Announcement of FY2021 Q2 results

Consolidated Financial Results

for the Six Months Ended September 30, 2021

[Japanese GAAP]

November 2, 2021

Company name: TOA Corporation

Stock exchange listing: Tokyo Stock Exchange

Code number: 6809

URL: https://www.toa.jp/

Representative: TAKEUCHI Kazuhiro, President, CEO

Contact: YOSHIDA Keigo, General Manager of Accounting & Financial Department

Scheduled date of filing quarterly securities report: November 12, 2021

Scheduled date of commencing dividend payments: December 2, 2021

Availability of supplementary briefing material on quarterly financial results: Yes

Schedule of quarterly financial results briefing session: Yes (Only in the form of a video posted on the Company's website.)

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

1. Consolidated Financial Results for the Six Months Ended September 30, 2021 (April 1, 2021 to September 30, 2021)

(1) Consolidated Operating Results		(% indicates changes from the previous corresponding period.)
		Net sales		Operating profit		Ordinary profit	Profit attributable to
				owners of parent
	Six months ended	Million yen	%	Million yen	%	Million yen	%	Million yen	%
	September 30, 2021	18,937	7.2	748	-	822	-	460	-
	September 30, 2020	17,666	(14.9)	(32)	-	53	(95.8)	(155)	-

(Note) Comprehensive income: Six months ended September 30, 2021: ¥2,267 million [297.5 %] Six months ended September 30, 2020: ¥570 million [(30.6) %]

Basic earnings

Diluted earnings

per share

per share

Six months ended

Yen

Yen

September 30, 2021

14.15

-

September 30, 2020

(4.74)

-

(2) Consolidated Financial Position

Total assets

Net assets

Equity ratio

Million yen

Million yen

%

As of September 30, 2021

60,584

48,096

76.2

As of March 31, 2021

58,572

46,365

75.8

(Reference) Equity: As of

September 30, 2021: ¥

46,176 million

As of March 31, 2021: ¥44,402 million

2. Dividends

Annual dividends

1st

2nd

3rd

Year-end

Total

quarter-end

quarter-end

quarter-end

yen

yen

yen

yen

yen

Fiscal year ended March 31, 2021

-

10.00

-

10.00

20.00

Fiscal year ending March 31, 2022

-

10.00

Fiscal year ending March 31, 2022

-

10.00

20.00

(Forecast)

(Note) Revision to the forecast for

dividends announced most recently: No

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Breakdown of the dividends for the fiscal year ended March 31, 2021: Stable dividend ¥20

Dividends for the fiscal year ending March 31, 2022 (Forecast) will be determined by taking into account the performances on stable dividend of ¥20, aiming at a consolidated dividend payout ratio of 35%, as announced in "Consolidated Financial Results for the Fiscal Year Ended March 31, 2021" on May 7, 2021.

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

(% indicates changes from the previous corresponding period.)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Basic earnings
		owners of parent	per share
	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
Full year	42,000	3.5	2,550	11.2	2,600	1.6	1,700	6.5	52.23

(Note) Revision to the financial results forecast announced most recently: No

* Notes:

1. Changes in significant subsidiaries during the period under review (changes in specified subsidiaries resulting in changes in scope of consolidation): No
2. Accounting policies adopted specially for the preparation of quarterly consolidated financial statements: Yes
3. Changes in accounting policies, changes in accounting estimates and retrospective restatement
4. 1. Changes in accounting policies due to the revision of accounting standards: Yes
   2. Changes in accounting policies other than 1) above: No
   3. Changes in accounting estimates: No
   4. Retrospective restatement: No
5. Total number of issued shares (common shares)
6. 1. Total number of issued shares at the end of the period (including treasury shares):

September 30, 2021: 34,536,635 shares

March 31, 2021: 34,536,635 shares

1. Total number of treasury shares at the end of the period: September 30, 2021: 1,990,616 shares
   March 31, 2021: 2,017,212 shares
2. Average number of shares during the period:

Six months ended September 30, 2021: 32,528,522 shares

Six months ended September 30, 2020: 32,826,435 shares

• These quarterly financial results are outside the scope of quarterly review by a certified public accountant or an audit corporation.
• Explanation of the proper use of financial results forecast and other notes
• • Forecasts presented herein are the current prospects based on information currently available and contain elements of uncertainty. Actual results may therefore differ from the above forecasts due to subsequent changes in the circumstances.
  • The Company plans to post a financial results briefing video and a supplementary briefing material on financial results on its website.

