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, 2020
(Based on Japanese GAAP)
April 30, 2020
Company name:SMS CO., LTD.

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

URL

https://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 19, 2020
June 19, 2020

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

June 22, 2020
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, 2020 (from April 1, 2019 to March 31, 2020)(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, 2020
35,140
14.0
4,935
4.1
6,355
6.3
4,760
12.9
Year ended March 31, 201930,836
15.9
4,743
17.9
5,979
19.4
4,216
25.5

Earnings per share

Profit attributable toOrdinary profit/total Operating profit/net
owners ofassets
sales
parent/equity
Yen%%%
54.45
27.5
12.9
14.0
48.24
24.4
12.8
15.4

Diluted earnings pershare

Yen
54.69
48.51

Year ended March 31, 2020
Year ended March 31, 2019(2) Consolidated financial position

Total assets
As of March 31, 2020
As of March 31, 2019

Net assets

Equity ratio

Millions of yen
50,996
47,467

Millions of yen
19,39815,539Cash flows fromoperating activities
Millions of yen
5,591
5,156

Cash flows frominvesting activities
Millions of yen(2,127)(1,066)

Net assets per share%
37.7
32.4

Yen
220.86176.55(3) Consolidated cash flows

Year ended March 31, 2020
Year ended March 31, 2019

Cash flows from
Cash and cash equivalents
at end of period
financing activities
Millions of yen
Millions of yen(3,132)
10,493(2,943)9,890

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

Year ended March 31, 2019Year ended March 31, 2020
Year ending March 31, 2021
(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

–
–

7.50
8.50

7.50
8.50

652
739

15.5
15.5

3.8
4.3

–

0.00

–––

1–

3. Forecast of consolidated financial results for the year ending March 31, 2021 (from April 1, 2020 to March 31, 2021)
Net sales
Full year

Millions of yen
37,436Percentages 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
6.5
5,028
1.9
6,459
1.6
4,785
0.5
54.98

4. Notes(1) Changes in significant subsidiaries during the year ended March 31, 2020(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:
Changes in accounting policies due to other reasons:

Yes
No

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

NoNo(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, 2020

87,057,600 shares As of March 31, 2019

86,998,800 sharesNumber of treasury shares at the end of the period
As of March 31, 2020

445 shares As of March 31, 2019372 shares

Average number of shares during the period
Year ended March 31, 2020

87,033,325 shares Year ended March 31, 2019

286,934,982 shares

Consolidated financial statements
Consolidated balance sheets(Millions of yen)
As of March 31, 2019

As of March 31, 2020

AssetsCurrent assets
Cash and deposits
Accounts receivable - trade
Merchandise and finished goods
Work in process
Supplies
Accounts receivable - otherPrepaid expenses
OtherAllowance for doubtful accounts10,703
4,323

11,091
5,213

1
13–
14

36
4,478

30
6,183

634
46664
18(114)(113)

20,123

23,102459

626

Accumulated depreciation

(276)

(291)

Buildings, net

183

335

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

Tools, furniture and fixtures

749

806

Accumulated depreciation

(498)

(545)

Tools, furniture and fixtures, net

251

261

Machinery, equipment and vehicles

4237

Accumulated depreciation

(30)

(17)

Machinery, equipment and vehicles, net

12

20–

481

–

(91)

Right-of-use assetsAccumulated depreciation
Right-of-use assets,net

–389

447

1,006

10,574

10,148

SoftwareTrademark right

1,174
9,246

1,637
9,126

Customer-related assets
Other

2,088
0

1,825
0

Total intangible assets

23,08322,738Investments and other assets
Investment securities

2,048

2,225

855
880

873
1,039

Total property, plant and equipment
Intangible assets
Goodwill

Deferred tax assets
Leasehold and guarantee deposits
Other
Total investments and other assets
Total non-current assets
Total assets

