Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy
between this translated document and the Japanese original, the original shall prevail.

August 8, 2024

Consolidated Financial Results for the Six Months Ended June 30, 2024
(Under Japanese GAAP)
Company name:
MEC COMPANY LTD.
Listing:
Tokyo Stock Exchange (Securities code: 4971)
URL:
https://www.mec-co.com/en/
Representative:
Kazuo MAEDA, CEO & President
Inquiries:
Aya MATSUSHITA, Corporate Communication OfficeTelephone:+81-(0)6-6401-8160
Scheduled date to file semi-annual securities report:
August 9, 2024
Scheduled date to commence dividend payments:
September 3, 2024
Preparation of supplementary material on financial results:
Yes
Holding of financial results briefing:
Yes (for institutional investors, securities analysts)(Yen amounts are rounded down to millions, unless otherwise noted.)1.

Consolidated financial results for the six months ended June 30, 2024 (from January 1, 2024 to June 30, 2024)(1) Operating results(Percentages indicate year-on-year changes.)
Net sales

Six months ended
June 30, 2024
June 30, 2023

Operating income

Net income attributable toowners of parent

Ordinary income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen

%

8,882
6,198

43.3
-23.7

2,362
838

181.8
-59.8

2,641
1,003

163.3
-57.7

1,890
1,076

75.7
-35.2

Note: Comprehensive income

For the six months ended June 30, 2024:
For the six months ended June 30, 2023:

Basic earnings
per share

Six months ended
June 30, 2024
June 30, 2023

¥2,627 million¥1,905 million[37.9%][-15.0%]

Diluted earnings
per share
Yen

Yen

100.9756.79-(2) Financial position
Total assets

As ofJune 30, 2024
December 31, 2023
Reference:

Net assets

Equity-to-asset ratio

Millions of yen

Millions of yen

31,41028,66526,932
24,777

EquityAs of June 30, 2024:
As of December 31, 2023:

%

85.7
86.4

¥26,932 million¥24,777 million

2.Cash dividends
1Q-endAnnual dividends per share
Fiscal
2Q-end3Q-endyear-end

Yen

Yen

Yen

25.00

45.00

FY2024 (Forecast)
25.00(Note) Revision of recently announced dividends forecast: None

45.00

FY2023
FY2024

-

Yen

20.00
20.00

Yen

Total

-

3. Consolidated earnings forecasts for the fiscal year ending December 31, 2024 (January 1, 2024 to December 31, 2024)(Percentages indicate changes from previous fiscal year for full-year figures, and year-on-year changes for quarterly changes.)

Net sales
Millions of yen

Operating income%

Ordinary income

Millions of yen%

Millions of yen

Full year
18,50032.0
4,900(Note) Revision of recently announced earnings forecast: Yes

96.6

5,200

93.8

Net income
attributable to parent
company’s
shareholders

Net income
per share

Millions ofyen%Millions of yen

3,600

56.2

192.26*Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of
consolidation): None
(2) Adoption of accounting treatment specific to the preparation of semi-annual consolidated financial statements: Yes
Note: For details, please see “Application of accounting procedures specified to create consolidated financial statements forthe six months period” on page 11 of the attached materials.
(3) Changes in accounting policies, changes in accounting estimates, and restatement(i)
Changes in accounting policies due to revisions to accounting standards and other regulations: None(ii) Changes in accounting policies due to other reasons: None(iii) Changes in accounting estimates: None(iv) Restatement: None
(4) Number of issued shares (common shares)(i)

Total number of issued shares at the end of the period (including treasury shares)
As of June 30, 2024
As of December 31, 2023

(ii)

Number of treasury shares at the end of the period
As of June 30, 2024
As of December 31, 2023

(iii)

1,346,241 shares
1,346,241 shares

Average number of shares outstanding during the period
Six months ended June 30, 2024
Six months ended June 30, 2023*

20,071,093 shares
20,071,093 shares

18,724,852 shares
18,952,670 shares

Semi-annual financial results reports are exempt from review conducted by certified public accountants or an audit firm.

