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.

Consolidated Financial Results
for the Nine Months Ended December 31, 2023
(Based on Japanese GAAP)

February 14, 2024

Company name:
Foster Electric Company, Limited
Stock exchange listing: Tokyo
Stock code:
Representative:

6794
CEO

URL https://www.foster-electric.com/
Kazuhiro Kishi

Inquiries:

General Manager, IR and GovernanceManagement Dept.

Ichiro Kosuge

TEL +81-42-546-2305

Scheduled date to file Quarterly Securities Report:
Scheduled date to commence dividend payments:

February 14, 2024–

Preparation of supplementary material on quarterly financial results:
Holding of quarterly financial results meeting:Yes
No(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the nine months ended December 31, 2023 (from April 1, 2023 to December 31, 2023)(1) Consolidated operating results (cumulative)
Percentages indicate year-on-year changes
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Millions of yen% Millions of yen% Millions of yen% Millions of yen%
Nine months ended December 31, 2023
90,844
2.5
3,862 433.9
4,007 228.5
2,480–Nine months ended December 31, 2022
88,612
35.1
723
–
1,219
–
(241)
–
Note: Comprehensive income:Nine months ended December 31, 2023 ¥6,506 million [97.9%]
Nine months ended December 31, 2022 ¥3,287 million [-%]
Earnings per share

Diluted earnings per shareYen
111.65(10.91)

Nine months ended December 31, 2023
Nine months ended December 31, 2022

Yen
–
–

(2) Consolidated financial position
Total assets
As of December 31, 2023
As of March 31, 2023
Reference: Equity capital:

Net assets

Equity ratio

Millions of yen
Millions of yen
101,360
62,611
92,871
56,515
As of December 31, 2023 ¥56,098 million
As of March 31, 2023
¥51,095 million

Net assets per share
%
55.3
55.0

Yen
2,522.17
2,302.49

2. Cash dividends
Annual dividends per share

Year ended March 31, 2023
Year ending March 31, 2024

1st quarter-end

2nd quarter-end

3rd quarter-end

Fiscal year-end

Yen
–
–

Yen
10.00
10.00

Yen
–
–

Yen
10.00

Yen
20.00

15.00

25.00

Year ending March 31, 2024 (Forecast)
Note: Changes in dividend forecast subsequent to the most recent announcement: None

Total

3. Forecast of consolidated financial results for the year ending March 31, 2024 (from April 1, 2023 to March 31, 2024)
Percentages indicate year-on-year changes
Profit attributable to
Net 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
120,000
(1.1)
4,000
63.5
3,500
50.3
2,000 135.7
90.05
Note: Changes in forecast of financial results subsequent to the most recent announcement: None

4. Notes(1) Changes in significant subsidiaries during the nine months ended December 31, 2023
(changes in specified subsidiaries resulting in the change in scope of consolidation):(2) Application of special accounting methods for preparing quarterly consolidated financial statements:

NoNo(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 December 31, 2023

25,000,000 shares

As of March 31, 2023

25,000,000 shares

As of March 31, 2023

2,808,421 shares

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

2,757,705 shares

Average number of shares during the period (cumulative from the beginning of the fiscal year)
Nine months ended December 31, 2023
22,221,109 shares Nine months ended December 31, 2022
22,187,031 shares* Quarterly consolidated financial statements are not subject to quarterly audit by a certified public accountant or audit corporation.
* Information on proper use of the projected financial results and other notes(Precautionary notes on forward-looking statements)
Forward-looking statements in this document, including earnings projections, are based on currently available information and certain
assumptions that the Company regards as reasonable at the time of writing, and the Company does not in any way guarantee theachievement of the projections. Actual results may differ substantially from the forecast figures depending on various factors.
For the preconditions of and precautions in using the earnings projections, please refer to “Explanation of forecast of consolidated
financial results and other forward-looking information” on page 3 of the Attachment.

