東洋電機製造（6505） – [Delayed] Summary of Consolidated Business Results for the First Half of Fiscal 2021

Summary of Consolidated Business Results for the First Half of Fiscal 2021 January 12, 2022 Company Name: Stock Code: Representative Inquiries: Toyo Denki Seizo K.K. 6505 Akira Watanabe, President Toshihito Nakanishi, Operating Officer, General Manager, Management Planning Department TEL: +81-3-5202-8122 Stock Exchange: 1st Section of the Tokyo Stock Exchange URL https://www.toyodenki.co.jp Scheduled date of submission of quarterly financial report Scheduled date of commencement of dividend payments Preparation of quarterly financial report supplemental explanatory materials Holding of quarterly financial results briefing : : — : Yes : Yes January 13, 2022 (Note: Amounts less than one million yen in financial statements and supplementary data are rounded down.) 1. Consolidated Business Results for the First Half of Fiscal 2021 (June 1, 2021 to November 30, 2021) (1) Consolidated Operating Results Net Sales Operating Income Ordinary Income Net Income Attributable to Owners of the Parent (Percentage figures show year-on-year increase or decrease.) 1H Fiscal 2021 1H Fiscal 2020 Millions of yen 14,803 16,720 % Millions of yen (362) 177 (11.5) (13.8) % Millions of yen (83) — 355 (41.3) % Millions of yen 186 — 451 (6.7) % (58.8) (4.1) (Note) Comprehensive income: : 1H Fiscal 2021 1H Fiscal 2020 (695) million yen [-%] (784) million yen [-%] Net Income per Share Diluted Net Income per Share 1H Fiscal 2021 1H Fiscal 2020 Yen 20.82 50.49 Yen — — (2) Consolidated Financial Position 1H Fiscal 2021 As of May 31, 2021 Total Assets Net Assets Shareholders’ Equity Ratio Millions of yen 50,290 51,967 Millions of yen 23,044 24,008 % 45.8 46.2 (Reference) Shareholders’ equity:: As of November 30, 2021 As of May 31, 2021 24,008 million yen 23,044 million yen 2. Dividend Information 1Q Interim 3Q Fiscal Year-End Total Annual Dividend Fiscal 2020 Fiscal 2021 Fiscal 2021 (Forecast) Yen — — (Note) Revisions to the most recently announced dividend forecast: No Yen — — Yen 30.00 30.00 Yen 30.00 30.00 Yen 0.00 0.00 — 3. Consolidated Performance Forecast for Fiscal 2021 (June 1, 2021 to May 31, 2022) (Percentage figures show year-on-year increase or decrease.) Net Sales Operating Income Ordinary Income Net Income Attributable to Owners of the Parent Net Income per Share Full year Millions of yen 33,000 % Millions of yen 250 (0.4) % Millions of yen 600 (41.0) % Millions of yen 700 (20.8) % (28.4) Yen 78.29 (Note) Revisions to the most recently announced performance forecast: Yes * Notes: (1) Transfers of major subsidiaries during the period: No (Transfers of specified subsidiaries accompanied by changes in the scope of consolidation) Newly included: – companies (name of the company) Excluded: – companies (name of the company) (2) Application of special accounting practices for the preparation of quarterly consolidated financial statements: No (3) Changes in accounting policies, changes in accounting estimates, and restatement (a) Changes in accounting policies in accordance with revisions to accounting standards and related practices: Yes (b) Any changes other than (a) above: No (c) Changes in accounting estimates: No (d) Restatement: No (4) Shares outstanding (common stock) (a) Number of shares outstanding as of the end of the period (including treasury stock): (b) Number of shares of treasury stock as of the end of the period: (c) Average number of shares for the period (fiscal year-to-date): 1H Fiscal 2021 9,735,000 shares Fiscal 2020 9,735,000 shares 1H Fiscal 2021 794,398 shares Fiscal 2020 794,128 shares 1H Fiscal 2021 8,940,722 shares 1H Fiscal 2020 8,941,457 shares * Quarterly financial reports are not subject to quarterly review procedures by a certified public accountant or audit firm. * Disclaimer concerning the proper use of business results forecasts and other relevant specific items (Note on forward-looking statements) The forecasts for business results presented in this document are based on management’s assumptions and beliefs in light of currently available information. Toyo Denki cautions readers that due to a variety