* Proper use of earnings forecasts, and other special matters-The business forecasts and such like stated in this material are based on the information currently available to the Company andcertain assumptions that are judged to be rational. Actual results may vary significantly from the forecasts due to various factors.
In addition, for matters concerning the above forecasts, please refer to “1. Analysis relating to the operating results (3) Analysis offorward-looking information, such as the consolidated earnings forecast” on page 4 of the attachment.
- We are planning to hold financial results briefing for institutional investors and analysts on Thursday, August 8, 2024. Materials offinancial results briefings are posted on our website.

MEC COMPANY LIMITED<4971> Consolidated Financial Results for the Six Months ended of the Fiscal Year Ended June 30, 2024

 Table of Contents for Attached Material
1.

2.

Analysis relating to the operating results.................................................................................................................................. 2(1) Overview of business results for the six months ended June 30, 2024 ............................................................................ 2(2) Summary of financial situation for the six months period under review ......................................................................... 3(3) Analysis of forward-looking information, such as the consolidated earnings forecast .................................................... 4
Consolidated interim financial statements and major notes...................................................................................................... 5(1) Consolidated interim balance sheet ................................................................................................................................. 5(2) Consolidated interim statement of income and consolidated interim statement of comprehensive income .. 7
Consolidated interim statement of income........................................................................................................... 7
Consolidated interim statement of comprehensive income .................................................................................... 8(3) Consolidated interim statements of cash flows ............................................................................................. 9(4) Notes to interim consolidated financial statements ..................................................................................... 11(Notes on the premise of a going concern).................................................................................................. 11(Notes on marked changes in the amount of shareholders’ equity)............................................................. 11(Application of accounting procedures specified to create consolidated financial statements for the six months
period) ......................................................................................................................................................... 11(Notes on Segment Information) ................................................................................................................. 111

MEC COMPANY LIMITED<4971> Consolidated Financial Results for the Six Months ended of the Fiscal Year Ended June 30, 2024

1.

Analysis relating to the operating results(1) Overview of business results for the six months ended June 30, 2024
During the first six months of the fiscal year under review (January 1, 2024 to June 30, 2024), theJapanese economy experienced a trend of gradual recovery despite signs of stagnation due to an increase in
the burden of costs from the depreciation in the yen and a decline in personal consumption. Overseas
economies continued to be impacted by monetary tightening, concerns about the outlook for the Chinese
economy, and geopolitical risks, which remained in a highly tense state.
In the electronics industry, investment in cutting-edge areas remained strong in response to advances in
IoT and AI, and there were signs of recovery in demand in conventional areas as well. Sales also remainedsolid in general in vehicle mounted products, where the technological transition towards electrification andautomated driving is progressing. Inventory adjustments for PCs and smartphones appear to have run theircourse, and although demand is tending to recover, the pace seems to be slow and lacks strength.
The electronic circuit board and components industries, markets to which the company group is related,
continued to be affected by the electronics industry in general.
In this environment, the company group worked on business activities under the guiding principle of“create and transform” to achieve the first phase of our “Phase 1 Medium Term Management Plan
(2022 to 2024)” towards the realization of our 2030 Vision: “Create new value with visionary
technology and tackle the challenges of achieving a sustainable society in collaboration with customers.”
In particular, we focused on the development and sales of products for high-density electronic substrates,
as society is in a period of change and transformation towards digitalization and becoming greener.
As a result, total consolidated net sales for the consolidated six-month period under review amounted to8,882 million yen (up 2,684 million yen or 43.3% year on year). Selling, general and administrative
expenses were 3,020 million yen (up 212 million yen year on year, or 7.6%), operating income was 2,362
million yen (up 1,524 million yen year on year, or 181.8%), and operating income to net sales improved by
13.1 percentage points year on year to 26.6%. Ordinary income was 2,641 million yen (up 1,637 million
yen or 163.3% year on year). Net income before income taxes amounted to 2,637 million yen (up 1,088
million yen year on year or 70.3%), and net income attributable to owners of parent was 1,890 million yen(up 814 million yen year-on-year, or 75.7%).
Looking at a breakdown of net sales, sales of chemicals were 8,384 million yen (up 2,299 million yen,or 37.8%, compared with the same period last year), machinery sales were 411 million yen (up 345 million
yen, or 522.2%, year on year), sales of materials were 81 million yen (up 37 million yen, or 86.0%, year onyear), and other sales were 4 million yen (up 1 million yen, or 36.7%).
The overseas sales ratio was 61.4%, down 1.1 percentage points year on year from 62.5%. If sales tooverseas customers sold via Japanese domestic distributors were included in the overseas sales ratio, theresult would be 76.3% (up 0.8 percentage points year on year).
Net sales reached a record high for a six-month period under the impact of foreign exchange rates, therecovery trend for production of related electronic equipment, and the gradual expansion of demand for
products for use in cutting-edge package substrates. Profits also increased significantly due to an increasein production volume of chemicals, as well as profit contributions due to the improvement of production
efficiency as part of our global production strategy.
Compared to the same period of the previous year, sales of major products increased overall under the
impact of the electronics industry. Sales of the CZ Series of super-roughening adhesive enhancement
products, which have a large share of the market for semiconductor-mounted package substrates, increased
greatly, impacted by the recovery trend in demand for the Company’s products as inventory adjustments
in related electronic equipment have run their course, and the gradual expansion in demand for cuttingedge package substrates, while sales of the EXE Series for displays also increased as inventory adjustments
in related electronic equipment have run their course and demand for the Company’s related products isrecovering. Sales of the SF Series for displays increased, due to production trends for related electronicequipment. Sales of the V-Bond Series of adhesion improvers for multilayered substrates for automotive
boards remained strong.
2MEC COMPANY LIMITED<4971> Consolidated Financial Results for the Six Months ended of the Fiscal Year Ended June 30, 2024