330

11

3,814

4,149

27,34427,89347,46750,996

(Millions of yen)
As of March 31, 2019

As of March 31, 2020

Liabilities
Current liabilities
Accounts payable - trade

353

314

2,487
6,064

2,487
7,711

Accrued expenses
Income taxes payable

529
623

451
534

Accrued consumption taxes
Advances received

435
583

536
725

Deposits received
Provision for bonuses

78
481

84
600

ProvisionForRepayment
Lease obligations

227
–242
112

Other

24

30

11,891

13,831Long-term borrowings
Retirement benefit liability

17,632311

15,144354

Deferred tax liabilities
Lease obligations

2,078–

1,994
260

13

11

20,037

17,76631,92831,597

Share capital
Capital surplus

2,208
13

2,246
51

Retained earnings
Treasury shares

14,971(0)

19,079(0)Total shareholders' equity

17,193

21,37600

Foreign currency translation adjustment(1,834)(2,149)Total accumulated other comprehensive income(1,833)(2,149)Current portion of long-term borrowings
Accounts payable - otherTotal current liabilities
Non-current liabilities

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

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

Share acquisition rights
Total net assets
Total liabilities and net assets

4179

171

15,53919,39847,46750,996

Consolidated statements of income and consolidated statements of comprehensive income
Consolidated statements of income(Millions of yen)
Fiscal year ended
March 31, 2019
Net sales

Fiscal year ended
March 31, 2020

30,83635,140

Cost of sales

3,535

4,048

Gross profit

27,30131,091

Selling, general and administrative expenses

22,55826,156

Operating profit

4,743

4,935

1124Share of profit of entities accounted for using equity method
Other

1,352
66

1,486
62

Total non-operating income

1,430

1,573

51

4366
46102
–

Non-operating income
Interest income

Non-operating expenses
Foreign exchange losses
Interest expenses
Arrangement fee
Other

30

6

Total non-operating expenses

194152

Ordinary profit

5,979

6,355

Extraordinary income
Gain on sales of non-current assets

11

Gain on liquidation of subsidiaries
Gain on sale of businesses

6––55

Total extraordinary income

857

Extraordinary losses
Loss on sales and retirement of non-current assets

165

23

Loss on valuation of investment securities
Loss on withdrawal from business

4233

–
–

Event cancellation loss
Other–
49

13–

Total extraordinary losses

453

37

Profit before income taxes

5,534

6,375

Income taxes - current
Income taxes - deferred

1,564
(221)

1,702(87)

Total income taxes

1,342

1,615

Profit

4,191

4,760

(25)

–

4,216

4,760

Profit attributable to non-controlling interests
Profit attributable to owners of parent5

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, 2019

March 31, 2020
4,191

4,760

0(399)

(0)
(310)

(3)

(4)

(402)

(315)

3,788

4,444

3,806

4,444

(17)

–

Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests6Consolidated statements of changes in equity
Fiscal year ended March 31, 2019
(Millions of yen)
Shareholders' equity
Share capital
Balance at beginning of period

Capital surplus

Retained earnings

Total shareholders'equity

Treasury shares

2,167

3,965

14,545(0)

20,677Issuance of new shares

41

41

–

–

82

Dividends of surplus

––

(564)

–(564)

Profit attributable to ownersof parent

–

–

4,216

–

4,216

Change in ownership interestof parent due to transactions
with non-controlling interests–(3,992)(3,225)–(7,218)Purchase of treasury shares

––

–

(0)

(0)

Net changes in items otherthan shareholders' equity

–

–––

–

Total changes during period

41(3,951)

426(0)(3,484)

Balance at end of period

2,208

13

14,971(0)17,193

Changes during period

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities

Foreign currencytranslation
adjustment

Total accumulated
Share acquisition
otherrights
comprehensive
income0(1,423)(1,423)Issuance of new shares––

Dividends of surplus––

Profit attributable to ownersof parent–

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

Non-controllinginterests

Total net assets

135

4,252

23,641–––

82–––(564)

––––

4,216

––––

–

(7,218)Purchase of treasury shares

–––––

(0)

Net changes in items otherthan shareholders' equity

0(410)(410)

44(4,252)(4,618)

