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, 2016
(Based on Japanese GAAP)
April 28, 2016
Company name:SMS CO., LTD.

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

URL

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

CEODirector, Corporate Planning Department

Natsuki Goto
Masato Sugizaki

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

June 24, 2016
June 24, 2016

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

June 27, 2016
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, 2016 (from April 1, 2015 to March 31, 2016)(1) Consolidated operating results
Percentages indicate year-on-year changes
Profit attributable to
Net sales
Operating income
Ordinary income
owners of parent
Millions of yen% Millions of yen% Millions of yen% Millions of yen%
Year ended March 31, 2016
19,069
26.7
2,756
32.6
3,509
30.3
2,265
24.2
Year ended March 31, 2015
15,056
25.0
2,079
20.2
2,693
15.1
1,824
32.2

Earnings per share

Profit attributable toOrdinary
owners ofincome/total assets
parent/equity
Yen
%
%
55.69
29.5
13.2
44.60
28.4
27.2

Diluted earnings per
share

Yen
55.86
44.72

Year ended March 31, 2016
Year ended March 31, 2015

Operatingincome/net sales
%
14.5
13.8

(2) Consolidated financial position
Total assets
As of March 31, 2016
As of March 31, 2015

Net assets

Equity ratio

Millions of yen
41,68911,421Millions of yen
13,157
6,923

Cash flows fromoperating activities
Millions of yen
2,244
3,103

Cash flows frominvesting activities
Millions of yen(18,401)(1,049)Net assets per share
%
20.5
59.7

Yen
211.03168.03(3) Consolidated cash flows

Year ended March 31, 2016
Year ended March 31, 2015

Cash flows from
Cash and cash equivalents
financing activities
at end of period
Millions of yen
Millions of yen
18,656
5,147(1,271)2,694

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

Year ended March 31, 2015
Year ended March 31, 2016
Year ending March 31, 2017
(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

–
–

7.00
7.00

7.00
7.00

283
283

15.6
12.5

4.4
3.7

–

0.00

–

–

–

1

–

3. Forecast of consolidated financial results for the year ending March 31, 2017 (from April 1, 2016 to March 31, 2017)

Net sales
Millions of yen
Six months ending
September 30, 2016
Full year

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

12,112

29.9

1,956

3.0

2,493

4.2

1,731

8.1

42.69

24,051

26.1

3,432

24.5

4,215

20.1

2,718

20.0

67.03

4. Notes(1) Changes in significant subsidiaries during the year ended March 31, 2016(changes in specified subsidiaries resulting in the change in scope of consolidation):Yes(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, 2016

41,887,200 shares As of March 31, 2015

41,887,200 shares

Number of treasury shares at the end of the period
As of March 31, 2016

1,330,272 shares As of March 31, 2015

1,330,272 shares

40,556,928 shares Year ended March 31, 2015

40,801,154 shares

Average number of shares during the period
Year ended March 31, 20162

Consolidated financial statements
Consolidated balance sheets(Thousands of yen)
As of March 31, 2015

As of March 31, 2016

AssetsCurrent assets
Cash and deposits
Accounts receivable - trade

2,708,623
2,486,428

5,291,707
3,982,752

109,185
7,784

95,83031,185

12,721
1,306,471

6,770
1,891,531

Prepaid expenses
Deferred tax assets

572,957
214,454685,224
268,219

Other
Allowance for doubtful accounts

38,232(93,840)

140,001(217,510)

7,363,018

12,175,712

208,087(71,655)

383,400(151,756)

136,432

231,643

275,425(164,006)

515,019(366,414)

Tools, furniture and fixtures, net

111,419

148,605

Machinery, equipment and vehicles
Accumulated depreciation

11,871(3,322)110,080(61,999)

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
Total property, plant and equipment

8,548

48,081

256,400

428,330

1,318,296
730,608

12,874,322
1,335,532––

10,046,813
3,046,910

Intangible assets
Goodwill
SoftwareTrademark right
Customer-related assets
Other
Total intangible assets

50

50

2,048,954

27,303,627

1,240,328
101,309

1,025,966
211,138

382,489
28,629516,448
28,5781,752,757

1,782,132

4,058,113

29,514,090

11,421,131

41,689,802

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

(Thousands of yen)
As of March 31, 2015

As of March 31, 2016

Liabilities
Current liabilities
Accounts payable - trade131,641

451,116

Short-term loans payable
Accounts payable - other188
2,604,033

19,002,638
3,443,188

Accrued expenses
Income taxes payable

207,408
554,460

232,160
947,942

Accrued consumption taxes
Advances received

371,52152,158100,331
1,102,636

Deposits received
Provision for bonuses

56,556
241,572

45,718373,715

ProvisionForRepayment
Other

135,835
38,713

129,785
85,266

Total current liabilities

4,394,091

25,914,499

Non-current liabilities
Net defined benefit liability

89,634

111,938

Deferred tax liabilities
Other–
14,1632,442,393
63,305

Total non-current liabilities
Total liabilities

103,797

2,617,637

4,497,889

28,532,136

Net assets
Shareholders' equity
Capital stock

304,166

304,166

Retained earnings
Treasury shares

7,249,161(1,036,485)

