北越工業（6364） – Summary of Financial Results 2022

Note: This document has been translated from a part of 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. May 10, 2022 Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (Under Japanese GAAP) Company name: Hokuetsu Industries Co., Ltd. Tokyo Stock Exchange Listing: 6364 Securities code: https://www.airman.co.jp/ URL: Yoshimasa Horiuchi, President, CEO Representative: Goichi Sato, Director, General Manager of Administration Dept. Inquiries: Telephone: +81-256 93-5571 Scheduled date of annual general meeting of shareholders: Scheduled date to commence dividend payments: Scheduled date to file annual securities report: Preparation of supplementary material on financial results: Yes Holding of financial results briefing: June 28, 2022 June 29, 2022 June 28, 2022 Yes (for institutional investors and analysts) (Yen amounts are rounded down to millions, unless otherwise noted.) 1. Consolidated financial results for the fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022) (1) Consolidated operating results (Percentages indicate year-on-year changes.) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Fiscal year ended March 31, 2022 March 31, 2021 Millions of yen % Millions of yen % Millions of yen % Millions of yen % 36,650 32,929 11.3 (21.2) 3,570 2,489 43.4 (53.2) 4,055 2,920 38.8 (46.5) 2,748 1,944 41.4 (46.3) Note: Comprehensive income For the fiscal year ended March 31, 2022: For the fiscal year ended March 31, 2021: ¥2,516 million ¥2,370 million [6.1%] [(27.2)%] Basic earnings per share Diluted earnings per share Return on equity Fiscal year ended March 31, 2022 March 31, 2021 Yen 95.76 67.20 Yen – – Reference: Share of profit (loss) of entities accounted for using equity method For the fiscal year ended March 31, 2022: For the fiscal year ended March 31, 2021: ¥84 million ¥22 million Ratio of ordinary profit to total assets Ratio of operating profit to net sales % 9.0 6.6 % 9.1 6.6 % 9.7 7.6 (2) Consolidated financial position As of March 31, 2022 March 31, 2021 Reference: Equity Total assets Net assets Equity-to-asset ratio Net assets per share Millions of yen Millions of yen 45,827 43,379 31,303 29,962 % 68.0 68.8 Yen 1,097.97 1,036.37 As of March 31, 2022: As of March 31, 2021: ¥31,161 million ¥29,834 million (3) Consolidated cash flows Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at end of period Fiscal year ended March 31, 2022 March 31, 2021 Millions of yen Millions of yen Millions of yen Millions of yen 2,276 4,099 (615) (2,017) (2,222) (1,731) 10,613 11,049 2. Cash dividends Annual dividends per share First quarter-end Second quarter-end Third quarter-end Fiscal year-end Total Total cash dividends (Total) Payout ratio (Consolidated) Ratio of dividends to net assets (Consolidated) Yen Yen Yen Yen Millions of yen % Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Fiscal year ending March 31, 2023 (Forecast) – – – Yen 5.00 10.00 10.00 – – – 17.00 22.00 20.00 30.00 20.00 30.00 640 865 32.7 31.3 30.8 % 2.2 2.8 3. Consolidated earnings forecasts for the fiscal year ending March 31, 2023 (from April 1, 2022 to March 31, 2023) Net sales Operating profit Ordinary profit Six months ending September 30, 2022 Fiscal year ending March 31, 2023 Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen 19,500 15.5 1,620 (3.8) 1,700 (5.2) 1,190 (3.7) 41.93 40,000 9.1 3,820 7.0 4,000 (1.4) 2,760 0.4 97.25 (Percentages indicate year-on-year changes.) Profit attributable to owners of parent Basic earnings per share * Notes (1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None (2) Changes in accounting policies, changes in accounting estimates, and restatement (i) Changes in accounting policies due to revisions to accounting standards and other regulations: Yes (ii) Changes in accounting policies due to other reasons: None (iii) Changes in accounting estimates: None (iv) Restatement: None (3) Number of issued shares (common shares) (i) Total number of issued shares at the end of the period (including treasury shares) (ii) Number of treasury shares at the end of the period As of March 31, 2022 As of March 31, 2021 As of March 31, 2022 As of March 31, 2021 (iii) Average number of shares outstanding during the period Fiscal year ended March 31, 2022 Fiscal year ended March 31, 2021 30,165,418 shares 30,165,418 shares 1,784,261 shares 1,377,850 shares 28,703,998 shares 28,935,921 shares Note: The number of treasury shares at the end of the period includes the