Results by segment were as follows.
In Japan, demand for products for advanced package substrates for generative AI and other applications
remained strong and there were signs of recovery in demand for products related to personal computers. In
addition, demand for conventional servers also began to pick up as the investment restraint in place sincelast year turned around. There was also an increase in demand for chemicals for displays due to production
trends for related electronic devices. Meanwhile, in the South Korean market, where we sell products via aJapanese distributor, demand for the memory package substrates is in the process of recovery and there
was no strong demand for our products. As a result, the consolidated net sales for the six-month period
were 3,545 million yen (up 1,122 million yen year on year, or 46.3%) and segment profit was 1,703
million yen (up 1,457 million yen year on year, or 594.2%).
In Taiwan, demand for package substrates due to a recovery in investment in conventional servers and amoderate recovery trend for smartphones resulted in consolidated net sales for the six-month period of
1,674 million yen (up 468 million yen year on year, or 38.9%) and segment profit of 248 million yen (up150 million yen year on year, or 153.1%).
In Hong Kong (Hong Kong, Zhuhai), demand for smartphone and vehicle mounted related products wason a moderate recovery trend. As a result, consolidated net sales for the six-month period amounted to
1,066 million yen (up 345 million yen year on year, or 48.0%) and segment profit was 221 million yen (up129 million yen year on year, or 140.1%).
In China (Suzhou), there were signs of a recovery in demand for products related to servers andsmartphones. As a result, consolidated net sales for the six-month period amounted to 1,702 million yen(up 574 million yen year on year, or 50.9%) and segment profit of 306 million yen (up 251 million yen
year on year, or 459.8%).
In Europe, while the demand trend varied depending on the customer, consolidated net sales for the sixmonth period amounted to 532 million yen (up 96 million yen year on year, or 22.1%) and segment profit
was 24 million yen (up 8 million yen year-on-year, or 50.9%).
In Thailand, while capital investment by electronic board manufacturers in Southeast Asia was active, atrend of recovery was observed in demand mainly for products for multilayer boards. As a result,consolidated net sales for the six-month period amounted to 360 million yen (up 76 million yen year on
year, or 27.0%) and segment profit was 33 million yen (up 30 million yen year on year, or 1,172.0%).
(2) Summary of financial situation for the six months period under review(i) Assets, liabilities, and net assets
As a result of increases in cash and deposits, accounts receivable - trade, and other items, assets were
31,410 million yen, up 2,745 million yen from the previous fiscal year.
Liabilities came to 4,478 million yen, up 590 million yen from the previous fiscal year, mainly due toincreases in notes and accounts payable and income taxes payable.
Mainly because of increases in retained earnings and foreign currency translation adjustment due to theweak yen, net assets increased by 2,155 million yen from the previous fiscal year to 26,932 million yen.
As a result of the above, the equity ratio reached 85.7%.