of factors actual results may differ materially from forecasts. Please refer to “Explanation of Consolidated Performance Forecast and Other Forward-looking Information” in the Accompanying Materials on page 3 for details relating to forecasts of operating results (available in Japanese only). * This report is an abridged translation of the Japanese summary consolidated business results, which has been prepared in accordance with accounting principles generally accepted Japan, for reference purpose only. Toyo Denki Seizo K. K. (6505) Summary of Consolidated Business Results for the First Half of Fiscal 2021 Fiscal 2020 (As of May 31, 2021) 1H Fiscal 2021 (As of November 30, 2021) (Millions of yen) 3,964 13,218 － 901 514 3,565 2,821 7 114 196 (2) 25,300 12,338 (5,928) 6,410 8,397 (7,430) 966 1,301 24 4,857 (4,234) 622 9,325 289 14 303 13,832 223 2,988 (6) 17,037 26,666 51,967 3,971 － 13,673 1,332 609 3,079 2,628 18 18 254 (1) 25,584 12,346 (6,134) 6,211 8,419 (7,564) 855 1,301 18 4,931 (4,363) 567 8,955 195 14 209 12,399 218 2,929 (6) 15,540 24,705 50,290 2. Consolidated Financial Statements (1) Consolidated Balance Sheets Assets Current assets Cash and cash equivalents Trade notes and accounts receivable Trade notes, accounts receivable, and contract assets Electronically recorded monetary claims – operating Products and finished goods Work in process Raw materials and stored goods Advances Other accounts receivable Other Allowance for doubtful accounts Total current assets Fixed assets Property, plant and equipment Buildings and structures Accumulated depreciation Buildings and structures, net Machinery and equipment Accumulated depreciation Machinery and equipment, net Land Construction in progress Other Accumulated depreciation Other, net Total property, plant and equipment Intangible assets Software Other Total intangible assets Investments and other assets Investment securities Deferred tax assets Other Allowance for doubtful accounts Total investments and other assets Total fixed assets Total assets Toyo Denki Seizo K. K. (6505) Summary of Consolidated Business Results for the First Half of Fiscal 2021 (Millions of yen) Fiscal 2020 (As of May 31, 2021) 1H Fiscal 2021 (As of November 30, 2021) Liabilities Current liabilities Trade notes and accounts payable Electronically recorded obligations – operating Short-term debt Accrued expenses Income taxes payable Consumption and other taxes payable Advances received Contract liabilities Deposits received Reserve for directors’ bonuses Reserve for employees’ bonuses Reserve for order losses Other Total current liabilities Long-term liabilities Long-term debt Long-term payables Deferred tax liabilities Net defined benefit liability Other Total long-term liabilities Total liabilities Net assets Shareholders’ equity Capital stock Capital surplus Retained earnings Treasury stock Total shareholders’ equity Accumulated other comprehensive income Unrealized holding gains on available-for-sale securities Foreign currency translation adjustments Adjustments of defined benefit plans Total accumulated other comprehensive income Total net assets Total liabilities and net assets 1,668 4,705 2,085 611 161 207 34 － 193 36 827 871 224 11,628 11,759 17 427 4,124 1 16,330 27,958 4,998 3,177 12,320 (1,281) 19,214 4,803 88 (97) 4,793 24,008 51,967 1,726 4,061 2,785 645 155 34 － 53 194 19 849 922 121 11,568 11,466 17 39 4,152 1 15,677 27,245 4,998 3,177 12,238 (1,282) 19,132 3,914 82 (85) 3,911 23,044 50,290 (2) Consolidated Statements of Income and Comprehensive Income Consolidated Statements of Income for the First Half Toyo Denki Seizo K. K. (6505) Summary of Consolidated Business Results for the First Half of Fiscal 2021 1H Fiscal 2020 (June 1, 2020 to November 30, 2020) 1H Fiscal 2021 (June 1, 2021 to November 30, 2021) (Millions of yen) 16,720 13,003 3,716 3,539 177 0 154 23 － 34 29 242 33 0 17 13 65 355 407 － 407 － － 762 423 (112) 311 451 451 14,803 11,754 3,048 3,411 (362) 0 105 121 63 － 26 316 30 0 － 7 38 (83) 366 94 460 59 59 317 127 4 131 186 186 Net sales Cost of sales Gross profit Selling, general and administrative expenses Operating income (loss) Non-operating