9,145,508(1,036,485)

Total shareholders' equity

6,516,843

8,413,190

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

10,4039,888

Foreign currency translation adjustment

287,523

135,593

Total accumulated other comprehensive income

297,926

145,482

47,33980,108Subscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets

461,1334,518,884

6,923,242

13,157,666

11,421,131

41,689,802

Consolidated statements of income and consolidated statements of comprehensive income
Consolidated statements of income(Thousands of yen)
Fiscal year ended
March 31, 2015
Net sales

Fiscal year ended
March 31, 2016

15,056,370

19,069,101

Cost of sales

1,332,631

2,204,290

Gross profit

13,723,738

16,864,810

Selling, general and administrative expenses

11,644,320

14,108,270

Operating income

2,079,418

2,756,539

5,393

10,885

398
115

453
–

Share of profit of entities accounted for using equity method
Consulting fee

413,708
157,912

781,798–

Other

44,35139,059Total non-operating income

621,879

832,197

Foreign exchange losses
Interest expenses

403
4,739

35,95735,738Commission for purchase of treasury shares
Other

1,725
935

–
7,256

Total non-operating expenses

7,803

78,952

2,693,494

3,509,785

Gain on step acquisitions
Gain on sales of investment securities

185,084
1,434–
240,038

Total extraordinary income

186,519240,038

Non-operating income
Interest income
Interest on securities
Operations consignment fee

Non-operating expenses

Ordinary income
Extraordinary income

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

28,282

4,853

Impairment loss
Loss on abolishment of retirement benefit plan–
14,60416,000–Loss on valuation of investment securities
Loss on sales of investment securities–
12,44083,257–––

18,98550,56755,327

173,662

Profit before income taxes

2,824,685

3,576,161

Income taxes - current
Income taxes - deferred

997,497(4,602)

1,265,170(98,415)

992,895

1,166,754

1,831,790

2,409,406

Loss on sales of shares of subsidiaries and associates
Provision of allowance for doubtful accounts
Total extraordinary losses

Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

5

7,341

143,893

1,824,448

2,265,512

Consolidated statements of comprehensive income(Thousands 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, 2015

March 31, 2016

1,831,790

2,409,406

10,366
270,954(571)(95,369)

1,933

12,001

283,255(83,939)

2,115,045

2,325,467

2,101,430

2,113,068

13,614

212,398

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, 2015
(Thousands of yen)
Shareholders' equity
Capital stock
Balance at beginning of current
periodCapital surplus

Retained earnings

Total shareholders'equityTreasury shares

303,914

278,9075,909,700(502,456)

5,990,067

Issuance of new shares

252

243

–

–

495

Dividends of surplus––(204,753)–(204,753)

Profit attributable to ownersof parent––

1,824,448–

1,824,448

Net increase (decrease) in
surplus by change ofconsolidated scope––(2,286)–(2,286)

Change in treasury shares ofparent arising fromtransactions with noncontrolling shareholders–(279,150)(277,948)–(557,099)

Purchase of treasury shares

–

–

–

(534,029)(534,029)

Net changes of items otherthan shareholders' equity

–

–

–

–

–

Total changes of items during
period252(278,907)

1,339,461(534,029)

526,776

304,166–

7,249,161(1,036,485)

6,516,843

Changes of items during period

Balance at end of current period

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities

Foreign currencytranslation
adjustment

Total accumulated
othercomprehensive
income9,979

10,933Issuance of new shares–

Dividends of surplus
Profit attributable to ownersof parent

Subscription
rights to shares

Non-controllinginterests

Total net assets

20,912

19,51344,395

6,074,888

–

–

–

–

495

–

–

–

–

–

(204,753)

–

–

–

–

–

1,824,448

Net increase (decrease) in
surplus by change ofconsolidated scope

–

–

–

–

–

(2,286)

Change in treasury shares ofparent arising fromtransactions with noncontrolling shareholders

–

–

–

–

–

(557,099)

Purchase of treasury shares

–

–

–

–

–

(534,029)

Net changes of items otherthan shareholders' equity

423

276,590277,01327,826

16,738

321,577

Total changes of items during
period423

276,590277,01327,826

16,738848,353

Balance at end of current period

10,403

287,523

297,926

47,33961,133

6,923,242

Balance at beginning of current
periodChanges of items during period7

Fiscal year ended March 31, 2016
(Thousands of yen)
Shareholders' equity
Capital stock
Balance at beginning of current
periodCapital surplus

Retained earnings

Total shareholders'equityTreasury shares

304,166–

7,249,161(1,036,485)

