マルマエ（6264） – [Delayed] Financial Results Summary for Q1 FY2022

Marumae Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. Summary of Financial Results for the Three Months Ended November 30, 2021 (Japanese GAAP) (Non-consolidated) Name of Listed Company: Marumae Co., Ltd. Stock Exchange Listing: Tokyo Security Code: 6264 URL: https://www.marumae.com/en/ Representative: Toshikazu Maeda, President and Representative Director Contact: Takeshi Shimomai, General Manager of the Administration Headquarters Email: inquiry_en@marumae.com December 28, 2021 Scheduled date for submission of the quarterly report: January 13, 2022 Scheduled start date of dividends payment: – Preparation of supplementary materials for the quarterly financial results: Yes Quarterly earnings release conference: None Note: Amounts are rounded down to the nearest million yen. 1. Financial Results for the Three Months Ended November 30, 2021 (September 1, 2021 to November 30, 2021) (1) Operating Results (Cumulative) Note: Percentages indicate changes from the same period of the previous fiscal year. Net sales (Millions of yen) Operating profit (Millions of yen) Ordinary profit (Millions of yen) Profit (Millions of yen) Earnings per share of common stock (Yen) Basic Diluted Three months ended November 30, 2020 November 30, 2021 1,100 200 200 137 10.76 – % 16.9 35.9 39.1 40.6 1,938 595 592 422 32.98 – % 76.1 197.0 196.0 206.5 Note: From the beginning of the first quarter of the fiscal year ending August 31, 2022, the Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020), etc. Figures for the first quarter of the fiscal year ending August 31, 2022 include the effects of the new standards. However, the percentages of changes from the same period of the previous fiscal year are calculated based on the financial results for the same period of the previous fiscal year prior to the application of the standards, as their impact is immaterial. Marumae August 31, 2021 November 30, 2021 As of 9,742 6,327 64.9 10,794 6,570 60.9 (2) Financial Position Total assets (Millions of yen) Net assets (Millions of yen) Equity ratio (%) 2. Dividends 1Q-end dividends per share (Yen) 2Q-end dividends per share (Yen) 3Q-end dividends per share (Yen) Year-end dividends per share (Yen) Annual dividends per share (Yen) Reference: Equity: 6,570 million yen (as of November 30, 2021) 6,327 million yen (as of August 31, 2021) Note: From the beginning of the first quarter of the fiscal year ending August 31, 2022, the Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020), etc. Figures for the first quarter of the fiscal year ending August 31, 2022 include the effects of the new standards. Fiscal year ended Fiscal year ending August 31, 2021 August 31, 2022 – – 14.00 24.00 10.00 18.00 (Forecast) – – (Forecast) 18.00 (Forecast) 36.00 (Forecast) Note: Revision to the most recently announced dividends forecast: None 3. Financial Forecasts for the Fiscal Year Ending August 31, 2022 (September 1, 2021 to August 31, 2022) Note: Percentages indicate changes from the corresponding period of the previous fiscal year. Six months ending February 28, 2022 Fiscal year ending Net sales (Millions of yen) Operating profit (Millions of yen) Ordinary profit (Millions of yen) Profit (Millions of yen) Earnings per share (Yen) (Cumulative) August 31, 2022 3,540 900 890 623 48.68 % 54.0 112.2 110.6 111.6 7,200 1,800 1,780 1,245 97.30 % 34.1 49.1 48.3 38.0 Note: Revision to the most recently announced financial forecasts: None From the beginning of the first quarter of the fiscal year ending August 31, 2022, the Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020), etc. The financial forecasts presented above include the effects of the new standards. However, the percentages of changes from the corresponding period of the previous fiscal year are calculated based on the financial results for the same period of the previous fiscal year prior to the application of the standards, as their impact is immaterial. Marumae Notes Note: For further information, please refer to “2. Quarterly Financial Statements and Primary Notes, (3) Notes to the Quarterly (1) Adoption of special accounting methods for preparation of quarterly financial statements: None (2) Changes in accounting policies, changes in accounting estimates and restatements 1. Changes in accounting policies along with changes in accounting standards: Yes 2. Changes in accounting policies, other than those included in 1. above: None 3. Change in accounting estimates: None 4. Restatements: None Financial Statements, Changes in accounting policies” on page 7. (3) Number of shares issued and outstanding (common stock) 1. Number of shares issued and outstanding (including treasury shares) As of November 30, 2021: 13,053,000 shares As of August 31, 2021: 13,053,000 shares 2. Number