Company’s shares (345,900 shares for the fiscal year ended March 31, 2022 and 339,700 shares for the fiscal year ended March 31, 2021) held by “Custody Bank of Japan, Ltd. (Trust Account E).” The Company’s shares held by “Custody Bank of Japan, Ltd. (Trust Account E)” are included in treasury shares, which is deducted from the average number of shares outstanding during the period (329,823 shares for the fiscal year ended March 31, 2022 and 318,862 shares for the fiscal year ended March 31, 2021). (Reference) Overview of non-consolidated financial results Non-consolidated financial results for the fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022) (1) Non-consolidated operating results (Percentages indicate year-on-year changes.) Net sales Operating profit Ordinary profit Profit Fiscal year ended March 31, 2022 March 31, 2021 Millions of yen % Millions of yen % Millions of yen % Millions of yen % 35,539 29,975 18.6 (21.7) 2,179 1,500 45.3 (48.4) 3,090 2,110 46.4 (43.2) 2,128 1,424 49.4 (45.0) Fiscal year ended March 31, 2022 March 31, 2021 Basic earnings per share Diluted earnings per share Yen 74.16 49.23 Yen – – (2) Non-consolidated financial position As of March 31, 2022 March 31, 2021 Reference: Equity corporation. Total assets Net assets Equity-to-asset ratio Net assets per share Millions of yen Millions of yen 37,611 35,556 23,252 22,685 % 61.8 63.8 Yen 819.28 788.02 As of March 31, 2022: As of March 31, 2021: ¥23,252 million ¥22,685 million * Financial results reports are exempt from audit conducted by certified public accountants or an audit * Proper use of earnings forecasts, and other special matters (Caution regarding forward-looking statements and others) The forward-looking statements, including earnings forecasts, contained in this material are based on information currently available to the Company and on certain assumptions deemed to be reasonable. Consequently, any statements herein do not constitute assurances regarding actual results by the Company. Moreover, actual business and other results may differ from the forecast due to various factors going forward. (How to obtain supplementary material on financial results) The Company is scheduled to hold a financial results briefing for institutional investors and analysts on Monday, May 30, 2022. Supplementary material on financial results to be used in this financial results briefing will be posted on the Company’s website shortly after the briefing. Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 As of March 31, 2021 As of March 31, 2022 (Thousands of yen) 11,380,014 13,629,839 – – 3,189,689 183,939 773,816 334,955 (80,908) 29,411,346 8,406,894 (4,077,475) 4,329,418 8,550,566 (6,164,612) 2,385,954 1,963,579 118,222 1,497,260 (1,380,625) 116,635 8,913,809 77,979 4,024,345 383,377 355,303 219,392 (6,067) 4,976,350 13,968,139 43,379,486 10,943,932 – 4,213,794 10,831,530 4,044,849 207,934 1,223,282 1,082,865 (56,172) 32,492,016 8,859,613 (4,443,267) 4,416,346 8,656,006 (6,391,950) 2,264,055 2,006,579 168,639 1,564,706 (1,430,233) 134,473 8,990,094 65,228 2,984,889 528,753 561,703 210,492 (5,876) 4,279,963 13,335,285 45,827,302 Consolidated financial statements (1) Consolidated balance sheet Assets Current assets Cash and deposits Notes and accounts receivable – trade Notes receivable – trade Accounts receivable – trade 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 and structures Accumulated depreciation Buildings and structures, net Machinery, equipment and vehicles Accumulated depreciation Machinery, equipment and vehicles, net Land Construction in progress Other Accumulated depreciation Other, net Total property, plant and equipment Intangible assets Investments and other assets Investment securities Investments in capital of subsidiaries and associates Deferred tax assets Other Allowance for doubtful accounts Total investments and other assets Total non-current assets Total assets – 1 – Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 As of March 31, 2021 As of March 31, 2022 (Thousands of yen) 3,254,537 3,450,787 375,000 600,000 637,490 – 632,232 65,800 16,200 1,779,161 10,811,208 100,000 – 158,017 137,334 2,064,464 – 146,037 2,605,853 13,417,062 3,416,544 3,887,594 22,316,367 (967,748) 28,652,758 1,388,090 (113,584) (92,634) 1,181,871 127,795 29,962,424 43,379,486 4,237,599 4,052,298 100,000 – 904,937 305,666 683,160 50,240 18,600 1,586,362 11,938,864 – 2,440 174,896 124,106 2,049,661 114,438 119,457 2,585,000 14,523,865 3,416,544 