3

MEC COMPANY LIMITED<4971> Consolidated Financial Results for the Six Months ended of the Fiscal Year Ended June 30, 2024(ii) Cash flow
Looking at the financial position in the six-month period under review, cash and cash equivalents(hereinafter referred to as “cash”) rose 1,668 million yen from the previous fiscal year to 8,358 million
yen.
Outlines of cash flow conditions and reasons for fluctuations during the six-month period under review
are as follows:(Cash flow from operating activities)
Cash from operating activities amounted to 1,989 million yen (up 1,194 million yen year on year). Thiswas mainly because the Company recorded net income before income taxes of 2,637 million yen,depreciation of 391 million yen, and income taxes paid of 284 million yen.
(Cash flow from investment activities)
As a result of investment activities, cash used amounted to 79 million yen (down 671 million yen year onyear). This was mainly due to net proceeds from withdrawal of time deposits of 605 million yen andpurchase of property, plant and equipment of 508 million yen.
(Cash flow from financial activities)
As a result of financing activities, cash used amounted to 483 million yen (down 920 million yen year onyear). This was mainly due to dividends paid of 472 million yen.

(3) Analysis of forward-looking information, such as the consolidated earnings forecast
The Company has revised the full-year consolidated earnings forecast as notified in “Differences
between Consolidated Earnings Forecast and Actual Results for the First Six Months of the Fiscal YearEnding in December 2024 and Revision to the Full-Year Consolidated Earnings Forecast” publishedtoday (August 8, 2024). The forecasts mentioned in this material are determined based on the information
available at this time. Actual results may differ from the earnings forecast due to various factors.

4

MEC COMPANY LIMITED<4971> Consolidated Financial Results for the Six Months ended of the Fiscal Year Ended June 30, 20242.

Consolidated interim financial statements and major notes(1) Consolidated interim balance sheet(Thousands of yen)
As of December 31, 2023

As of June 30, 2024

AssetsCurrent assets
Cash and deposits

8,755,863

9,993,751

Notes and accounts receivable - trade

4,766,168

5,817,634

278,458

319,106

Merchandise and finished goods

620,262

691,681Work in process

127,880

134,240

Raw materials and supplies

772,256

720,274

Other

177,695

224,129

Allowance for doubtful accounts-5,714-6,267

15,492,870

17,894,549

7,940,205

8,101,022

Accumulated depreciation-3,425,889-3,673,699

Buildings and structures, net

4,514,315

4,427,322

Machinery, equipment and vehicles

3,493,027

3,730,113

Accumulated depreciation-2,572,272-2,681,255

920,755

1,048,858

1,666,134

1,821,341-1,257,463-1,330,842

408,671490,499

3,646,812

3,704,827

90,302

105,150

Accumulated depreciation-28,712-25,888

Right-of-use asset, net

61,59079,261

Construction in progress

268,124

246,747

9,820,269

9,997,517

160,182

159,649

Investment securities

1,866,609

1,896,317

Retirement benefits assets

1,193,849

1,221,609

Deferred tax assets

11,345381

Other120,079

240,561

3,191,884

3,358,870

13,172,336

13,516,037

28,665,207

31,410,586

Electronically recorded monetary claims operating

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

Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Right-of-use asset

Total property, plant and equipment
Intangible assets
Investments and other assets

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

5MEC COMPANY LIMITED<4971> Consolidated Financial Results for the Six Months ended of the Fiscal Year Ended June 30, 2024