of shares of treasury shares As of November 30, 2021: 250,253 shares As of August 31, 2021: 250,196 shares 3. Average number of shares outstanding (cumulative quarterly period) Three months ended November 30, 2021: 12,802,785 shares Three months ended November 30, 2020: 12,802,804 shares * Status of implementation of quarterly review procedures This Summary of Financial Results is exempt from the quarterly review procedures by certified public accountants or audit firms. * Explanation regarding the appropriate use of financial forecasts and other notes The financial forecasts and other forward-looking statements presented in this Summary of Financial Results are based on information available to the Company at the time of the issuance of this report, and certain assumptions judged to be reasonable by the Company. Actual financial results may differ significantly due to various factors. Please refer to “1. Qualitative Information on Quarterly Financial Results, (1) Description of Operating Results” on page 2 for the assumptions used for financial forecasts and other notes on their use. Marumae Contents 1. Qualitative Information on Quarterly Financial Results ………………………………………………………. 2 (1) Description of Operating Results …………………………………………………………………………………. 2 (2) Description of Financial Position …………………………………………………………………………………. 3 (3) Description of Financial Estimates Information such as Financial Forecasts …………………. 3 2. Quarterly Financial Statements and Primary Notes ……………………………………………………………. 4 (1) Quarterly Balance Sheet ………………………………………………………………………………………………. 4 (2) Quarterly Statement of Income …………………………………………………………………………………….. 6 (3) Notes to the Quarterly Financial Statements …………………………………………………………………. 7 1 Marumae 1. Qualitative Information on Quarterly Financial Results From the beginning of the first quarter of the fiscal year ending August 31, 2022, the Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020), etc. Comparisons with the same period of the previous fiscal year in the description of operating results and comparisons with the end of the previous fiscal year in the description of financial position are based on figures for the same period of the previous fiscal year and at the end of the previous fiscal year prior to the application of the standards, For further information, please refer to “2. Quarterly Financial Statements and Primary Notes, (3) Notes to the Quarterly Financial as their impact is immaterial. Statements, Changes in accounting policies.” (1) Description of Operating Results During the three months ended November 30, 2021, the severe situation due to the Novel Coronavirus (COVID-19) was gradually easing and private consumption was picking up recently in the Japanese economy. In the semiconductor sector, which is our main sales sector, demand for logic devices expanded rapidly amid growing demand for memory, with business activity reaching a record high. Regarding the flat panel display (FPD) sector, investment in Generation 6 organic light-emitting diodes (OLEDs) for the Chinese market was on a recovery trend. In addition, investment in Generation 10.5 LCD panels also showed signs of recovery. Under these economic circumstances, in the semiconductor sector, orders from both new and existing customers increased. In the FPD sector, an expansion of orders for large vacuum chambers (vacuum containers) contributed to generally favorable business performance. Regarding expenses, cost of sales was reduced mainly due to increased factory operation rates and a decrease in provision for loss on order received and inventory write-down. As a result, the operating results for the three months ended November 30, 2021 were net sales of 1,938 million yen (year-on-year growth of 76.1%), operating profit of 595 million yen (year-on-year growth of 197.0%), ordinary profit of 592 million yen (year-on-year growth of 196.0%), and quarterly net profit of 422 million yen (year-on-year growth of 206.5%). Since the Company has only one segment, the precision parts business, a description by segment is omitted. The operating results of the precision parts business, by sales sector are described below. The Semiconductor Sector In the semiconductor sector, orders received increased by 107.4% year-on-year to 1,873 million yen, and net sales increased by 61.6% year-on-year to 1,444 million yen. Please note that figures for orders received include materials supplied for a fee. In the FPD sector, orders received increased by 300.6% year-on-year to 619 million yen, and net sales increased by 125.2% year-on-year In the other sectors, orders received decreased by 93.0% year-on-year to 3 million yen, and net sales increased by 257.2% year-on-year The FPD Sector to 370 million yen. The Other Sectors to 63 million yen. 2 Marumae (2) Description of Financial