Financial Results for the Second Quarter of FY 2021 [Based on the Japanese Accounting Standards]

(Consolidated)

November 9, 2021

Name of the company:

Takachiho Koheki Co., Ltd.

Stock Market:

Tokyo Stock Exchange First Section

Code No.:

2676

URL:

https://www.takachiho-kk.co.jp

Representative (job title):

Takanobu Ide (President and CEO)

Contact person (job title):

Masaya Iwamoto (General Manager of Administrative Department)

TEL:

03-3355-1111

Registration date of quarterly report: November 10, 2021

Additional explanation materials; No

Financial results briefing; Yes

Date of dividends payment: December 6, 2021

(Amounts less than one million yen are rounded down.)

1. Consolidated Financial Results for the Second Quarter of FY 2021 (from April 1, 2021 to September 30, 2021)

(1) Consolidated Operating Results (Cumulative)

(Percent figures represent changes from the same period last year)

Quarterly net income

Net sales

Operating income

Ordinary income

attributable to the

shareholders of the

parent company

million

%

million

%

million

%

million

%

yen

yen

yen

yen

Second quarter of FY 2021

9,583

3.3

431

97.2

490

176.5

334

447.8

Second quarter of FY 2020

9,273

8.8

218

42.6

177

59.7

60

79.6

Note: Comprehensive income:

266million yen (183.9%) for the second quarter of FY 2021

93million yen (-70.6%) for the second quarter of FY 2020

Quarterly net income per share

Fully diluted quarterly net

income per share

yen

Yen

Second quarter of FY 2021

37.50

37.48

Second quarter of FY 2020

6.85

  1. Consolidated Financial Position

Total assets

Net assets

Equity ratio

Net assets per share

million yen

million yen

%

yen

Second quarter of FY 2021

18,941

14,330

75.6

1,607.20

FY 2020

19,473

14,174

72.7

1,590.28

Reference: Owner's equity: 14,313 million yen for the second quarter of FY 2021 14,162 million yen for FY 2020

2.

Dividends

Annual cash dividends per share

At 1st quarter end

At 2nd quarter

At 3rd quarter end

At fiscal year end

Total

end

yen

yen

yen

yen

yen

FY 2020

-

12.00

-

13.00

25.00

FY 2021

-

12.00

FY 2021 forecast

-

-

-

Note: Revisions to the most recently disclosed dividend forecasts: None

Our dividend policy is to have a consolidated payout ratio of 40% or more, with a stable dividend amount (24 yen per year) as the lower limit. In accordance with this policy, the dividend amount is undecided at this time, but for the fiscal year ending March 2021, we are planning for the dividend at the end of the second quarter to be 12 yen, and the year-end dividend will be the annual dividend with a consolidated payout ratio of 40% or more. Therefore, the year-end dividend and annual dividend are indicated as "-".

3. Forecast of Consolidated Operating Results for FY 2021 (from April 1, 2021 to March 31, 2022)

(Percent figures represent year-on-year changes)

Net income attributable

Net

Net sales

Operating income

Ordinary income

to the shareholders of the

income

parent company

per share

million yen

%

million

%

million

%

million yen

%

yen

yen

yen

FY 2021

21,700

5.4

1,130

27.5

1,100

18.7

770

40.4

86.46

Note: Revisions to the most recently disclosed forecast of operating results: None

* Notes:

  1. Changes to principal subsidiaries for the current consolidated cumulative quarter (changes to specified subsidiary companies accompanying changes to the scope of consolidation): None
  2. Application of special accounting treatment to the preparation of quarterly consolidated financial statements: None
  3. Changes in accounting policies and estimates, and retrospective restatement:
    1. Changes in accounting policies due to amendments of accounting standards: Yes
    2. Changes in accounting policies other than (i) above: None
    3. Changes in accounting estimates: None
    4. Retrospective restatement: None

Note: For details, see Appendix P.8 "2. Quarterly Consolidated Financial Statements and Main Notes (3) Notes on Quarterly Consolidated Financial Statements (Changes in Accounting Policy)".

