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 Six Months Ended September 30, 2022
(Based on Japanese GAAP)
October 28, 2022
Company name:SMS CO., LTD.
Stock exchange listing: Tokyo
Stock code:
Representative:

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

Inquiries:
CFO
Scheduled date to file Quarterly Securities Report:

Masato Sugizaki
November 11, 2022

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 six months ended September 30, 2022 (from April 1, 2022 to September 30, 2022)(1) Consolidated operating results (cumulative)
Net sales
Six months ended September 30, 2022
Six months ended September 30, 2021

Millions of yen
23,33419,927

Percentages indicate year-on-year changes
Profit attributable toOperating profit
Ordinary profit
owners of parent% Millions of yen% Millions of yen% Millions of yen%
17.1
4,609
25.2
5,758
22.5
4,129
21.3
6.9
3,682
24.8
4,700
22.0
3,404
22.7

Earnings per share

Diluted earnings per share

Yen
47.38
39.07

Six months ended September 30, 2022
Six months ended September 30, 2021

Yen
47.17
38.89

(2) Consolidated financial position
Total assets
As of September 30, 2022
As of March 31, 2022

Net assets

Millions of yen
64,75256,585Equity ratio

Millions of yen
36,94529,991

%
56.4
52.4

2. Cash dividends
Annual dividends per share

Year ended March 31, 2022
Year ending March 31, 2023

1st quarter-end

2nd quarter-end

3rd quarter-end

Fiscal year-end

Yen
––

Yen
0.00
0.00

Yen–

Yen
10.50

Yen
10.50

–––

Year ending March 31, 2023 (Forecast)Total

3. Forecast of consolidated financial results for the year ending March 31, 2023 (from April 1, 2022 to March 31, 2023)
Percentages indicate year-on-year changes
Profit attributable toNet sales
Operating profit
Ordinary profit
Earnings per shareowners of parent
Millions of yen% Millions of yen% Millions of yen% Millions of yen%
Yen
Full year
46,063
18.4
7,238
14.6
8,499
10.0
5,984
10.6
68.67

14. Notes(1) Changes in significant subsidiaries during the six months ended September 30, 2022
(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:

Yes(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 September 30, 2022

87,148,500 shares As of March 31, 2022

87,147,800 shares

Number of treasury shares at the end of the period
As of September 30, 2022

561 shares As of March 31, 2022

561 shares

Average number of shares during the period (cumulative from the beginning of the fiscal year)
Six months ended September 30, 2022

87,147,506 shares Six months ended September 30, 2021

287,125,207 shares

Quarterly consolidated financial statements
Consolidated balance sheets(Millions of yen)
As of March 31, 2022

As of September 30, 2022

AssetsCurrent assets
Cash and deposits
Accounts receivable - trade

14,6405,842

17,813
5,991

28253325

Accounts receivable - otherPrepaid expenses

6,757
665

8,126
809

Other
Allowance for doubtful accounts

27(163)68(178)27,82332,687746(396)

838(452)

350

386

864
(642)

994
(751)

Tools, furniture and fixtures, net

222

243

Machinery, equipment and vehicles
Accumulated depreciation

28(18)

26(16)

Work in process
Supplies

Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Tools, furniture and fixtures
Accumulated depreciation

99

Right-of-use assetsAccumulated depreciation

Machinery, equipment and vehicles, net

688
(394)

813
(539)

Right-of-use assets,net

294

274

876

913

Goodwill
Software

8,907
3,013

10,0433,574

Trademark right
Customer-related assets

9,581
1,421

11,3851,542

0

0

22,923

26,546

Investment securities
Deferred tax assets

2,825
975

2,376
1,025

Leasehold and guarantee deposits

1,160

1,203

Total investments and other assets

4,962

4,604

28,762

32,06456,58564,752

Total property, plant and equipment
Intangible assets

Other
Total intangible assets
Investments and other assets

Total non-current assets
Total assets3

(Millions of yen)
As of March 31, 2022

As of September 30, 2022

Liabilities
Current liabilities
Accounts payable - trade

307

258

Current portion of long-term borrowings
Accounts payable - other

1,999
8,933

1,901
10,259Accrued expenses
Income taxes payable

577
1,674

721
1,422

Accrued consumption taxes
Contract liabilities

460
1,004

664
1,427

Deposits received
Provision for bonuses

169
704

215
689

Lease liabilities
Other131
244

149
336

Total current liabilities

16,20718,044Non-current liabilities
Long-term borrowings

8,054

7,103

173
1,973

191
2,310

185
0

156
0

10,387

9,762

26,59427,807

Shareholders' equity
Share capital

2,310

2,311

Capital surplus
Retained earnings

114
27,699115
30,913(1)(1)