3,887,594 24,278,736 (1,354,354) 30,228,520 999,897 20,966 (87,775) 933,088 141,827 31,303,436 45,827,302 Liabilities Current liabilities Notes and accounts payable – trade Electronically recorded obligations – operating Short-term borrowings Current portion of bonds payable Income taxes payable Contract liabilities Provision for bonuses Provision for bonuses for directors (and other officers) Provision for product warranties Other Total current liabilities Non-current liabilities Long-term borrowings Deferred tax liabilities Provision for share awards Provision for share awards for directors (and other officers) Retirement benefit liability 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 Accumulated other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulated other comprehensive income Non-controlling interests Total net assets Total liabilities and net assets – 2 – Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (2) Consolidated statements of income and comprehensive income Consolidated statement of income (Thousands of yen)Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 32,929,473 24,715,851 8,213,622 36,650,986 27,102,151 9,548,835 Net sales Cost of sales Gross profit Selling, general and administrative expenses Packing and transportation costs Provision of allowance for doubtful accounts Provision for product warranties Remuneration, salaries and allowances for directors (and other officers) Provision for bonuses Provision for bonuses for directors (and other officers) Retirement benefit expenses Provision for share awards Provision for share awards for directors (and other officers) Other Total selling, general and administrative expenses Operating profit Non-operating income Interest income Dividend income Share of profit of entities accounted for using equity method Foreign exchange gains Other Total non-operating income Non-operating expenses Interest expenses Commission for syndicated loans Other Total non-operating expenses Ordinary profit Extraordinary income Gain on disposal of non-current assets Gain on sale of investment securities Total extraordinary income Extraordinary losses Loss on disposal of non-current assets Total extraordinary losses Profit before income taxes Income taxes – current Income taxes – deferred Total income taxes Profit Profit attributable to non-controlling interests Profit attributable to owners of parent – 3 – 644,083 79,717 – 2,207,191 300,665 56,971 104,221 14,266 33,598 2,283,232 5,723,948 2,489,674 7,182 88,433 22,787 113,367 218,855 450,627 10,748 2,999 5,644 19,392 2,920,909 277 – 277 25,750 25,750 2,895,436 846,220 97,767 943,987 1,951,448 7,061 1,944,387 871,201 (24,927) 2,400 2,272,562 318,982 50,240 107,689 14,231 28,550 2,337,709 5,978,639 3,570,195 6,133 81,914 84,436 252,485 93,311 518,280 8,475 14,999 9,757 33,233 4,055,242 5,226 2,050 7,277 15,522 15,522 4,046,997 1,316,606 (34,535) 1,282,070 2,764,927 16,122 2,748,804 Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 Consolidated statement of comprehensive income (Thousands of yen)Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Profit Other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Remeasurements of defined benefit plans, net of tax Share of other comprehensive income of entities accounted for using equity method Total other comprehensive income Comprehensive income Comprehensive income attributable to Comprehensive income attributable to owners of parent Comprehensive income attributable to non-controlling interests 1,951,448 436,444 (29,752) 8,023 4,788 419,503 2,370,952 2,363,891 7,061 2,764,927 (388,193) 81,587 4,858 52,963 (248,782) 2,516,144 2,500,021 16,122 – 4 – Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (3) Consolidated statement of changes in equity Fiscal year ended March 31, 2021 Share capital Capital surplus Retained earnings Treasury shares Shareholders’ equity (Thousands of yen)Total shareholders’ equity Balance at beginning of period 3,416,544 3,887,594 21,110,162 (413,091) 28,001,210 Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Net changes in items other than shareholders’ equity – (738,183) 1,944,387 (738,183) 1,944,387 (591,552) (591,552) 36,896 36,896 Total changes during period – 1,206,204 (554,656) 651,547 Balance at end of period 3,416,544 3,887,594 22,316,367 (967,748) 28,652,758 Accumulated other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulated other comprehensive income Non-controlling interests Total net assets Balance at beginning