Total changes during period0(410)(410)

44(4,252)(8,102)

Balance at end of period0(1,834)(1,833)179–

15,539Balance at beginning of period
Changes during period7

Fiscal year ended March 31, 2020
(Millions of yen)
Shareholders' equity
Share capital
Balance at beginning of period

Capital surplus

Retained earnings

Total shareholders'equityTreasury shares

2,208

13

14,971(0)

17,193Issuance of new shares

37

37

––

75

Dividends of surplus––(652)–(652)

Profit attributable to ownersof parent

–

–

4,760

–

4,760

Purchase of treasury shares–––(0)(0)

Net changes in items otherthan shareholders' equity

–

–

––

–

Changes during period

Total changes during period

37

37

4,107(0)4,183Balance at end of period

2,246

51

19,079(0)21,376

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities

Foreign currencytranslation
adjustment0(1,834)(1,833)179

Issuance of new shares

––––

75

Dividends of surplus

––––

(652)

Profit attributable to ownersof parent

––––

4,760

Purchase of treasury shares

––––

(0)

Net changes in items otherthan shareholders' equity

(0)

(315)

(315)

(7)

(323)

Total changes during period

(0)

(315)

(315)

(7)

3,859

Balance at end of period0(2,149)(2,149)171

19,398

Balance at beginning of period

Total accumulated
Share acquisition
otherrights
comprehensive
incomeTotal net assets

15,539Changes during period

8Consolidated statements of cash flows(Millions of yen)
Fiscal year ended

Fiscal year ended

March 31, 2019

March 31, 2020

Cash flows from operating activities
Profit before income taxes
Depreciation

5,534
1,061

6,375
1,211

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

807
163

809
21

Loss (gain) on valuation of investment securities
Share-based remuneration expenses471–(10)Loss on withdrawal from business
Loss (gain) on sale of businesses

233––(55)

Share of loss (profit) of entities accounted for using equity
method

(334)

(179)

Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses

(109)
39(0)
121

IncreaseDecreaseInProvisionForRepaymentOpeCF
Increase (decrease) in retirement benefit liability

74
150

1443

Foreign exchange losses (gains)
Interest expenses

5166

43102

Decrease (increase) in trade receivables
Increase (decrease) in accrued consumption taxes(34)28(910)101

Decrease (increase) in accounts receivable - other
Decrease (increase) in prepaid expenses(1,004)(64)(1,626)(30)

Increase (decrease) in advances received
Increase (decrease) in accounts payable - other(581)
993

176
1,647

Other, net

73(308)Subtotal

7,225

7,547

1127

Interest paid
Income taxes paid

(62)
(2,018)(102)(1,880)Net cash provided by (used in) operating activities

5,156

5,591

Interest and dividends received

Cash flows from investing activities
Payments into time deposits(1,047)(729)

Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment

982
(216)

916
(419)

Purchase of intangible assets
Payments for acquisition of businesses(731)–(1,186)
(5)

–57

(23)

(762)

Proceeds from sale of businesses
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Other, net
Net cash provided by (used in) investing activities

9(29)1(1,066)(2,127)

(Millions of yen)
Fiscal year ended
March 31, 2019

Fiscal year ended
March 31, 2020

Cash flows from financing activities
Proceeds from long-term borrowings
Repayments of long-term borrowings

10,953(1,941)–(2,488)

Repayments of lease obligations
Proceeds from issuance of share acquisition rights–4(78)
8

Proceeds from issuance of shares resulting from exerciseof share acquisition rights

50

70

Dividends paid
Payments from changes in ownership interests in(557)(644)

subsidiaries that do not result in change in scope ofconsolidation(11,453)

–

(0)

(0)

Net cash provided by (used in) financing activities(2,943)(3,132)

Effect of exchange rate change on cash and cash equivalents

(24)

270

Other, net

Net increase (decrease) in cash and cash equivalents

1,122602

Cash and cash equivalents at beginning of period

8,768

9,890

Cash and cash equivalents at end of period

9,890

10,49310