○ Contents of Attachment
1. Overview of operating results, etc. ........................................................................................................................................................ 2(1) Operating results for the period under review .............................................................................................................................. 2(2) Financial position for the period under review ............................................................................................................................. 2(3) Explanation of forecast of consolidated financial results and other forward-looking information ............................................... 3
2. Quarterly consolidated financial statements .......................................................................................................................................... 4(1) Consolidated balance sheets ......................................................................................................................................................... 4(2) Consolidated statements of income (cumulative) and consolidated statements of comprehensive income (cumulative) ............ 6(3) Consolidated statements of cash flows ......................................................................................................................................... 8(4) Notes to the quarterly consolidated financial statements ............................................................................................................ 10(Notes on going concern assumption)..................................................................................................................................... 10(Notes on significant changes in the amount of shareholders’ equity) .................................................................................... 10(Changes in accounting policies) ............................................................................................................................................ 10(Additional information) ......................................................................................................................................................... 10(Segment information, etc.) .................................................................................................................................................... 11-1-

1. Overview of operating results, etc.

(1) Operating results for the period under review
During the nine months ended December 31, 2023, the outlook for the global economy remained in a state of flux. The end of theover three-year-long COVID-19 pandemic triggered a full-fledged resumption of economic activities, but uncertainties continued topersist amid intensified geopolitical tensions caused by the prolonged Russia–Ukraine war and Hamas’ surprise attack on Israel. The
situation is further exacerbated by persistently high policy interest rates in the US and Europe and uncertainties surrounding the
Chinese economy, despite subsiding inflation in developed countries.
The automotive market, the Foster Group (the “Group”)’s focus, has been seeing a recovery in sales, owing to the easing ofsemiconductor shortages and the increase in production and sales of electric vehicles (EVs).
Under these circumstances, the Group has pressed forward with its “partner strategy” set forth in the medium-term business plan,under which it has strived to establish an optimal production system by improving the accuracy of demand forecasts while
maintaining appropriate inventory levels. The Group has also continued to advance cost reduction measures. Further, progress has
been made as planned in preparing for the launch of speaker production at our plant in Binh Duong Province, Vietnam to mitigate
the potential impact of geopolitical risks and for the establishment of the Hungary plant with the goal of reducing CO2 emissions
through local production and consumption and on the logistics front.
As a result, consolidated net sales for the nine months ended December 31, 2023 increased to ¥90,844 million (up 2.5% YoY). On
the profit front, operating profit increased to ¥3,862 million (up 433.9% YoY), ordinary profit to ¥4,007 million (up 228.5% YoY),
and profit attributable to owners of parent to ¥2,480 million (in the previous year, loss attributable to owners of parent of ¥241
million).
Results by segment were as follows.
[Speaker Segment]
While sales continued to recover in the automotive market, in the first quarter, some customers adjusted their inventory that was
built up during periods of supply chain disruption, leading to a decrease in shipment volume. Regardless, net sales in the ninemonths ended December 31, 2023 increased to ¥72,649 million (up 0.8% YoY), reflecting a steady recovery in sales during thesecond and third quarters. On the profit front, the absence of over ¥700 million in air freight charges, which had been incurred bya consolidated subsidiary in South Korea in the first quarter of the last fiscal year (ended December 31*), along with reductions in
sea freight costs and the successful implementation of ongoing cost improvement measures, contributed positively. As a result,operating profit grew significantly to ¥3,585 million (up 465.5% YoY).
*Because the fiscal year end of the Korean consolidated subsidiary is December 31, the profit and loss of the subsidiary for theperiod from January to September 2023 is combined with that of the Group for the first nine months of the consolidated fiscal year.
[Mobile Audio Segment]
While shipments of consumer actuators proceeded as planned through the second quarter, there were shipment volume adjustmentsin the third quarter. Accordingly, net sales increased to ¥11,477 million (up 5.2% YoY). On the profit front, however, operating
profit fell to ¥592 million (down 2.6% YoY).
[Other Segment]
In the Other segment, which includes micro acoustic components and FOSTEX brand products, net sales increased to ¥9,140
million (up 19.4% YoY), owing in part to sales of speakers for acoustic vehicle alerting systems. On the profit front, the operating
loss came to ¥315 million (in the previous year, operating loss of ¥518 million) due to the recording of expenses related to the
production relocation plan for NAM WAH STAR ELECTRONICS (SHENZHEN) CO., LTD., to which the Company has
outsourced the production of micro acoustic components; according to the plan, production facilities will be relocated to our plantin China.