(4) Number of shares issued (common stock)

(i)

Number of shares issued at the end of the period (including

FY 2021 2Q

10,171,800

FY 2020

10,171,800

treasury shares)

(ii)

Number of treasury shares at the end of the period

FY 2021 2Q

1,266,078

FY 2020

1,266,078

(iii)

Average number of shares issued during the period (QTD)

FY 2021 2Q

8,905,722

FY 2020 2Q

8,905,742

Note: The number of treasury stocks to be deducted in calculating the number of treasury stocks at the end of the period and the average number of shares during the period includes the shares of the Company held by Japan Custody Bank, Ltd. (Trust E Unit) as a trust property related to the "Share Benefit Trust (BBT)" system.

  • This quarterly financial summary is not subject to audit quarter review.
  • Appropriate use of forecasts and other items warranting special mention: (Notes to the forecasts)
    The operating result forecast and other forward-looking statements contained in this report are based on the information currently available to the Company and certain assumptions the Company considers reasonable, and the Company by no means guarantees such achievement. In addition, final results may differ significantly from forecasts due to a variety of factors.

(How to obtain supplementary financial statements)

We are planning to hold a briefing session for institutional investors and analysts on Wednesday, November 24, 2021.

The financial results briefing materials distributed at this briefing will be posted on our website immediately after the event.

○Table of Contents to the Attached Materials

Contents

Page

1. Qualitative information on financial results for the current quarter

2

(1)

Explanation of Operating Results

2

(2)

Explanation of Financial Position

3

(3)

Explanation of the Future Outlook, including Forecast of Consolidated Operating Results

3

2. Quarterly Consolidated Financial Statements

4

(1)

Quarterly Consolidated Balance Sheet

4

(2)

Quarterly Consolidated Income Statements and Statements of Comprehensive Income

6

(Quarterly Consolidated Income Statement)

6

(Consolidated cumulative second quarter)

6

(Quarterly Consolidated Statements of Comprehensive Income)

7

(Consolidated cumulative second quarter)

7

(3)

Notes on the quarterly consolidated financial statements

8

(Note on going-concern assumption)

8

(Note in case of remarkable changes in amount of shareholders' equity)

8

(Change in accounting policy)

8

(Additional Information)

8

(Segment Information, etc.)

10

(Revenue recognition)

11

-1-

1. Qualitative information on financial results for the current quarter

  1. Explanation of Operating Results
    The Japanese economy during the second quarter of the current consolidated cumulative period is still in a difficult situation due to the impact of the new coronavirus infection (COVID-19), and although it continues to pick up, the pace has weakened in a severe situation.
    As for the outlook, it is expected that the economy will pick up due to the effects of various policies and the improvement of overseas economies, while thorough infection control measures and vaccination are being promoted. However, close attention should be paid to the downside risk due to the impact through the supply chain.
    It is also necessary to keep an eye on the effects of domestic and international infectious disease trends and fluctuations in the financial and capital markets.
    Although the market environment for our Group remains harsh due to increasingly fierce competition, we are striving to strengthen competitiveness and improve profitability through added value to achieve further growth and create revenue bases by expanding our global business and new business.
    In the System Segment, we have made efforts to increase the added value of our flagship products, Electronic Article Surveillance Systems, CCTV camera systems and Access Control Systems. We are promoting sales for Cloud-based Wireless LAN Systems and remote access products related to teleworking and are developing new markets for Retail Solutions such as RFID Systems and labor saving systems, as well as Cloud-based services. We are expanding the Advanced Fire Protection System Business, which is operated in Thailand and the ASEAN region.
    In the Device Segment, we have promoted sales mainly in the telecom infrastructure area, industrial equipment market area centered on IoT, amusement market area and the automotive area in the Electronic Business. In the Industrial Systems Business, we have focused on sales of Mechanical Components for the industrial equipment market such as semiconductor manufacturing equipment, which is expected to continue to grow, and residential equipment in North America, the ASEAN region and China, and the development of the automobile interior components market in Japan and overseas.
    Under these circumstances, as for operating results in the second quarter of the current consolidated cumulative period, sales increased 3.3%YOY to 9,583 million yen due to promising large-scale projects such as CCTV camera systems and face recognition systems for the retail market and strong sales of mechanical parts for housing equipment in the United States.
    In terms of profit and loss, operating income increased by 97.2 percent YOY to 431 million yen. Ordinary income increased by 176.5 percent YOY to 490 million yen. Quarterly net income attributable to shareholders of the parent company increased by 447.8 percent YOY to 334 million yen.
    The Operating results of each Segment are as follows: (System Segment)