of period 951,646 (88,620) (100,657) 762,367 123,394 28,886,972 Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Net changes in items other than shareholders’ equity Total changes during period 436,444 (24,964) 8,023 419,503 436,444 (24,964) 8,023 419,503 4,401 4,401 Balance at end of period 1,388,090 (113,584) (92,634) 1,181,871 127,795 29,962,424 (738,183) 1,944,387 (591,552) 36,896 423,904 1,075,452 – 5 – Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 Fiscal year ended March 31, 2022 Share capital Capital surplus Retained earnings Treasury shares Shareholders’ equity (Thousands of yen)Total shareholders’ equity Balance at beginning of period 3,416,544 3,887,594 22,316,367 (967,748) 28,652,758 Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Net changes in items other than shareholders’ equity – (786,435) 2,748,804 (786,435) 2,748,804 (442,726) (442,726) 56,119 56,119 Total changes during period – 1,962,369 (386,606) 1,575,762 Balance at end of period 3,416,544 3,887,594 24,278,736 (1,354,354) 30,228,520 Accumulated other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulated other comprehensive income Non-controlling interests Total net assets Balance at beginning of period 1,388,090 (113,584) (92,634) 1,181,871 127,795 29,962,424 Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Net changes in items other than shareholders’ equity (388,193) 134,551 4,858 (248,782) Total changes during period (388,193) 134,551 4,858 (248,782) 14,032 14,032 Balance at end of period 999,897 20,966 (87,775) 933,088 141,827 31,303,436 (786,435) 2,748,804 (442,726) 56,119 (234,750) 1,341,012 – 6 – Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (4) Consolidated statement of cash flows Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 (Thousands of yen) Cash flows from operating activities Profit before income taxes Depreciation Increase (decrease) in retirement benefit liability Increase (decrease) in provision for share awards Increase (decrease) in provision for share awards for directors (and other officers) Increase (decrease) in allowance for doubtful accounts Increase (decrease) in provision for product warranties Interest and dividend income Interest expenses Share of loss (profit) of entities accounted for using equity method Loss (gain) on sale of investment securities Subsidy income Loss (gain) on disposal of property, plant and equipment Decrease (increase) in trade receivables Decrease (increase) in inventories Increase (decrease) in trade payables Decrease (increase) in consumption taxes refund receivable Increase (decrease) in accrued consumption taxes Other, net Subtotal Interest and dividends received Interest paid Subsidies received Income taxes paid Net cash provided by (used in) operating activities Cash flows from investing activities Payments into time deposits Proceeds from withdrawal of time deposits Purchase of property, plant and equipment Proceeds from sale of property, plant and equipment Purchase of intangible assets Purchase of investment securities Proceeds from sale of investment securities Proceeds from redemption of investment securities Loan advances Proceeds from collection of loans receivable Proceeds from divestments Net cash provided by (used in) investing activities 2,895,436 938,707 (4,507) 25,283 33,428 80,117 (6,170) (95,616) 10,748 (22,787) – (170,667) 25,472 732,897 994,239 (625,733) 262,793 109,414 (233,661) 4,949,395 95,649 (11,714) 165,222 (1,099,544) 4,099,008 (630,250) 630,222 (1,964,972) 435 (26,321) (421,654) – 393,955 – 940 – (2,017,645) 4,046,997 1,022,086 (7,812) 25,279 28,419 (24,927) 2,400 (88,047) 8,475 (84,436) (2,050) (27,929) 10,296 (1,261,849) (1,174,172) 1,674,433 (628,967) (91,605) (236,232) 3,190,356 88,167 (8,156) 33,374 (1,027,577) 2,276,164 (630,273) 630,266 (1,105,124) 5,424 (22,311) (750) 9,450 497,950 (1,000) 290 180 (615,898) – 7 – Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Cash flows from financing activities Repayments of long-term borrowings Redemption of bonds Repayments of lease liabilities Purchase of treasury shares Dividends paid Dividends paid to non-controlling interests Net cash provided by (used in) financing activities Effect of exchange rate change on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period (375,000) – (23,203) (591,552) (738,699) (2,660) (1,731,115) 26,709 376,956 10,672,908 11,049,865 (375,000) (600,000) (16,009) (442,726) (786,202) (2,090) (2,222,028) 125,672 (436,090) 11,049,865 10,613,775 – 8 –