(2) Financial position for the period under review
As of December 31, 2023, total assets amounted to ¥101,360 million, up ¥8,489 million compared to March 31, 2023, mainly because
of increases in cash and deposits and property, plant and equipment. Owing chiefly to increases in accounts payable-trade and longterm borrowings, total liabilities grew ¥2,393 million to ¥38,749 million. Net assets came to ¥62,611 million, up ¥6,096 million,
mainly as the result of increases in retained earnings and foreign currency translation adjustment. The equity ratio was 55.3% as ofDecember 31, 2023, up 0.3 percentage points from March 31, 2023.

-2-

(Cash flows for the period under review)
Cash and cash equivalents as of December 31, 2023 totaled ¥18,868 million, up ¥5,221 million from the level on March 31, 2023,
as a result of the cash flows described below.
[Operating activities]
Net cash provided by operating activities was ¥12,440 million, chiefly due to an increase in trade payables.
[Investing activities]
Net cash used in investing activities totaled ¥4,113 million, mainly due to capital investments.
[Financing activities]
Net cash used in financing activities totaled ¥3,687 million, primarily due to a decrease in short-term borrowings.
(3) Explanation of forecast of consolidated financial results and other forward-looking information
Our full-year forecast remains unchanged at this time.

-3-2. Quarterly consolidated financial statements(1) Consolidated balance sheets(Millions of yen)
As of March 31, 2023

As of December 31, 2023

AssetsCurrent assets
Cash and deposits

13,646

18,868Notes and accounts receivable - trade
Electronically recorded monetary claims - operating

24,988482

24,087494

Securities
Finished goods–
20,037215
20,265

Raw materials
Work in process

8,195
1,492

8,395
1,348

137
813

129
1,704

Advance payments to suppliers
Other

3,096
1,173

588
1,939

Allowance for doubtful accounts

(169)

(134)

73,89377,901

6,718

8,071

Machinery, equipment and vehicles, net
Tools, furniture and fixtures, net

4,122
1,764

4,595
1,880

Land
Construction in progress

1,575
848

3,372
1,031

Total property, plant and equipment

15,03018,951

81

106

Other

132

149

Total intangible assets

214

255

Investment securities
Long-term prepaid expenses

1,446
82

1,971
152

Retirement benefit asset
Deferred tax assets

1,313
669

1,401
527

Supplies
Accounts receivable - otherTotal current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net

Intangible assets
SoftwareInvestments and other assets

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

-4-

221

198

3,732

4,251

18,97723,45892,871

101,360

(Millions of yen)
As of March 31, 2023

As of December 31, 2023

Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings

9,380
17,156

12,734
11,648Current portion of long-term borrowings
Accounts payable - other

300
2,909

575
2,886

Lease liabilities
Income taxes payable

137
839

463
652

Accrued expenses
Provision for bonuses

2,274
432

2,104
540

Other

1,369

1,384

Total current liabilities

34,79932,990Long-term borrowings
Deferred tax liabilities

–
564

3,175
634

Lease liabilities
Retirement benefit liability

131
81

1,367
87

Provision for retirement benefits for directors (and otherofficers)

24

26

Provision for share awards
Asset retirement obligations

188
264

139
–

Other

302

327

Non-current liabilities

Total non-current liabilities

1,556

5,758

36,35638,749

Share capital
Capital surplus

6,770
6,896

6,770
6,896

Retained earnings
Treasury shares

34,531(4,152)