6,516,843

Issuance of new shares

–

–

–

–

–

Dividends of surplus––(283,898)–(283,898)

Profit attributable to ownersof parent––

2,265,512–

2,265,512

Net increase (decrease) in
surplus by change ofconsolidated scope––(23,025)–(23,025)

Change in treasury shares ofparent arising fromtransactions with noncontrolling shareholders––(62,241)–(62,241)

Purchase of treasury shares

–

–

–

–

–

Net changes of items otherthan shareholders' equity

–

–

–

–

–

Total changes of items during
period

––1,896,347–

1,896,347

304,166–

9,145,508(1,036,485)

8,413,190

Changes of items during period

Balance at end of current period

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities

Foreign currencytranslation
adjustment

Total accumulated
othercomprehensive
income10,403

287,523

Issuance of new shares–

Dividends of surplus–

Profit attributable to ownersof parent

Subscription
rights to shares

Non-controllinginterests

Total net assets

297,926

47,33961,133

6,923,242

–

–

–

–

–

–

–

–

–

(283,898)

–

–

–

–

–

2,265,512

Net increase (decrease) in
surplus by change ofconsolidated scope

–

–

–

–

–

(23,025)

Change in treasury shares ofparent arising fromtransactions with noncontrolling shareholders

–

–

–

–

–

(62,241)

Purchase of treasury shares

–

–

–

–

–

–

Net changes of items otherthan shareholders' equity(514)(151,929)(152,444)

32,7694,457,751

4,338,076

Total changes of items during
period(514)(151,929)(152,444)

32,7694,457,751

6,234,423

Balance at end of current period

9,888

135,593

145,482

80,1084,518,884

13,157,666

Balance at beginning of current
periodChanges of items during period8Consolidated statements of cash flows(Thousands of yen)
Fiscal year ended
March 31, 2015

Fiscal year ended
March 31, 2016

Cash flows from operating activities
Profit before income taxes
Depreciation

2,824,685
264,081

3,576,161
557,450

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

343,300
28,282425,672
4,853

Impairment loss
Loss (gain) on step acquisitions–(185,084)

16,000–Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities

12,440–(240,038)
83,257

Loss on abolishment of retirement benefit plan
Share of (profit) loss of entities accounted for using equity

14,604–(100,373)(219,277)

methodLoss (gain) on sales of shares of subsidiaries andassociates
Increase (decrease) in allowance for doubtful accounts–

18,98544,31125,804

Increase (decrease) in provision for bonuses
IncreaseDecreaseInProvisionForRepaymentOpeCF

58,763
18,347132,142(6,050)

Increase (decrease) in net defined benefit liability
Foreign exchange losses (gains)(40,951)403

22,30335,957

Decrease (increase) in notes and accounts receivable trade(565,067)(262,710)

Increase (decrease) in accrued consumption taxes
Decrease (increase) in prepaid expenses

281,41443,948(277,234)
33,585

Increase (decrease) in advances received
Increase (decrease) in accounts payable - other(6,024)
1,418,728(103,575)
243,886

Decrease (increase) in lease and guarantee deposits
Other, net(55,993)(384,751)(29,032)(481,122)

Subtotal

4,015,065

3,557,017

5,945(5,075)

10,669(35,947)

Income taxes paid

(912,475)(1,287,252)

Net cash provided by (used in) operating activities

3,103,460

2,244,486

Payments into time deposits
Purchase of property, plant and equipment(1,356)(127,601)(116,512)(129,952)

Purchase of intangible assets
Proceeds from sales of investment securities(618,800)
8,934(772,738)
502,341

Purchase of investment securities
Purchase of shares of subsidiaries and associates(50)(65,278)(8,330)–

Payments of loans receivable
Purchase of shares of subsidiaries resulting in change in(19,086)(37,680)(229,989)(17,907,051)

Interest and dividend income received
Interest expenses paid

Cash flows from investing activities

scope of consolidation
Other, net
Net cash provided by (used in) investing activities

9

3,580

68,020(1,049,649)(18,401,902)

(Thousands of yen)
Fiscal year ended
March 31, 2015

Fiscal year ended
March 31, 2016

Cash flows from financing activities
Increase in short-term loans payable
Proceeds from issuance of common shares

188
495

19,004,038–

Purchase of treasury shares
Cash dividends paid

(534,028)(204,410)–(282,744)

Payments from changes in ownership interests in
subsidiaries that do not result in change in scope of(534,229)(42,114)–(22,925)

Net cash provided by (used in) financing activities(1,271,984)

18,656,253

Effect of exchange rate change on cash and cash equivalents

10,506(54,803)

Net increase (decrease) in cash and cash equivalents

792,3322,444,033

Cash and cash equivalents at beginning of period

1,897,846

2,694,008

Increase in cash and cash equivalents from newly
consolidated subsidiary

3,828

9,301

2,694,008

5,147,343

consolidation
Other, net

Cash and cash equivalents at end of period10