Position Assets Assets increased by 1,051 million yen compared to the end of the previous fiscal year, to 10,794 million yen. This was mainly due to increases in notes and accounts receivable – trade, property, plant and equipment, work in process and cash and deposits of 332 million yen, 330 million yen, 134 million yen and 123 million yen, respectively. Liabilities increased by 808 million yen compared to the end of the previous fiscal year, to 4,224 million yen. This was mainly due to increases in long-term borrowings, advances received and notes and accounts payable – trade of 420 million yen, 105 million yen and 100 million Liabilities yen, respectively. Net assets Net assets increased by 242 million yen compared to the end of the previous fiscal year, to 6,570 million yen. This was mainly due to an increase in retained earnings of 243 million yen from the recording of profit of 422 million yen, offsetting a decrease resulting from the payment of dividends of 179 million yen. As a result, the equity ratio decreased to 60.9%, from 64.9% in the previous fiscal year. (3) Description of Financial Estimates Information such as Financial Forecasts Currently, there are no changes to the financial forecasts for the six months ending February 28, 2022 and fiscal year ending August 31, 2022. The Company will promptly disclose any changes, as necessary. 3 Marumae As of August 31, 2021 As of November 30, 2021 (Thousands of yen) 2. Quarterly Financial Statements and Primary Notes (1) Quarterly Balance Sheet ASSETS Current assets Cash and deposits Notes and accounts receivable – trade Electronically recorded monetary claims – operating Merchandise and finished goods Work in process Raw materials and supplies Other Allowance for doubtful accounts Total current assets Non-current assets Property, plant and equipment Buildings, net Structures, net Vehicles, net Machinery and equipment, net Tools, furniture and fixtures, net Land Leased assets, net Construction in progress Intangible assets Investments and other assets Total non-current assets Total assets 4 4,813,526 5,542,139 2,505,018 745,637 940,160 15,410 570,241 12,226 28,368 (3,537) 1,591,688 78,152 2,273,591 15,916 12,775 766,549 3,056 14,922 51,803 120,646 4,929,102 9,742,628 2,628,351 1,077,765 1,048,257 14,898 704,325 33,734 39,295 (4,489) 1,589,582 76,012 2,538,838 14,156 13,479 766,549 2,886 85,670 46,935 117,832 5,251,945 10,794,085 Total property, plant and equipment 4,756,653 5,087,177 Marumae (Thousands of yen) As of August 31, 2021 As of November 30, 2021 349,644 484,512 153,541 181,722 18,900 24,000 627,534 26,380 1,069 12,936 2,384,202 4,224,057 1,241,157 1,938,342 3,552,625 6,570,028 6,570,028 10,794,085 1,452,372 1,839,854 1,923,694 2,343,816 (161,971) (162,097) 249,270 427,012 48,067 219,853 36,046 16,000 456,122 25,251 1,069 13,106 1,963,121 3,415,494 1,241,157 1,938,342 3,309,607 6,327,134 6,327,134 9,742,628 LIABILITIES Current liabilities Notes and accounts payable – trade Current portion of long-term borrowings Advances received Income taxes payable Provision for loss on order received Provision for share-based remuneration Other Total current liabilities Non-current liabilities Long-term borrowings Provision for retirement benefits Asset retirement obligations Other Total non-current liabilities Total liabilities NET ASSETS Shareholders’ equity Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity Total net assets Total liabilities and net assets 5 Marumae (Thousands of yen) Three months ended Three months ended November 30, 2020 November 30, 2021 1,100,975 767,451 333,523 133,186 200,336 2 – 81 4,979 5,063 4,149 904 – 0 19 19 2 2 200,363 55,048 7,536 62,585 137,777 1,938,333 1,150,238 788,094 193,029 595,065 3,059 1,094 186 4,342 4,301 2,128 2 – 0 – – 0 0 592,977 168,195 2,525 170,720 422,257 5,054 200,345 6,430 592,977 (2) Quarterly Statement of Income (Three-month period) Selling, general and administrative expenses Net sales Cost of sales Gross profit Operating profit Non-operating profit Interest income Foreign exchange gains Commission income Other Total non-operating profit Non-operating expenses Interest expenses Foreign exchange losses Compensation expenses Other Total non-operating expenses Ordinary profit Extraordinary income Gain on sales of non-current assets Total extraordinary income Extraordinary losses Loss on retirement of non-current assets Total extraordinary losses Profit before income taxes Income taxes – current Income taxes – deferred Total income taxes Profit 6 Marumae (3) Notes to the Quarterly Financial Statements Changes in accounting policies Application of the Accounting Standard for Revenue Recognition, etc. From the beginning of the first quarter of the fiscal year ending August 31, 2022, the Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020), etc., and