36,565(4,077)

Total shareholders' equity

44,045

46,154385

670

Foreign currency translation adjustment
Remeasurements of defined benefit plans

6,687
(22)

9,297
(24)

Total accumulated other comprehensive income

Total liabilities
Net assets
Shareholders' equity

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

7,050

9,943

Non-controlling interests

5,419

6,512

Total net assets

56,51562,611

92,871

101,360

Total liabilities and net assets-5-(2) Consolidated statements of income (cumulative) and consolidated statements of comprehensive income(cumulative)
Consolidated statements of income (cumulative)(Millions of yen)
Nine months ended
December 31, 2022

Nine months ended
December 31, 2023

Net sales

88,612

90,844

Cost of sales

77,61576,883Gross profit

10,996

13,960

Selling, general and administrative expenses

10,273

10,098Operating profit

723

3,862

Non-operating income
Interest income

67

115

Dividend income
Subsidy income

30
66

37
4

Foreign exchange gains
Miscellaneous income

561
251

481
212

Total non-operating income

978

852

Non-operating expenses
Interest expenses

333

543

Miscellaneous losses

148

163

Total non-operating expenses

481

707

1,219

4,007

Ordinary profit
Extraordinary income
Gain on sale of non-current assets–

701

Gain on reversal of asset retirement obligations–

133

Total extraordinary income–

835

Extra retirement payments
Severance payments

254
–

–
488

Total extraordinary losses

Extraordinary losses

254

488

Profit before income taxes

964

4,354

Income taxes - current
Income taxes - deferred

993
(120)

1,003
(13)

Total income taxes

872

989

Profit92

3,364

Profit attributable to non-controlling interests

334

884

Profit (loss) attributable to owners of parent

(241)

2,480

-6-

Consolidated statements of comprehensive income (cumulative)(Millions of yen)
Nine months ended
December 31, 2022

Nine months ended
December 31, 2023

Profit92

3,364

Other comprehensive income
Valuation difference on available-for-sale securities

19

285

Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax

3,180
(5)

2,857
(2)

Total other comprehensive income

3,194

3,141

3,287

6,506

2,592

5,374

694

1,131

Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests-7-

(3)Consolidated statements of cash flows(Millions of yen)
Nine months ended
December 31, 2022

Nine months ended
December 31, 2023

Cash flows from operating activities
Profit before income taxes
Depreciation

964
2,729

4,354
2,353

139
10

(54)
2

2

2

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

(17)
150

(46)
110

Subsidy income
Gain on sale of non-current assets

(66)
–

(4)
(701)

Severance payments
Extra retirement payments

–
254

488
–

Gain on reversal of asset retirement obligations
Interest and dividend income

–
(98)

(133)
(153)

Interest expenses
Foreign exchange losses (gains)

333
1,492

543
274

Decrease (increase) in trade receivables
Decrease (increase) in inventories(3,940)(2,421)

1,949
1,175

(477)
(150)

2,799
(821)

Increase (decrease) in accounts payable - other
Decrease (increase) in advance payments to suppliers(968)(3,078)

(138)
2,725

Other, net

1,714

(204)

Subtotal(3,428)

14,52098

153Interest paid
Subsidies received

(333)
66

(543)
4

Severance payments
Extra retirement payments

–
(254)

(488)
–

Income taxes paid
Income taxes refund

(642)
438

(1,206)–(4,055)

12,440–(207)

Proceeds from redemption of securities
Purchase of investment securities

839
(0)

–
(149)

Purchase of property, plant and equipment
Purchase of intangible assets(1,974)(19)(3,932)(43)

Proceeds from sale of property, plant and equipment
Purchase of long-term prepaid expenses

–
(56)

330
(128)

Decrease (increase) in time deposits
Other, net

112
(161)

