Foreign exchange losses (gains)

231124(29)

Decrease (increase) in notes and accounts receivable trade

(10)

(279)

Increase (decrease) in accrued consumption taxes
Decrease (increase) in accounts receivable - other141(599)

159(956)

Decrease (increase) in prepaid expenses
Increase (decrease) in advances received

(20)
13182
60

Increase (decrease) in accounts payable - other
Other, net

821
(407)

806
(63)

Subtotal

5,169

6,731

10(48)

11(48)

Income taxes paid

(1,211)(1,883)

Net cash provided by (used in) operating activities

3,919

4,811

Payments into time deposits
Proceeds from withdrawal of time deposits(1,199)655(998)
1,024Purchase of property, plant and equipment
Purchase of intangible assets

(67)
(815)

(214)
(707)

Purchase of investment securities
Proceeds from sales of investment securities

(40)
13–
–

Payments of loans receivable
Purchase of shares of subsidiaries resulting in change in

(38)

–

–

(1,197)

–

(11)

381

–

76

9(1,033)(2,095)Interest and dividend income received
Interest expenses paid

Cash flows from investing activities

scope of consolidation
Payments for sales of shares of subsidiaries resulting inchange in scope of consolidation
Proceeds from sales of shares of subsidiaries resulting inchange in scope of consolidation
Other, net
Net cash provided by (used in) investing activities

9(Millions of yen)
Fiscal year ended
March 31, 2017

Fiscal year ended
March 31, 2018

Cash flows from financing activities
Decrease in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of shares resulting from exercise(19,000)
12,012

(32)
973

(600)

(1,359)of share acquisition rights
Proceeds from issuance of common shares–

173,679–

Proceeds from sales of treasury shares
Cash dividends paid

3,324
(289)

–(478)(3)(230)

Payments from changes in ownership interests in
subsidiaries that do not result in change in scope ofconsolidation
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

12(875)(1,107)(17)

19

Net increase (decrease) in cash and cash equivalents

1,993

1,627

Cash and cash equivalents at beginning of period

5,147

7,140

Cash and cash equivalents at end of period

7,140

8,768

10