Star Micronics : Fiscal 2023 First-quarter Consolidated Earnings Report(1,309KB)

May 11, 2023

Fiscal 2023 First-quarter Consolidated Earnings Report（Japanese GAAP）

These financial statements have been prepared for reference in accordance with accounting principles and practices generally accepted in Japan.

Company name: Star Micronics Co., Ltd.		Stock listing: Tokyo Stock Exchange
Code: 7718	URL https://www.star-m.jp
Representative Director: Mamoru Sato, President and CEO
Inquiries: Seigo Sato, Senior Executive Officer, General Manager, General Administration Headquarters
TEL: [phone]
Scheduled release of Fiscal 2023 First-quarter Business Report: May 12, 2023
Scheduled payment of dividends: -
Preparation of supplementary explanatory materials for quarterly earnings report: Yes
Quarterly earnings presentation: None
						(Figures less than one million are rounded down)
1. Results for the First Quarter of Fiscal 2023 (From January 1, 2023 to March 31, 2023)
(1) Consolidated Operating Results	（Percentages represent changes over the corresponding period of the previous fiscal year）
									Net Income
		Net Sales	Operating Income	Ordinary Income		Attributable to
								Owners of Parent
		(¥ million)	%	(¥ million)	%	(¥ million)	%	(¥ million)	%
FY 2023 First Quarter	21,116	20.4	4,106	70.2	4,324	65.3		3,174	73.7
FY 2022 First Quarter	17,539	37.1	2,412	112.2	2,615	112.5		1,827	84.4
(Note) Comprehensive income FY 2023 First Quarter ¥3,744 million［1.9%］ FY 2022 First Quarter ¥3,673 million［40.3%］
		Net Income	Diluted Net Income
		Per Share	Per Share
			(¥)		(¥)
FY 2023 First Quarter		84.21		83.96
FY 2022 First Quarter		47.42		47.17
(2) Consolidated Financial Position
		Total Assets	Net Assets	Equity Ratio
			(¥ million)		(¥ million)		%
As of March 31, 2023		97,387		75,337		76.9
As of December 31, 2022		99,538		73,088		73.0
Reference: Shareholders' Equity
	As of March 31, 2023 ¥74,926 million As of December 31, 2022 ¥72,628 million
2. Dividends
				Dividends Per Share
		1Q end		2Q end	3Q end	Year-end		Full Year
			(¥)	(¥)		(¥)		(¥)		(¥)
FY 2022		－		30.00	－		40.00		70.00
FY 2023		－
FY 2023(projected)				30.00	－		30.00		60.00

(Note) Changes to the latest dividend forecast announced: None

Breakdown of Year-End Dividends in FY2022 Ordinary dividend ¥30.00 Special dividend ¥10.00

3. Consolidated Outlook for the Fiscal Year Ending December 31, 2023（From January 1, 2023 to December 31, 2023)

			(Percentages represent changes over the corresponding period of the previous fiscal year)
							Net Income	Net
	Net Sales		Operating Income	Ordinary Income	Attributable to	Income
							Owners of Parent	Per Share
(¥	million)	%	(¥ million)	%	(¥ million)	%	(¥ million)	%	(¥)
Interim term	41,900	6.7	6,400	11.8	6,600	10.5	5,000	18.8	133.34
Full Year	79,500	(9.0)	10,500	(24.6)	10,800	(23.9)	8,100	(21.3)	218.58

(Note) Changes to the latest consolidated results forecast announced: None

*Note

(1) Significant changes in subsidiaries during the	period under review (changes	in certain specified subsidiaries
resulting in revised scope of consolidation): None
New company: － (Company name)	, Excluded company: －	(Company name)

1. Adoption of special accounting treatment used in preparation of the quarterly consolidated financial statements: None
2. Changes in accounting policies, estimates and restatement or corrections
3. 1. Changes associated with revised accounting standards: Yes
   2. Changes other than those in (i) above: None
   3. Changes in accounting estimates: None
   4. Retrospective restatement: None
4. Number of shares issued and outstanding (Common stock)
5. 1. Number of shares issued and outstanding at period-end (Including treasury stock)

As of March 31, 2023	42,465,134 shares	As of December 31, 2022	42,465,134 shares
(ii) Number of treasury stock at period-end
As of March 31, 2023	4,766,204 shares	As of December 31, 2022	4,809,548 shares
(iii) Average number of outstanding shares (During the three months)
As of March 31, 2023	37,698,930 shares	As of March 31, 2022	38,550,241 shares

• This quarterly earnings report is not subject to quarterly reviews.
• Regarding the appropriate use of earnings projections and other noteworthy matters

The above projections are based on information available at the time of release of this report and certain assumptions the Company considers reasonable. The Company does not promise that these projections will be achieved. Actual results may differ materially from projections due to a variety of factors. For information regarding the assumptions and other matters related to earnings projections in this report, refer to "(3) Explanation of the Consolidated Earnings Projections and Other Forecasts" under "1. Qualitative Information regarding Quarterly Consolidated Business Performance" on page 2.