income Interest income Dividend income Equity in profit of unconsolidated subsidiaries and affiliates Foreign exchange gains Insurance claim income from disasters Miscellaneous income Total non-operating income Non-operating expenses Interest expenses Loss on disposal of fixed assets Foreign exchange losses Miscellaneous loss Total non-operating expenses Ordinary income (loss) Extraordinary income Gain on sales of investment securities Gain on the reversal of foreign currency translation adjustments Total extraordinary income Extraordinary losses Losses on valuation of investment securities Total extraordinary losses Income before income taxes Income taxes: Current Income taxes: Deferred Total income taxes Net income Net income attributable to owners of the parent Consolidated Statements of Comprehensive Income for the First Half Toyo Denki Seizo K. K. (6505) Summary of Consolidated Business Results for the First Half of Fiscal 2021 1H Fiscal 2020 (June 1, 2020 to November 30, 2020) 1H Fiscal 2021 (June 1, 2021 to November 30, 2021) (Millions of yen) Net income Other comprehensive income Unrealized holding gains on available-for-sale securities Foreign currency translation adjustments Adjusted amounts of defined benefit plans Share of other comprehensive income of affiliates to which the equity method is applied Total other comprehensive income Comprehensive income Comprehensive income attributable to: Owners of the parent Non-controlling interests 451 (1,258) 31 22 (30) (1,236) (784) (784) － 186 (888) 2 12 (8) (881) (695) (695) － (3) Consolidated Statements of Cash Flows Cash flows from operating activities Toyo Denki Seizo K. K. (6505) Summary of Consolidated Business Results for the First Half of Fiscal 2021 1H Fiscal 2020 (June 1, 2020 to November 30, 2020) 1H Fiscal 2021 (June 1, 2021 to November 30, 2021) (Millions of yen) Income before income taxes Depreciation and amortization Increase (decrease) in allowance for doubtful accounts Increase (decrease) in reserve for employees’ bonuses Increase (decrease) in net defined benefit liability Increase (decrease) in reserve for order losses Interest and dividend income Interest expenses Insurance claim income from disasters Loss (gain) on sales of investment securities Gain on the reversal of foreign currency translation adjustments Decrease (increase) in notes and accounts receivable-trade Decrease (increase) in inventories Increase (decrease) in notes and accounts payable-trade Increase (decrease) in advances received Increase (decrease) in accrued expenses Equity in loss (profit) of unconsolidated subsidiaries and affiliates Loss (gain) on valuation of investment securities Increase (decrease) in consumption and other taxes payable Other Subtotal Interest and dividend received Interest expenses paid Refund of (Payments for) corporate and other taxes Cash flows from operating activities Cash flows from investing activities Purchases of property, plant and equipment Proceeds from sales of property, plant and equipment Purchases of intangible assets Purchases of investment securities Proceeds from sales of investment securities Proceeds from liquidation of a related company Payments of loans receivable Other Cash flows from investing activities Cash flows from financing activities Increase (decrease) in short-term debt Repayment of long-term debt Purchase of treasury stock Cash dividend paid Other Cash flows from financing activities Effect of exchange rate change on cash and cash equivalents Increase (decrease) in cash and cash equivalents Balance of cash and cash equivalents at the beginning of the period Balance of cash and cash equivalents at the end of the period 762 673 1 34 21 192 (154) 33 (34) (407) － 635 (244) (771) 21 24 (23) － (276) (15) 472 154 (34) (374) 218 (211) － (19) (96) 693 － (15) (28) 322 1,416 (324) 0 (267) 0 822 3 1,368 3,293 4,661 317 613 (0) 21 27 50 (105) 30 － (366) (94) (887) 583 (585) 18 54 (121) 59 (173) (38) (597) 105 (31) (101) (624) (239) 0 (16) (6) 466 283 － (17) 470 700 (292) 0 (268) 0 137 23 7 3,964 3,971 Toyo Denki Seizo K. K. (6505) Summary of Consolidated Business Results for the First Half of Fiscal 2021 (3) Notes on