Honda Tsushin Kogyo : Consolidated Financial Results for the Nine Months Ended December 31, 2021

Consolidated Financial Results

for the Nine Months Ended December 31, 2021 [Under Japanese GAAP]

January 31, 2022

Company name: HONDA TSUSHIN KOGYO CO.,LTD.

Listing: Tokyo Stock Exchange

Securities code: 6826

URL: https://www.htk-jp.com/

Representative: Kinji Kashio, Representative Director and President

Inquiries: Osamu Mizuno, Director, Chief Financial Officer

Telephone: [phone]

Scheduled date to commence dividend payments: None

Scheduled date to submit the Quarterly Securities Report: February 14, 2022

Preparation of supplementary material on financial results: Yes

Holding of financial results briefing: None

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the nine months ended December 31, 2021 (from April 1, 2021 to December 31, 2021)

(1) Consolidated Results of Operations (cumulative)		(Percentages indicate year-on-year changes.)
		Net Sales			Operating profit		Ordinary profit	Profit attributable to
					owners of parent
Nine months ended	Millions of yen	％	Millions of yen	％	Millions of yen	％ Millions of yen	％
December 31, 2021	13,362	26.3	586		624	459
December 31, 2020	10,577		(232)		(75)	(46)
(Note) Comprehensive income: Nine months ended December 31, 2021: ¥508 million [-%]
	Nine months ended December 31, 2020: ¥(32) million [-%]
		Profit per share		Fully diluted profit
			per share
Nine months ended				Yen	Yen
December 31, 2021			19.92
December 31, 2020			(2.01)

(Note) Since "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29), etc. have been applied from the first quarter of the fiscal year ending March 31, 2022, the above amounts of consolidated financial results reflect the application of the accounting standard, etc. Therefore, the rate of change in "Net sales" compared to the first nine months of the previous fiscal year is not stated.

(2) Consolidated Financial Position

		Total assets	Net assets	Equity-to-asset ratio	Net assets per share
As of		Millions of yen	Millions of yen	％	Yen
December 31,2021	15,858	11,369	71.7	492.52
March 31, 2021		14,505	11,004	75.9	477.44
(Reference) Equity:	As of December 31, 2021: ¥11,369 million
	As of March 31, 2021: ¥11,004 million

2. Cash dividends

		Annual dividends per share
	First quarter-end	Second quarter-end	Third quarter-end	Fiscal year-end		Total
	Yen	Yen	Yen	Yen		Yen
Fiscal year ended	0.00					7.00	7.00
March 31, 2021
Fiscal year ending	0.00
March 31, 2022
Fiscal year ending							12.00		12.00
March 31, 2022 (Forecast)
(Note) Revisions of dividend forecast from recently announced figures: Yes

3. Earnings Forecast of Consolidated Financial Results for Fiscal Year Ending March 31, 2022 (From April 1, 2021 to March 31, 2022)

(% indicates changes from the previous corresponding term)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Profit per share
		owners of parent
	Millions of yen	％ Millions of yen	％ Millions of yen	％ Millions of yen	％	Yen
Full year	18,000	20.5	850	850	475.1	650	756.4	28.16

(Note) Revisions of forecast of financial results from recently announced figures: Yes

* 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 specific accounting treatments to the preparation of quarterly consolidated financial statements: Yes
3. Changes in accounting policies, changes in accounting estimates, and restatement

1. Changes in accounting policies due to revisions to accounting standards and other regulations: Yes
2. Changes in accounting policies due to other reasons: None
3. Changes in accounting estimates: None
4. Restatement: None

1. Number of issued shares (common shares)

1)	Total number of issued shares at the end of	As of	25,006,200	As of	25,006,200
the period (including treasury shares):	December 31, 2021	shares	March 31, 2021	shares
2)	Number of treasury shares at the end of the	As of	1,922,244	As of	1,956,444
period:	December 31, 2021	shares	March 31, 2021	shares
3)	Average number of shares outstanding	Nine months ended	23,070,276	Nine months ended	23,042,985
during the period:	December 31, 2021	shares	December 31, 2020	shares

• Financial results reports are exempt from audit conducted by certified public accountants or an audit corporation.