(Thousands of yen)
As of December 31, 2023

As of June 30, 2024

Liabilities
Current liabilities
722,187

926,101

597,301

648,958

Accounts payable - other466,996408,318

Accrued expenses

143,590

177,449

Income taxes payable

181,148

726,663

Provision for bonuses

289,944333,872

Provision for directors' bonuses

37,82225,519Accounts payable - facilities

202,342

8,502

Other

230,863

295,854

2,872,195

3,551,239

853,602745,979

4,813

4,596

Provision for Share-based compensation

102,167

111,739

Other

55,01964,513

Total non-current liabilities

1,015,603

926,829

Total liabilities

3,887,799

4,478,069

594,142594,142541,273541,273

Retained earnings

22,722,374

24,140,721

Treasury shares-2,031,602-2,031,602

Total shareholders' equity

21,826,187

23,244,535

658,010609,085

2,033,161

2,845,633

260,048

233,263

Total accumulated other comprehensive income

2,951,220

3,687,982

Total net assets

24,777,408

26,932,517

Total liabilities and net assets

28,665,207

31,410,586

Notes and accounts payable - trade
Electronically recorded monetary obligationsoperating

Total current liabilities
Non-current liabilities
Deferred tax liabilities
Retirement benefit liability

Net assets
Shareholders' equity
Capital stock
Capital surplus

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Remeasurements of defined benefit plans

6

MEC COMPANY LIMITED<4971> Consolidated Financial Results for the Six Months ended of the Fiscal Year Ended June 30, 2024

(2) Consolidated interim statement of income and consolidated interim statement of comprehensive income(Consolidated interim statement of income)(Thousands of yen)Six months ended
June 30, 2023

Six months ended
June 30, 2024

Net sales

6,198,466

8,882,495

Cost of sales

2,552,016

3,499,378

Gross profit

3,646,450

5,383,117

Selling, general and administrative expenses

2,807,947

3,020,178

838,5032,362,939

Interest income

24,04734,981Dividend income

4,817

5,917

Proceeds from sales of prototypes

3,513

3,758

Gain on investments in partnership

3,210

19,162

123,434

204,479

8,691

10,882

167,713279,181

224

499

Other

2,712

415

Total non-operating expenses

2,937

914

1,003,279

2,641,206

Gain on sales of non-current assets

556,530

6,700

Total extraordinary income

556,530

6,700

Loss on retirement of non-current assets

11,35910,824

Total extraordinary losses

11,35910,824

Net income before income taxes

1,548,450

2,637,081

Income taxes

472,209746,504

Net income

1,076,240

1,890,576

Net income attributable to owners of parent

1,076,240

1,890,576

Operating income
Non-operating income

Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses

Ordinary income
Extraordinary income

Extraordinary losses

7

MEC COMPANY LIMITED<4971> Consolidated Financial Results for the Six Months ended of the Fiscal Year Ended June 30, 2024

(Consolidated interim statement of comprehensive income)(Thousands of yen)Six months ended
June 30, 2023
ProfitSix months ended
June 30, 2024

1,076,240

1,890,576

Valuation difference on available-for-sale securities

306,017-48,925

Foreign currency translation adjustment

543,687

812,471

Remeasurements of defined benefit plans-20,249-26,785

Total other comprehensive income

829,455

736,761

1,905,696

2,627,338

1,905,696

2,627,338－－

Other comprehensive income

Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to noncontrolling interests

8

MEC COMPANY LIMITED<4971> Consolidated Financial Results for the Six Months ended of the Fiscal Year Ended June 30, 2024

(3) Consolidated interim statements of cash flows(Thousands of yen)Six months ended

Six months ended

June 30, 2023

June 30, 2024

Cash flows from operating activities
Interim profit before income taxes

1,548,450

2,637,081

372,164

391,573

6,350

9,572

-112,089

40,910-34,588-12,303

Increase (decrease) in retirement benefit liability

-853

-457

Decrease (increase) in retirement benefit asset-17,589-24,966-3,210-19,162-28,864-40,898

224

499

645,347-811,530-882

88,380

Increase (decrease) in trade payables-467,997

186,692

Other-719,347-210,458

Subtotal

1,187,114

2,234,932

26,68939,766-435-674-418,414-284,117

794,953

1,989,907

Payments into time deposits-1,968,656-1,508,625

Proceeds from withdrawal of time deposits

1,614,904

2,113,729

Purchase of property, plant and equipment-1,297,269-508,612

943,231

8,167

Purchase of intangible assets-6,980-18,400

Purchase of investment securities-36,455-38,461-116-127,789-751,343-79,993

Depreciation
Increase (decrease) in provision for share-based
compensation
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for directors'
bonuses