30,12333,339567(1,052)

502
2,686

(484)

3,189

352

416

29,991

36,94556,58564,752Retirement benefit liability
Deferred tax liabilities
Lease liabilities
Other
Total non-current liabilities
Total liabilities
Net assets

Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total accumulated other comprehensive income
Share acquisition rights
Total net assets
Total 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)Six months ended

Six months ended

September 30, 2021

September 30, 2022

Net sales
Cost of sales

19,927
2,046

23,3342,451Gross profit

17,881

20,883

Selling, general and administrative expenses

14,198

16,274

Operating profit

3,682

4,609

Share of profit of entities accounted for using equity method
Other

1,113
17

1,152
38

Total non-operating income

1,130

1,191

59

3

Interest expenses
Other

42
1035
3

Total non-operating expenses

112

42

4,700

5,758

Gain on sale of non-current assets

10

Total extraordinary income

10

Loss on sale and retirement of non-current assets
Loss on sale of investment securities

14–81

Loss of reversal of foreign currency translation adjustment–33

Non-operating income

Non-operating expenses
Foreign exchange losses

Ordinary profit
Extraordinary income

Extraordinary losses

1443

Profit before income taxes

Total extraordinary losses

4,687

5,715

Income taxes

1,283

1,586

Profit

3,404

4,129

Profit attributable to owners of parent

3,404

4,129

5

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 accountedfor using equity method
Total other comprehensive income
Comprehensive income

Six months ended

Six months ended

September 30, 2021

September 30, 2022

3,404

4,12901,394

03,702(10)

(28)

1,384

3,674

4,788

7,803

4,788

7,803

–

–

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

6

Consolidated statements of cash flows(Millions of yen)

Cash flows from operating activities
Profit before income taxes

Six months ended

Six months ended

September 30, 2021

September 30, 2022

4,687

5,715

Depreciation
Amortization of goodwill

792
415

938
438

Loss (gain) on sale and retirement of non-current assets
Loss (gain) on sale of investment securities

13–

81

Loss on Reversal of Foreign currency translation adjustment
Share of loss (profit) of entities accounted for using equity

–

33

133

419

methodIncrease (decrease) in allowance for doubtful accounts

(25)

(5)

(103)
0(61)
(10)

Foreign exchange losses (gains)
Interest expenses

59
42

335

Decrease (increase) in trade receivables
Increase (decrease) in accrued consumption taxes

(51)
21

140
185

Decrease (increase) in accounts receivable - other
Decrease (increase) in prepaid expenses(805)
41(1,349)(129)

Increase (decrease) in contract liabilities
Increase (decrease) in accounts payable - other

208
1,357

238
1,308

Other, net

258

62

Subtotal

7,046

7,975

312(42)101(36)(1,913)

7,108

6,038

(122)

(215)

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

42(168)16(131)

Purchase of intangible assets
Proceeds from sale of investment securities

(888)
–

(1,217)070(1,129)(1,548)(2,026)(55)(1,048)(64)7627

1(849)

(915)

(0)

–

Net cash provided by (used in) financing activities(2,897)(2,020)Effect of exchange rate change on cash and cash equivalents

162442

Increase (decrease) in provision for bonuses
Increase (decrease) in retirement benefit liability

Interest and dividends received
Interest paid
Income taxes refund (paid)
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits

Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Repayments of long-term borrowings
Repayments of lease liabilities
Proceeds from issuance of share acquisition rights
Proceeds from issuance of shares resulting from exercise ofshare acquisition rights
Dividends paid
Other, net

Net increase (decrease) in cash and cash equivalents

3,244

2,912

Cash and cash equivalents at beginning of period

10,144

14,126

Cash and cash equivalents at end of period

13,38917,0397