Consolidated Financial Statements (Notes on Going Concern Assumption) Not applicable (Notes on Significant Changes in the Amount of Shareholders’ Equity) Not applicable (Changes in accounting policies) (Application of Accounting Standard for Revenue Recognition, Etc.) The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and relevant ASBJ regulations effective from the beginning of the fiscal period under review, and it has recognized revenue at the time the control of promised goods or services is transferred to the customer in the amount expected to be received upon exchange of said goods or services. In addition, the Company applies the alternative practice provided in Paragraph 98 of the Guidance on Accounting Standard for Revenue Recognition and recognizes revenue upon shipment of goods or products sold in Japan, if the period from shipment to transfer of control of the goods or products to the customer is of normal length. As for construction contracts, the Company has conventionally applied the percentage-of-completion method to the portion of on-going construction with a certainty of delivery, and the completion contract method to others. However, as for contracts where performance obligations are fulfilled through a certain period from the fiscal period under review, the Company has shifted to a method in which it estimates the percentage of completion concerning the fulfillment of performance obligations and recognizes revenue based on the completion status for a certain period. As for contracts where performance obligations are fulfilled at a certain point of time, the Company has shifted to a method in which it recognizes revenue at the completion of construction, etc. The percentage of completion concerning the fulfillment of performance obligations is estimated based on the ratio of incurred cost to gross estimated cost (input method). Application of the Accounting Standard for Revenue Recognition, etc. is subject to the transitional treatment provided for in the proviso to Paragraph 84 of the Accounting Standard for Revenue Recognition. The cumulative effect of retrospective application, assuming the new accounting policy had been applied to periods prior to the beginning of the fiscal period under review, was added to or deducted from the opening balance of retained earnings of the fiscal period under review, and thus the new accounting policy was applied from such opening balance. There is no impact on the profit and loss of the first half of the year under review as a result of this change. There is also no impact on the beginning balance of retained earnings. Due to the application of the Accounting Standard for Revenue Recognition, “Trade notes and accounts receivable,” which were presented under “Current assets” in the consolidated balance sheet for the previous fiscal year, are included in “Trade notes, accounts receivable, and contract assets” from the fiscal period under review, and “Advances received,” which were presented under “Current liabilities,” are included in “Contract liabilities” from the fiscal period under review. In accordance with the transitional treatment provided for in Paragraph 89-2 of the Accounting Standard for Revenue Recognition, figures for the previous fiscal year have not been restated in accordance with the new approach to presentation. (Application of Accounting Standard for Fair Value Measurement, Etc.) The “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019 ) and relevant ASBJ regulations have been applied from the beginning of the fiscal period under review, and in accordance with the transitional treatment provided for 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 policy set forth by the Accounting Standard for Fair Value Measurement, etc. is applied prospectively. There was no impact on the quarterly consolidated financial statements. Toyo Denki Seizo K. K. (6505) Summary of Consolidated Business Results for the First Half of Fiscal 2021 (Segment Information) [Segment Information] First Half of Fiscal 2020 (June 1, 2020 to November 30, 2020) Information regarding Net Sales and Income (Loss) by Reporting Segment Reporting Segment Transportation Systems Industrial Systems Information Equipment Systems Other (Note 1) Total Adjustment Amount (Note 2) (Millions of yen) Amount Recorded on Consolidated Statements of Income (Note 3) 11,078 5,035 10 11,089 1,065 0 5,035 375 604 － 604 175 2 16,720 178 181 (19) 189 16,910 1,596 － (189) (189) (1,419) 16,720 － 16,720 177 Net sales Sales to third parties Inter-segment sales and transfers Total Segment profit (loss) (Notes) 1. 