–
16

(1,261)(4,113)

Decrease (increase) in retirement benefit asset
Increase (decrease) in retirement benefit liability
Increase (decrease) in provision for retirement benefits for
directors (and other officers)

Increase (decrease) in trade payables
Decrease (increase) in accounts receivable - other

Interest and dividends received

Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of securities

Net cash provided by (used in) investing activities-8-

(Millions of yen)
Nine months ended
December 31, 2022

Nine months ended
December 31, 2023

Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings

7,154
–

(6,342)
3,750

Repayments of long-term borrowings
Dividends paid

(668)
(223)

(300)
(447)

Dividends paid to non-controlling interests
Purchase of treasury shares

–
–

(92)
(0)

Other, net

–

(254)

Net cash provided by (used in) financing activities

6,262(3,687)

Effect of exchange rate change on cash and cash equivalents

489

581

Net increase (decrease) in cash and cash equivalents

1,435

5,221

Cash and cash equivalents at beginning of period

12,08913,646

Cash and cash equivalents at end of period

13,525

18,868-9-

(4) Notes to the quarterly consolidated financial statements(Notes on going concern assumption)
Not applicable.
(Notes on significant changes in the amount of shareholders’ equity)
Not applicable.
(Changes in accounting policies)
Not applicable.
(Additional information)
From the second quarter of the fiscal year ending March 31, 2024, “Lease liabilities,” which were included in “Other” under“Current liabilities” and “Non-current liabilities” in the fiscal year ended March 31, 2023, will be reported as an independent item
due to an increase in their monetary importance. To reflect this change in presentation, the Company has reconfigured its
consolidated financial statements for the previous fiscal year.
As a result, in the consolidated balance sheet for the previous fiscal year, the Company has reclassified ¥137 million previously
included in “Other” under “Current liabilities” and ¥131 million previously included in “Other” under “Non-current liabilities” as“Lease liabilities.”- 10 -

(Segment information, etc.)[Segment information]
I. Nine months ended December 31, 2022 (from April 1, 2022 to December 31, 2022)
1. Information on amount of net sales and profit (loss) for each reportable segment(Millions of yen)Amounts on
consolidated
Adjustments
statement of* Note 1
income* Note 2

Reportable segments
Speaker

Mobile Audio

Other

Total

Net sales
Sales to external customers

72,037

10,907

5,667

88,612－

88,612

－

－

1,985

1,985

(1,985)－

Total

72,037

10,907

7,653

90,598(1,985)88,612

Segment profit (loss)

633

608

(518)

723

(0)

723

Inter-segment sales or transfers

Notes:

1. Adjustments to segment profit (loss) reflect the elimination of inter-segment transactions.
2. Total segment profit (loss) is adjusted with the operating profit in the quarterly consolidated statement of income.

2. Information on impairment losses of non-current assets or goodwill, etc. for each reportable segment(Important impairment losses of non-current assets)
Not applicable.
II. Nine months ended December 31, 2023 (from April 1, 2023 to December 31, 2023)
1. Information on amount of net sales and profit (loss) for each reportable segment
Reportable segments
Speaker

Mobile Audio

Other

Total

(Millions of yen)Amounts on
consolidated
Adjustments
statement of* Note 1
income* Note 2

Net sales
Sales to external customers

72,64911,477

6,717

90,844－

90,844

－

－

2,422

2,422

(2,422)－

Total

72,64911,4779,140

93,266(2,422)

90,844

Segment profit (loss)

3,585

592

(315)

3,862

－

3,862

Inter-segment sales or transfers

Notes:

1. Adjustments to segment profit (loss) reflect the elimination of inter-segment transactions.
2. Total segment profit (loss) is adjusted with the operating profit in the quarterly consolidated statement of income.

2. Information on impairment losses of non-current assets or goodwill, etc. for each reportable segment(Important impairment losses of non-current assets)
Not applicable.

- 11 -