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, 2019
(Based on Japanese GAAP)
April 26, 2019
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 19, 2019
June 19, 2019

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

June 20, 2019
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, 2019 (from April 1, 2018 to March 31, 2019)(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, 201930,836
15.9
4,743
17.9
5,979
19.4
4,216
25.5
Year ended March 31, 2018
26,611
15.4
4,021
10.3
5,007
13.0
3,361
20.0

Earnings per share

Profit attributable toOrdinary profit/total Operating profit/net
owners ofassets
sales
parent/equity
Yen%%%
48.24
24.4
12.8
15.4
38.57
18.5
11.2
15.1

Diluted earnings pershare

Yen
48.51
38.72

Year ended March 31, 2019Year ended March 31, 2018
(2) Consolidated financial position

Total assets
As of March 31, 2019
As of March 31, 2018

Net assets

Equity ratio

Millions of yen
47,46746,087

Millions of yen
15,53923,641

Cash flows fromoperating activities
Millions of yen
5,156
4,811

Cash flows frominvesting activities
Millions of yen(1,066)(2,095)

Net assets per share%
32.4
41.8

Yen
176.55221.72(3) Consolidated cash flows

Year ended March 31, 2019Year ended March 31, 2018

Cash flows from
Cash and cash equivalents
at end of period
financing activities
Millions of yen
Millions of yen(2,943)
9,890(1,107)8,768

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

Year ended March 31, 2018Year ended March 31, 2019Year ending March 31, 2020
(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

–
–

6.50
7.50

6.50
7.50

564
652

16.8
15.5

3.1
3.8

–

0.00

–

––

1–

3. Forecast of consolidated financial results for the year ending March 31, 2020 (from April 1, 2019 to March 31, 2020)
Net sales
Millions of yen
Six months ending
September 30, 2019
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

18,358

22.1

2,586

32.4

3,529

21.5

2,577

19.5

29.65

37,557

21.8

5,623

18.6

6,854

14.6

5,065

20.1

58.27

4. Notes(1) Changes in significant subsidiaries during the year ended March 31, 2019(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:
Yes
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, 2019

86,998,800 shares As of March 31, 2018

86,842,000 shares

Number of treasury shares at the end of the period
As of March 31, 2019372 shares As of March 31, 2018

310 shares

Average number of shares during the period
Year ended March 31, 201986,934,982 shares Year ended March 31, 2018

286,815,332 shares

Consolidated financial statements
Consolidated balance sheets(Millions of yen)
As of March 31, 2018

As of March 31, 2019

AssetsCurrent assets
Cash and deposits
Accounts receivable - trade
Merchandise and finished goods
Work in process
Supplies
Accounts receivable - otherPrepaid expenses
Other
Allowance for doubtful accounts

9,515
4,308

10,703
4,323

50
29

11320
3,474

36
4,478

571
12634
46(224)(114)

17,75920,123413

459

Accumulated depreciation

(252)

(276)

Buildings, net

160

183

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

Tools, furniture and fixtures

687

749

Accumulated depreciation

(454)

(498)

Tools, furniture and fixtures, net

233

251

Machinery, equipment and vehicles

3942

Accumulated depreciation

(27)

(30)

Machinery, equipment and vehicles, net

1112405

447

Total property, plant and equipment
Intangible assets
Goodwill

11,53910,574

SoftwareTrademark right

1,382
9,412

1,174
9,246

Customer-related assets
Other

2,368
0

2,088
0

Total intangible assets

24,70323,083

Investments and other assets
Investment securities

1,721

2,048

Deferred tax assets
Leasehold and guarantee deposits

730
746

855
880

Other

20

30

Total investments and other assets
Total non-current assets
Total assets

3

3,219

3,814

28,32827,344

46,08747,467

(Millions of yen)
As of March 31, 2018

As of March 31, 2019

Liabilities
Current liabilities
Accounts payable - trade

292

353

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

8
1,395

–
2,487

Accounts payable - otherAccrued expenses

5,061
289

6,064
529

Income taxes payable
Accrued consumption taxes

1,068
406

623
435

Advances received
Deposits received

1,183
70

583
78

Provision for bonuses
ProvisionForRepayment

445
153

481
227

Other2224

10,40011,891Long-term loans payableRetirement benefit liability

9,690
160

17,632
311

Deferred tax liabilities
Other2,175
19

2,078
13

Total non-current liabilities

12,046

20,03722,44631,928

Shareholders' equity
Capital stock

2,167

2,208

Capital surplus
Retained earnings

3,965
14,545

13
14,971

Total current liabilities
Non-current liabilities

Total liabilities
Net assets

Treasury shares

(0)

(0)

20,677

17,193

Valuation difference on available-for-sale securities
Foreign currency translation adjustment0(1,423)0(1,834)

Total accumulated other comprehensive income(1,423)(1,833)

Share acquisition rights
Non-controlling interests

135
4,252

179
–

Total net assets

23,641

15,53946,08747,467

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, 2018
Net sales

Fiscal year ended
March 31, 2019

26,61130,836

Cost of sales

3,289

3,535

Gross profit

23,322

27,301

Selling, general and administrative expenses

19,30022,558Operating profit

4,021

4,743

29–

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

8950

111,352

Other

58

66

1,047

1,430

Foreign exchange losses
Interest expenses

–
48

51
66

Arrangement fee
Other–
1346
30

Non-operating income
Foreign exchange gains

Total non-operating income
Non-operating expenses

Total non-operating expenses

61

194

5,007

5,979

Gain on sales of non-current assets
Gain on liquidation of subsidiaries

5–

16

Total extraordinary income

58

Ordinary profit
Extraordinary income

Extraordinary losses
Impairment loss

3–

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

28
31–
165

Loss on valuation of investment securities
Loss on business withdrawal

1914

4233

Other–

49

Total extraordinary losses

98453

Profit before income taxes

4,914

5,534

Income taxes - current

1,707

1,564

Income taxes - deferred(299)(221)