System Segment sales increased by 7.3 percent YOY to 5,704 million yen and operating income increased by 264.1 percent YOY to 239 million yen. For retail solution products, sales increased 20.4% YOY to 2,147 million yen due to large-scale projects such as CCTV camera systems and face recognition systems for retailers. For office solution products, sales decreased by 0.6 percent YOY to 1,460 million yen due to a decrease in sales of remote access products, which were strongly affected by the impact of COVID-19 last year, although the access control system for data centers performed well.

For Global Products, sales of Advanced Fire Protection Systems in Thailand slowed down due to the spread of COVID-19. For this reason, sales decreased by 1.7 percent YOY to 1,111 million yen. For service and support products, MSP services

  1. performed well, and sales increased 5.9 percent YOY to 984 million yen. (* MSP service: managed service provider service)

(Device Segment)

Device Segment sales decreased by 2.0 percent YOY to 3,878 million yen and operating income increased by 25.6 percent YOY to 192 million yen. For Semiconductor products, although orders for electronic components such as those for semiconductor manufacturing equipment were strong, sales decreased 11.3 percent YOY to 1,849 million yen, due to the impact of the decline in sales for communication terminals and semiconductor shortages, which were strong last year. For Mechanical Component Products, sales increased 8.2 percent YOY to 2,029 million yen due to strong sales of soft-closed parts for housing equipment in the United States and communication cables for industrial equipment.

-2-

  1. Explanation of Financial Position
    Total assets as of the end of the current consolidated fiscal year decreased by 532 million yen YOY to 18,941 million yen. This is because of an increase of 1,074 million yen in contract assets and 680 million yen in Merchandise and finished goods, and a decrease of 1,778 million yen in notes and accounts receivable and 613 million yen in cash and deposits. Liabilities decreased by 688 million yen YOY to 4,610 million yen. This was due to an increase of 829 million yen in contract liabilities, a decrease of 1,029 million yen in other current liabilities, and a decrease of 482 million yen in notes and accounts payable. Net assets increased by 155 million yen YOY to 14,330 million yen. This was due to an increase in retained earnings of 218 million yen due to quarterly net income attributable to owners of the parent of 334 million yen and dividend payments of 115 million yen. The equity ratio increased by 2.9 points from the end of the previous consolidated fiscal year to 75.6 percent. As described in (Changes in Accounting Policy) below, from the first quarter consolidated accounting period of the fiscal year ending March 2022, some of the notes and accounts receivable are contract assets and some of the other current liabilities are contract liabilities.
  2. Explanation of the Future Outlook, including Forecast of Consolidated Operating Results
    Although the consolidated (cumulative) earnings forecast for the second quarter of the fiscal year ending March 2022 has been revised upward, the consolidated earnings forecast for the full year remains unchanged from the figures announced on May 14, 2021. For details, please refer to the "Notice Concerning Revision of Consolidated Earnings Forecast for the Second Quarter of the Fiscal Year Ending March 2022 (Cumulative)" announced on October 15, 2021.

-3-

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Takachiho Koheki Co. Ltd. published this content on 10 December 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 December 2021 00:11:02 UTC.