2. 3. The “Other” segment includes operations not included in reporting segments such as the dispatch of temporary staff. The segment profit (loss) adjustment amount is a loss of 1,419 million yen. This is comprised of an elimination of intersegment sales and transfer amount of a gain of 0 million yen and corporate expenditure (a loss of 1,420 million yen) that is not allocated to each reporting segment. Corporate expenditure is primarily comprised of selling, general and administrative expenses, as well as research and development costs that are not allocated to each reporting segment. Segment profit (loss) has been adjusted with operating income recorded under the quarterly consolidated statements of income. First Half of Fiscal 2021 (June 1, 2021, to November 30, 2021) Information regarding Net Sales and Income (Loss) by Reporting Segment Net sales Sales to third parties Inter-segment sales and transfers Total Segment profit (loss) (Notes) Reporting Segment Transportation Systems Industrial Systems Information Equipment Systems Other (Note 1) Total Adjustment Amount (Note 2) 10,110 4,379 10 10,120 1,034 0 4,379 (98) 309 － 309 49 4 14,803 182 14,986 171 176 (9) 976 (1,339) (Millions of yen) Amount Recorded on Consolidated Statements of Income (Note 3) － (182) (182) 14,803 － 14,803 (362) 1. 2. 3. The “Other” segment includes operations not included in reporting segments such as the dispatch of temporary staff. The segment profit (loss) adjustment amount is a loss of 1,339 million yen. This is comprised of an elimination of intersegment sales and transfer amount of a loss of 0 million yen and corporate expenditure (a loss of 1,338 million yen) that is not allocated to each reporting segment. Corporate expenditure is primarily comprised of selling, general and administrative expenses, as well as research and development costs that are not allocated to each reporting segment. Segment profit (loss) has been adjusted with operating loss recorded under the quarterly consolidated statements of income. Toyo Denki Seizo K. K. (6505) Summary of Consolidated Business Results for the First Half of Fiscal 2021 (1) Status of Production, Orders, and Sales 3. Other (a) Production Status 1H Fiscal 2020 (June 1, 2020 to November 30, 2020) 1H Fiscal 2021 (June 1, 2021 to November 30, 2021) Amount (Millions of yen) Share (%) Amount (Millions of yen) Share (%) Business segment Transportation Systems Industrial Systems Information Equipment Systems Other Total Other Total Other Total (b) Status of Orders Received Business segment Transportation Systems Industrial Systems Information Equipment Systems (c) Sales Status Business segment Transportation Systems Industrial Systems Information Equipment Systems Notes: 1 Amounts are based on sales prices. 2 The above amounts do not include consumption and other taxes. 15,572 100.0 13,443 100.0 1H Fiscal 2020 (June 1, 2020 to November 30, 2020) 1H Fiscal 2021 (June 1, 2021 to November 30, 2021) Orders Received (Millions of yen) Balance (Millions of yen) Orders Received (Millions of yen) Balance (Millions of yen) Notes: 1 Amounts are based on sales prices. 2 The above amounts do not include consumption and other taxes. 14,393 27,731 14,213 26,396 1H Fiscal 2020 (June 1, 2020 to November 30, 2020) 1H Fiscal 2021 (June 1, 2021 to November 30, 2021) Amount (Millions of yen) Share (%) Amount (Millions of yen) Share (%) 9,250 4,021 172 － 8,907 4,952 348 4 10,110 4,379 309 4 68.8 29.9 1.3 － 20,263 5,988 144 － 68.3 29.6 2.1 0.0 70.2 28.3 1.5 － 21,743 5,841 146 － 66.3 30.1 3.6 0.0 10,927 4,403 240 － 8,661 5,518 210 2 11,078 5,035 604 2 Notes: 1 Amounts are based on sales prices. 2 The above amounts do not include consumption and other taxes. 16,720 100.0 14,803 100.0