Table of Contents of Appendix
1. Qualitative Information on Quarterly Consolidated Financial Performance	2
(1)	Explanation of operating results	2
(2)	Explanation of financial position	2
(3)	Explanation of forward-looking statements, including forecasts of consolidated business performance	2
2. Quarterly Consolidated Financial Statements and Principal Notes	4
(1)	Quarterly Consolidated Balance Sheets	4
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income	6
(3)	Notes to quarterly consolidated financial statements	7
(Notes on the going concern assumption)	7
(Notes on significant changes in the amount of shareholders' equity)	7
(Notes on accounting methods specific to preparation of quarterly financial statements)	7
(Changes in accounting policies)	8

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1. Qualitative Information on Quarterly Consolidated Financial Performance

1. Explanation of operating results

During the third quarter under review (October to December 2021), net sales increased steadily, to 4,695 million yen (up 5.2% from the previous quarter), due to the expansion of production in response to the significant growth in demand in the telecommunications and factory automation sectors and the trend of recovery in the automobile connector sector. Operating profit increased significantly, to 358 million yen (up 153.9% from the previous quarter), mainly reflecting higher sales, the expansion of production, and streamlining in the connector business.

As a result, during the nine months under review (April to December 2021), the Company saw a dramatic upturn in its consolidated business performance, posting net sales of 13,362 million yen (up 26.3% year on year), operating profit of 586 million yen (compared to an operating loss of 232 million yen in the first nine months of the previous fiscal year), ordinary profit of 624 million yen (compared to an ordinary loss of 75 million yen in the first nine months of the previous fiscal year) and profit attributable to owners of parent of 459 million yen (compared to a loss attributable to owners of parent of 46 million yen in the first nine months of the previous fiscal year).

The consolidated business performance is expected to remain steady toward the fiscal year ending March 31, 2023, with demand remaining at a high level for the time being, given a record order backlog. In addition, reflecting the fact that profits for the nine months under review exceeded the values in the initial full-year earnings forecasts, the Company has decided to revise up the full-year earnings forecasts and dividend forecast and increase the dividend, as described in "(3) Explanation of forward-looking statements, including forecasts of consolidated business performance."

See the Supplementary Material to Financial Results for details.

1. Explanation of financial position (Assets)
   Total assets were 15,858 million yen, an increase of 1,352 million yen from the end of the previous fiscal year. This mainly reflects an increase in inventories.
   (Liabilities)
   Liabilities increased 988 million yen from the end of the previous fiscal year, to 4,489 million yen. This is attributable mainly to an increase in trade payables.
   (Net assets)
   Net assets increased 364 million yen from the end of the previous fiscal year, to 11,369 million yen. This result was primarily attributable to an increase in retained earnings.
2. Explanation of forward-looking statements, including forecasts of consolidated business performance

The Company revises its full-year earnings forecast and dividend forecast, reflecting the fact that its business performance has continued to recover and grow and profits for the nine months under review have exceeded the values in the initial full-year earnings forecasts.

2

• Full-yearearnings forecast

		Net sales	Operating profit	Ordinary profit	Profit attributable	Earnings per
		to owners of parent	share
		(Million yen)	(Million yen)	(Million yen)
		(Million yen)	(Yen)
Previous	forecasts	16,500	500	450	320	13.88
(A)
Revised	forecasts	18,000	850	850	650	28.16
(B)
Change (B-A)	1,500	350	400	330
Change (%)	9.09	70.00	88.89	103.13
(Reference)
Results	for the
previous	fiscal	14,932	(74)	147	75	3.29
year
(FY2020)

• Dividend forecast

Previous forecast: Year-end dividend of 8 yen (up 1 yen from the previous fiscal year) --> Revised forecast: Year-end dividend of 12 yen (up 5 yen from the previous fiscal year)

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