recognizes revenue at the amounts expected to be received in exchange for promised goods or services, at the point when the control of such goods or services is transferred to customers. The primary changes due to the application of the accounting standard, etc. are as follows: The Company engages in buy-sell transactions, in which the Company purchases materials from customers, processes said materials, and sells the resulting products to the said customers at a price that includes the purchase price and added processing costs. In cases where the customers that supply the materials for a fee are substantially obligated to repurchase the goods supplied for a fee, the Company has previously presented net sales and cost of sales on a gross basis at the time of resale to the customers. However, due to the application of the accounting standard, etc., the Company has changed to a method of presenting only the amount equivalent to the processing fee as revenue on a net basis, which excludes the purchase price of goods supplied for a fee from net sales. The Company has applied the new accounting policy from the beginning balance of the period under review, in accordance with the transitional treatment prescribed in the proviso of Paragraph 84 of the Accounting Standard for Revenue Recognition. However, the Company has not applied the new accounting policy retrospectively to contracts for which nearly all revenue amounts were recognized in accordance with the previous treatment prior to the beginning of the first quarter of the fiscal year ending August 31, 2022, based on the method prescribed in Paragraph 86 of the Accounting Standard for Revenue Recognition. There is no cumulative effect on retained earnings at the beginning of the period, if the new accounting policy is applied retrospectively to the periods prior to the beginning of the first quarter of the fiscal year ending August 31, 2022. thousand yen, respectively. As a result, net sales and cost of sales for the three months ended November 30, 2021 decreased by 12,701 thousand yen and 12,701 In addition, due to the application of the accounting standard, etc., inventories of goods supplied for a fee and goods supplied for a fee included in work in process are no longer presented as “Raw materials and supplies,” “Merchandise and finished goods,” or “Work in process,” but are instead presented as “Other” under current assets. In accordance with the transitional treatment prescribed in Paragraph 89-2 of the Accounting Standard for Revenue Recognition, figures for the previous fiscal year have not been reclassified using the new presentation method. Furthermore, in accordance with the transitional treatment prescribed in Paragraph 28-15 of the “Accounting Standard for Quarterly Financial Reporting” (ASBJ Statement No. 12, March 31, 2020), the Company has not presented information on disaggregated revenue from contracts with customers for the three months ended November 30, 2020. Application of the Accounting Standard for Fair Value Measurement, etc. From the beginning of the first quarter of the fiscal year ending August 31, 2022, the Company has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019), etc. In accordance with the transitional treatment prescribed in Paragraph 19 of the Accounting Standard for Fair Value Measurement and Paragraph 44-2 of the “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019), the new accounting policies prescribed by the Accounting Standard for Fair Value Measurement, etc. will be applied prospectively. There is no effect of the new standards on the quarterly financial statements. Going concern assumptions: None 7 Marumae Additional information Accounting estimates associated with the COVID-19 pandemic the outlook for the domestic economy remains uncertain. The worldwide spread of COVID-19 has had a widespread impact on the economy and business activities. The Company forecasts that In light of the external information available as of the end of the first quarter of the fiscal year ending August 31, 2022, the Company makes accounting estimates based on the assumption that the effect on the Company’s financial results will be immaterial. However, if the infection status of COVID-19 is prolonged, or if its effect on the economic environment changes, it is possible that it could impact the Company’s financial position and operating results for the second quarter onward. Significant changes in shareholders’ equity: None Segment information, etc. Segment information Three months ended November 30, 2020 (from September 1, 2020 to November 30, 2020) and three months ended November 30, 2021 (from September 1, 2021 to November 30, 2021) Since the Company has only one segment, the precision parts business, a description of segment information is omitted. 8