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Table of Contents
1. Qualitative Information on Quarterly Financial Results for the Period under Review. .......................................	4
(1)	Explanation of Operating Results....................................................................................................................	4
(2)	Explanation of Financial Position ...................................................................................................................	5
(3)	Explanation of Consolidated Financial Results Forecast and Other Forward-Looking Information ..............	6
2. Quarterly Consolidated Financial Statements and Primary Notes.......................................................................	7
(1)	Quarterly Consolidated Balance Sheets ..........................................................................................................	7
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income ..................................................	9
	Quarterly Consolidated Statements of Income................................................................................................	9
	Quarterly Consolidated Statements of Comprehensive Income....................................................................	10
(3)	Quarterly Consolidated Statements of Cash Flows .......................................................................................	11
(4)	Notes to the Quarterly Consolidated Financial Statements ...........................................................................	12
	(Notes on going concern assumption)...........................................................................................................	12
	(Notes in the case of significant changes in shareholders' equity)................................................................	12
	(Accounting policies adopted specially for the preparation of quarterly consolidated financial
	statements) ....................................................................................................................................................	12
	(Changes in accounting policies) ..................................................................................................................	12
	(Segment information) ..................................................................................................................................	14

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1. Qualitative Information on Quarterly Financial Results for the Period under Review

(1) Explanation of Operating Results

During the six months ended September 30, 2021, the environment surrounding TOA Corporation (hereinafter "the Company") and its subsidiaries (collectively, the "Group") remains severe due to the spread of coronavirus disease (hereinafter "COVID-19") and recovery has been delayed in some areas with cities being locked down and economic activities being restricted intermittently. In many areas, however, restrictions on activities have been eased due to factors, such as the rising vaccination rates, and the economy continues on a recovery track.

In such an environment, in an effort to realize our corporate value "Smiles for the Public," we formulated a new management vision targeting 2030, "Dr. Sound-becoming a professional organization that improves sound in society." We will aim to create the value of reassurance, reliability, and emotion as a reliable partner that will realize along with our customers a cycle of identifying, solving, and improving social issues through the continuous provision of "good sound experiences" that customers will choose. In the domestic market, we are expanding our product lineup of audio equipment and visual equipment, which are the foundation of our profitability and competitiveness. At the same time, we have started our efforts to solve social issues through co-creation with various companies in order to offer new value. Overseas, we are strengthening our sales activities and increasing their efficiency as we see signs of recovery in socioeconomic activities.

As a result, net sales during the six months ended September 30, 2021 were ¥18,937 million (up ¥1,271 million, or 7.2%, year on year). Profits showed year-on-year improvement at all levels due to an improvement in the cost ratio and a decrease in selling, general and administrative expenses. Operating profit was ¥748 million (up ¥780 million year on year), ordinary profit was ¥822 million (up ¥768 million year on year), and profit attributable to owners of parent was ¥460 million (up ¥616 million year on year).

Performance by segment is as follows.

(Japan)

Net sales amounted to ¥11,543 million (up ¥5 million, or 0.0%, year on year), and segment profit (operating profit) to ¥2,224 million (up ¥325 million, or 17.2%, year on year).

Net sales of the entire segment were flat due to an increase in sales of products for airport facilities and sales to the education market despite a decrease in sales of products for railway cars.

Segment profit increased due to improvement in the cost ratios for domestic sales and sales of products for railway cars and a decrease in selling, general and administrative expenses.