○ (Attached Documents) Index
1. Qualitative Information regarding Quarterly Consolidated Business Performance	2
(1)	Explanation of Consolidated Operating Results	2
(2)	Explanation of Financial Position	2
(3)	Explanation of the Consolidated Earnings Projections and Other Forecasts	2
2. Quarterly Consolidated Financial Statements and Major Notes	3
(1)	Quarterly Consolidated Balance Sheet	3
(2)	Quarterly Consolidated Statement of Income and Consolidated Statement of Comprehensive Income	5
(3)	Notes to Quarterly Consolidated Financial Statements	7
(Note on Going Concern Assumption)	7
(Note on Significant Changes in Shareholders' Equity Accounts)	7
(Changes in Accounting Policies)	7

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1. Qualitative Information regarding Quarterly Consolidated Business Performance

(1) Explanation of Consolidated Operating Results

During the first quarter of fiscal 2023, the fiscal year ending December 31, 2023, conditions surrounding the global economy remained shrouded in uncertainty, despite a modest economic recovery. Amid the surge in resource prices and historic levels of inflation, the central banks of various countries have taken steps to raise interest rates in an effort to curb inflation. Concerns surrounding an economic recession are also continuing to mount owing to the incidence of financial system instability in the U.S. and Europe.

In each of the major markets in which the Star Micronics Group operates, demand for POS printers was generally weak. In addition, demand for the Group's mainstay machine tools in overseas markets, which had previously remained high, stalled with little or no forward momentum. Exacerbating these difficult trends, demand in Japan also failed to recover.

Under these circumstances, the Star Micronics Group reported sales of ¥21,116 million for the first quarter of the fiscal year under review, up 20.4% compared with the corresponding period of the previous fiscal year. The increase was largely due to an upswing in sales of machine tools in the U.S. and European markets. From a profit perspective, operating income climbed 70.2%, to ¥4,106 million due in large part to higher sales. Ordinary income increased 65.3%, to ¥4,324 million. Net income attributable to owners of parent grew 73.7%, to ¥3,174 million.

(Special Products)

In POS printers, mPOS demand, which had previously remained robust, stalled in the period under review. Despite this sluggish demand, sales increased. In addition to the easing of delays in the supply of products that had arisen due to difficulties in procuring components and parts as well as disruptions to logistics throughout the previous fiscal year, this upswing in sales largely reflects the impact of the yen's depreciation. Looking at trends by geographic region, sales in the U.S. and European markets grew substantially. This is mainly attributable to the successful steps taken to ensure the supply of products to meet demand. In contrast, results in Japan decreased on the back of weak sales.

Accounting for these factors, sales and profits increased substantially. In specific terms, sales grew 32.4% compared with the corresponding period of the previous fiscal year, to ¥4,822 million. Operating income jumped 77.9% year on year, to ¥1,227 million.

(Machine Tools)

Sales of CNC automatic lathes increased. Amid the overall impact of the yen's depreciation, this growth in sales was mainly due to the steady filling of backlog orders mostly in the U.S. and European markets from the previous fiscal year. By geographic region, sales increased significantly centered mainly on medical- and automotive-related products in the U.S. and European markets, respectively. Meanwhile, sales decreased substantially in the Asian market. This was largely attributable to weak sales of automotive-related products on the back of the continued cautious approach toward capital investment in China over the latter half of the previous fiscal year. On the domestic front, sales decreased due to lack of momentum outside of the mainstay automotive sector.

Accounting for each of the aforementioned factors, sales increased 17.3% compared with the corresponding period of the previous fiscal year, to ¥16,294 million. Operating income boosted 55.0%, to ¥3,405 million.

(2) Explanation of Financial Position

Total assets as the end of the first quarter of the fiscal year under review stood at ¥97,387 million, a decrease ¥2,151 million compared with the end of the previous fiscal year. Despite an increase in inventories, this was mainly due to the decline in cash and deposits and trade notes and accounts receivable. Total liabilities came to ¥22,050 million, a decrease of ¥4,399 million compared with the previous fiscal year-end. This largely reflected the decline in electronically recorded obligations and income taxes payable. Total net assets increased ¥2,248 million compared with the end of the previous fiscal year, to ¥75,337 million. This was in large part due to the increase in retained earnings and foreign currency translation adjustments.

1. Explanation of the Consolidated Earnings Projections and Other Forecasts
   Earnings projections remain unchanged from the projections announced on February 9, 2023.

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2. Quarterly Consolidated Financial Statements and Major Notes

1. Quarterly Consolidated Balance Sheet

		(Unit: Thousands of yen)
	As of December 31, 2022	As of March 31, 2023
Assets
Current assets
Cash and deposits	30,069,164	26,799,923
Trade notes and accounts receivable	22,749,935	21,547,554
Securities	34,278	2,297
Merchandise and finished goods	14,361,778	17,064,881
Work in process	6,578,912	6,336,183
Raw materials and supplies	4,146,484	4,295,725
Other	2,264,776	1,823,512
Allowance for doubtful accounts	(132,608)	(151,514)
Total current assets	80,072,720	77,718,563
Non-current assets
Property, plant and equipment
Buildings and structures, net	7,384,989	7,300,318
Machinery, equipment and vehicles, net	3,332,228	3,348,500
Tools, furniture and fixtures, net	1,350,231	1,290,836
Land	2,008,241	2,017,233
Lease assets, net	61,195	55,030
Construction in progress	215,439	220,330
Other, net	1,344,130	1,353,244
Total property, plant and equipment	15,696,456	15,585,495
Intangible assets
Other	445,331	417,352
Total intangible assets	445,331	417,352
Investments and other assets
Investment securities	1,131,830	1,196,885
Deferred tax assets	425,428	503,675
Net defined benefit asset	1,299,938	1,506,019
Other	466,926	459,614
Total investments and other assets	3,324,123	3,666,195
Total non-current assets	19,465,910	19,669,043
Total assets	99,538,631	97,387,607

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