Loss (gain) on investments in investment
partnerships
Interest and dividend income
Interest expenses
Decrease (increase) in notes and accounts
receivable - trade
Decrease (increase) in inventories

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

Proceeds from sale of property, plant andequipment

Other
Net cash provided by (used in) investment
activities

9MEC COMPANY LIMITED<4971> Consolidated Financial Results for the Six Months ended of the Fiscal Year Ended June 30, 2024

Cash flows from financing activities-7,274-11,115

Purchase of treasury shares-899,943－

Dividends paid

-496,265-472,129-1,403,483-483,245

157,312

242,045

Increase (decrease) in cash and cash equivalents-1,202,560

1,668,714

Cash and cash equivalents at beginning of period

7,776,959

6,690,174

Cash and cash equivalents at end of period

6,574,398

8,358,888

Payments for repayment of lease obligations

Net cash provided by (used in) financing
activities
Effect of exchange rates changes on cash and cash
equivalents

10MEC COMPANY LIMITED<4971> Consolidated Financial Results for the Six Months ended of the Fiscal Year Ended June 30, 2024

(4) Notes to interim consolidated financial statements(Notes on the premise of a going concern)
N/A(Notes on marked changes in the amount of shareholders’ equity)
N/A(Application of accounting procedures specified to create consolidated financial statements for the six months
period)(Calculation of tax expenses)
For tax expenses, the Company has adopted the method of reasonably estimating the effective tax rate
after the application of tax effect accounting to net income before income taxes for the consolidated
accounting year and multiplying net income before income taxes for the period by this estimated effective
tax rate. However, in cases where the result of calculating using this effective tax rate lacks reasonablenessin a striking manner, the Company bases calculations on the legal tax rate.
(Notes on Segment Information)[Segment Information]
1 For the previous interim consolidated fiscal year (From January 1, 2023 to June 30, 2023)(1) Information on net sales, profit or loss by reportable segment(Thousands of yen)
Reportable segment
Total
Japan

TaiwanHong Kong

China

ThailandEuropeSales to externalcustomers

2,423,594

1,205,176

720,802

1,128,591

283,816

436,485

6,198,466

Inter-segment sales
and transfers

1,124,683－

34,9302,710－

36,2601,198,584

Total

3,548,277

1,205,176

755,733

1,131,301

283,816

472,745

7,397,051

Segment profit

245,356

98,13092,10054,703

2,596

15,956

508,844

Net sales(2) Differences between the total amount at reportable segments and the amount stated in the interim
consolidated financial statements, and main details of such differences (matters concerning
reconciliation)(Thousands of yen)
Net sales

AmountReportable segment total

508,844

Intersegment eliminations

329,658

Sales stated in the interim Consolidated Financial Statements

838,50311

MEC COMPANY LIMITED<4971> Consolidated Financial Results for the Six Months ended of the Fiscal Year Ended June 30, 2024

2 For the current interim consolidated fiscal year (From January 1, 2024 to June 30, 2024)(1) Information on net sales, profit or loss by reportable segment(Thousands of yen)
Reportable segment
Total
Japan

TaiwanHong Kong

China

ThailandEuropeSales to externalcustomers

3,545,785

1,674,027

1,066,483

1,702,971

360,306

532,920

8,882,495

Inter-segment sales
and transfers

2,270,428

－

4,992

5,563

－

1,910

2,282,894

Total

5,816,214

1,674,027

1,071,475

1,708,534

360,306

534,830

11,165,390

Segment profit

1,703,168

248,322

221,104

306,219

33,02924,0852,535,929

Net sales(2) Differences between the total amount at reportable segments and the amount stated in the interim
consolidated financial statements, and main details of such differences (matters concerning
reconciliation)(Thousands of yen)
Net sales

AmountReportable segment total

2,535,929

Intersegment eliminations-172,989

Sales stated in the interim Consolidated Financial Statements

2,362,939

12