(Asia & Pacific)

Net sales amounted to ¥3,186 million (up ¥391 million, or 14.0%, year on year), and segment profit (operating profit) to ¥508 million (up ¥80 million, or 18.9%, year on year).

In Thailand, net sales decreased due to factors, such as impact of delays in construction attributable to the spread of COVID-19, despite the progress in delivering large-scale projects for railway facilities. In Vietnam, sales grew thanks to the progress in delivering large-scale projects for public offices. In Indonesia and Malaysia, the delivery of large-scale projects for public offices progressed and sales of audio equipment to the religious market were solid. As a result, net sales for the entire segment increased.

Segment profit increased due to the increase in net sales despite deterioration in the cost ratio and an increase in selling, general and administrative expenses.

(Europe, Middle East & Africa)

Net sales amounted to ¥2,153 million (up ¥300 million, or 16.2%, year on year), and segment profit (operating profit) to ¥290 million (up ¥157 million, or 118.6%, year on year).

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Net sales increased due mainly to progress in delivering large-scale projects in the United Kingdom and South Africa, robust sales in Europe and Middle East, and the impact of yen depreciation.

Segment profit increased due to the increase in net sales and an improvement in the cost ratio despite an increase in selling, general and administrative expenses.

(The Americas)

Net sales amounted to ¥1,082 million (up ¥294 million, or 37.4%, year on year), and segment profit (operating profit) to ¥98 million (up ¥93 million year on year).

In the United States, net sales increased as the spread of COVID-19 peaked and economic activities showed signs of recovery, which resulted in robust sales of audio equipment for retailers. In Canada, net sales increased as sales to the education market grew.

Segment profit increased due to the increase in net sales despite deterioration in the cost ratio and an increase in selling, general and administrative expenses.

(China & East Asia)

Net sales amounted to ¥971 million (up ¥278 million, or 40.3%, year on year), and segment profit (operating profit) to ¥130 million (up ¥76 million, or 140.9%, year on year).

As the spread of COVID-19 slowed down, net sales in Taiwan and China increased due mainly to delivery of multiple large-scale projects, for plant markets in Taiwan, and for education and other markets in China. In Hong Kong, net sales decreased year on year because of the delivery of multiple large-scale projects in the previous fiscal year, while sales were solid in Taiwan and China. As a result, net sales for the entire segment increased.

Segment profit increased due to the increase in net sales and an improvement in the cost ratio despite an increase in selling, general and administrative expenses.

1. Explanation of Financial Position
2. 1. Assets, Liabilities and Net Assets

Total assets at the end of the six months ended September 30, 2021 increased ¥2,011 million from the end of the previous fiscal year to ¥60,584 million. Assets increased due mainly to increases in cash and deposits as well as revaluation of investment securities, despite a decrease in notes and accounts receivable

• trade. The increase in liabilities and net assets is mainly attributable to increases in valuation difference on available-for-sale securities and foreign currency translation adjustment as a result of yen depreciation.
  (ii) Cash Flows

Cash and cash equivalents at the end of the six months ended September 30, 2021 (hereinafter "cash") increased by ¥800 million from the end of the previous fiscal year to ¥17,069 million. The status of cash flows and their contributing factors during the six months ended September 30, 2021 are as follows.

(Cash flows from operating activities)

Net cash provided by operating activities amounted to ¥1,937 million. This was mainly attributable to ¥841 million of profit before income taxes, ¥699 million of depreciation, a ¥1,089 million decrease in trade receivables, a ¥509 million decrease in accounts payable - other, and ¥178 million of income taxes paid.

(Cash flows from investing activities)

Net cash used in investing activities amounted to ¥776 million. This was mainly attributable to ¥874 million of payments into time deposits, ¥124 million of purchase of property, plant and equipment, and ¥331 million of proceeds from withdrawal of time deposits.

(Cash flows from financing activities)

Net cash used in financing activities amounted to ¥779 million. This was mainly attributable to ¥324 million of dividends paid, ¥251 million of repayments of finance lease obligations, and ¥142 million of repayments to non-controlling shareholders.

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