Total income taxes

1,408

1,342

Profit

3,506

4,191

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

5145

(25)

3,3614,216

Consolidated statements of comprehensive income(Millions of yen)

ProfitOther comprehensive income

Fiscal year ended

Fiscal year ended

March 31, 2018

March 31, 2019
3,506

4,191

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

(0)
(800)

0(399)

Share of other comprehensive income of entities accounted
for using equity method

(25)

(3)

Total other comprehensive income

(825)

(402)

2,680

3,788

2,776

3,806

(95)

(17)

Comprehensive income
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, 2018
(Millions of yen)
Shareholders' equity
Capital stock
Balance at beginning of current
periodCapital surplus

Retained earnings

Total shareholders'equity

Treasury shares

2,153

4,148

11,662(0)

17,963Issuance of new shares

14

14–

–

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)Purchase of treasury shares–––(0)(0)

Net changes of items otherthan shareholders' equity–––––Total changes of items during
period14(183)

2,882

(0)

2,713

Balance at end of current period

2,167

3,965

14,545(0)

20,677

Changes of items during period

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 parent–

Net increase (decrease) insurplus by change ofconsolidated scope

Non-controllinginterests

Total net assets

110

4,347

21,583–––29–––(478)

––––

3,361

–––––(197)

Purchase of treasury shares–––––(0)Net changes of items otherthan shareholders' equity

(0)

(584)

(584)

25(95)(655)

Total changes of items during
period

(0)

(584)

(584)

25(95)

2,058

Balance at end of current period0(1,423)(1,423)

135

4,252

23,641

Balance at beginning of current
periodChanges of items during period7

Fiscal year ended March 31, 2019
(Millions of yen)
Shareholders' equity
Capital stock
Balance at beginning of current
periodCapital surplus

Retained earnings

Total shareholders'equityTreasury 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

Net increase (decrease) insurplus by change ofconsolidated scope–(3,992)(3,225)–(7,218)

Purchase of treasury shares–––(0)(0)

Net changes of items otherthan shareholders' equity–––––Total changes of items during
period41(3,951)

426(0)(3,484)

Balance at end of current period

2,208

13

14,971(0)17,193

Changes of items 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

Non-controllinginterests

Total net assets

135

4,252

23,641–––82––––(564)

––––

–

4,216

Net increase (decrease) insurplus by change ofconsolidated scope–––––(7,218)

Purchase of treasury shares–––––(0)Net changes of items otherthan shareholders' equity

0(410)(410)

44(4,252)(4,618)

Total changes of items during
period0(410)(410)

44(4,252)(8,102)

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

15,539Balance at beginning of current
periodChanges of items during period

8Consolidated statements of cash flows(Millions of yen)
Fiscal year ended
March 31, 2018

Fiscal year ended
March 31, 2019

Cash flows from operating activities
Profit before income taxes
Depreciation

4,914
965

5,534
1,061

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

741
26

807
163

Impairment loss
Loss (gain) on valuation of investment securities

319–
4

Loss (gain) on sales of shares of subsidiaries andassociates

28–Share-based compensation expenses
Loss on withdrawal from business

331471233

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

(106)

(334)

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

95126

(109)
39

IncreaseDecreaseInProvisionForRepaymentOpeCF
Increase (decrease) in retirement benefit liability

1024

74
150

Foreign exchange losses (gains)
Interest expenses

(29)
48

5166

Decrease (increase) in notes and accounts receivable trade

(279)

(34)

Increase (decrease) in accrued consumption taxesDecrease (increase) in accounts receivable - other

159
(956)

28(1,004)

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

182
60(64)(581)

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

806
(160)

993
73

Subtotal

6,731

7,225

11(48)

11(62)

Income taxes paid

(1,883)(2,018)Net cash provided by (used in) operating activities

4,811

5,156

Payments into time deposits
Proceeds from withdrawal of time deposits

(998)
1,024

(1,047)982

Purchase of property, plant and equipmentPurchase of intangible assets

(214)
(707)

(216)
(731)

Purchase of shares of subsidiaries resulting in change inscope of consolidation(1,197)(23)

Payments for sales of shares of subsidiaries resulting inchange in scope of consolidation(11)–9(29)(2,095)(1,066)

Interest and dividend income received
Interest expenses paid

Cash flows from investing activities

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

9

(Millions of yen)
Fiscal year ended
March 31, 2018

Fiscal year ended
March 31, 2019

Cash flows from financing activitiesDecrease in short-term loans payable
Proceeds from long-term loans payable

(32)
973

–
10,953(1,359)–(1,941)
4

1750

Cash dividends paid
Payments from changes in ownership interests in(478)(557)

subsidiaries that do not result in change in scope ofconsolidation(230)(11,453)2(0)Net cash provided by (used in) financing activities(1,107)(2,943)

Effect of exchange rate change on cash and cash equivalents

19(24)Net increase (decrease) in cash and cash equivalents

1,627

1,122

Cash and cash equivalents at beginning of period

7,140

8,768

Cash and cash equivalents at end of period

8,768

9,890

Repayments of long-term loans payable
Proceeds from issuance of share acquisition rights
Proceeds from issuance of shares resulting from exerciseof share acquisition rights

Other, net10